Commonwealth Chesapeake Corp.

Plain-English summary

Commonwealth Chesapeake Corporation received a PSD permit and approval to construct a peaker power plant in Accomack County, Virginia. Four local residents petitioned for review, raising concerns about health, environmental effects, visibility, acid rain, groundwater, land use, and noise. The Environmental Appeals Board dismissed William Reese's petition because he had not participated in the public hearing or commented on the draft permit. It denied the other three petitions, finding no clear error in Virginia's choice of water injection instead of selective catalytic reduction for nitrogen oxides, its treatment of acid-rain and visibility issues, or its decision to defer non-air impacts to state and local processes.

Decision snapshot

• Cited authorities: 42 U.S.C. §§ 7470, 7472, 7475, and 7651; 40 C.F.R. §§ 50.2, 52.21, and 124.19
• Outcome: Petition No. 96-5 was dismissed for lack of standing. Review of Petitions 96-2, 96-3, and 96-4 was denied.
• Key point: A PSD petitioner must participate in the permitting process and support review claims with specific evidence of clear error or an important policy matter.

Full text (EPA EAB public release)

764 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

IN RE COMMONWEALTH CHESAPEAKE CORP.

PSD Appeal Nos. 96-2, 96-3, 96-4 & 96-5
ORDER DENYING REVIEW

Decided February 19, 1997

Syllabus

Four private citizens have petitioned the Board for review of a prevention of significant
deterioration (PSD) permit and approval to construct issued by the Commonwealth of Virginia’s
Department of Environmental Quality (VDEQ) to Commonwealth Chesapeake Corporation
(CCC), pursuant to Clean Air Act § 165, 42 U.S.C. § 7475. The permit authorizes CCC to construct
a “peaker power plant” in Accomack County, Virginia, in proximity to two Clean Air Act Class II
areas: the Assateague Island National Seashore and the Chincoteague National Wildlife Refuge.
The plant will consist of three 132.5-megawatt simple cycle combustion gas turbines and three
3.5 million gallon distillate oil storage tanks. The plant is designed to operate during periods of
peak demand for electricity. Petitioners are residents of Accomack County who oppose con-
struction of the plant, alleging that: (1) air emissions from the facility and other effects of plant
operation will harm human health and the ecosystem in the surrounding communities; (2) the
plant will cause visible plumes to form in the nearby Class I areas, and VDEQ erred in not requir-
ing high-temperature selective catalytic reduction (SCR) as the “best available control technolo-
gy” (BACT) for the plant in order to prevent plume formation; (3) the plant will contribute to acid
rain formation; and (4) the plant will have other negative impacts unrelated to air quality, such
as depletion of groundwater resources, conversion of agricultural land, and excessive noise.

Held: The Board has determined that one petitioner lacks standing to petition for review
of the permit because he failed to participate in the public hearing or provide comments on the
draft permit, and therefore that petition must be dismissed. With respect to the remaining three
petitions, the Board concludes that petitioners have not met their burden of showing that
VDEQ’s decision should be reviewed. First, petitioners’ general allegations that emissions from
the plant and other effects of plant operation will pose unreasonable risks to human health and
the environment do not provide sufficient specificity or supporting information from which the
Board could conclude that VDEQ clearly erred in issuing the permit. Further, the record shows
that VDEQ analyzed the air emissions expected from the plant, and concluded that the emis-
sions are not of sufficient magnitude to lead to the adverse effects claimed by petitioners.
Second, VDEQ did not err in selecting water injection rather than SCR as BACT for the control
of nitrogen oxides (NOx) emissions. The record shows that SCR is not a cost-effective control
option for this plant, because the incremental cost of installing SCR technology is over $8500
per ton of additional NOx removed, whereas the only other comparable plant required to uti-
lize the SCR technology under consideration did so at an incremental cost of approximately
$2200 per ton. Petitioners offered no specific information that suggests this analysis is erroneous,
either by showing the $8500 per ton cost as calculated by VDEQ is overstated or is within
the range of control costs borne by similar sources. Further, although VDEQ was not required
to perform a formal visibility analysis, it did consider visibility impacts in the Class II areas.
VDEQ concluded that visible plumes were not likely, because of the permit’s 10% opacity limit
and because of an anticipated overall NOx emissions reduction due to the fact that the plant
will provide electricity presently provided by more-polluting facilities. Third, VDEQ did not err

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COMMONWEALTH CHESAPEAKE CORP. 765

in rejecting petitioners’ claim that the plant will significantly contribute to acid rain formation.
VDEQ concluded that the plant will emit NOx and sulfur dioxide (acid rain precursors) in
amounts far below those regulated under the acid rain provisions of the Clean Air Act, and peti-
tioners have failed to explain why the State's response to this issue is clearly erroneous. Fourth,
VDEQ did not err in rejecting petitioners’ arguments that the plant will have negative non-air
quality impacts. As to groundwater impacts, VDEQ deferred to a State process for issuing
groundwater withdrawal permits. As to other impacts (such as land use considerations and
noise), VDEQ deferred to a State policy pursuant to which such impacts are considered in local
planning and zoning processes. To the extent VDEQ has the discretion to consider non-air qual-
ity related impacts in issuing PSD permits, it was not clear error in this instance for it to defer
to State procedures and policies. For these reasons, the petitions for review are denied.

Before Environmental Appeals Judges Ronald L. McCallum,
Edward E. Reich and Kathie A. Stein.

Opinion of the Board by Judge Reich:

I. BACKGROUND

We have consolidated for decision four petitions seeking review
of a decision of the Commonwealth of Virginia’s Department of
Environmental Quality (VDEQ) granting a final prevention of signifi-
cant deterioration (PSD) permit and approval to construct to
Commonwealth Chesapeake Corporation (CCC), pursuant to Clean Air
Act § 165, 42 U.S.C. § 7475.' The permit authorizes CCC to construct a
“peaker power plant,” i.e., a generating station to provide electricity
to utilities during periods of peak demand for electrical power. The
facility will be constructed in Accomack County, Virginia, on a site
approximately 160 kilometers east of Shenandoah National Park, a
“Class I” area administered by the National Park Service, and approx-
imately 18 kilometers west of the Assateague Island National Seashore
and the Chincoteague National Wildlife Refuge, both of which are
“Class II” areas.” The facility will consist of three 132.5-megawatt sim-
ple cycle combustion gas turbines and three 3.5 million gallon distil-
late oil storage tanks. The turbines will combust distillate oil with a

1 VDEQ administers the PSD program in Virginia pursuant to a delegation of authority from
U.S. EPA Region III. Because Virginia acts as EPA's delegate in implementing the federal PSD pro-
gram under the delegation agreement, the permit is considered an EPA-issued permit for pur-
poses of federal law, and is subject to review by the Board pursuant to 40 C.F.R. § 124.19. In re
Hadson Power 14—Buena Vista, 4 E.A.D. 258, 259 (EAB 1992); see also In re West Suburban
Recycling and Energy Center, LP. 6 E.A.D. 692, 695 n.4 (EAB 1996) (“For purposes of Part 124,
a delegate State stands in the shoes of the Regional Administrator [and must] follow the proce-
dural requirements of Part 124. * * * A permit issued by a delegate is still an “EPA-issued permit”
***™) (quoting 45 Fed. Reg. 33,413 (May 19, 1980)).

2 Comments of the U.S. Department of the Interior, National Park Service, on CCC draft per-

mit issued by VDEQ (Dec. 7, 1995) (hereafter “NPS Comments”). The significance of these clas-
sifications is discussed infra, Part ILA.

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766 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

maximum sulfur and nitrogen content of 0.05% each by weight. The
conditions of the permit limit operation of each turbine to 2000 hours
per year (meaning that if all turbines are operated simultaneously, the
facility could operate for no more than 2000 hours per year). Permit
Condition 10. The permit further provides that, out of the 2000 hour
limit, no turbine, or combination of turbines, can operate at peak
operating load (i.e., 132.5 megawatts) for more than 500 hours per
year. Id

The petitioners are residents of Accomack County who oppose
construction of the facility.’ The petitions for review collectively raise
numerous objections to VDEQ’s decision to allow construction of the
facility. Petitioners’ objections relate primarily to alleged negative
impacts that emissions from the facility will have on the health of the
residents in the surrounding communities, and alleged negative
impacts on the environment, including the Assateague Island National
Seashore and the Chincoteague National Wildlife Refuge.

At the Board’s request, VDEQ submitted responses to each of the
petitions for review, together with relevant portions of the administra-
tive record relied upon by VDEQ in reaching its decision. VDEQ
argues that one petitioner, William Reese, lacks standing to petition for
review of VDEQ’s permit decision. VDEQ argues that the remaining
three petitions fail to meet the standards necessary to invoke Board
review of its decision, as set forth at 40 C.F.R. § 124.19. For the reasons
explained below, we agree and must therefore deny the petitions.

II. DISCUSSION
A. Statutory Background

The Clean Air Act’s PSD program serves to regulate air pollution
in areas (known as “attainment” areas) where air quality meets or is
cleaner than the national ambient air quality standards (NAAQS), as

• VDEQ has explained that:

The proposed CCC project is designed to respond quickly
to peak demands for electricity. Simple cycle combustion tur-
bines can be brought up to full load quickly and turned off
quickly as demand subsides, making this kind of operation
the appropriate response to peak demands for electricity.
Engineering Analysis for CCC PSD Permit Application at 7 (May 21, 1996) (hereafter “Engineering
Analysis”).

' The petitioners are: Elizabeth Trader (Petition No. 96-2); Dorothy Bonney (Petition No. 96-
3); Marvel Wimbrow (Petition No. 96-4); and William Reese (Petition No. 96-5).

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COMMONWEALTH CHESAPEAKE CORP. 767

well as areas that cannot be classified as “attainment” or “non-attain-
ment” areas (“unclassifiable” areas). Clean Air Act § 160 et seq., 42
U.S.C. § 7470 et seq.; see In re Masonite Corp., 5 E.A.D. 551, 552 n.1
(EAB 1994). The NAAQS define levels of air quality Gin terms of the
concentration of certain regulated pollutants in the ambient air)
“which the Administrator judges are necessary, with an adequate mar-
gin of safety, to protect the public health.” 40 C.F.R. § 50.2(b).* The
NAAQS represent “ceilings” on the maximum concentration of such
regulated pollutants. New Source Review Workshop Manual at C.3
(hereafter “Draft Manual”).°

The goals of the PSD program are:

(1) to ensure that economic growth will occur in har-
mony with the preservation of existing clean air
resources; (2) to protect the public health and welfare
from any adverse effect which might occur even at air
pollution levels better than the [NAAQS]; and (3) to
preserve, protect, and enhance the air quality in areas
of special natural recreational, scenic, or historic value,
such as national parks and wilderness areas.

Draft Manual at C.5. To that end, the PSD regulations at 40 C.F.R. §
52.21 require, among other things, that new major stationary sources
of air pollution and major modifications of such sources be carefully
reviewed prior to construction to ensure that emissions from such
facilities will not cause exceedance of the NAAQS or applicable PSD
ambient air quality “increments”. 40 C.F.R. § 52.21 et seq. A PSD “incre-
ment” refers to “the maximum allowable increase in concentration
that is allowed to occur above a baseline concentration for a pollu-
tant.” Draft Manual at C.3; 40 C.F.R. § 52.21(c) (setting forth increments
for regulated pollutants).

The size of a PSD increment depends upon the classification of
the area within which a new source is proposed to be built or modi-
fied. See 40 C.F.R. § 52.21(c). As the EPA has explained:

NAAQS have been set for six criteria pollutants: sulfur dioxide, particulate matter, nitrogen
oxides, carbon monoxide, ozone, and lead. See id. §§ 50.4-50.12 (primary and secondary NAAQS
for criteria pollutants).

6 The New Source Review Workshop Manual is a draft document issued by EPA’s Air Quality
Management Division in October 1990. It was developed for use in conjunction with new source
review workshops and training, and to guide permitting officials. Although it is not accorded the
same weight as a binding Agency regulation, it has been looked to by this Board as a statement
of the Agency's thinking on certain PSD issues. See Masonite Corp. 5 E.A.D. 551, 558 n.8.

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768 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

The PSD requirements provide for a system of area
classifications which affords States an opportunity to
identify local land use goals. There are three area clas-
sifications. Each classification differs in terms of the
amount of growth it will permit before significant air
quality deterioration would be deemed to occur. Class
I areas have the smallest increments and thus allow
only a small degree of air quality deterioration. Class II
areas can accommodate normal well-managed indus-
trial growth. Class III areas have the largest increments
and thereby provide for a larger amount of develop-
ment than either Class I or Class II areas.

Draft Manual at C.4-C.5.

Parks and wilderness areas were initially designated as “Class I”
or “Class II” depending upon size. See Clean Air Act § 162, 42 U.S.C.
§ 7472.’ Parks and wilderness areas that are designated as Class I areas
under the Clean Air Act are entitled to enhanced protections under the
PSD program. See In re Hadson Power, 4 E.A.D. at 260-61; In re Old
Dominion Electric Cooperative, 3 E.A.D. 779, 780 (Adm’r 1992). In
particular, the Clean Air Act requires that written notice of a proposed
PSD permit be provided to the Federal Land Manager (FLM) for a
Class I area that may be affected by emissions from the proposed
facility. CAA § 165(d)(2)(A), 42 U.S.C. § 7475(d)(2)(A). In this instance,
VDEQ provided notice of the proposed permit to the National Park
Service as the FLM for the Shenandoah National Park. The Class II
areas at issue here, Assateague Island National Seashore and the
Chincoteague National Wildlife Refuge, are managed by the National
Park Service and the U.S. Fish and Wildlife Service, respectively.

Among other requirements, and of importance to this appeal, the
PSD regulations require that new major stationary sources and major
modifications of such sources employ the “best available control tech-

” The CAA provides that the following parks in existence on August 7, 1977, are Class I areas
that may not be redesignated:

(1) international parks,

(2) national wilderness areas which exceed 5,000 acres in
size,

(3) national memorial parks which exceed 5,000 acres in size,
and

(4) national parks which exceed six thousand acres in size(.]

CAA § 162(a), 42 U.S.C. § 7472(a). All other “attainment” or “unclassifiable” areas were initially
designated “Class II” areas. Id. § 162(b), 42 U.S.C. § 7472(b).

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COMMONWEALTH CHESAPEAKE CORP. 769

nology” (BACT) to minimize emissions of regulated pollutants. 42 U.S.C.
§ 7475 (a)(4); 40 C.F.R. § 52.21(j)(2). BACT is defined in part as follows:

[BACT] means an emissions limitation (including a visi-
ble emission standard) based on the maximum degree
of reduction for each pollutant subject to regulation
under [the] Act which would be emitted from any pro-
posed major stationary source or major modification
which the Administrator, on a case-by-case basis, taking
into account energy, environmental, and economic
impacts and other costs, determines is achievable for
such source or modification through application of pro-
duction processes or available methods, systems, and
techniques, including fuel cleaning or treatment or
innovative fuel combustion techniques for control of
such pollutant.

40 C.F.R. § 52.21(b)(12).

B. Standard of Review

Under the regulations that govern the Board’s review of PSD
permit decisions, a PSD permit decision will ordinarily not be
reviewed unless the decision is based on either a clearly erroneous
finding of fact or conclusion of law, or involves an important matter
of policy or exercise of discretion that warrants review. 40 C.F.R. §
124.19(a); see In re Masonite Corp., 5 E.A.D. at 557. The preamble to
§ 124.19 states that the Board’s power of review “should be only
sparingly exercised,” and that “most permit conditions should be
finally determined at the Regional [State] level * * *.” 45 Fed. Reg.
33,412 (May 19, 1980). The burden of demonstrating that review is
warranted rests with the petitioner who challenges the permit deci-
sion. See 40 C.E.R. § 124.19(a); In re Envotech, L.P., 6 E.A.D. 260, 265
(EAB 1996); Masonite Corp. at 557. The Board has explained that in
order to establish that review of a permit is warranted, § 124.19(a)
requires a petitioner to both state the objections to the permit that
are being raised for review, and to explain why the permit decision
maker’s previous response to those objections (i.e., the decision
maker’s basis for the decision) is clearly erroneous or otherwise war-
rants review. In re Puerto Rico Electric Power Authority, 6 E.A.D.
253, 255 (EAB 1995); In re Genesee Power Station L.P., 4 E.A.D. 832,
866 (EAB 1993). The foregoing regulatory scheme “provides the
yardstick against which the Board must measure” petitions for
review of PSD and other permit decisions. See Envotech, L.P., ©
E.A.D. at 265.

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770 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

C. Standing

In addition, the regulations governing issuance and review of PSD
permits require a petitioner to demonstrate that he or she has “stand-
ing” to challenge the permit decision. The Board has explained that:

Even if a petition for review has been timely filed,
the merits of the petition may not be considered by the
Board unless the petitioner has “standing” to assert the
issues raised in the petition. * * * [A] petitioner has
“standing” to pursue an appeal of the conditions of a
final permit that are identical to the conditions of the
draft permit only if the petitioner filed timely com-
ments on the draft permit or participated in the public
hearing on the draft permit.

*** A petitioner who failed to file timely comments on
a draft permit or participate in the public hearing will
only have standing to pursue an appeal to the extent
that the conditions in the draft permit are changed in
the final permit. * * * This requirement is imposed in
order to “ensure that the Region has an opportunity to
address potential problems with the draft permit
before the permit becomes final.”

Envotech, L.P., 6 E.A.D. at 265 (quoting In re Beckman Production
Services, 5 E.A.D. 10, 16 (EAB 1994)).

VDEQ alleges that petitioner William Reese (Petition No. 96-5)
neither filed comments on the draft CCC permit during the public
comment period, nor participated in the public hearing held on
January 9, 1996. VDEQ has provided the Board with portions of the
administrative record concerning Mr. Reese’s alleged lack of standing
to petition for review. VDEQ’s Response to Petition No. 96-5 at 1 (cit-
ing attendance record from January 9, 1996 public hearing and index
of comments received on draft permit). Mr. Reese’s petition does not
claim or demonstrate that he either filed comments on the draft per-
mit or participated in the public hearing, nor does the petition pur-
port to relate to changes from the draft to final permit. See Petition No.
96-5. Based on the record before the Board, it does not appear that
Mr. Reese has fulfilled the regulatory prerequisites to having standing
to petition for review of VDEQ’s decision. Accordingly, Mr. Reese’s
petition must be dismissed for lack of standing.*

• We note that the objections to the CCC permit raised in Mr. Reese’s petition (alleged negative
  impact on human health and the environment) are raised in the remaining three petitions as well.

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COMMONWEALTH CHESAPEAKE CORP. 771

D. The Merits of the Remaining Petitions

The remaining three petitions for review raise numerous objec-
tions to VDEQ’s permit decision. We will address the objections in the
approximate order in which they appear in the petitions.

1. Alleged Health and Environmental Risks

All petitioners contend generally that emissions from, and other
effects of, the proposed CCC facility will pose unreasonable health
risks to citizens in the surrounding communities and will potentially
harm the surrounding ecosystem. For example, petitioner Elizabeth
Trader (Petition No. 96-2) alleges that:

[CCC plant] emissions will aggravate asthma and other
breathing problems in humans especially children and
elderly people. They are also connected to numerous
cancers. Many of these emissions are carcinogens!
New evidence has just been known that these chemi-
cals can effect the endoctrine [sic] system of people
and animals which may account for the dramatic
increase in cancers such as breast and testicular.

Petition No. 96-2 at 1 (emphasis in original). Ms. Trader also contends
that the plant will generate harmful electromagnetic fields, and result
in a rise in infectious diseases due to contribution to global warming.
Id. at 3-4. In the same vein, petitioner Dorothy Bonney (Petition No.
96-3) states that:

We who live in this area are outraged that our govern-
ing bodies are allowing [CCC] to build a huge 400
megawatt power plant in an area so delicate in nature
and so populated. [The region] is too delicate to allow
that huge plant to be built.

Petition No. 96-3 at 1. Petitioner Marvel Wimbrow alleges that:

I became an asthmatic for the first time seventeen
years ago * * *. Since then I have become allergic to
many things including airborne pollutants. Asthma has
increased 66 per cent since 1980 and I am very con-
cerned about the pollution that this [peaker plant will
be emitting. [CCC]’s permit allows 1218.3 tons of
[nitrogen oxides to be dumped into the atmosphere
during a one year period.

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772 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Petition No. 96-4 at 1,

While the Board endeavors to construe petitions for review
broadly, especially when they are filed by persons unrepresented by
counsel, the petitioners’ general allegations that chemicals emitted by
the plant and other effects of plant operation will pose unreasonable
risks to human health and the environment do not provide sufficient
information or specificity from which the Board could conclude that
VDEQ clearly erred in issuing the permit or in establishing the condi-
tions contained in the permit. See Puerto Rico Electric Power
Authority, 6 E.A.D. at 255; Genesee, 4 E.A.D. at 867-68. Furthermore,
the petitions do not identify the specific permit conditions being chal-
lenged. See id. In re LCP Chemicals, 4 E.A.D. 661, 665 (EAB 1993).
Except with respect to the control technology required to minimize
emissions of nitrogen oxides (addressed in more detail below), the
petitions do not attempt to explain how VDEQ allegedly erred in
establishing the conditions of the permit, or how such an alleged error
will lead to the adverse health and environmental effects predicted by
the petitioners.

The Board appreciates petitioners’ concern for the health and
well-being of their community and environment. However, we empha-
size that the overarching purpose of the PSD regulations and permit-
ting requirements is to prevent significant degradation of air quality in
areas that have attained the national ambient air quality standards.
Petitioners have provided the Board with no basis to conclude that
VDEQ'’s permit decision will lead to such significant degradation. In its
response to comments received at the January 9, 1996 public hearing,
and in its responses to these petitions, VDEQ has explained that it
compared the predicted concentrations of regulated pollutants to be
emitted by the plant with the applicable NAAQS (or the State “signifi-
cant ambient air concentration” (SAAC) in the absence of a NAAQS),
and determined that the predicted concentrations were well within the
NAAQS or SAAC for each pollutant. VDEQ's Public Hearing Response
(Mar. 6, 1996), at 1-2; VDEQ’s Responses to Petitions No. 96-2, 96-3 &
96-4, at 1-2.° The engineering analysis performed by VDEQ in con-
nection with its permit review further explains that:

” According to VDEQ, the proposed plant will emit nitrogen oxides, sulfur dioxide, total sus-
pended particulate, particulate matter less than 10 microns, carbon monoxide, volatile organic
compounds, sulfuric acid mist, nickel, formaldehyde, lead, and beryllium. VDEQ’s Responses to
Petitions at 1, A comparison of the predicted concentrations and the NAAQS or SAAC for each
pollutant is found in Attachment D to VDEQ’s Responses to Petitions. This comparison confirms
VDEQ’s statement that all predicted levels are well below the applicable NAAQS and SAAC.

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COMMONWEALTH CHESAPEAKE CORP. 773

CCC had submitted an air quality impact analysis in
support of their application. It was concluded that the
source adhered to the approved modeling protocol
and fulfilled all federal and State requirements related
to PSD air quality analyses. Modeling results * * * indi-
cated that the impacts of all criteria pollutants were
well below EPA’s significant impact criteria and conse-
quently, a PSD Increment Consumption Analysis (ICA)
and a National Ambient Air Quality Standards Analysis
(NAAQSA) was not required.

Engineering Analysis at 7.'° Petitioners have not alleged that the emis-
sions anticipated from the CCC plant will exceed any applicable PSD
increment, NAAQS, or SAAC, and have provided no information that
suggests that VDEQ’s determination was erroneous. Accordingly,
review on the basis of this issue must be denied."

2. Alleged Impact on Visibility and BACT Analysis

Two petitioners’ allege that the CCC plant will cause visibility
problems in the Assateague Island National Seashore and Chinco-
teague National Wildlife Refuge, as well as negatively impact the
Chesapeake Bay, and that VDEQ should have required the use of
high-temperature selective catalytic reduction (SCR) as BACT for the

” “ICA” and *NAAQSA” refer to the “full impact analysis” that is required when preliminary
modeling shows that the ambient concentrations of a particular pollutant exceed prescribed sig-
nificant ambient impact levels. Draft Manual at C.25. A “full impact analysis” would consider emis-
sions from the proposed source, as well as existing sources of air pollution and residential, com-
mercial, and industrial growth that accompanies the new source. Id.

1 For the same reasons, we reject petitioner Elizabeth Trader's contention (Petition 96-2 at
2, 5) that the facility will pose an unacceptable risk to children attending nearby schools or to a
migrant worker's camp near the proposed site. There has been no showing that emissions from
the plant will pose any health risks, to sensitive populations or otherwise. Further, we must reject
Ms. Trader’s unsupported allegation that the cumulative effect of the CCC plant's emissions, in
light of existing sources of chemical emissions such as agricultural spraying and nearby industri-
al facilities, will harm human health and the environment. Petition No. 96-2 at 2. In its response
to comments, VDEQ explained that the impacts expected from the CCC plant were so minimal
that multi-source modeling was not required. See VDEQ’s Public Hearing Response at 3: Draft
Manual at C.24-C.25 (explaining that full impact analysis for a particular pollutant is not required
“when emissions of that pollutant from a proposed source or modification would not increase
ambient concentrations by more than prescribed significant ambient impact levels * * *~), see also
supra n. 10 and accompanying text. Ms. Trader merely reiterates a comment on cumulative
emissions made during the public hearing, without explaining why the State's response to that
comment was in error. Accordingly, we deny review on the basis of this issue. See Envotech, LP,
6 E.AD. at 268 (rejecting objections in petitions that merely reiterate earlier comments, without
explaining why Region's response is erroneous).

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774 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

project in order to prevent these impacts in the Class II areas. In par-
ticular, petitioner Elizabeth Trader contends that:

The National Park Service has stated in a letter that
the emissions from this plant will cause a visibility
problem in the Chincoteague National Wildlife Refuge.
They also stated that these emissions may be detri-
mental to the health of the Chesapeake Bay. * * * CCC
was asked by the EPA to use [SCR] equipment because
of these problems * * *. I feel because we are in an
extremely fragile environment * * * CCC should be
made to use this equipment if constructed. The chem-
icals will be dangerous to our wildlife.

Petition No. 96-2 at 2. Petitioner Dorothy Bonney alleges that “The
CCC will not even be required to use improved methods in their emis-
sions. * * * Now too much nitrogen oxide will be allowed by this
plant.” Petition No. 96-3 at 2. In issuing the permit, VDEQ determined
that BACT for the control of nitrogen oxides was water injection. See
“Fact Sheets for Commonwealth Chesapeake Corporation” at 3
(attached to Petition No. 96-2). Using this control technology, the per-
mit would allow CCC to emit 1218.3 tons per year (tpy) of nitrogen
oxides at a rate of 42 parts per million (ppm) at base load and 65 ppm
at peak load. Id. at 2. In conducting its BACT analysis, VDEQ reject-
ed the use of SCR as BACT for nitrogen oxides, on the basis that
although SCR was technologically feasible and would further reduce
nitrogen oxides emissions, it was not economically feasible for the
CCC plant because the technology would be “prohibitively costly”.
Engineering Analysis for CCC PSD Permit Application at 11.

Petitioners’ claims concerning visibility and impact on the
Chesapeake Bay stem from comments filed by U.S. EPA Region II and
by the National Park Service (NPS) with respect to CCC’s initial BACT
analysis for nitrogen oxides.'* Region III provided comments to VDEQ
that recommended high temperature SCR as BACT for NOx emissions.
In particular, the Region commented that high temperature SCR had
been applied as BACT in a PSD permit issued to the Puerto Rico
Electric Power Authority (PREPA) for a project involving three 83-
megawatt turbines firing 0.15% sulfur distillate fuel oil. See Comments
of William Browne, Region III Environmental Engineer, Attachment 8
to VDEQ's Response to Petition No. 96-2. The Region’s comments stat-

• We note that neither Region III nor NPS elected to appeal VDEQ’s decision not to require
  SCR as BACT for the CCC plant, as they had a right to do pursuant to 40 C.F.R. § 124.19. Region
  I declined the Board's invitation to provide comments on the petitions for review that were filed.

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COMMONWEALTH CHESAPEAKE CORP. 775

ed that “{aldvances in the state-of-the-art of high temperature SCR cat-
alysts demonstrate that NOx emissions from the simple cycle com-
bustion turbine [CCC] project can be reduced cost effectively by 1000
tpy.” Id.”

The NPS submitted two letters to VDEQ commenting on the con-
ditions of the proposed CCC permit. In a letter dated December 7,
1995, the NPS “agreeld] that water injection represents [BACT] to min-
imize [nitrogen oxide] emissions from this facility, however, we do not
agree that [65 ppm] for peak load conditions is an appropriate BACT
emission limit for water injection technology.” Letter from NPS to
VDEQ, at 1-2 (Dec. 7, 1995). The letter stated that while the proposed
facility would have “negligible” impact on the Shenandoah National
Park (a Class I area), NPS was concerned about the project's potential
impact on the Assateague Island National Seashore (NS), the
Chincoteague National Wildlife Refuge (NWR), and the Chesapeake
Bay. Id. at 2. In particular, the NPS commented that it had performed
a visibility analysis that indicated that at both the peak rate (65 ppm)
and base load rate (42 ppm), visible plumes could impact Assateague
Island NS and Chincoteague NWR during certain wind conditions.
Id. The NPS stated that a peaking facility in Georgia was required to
meet a BACT limit of 25 ppm using water injection, and that a 25 ppm
emission rate “greatly reduces the magnitude and frequency of poten-
tial visible plume impacts in these Class II areas.” Id. at 3. The NPS
suggested that, at a minimum, VDEQ “require a NOx limit of 42 ppm
at all loads for the turbines Commonwealth Chesapeake has chosen.”
Id. at 2 (emphasis in original). The NPS also suggested that a lower
NOx limit would minimize the contribution of the CCC plant to nitro-
gen loading in Chesapeake Bay.

VDEQ responded to the first NPS comment letter by way of a
reply dated January 10, 1996. See Attachment 9 to VDEQ’s Response
to Petition No. 96-2. With respect to the 25 ppm NOx limit which the
NPS said had been achieved by a plant in Georgia, VDEQ noted that

3 The Region's comments did not include a cost analysis of SCR as BACT for the CCC plant.

" The Clean Air Act provides that, notwithstanding that the emissions from a proposed facil-
ity do not cause or contribute to exceedances of the Class I increment in an area, a permit may
not be issued where the FLM demonstrates to the satisfaction of the State that the facility's emis-
sions will have an adverse impact on “air quality related values,” including visibility, at a Class I
area. Clean Air Act § 165(d(2)(c)Gi), 42 U.S.C. § 74752 OG; see also 40 CFR. § 52.21(p)(4).
A permit issuer is required to “consider” a visibility analysis performed by the FLM that shows
that a new source may adversely impact visibility in a Class I area. 40 CFR. § 52.21(p)(3). No
similar consideration is mandated for a visibility analysis performed with respect to a Class II area.
See id, see also infra n. 18.

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776 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

the limit was actually based on using gas as fuel, and not oil. VDEQ
stated that based on information available in EPA’s BACT
Clearinghouse, the limits established in the CCC proposed permit
were valid. Id. at 1. VDEQ further stated that a visibility analysis was
only required for Class I areas; that the permits 10% opacity limit
would not allow CCC to release any visible plume; and that, when
overall emission impacts were considered, implementation of the CCC
project would substantially decrease NOx and SO2 emissions because
the plant would displace some generation from existing sources hav-
ing higher emission rates than the rates proposed for CCC. Id. at 2.
VDEQ stated that the ground level concentration of NOx was pre-
dicted to be only 0.311 _g/m}, and that only a fraction of that would
go into the Bay. Id. at 2. Again, VDEQ stated that the effect of the pro-
ject should be an overall decrease in nitrogen loading to the Bay,
because the plant would displace power generated from existing
sources with higher emissions levels. Id. at 2.

In a second comment letter dated April 12, 1996, the NPS advised
VDEQ that:

[W]e learned [that] EPA informed the VDEQ that high
temperature selective catalytic reduction (SCR) catalysts
are now available that could be used to control NOx
emissions from the [CCC] turbines. * * * Our calculations
indicate the NOx emission rate with SCR would be 26.2
ppm, close to the 25 ppm rate we modeled. We, there-
fore, urge you to require [CCC] to install SCR on the tur-
bines, as even a 6 percent increase in NOx emissions
control would substantially reduce the magnitude and
frequency of visible plume impacts * * *.

Letter from NPS to VDEQ at 1-2 (April 12, 1996). The NPS stated that
even though a visibility analysis was not required for Class II areas,
VDEQ should consider the effect of visible plumes which could
detract from visitors’ enjoyment of the Assateague Island NS and
Chincoteague NWR. Id. at 1. The NPS also contended that while a 10%
opacity limit might prevent visible plumes at the stack, it would not
preclude NOx conversion and visible plume formation downwind. Id.

VDEQ responded to the second NPS comment letter in a
response dated June 5, 1996. Letter from VDEQ to NPS (Attachment
10 to VDEQ’s Response to Petition No. 96-2). VDEQ explained that it
had forwarded the information received from EPA on high-tempera-
ture SCR to CCC for consideration, and had evaluated the information
itself. Based on its evaluation, VDEQ agreed with EPA that the type of

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COMMONWEALTH CHESAPEAKE CORP. 777

SCR suggested by EPA (using zeolitic catalysts) could be operated at
the temperatures expected in the CCC turbines. However, based on
CCC’s cost estimates and VDEQ’s BACT analysis, VDEQ concluded
that the technology was “prohibitively costly” at an incremental cost
of over $8500 per ton of pollutant removed (compared with the $2202
incremental cost per ton at the PREPA facility), and did not represent
BACT because it was economically infeasible. See id. at 1."°

The record includes a detailed cost analysis prepared by CCC,
comparing the incremental cost effectiveness of SCR technology for its
project with that of the PREPA facility."° Letter from CCC to VDEQ
(April 22, 1996). CCC pointed out in its cost analysis that while the
technology has not yet been applied to facilities similar to CCC, the
smaller PREPA plant “which has a maximum exhaust flow substantial-
ly lower than our units would be the closest in size when it is put into
service.” Id. at 1. CCC further noted that the PREPA facility is permit-
ted as “a baseload facility rather than a peaking facility, which sub-
stantially decreases unit removal costs for the PREPA facility. * * *
Costs are higher for our units because they are substantially larger
than the PREPA units. * * * [T]he PREPA units would be run on a con-
tinuous basis. In contrast, our units would rarely operate as much as
400 hours [each] per year. The substantial capital costs combined with
infrequent operation of our facility, result in much high [sic] unit
removed expenses for our plant than for PREPA.” Id. The record
includes CCC’s line-by-line cost estimates for direct and indirect costs
associated with implementing the SCR technology (assuming the CCC

'5 CCC’s cost estimate concluded that the incremental cost of adding SCR technology was
over $10,000 per ton, but VDEQ discounted some of CCC’s cost assumptions in performing its
own BACT analysis. See Engineering Analysis at 10.

© “Incremental cost effectiveness” (i.e., dollars per incremental ton removed) is calculated
by dividing the incremental cost of a control option (cost of control option minus cost of next
control option) by the incremental rate of emissions controlled (next control option emission rate
minus control option emission rate). See Draft Manual at B.41. In this instance, SCR is the “con-
trol option” and water injection is the “next control option”. The cost is calculated by dividing
the difference between the total annual costs for SCR and the cost of water injection ($8,308,756
SCR cost - $0 water injection cost = $8,308,756, in VDEQ's calculation) by the difference between
emission rates for water injection and SCR (1218.3 tpy water injection emission rate - 243.66 tpy
SCR emission rate = 974.64 tpy additional emission reduction through the use of SCR). Because
a water injection system is an integral component of the combustion turbine, there is no addi-
tional cost associated with use of that technology for NOx removal. See Engineering Analysis at

11. Thus, the incremental cost effectiveness of SCR technology for the CCC project is calculated
    as follows:

$8,308,756 = $8524.95 (incremental cost per ton
1218.3 - 243.66 of pollutant removed)

Id.

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778 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

plant operates for the maximum number of hours allowed under the
permit, 2000 hours per turbine per year), together with the line-by-
line estimates for the PREPA plant (assuming a continuous operation
of 8760 hours per year). Id.; Letter from CCC to VDEQ (April 24, 1996)
(with PREPA costs attached). In performing its analysis, CCC adopted
the same estimating factors used by PREPA in performing its analysis,
with certain exceptions reflecting differences in the size and type of
the two projects. See id. Based on CCC's analysis, VDEQ concluded
that installation and operation of SCR technology would result in
$8,308,756 in increased annual expense, while reducing NOx emis-
sions by 974.64 tpy, for an incremental cost per ton of NOx removed
of $8524.95. Engineering Analysis at 11.7 In contrast, the PREPA
analysis showed that SCR technology at that facility would result in an
increased annual expense of $4,052,582, while reducing NOx emis-
sions by 1,840 tpy, for an incremental cost per ton of NOx removed
of $2202. Letter from CCC to VDEQ (April 24, 1996), attachment at 2.

Neither petitioner has offered any specific information that sug-

• gests that VDEQ erred in establishing the NOx emissions limits in the
  permit or in concluding that high-temperature SCR was not BACT for
  the project because it was not cost-effective.'* In the absence of any
  information in the record that contradicts VDEQ’s findings with
  respect to CCC’s cost analysis, we cannot say that VDEQ clearly erred
  in concluding that high-temperature SCR was not BACT for this pro-
  ject because of the high costs estimated to implement the technology.
  The Board has explained that:

In determining whether BACT for a pollutant should
be based on a particular control technology, the per-
mit issuer must consider the economic impacts of
using the control technology. See 40 C.F.R. §
52.21(b)(12) (BACT definition). The determination of
economic impacts focuses on whether the control
option under consideration would be cost-effective,

'" See supra n. 16. CCC notes that the incremental cost it calculated is based on a full 2000
hours per unit per year of operation. Under “likely operating conditions” as a peaker power plant,
CCC contends that a more realistic estimate of usage is between 200 and 400 hours per unit per
year, with costs per ton of NOx removed rising to the range of $50,000 to $100,000. Letter from
CCC to VDEQ (April 24, 1996) at 3.

" As to visibility effects, the regulations do not require VDEQ to perform a formal visibili-
ty analysis in Class II areas. See 40 C.F.R. § 52.21(p)(3). Nevertheless, VDEQ did consider and
address potential visibility impacts, and concluded that the permit’s NOx emissions limits were
appropriate in light of the permit’s 10% opacity limit, and the anticipated overall NOx reduction
due to the project’s implementation.

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COMMONWEALTH CHESAPEAKE CORP. 779

measured in terms of “the dollars per tons of pollutant
emissions reduced.” New Source Review Workshop
Manual at B.31. * * * The “average cost-effectiveness”
of a particular technology is calculated by dividing the
average annualized cost of installing and operating the
control technology by the tons per year of pollutant
that the technology would remove. Id. at B.37. This
cost-effectiveness figure is then compared with what
other companies in the same industry have been
required to pay in recent BACT determinations to
remove a ton of the same pollutant. In most cases, a
control option is determined to be economically
achievable if its cost-effectiveness is within the range
of costs being borne by other sources of the same type
to control the pollutant. /nter-Power at 7; New Source
Review Workshop Manual at B.44. “In the absence of
unusual circumstances, the presumption is that sources
within the same source category are similar in nature,
and that [they can bear the same} costs and other
impacts.” Id. at B.29.

Masonite Corp., 5 E.A.D. at 564 (also noting that incremental cost-
effectiveness should be calculated). In this instance, the cost analysis
prepared by CCC and reviewed by VDEQ showed that CCC’s incre-
mental costs in implementing high-temperature SCR would be nearly
four times the incremental per-ton costs incurred by the only other
similar source to have utilized the technology. Petitioners have the
burden of proof of establishing that this determination is clearly erro-
neous. Yet, they have provided no information that suggests that
CCC’s cost analysis overstates the cost of the technology or that a
$8500 per ton figure is “within the range of costs being borne by other
sources of the same type to control the pollutant.” In these circum-
stances, it was not clear error for VDEQ to reject high-temperature
SCR as BACT for NOx emissions from the CCC project.”

3. Alleged Contribution to Acid Rain

Petitioner Elizabeth Trader contends that CCC plant emissions will
contribute to harmful acid rain. Petition No. 96-2 at 2. In its response

1 We note that both VDEQ and CCC focused their cost analyses on the incremental cost
effectiveness of SCR rather than the average cost effectiveness. Both average and incremental cost
effectiveness should be considered in evaluating a control option. See Draft Manual at B.35, B.41
(“The incremental cost effectiveness should be examined in combination with the average cost

Continued

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780 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

to comments received during the public hearing, VDEQ explained
that the permit conditions represented BACT for sulfur dioxide (use
of 0.05% sulfur fuel) and NOx (use of 0.05% fuel bound nitrogen fuel
and water injection), chemicals that are precursors to acid rain.
VDEQ's Public Hearing Response at 2. VDEQ went on to State, rela-
tive to the Clean Air Act’s (CAA) acid rain provisions:

[T]he Clean Air Amendments of 1990 *** focused on
coal utility boilers to combat acid rain. Phase I of the
Acid Rain provision affects units emitting 2.5 pounds
of SO2 per million British thermal units (b/mmBtu).
Phase II affects units emitting 1.2 lb/mmBtu. CCC will
emit 0.3 lb/mmBtu. Coal boilers emit over 30,000 tons
of SO2 and 7800 tons of NOx. The combustion turbines
at CCC are much cleaner units, with proposed emis-
sions of 258 tons of SO2 and 1218 tons of NOx.

Id. See also CAA § 401 et seq., 42 U.S.C. § 7651 et seq.

On appeal, the petitioner has merely reiterated the comment
made during the public hearing, without explaining why the State’s
response is clearly erroneous. Review on the basis of this issue must
therefore be denied. See supra n.11; Envotech, L.P., 6 E.A.D. at 268.

effectiveness in order to justify elimination of a control option.”). Average cost effectiveness
reflects the total annual cost of a control option, divided by “annual emission reductions.” Id. at
B.36. Annual emission reductions are the difference between the baseline (uncontrolled) emis-
sion rate and the control option emission rate. Utilizing this formula, VDEQ calculated the aver-
age cost effectiveness of SCR as follows:

$8,308,756 (cost of SCR)

7809.60 (Baseline emission rate) - 243.66 (SCR emission rate)

Engineering Analysis at 11. This formula yielded an “average cost effectiveness” figure of $1098.18
per ton. Id. There has been no contention that this figure undercuts VDEQ's conclusion that SCR
is not BACT for the CCC plant, and in any event, based on the record, the figure appears unre-
alistically low, VDEQ’s calculation does not account for the fact that significant emission controls
are achieved with the water injection technology that is inherent in the combustion turbines prior
to adding SCR. The Draft Manual explains that:

When calculating the cost effectiveness of adding post process

emissions controls to certain inherently lower polluting

processes, baseline emissions may be assumed to be the emis-

sions from the lower polluting process itself. In other words,

emission reduction credit can be taken for use of inherently

lower polluting processes.
Draft Manual at B.37. If the baseline emission rate in the above formula is adjusted to reflect emis-
sions after water injection (i.e. a baseline emission rate of 1218.30 tons per year rather than the
uncontrolled rate of 7809.6 tons per year) then the formula yields an average cost effectiveness
for the SCR technology that is identical to the incremental cost effectiveness.

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COMMONWEALTH CHESAPEAKE CORP. 781

4. Non-Air Quality Related Impacts

Petitioners Elizabeth Trader and Marvel Wimbrow contend that
construction of the plant will result in depletion of ground water
resources. See Petition No. 96-2 at 3, Petition No. 96-4 at 1. Petitioner
Elizabeth Trader also contends that construction of the plant will con-
vert agricultural land to industrial use; that the plant will be exces-
sively noisy; and that the community is not equipped to manage a
potential fire at the plant. Petition No. 96-2 at 2-3. As to groundwater
impacts, VDEQ has explained that consumption of groundwater by
CCC will be addressed through review of a “ground water withdraw-
al application” from CCC. See Letter from VDEQ to Petitioner Dorothy
Bonney (March 15, 1996). As this concern does not directly implicate
the conditions of CCC’s permit, or significantly affect the BACT deter-
mination, and in any event will be addressed in a separate proceed-
ing, it was not clear error for VDEQ to elect not to address it in the
PSD permit proceeding. As to petitioner's other non-air quality relat-
ed concerns. VDEQ has referenced a State policy pursuant to which
non-air quality related concerns such as “the suitability of a proposed
facility to a specific location” will be determined by local planning
and zoning authorities, while VDEQ confines its permitting inquiry
only to air quality related concerns. See VDEQ’s Response to Petition
No. 96-2, Attachment 14 (“Virginia State Air Pollution Control Board
Suitability Policy Statement”). To the extent that the State has discre-
tion to consider non-air quality related concerns as part of the PSD
permit review process, we cannot say that VDEQ clearly erred in this
case in deferring to the State policy and choosing to leave those issues
to be addressed through the local planning and zoning processes.
Review on the basis of these issues must therefore be denied.

III. CONCLUSION

For the foregoing reasons, Petition No. 96-5 is hereby dismissed
for lack of standing. Review of Petitions 96-2, 96-3 and 96-4 is here-
by denied for the reasons stated above.

So ordered.

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