UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

NOV 19, 1991

MEMORANDUM

SUBJECT: Applicability of PSD to Watertown Power Plant, South Dakota;

John B. Rasnic, Director

TO:

Douglas M. Skie, Chief

This is in response to your memorandum dated September 26, 1991, regarding the
applicability of PSD to a shutdown power plant upon reactivation. My staff has reviewed the
materials provided and we believe that the position Region VIII has taken thus far is consistent
with the EPA national policy.
The general policy on whether a shutdown plant if reopened would be subject to PSD as a
new source is set forth in a series of memoranda from the Stationary Source Compliance Division
(SSCD) starting with a September 6, 1978 memorandum from Edward E. Reich to Stephen A.
Dvorkin. According to SSCD guidance, whether a source which has been shut down is subject to
PSD review upon reactivation depends on whether the shutdown is considered permanent. EPA
evaluates permanence of shutdowns based upon the intent of the owner or operator. The facts and
circumstances of the particular case, including duration of the shutdown and the handling of the
shutdown by the State, are considered evidence of intent of the owner or operator. A shutdown
lasting for two years or more, or resulting in removal of the source from the emissions inventory
of the State, should be presumed permanent. The owner or operator proposing to reopen the
source would have the burden of showing that the shutdown was not permanent, and of
overcoming any presumption that it was. Also see the attached May 27, 1987 memorandum from
John S. Seitz to David P. Howekamp regarding Reactivation of Noranda Lakeshore Mines' RLA
Plant and PSD review.
In the case of the Watertown Power Plant (WPP), your staff has provided the following
information. The plant consists solely of a single unit, simple cycle, oil fired combustion turbine.
The WPP operated from 1979 until 1981 when the turbine failed. Extensive and costly repairs
were made and completed in 1982.

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Of the $1.5 million spent on repairing the turbine, $1.2 million was covered by insurance,
and more of the cost was recovered by litigation against the manufacturer. The net cost to restore
the turbine at WPP was $237,953.
Due to operating costs and diminished load growth, however, the Board of Directors
decided to place the plant on deactivated status until 1984 and decided again in 1984 and then in
1989 to continue the deactivated status. The SIP operating permit was allowed to expire.
Since 1982, the unit has been treated as being in cold standby, requiring 6-8 weeks to
reactivate. Information submitted to EPA thus far indicates that the plant has been maintained to
ensure its readiness. The September 13, 1991 letter to Mr. John Dale of your staff from the
Missouri Basin Municipal Power Agency (MBMPA) details what has been done during the entire
standby period to ensure readiness; thereby, validating the intent to reactivate. These actions
include maintaining two full time employees on site, and periodic testing and maintenance of the
system to ensure quick reactivation. It appears that reactivation of the plant would not require
more than a limited amount of time and capital. Further, the MBMPA has stated in a variety of
reports, starting from the early 1980s, their intent to reactivate the plant.
With the facts presented, which include an intent to maintain the turbine, WPP has
overcome the presumption that the shutdown was permanent. Therefore, although this plant has
been shut down for a period of time long enough to be considered permanently shut down, and
has relinquished its operating permits, the source has demonstrated their intent to treat the
shutdown as temporary. This is a unique situation given the very long period of the shutdown.
However, the continued maintenance of the facility throughout the years, the resulting ability to
bring the plant back on line with only a few weeks of work, and the statements of intent of the
owners at the time of shutdown and in subsequent years to reactivate the facility, all compel us to
concur with your determination that Missouri Basin has demonstrated that the shutdown was
never intended to be permanent. Therefore, given the evidence presented, reactivation of this
combustion turbine would not be subject to PSD requirements.
If you have any questions concerning our response, please contact Clara Poffenberger at
FTS 398-8709.
Attachments
cc:

John Dale, Region VIII

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

SEP 6 1978

OFFICE OF ENFORCEMENT

MEMORANDUM

SUBJECT:

PSD Requirements

FROM:

Director
Division of Stationary Source Enforcement

TO:

Stephen A. Dvorkin, Chief

In response to your memo dated June 29, 1978, we have consulted with the Offices of
General Counsel and Air Quality Planning and Standards and provide the following responses to
your questions regarding the applicability of several PSD requirements.
Q - 1(a). Is a source which shut down approximately four years ago because of an
industrial accident, and which was not and is not required to obtain a permit under a SIP, subject
to the requirements of PSD? This source was not subject to PSD requirements prior to March 1,
1978.
A - This is a question which we have not previously addressed, but we believe that EPA
policy should be as follows. A source which had been shut down would be a new source for PSD
purposes upon reopening if the shutdown was permanent. Conversely, it would not be a new
source if the shutdown was not permanent. Whether a shutdown was permanent depends upon
the intention of the owner or operator at the time of the shutdown as determined from all the facts
and circumstances, including the cause of the shutdown and the handling of the shutdown by the
State. A shutdown lasting for two years or more, or resulting in removal of the source from the
emissions inventory of the State, should be presumed permanent. The owner or operator
proposing to reopen the source would have the burden of showing that the shutdown was not

permanent, and of overcoming any presumption that it was. Under the facts you have given us,
we would presume that the shutdown was permanent, since it has already lasted about four years.
Consequently, unless the owner or operator of the source were to rebut that presumption, we
would treat the source as a new source for PSD purposes.
We assume that your statement that the source was not subject to the PSD regulations in
effect before March 1, 1978, means that it was not in one of the nineteen source categories listed
in Section 52.21(d) (1) of those regulations. A proposed new source which was not in one of
those categories would be subject to the PSD regulations promulgated on June 19, 1978,
unless (1) all required SIP permits had been obtained by March 1, 1978, and (2) construction
commences before March 19, 1979, is not discontinued for 18 months or more and is completed
within a reasonable time. See Section 52.21(i) (3), 43 FR 26406. Here, all required SIP permits
were obtained by March 1, since none was required. Consequently, the source would not be
subject to the new regulations, assuming that the reopening is commenced before March 19,
1979, is not discontinued for more than 18 months and is completed within a reasonable time.
If we were to treat the source as an existing source for PSD purposes, we would also
conclude that it is not subject to the new regulations.[SEE FOOTNOTE 1] No source on which
construction commenced before June 1, 1975, would be subject to those regulations. [SEE
FOOTNOTE 1] See Clean Air Act Sections 168(b), 169(4); 40 CFR 52.21(d) (1) (1977). Here,
since the source was in operation about 4 years ago, construction on it presumably commenced
before then, well before June 1, 1975. Hence, it would (presumably) not be subject to the new
regulations.
Q - 1(b). Would your answer to 1.a., above, change if the source is or was required to
obtain a SIP permit?
A - If the source shut down temporarily, it would not be required to obtain a PSD permit
in order to start up.

[FOOTNOTE 1] Application of this rule requires special guidance for multifacility sources which

construct in phases. Generally, if one phase of a multifacility source commenced construction by

June 1, 1975, all other mutually dependent phases specifically approved for construction at the

same time will also be "grandfathered". On the other hand, each independent

facility must have commenced construction individually by June 1, 1975, to have achieved

grandfather status. See 43 FR 26396, 19 June 1978.

On the other hand, if the source shut down permanently, it would, upon reopening, be
required to obtain a PSD permit unless the following two conditions were met: 1) the SIP permit
was obtained prior to 3/1/78 and 2) any construction necessary for reopening is commenced prior
to 3/19/79, is not discontinued for 18 months or more and is completed within a reasonable time.
Q - 2. Is the EPA required in all cases to forebear from issuing a PSD permit until a SIP
permit has been issued or is such forbearance required only when the source is subject to the
"Interpretative Ruling" (41 FR 55524, December 21, 1976)?
A - EPA should refrain from issuing a PSD permit prior to issuance of a SIP permit only
in cases where the source is also subject to the Interpretative Ruling. (See 43 FR 26402, column
3.)
Q - 3. In the evaluation of BACT, does equipment reliability play a part, i.e., should a unit
capable of 80% control with a 20% downtime, be preferred to a unit capable of 90% control with
a 35% downtime? Can backup equipment be required for BACT purposes?
A - Questions concerning BACT should be addressed to the Control Programs
Development Division in Durham, N.C.
Q - 4. For the purpose of determining what constitutes "air pollution control equipment,"
what is meant by the phrase ". . . normal product of the source or its normal operation"? (43 FR
26392, mid. col., June 19, 1978). Does that refer to the quantity or quality of the product or both,
i.e., if a baghouse collects 100% of the product, a settling chamber collects 20%, and without
some device no product is collected, what is deemed to be "air pollution control equipment"?
A - If a source (such as one which produces zinc-oxide) cannot capture any of its product
without the use of some type of control device, the least efficient control device used in the
industry will be considered vital to the process. For example, if sources in such an industry
typically employ either settling chambers or baghouses, potential emissions will be calculated as
the emissions from such a source with a settling chamber installed.
Q - 5. Do the provisions of Section 167 of the Clean Air Act, which refer to issuance of an
Order and seeking injunctive relief for PSD violations, create enforcement authorities independent
of those created in Section 113 for SIP violations, or do they simply incorporate Section 113 by
reference?
A - We believe that Section 167 provides the Agency with enforcement authority which

4
is not necessarily otherwise provided by Section 113. The Office of Enforcement is drafting

guidance on implementation of Section 167. This guidance should be completed shortly. In the
interim, the Agency should enforce against violations of the PSD requirements under the
mechanisms established by Section 113, generally. There is one important situation, however, in
which resort to Section 167 may be necessary. This would occur when a state had issued a permit
that EPA considered to be invalid. In this situation, we believe that Section 167 provides the
Agency with the authority to halt the construction of the source directly, without first having to
resort to the cumbersome process of seeking a judicial declaration that the state permit is invalid.
(See 42 FR 57473 (1977)). In this respect, Section 167 provides the agency with authority similar
to that provided by section 113(a) (5) and (b)(5) to prevent sources with invalid permits from
constructing in nonattainment areas. Please note, however, that no delegations for enforcement of
the PSD requirements have been signed yet, and so any action under Section 167 would have to
be taken in close coordination with DSSE, and any Section 167 orders would have to be signed
by the Administrator.
If you have any further questions on these issues, please contact Libby Scopino at FTS
755-2564.
Edward E. Reich

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

OFFICE OF
AIR AND RADIATION

MAY 27 1987

MEMORANDUM
SUBJECT:

Reactivation of Noranda Lakeshore Mines, RLA Plant and PSD Review

FROM:

John S. Seitz, Director

TO:

David P. Howekamp, Director

Pursuant to your recent request, this memorandum addresses the status of Noranda
Lakeshore Mines' roaster leach acid (RLA) plant in Arizona. Noranda is contemplating startup of
the RLA plant which has been shut down since 1977. The company contends that the shutdown
was not intended to be permanent, and therefore believes that the plant should not be subject to
PSD review.
Whether or not a source which has been shut down is subject to PSD review upon
reactivation depends on whether the shutdown is considered permanent. EPA evaluates
permanence of shutdowns based on the intent of the owner or operator. The facts and
circumstances of the particular case, including the duration of the shutdown and the handling of
the shutdown by the State, are considered as evidence of the owner or operator's intent. This
decision making framework follows the policy on plant reactivation which EPA set forth in 1978.
The September 6, 1978 memorandum which initiated this policy states: "A shutdown lasting for
two years or more, or resulting in removal of the source from the emissions inventory of the
State, should be presumed permanent. The owner or operator proposing to reopen the source
would have the burden of showing that the shutdown was not permanent,

and of overcoming any presumption that it was." Several memoranda later issued by SSCD
(August 8, 1980; October 3, 1980; July 9, 1982) applied this shutdown/reactivation policy.
In the case of Noranda's RLA plant, your staff has provided the following information.
The RLA plant, previously owned by Hecla Mining Company, was shut down by Hecla in 1977
due to market conditions. Reports issued by Hecla at the end of 1977 stated that the ALA facility
could be operational within one week. However, due to poor economic conditions Hecla decided
to terminate their lease for the ALA plant. In 1979 Noranda purchased the facility, but never
operated the ALA plant due to similar economic problems; the ALA plant itself has not operated
since 1977. The ALA plant was deleted from Noranda's operating permits in 1980, and Noranda'
remaining operating permits were surrendered in 1984. In 1986, the ALA plant was removed
from the State's emission inventory. Your staff has also indicated that the roaster may need at
least several hundred thousand dollars worth of work before being operable, and could not come
on line for approximately four months.
Since the ALA plant has been shut down for well over 2 years and has been removed from
the State's emission inventory, EPA presumes that the shutdownwas permanent. However,
Noranda has submitted documentation to Region 9 seeking to demonstrate that the shutdown was
not intended to be permanent. Included is a 1980 statement of intent for long term operation of
the facility, evidence of some search for toll concentrates of sufficient quality to allow operation,
and evidence of some level of custodial maintenance. The question which now arises is whether
the information submitted is sufficient to rebut the presumption of a permanent shutdown.
EPA evaluates the permanence of the shutdown based on the demonstrated intent of the
owner or operator to reopen the source. Facts and circumstances surrounding the shutdown,
including duration of the shutdown and the handling of the shutdown by the source and State, are
evidence of the owner's intent. In Noranda's case, the significant amount of time that has elapsed,
as well as Noranda's failure to maintain the operating permit, removal of the ALA plant from the
emissions inventory, and the time and capital that must be invested in the rehabilitation of the
plant in order to make it operable, are evidence that the shutdown was intended to be
permanent.

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There is not sufficient evidence of intent to reopen the source to regard this as a

temporary shutdown. Therefore, SSCD concurs with Region 9's determination that the source, for
PSD purposes, is permanently shut down, and must meet Federal PSD requirements for
construction and operation.
If You have any questions, please contact Sally M. Farrell at FTS 382- 2875.
cc:

Wayne Blackard, Region IX