The real conflict here concerns who is the appropriate entity to identify the facility's purpose or basic design. Petitioners essentially maintain that this role falls to IEPA, independent of how the applicant articulates the project in its permit application. In this regard, Petitioners argue that requiring Prairie State to consider using low-sulfur coal would not redefine Prairie State's proposed Facility on the grounds that "[t]he basic purpose of the facility would remain the same: the production of electricity, from coal" and that requiring the use of low-sulfur coal "would not call into question the existence of the power plant." Response to OAR's Brief at 10. Petitioners' argument, however, does not explain how the permit issuer is to identify the proposed Facility's basic purpose and, thus, it offers no clear standard for doing so.21 We must reject this approach and instead conclude the statute contemplates that the permit issuer looks to how the permit applicant defines the proposed facility's purpose or basic design in its application, at least where that purpose or design is objectively discernable, as it is here.

Our conclusion flows from the specific statutory words and phrases identified both by Petitioners and OAR and from Congress' establishment of the PSD program as a permitting system that is initiated by an application from the owner or operator of a proposed source. In essence, the statute contemplates that the process for issuing a PSD permit involves, among other things, the following: (1) a "permit application;" (2) an analysis of the ambient air quality, which may be conducted by "the major emitting facility applying for such permit;" (3) notice of the "permit application" to the Federal Land Manager in certain circumstances; (4) an opportunity for public comment regarding "the air quality impact of such source, alternatives thereto, control technology requirements, and other appropriate considerations;" (5) the facility owner or operator's demonstration that emissions from the facility will not cause or contribute to violations of the NAAQS or PSD increments; and (6) a demonstration that the "proposed facility” is “subject to" BACT. CAA § 165, 42 U.S.C. § 7475. The specific statutory words in the definition of BACT (i.e., processes, methods, systems, and techniques) that Petitioners point to as including the "means" but excluding the "facility's 'end,' 'object,' 'aim,' or 'purpose" from BACT review must not be read in isolation, but instead are a part of a permit application process that requires the "proposed facility" to be subject to BACT. In this context, the permit applicant initiates the process and, in doing so, we conclude, defines the proposed facility's end, object, aim, or purpose that is the facility's basic design, which no doubt will be reflected in the permit applicant's schematic design for the proposed facility.

21 In this respect, Petitioners' argument suffers from the same criticism they level against OAR's "basic design" notion. Response to OAR's Brief at 3 (stating that OAR "would add a preliminary step to its traditional top-down BACT analysis: a permitting agency would designate (according to no clear standards beyond the applicant's say-so) certain elements of the applicant's preferred design as 'basic,' or 'fundamental,' and eliminate any pollution controls that would alter those elements").

Looking in the first instance to how the permit applicant defines the proposed facility's purpose or basic design in its application not only harmonizes the BACT definition with the permit application process in which the definition must be applied, but also is consistent with the Agency's long-standing policy against redefining the proposed facility.22 When the Administrator first developed this policy in Pennsauken, the Administrator concluded that permit conditions defining the emissions control systems "are imposed on the source as the applicant has defined it" and that "the source itself is not a condition of the permit." In re Pennsauken County, N.J., Res. Recovery Facility, 2 E.A.D. 667, 673 (Adm'r 1988) (emphasis added); see also In re Old Dominion Elec. Coop., 3 E.A.D. 779, 793 n.38 (Adm'r 1992) ("Traditionally, EPA has not required a PSD applicant to change the fundamental scope of its project."); In re Spokane Reg'l Waste-to-Energy, 2 E.A.D. 809, 811 n.7 (Adm'r 1989) (same).

For these reasons, we conclude that the permit issuer appropriately looks to how the applicant, in proposing the facility, defines the goals, objectives, purpose, or basic design for the proposed facility. Thus, the permit issuer must be mindful that BACT, in most cases, should not be applied to regulate the applicant's objective or purpose for the proposed facility, and therefore, the permit issuer must discern which design elements are inherent to that purpose, articulated for reasons independent of air quality permitting, and which design elements may be changed to achieve pollutant emissions reductions without disrupting the applicant's basic business purpose for the proposed facility.23

22 As explained further below in Part II.B.2.b, the Agency's policy counsels against redefining the facility's basic design, but also reserves "the discretion to engage in a broader analysis if [the states] so desire." NSR Manual at B.13.

23 OAR specifically recognizes that the applicant's definition of the facility's design must be "for reasons independent of air quality permitting." OAR Brief at 13. In this regard, we note that cost savings generally is not a sufficient purpose or objective that would justify treating a design element as basic or fundamental. Instead, cost is generally considered at step 4 of the top-down BACT review method. NSR Manual at B.8, B.26-.45; In re Steel Dynamics, Inc., 9 E.A.D. 165, 202-07 (EAB 2000); In re Masonite Corp., 5 E.A.D. 551, 564 (EAB 1994); In re Inter-Power of N.Y., Inc., 5 E.A.D. 130, 135-36, 145-50 & n.33 (EAB 1994); In re Hibbing Taconite Co., 2 E.A.D. 838, 843 (Adm'r 1989) (requiring consideration of burning natural gas, rather than petroleum coke, notwithstanding the greater cost of natural gas). Likewise, the business objective of avoiding risk associated with new, innovative or transferable control technologies is not treated as a basic design element, but instead is considered under step 2 of the top-down method. NSR Manual at B.18 ("A source would not be required to experience extended time delays or resource penalties to allow research to be conducted on a technique. Neither is it expected that an applicant would be required to experience extended trials to learn how to apply a technology on a totally new or dissimilar source type."). Thus, when evaluating an applicant's assertion that a design element is fundamental, the permit issuer should consider whether the facts underlying that assertion are better considered within the framework of steps 2 through 5 of the top-down method, rather than grounds for excluding redesign at step 1.

In the present case, IEPA's findings in its Response to Comments, which were based on information submitted by the permit applicant, contradict Petitioners' unsupported assertion that the purpose of Prairie State's proposed Facility must be broadly viewed as the production of electricity from coal. In concluding that compelling use of low-sulfur coal would redefine the proposed Facility's basic design or purpose, IEPA properly considered Prairie State's objectives for the proposed Facility. In particular, IEPA found that the "source of coal for which the plant would be developed is a specific reserve of 240 million tons of recoverable coal." Response to Comments at 23. IEPA also found that this "specific reserve" of coal "would meet the needs of the proposed plant for more than 30 years." Id. For this reason, IEPA concluded that "the use of a particular coal supply is an inherent aspect of the proposed project." Id.; see also id. at 25 ("The development of a mine-mouth power plant is an intrinsic aspect of the proposed plant, which would be developed to use a specific reserve of fuel, which is adequate for the expected life of the plant."). IEPA's findings regarding the central purpose of the proposed Facility - production of electricity from a dedicated 30-year supply of coal - is supported in part by the fact that Prairie State submitted the permit application for the coal mine and electric generating plant as a single new source. Permit Application at 2-5.24 As such, the mine's pollutant emissions were included in Prairie State's air quality modeling and Prairie State's BACT analysis. Id. at App. B, Attach. B-1, App. C, Attach. C-5.

In the face of IEPA's specific findings regarding the proposed Facility's purpose and Prairie State's permit application for the co-located mine and power plant, we cannot infer, as Petitioners assert, that a change in coal supply "would not call into question the existence of the power plant," nor that “[t]he basic purpose of the facility would remain the same." Response to OAR's Brief at 10. To the contrary, the identification of a 30-year fuel supply under common ownership or control and co-located with the electric power generating plant would appear to be a valid purpose or objective that is independent of air quality permitting. While cost savings may be a factor, utilization of this particular coal resource is the primary objective. Petitioners certainly have not pointed to anything in the record

24 There is no suggestion in the record that Prairie State's proposed electric generating plant and mine are not appropriately classified in this case as one source under the applicable regulations and guidance. Stationary source is defined as "any building, structure, facility, or installation," which in turn is defined as "all of the pollutant emitting activities which belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same person (or persons under common control)." 40 C.F.R. § 52.21(b)(5), (6). A support facility may be considered to be a part of the same industrial group as the primary facility it supports even if the supporting facility would be classified in a separate group when operated independently. 45 Fed. Reg. 52,695 (Aug. 7, 1980); see also Letter from Robert B. Miller, EPA Region 5, to William Baumann, Wisc. Dept of Natural Resources, Regarding Oscar Mayer and Madison Gas & Elec. (Aug. 25, 1999).

that would contradict this conclusion.25

We also specifically reject Petitioners' contention that an electric generating facility's purpose must be viewed as broadly as "the production of electricity, from coal." Response to OAR's Brief at 10. We have frequently recognized that an electric generating facility's purpose may be more narrowly defined. For example, in Kendall New Century, we recognized that it was appropriate for the permitting authority to distinguish between electric generating stations designed to function as "base load" facilities and those designed to function as "peaking" facilities, and that this distinction affects how the facility is designed and the pollutant emissions control equipment that can be effectively used by the facility. In re Kendall New Century Dev., 11 E.A.D. 40, 50-52 & n.14 (EAB 2003) (noting that a change from base-load to peaking would redefine the proposed facility's design). It has also been long-standing EPA policy that certain fuel choices are integral to the electric power generating station's basic design. See NSR Manual at B.13 ("applicants proposing to construct a coal-fired electric generator, have not been required by EPA as part of a BACT analysis to consider building a natural gas-fired electric turbine although the turbine may be inherently less polluting per unit product"); In re SEI Birchwood, Inc., 5 E.A.D. 25, 29-30 n.8 (EAB 1994) (switch to natural gas would redefine coal-fired electric generating plant); In re Haw. Commercial & Sugar Co., 4 E.A.D. 95, 99-100 (EAB 1992) (switch from coal to oil-fired combustion turbine not required); In re Old Dominion Elect. Coop., 3 E.A.D. 779, 793 (Adm'r 1992) (switch to natural gas would redefine coal-fired electric generating plant).

We reject Petitioners' contention that the Agency's policy against using the BACT analysis to redefine the basic design of the proposed source has "no clear standards" or "lacks any principled standards." Response to OAR's Brief at 3, 12. We first note that the NSR Manual's guidance on "redefining the design of the source" applies only to "lower polluting processes." NSR Manual at B.13-.14. As such, the Agency's guidance does not allow the applicant's business purpose or design to preclude application of "add-on controls," including demonstrated and transferable technologies and innovative technologies. NSR Manual at B.11-.12. Also, in this context, OAR specifically recognizes that the applicant's design objectives must be "for reasons independent of air quality permitting." OAR Brief

25 We reject Petitioners contention that the Permit condition allowing Prairie State to use coal obtained off-site during limited interruptions in the mine-mouth coal supply is evidence that off-site coal would not significantly alter the design, scope, or purpose of the project. Response to OAR's Brief at 13-14. The limited circumstances in which the Permit would authorize use of off-site coal does not call into question IEPA's conclusion that permitting a co-located and co-owned 30-year coal supply for the proposed Facility is part of its fundamental purpose or basic design.

at 13. The NSR Manual also states with respect to production processes,26 that where “a given production process or emissions unit can be made to be inherently less polluting" "the ability of design considerations to make the process inherently less polluting must be considered as a control alternative for the source." NSR Manual at B.14 (emphasis added).27 Thus, viewing the proposed facility's basic design as something that generally should not be redefined through BACT review does not prevent the permit issuer from taking a "hard look"28 at whether the proposed facility may be improved to reduce its pollutant emissions. That hard look necessarily should include consideration of whether the permit applicant's basic design is "independent of air quality permitting." OAR Brief at 13.29

In the case of In re Knauf Fiber Glass, GmbH, 8 E.A.D. 121, 127 (EAB 1999), the Board concluded that the permit issuer had not taken a sufficiently hard look at the proposed facility's basic design. In that case, we noted that the permit issuer "attempted to explain" the reasons why certain other fiberglass production plants identified in the public comments were able to achieve lower PM10 emissions limits by referring to "patented process design techniques" that result in different processes used by other facilities. Id. at 136. The permit issuer asserted that requiring a lower emissions rate "would amount to a redefinition of the source" and that the BACT analysis was appropriately confined to the facilities employing the same proprietary process, i.e., only other facilities owned by the permit applicant. Id. We observed that EPA's history of regulating the fiberglass industry lent some support to the argument that different fiberglass production facilities employ proprietary process methods and that the Agency generally recognizes that those process differences "vary from firm to firm and product to product" and are both confidential and proprietary to the different facilities. Id. at 139-40. Nevertheless, we rejected the permit applicant's arguments and remanded the permit for a more detailed BACT analysis. We explained that the permit issuer's failure to take a sufficiently hard look at the design issues had the "potential to circumvent the purpose of BACT, which is to promote use of the best control technologies as widely as possible." Id. at 140. After remand, it was clear that a more thorough

26 The NSR Manual states that “[a] production process is defined in terms of its physical and chemical unit operations used to produce a desired product from a specific set of raw materials.” NSR Manual at B.13-.14.

27 OAR states that "EPA acknowledges that the potentially-applicable control options evaluated in the BACT review should include ‘inherently lower-polluting processes' as well as add-on pollution controls." OAR Brief at 4 (citing NSR Manual at B.10, B.13).

at 6.

28 OAR explains that BACT review requires a "hard look" at the proposed facility. OAR Brief

29 Thus, while we agree with OAR's statement that "an applicant's basic design is a matter solely within the expertise and discretion of the permit applicant," we also note that the assertion, and finding, that the design is for reasons independent of air quality permitting must be reasonable and supported by the record.