A modification as defined under the Clean Air Act is an increase in any air pollutant or regulated contaminant, pure and simple. Perhaps we're already dealing with BACT or something but it sounds mysterious, not clear.

Then the second part of the justification (in the post) says that the operator shouldn't have to pay for it. Do us taxpayers pay for it or what?  Does the operator just get off Scott-free?

I will readily admit that Stephen Johnson is not my favorite EPA Administrator, possibly one of the worst. The Boosh administration asked for last-minute changes to create the "Boosh Legacy" and I hope Johnson is stopped from doing anything until a reasonable person can be appointed.
sammie

Onward through the fog

A modification as defined under the Clean Air Act is an increase in any air pollutant or regulated contaminant, pure and simple. Perhaps we're already dealing with BACT or something but it sounds mysterious, not clear.

It's referring to infrastructure modifications. The original idea back in the 70s was that to force every existing polluter to install new pollution reduction equipment would be too draconian. But since existing plants would eventually have to be upgraded or replaced, it would be logical to require the anti-pollution installation then. This was the concept of New Source Review.

The Bush admin has tried to gut this in many ways. The case in question here involves accounting tricks - allowing a method of measuring emissions increases which wouldn't trigger NSR (whose threshhold has already been severely undermined.)

Then the second part of the justification (in the post) says that the operator shouldn't have to pay for it. Do us taxpayers pay for it or what?  Does the operator just get off Scott-free?

Nobody would pay for it, since it wouldn't be done at all. (Though they also try to hedge their bets here - the admin has also sought ways to get PUCs to allow utilities to raise rates to make consumers pay for any NSR installations which do have to be undertaken.)