EPA GRANTED A PSD PERMIT FOR KAHE UNIT 6, A LARGE OIL- FIRED ELECTRICITY-GENERATING UNIT OWNED BY THE HAWAIIAN ELECTRIC COMPANY ( HECO ) IN JANUARY 1979. IN APRIL 1982, EPA ISSUED A NOTICE OF VIOLATION ( NOV ) TO HECO FOR VIOLA- TION OF THE PERMIT'S EMISSION LIMITS FOR OXIDES OF NITROGEN ( NOX ) AND PARTICULATE MATTER ( PM ), BASED ON RESULTS OF A PERFORMANCE TEST CONDUCTED IN JULY 1981. AT AN ENFORCE- MENT CONFERENCE IN 1982, HECO ARGUED THAT IT WAS NOT POSSI- BLE TO MEET THE PERMIT CONDITIONS AND REQUESTED THAT EPA MODIFY THE PERMIT. EPA AND HECO HAVE BEEN NEGOTIATING OVER THE PERMIT LIMITS WITHOUT RESOLUTION SINCE 1982. HECO HAS BEEN IN VIOLATION OF THE PERMIT LIMITS SINCE 1981 AND IS REGION 9'S OLDEST SIGNIFICANT VIOLATOR. HECO HAS TRIED A NUMBER OF DIFFERENT TECHNIQUES BUT HAS FAILED TO ACHIEVE COMPLIANCE WITH THE PERMIT. IN FEBRUARY 1987, HECO APPLIED FOR A PSD PERMIT MODIFICATION TO RETROFIT KAHE UNIT 6 FOR NOX COMBUSTION CONTROL (LOW- NOX BURNER) AND TO COMPLY WITH NEW EMISSION LIMITS FOR NOX AND PM BY DECEMBER 1988. HECO ESTIMATES THE NEW PRO- JECT COST TO BE ABOUT $3,400,000. EPA REGION 9 INDICATED THAT HECO'S LATEST PROPOSAL WAS ACCEPTABLE IF EMBODIED IN A CONSENT DECREE WITH APPROPRIATE CONSTRUCTION AND COMPLIANCE SCHEDULES AND CIVIL PENALTIES TO RESOLVE THE ENFORCEMENT ACTION. HECO INITIALLY REFUSED, INSISTING THAT ITS NON