# State ofNewMexico

Susana Martinez Governor June 24, 2011

Dr. Alfredo Armendariz Regional Administrator (6-A) U.S. Environmental Protection Agency, Region 6 1445 Ross Avenue, Suite 1200 Dallas, TX 75202-2733

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On behalf of the New Mexico Environment Department, I am pleased to submit to the Environmental Protection Agency the enclosed revisions to the New Mexico State Implementation Plan (SIP). These revisions include amendments to New Mexico's Regional Haze SIP under 40 CFR § 51.309.

The hearing record for all ofthe SIP revisions is attached, which includes the revised SIP, filed regulations, transcripts, exhibits, public notices, affidavits ofpublication, the notice ofintent to presenttechnical testimony, and public comments.

Included with the attached hardcopy of the hearing record is an electronic copy of the record provided on disk which I certify to be an exact duplicate ofthe hardcopy.

These SIP revisions satisfY the requirements ofthe Clean Air Act, comply with EPA regulations and policy, and will result in significant emission reductions while preserving the proper federalstate partnership envisioned under the Clean Air Act. As such, EPA must approve these revisions. In addition, because the enclosed SIP revisions address two differentprovisions ofthe federal Clean AirAct, I believe EPA should address them separately.

First, the enclosed "Interstate Transport SIP" addresses Section 11 0 ofthe Act, which requires
states to avoid interfering with any other states' implementation plans for visibility. As made clear in the Interstate Transport SIP submitted in 2007, and further explained in two letters to EPA Region 6 from the previous New Mexico administration (one from Governor Richardson on June 12,2009 and another from a member ofhis staffon May 6, 2010), New Mexico has already satisfied its Interstate Transport obligations. However, the enclosed Interstate Transport SIP supplements those previous submittals by confirming that the emissions from New Mexico

sources will not exceed the assumptions utilized in the modeling conducted by the Western Regional Air Partnership (WRAP), upon which other western states' visibility plans are based.

State Capitol • Room 400 • Santa Fe, New Mexico 87501 • 505-476-2200 • fax: 505-476-2226EPA has already recognized that "the analysis conducted by the WRAP provides an appropriate

means for designing a [plan] that will ensure that emissions from sources in New Mexico are not interfering with the visibility programs ofother states." 

### In fact, the enclosed Interstate Transport SIP confirms that emissions will actually be much lower than the WRAP modeling assumptions.

Second, the enclosed revisions to the 2003 "Regional Haze Section 309 SIP" and the enclosed "Regional Haze Section 309(g) SIP" (together, the "Regional Haze SIPs") address New Mexico's obligation to reduce visibility impairment at national parks and wilderness areas ("Class I areas") in accordance with Sections 169A & 169B ofthe Clean Air Act. The Regional Haze SIPs satisfy New Mexico's regional haze requirements by adopting new sulfur dioxide (S02) milestones for the Section 309 Backstop Trading Program, establishing reasonable progress goals and a long-term strategy for New Mexico's nine Class I areas, and adopting a variety of control measures to address emissions of visibility impairing pollutants from New Mexico sources. Most notably, the enclosed Regional Haze SIP also includes a Best Available Retrofit Technology (BART) determination for the San Juan Generating Station, which requires the installation of a Selective Non-Catalytic Reduction (SNCR) system to meet EPA's presumptive BART limit for nitrogen oxides (NO,).

I am aware that EPA has proposed a different plan for implementing the Interstate Transport program and at least a portion of the Regional Haze program in New Mexico through a combined Federal Implementation Plan (FIP). I am also aware ofEPA's concern that it is bound by a court orderto complete that rulemaking effort by August 5, 20II. However, the court order imposing the August 5, 20II deadline only requires EPA to address Interstate Transport requirements before that date. In addition, the proposed FIP suffers from a variety oflegal and technical flaws and inappropriately seeks to address only an isolated portion ofthe regional haze
program. Under these circumstances, I believe EPA can and should address the Interstate Transport program and Regional Haze program separately. Doing so will enable EPA to address New Mexico's Interstate Transport requirements by the court-ordered deadline, while allowing additional time for review ofthe more lengthy and complicated Regional Haze SIPs.

One ofthe fundamental principles expressed in Section !OI ofthe Clean Air Act is that "air pollution control at its source is the primary responsibility of States and local governments." That principle is nowhere better illustrated in the Act than in its visibility provisions, which, as EPA and the courts have recognized, grant to the states significant discretion in the implementation of measures to address visibility impairment. In designing the regional haze
program, Congress recognized that the individual states are best-equipped to balance the need for robust environmental protections with the costs those protections necessarily entail.

Moreover, nothing in the Clean Air Act requires EPA to address Interstate Transport and Regional Haze requirements together. On the contrary, EPA has generally addressed these programs separately in the past. As just one example, EPA Region 8 recently proposed to take separate action on the Interstate Transport and Regional Haze implementation plan revisions submitted by the state of Colorado. Even EPA's proposed FIP for New Mexico itself contemplates separate Interstate Transport and Regional Haze plans with regard to S02 emiSSIOns.Accordingly, EPA should meet its August 5, 2011 deadline by simply approving New Mexico's prior Interstate Transport submittals, as supplemented by the enclosed Interstate Transport SIP. Even if EPA does not agree that New Mexico's prior submittals have already satisfied its Interstate Transport obligations, EPA should be able to act on New Mexico's four-page Interstate Transport SIP before August 5, 2011.

Since the court order does not require EPA to address New Mexico's Regional Haze program by August 5, 2011, New Mexico is now, as ofthis submittal, in the same position as nearly every other state

- awaiting EPA action on its Regional Haze SIP. As with other states, EPA must determine whether New Mexico's Regional Haze SIPs are complete no more than six months from this date and, following that completeness determination or the expiration of six months, EPA must actto approve or disapprove those SIPs within twelve months, including time allowed for public notice and comment on the proposed action. Because EPA will be required to consider New Mexico's Regional Haze SIPs regardless ofwhether it flllalizes the proposed FIP, EPA should take no action on its proposed FIP, particularly since the August 5, 2011 deadline does not apply to regional haze. At a minimum, EPA should reopen the docket on the proposed PIP for at leastninety (90) days to accept further comment in light ofthe submission ofthese SIP revisions.

I hope you will begin an immediate, expedited review and approval ofthe enclosed SIP revisions and, as recommended above, take separate action on the separate Interstate Transport and Regional Haze requirements ofthe Clean AirAct.

If there are any questions concerning this SIP submittal, please contact Raj Solomon at (505) 827-2855.

Sincerely,

SusanaMartinez Governor

Enclosures

cc: Guy Donaldson, EPA Region 6 Dave Martin, NMED Cabinet Secretary Raj Solomon, NMED Deputy Cabinet Secretary1 

### List of Enclosures:

01 Section 309 Revised State Implementation Plan 02 Appendix K - Recommendations for Making Attribution Determinations in the Context of Reasonably Attributable BART 03 20.2.73 NMAC Revisions - Notices of Intent and Emissions Inventory Requirements 04 20.2.81 NMAC Revisions - Western Backstop Sulfur Dioxide Trading Program

05 Section 309(g) State Implementation Plan 06 Appendix A - Emissions Overview (WRAP, undated) 07 Appendix B - Air Quality Modeling (WRAP, undated) 08 Appendix C - Summary of WRAP RMC BART Modeling for New Mexico 09 Appendix D - New Mexico BART Determination for San Juan Generating Station 10 Appendix E - Supplementary Information for Four Factor Analyses by WRAP States, EC/R Incorporated, May 4,2009 (corrected April 20, 2010) 11 Appendix F - Supplementary Information for Four-Factor Analyses for Selected Individual Facilities in New Mexico, May 5, 2009

12 NMED Notice of Intent to Present Technical Testimony - May 2, 2011 13 NMED Ex. 1 Clean Air Act § 169A 14 NMED Ex. 2 Clean Air Act § 169B 15 NMED Ex. 3 40 C.F.R. § 51.308 (Regional Haze Rule § 308) 16 NMED Ex. 4 40 C.F.R. § 51.309 (Regional Haze Rule § 309) 17 NMED Ex. 5 BART Guidelines – Appendix Y to 40 C.F.R. Part 51 Published at 70 Fed. Reg. 39104

18 NMED Ex. 6 NMED Requests for Information from PNM 19 NMED Ex. 6a Email - BART Modeling Results from WRAP (11.9.06) 20 NMED Ex. 6b Email – PNM San Juan Generating BART Modeling (6-26-07) 21 NMED Ex. 6c Email - Comments on the BART modeling report for the San Juan Generating Station (7.30.07) 22 NMED Ex. 6d Email - SJGS BART Analysis Additional Information Request (9.21.07) 23 NMED Ex. 6e Letter - Department Request (12.21.07) 24 NMED Ex. 6f Letter PNM-BART-Request (4-25-08) 25 NMED Ex. 6g Email - PNM NOxInformation Review (3.20.08) 26 NMED Ex. 6h Email - Meeting (6.18.08) 27 NMED Ex. 6i Letter – Additional Information Request (12.29.08)2 

### 28 NMED Ex. 7 PNM Submittals Related to BART 29 NMED Ex. 7a San Juan BART Modeling Protocol (4.13.07) 30 NMED Ex. 7b PNM BART Analysis (6.6.07) 31 NMED Ex. 7c Email Thread with Cost Analysis Attached 32 NMED Ex. 7d SCR Cost Analysis - (7.11.07) 33 NMED Ex. 7e SNCR HybridCost Analysis (7.11.07) 34 NMED Ex. 7f Updated Visibility Cost Effectiveness Data - (8.23.07) 35 NMED Ex. 7g PNM Response to NMED(9.14.07) - September 14, 2007 36 NMED Ex. 7h PNM SCR Schematic 37 NMED Ex. 7i Refined Visibility Results (11.5.07) 38 NMED Ex. 7j PNM Discussion of OAQPS Cost Manual Method (3.29.08) 39 NMED Ex. 7k Final BARTModeling Response (3.31.08) 40 NMED Ex. 7L Final BARTSNCR Analysis (5.30.08) 41 NMED Ex. 7m Discussion of SJGS Coal and Classification 42 NMED Ex. 7n Final Nalco-MOBOTEC NOx BART Analysis (8.28.08) 43 NMED Ex. 7o Final PM BART Analysis (8.28.08) 44 NMED Ex. 7p PNM SO3 Removal Report (3.16.09) 45 NMED Ex. 7q SNCR Cover Ltr (2.9.11) 46 NMED Ex. 7r PNM BART SNCRAnalysis Update (2.9.11) 47 NMED Ex. 7s SNCRCover Ltr (2.11.11) 48 NMED Ex. 7t Revised SNCR Analysis (2.11.11) 49 NMED Ex. 7u Rate Impact Analysis (2.11.11)

50 NMED Ex. 8 Testimony of Mary Uhl 51 NMED Ex. 8a Testimony on Scientific and Regulatory Background of Regional Haze 52 NMED Ex. 8b Regional Haze Powerpoint Slides 53 NMED Ex. 8c Testimony Re BART Determination for PNM SJGS

54 NMED Ex. 9 Testimony of Rita Bates 55 NMED Ex. 9a Testimony Re Revisions to 2003 § 309 SIP 56 NMED Ex. 9b Testimony Re Proposed §309(g) SIP

57 NMED Ex. 10 Additional Proposed Revisions to § 309 SIP (5.2.11)

58 NMED Ex. 11 Additional Proposed Revisions to § 309(g) SIP (5.2.11)

59 NMED Ex. 12 Public Notices3 

### 60 San Juan Citizens Alliance Comment Letter - May 3, 2011 61 NMED Response to San Juan Citizens Alliance Comments 62 Public Service Company of New MexicoNotice of Intent to Present Technical Testimony - May 17, 2011 63 San Juan Coal Company Notice of Intent to Present Technical Testimony - May 17, 2011 64 The Natural Resources Defense Council, San Juan Citizens Alliance, and WildEarth Guardians Entry of Appearance - May 17, 2011 65 NMED Notice of Receipt of Comments - May 16, 2011 (includes U.S. EPA Comments)

66 NMED Supplemental Notice of Intentto Present Technical Testimony - May 20, 2011 67 NMED Ex. 13 May 20, 2011 Revisions to § 309(g) SIP in Response to EPA Comments 68 NMED Ex. 14 May 20, 2011 Revisions to 20.2.81 NMAC in Response to EPA Comments 69 NMED Ex. 15 May 13, 2011 Comments from U.S. EPA Region 6 70 NMED Ex. 16 NMED Responses toEPA Comments of May 13, 2011 71 NMED Ex. 17 U.S.F.S. Letter of March 30, 2011with Comments 72 NMED Ex. 18 NMED Response to U.S.F.S Comments of March 30, 2011 73 NMED Ex. 19 Proposed Statement of Reasons for Adoption and Order 74 NMED Second Notice of Receipt of Comments - May 26, 2011 (includes comments received May 25, 2011 from U.S. Park Service and Fish and Wildlife Service)

75 NMED Exhibits Presented at the June 1, 2011 Hearing 76 NMED Ex. 20 Compiled Section 309(g) SIP (included herein as Section 309(g) SIP) -- was not included in submittal EPA received -- probably the same as enclosures 05 to 11. 77 NMED Ex. 21 Responses to U.S. Park Service and Fish and Wildlife Service Comments

78 Transcript of Hearing - June 1 and 2, 2011 (Volumes 1 and 2)

79 New Mexico Environmental Improvement Board Statement of Reasons for Adoption of SIP Revisions