M E M O R A N D U M

TO: Gary S. Rose, Director Date Rec'd: 08/30/2011

FROM: James Grillo, APCE

Kiernan Wholean, SAPCE Richard A. Pirolli, Assistant Director

SUBJECT: BACT Recert ification for Montville Power LLC Biomass , Permit No. 1 07

- 0056

Pursuant to Part VII.F of NSR permit number 107

- 0056, issued on April 6

, 2010

, Montville Power LLC has submitted a BACT recertification analysis. The NSR permit requires that BACT be recertified if the project did

not st art construct ion within (18) months of the permit issue date. The following is a chronological accounting of
the BACT recertification process:

O n August 30

, 2011 Montville Power submitted a timely BACT analysis

. On September 20, 2011 the Department requested additional information by electronic mail to clarify several items in the submitted BACT analysis. (see electronic mail from J. Grillo) On April 11, 2 012 Montville Power submitted an analysis of fugitive GHG emissions from natural gas piping components and SF 6 emissions from electrical equipment. (see electronic mail from C. Karlic) On April 24, 2012 the Department notified Montville Power that a new BACT analysis was posted on the RBLC website and that they should include this determination in their submittal to the Department ’ s September 2011 request for additional information. (see electronic mail to C. Karlic)
On May 7, 2012 Montville Power submitted a revised BACT analysis in response to the Department ’ s previous requests for additional information.
On July 12, 2012 the Department requested additional information by electronic mail to clarify several items concerning the CO 2 BACT analysis. (see electronic mail from J. Grillo) On August 1, 2012 Montville Powe r submitted additional information in response to the Department ’ s July request. (see electronic mail from C. Karlic) On August 12, 2012 Montville Power submitted additional information clarifying the pro posed energy efficiency measures for the existing boiler. (see electronic mail from C. Karlic) On August 14, 2012 Montville Power submitted additional information supporting a higher emissions

li mit for SO 2 than a recently permitted source in Wisconsin. (see electronic mail from C. Karlic) On September 7, 2012 Montville Power submitted additional informatio n in response to the Department’s request s of August 21 st and 22 nd , 2012. (see electronic mail from C. Karlic)

The NSR permit th at was issued in April 2010 included a BACT review for the following pollutants: PM10/2.5, SOx, NOx , VOC, and CO. On January 28, 2011, t he Department adopted new regulations concerning CO 2 emissions from new sources and si nce Montville Power had not begun construction of the biomass project prior to these new regulations a complete BACT analysis of CO 2 emissions is required pursuant to RCSA 22a

- 174

- 3a(j).

The Montville project has been designed to operate with two distinct operating scenarios, one being a biomass only base load unit producing 42 MW (net) of electricity , the other a fossil fuel fired un it for peaking up to 82

MW.

### Montville Power LLC BACT Recertification 2012

2 

### Technical Analysis

A

. Criteria Pollutants:

Montville Power has identified five (5) recent ly permitted biomass plants using the EPA RACT BACT/LAER Clearinghouse (RBLC) and has made the following determinations concerning th eir project:

Beaver Wood Energy Fair Haven, LLC

– Vermont : February 10, 2012, N ew advanced stoker fired 34 MW gross biomass electric generating station has not been constructed or the emissions verified by stack testing.

Several pollutants had slightly lower emission rates or averaging times compared to the Montville project and can be compared in the table below:

Pollutant Beaver Wood Montville
NOx 0.06 lbs/MMBtu (hourly)

0.03 lbs/MMBtu ( 12

- month rolling) 0.06 lbs/MMBtu (24

- hour )

CO 0.075 lb/MMBtu ( 24

- hr block) 0.1 lbs/MMBtu (8

- hr block)
VOC 0.005 lbs/MMBtu 0.01 lbs/MMBtu

While these pollutants have lower emissions rates than the Montville permit, there are signific ant differences in the projects:

1

. The Beaver Wood project is a new construction project firing biomass only where as the Montville project is a conversion of a existing 82 MW E GU boiler firing natural gas/ No. 6 oil in addition to the
biomass at 42 MW. This unit will use a recently new and unproven proprietary technology from Riley P ower to control NOx, CO and VOC called a multi

- pollutant ca talytic reactor (MPCR). There

were no other ident ified biomass units with emiss ion rates for NOx, CO and VOC similar to the proposed Beaver Wood project.

2

. The Beaver Wood project is a biomass only fired boiler where as Montville will retain the ability to burn either natural gas or No. 2 ULSD fuel oil for peaking up to 82 MW. The emissions c ontrol system for the Montville project has been designed to operate with all three fuels at full load and achieve the permitted emission limit s

. There is no known facility either planned or operating that will be operate d like the Montville project.
3

. The hourly averaging time for NOx emissions compared to the 24

- hour time period for Montville is

unprove n for a variable fuel source such a biomass. Th e much lower emission rate associated with
the 12

- month r olling average also is unproven for boilers using this type of fuel.

4

. The lower CO emission is possibly achievable because the averag ing time is long er than the Montville project

, however the emission rate is still unproven at this time.
5

. The VOC emiss ion rate is lower using the new MPCR control system but it also not comparable to any other simila r biomass plant which leads to speculation of the val idity of the emissions rate and the ability of the unit to achieve this emissions rate.

The emissions rates and averaging times for the Beaver Wood project can be dismissed as BACT at this time as discussed above primarily bec ause the Beaver Wood project has been designed as a new source to be operated as a biomass only fired unit with a control system that appears to be unproven at this time as no other source has been identified to be using this control system

. Additionally, t he Montville project

### Montville Power LLC BACT Recertification 2012

3

will be required to operate with two distinct operating scenarios, one being a biomass only base load unit producing 42 MW of electricity , the other as 82 MW fossil fuel fired peaking unit

. There are no other identified projects similar to the Montville projec t where stringent emissions rates are being proposed with two distinct operating scenarios.

International Paper Company, Red River Mill

– Louisiana: April 5, 2011. Modification to an existing biomass plant allowing an increase of SOx emissions up to 60 lb s/hr. The Montville project has a SOx emission rate of 15 lbs/hr.

Oglethorpe Power Corporation, Warren County Biomass Energy Center

– Georgia: December 17, 2010.
Planned new construction of a fluidized bubbling bed boiler. Oglethorpe Power decided not to pursue the project.

Georgia Power Company, Mitchell Steam Generating P lant

– Georgia: December 3, 201 0. Conversion of a coal fired EGU to stoker fired biomass. None of the criteria pollutants in the Mitchell Steam Generating BACT determination are low er than the Montville project.

Laidlaw Berlin Biopower LLC

– New Hampshire: July 26, 2010 Conversion of an existing boiler to a bubbling fluidized bed biomass boiler . Similar to the Beaver Wood project discussed above, the Laidlaw project has not been co nstructed or the emissions verified at this
time and the emissions limitations should be not be considered as an achievable BACT and should be
dismissed as BACT.

The Department di d identify another recently permitte d utility sized biomass boiler that is currently under
construction in Wisconsin.

WE Energies is constructing a 50 MW dual fired, natural gas and biomass, fluidized bed boiler. While this is not the same technology as the Montville project it is discussed below because it is actually under construction and there is an expectation that the unit will meet the permitted emissions rate. Two pollutants in the Wisconsin permit have lower emission rates when compared to the Montville project
and are listed in the table below:

Pollutant WE Energi es Montville
PM10/2.5 0.024 lb/MMBtu/hr 0.02 6 lbs/MMBtu

SOx 8 lb /hr 15 lb/hr

T he WE Energies project is a fluidiz ed bed boiler and it will use a fabric filter baghouse to control PM emissions which may allow the unit to achieve the slightly lower PM emission rate. The Montville project will be a stoker boiler and fabric filters were rejected as BACT in the original permitting of this unit because of potential bag house fires. The Department has not identified any solid fuel stoker boilers using a ba g house to control PM emissions and therefore fabric filters are still considered technically
infeasible at this time.

While the SOx emissions rate for WE Energies is half of the Montville project it is unknown where the
emissions rate was derived from as t here was no BACT analysis completed for SOx emissions. It appears the sulfur content of the fuel may be representative of the local biomass supply as all of the

### Montville Power LLC BACT Recertification 2012

4

biomass for this unit will come from the adjacent mill. The WE Energies permit has a fuel sul fur limit of 0.35% by weight which would not equate to their permit limit of 8 lbs/hr. Using WE Energies sulfur limit, firing rate and the assumption that 100 % of the sulfur converts to SOx, the em issions rate would be
about 664 lbs/hr. During the public comment period, it was noted that allowable sulfur content in the permit did not equate to the permit emissions limit of 8 lbs/hr and that a BACT analysis for SO 2 should have been required. The state responded that the emissions rate was based on histori c data from an existing biomass unit at the mill and that the project would not need a BACT analysis for SO 2 since annual emissions would be below 40 tpy. T he Montville emissions rate is based on the default AP

- 42
emi ssi ons f

actor of 0.025 lb/MMBtu with t he fuel comin g from multiple sources with unknown sulfur

content s

. The WE Energies SO 2 limit does not represent any other permitted biomass emissions
limitation for SO 2

. Since the emissions rate for WE Energies is based on historical emissions data for

t heir fuel supply a similar rate should not be considered BACT at this time for the Montville project.

The Oglethorpe , Laidlaw and WE Energies projects are new fluidized bed units and while there are some criteria pollutants that have been permitted with l ower emissions rates than the Montvi lle project, as discussed above, they should be dismissed for the following reasons

. First, t he Montville project is proposed as a modification to
an exis ting source, where the existing boiler would be modified to allow stoker firing for biomass and conventional firing for fossil fuels. This modification would continue to use much of the ancillary equipment for the boiler. If Montville were required to install a fluidized bed fired unit to meet slightly lower emissions , the entire existing boiler and possibly some of the ancillary equipment would need to be removed which would greatly increase the cost of the project to the point where the project would not be constructed. Based on this, the
use of a fluidized bed boil er would be technically and financially infeasible for the project.

Criteria Pollutant BACT Recommendation :

Th e project as proposed would reduce criteria pollutants from fossil fuel firing as compared to existing operation
because the modification allows use of control technology installed for biomass to be used with fossil fuels and the modification requires switching from No. 6 fuel oil to ULSD.

Existing Emissions Rate (lbs/MMbtu) Post Modification Emission

Rate (lbs/MMBtu) Percent Reduction

Nat. Ga s No. 6 oil Nat. Gas ULSD Nat. Gas ULSD

NOx 0.20 0.25 0.06 0.06 70% 76 76%

CO 0.098 0.036 0.084 0.036 14% 0%

VOC 0.0055 0.005 0.0055 0.0014 0% 72%

PM 0.10 0.14 0.0076 0.024 92% 83%

SOx 0.0006 0.33 0.0006 0.0017 0% 99%

Based on the information su b mitted by permittee, the Department’s review and verification , the previously approved BACT for the criteria pollutants in the Montville Power C P/OP permit are considered adequate at this time and no further modification of the permit i s required for these pollutants. [RCSA 22a

- 174

- 3a(j)(5)]

### Montville Power LLC BACT Recertification 2012

5



### B

. Greenhouse Gase (CO2e):

On January 28, 2011, the Department incorporated a requirement to conduct PSD/ BACT analysis for CO 2 e emissions on new sources with potential emissions greater than 100,000 tons or more p er year. The project has potential emissions of CO 2 e

, including fugitive emission from the natural gas lines and circuit breakers, in excess of 500,000 tpy. Since construction did not begin before these new regulations became effective, the permittee is now required to evaluate PSD/ BACT for CO 2 e emissions from the source.

The CO 2 e BACT analysis submitted by the permittee is based on the March 2011 EPA guidance document for bioenergy production titled “Guidance for Determining Best Available Control Techn ology for Reducing Carbon Dioxide Emissions from Bioenergy Production”. This document along with the traditional 5

- step top

- down approach is the basis for this analysis.

I

. BACT for fugitive Greenhouse Gas (GHG) emissions.

There are several potential so urces of fugitive Greenhouse Gas ( GHG ) emissions outside of the combustion process for this source that have high global warming potentials. Sulfur hexafluouride (SF 6 ) is used as a dielectric insulator and arc quenching medium in modern circuit breakers. The natural gas supply line, pumps and valves will also have fugitive ( CH 4 ) emissions associated with this project. The emissions from these compounds would be relatively small when compared to the GHG emissions resulting from the combustion

proces s acco unting for less than 0.003 % of the total CO 2 e emissions for this source an d should be considered de

minimi s.

Montville Power has determined that it will not need to install a new circuit breaker for the project at this time. If during the final design it is determined that a new circuit breaker will be installed Montville power will implement measures to minimize fugitive SF 6 emissions by the use of a state

- of

- the

- art enclosed pressure circuit
breaker with leak detection to maintain SF 6 emissions to less than 0.5%/year (by weight). Montville Power has
estimated that the CO 2 e emissions from this type of circuit breaker to be 6 tpy.

The fugitive CH 4 emissions exist for all natural gas pipelines and preventative leak detection and maintenance
should be cons idered BACT for these emissions. Montville Power has an existing pipeline safety program consisting of visual inspections on a monthly basis and an annual leak detection analysis which is done by an outside vendor. The estimated fugitive CO 2 e emissions fr om the natural gas piping components are 10.9 tpy.

The fugitive emission are de minimi s , approximately 0.003% of the total CO 2 e emissions for the project, when compared to the combustion greenhouse gases. The above best management practices have been det ermined to
be BACT for these sources and no further analysis is required

. The permit shall be revised to include these best management practices and a ll fugitive emissions will be included in an annual CO 2 e emissions limitation.

II. BACT for Greenhouse Gas Emissions from Combustion

1. The permittee identified three potential BACT options for CO 2 e emissions: Biomass only as a renewable energy source Energy Efficiency improvements Carbon capture and sequestration

### Montville Power LLC BACT Recertification 2012

6

A. Biomass as BACT: On January 12, 2 011 EPA announced that they were deferring GHG permitting for industries that use biomass as they are evaluating whether or not biomass is “carbon neutral” and how the emissions from these sources should be accounted for. The Connecticut regulations promu lgated in January 2011 did not exempt biomass sources from GHG permitting. Based on the state’s current regulation requirements there is no presumption that biomass is “carbon neutral” or BACT for CO 2 e emissions and the Department therefore rejects biomas s only as BACT.

B. Energy Efficiency Measures: The permittee has identified several options to increase the overall plant efficiency to include the following: Replacement of the existing continuous fin economizer with a bare

- tube in

- line economizer whi ch is more appropriate for biomass firing.
Removal of a portion of the low temperature superheater (LTSH) i n order to prevent overheating of the tubes in the LTSH, to insure proper heating of the steam for the turbine, proper cooling of the flue gas
and to me et ASME code. Conversion of the existing air soot blower system to a steam soot blowing system and; Replacement of the air heater baskets with new baskets more appropriately designed for biomass firing

.

C. Carbon Capture and Sequestration:
Usi ng Carbon Capture and Sequestration (CCS) would actually remove the CO 2 from the exhaust stream and transport the captured gas to be stored in underground geological formations deemed suitable to retain the
CO 2
. Currently the only underground formations t hat have been considered to be adequate for underground sequestration are deep saline formations, un

- mineable coal seams, oil and gas reservoirs, organic rich shale
and basalt formations.

2. Technical feasibility of the identified options:

A

. Energy Ef

ficiency Measures The identified energy efficiency measures are technically feasible and will increase the heat transfer ability for the plant and will also increase the overall plant efficiency for all modes of operation. These efficiency measures were incorporated into the original proposed modification but would not be implemented unless the project was to be constructed. The modified unit was originally designed to operate on biomass and fossil fuels to be as efficient as possible for each fuel . Als o as noted in the previous section this modification results in decreased criteria pollutant emissions while firing fossil
fuels.

B

. Carbon Capture and Sequestration (CCS) The primary technical challenges to carbon capture in a boiler with flue gas cha rac teristics like this unit
are low CO 2 concentrations and high O 2 concentrations in the flue gas. There is currently limited minor scale carbon capture systems operating for similar plants and no known full scale carbon capture syste ms operating for biomass plants at this time

.

Even if carbon capture were technically feasible at this time, sequestration options are limited as the geologic conditions in New England do not allow for long term storage of CO 2. The US Departmen t of Energy’s 2010 Carbon Sequestration Atlas, 3 rd Edition (the “Atlas”) identifies seven separate carbon sequestration partnerships. None of the New England states are included in any of the partnerships. The

### Montville Power LLC BACT Recertification 2012

7

Atlas also estimates the sequestrat ion potential for all of the New England states as minimal to zero or not having been assessed for sequestration potential.

Since there are no full scale carbon capture applications currently operating and that there is no suitable
CO 2 storage sites available in the immediate area for sequestration

, CCS not considered tec hnically
feasible at this time.

3. Ranking of the remaining control technologies: Energy efficiency measures are the only remaining control t echnology and will be discussed further in Steps
4 and 5 below.

4. Evaluation of the most effective controls: The use of additional energy efficiency measures to increase heat transfer properties during biomass firing
has been determined to be the most ef fective control for the proposed project and are discussed below:

By replacing the existing continuous fin economizer with a bare

- tube in

- line economizer which is more appropriate for biomass firing it will increase the flue gas outlet temperature for the regenerative selective catalytic reduction system (RSCR) operation. The flue gas must remain within a certain operating range to meet the NOx emissions limit in the permit. If the flue gas temperature were to drop to below the minimum operating temperat ure, additional heat would need to be added to the flue gas reducing plant efficiency. The existing LTSH is configured only for fossil fuel firing and not for biomass. Removal of a portion of the low temperature superheater (LTSH) will prevent overheat in g of the tubes in the LTSH and insure proper heating of the steam for the turbine, proper cooling of the flue gas and to me et ASME code. Conversion of the existing air soot blower system to a steam soot blowing system which will be more
effective to remo ve the larger and harder to remove particulates that will be found in the fireside heat absorption surfaces. , and; Replacement of the air heater baskets with new baskets more appropriately designed for biomass firing to increase heat transfer efficiency to the combustion air used in the boiler.

The permittee detailed the above energy efficiency measures in their August 12, 2012 electronic mail to the Department.

5. Permittee’s Selection of BACT:
The RACT/BACT/LAE R Clearinghouse was reviewed to determine CO 2 BACT decisions for similar projects throughout the country. Beaver Wood Energy Fair Haven LLC to be located in Rutland, VT is the only biomass boiler with a CO 2 limitation listed in the clearinghouse . The Vermont project would be a new
482 MMBtu/hr wood fired boiler that has not begun construction . T he permittee identified several issues with the Vermont project when co mpared to their project

. The differences between the projects will be
discussed below

. Given these differences t he permittee has p roposed a combination of energ y efficiency

me asures, an enforceable numerical heat rate value and an annual limit on CO 2 e emissions as BACT.

A

. The permittee has proposed physical modifications to the existing equipment that will increa se the
overall effi ciency of the unit for all firing methods . The project has been designed to achieve the highest efficiency possible in order to minimize f uel use and pollutant emissions for both fossil fuel firing ( 82 MW) and biomass firing (40 MW). Without these change s the efficiency of the boiler while firing
biomass would be decreased.

### Montville Power LLC BACT Recertification 2012

8

B. The permittee h as proposed using heat rate as the method of determining actual thermal efficiency of the unit expressed as BTU/kW

- hr

. The permittee estimated the thermal efficienc y for the unit on a worst
case basis for each fuel, Table 1 of the submitted BACT analysis, using a The rmoflex model. (see
attachment ) The actual heat input w ill be determined using CEMS for each fuel. There are several methods that can be used to determine the heat input of the biomass and the permittee has requested that they have the option to decide on a methodology befo re actual commercial operation begi ns.

The permittee proposed to adjust the predicted Thermoflex heat rates to account for actual design, construction and operation variables of the unit. A design variable of 5% was used to account for changes b etween the preliminary design ing stages th rough actual construction of the plant . An operations variable of 15% was used to account for actual plant performance that will occur between major equipment overhauls. The operations variable also includes a correction for the CO 2 e emission
rates based on the expected type of fuel versus the default biomass CO 2 e emission rates found in 40 CFR
98.

Based on the abo ve information the permittee initially proposed the following energy efficiency and numerical
limitation s as CO 2 e BACT for the unit:

1. Pr oposed energy efficiency measures as discussed above.

2. A limit for the “ allowable heat rate” to determin e the plant efficiency to be calculated by the following equation: The sum of [(percent biomass heat input) x (17,448 Btu/kWh)] + [(percent natural g as input) x (13,594 Btu/kWh)] + [(percent ULSD heat input) x 12,828 Btu/kWh)]; and (Note: The heat rates for each fuel represent an actual measure of plant efficiency for that mode of operation and are to be considered an enforceable condition in the per mit)
3. An a nnual allowable CO 2 e limit of 556,012 tons/yr to be calculated by the following equation: The sum of [(biomass annual heat input) x 211.14 lb/MMBtu)] + [(natural gas annual heat input) x 117 lb/MMbtu)] + [(ULSD annual heat input) x 163.6 lb/MM Btu)]/2000

Department’s CO 2 e BACT Determination In reviewing the submitted BACT analysis t he Department has determined that the Beaver Wood Energy Fair Haven, LLC plant in Vermont is the only similar project listed in the RACT/BACT/LAER Clearinghouse with a CO 2 BACT limitation at this time. The Department identified o ne other one additional source , WE Energies
located in Wisc onsin, which has a permit limit of 3,12 0 lbs

- CO 2 /MW

- hr

. C onstruction has begun and the plant is expected to be operational in late 2013

.

The Department requested that the permittee evaluate the Wisconsin project on July 12, 2012 and the permittee responded to that request on August 1, 2012.

The Department has confirmed that these are the only two comparable biomass plants with a CO 2 limitation in
their permits and they are discussed below.

A. The Beaver Wood permit has incorporated CO 2 e BACT to include the following:

Implementing energy efficiency, good operating and maintenance practices,

An emission limitation of 2,993 lb

- CO 2 e/MW

- hr on a 30

- day rolling average. The use of a CO 2 CEMS to record actual CO 2 emissions. CO 2 e emissions will be calculated using the

### Montville Power LLC BACT Recertification 2012

9

default CH 4 and N 2 O emission factors found in 40 CFR Part 98, Subpart C, Table C

- 2 and the global warming potentials found in 40 CFR Part 98, Subpart A, Table A

- 1.

B. The WE Energies permit has incorporated CO 2 e BACT to include the following:

An emission limitation of 3,120 lb

- CO 2 e/MW

- hr over any consecutive 12

- month period.
The use of a CO 2 CEMS to record actual CO 2 emissions. No information on how or if CH 4 and N 2 O
emissions will be calculated.

It is important to note that n either of these two projects has been constructed at this time and that compliance with
the emission limit or averaging time s have not been v erified . (see electronic mail s from Steve Snook, Vermont
Air Pollution Control Division concerning the Beaver Wood project , dated 04/24/12 and 07/10/12 )

Montville Power has proposed energy efficiency measures and monitoring of the heat rate as a control option to
reduce CO 2 emissions. The main difference in Montville Power’s BACT proposal compared to the other two
identifi ed projects is that Montville has proposed a heat rate limit (Btu/kW

– hr) rather than a mass emission rate (lb

- CO 2 e/MW

- hr) limitation. The use of heat rate as a limitation on CO 2 emissions is a superior method of controlling emissions than using a mass emi ssion rate because plant efficiency directly affects CO 2 emissio ns. If
a mass emission rate were determined to be BACT for CO 2 , over time the plant’s efficiency would degrade and
the annual allowable CO 2 limit would be attained at a much faster rate

, limi t ing the plant’s ability to meet

ele ctrical obligations to the grid on an annual basis.

Since Mon tville Pow er did not propose a short term mass emission limitation in lb

- CO 2 e/MW

- hr their proposed
heat rate of 1 7,448 Btu/kW

- hr was converted to a mass emiss ion rate and it equates to 3,792 lbs

- CO 2 /MW

- hr.
While this is almost 27% higher than the Beaver Wood project there are significant differences in the “units of
measure” and they are discussed below:

As discussed earlier in the criteria pollutant BACT an alysis , the Beaver Wood project is a ne w, unconstructed source and not a modifi ed existing source as the Montville Project

. There are unkn owns concerning what the actual emissions for the Montville project will be because the project entails modifying a conventional gas/oil fired boiler to a solid fuel stoker boiler with a net electrical output of 42

MW , along with keeping the ability to fire limited fossil fuel at 82 MW . T he current Montville NSR permit requires the permittee to track and evaluate the criteria and HAP emissions over the first year of operation and determine if revised emissions are needed for any pollutants . This analysis was required because while BACT/PSD/LAER limits are incorpora ted into the permit there was and still is limited

ope rational information for a unit like Montville’s projec t

. The same methodology to track the traditional pollutants should be included in the permit for any CO 2 e limitations that are determined to be BACT for the project.

Another significant difference in the project s is the ability for Beaver Wood to show compliance with
their short term CO 2 e emission rate and averaging time . The Beaver Wood emission rate is essentially
based on the default emission factors found in 40 CFR Part 98 with no consideration f or design variations or plant efficiency loss between overhauls. The plant degradation variable has been used and approved in recent combined cycle CO 2 BACT analysi s and should be considered in determining BACT for the Montville project

.

### Montville Power LLC BACT Recertification 2012

10 Montville Pow er has identified that electrical output may vary approximately 2.5% from summer to winter which would affect their ability to meet a 30

- day rolling average (see May7, 2012 BACT submittal, T able 1). Beaver Wood’s 30

- day rolling average is a stringent averaging time and because
there was no consideration for seasonal environmental conditions for their BACT determination

, specifically ambient temperatures

, a similar averaging time may not be appropriate for the Montville project

. Many of the recent combined cycle CO 2 BACT analyses have set much longer averaging times

an d similar averaging times would be more applicable to Montville’s project. For these reasons, the
Beaver Wood CO 2 limitati ons should be dismissed as BACT.

When comparing the higher mass emission rate for Montville to the Wisconsin project s rates all of the
parameters need to be normalized between the projects include using the same electrical output (gross vs. net), heat rat e base on same load, moisture content of the fuel, same design variable adjustment, and
consideration of the CO 2 lb/MMBtu emission rates.

The permittee has detailed these differences in their August 1, 2012 submittal to the Department. After

re

- calculati ng the mass emission rates to make the two analysis equitable, the Montville project has an emission rate about 4% higher, 2,806 lbs/MW

- hr vs. the WE Energies project emission rate of 2,700
lbs/MW

- hr . These rates are based on the following assumptions:

1. heat rate based on gross electrical output.

2. heat rate based on 100% load over any consecutive 12

- month period averaging time.
3. heat rate based on 35% moisture in the fuel

4. no design or operational variables applied to the heat rate or em ission rate
5. emission rate based on 225.4 lb/MMBtu

After reviewing the above information, Montv ille Power revised their August 2012 CO 2 BACT to include the following:

1. Proposed energy effici ency measures as discussed earlier

. 2. A limit for the “ all owable heat rate” to determine the plant efficiency to be calculated by the following equation: The sum of [(percen t biomass heat input) x (1 5,564 Btu/kWh (gross )] + [(percent natural gas input) x ( 11,963 Btu/kWh) (gross) ] + [(p ercent ULSD heat input) x 11 ,769 Btu/kWh) (gross) ]; and (Note: The heat rates for each fuel represent an actual measure of plant efficiency for that mode of operation and are to be considered an enforceable condition in the permit)

3. An a nnual allowable CO 2 e limit of 590,104 tons/yr to be calculated by the following equation: The sum of [CO 2 CEM data ] + [(natural gas annual heat input) x 117 lb/MMbtu)] + [(ULSD annual heat input) x 163.6 lb/MMBtu)]/2000

Montville Power did not propose to use a CO 2 CEM as was required in the other b iomass project s . EPA has generally commented in previous combined cycle CO 2 BACT reviews that a CO 2 CEMS should be requir ed as it is a direct measure of CO 2 in the flue gas . The default emission factors found in 40 CFR
Part 98 can then be used for CH 4 a nd N 2 O to calculate the total CO 2 e as these emissions typically are less
than 2% of the total emissions and can be co nsidered de minimi s. Using a CO 2 CEMS will provide the
most accurate measure of annual emissions and should be considered as a compliance method for the Montville project.

### Montville Power LLC BACT Recertification 2012

11 GHG BACT Recommendation :

Based on the information submitted by permittee, the Departme nt’s review and verification of recent BACT reviews for similar biomass plants, staff recommends that the following CO 2 e limitations are BACT for this

source:

T he proposed energy efficiency methods discussed above, along with good operating and maintenance practices. Montville Energy shall submit to the Department document ation certifying that the energy efficiency methods have been incorporated into the plant at least 60

- days prior to commencement of commercial operation. [Note: good operating and maintenance practices will not necessarily reduce

CO 2 emissions but will aid in the assurance that t he plant is being operated properly. The current permit requires that the permittee develop a operating and maintenance plan (O&M) according to the manufacturer’s specifications and written recommendations and these practices will incorporated into the plan. ]

An enforceable heat rate of 15, 564 Btu/kW

- hr (gross) with a rolling 12

- month averaging period. Heat

i nput will be monitored by CEMS and the methodology to be used shall be acceptable to the department and the permittee . Gross electrical output will be the sum of the hourly data as met ered by the station

. An enforceable annual CO 2 e limit of 590,104 tons/yr.

I nstall ation a CO 2 CEMS to measure actual annual emissions

. The default emission factors found in 40
C FR Part 98 will be used to calculate CH 4 and N 2 O emissions from the combusti on process and then
added to the CEMS data to calculate the total annual CO 2 e emissions. Included in the annual CO 2 e emission limit shall be any estimated fugitive emissions from the SF 6 insulated electrical equipment and the natural gas piping components

. Additional monitoring and record keeping shall be required for the fugitive GHG emissions in NSR permit. The preventive measures for any fugitive CO 2 e emissions shall
be included in the facilities O&M Plan. The conditions of the O&M plan will be speci fied in the modified permit and will be considered to be an enforceable condition. The permittee will also track and
evaluate the heat rate of the unit and CO 2 e emissions over the first year of operation for all modes of operation and evaluate the need to revise the operating limits , design/operational variables and averaging periods at that time. The permittee shall be required to submit a report of this data which supports their conclusions for further permit modification.

Montville Power shall submit a non

- minor modification application for NSR permit number 107

- 0056 to incorporate the above changes into the NSR permit pursuant to RCSA Sections 22a

- 174

- 3a(a)(1)(J) and

- 2a(d)(4)(A) within 60

- days of receipt of this BACT approval.

A compliance review c onsistent with the D E EP Environmental Compliance History Policy was performed as part
of this BACT review. The complian ce history review using the SIMS Enforcement database was conducted along with a review of air program compliance as reported by the Com pliance and Field Operations Section of the Bureau of Air Management. Also, a review of the agency wide compliance information form submitted by the applicant was conducted in order to assess compliance with environmental laws within the past five years

.

James Grillo, APCE Date

REVIEW:

Kiernan Wholean Richard A. Pirolli Supervising APCE Assistant DirectorOctober 9, 2012

Ms. Cynthia L. Karlic Reg ional Environmental Director NRG Energy, Inc. 1866 River Road Middletown, CT 06457

RE: BACT R ecertification for Montville Power LLC

D ear Ms Karlic :

The Department of Energy and Environmental Protection ("the Department" ) has reviewed the Best Available Control Technology (BACT) recertification package, submitted by Montville Power LLC on August 30, 2011

, M ay 7, 2012 and August 1

, 2012 as required by New So urce Review (NSR) permit number 107

- 0056 . The Department has determined that the BACT analysis for t he criteria pollutants is acceptable and no further action is required by Montville Power with respect to these p ollutants at this time. While t h e Department has determined the proposed limits and energy efficiency improvements are BACT for the CO 2 e emiss ions

, additional monitoring, record keeping and reporting requirem e nts need to be incorporated into the permit

, con sistent with the findings made in the attached technical analysis.

Montville Power LLC shall s ubmit a non

- minor permit m odification for perm it number 107

- 0056 to incorporate the CO 2 e BACT requirements in accordance with the Regulations of Con necticut State Agencies ( RCSA ) Section 22a

- 174

- 2a(d ) within 60

- days of receipt of this letter

. T he Department will require a public notice of the non

min or modificat ion to permit number 107

- 0056 and will take public comment only on the sections of the permit concerning the incorporation of the updated BACT requirements.

Pursuant to RCSA Section 22a

- 3a

- 2(e), nothing in this notice shall be deemed to preclu de the Department from requesting additional in formation on any applications submitted . During technical review, it is not uncommon for questions to arise that require additional information to resolve. The Department will make every effort to work with you to resolve any such issues. Your prompt response to any requests for additional information will expedite the processing of your applications.

This letter in no way grants immunity from legal action resulting from the failure of this source to remain in compliance with existing air pollution regulations, nor does it provide an exemption from compliance with future Federal, State or local laws.

If you have any questions concerning this notice, please contact Mr. James Grillo at (860) 424

- 4152.

Since rely,

Gary S. Rose
Director Engineering and Enforcement Division Bureau of Air Management GSR:jag Attachment