Department of Environmental Conservation

D E C banner

Background on RMRR from Final Regulatory Impact Statement (RIS)

Routine Maintenance, Repair, or Replacement (RMRR)

The regulatory exemption from the federal definition of "modification" for routine maintenance, repair, or replacement, known as the RMRR exclusion, has been subject to numerous court challenges and garnered significant discussion during the NSR workgroup meetings. A discussion of the statutory framework and the legal issues surrounding the interpretation and implementation of the RMRR provision is helpful to understanding the proposed amendments to Part 231 with respect to this issue.

The Act defines modification broadly as "any physical change in, or change in the method of operation, of a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted" (42 USC Section 7411[a][4]). A modification triggers permitting requirements under the CAA as well as the duty to install pollution controls (42 USC Sections 7475[a]), 7479[2][C]) and 7503[a]). By regulation, EPA exempted certain activities from the definition of modification, including maintenance, repair, and replacement activities. 'See also' 40 CFR Section 52.21[b][2][iii]).

To give full effect to the plain language of the CAA, which contains no exemption provision for the term "modification", Courts have construed the RMRR exclusion narrowly. As the Court explained in 'Alabama Power v Costle,' 636 F.2d 323 (1979), a case challenging the legality of EPA's then promulgated NSR rule, EPA does have discretion, in administering the Act's "modification" provision, to exempt from PSD review some emission increases on grounds of 'de minimis' or administrative necessity, however, such discretion is limited:

Implementation of the statute's definition of "modification" will undoubtedly prove inconvenient and costly to affected industries; but the clear language of the statute unavoidably imposes these costs except for de minimis increases. The statutory scheme intends to "grandfather" existing industries; but the provisions concerning modifications indicate that this is not to constitute a perpetual immunity from all standards under the PSD program. If these plants increase pollution, they will generally need a permit. Exceptions to this rule will occur when the increases are de minimis,. . .

(636 F2d at 400).

Consistent with 'Alabama Power,' EPA had, for over two decades, defined the RMRR exclusion as limited to "'de minimis' circumstances" ('see' 68 Fed Reg 61272 [Notice of ERP Rule, October 27, 2003]).

In the seminal decision 'Wisconsin Electric Power v Reilly', the Seventh Circuit Court of Appeals addressed the interpretation of "modification" and the extent of the RMRR regulatory exemption in the context of a proposed project at an electric generating facility ('Wisconsin Electric Power Company v Reilly,' 893 F.2d 901 [7th Cir. 1990] [en banc] ['WEPCO']). At issue in WEPCO was a proposed replacement program, termed a "life extension" program, which WEPCO submitted to Wisconsin Public Service Commission for approval. In support of the project, WEPCO stated that renovation of the emission units was necessary to enable them to operate beyond their currently planned retirement dates and would make the plant capable of generating at its design capacity until year 2010 ('id.' at 906).

The Court opined on two central issues, namely whether certain activities constituted a physical change within the meaning of the CAA and second whether, assuming the projects involved physical changes, did they constitute exempt RMRR activities. Notably, the Court rejected outright the argument that Congress intended to exclude like-kind replacements from the purview of a physical change:

[W]hether the replacement of air heaters and steam drums is a 'basic or fundamental change' in [defendant's facility] is irrelevant for our purposes, given Congress's directions on the subject: 'The term 'modification' means any physical change . . . .

('id.' at 908; 'see also id.' at 913 ["the modification provision applies to 'any physical change, without regard to cost', that causes an increase in emissions"] [emphasis added]). On the issue of how to interpret what activities constituted RMRR, the Court relied on EPA's policy guidance. That guidance stated that whether proposed work at a facility is routine, involves a case-by-case determination which considers four factors, namely the nature, extent, purpose, frequency, and cost of the work, as well as other relevant factors, to arrive at a common-sense finding. Having determined that the proposed work constituted a physical change and, thus, a modification, the Court went on to apply the four factors to determine whether the projects avoided classification as a modification as being RMRR. The Court concluded that the nature and extent of the proposed projects at WEPCO did not compare with other projects done in the industry, as WEPCO argued. The Court further concluded that the purpose, frequency and cost of the work demonstrated that the activities were not routine, but rather intended to extend the life of the units from their planned retirement dates and at a cost of at least $70.5 million. These facts, in the Court's view, provided strong indication that the projects were not routine. ('id.' at 912).

'United States v. Southern Indiana Gas & Electric Co.,' 245 F.Supp. 2d 994 (S.D. Ind. 2003) ('SIGECO') is also helpful in examining the routine maintenance issue. The Court in SIGECO addressed how broadly the RMRR exclusion should be defined in the context of a series of modifications at several power plants owned by defendants. Citing to 'WEPCO,' the Court stated:

The general rule is that any physical change to a unit which results in an increase in emissions constitutes a "modification" triggering compliance with the CAA. If the routine maintenance exemption were defined broadly, as Ohio Edison urges, the exemption would swallow both the rule and specific provisions of the Clean Air Act. More fundamentally, the exception for "routine maintenance, repair, or replacement" was not included by Congress in the Clean Air Act. This regulatory exception then must also be harmonized with the statutory language of the Clean Air Act. This Court concludes that if the broad definition given to "routine maintenance, repair, or replacement" by Ohio Edison were adopted, the regulation would be in direct conflict with the superceding and controlling language of the Clean Air Act

('id.' at 855).

Applying the four part test to each of the activities in question, the Court found that many of the projects were large in scope, expensive, involved outside contractors and increase in value to the units and were treated by the company as capital expenditures for accounting purposes. In other instances, the company failed to substantiate that the activities at issue were undertaken with such frequency that they could be considered routine ('id.' at 861).

More recently, and shortly after the last workgroup meeting, the U.S. Court of Appeals for the D.C. Circuit spoke to the issue of routine maintenance when it vacated the ERP Rule ('New York v. EPA II', 443 F.3d 880). The ERP Rule both defined and expanded the RMRR exclusion by providing that the replacement of components with identical or functionally equivalent components does not constitute a physical change as long as the cost of the replacement did not exceed 20 percent of the replacement value of the process unit and did not change its basic design parameters. The Court held that the ERP violated Section 111 of the Act in two respects. First, the word "any" in the definition "modification" means that all types of "physical changes" are covered and that an activity within the common phrase of "physical change" is subject to NSR when that activity results in an emission increase. Second, Congress defined modification in terms of emission increases, but the ERP would allow equipment replacements resulting in non-'de minimis' emission increases to avoid NSR, in violation of the express terms and clear intent of the Act.

In light of the foregoing, in particular the 'New York v. EPA II' decision, the Department believes that the question of how the term "modification" should be interpreted with respect to any regulatory exemption, including the RMRR exemption, is settled. The Act evinces a clear Congressional intent to broadly construe the term "modification", and neither expressly, nor impliedly, provides any categorical exemptions for particular activities or physical changes. Given the statutory framework, any exemption established by regulation must, by necessity, be of a 'de minimis' nature. Thus, the RMRR exclusion must be viewed in the nature of a narrow, 'de minimis' exclusion from NSR requirements rather than as a broad exemption or a measure providing regulatory flexibility.

The RMRR exclusion is currently embedded in the definition of the term "modification" in existing Part 200. To clarify the Department's intent with respect to RMRR, Part 200 will be amended to include a definition for RMRR. Whether work done at an emissions source constitutes RMRR will continue to be determined on a case-by-case basis by examining the nature and extent, purpose, frequency, and cost of the activity. Generally, RMRR refers to activities which are undertaken on a prescribed and/or regular schedule, limited in scope and expense, and typically paid for out of the operation and maintenance budget of the facility. RMRR generally does not refer to activities that are infrequent, large in scope, extend the life of the facility, or result in the regaining of lost capacity or availability.

Some activities which might qualify as RMRR in the case of an electric generating facility, for example, include the following: cleaning of a boiler and related ductwork to facilitate maintenance access and inspections; inspection of the furnace and gas path; inspection including non-destructive examination of known trouble areas; individual tube repair/replacement; inspection of tube shields and high erosion areas; inspection, repair and replacement of refractory in the slag necks and troughs; inspection and repair of ductwork and expansion joints; cleaning and inspection of boiler penthouses; water blasting, inspection, stud replacement and new refractory (cyclone fired boilers); inspection and repair of boiler casing, doors and inspection ports; inspection and repair of gas path deflection baffles and flow distributors; inspection and repair of all dampers (air and gas); removal, disassembling, inspection and repair of ignitors; cleaning, inspection and repair of external steam header vestibules; pressure testing water and steam tubing components; and chemical cleaning of water-side tubing to remove internal deposits.

During the workgroup meetings, but prior to the March 17th Federal Court decision, members of the regulated community expressed concern with the current practice of evaluating RMRR on a case by case basis and preferred the bright line test established by the ERP Rule. New York however, challenged the ERP Rule as clearly contrary to the CAA because it allowed potentially significant emission increasing activities to occur without the requirement for NSR review, under the auspices of a regulatory exemption. The Department agreed to discuss the RMRR issue during the workgroup process, but made clear that from the State's perspective, the ERP Rule was not a viable option for inclusion in a State NSR rule. The Department encouraged workgroup members to present alternative proposals and, in turn, presented concepts for discussion in addition to the four factor test. The Department's concepts included (1) a provision for predetermining RMRR activities in Title V permits, subject to public notice and comment; (2) relying on Title V operational flexibility provisions; and (3) utilization of PALs. Workgroup members did not present specific proposals and did not reach consensus on a particular approach to the RMRR issue. The Department believes that the four factor test is appropriate for inclusion in a regulatory definition in light of 'New York v EPA' II and that facilities which want to avoid case by case determinations and permitting review for modifications can avail themselves of other more appropriate regulatory flexibility discussed below.

  • Contact for this Page
    Division of Air Resources
    Part 231 Implementation Guidance
    625 Broadway
    Albany, NY 12233-3254
    Send us an email
  • This Page Covers
  • Page applies to all NYS regions