12/11/80

Delayed Compliance Orders Issued Under Section 113(d)(5) of the Clean Air Act

                            DEC 11 1980


SUBJECT:  Delayed Compliance Orders Issued Under Section
          113(d)(5) of the Clean Air Act


FROM:     Jeffrey G. Miller
          Acting Assistant Administrator
            for Enforcement


TO:       Regional Administrators
          Regions I-X


Introduction
     Since early in the coal conversion program, the Agency has
taken the position that EPA compliance date extensions (CDE's)
could be issued prior to the Federal Energy Administration
(FEA) issuance of a final prohibition order under the Energy
Supply and Environmental Coordination Act of 1974 (ESECA).  We
have continued this policy under the Powerplant and Industrial
Fuel Use Act of 1978 (FUA) in regard to delayed compliance
orders (DCOs) issued under Section 113(d)(5) of the Clean Air
Act.  However, several EPA Regional Offices have recently
raised questions about the appropriateness of this practice.
This memorandum responds to these concerns.  It affirms our
past legal position and states the policy rationale for
exercising this discretionary authority while at the same time
recognizing the need for a new approach toward determining
whether to issue a 113(d)(5) order to a source.


The Nature of the Problem
     By statute, a DCO can only be granted to a major
stationary source which has been prohibited from burning
petroleum products or natural gas by an order issued by the
Department of Energy.  Under ESECA, a prohibition order could
not be finalized or "made effective" by FEA's issuance of a
Notice of Effectiveness until EPA had certified or notified FEA
of certain statutorily required dates.  FUA provides that DOD
first promulgate a proposed prohibition order, then make
certain technical, financial, and environmental findings which
support the eventual issuance of a final prohibition order.
Final prohibition orders under both ESECA and FUA are major
federal actions under the National Environmental Policy Act
(NEPA) and, as such, cannot be issued until an Environmental
Impact Statement (EIS) has been finalized and published in the
Federal Register.


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     While EPA has issued CDE's or 113(d)(5) orders to fifteen
sources, only seven of these sources have received finalized
DOE prohibition orders.  DOE attributes problems in finalizing
such orders to difficulties in completing EIS's.  According
to DOE, this has frequently been due to inadequate and/or
incomplete analysis by particular contractors.  In any case, EPA
has been left, in the past, in the position of having issued a
CDE or 113(d)(5) order while the DOE order was later rescinded
or never made final.  Furthermore, because DOE EIS information
was either never available or only available after the decision
was made to issue a CDE or DCO, neither DOE nor EPA necessarily
had a complete understanding of the environmental impacts which
would be caused by a particular conversion to coal at the time
the CDE or DCO was being considered.


Continuation of Policy Regarding DCO Issuance Prior to DOE
Finalization of Orders
     DOE finalization of orders has taken approximately three
years in the past and DOE anticipates that FUA orders will
continue to take between two and three years.  Recipients of DOE
proposed prohibition orders are frequently sources ready to
switch to coal and capable of doing so without violating primary
ambient air quality standards. We believe that to require such
sources to wait approximately three years before they can burn
coal with the legal protection of an EPA DCO would contradict
the Agency's stated position to support environmentally
responsible coal use.  ( See, for instance, the Statement of
David G.  Hawkins, Assistant Administrator for Air, Noise, and
Radiation before the Subcommittee on Environment, Energy, and
Natural Resources, U.S. House of Representatives, 7/21/80. )
     Furthermore, experience has convinced us that EPA issuance
of a 113(d)(5) order is preferable to other courses of action.
Should a source begin burning coal without a DCO in violation
of SIP standards, an enforcement action would be appropriate.
The process of seeking an injunction and civil penalties is far
more resource-intensive than the process of DCO issuance.  As an
alternative to a 113(d)(5) order, an action under Section 110(f)
of the act is a less attractive option because issuance of a
Section 110(f) order does not involve establishment of
enforceable emission limits or schedules for covered sources.
A source which was granted a 110(f) petition would be able to
burn coal without controls, leading to increased emissions.
Moreover, in the past, sources have attempted in inappropriate
circumstances to invoke the emergency provisions of Section
110(f) in order to suspend the SIP and burn coal.  Such
petitions could increase if the DCO process were viewed as
ineffective.


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     We have concluded, therefore, that the most orderly and
effective enforcement action EPA can take with regard to
sources converting to coal is to use the statutory mechanism
of 113(d)(5).  In this way, the source is subject to an
enforceable schedule for installation of pollution control
equipment leading to compliance with the SIP.  Were we to
require final DOE orders before entertaining 113(d)(5) orders,
we would be likely to face an increase in SIP violations caused
by uncontrolled emissions of coal-burning facilities or increased
attempts to use Section 110(f) in a way that does not assure
eventual SIP compliance while burning coal.


Resolution of Concerns with Past Programs
     While for the above reasons, we will continue our policy
of not necessarily requiring a final DOE order under FUA before
issuing a DCO, we are also attempting to resolve two related
problems arising from DOE's past failure to complete the
necessary EIS work and to promulgate final ESECA orders.
     We recently communicated our concerns to the Assistant
Administrator of the Office Of Fuels Conversion (OFC), Robert
Davies, and members of his staff.  To help alleviate our
concerns, DOE has agreed henceforth to publish in the Federal
Register a Notice of Intent to Proceed in those cases in which
DOE staff are firmly committed to finalization of a proposed
prohibition order under FUA and for which a DCO is under
consideration.  In no case will EPA issue a DCO when a DOE
Notice of Intent to Proceed has not appeared.  Also, DOE will
not withdraw or rescind any proposed or final order which was
relied upon as the basis for issuance of a DCO.
     We also discussed DOE's preparation of EIS's and were
assured that DOE is firmly committed to carrying forward their
EIS work on coal conversions as expeditiously as possible.  We
emphasized to OFC that EPA issuance of 113(d)(5) orders is
discretionary ("...an order may be issued by the
Administrator...").  This means that in some circumstances, EPA
may choose to postpone issuance of a DCO or may, in fact, decide
not to issue one.  Environmental impacts other than the air
impacts under 113(d)(5) must be adequately assessed as soon as
possible in the DCO process.  We hope to turn around past delays
on EIS work so that we will have some significant progress
towards an EIS at the time of issuing a 113(d)(5) order.  DOE
anticipates completion of a regional EIS comprising 42 utilities
in the northeast by early 1981.  These findings should aid EPA
in making decisions as to when DCO issuance may pose problems
not related to air impacts.
     However, since even a draft EIS may not be available at
the time the 113(d)(5) order is submitted, we believe that EPA
has an obligation to make its own preliminary assessment of
possible impacts of coal-burning prior to issuing an order.  We
are developing a short questionnaire that can be completed by


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EPA air programs staff at the same time that the facility is
examined for assessment of necessary work on upgrading or
installing pollution control equipment.  Such problems as ash
disposal, coal pile runoff, and acid rain impacts will be
included.  EPA does not intend to take over EIS work on these
projects but rather intends to use such information as one
basis for decision-making regarding DCO's.  In a case in which
environmental impacts appear unusual or severe, the DCO work
could be postponed until DOE is able to do sufficient analysis
of the problem areas and arrive at plans for optimum mitigation
and, if appropriate, until the EIS process is completed.
     Other factors to be considered by EPA Regional Offices in
determining the appropriateness of proceeding with a DCO should
include:  The compliance status of the source at the time of
application; serious differences in modeling methods and/or
results arrived at by the applicant powerplant and EPA; and
State attitudes toward the planned conversion.  No one factor is
solely determinative in regard to DCO issuance, and each
application should be considered and discussed with care in the
light of all relevant circumstances.  We have emphasized to
DOE/OFC that decisions to issue DCO's will no longer be
relatively automatic but will require the thoughtful analysis
suggested here.
     In summation, we are committed to continuation of our
present policy of considering issuance of DCO's prior to DOE"s
issuance of final prohibition orders.  Any other course of
action would create delays of 2-3 years before DCO issuance and
coal burning, and would be likely to result in an increased
burden of EPA to take enforcement actions against violating
converters.  It is far preferable in the light of national
energy needs for EPA to aid in an orderly and expeditious
transition towards clean coal-burning by getting sources on
enforceable schedules by means of Section 113(d)(5).
     However, the statutory mechanisms must not be abused.  EPA
must be prepared to insure that each DCO is supportable by
findings based on the factors previously listed and by a
determination that DOE intends fully to complete all steps
necessary towards finalization of the proposed order, including
a complete and detailed EIS.
     If you have any questions concerning this memorandum,
please call Mary Douglas Dick of the Division of Stationary
Source Enforcement at FTS 755-0940.