STATE OF TEXAS OFFICE OF THE GOVERNOR GEORGEW.BUSH GOVERNOR January3,2000 Mr.GreggCooke RegionVIAdministrator U.S.EnvironmentalProtectionAgency 1445RossAvenue Dallas,TX75202-2733 DearMr.Cooke: ....**,I-:~**

...:0..._ (.:-,**"-~.:.: ;-T~**  :::-



# - EnclosedareproposedrevisionstoTexas'StateImplementationPlan(SIP)thattheTexas NaturalResourceConservationCommission(Commission)adoptedonDecember16,1999. ThefirstpackageofadoptedamendmentstoChapters101and116implementtherequirements ofSenateBill7,76thLegislature,1999,concerningtheemissionsbankingandtradingof allowancesandthepermittingofgrandfatheredelectricgeneratingfacilities. Thesecond packageofadoptedamendmentstoChapter116implementsthenewproceduresforstandard permitsauthorizedbySenateBill766,76thLegislature,1999. Thepublichearingcertification,completerecordofthepublichearing,andaccompanyingorder arealsoenclosed. IlookforwardtoyourexpeditiousapprovaloftheserevisionstotheTexas SIP.

W.BUSH GWB/bb:pf Enclosures

cc: Mr.RobertJ.Huston,Chainnan,TexasNaturalResourceConservationCommission Mr.JeffreyA.Saitas,P.E.,ExecutiveDirector,TexasNaturalResourceConservationCommission

POSTOFFICEBox 12428AUSTIN, TEXAS78711 (512)463-2000(VOICE)/(512)475-3165(TDD)TexasNaturalResource ConservationCommission PublicHearings

October1999 ConcerningRevisionsTo

Chapters101and116 ElectricIndustryRestructuring(SB7) RuleLogNumber99033-1l6-AI Volumelof2 "INTRODUCTION

ThecommissionheldpublichearingsinEIPasoandLubbockonOctober1,1999,inAustinonOctober 4, 1999,inIrvingonOctober5,1999,inHoustononOctober7, 1999,andinBeaumontonOctober7, 1999. ThehearingswereheldtoconsideramendmentstoChapters101and116,whichimplementthe requirementsofSenateBill7,concerningthepermittingofgrandfatheredandelectingelectricgenerating facilities.

WrittencommentswereacceptedthroughOctober11, 1999. Alltestimonyandcommentshavebeen reviewedandseriouslyconsidered. Thisvolumecontainsacompleterecordofthepublichearingandis dividedintothefollowingfoursections:

o PublicNotificationandProposal

o WrittenandOralTestimony

o EvaluationofTestimony

o StaffRecommendations

AdditionalcopiesofthishearingrecordaremaintainedintheTNRCCcentralofficeat12100North IH-35,Austin,Texas78753. Forfurtherinformation,contactBeecherCameronat(512)239-1495.

# ORAL TESTIMONYINDEXOFORALTESTIMONY

October1,1999,Lubbock,6:15pm

ReferenceNumber

0-1 Submittedby

DeanMetcalf,SouthwesternPublicService Subject:SB7

0-1 October1,1999,Lubbock,9:15pm JayWadsworth,LubbockPowerandLight Subject:SB7

# 58

# 7 TexasNaturalResourceConservationCommission PublicHearingRegistration Location:

# Lubbock Date: 

# October1,1999 Concerning:

# ProposedRevisionsto30

# TACChapter101

# and116

# andtheStateImplementationPlan

NameandAddress PresentingOral Wouldyouliketoreceivea Representing Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne) 

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Yes No Yes No

# 5'87 TexasNaturalResourceConservationCommission PublicHearingRegistration Location:

## Lubbock Date: 

## October1,1999 Concerning:

## ProRosedRevisionsto30

## TACChaRter101

## and116

## andtheStateImRlementatioqPlan

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# 5316c TexasNaturalResourceConservationCommission PublicHearingRegistration Location:Lubbock 

## Date: October1,1999 

## Concerning: ProposedRevisionsto30TACChapter116andtheStateImplementationPlan

NarneandAddress PresentingOral Wouldyouliketoreceivea Representing Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne)

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TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION LUBBOCK, TEXAS

IN THE MATTER OF: ) PROPOSED REVISIONS TO 30 TAC ) CHAPTER 101 AND 116 )

PUBLIC HEARING FRIDAY, OCTOBER 1, 1999

BE IT REMEMBERED that at 6:15 p.m., on Friday, the 1st day of October, 1999, the above-entitled matter

came on for hearing at the City of Lubbock Council Chambers, located at 1625 13th Street, in Lubbock, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings were reported by Bonda L. Elder, a Certified Shorthand Reporter of:**l~l~l** 

## '"1**'l~ll\'"**

### ---~-~---**81~1\\?lOl~** 

# arecordof excellence 800Brazos . Suite340 . Austin.Texas 78701 . 512-474-22332

1 PRO C E E DIN G S 2 FRIDAY, OCTOBER 1, 1999 3 (6:15 p.m.) 4 MR. CAMERON: Good evening and welcome to the 5 public hearing concerning theproposed amendments to 30 Texas 6 Administrative Code, Chapters 101 and 116, implementing the 7 provisions of Senate Bill 7, recently passed during the last 8 legislative session. These particular amendments are 9 referenced under Commission rule law 99033-116 for your 10 reference. 11 We're doing something a little bit differently 12 tonight, here. We're holding a hearing at 6:00 concerning 13 the implementation of Senate Bill 7 and at 9:00, we're going 14 to be hearing also concerning amendments to 30 TAC, Chapter 15 116, to implement Senate Bill 766. 16 For the convenience of anyone here, we'll take 17 testimony on either rule at any time and we'll just see that 18 and anyone who wants transcripts of the testimony will get 19 them. 20 With that, I'll call Mr. Dean Metcalfto corne 21 forward and present testimony. 22 MR. METCALF: My name is Dean Metcalf. I'm 23 manager of Pure Water Producing Conservices, which is a 24 subsidiary of New Century Energies, a wholly-owned 25 subsidiary of

-- who is the wholly-owned subsidiary of ROGERS, HARVEY &CRUTCHER (806) 744-77543

1 Southwestern Public Service. 2 Southwestern Public Service and Pesteroni 3 Electric Utility headquarted in Amarillo, Texas. SPS is a 4 wholly-owned subsidiary of Inovasive Houston Communities, a 5 Delbert Corporation. 6 SPS owns a total of 12 interconnecting power 7 generated stations and operates for the benefit of 8 approximately a million people, in 52,000 square miles of 9 eastern New Mexico, Texas, Oklahoma, and southwestern 10 Kansas. 11 10 of SPS's generating units in four locations 12 in Lamb, Lubbock, Potter, and Moore counties are classified 13 as grandfathered and will be regulated under the proposed 14 regulations. All of these grandfathered units are gas fired 15 and used as peaking -- and used as peaking power. 16 Nitrogen oxide emissions from these units are 17 among the lowest in Texas. SPS will reduce these emissions 18 even further to comply with the reductions required in 19 Senate Bill 7. 20 I've handed you a copy of the written comments 21 and I will now comment briefly on some ofthose written 22 comments. 23 The first issue that we have with the SB 7 24 concerns the use -- the consistent use ofthe acid rain 25 database. SPS believes that this database should be used ROGERS, HARVEY &CRUTCHER (806) 744-77544

1 for both

-- for determining heat input determination, from 2 both grandfathered facilities as well as electric 3 facilities. 4 Concerning the reconciliation periods that -- 5 that are in the rules, TNRCC rules, for proposed rules, what 6 we'd like to propose is that the reconciliation periodmatch 7 the reconciliation period for the acid rain database, the 8 federal program. And that allows for 60 days after the -- 9 after the conclose of control period that reconciliation of 10 your emissions to be in your accounts, compliance accounts 11 be allowed during that 60 day period, after the control 12 period stops. 13 For the allowance use part of the proposed 14 rules, and this comment is based on -- it's based on some 15 rules -- proposed rules that came offthe Internet instead 16 of out of the Texas Register, and subsequent to looking at 17 your -- what rules you provided here as -- as the official 18 rule, we're commenting on an -- an outdated proposal, so, it 19 has already been fixed in the proposed rule, so, but 20 basically what we're asking for is now allowed is use of 21 allowances for future years, beyond the one year after the 22

-- what we thought was in there, so, that

-- that has been 23 fixed. 24 Under the permitting issues or control 25 technology demonstration, what -- it -- it is somewhat ROGERS, HARVEY &CRUTCHER (806) 744-77545

1 limiting in the proposed rule, and what we're asking for is 2 a little bit more flexibility on how the control technology "---- ..... 3 is demonstrated. And that is also in my written comments. 4 Ageneral comment I'd like -- we'd like to 5 make is based on the permitting process. One ofthe 6 objectives of one of the objectives of the TNRCC seems to 7 have all emissions and all grandfathered facilities 8 permitted. TNRCC states that SB 7 only authorizes 9 permitting NOx at all grandfathered facilities and S02 at 10 coal-fired grandfathered facilities. 11 TNRCC has offered the voluntary emission 12 reduction permits; the VERP program, under 116, Subchapter 13 H, which permits emissions above air contaminants. There 14 seems to be little incentive in these regulations for a 15 utility to permit other air contaminants under the voluntary 16 program. 17 Utilities will provide -- should -- utilities 18 will probably choose to lead other air contaminants 19 grandfathered rather than apply for VERP permits. To create 20 a sentence to permit other air containments, some sort of 21 shield from Newsource Review or PSD Review will need to 22 exist in these permitting in its permitting process or 23 or the VERP program. 24 Those conclude my comments. 25 MR. CAMERON: Okay, Mr. Metcalf. I want to ROGERS, HARVEY &CRUTCHER (806) 744-77546

1 add that people present who are wishing -- who are wishing 2 to either give testimony or receive comments on any adopted 3 rules, please sign up on this sheet when I put it back up 4 there in front of table. 5 I call Mr. Steve Thurman to the floor. 6 MR. THURMAN: I don't have any further 7 comments. 8 MR. CAMERON: I understand Mr. Thurman will -- 9 will not be commenting. 10 Is there anyone in the audience who has not 11 signed up to speak and wishes to do so? 12 Okay. Again, I'll put the sign up sheet down 13 there. If you -- ifyou wish to get a copy of the rules as 14 they're adopted, please sign -- give your name and address. 15 I would remind everyone that the closing comment period is 16 5:00 p.m., October 11th, and with that, I will close this 17 hearing. Thank you very much. 18 (The public hearing concluded at approximately 19 6:20 p.m.) 20 21 22 23 24 25 ROGERS, HARVEY &CRUTCHER (806) 744-77541 2 3 STATE OF TEXAS 4 COUNTY OF LUBBOCK 5 C E R T I F I CAT E 7

6 I, BONDA L. ELDER, a Certified Shorthand Reporter in and 7 for the State ofTexas, do hereby certify that the 8 above-mentionedmatter occurred as hereinbefore set out. 9 I FURTHER CERTIFY THAT the proceedings of such were 10 reported by me or under my supervision, later reduced to 11 typewritten form under my supervision and control and that 12 the foregoing pages are a full, true, and correct 13 transcription of the original notes. 14 IN WITNESS WHEREOF, I here hereunto set my hand and seal 15 this 12th day of October, 1999. 16 17 18 19 20 21 22 23 24 25 

# j)"

. 

# tJAnLLttf\

# l1.kA

onda L. Elder Certified Shorthand Reporter CSR No. 7364

- Exp. 12/31/01 Rogers, Harvey &Crutcher 709 Broadway Lubbock, Texas 79401

ROGERS, HARVEY &CRUTCHER (806) 744-77541

TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION LUBBOCK, TEXAS

IN THEMATTEROF: ) PROPOSED REVISIONS TO 30 TAC ) CHAPTER 116 )

PUBLIC HEARING FRIDAY, OCTOBER 1, 1999

BE IT REMEMBERED that at 9:15 p.m., on Friday, the 1st day of October, 1999, the above-entitled matter

came on for hearing at the City of Lubbock Council Chambers, located at 1625 13th Street, in Lubbock, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings were reported by Bonda L. Elder, a Certified Shorthand Reporter of:



# 81D llVlG1D 

# arecordof excellence
800Brazos . Suite340 . Austin.Texas 78701 . 512-474-22332

you had indicated a desire to speak. Were you going to present testimony on Senate Bill 766 or Senate Bill 7 as well? FRIDAY, OCTOBER 1, 1999 (9:15 p.m.) MR. CAMERON: Let me -- let me open this hearing now, concerning revisions to chapter -- concerning revisions -- revisions to 30 Texas Administrative Code, Chapter 116, and State Implementation Plan. These particular minutes deal with the implementation of Senate Bill 766, recently passed during the last legislative session. My name is Beecher Cameron, with Regulatory and Development section. We're doing things a little bit differently tonight. We're actually holding this -- this is the second of two hearings we've held in this room. And we have -- the first one was at 6:00 and concerned the implementation of Senate Bill -- Senate Bill 7. What I'd like to this now as I understand we have commentors wishing to present testimony on both on 766 and 7. We allowed that at the previous hearing, we will do that here and we will probably continue this practice throughout the public hearings in Texas. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. O'Grady, unless you

ROGERS, HARVEY &CRUTCHER you're -- you're

(806) 744-77543

1 MR. O'GRADY: Just 766. 2 MR. CAMERON: Okay.**I.~hink** will call on you 3 first, since this -- since this is actually Senate Bill 766 4 hearing and we'll move on to our other speaker, who is on 5 on Senate Bill 7, so, Mr. O'Grady, please come forward. 6 MR. O'GRADY: Under 766, under the BACT, the 7 Best Available Control Technology, how do they define what 8 the BACT is? 9 MR. CAMERON: Okay. Let me make one -- during 10 -- during the public hearing, we -- it's only structured for 11 the receipt of testimony. I'll be -- I'll be glad to 12 address your question further after the hearing is after 13 the hearing is over, but during hearing, we can -- we only 14 receive testimony. It is a very structured type. They only 15 want me to receive testimony and we -- we don't respond to 16 questions during the actual hearing. 17 MR. O'GRADY: Oh, I see. 18 MR. CAMERON: So, I'm sorry that -- I'm sorry 19 that I didn't make that clear when I first told you. 20 MR. O'GRADY: Okay. That's okay. With 21 with compared to the OSHA standards, and if you're within 22 the OSHA standards on your emissions and your worker 23 exposure levels and so forth, would that be considered 24 the-- 25 MR. CAMERON: Again, I again, I'll have to ROGERS, HARVEY &CRUTCHER (806) 744-77544

1 defer that question until after -- after the hearing is 2 done. 3 MR. O'GRADY: Oh, then I don't have anything 4 5 6 7 else MR. CAMERON: Okay. MR. O'GRADY: -- further. MR. CAMERON: Okay. Thank you. 8 Okay. I guess, then, Mr. Jay Wadsworth come 9 forward. Okay, Mr. Wadsworth, I understand you will be 10 offering testimony on Senate Bill 7? 11 MR. WADSWORTH: Yes. 12 MR. CAMERON: Thank you. 13 MR. WADSWORTH: I'm Jay Wadsworth with Lubbock 14 Power and Light. I'd like to address the using the year 15 1997 to set load limits. And I have several, I guess, areas 16 ofmy concern. 17 One is load swings that are normal as a small 18 utility, in the fact that we may have a 50-megawatt unit 19 that runs 50 megawatts for four hours during the day in peak 20 load; at night, when there's no load, that run that unit 21 will run, maybe, 15 percent -- 15 megawatts or 30 percent of 22 the capacity of that unit. With that kind of a load swing, 23 ifyou take a yearly average of load, we have a 50-megawatt 24 unit that's been downrated to 20 meg -- 25 megawatts and so, 25 I think that's, using that year as a calendar year on fuel ROGERS, HARVEY &CRUTCHER (806) 744-7754Another one, most utilities overhaul units every five years. An overhaul will take approximately two months. If you happen to overhaul a unit in that calendar year, that's two months you didn't burn any fuel and I think that needs to be taken into consideration. Another one, as a competing utility that's been competing since 1916, in the electric market and I understand that we're going to competition, for Lubbock Power and Light, using the year 1997 will almost make us noncompetitive, because as it is now, we have the capacity

economical, we buy it from whoever can sell the electricity and this is the whole theory of

-- of the competition base. But under selecting this year, we just got put out of competition, even though we've been competing. So, I think there's got to be a better way of selecting other than just the amount of fuel that was burned in that calendar year on

a unit. The capabilities of that unit, ifwe're going to maintain and keep competition in the market place. MR. CAMERON: Thank you Mr. Wadsworth. Mr. Wadsworth, did you have any -- any written comments you wanted to submit as well? MR. WADSWORTH: We will

-- we will submit is not an adequate way 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 usage, due to our load wings, is to do it.

to generate if it's more economical. If 5

if it's not more

ROGERS, HARVEY &CRUTCHER (806) 744-77546

announcement, that has the mailing address on it. with a -- with a mailing address and your hearing additional written comments. I was unaware tonight that --
can we mail those to you?

MR. WADSWORTH: Okay. MR. CAMERON: And I'll be glad to provide you

I see no one. I will close the hearing, then.

(The public hearing concluded at approximately to need them and we'll get them MR. CAMERON: That's yeah, I'll -- I'll leave you the address before we leave tonight and I'll advise everyone here that the close of comment period for the comments on Senate Bill 766, as well as 7, is 5:00 p.m., October 11th.

MR. WADSWORTH: Appreciate it. Thank you. MR. CAMERON: Is there anyone else in the audience who has not signed up who would like to present testimony on either the implementation of Senate Bill 766 or Senate Bill 7?

Thank you. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 9:20 p.m.) 21 22 23 24 25 ROGERS, HARVEY &CRUTCHER (806) 744-77541 2 3 STATE OF TEXAS 4 COUNTY OF LUBBOCK 5 C E R T I F I CAT E 7

6 I, BONDA L. ELDER, a Certified Shorthand Reporter in and 7 for the State of Texas, do hereby certify that the 8 above-mentioned matter occurred as hereinbefore set out. 9 I FURTHER CERTIFY THAT the proceedings of such were 10 reported by me or under my supervision, later reduced to 11 typewritten form under my supervision and control and that 12 the foregoing pages are a full, true, and correct 13 transcription of the original notes. 14 IN WITNESS WHEREOF, I here hereunto set my hand and seal 15 this 12th day of October, 1999. 16 17 18 19 20 21 22 23 24 25

# ~C1WlLgtfd£~**~da** L. Elder Certified Shorthand Reporter CSR No. 7364

- Exp. 12/31/01 Rogers, Harvey &Crutcher 709 Broadway Lubbock, Texas 79401

ROGERS, HARVEY &CRUTCHER (806) 744-7754INDEXOFORALTESTIMONY

October1,1999,ElPaso,10:12am

ReferenceNumber

0-1 Submittedby

MarkRodriguez,ElPasoElectric Subject:SB7- 

## - -----_

.. - --- -....--.**-~_.** 

## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: EI

## Paso Date: 

## October1,1999 Concerning:

## ProposedRevisionsto30T 

## ACChapter101

## and116

## andtheStateImplementationPlan

NameandAddress PresentingOral Wouldyouliketoreceivea Representing Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne)**~\-..I**

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## TexasNaturalResourceConservationCommission 

# ?O PublicHearingRegistration Location: 

# EIPaso 

## Date: October1,1999 

## Concerning: ProposedRevisionsto30TACChapter116andtheStateImplementationPlan

NameandAddress PresentingOral Wouldyouliketoreceivea copyoftheconunission's Representing Testimony? rule(s)onceadopted? (pleasePrint) (CircleOne) (CircleOne)

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Yes No Yes No

Yes No Yes NoTRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION EL PASO, TEXAS

IN THE MATTER OF: PROPOSED REVISIONS TO 30 TAC CHAPTERS 101 AND 116
PUBLIC HEARING FRIDAY, OCTOBER 1, 1999

BE IT REMEMBERED that at 10:12 a.m., on Friday, the 1st day of October 1999, the above-entitled matter came on for hearing at the Texas Natural Resource Conservation Commission, 2 Civic Center Plaza, in El Paso, Texas, before BRIAN CHRISTIAN, Hearing Examiner; and the following proceedings were reported by David Perez, Certified Shorthand Reporter of Keith & Miller Certified Court Reporters**r~l~l** 

## '·1**'l~ll\"·**

### ---~-~---



# arecordof excellence
800Brazos • Suite340 • Austin,Texas 78701 • 512-474-22331 2 3 PRO C E E DIN G S FRIDAY, OCTOBER 1, 1999 (10:12 a.m.) 2

4 MR. CHRISTIAN: Good morning. I'd like 5 to welcome everybody to this public hearing which is 6 being conducted by the Texas Natural Resource 7 Conservation Commission. If you're not familiar with 8 the proposed rule changes, there are handouts of the 9 proposal and the public hearing notices are available. 10 My name is Brian Christian. I'm with the 11 government Relations Division of the Texas Natural 12 Resource Conservation Commission, with David Sanbacker 13 of the Executive Directors Office and Mr. Kerry Drake 14 of the Office of Permitting. 15 The purpose of this hearing is to solicit 16 comments and testimony from the public regarding the 17 proposed electric industry restructuring rule making 18 which implements Senate Bill 7. We were amending 19 sections in Title 30 of the administrative code, 20 Chapters 101 and 116, as well as, a State 21 Implementation Plan. 22 During this public hearing, individuals 23 may present oral statements when called upon in order 24 of registration. Open discussion is not permitted 25 during the hearing; however, agency staff members are

KENNEDY REPORTING SERVICE, INC. (512) 474-22333

1 available to discuss the proposal and answer questions 2 after the hearing. 3 I show that one individual is signed up 4 to speak. 5 Electric. I now calIon Mr. Mark Rodriguez of EI Paso Mr. Rodriguez, if you could come forward and 6 spell your name for the record. 7 MR. RODRIGUEZ: Yes. The spelling of my 8 name is M-A-R-K, last name is R-O-D-R-I-G-U-E-Z. 9 Thank you. EI Paso Electric appreciates 10 the opportunity to provide comments on this prposed SB 11 7 language. And there's just a few items this morning 12 that I would like to propose the TNRCC consider as they 13 draft the final language. 14 The first item that EI Paso Electric 15 wishes the TNRCC would consider is the language in the 16 Senate bill that refers to where commission reduction 17 credits can be obtained in EI Paso County. And in the 18 existing language, it indicates a portion of the EI 19 Paso County that includes Juarez, Mexico, as well as, 20 EI Paso itself. 21 EI Paso Electric believes it was the 22 intent of the legislation of SB 7 to include this whole 23 air shed that has been designated, consisting of Ciudad 24 Juarez, EI Paso County and Sunland Park, New Mexico, 25 southern Dona Ana County, be considered as the air shed

KENNEDY REPORTING SERVICE, INC. (512) 474-22334

1 where commission reductions can be obtained and be 2 useful for meeting the mandates of SB 7. 3 The other item El Paso Electric would 4 like the TNRCC to consider is language in SB 7 that 5 allows a utility with a rate freeze to be exempt from 6 the whole chapter during the time period their rate 7 freeze was in effect. 8 And what this, in essence, indicates is 9 in the case of El Paso Electric, our rate freeze ends 10 approximately July 31st of the year 2003. And it would 11 be after that time we believe the mandates of SB 7 12 would be required. 13 Another item we would like to have 14 consideration on is that the allowance of a mechanism 15 that occurs as part of this permit process under SB 7 16 be consistent with the allowance transaction mechanism 17 that's currently underway with part 75. 18 Rain Title 5 of the Clean Air Amendments.And the Acid

19 The last item we would like the TNRCC to 20 consider is the frequency of the reporting of the 21 allowance. And that if there was a way the TNRCC would 22 match that frequency of allowance reporting to the 23 frequency that occurs with the reporting of allowance 24 and emissions under the part 75 rules. 25 Once again, El Paso Electric appreciates

KENNEDY REPORTING SERVICE, INC. (512) 474-22335

1 the opportunity to present these items and thank you 2 very much. 3 MR. CHRISTIAN: Thank you, Mr. Rodriguez. 4 Is there anyone else present here who would like to 5 provide oral testimony on these proposed rules? 6 All right. The end of the comment period 7 is Monday, October 11th at 5:00 p.m. You may either 8 mail your comments to Mr. Casey Vise as outlined in the 9 proposed rules at the address given in the hearing 10 notice, or you may fax them to the attention of Mr. 11 Casey Vise at area code 512-239-4808. 12 We do ask that if you do fax in the 13 comments, please make certain to follow-up with a hard 14 copy as soon as possible. 15 We'd like to thank everybody for 16 attending this public hearing. I now declare the 17 hearing closed. And staff is available for questions 18 afterwards. Thank you. 19 (The public hearing concluded at 20 approximately 10:19 a.m.) 21 22 23 24 25

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 2 CERTIFICATE 6

3 I, David Perez, Certified Shorthand Reporter of 4 the State of Texas, do hereby certify that the above 5 and foregoing contains a true and correct transcription 6 of the public hearing held on October 1, 1999. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Certified to on October 18, 1999.

# _l)~d~ David Perez Certified Shorthand Reporter Texas CSR No. 7437 Expires December 31, 2000 (25000)

KENNEDY REPORTING SERVICE, INC. (512) 474-2233INDEXOFORALTESTIMONY

October4,1999,Austin,9:00am

ReferenceNumber

0-1

0-2 Submittedby GaryGibbs,CentralandSouthWestCorporation Subject:SB7 DickRobertson,TXUElectric Subject:SB7

0-1

0-2

0-3

0-4

0-5

0-6

0-7

0-8

0-9 October4,1999,Austin,12:10pm

MarkWehner,NeighborsforNeighbors Subject:SB766

AnnMesrobian,BastropCountyEnviromnentalNetwork Subject:SB766 DavidSavage,BakerandBotts Subject:SB766 C.Austin Subject: SB766 Dr.NeilCarman,SierraClub Subject:SB766 PeterAltman,SustainableEnergyandEconomicDevelopment Coalition(SEED) Subject:SB766andSB7 TomSmith,PublicCitizensTexasOffice Subject:SB766andSB7 SamEnfield,TexasRenewablePowerCoalition Subject:SB766andSB7 NeilCarman,SierraClub Subject:SB766

# TexasNaturalResourceConservationCommission 

# (j) PublicHearingRegistration Location: 

# Austin Date: 

# October4,1999 Concerning: 

# ElectricIndustryRestructuring(SB7)

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# @ PublicHearingRegistration Location: 

# Austin Date: 

# October4,1999 Concerning: 

# Air Permits

-VERP(SB7!l5f

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# TexasNaturalResourceConservationCommission 

# (j) PublicHearingRegistration Location: 

# Austin Date: 

# October4,1999 Concerning: 

# Air Permits

-VERP(SB766)

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# TexasNaturalResourceConservationCommission 

# (j PublicHearingRegistration Location: Austin 

# Date: October4,1999 

# Concerning: AirPermits

-VERP(SB766)

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# TexasNaturalResourceConservationCommission .3 

# PublicHearingRegistration Location: Austin 

# Date: October4, 1999 

# Concerning: AirPermits

-VERP(SB766)

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# I Yes No Yes No "_·l. ,"

### TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION AUSTIN, TEXAS

IN THE MATTER OF: ) PROPOSED REVISIONS TO 30 TAC) CHAPTERS 101 AND 116 ) AND THE STATE IMPLEMENTATION) PLAN )

PUBLIC HEARING MONDAY, OCTOBER 4, 1999



### BE IT REMEMBERED that at 9:00 a.m., on Monday, the 4th day of October 1999, the above-entitled matter came on for hearing at the Texas Natural Resource Conservation Commission, Building E, Room 201S, located at 12100 Park 35 Circle in Austin, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings

were reported by Janis Simon, a Certified Shorthand Reporter of:**l~l~l '·11l~ll\"·** 

### ---~-~---



# arecordof excellence
800Brazos . Suite340 . Austin,Texas 78701 . 512-474-2233

### 1 2 3 

### PRO C E E DIN G S MONDAY, OCTOBER 4, 1999 (9:00 a.m.) 2

4 

### MR. CAMERON: Good morning, 5 everyone. We're going to open this hearing 6 

### concerning proposed amendments to 30 Texas 7 Administrative Code Chapters 101 and 116, 8 

### referenced under Commission Rule Log 9 No. 99033-116. These proposed amendments will 10 implement the emission control and permitting 11 requirements of Senate Bill 7 recently passed 12 here in the last legislature. 13 There was a sign-up sheet here at the 14 front door. For those of you who have not 15 signed in, I would ask that you do so sometime 16 during this hearing, and if you wish to receive 17 a copy of the adopted rule, please provide your 18 address and/or business card. 19 For those of you who are not familiar 20 with this format, this hearing is structured 21 only for the receipt of testimony. There is no 22 cross-examination of staff or of the presenters. 23 Staff has been available for the half hour 24 previous to the hearing to answer questions, and 25 we will remain after the hearing is done if you KENNEDY REPORTING SERVICE, INC. (512)474-22333 

### 1 have any further questions. 2 And with that, I'm going to go ahead 3 and ask Mr. Gary Gibbs to please come forward 4 and present his comments. 5 

### MR. GIBBS: Good morning. For the 6 record my name is Gary Gibbs, and I'm providing 7 comments on behalf of my employer, Central and 8 South West Corporation in Dallas, Texas. 1 111 

### 9 hit the high points. The written comments will 10 be submitting as well, which will be more 11 detailed. 12 I guess the major concern that we have 13 is that the enabling language in SB 7 set forth 14 a very simple approach using an emission limit, 15 and it intended to provide the utilities 16 flexibility on achieving this limit. In our 17 discussions in developing that language, we 18 never intended for this to be an extensive 19 command and control regulatory program, which 20 seems to be the type of rule that we're 21 developing here. 22 It was also intended that this rule 23 would allow market forces to encourage deeper 24 emission reductions and to support a vigorous 25 emissions trading and banking program. KENNEDY REPORTING SERVICE, INC. (512)474-22334 

### 1 Unfortunately, we seem to have a command and 2 control approach that is going to stifle these 3 market forces so that we're not going to see 4 these creative reductions that we would 5 otherwise see. I think one of the examples that

• 

### 6 comes to mind is if you want to opt in a unit to 7 offset nonsubmissions at a grandfathered unit, 8 you're going to have an array of other 9 pollutants that are going to be considered from 10 that permitted unit, including S02, S02 

### limits 11 that are going to be more stringent than the 12 federal program. That's a considerable 13 disincentive for opting the unit down. 14 I think if we do that across the board, 15 werre not going to see many units opt it down. 16 I guess in short, we said this before at the 17 first hearing, we would urge the Agency to go 18 back and re-examine the intent of the enabling 19 legislation to not use the command and control 20 approach, to try to be as flexible as possible 21 l.n allowing unit s to opt in. 22 Let me touch on a few more specifics 23 that we recommend. We recommend that any 24 allowances resulting from utilization of opt-in 25 units be allowed to be traded. The rule KENNEDY REPORTING SERVICE, INC. (512)474-22335 

### 1 specifically says that you must stipulate which 2 control technology you intend to use to meet 3 each emission or -- excuse me, each facilities' 4 emission allowances. In many cases it may be 5 proposed that that unit will buy emission 6 allowances rather than use emission control 7 technology at all. 8 We recommend that the EPA Acid Rain 9 database be used consistently in determining 10 allowance allocation for both grandfathered 11 facilities and electing facilities. As 12 currently proposed, electing facilities would 13 use the emissions inventory rather than the Acid 14 Rain database. So, we have an inconsistency 15 there that just doesn't make sense. 16 We also recommend that there be a 17 reconciliation period following each control 18 period to allow allowances to be reconciled. As 19 present, on the last day of the reconciliation 20 period, you have to have everything in order. 21 That's not consistent with the Federal Acid Rain 22 program, which allows, I think, 60 days. We 23 recommend that this program use that same 24 reconciliation period. 25 I think that covers most of our primary KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 concerns. As I said, we'll be submitting 6



### 2 detailed comments. 3 

### 4 Mr. Gibbs. MR. CAMERON: Thank you,

5 

### Mr. Dick Robertson, please? 6 

### MR. ROBERTSON: I'm Dick Robertson 7 with TXU Electric Company in Dallas, Texas. 8 And, likewise, I've got a few oral comments here 9 we're going to give today. Most of our comments 10 will be addressed in detail by written comments. 11 Senate Bill 7, as passed by the Texas 12 Legislature, establishes an innovative, flexible 13 and cost-effective approach to obtaining NOx and 14 S02 emission reductions. 15 Under SB 7, TXU will be making a 25 16 percent reduction in S02 and over 50 percent 17 reduction NOx from its older power plants. 18 Electric utilities in Texas already have some of 19 the lowest NOx rates in the country with NOx 20 rates averaging 40 percent below the national 21 average. When the new Senate Bill 7 NOx



## .. 22 reductions are achieved, NOx rates for utilities 23 in Texas will be among the top five states in 24 the U.S. for lowest electric utility NOx rates. 25 Also, TXU will be making NOx reductions KENNEDY REPORTING SERVICE, INC. (512)474-22337 

### 1 in over 40

-- 50 percent in the Dallas/Fort 2 Worth area. We have already begun upgrading our 3 units there and will have made most of our 4 reductions well before May 2003. We, in fact, 5 are going to be making reductions at every power 6 plant in our system to some degree, and TXU 7 continues to support a permanent, fair air 8 quality solution to ensure cleaner air and 9 economic prosperity. 10 It's important for any fair solution to 11 include all reductions from all NOx sources. 12 TXU is doing its part to reduce emissions. TXU 13 believes there are provisions in this proposed 14 permitting

-- rulemaking and permitting process 15 that are overly burdensome and review intensive 16 and ultimately time consuming without a 17 coinciding environmental benefit, and we'll be 18 submitting some of the specific recommendations 19 in our written comments that we think will 2,0 result,in a more streamlined permitting process. 21 And we also have some recommendations on the 22 trading system. TNRCC's program has provisions 23 that vary significantly from EPA's proven and 2-4 successful federal allowance trading program, 25 and we think these differences will only limit KENNEDY REPORTING SERVICE, INC. (512)474-22338

1 

### the trading and raise costs and reduce benefits 2 in a flexible free-market approach. 3 

### In summary, we commend the Legislation 4 on passage of Senate Bill 7, and we encourage 5 

### the TNRCC to implement it In a most 6 

### cost-effective manner. And thank you for the 7 

### opportunity to give these comments. 8 9 

### Mr. Robertson.MR. CAMERON: Thank you,

10 

### I have no indication on the sheet today 11 

### that anyone else wishes to make an oral 12 

### presentation. I would ask if there is anyone in 13 the audience who has not signed up to speak that 14 would like to do so. 15 I would remind everyone that the close 16 

### of the comment period for the proposal is 17 5:00 

### p.m. on October 11, 

### and if there are no 18 

### further comments, I will close the**hearing~** 19 

### Thank you. 20 21 

### 22 23 24 25 (Hearing adjourned: 9:15 

### a.m.)

KENNEDY REPORTING SERVICE, INC. (512)474-22331 2 

### C E R T I F I CAT E 9



### 3 STATE OF TEXAS 4 COUNTY OF TRAVIS 5 6 

### I, JANIS SIMON, a Certified Shorthand 7 Reporter**~n** 

### and for the State of Texas, do 8 hereby certify that the above-mentioned matter 9 occurred as hereinbefore set out. 10 I FURTHER CERTIFY THAT the proceedings 11 of such were reported by me or under my 12 supervision, later reduced to typewritten form 13 under my supervision and control and that the 14 foregoing pages are a full, true, and correct 15 transcription of the original notes. 16 IN WITNESS WHEREOF, I have hereunto set 17 my hand and seal this 18th day of October 1999. 18 19 20 21 22 

### 23 24 25 Ja s Simon Certified Shorthand Reporter CSR No. 7076

- Expires 12/31/01 Kennedy Reporting Service, Inc. 800 Brazos, Suite 340 Austin, Texas 78701

KENNEDY REPORTING SERVICE, INC. (512)474-2233

### TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION AUSTIN, TEXAS

IN THE MATTER OF: ) PROPOSED REVISIONS TO 30 TAC) CHAPTER 116 AND THE STATE ) STATE IMPLEMENTATION PLAN )

PUBLIC HEARING MONDAY, OCTOBER 4, 1999

BE IT REMEMBERED that at 12:10 p.m., on Monday, the 4th day of October 1999, the above-entitled matter came on for hearing at the Texas Natural Resource Conservation Commission, Building E, Room 201S, located at 12100 Park 35 Circle in Austin, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings

were reported by Janis Simon, a Certified Shorthand Reporter of:



## 1**~-**

## .1:;;12(

## II**~-**

### .11"\,.,\1

# "G,

. _l:

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# arecordof excellence
800Brazos • Suite340 • Austin,Texas 78701 • 512-474-22331 2 3 

### PRO C E E DIN G S MONDAY, OCTOBER 4, 1999 (12:10 

### p.m.) 2

4 

### MR. CAMERON: Good morning, 5 

### everyone. I'd like to go ahead and open this 6 

### hearing concerning proposed amendments to 30 7 

### Texas Administrative Code Chapter 116 

### concerning 8 

### the implementation of Senate Bill 766. 9 

### is Beecher Cameron with the Regulation My name

10 

### Development Section. 11 

### members here, as well.We have several staff For the last half hour 12 

### we have been answering questions concerning the 13 proposal, and we'll be glad to fill in more 14 questions that may come up after the hearing. 15 For those of you who are not familiar 16 

### with this hearing structure, it is structured 17 for the receipt of oral testimony only. 18 

### is no questioning of the staff or There

19 

### cross-examination once the hearing begins. We 20 

### are doing something a little bit different with 21 this hearing. At nine o'clock this morning we 22 

### conducted a hearing concerning the 23 implementation of Senate Bill 7. 

### As I 24 mentioned, this is a hearing concerning the 25 implementation of Senate Bill 766. 

### KENNEDY REPORTING SERVICE, INC. (512)474-22331 

### I do know that there are some members 3



### 2 in the audience who are requesting to place 3 comments on both pieces of legislation. We'll 4 

### be glad to accept comments on either legislation 5 

### during this hearing, and we'll just make that 6 

### distinction in the public record. With that

-- 7 

### with those, also anyone who has not signed the 8 

### register, please do so this morning before you 9 

### leave and indicate whether you wish to speak or 10 

### not. 11 

### Also, if you wish to get a copy of the 12 

### rules as adopted by the Commission, please leave 13 us your address either on the form or in the 14 form of a business card, and with those 15 housekeeping chores out of the way, I'll calIon 16 

### our first speaker. 17 That will be Mr. Mark Wehner. Did I 18 pronounce that correctly? 19 

### MR. WEHNER: My name is Mark 20 Wehner. I'm a resident of Lee County. I am an 21 

### active member of the Neighbors For Neighbors 22 organization. Neighbors For Neighbors is a 23 group of Bastrop and Lee County residents and 24 businesses who have organized in response to 25 plans of Alcoa Aluminum to strip-mine lignite KENNEDY REPORTING SERVICE, INC. (512)474-22334 

### 1 coal from 15,000 acres in our community and sell 2 large amounts of ground water to the City of San 3 Antonio. The lignite mined from this operation 4 will be used by Alcoa to fuel its Rockdale 5 Aluminum smelter one of the state's top air 6 polluters. 7 

### While NFN is primarily concerned about 8 the impact of strip-mining our land and our 9 homes and**the-~xploitation** 

### of our water supply, 10 we're also concerned that this project, if 11 approved, will keep Alcoa dependent on lignite, 12 a cheap, inefficient and highly polluting fuel 13 source over the next 40 years. This action will 14 most assuredly keep Alcoa in its current 15 standing as one of the state's top air 16 polluters. This not only affects air quality 17 locally, but the plume of pollution from Alcoa's 18 Rockdale plant stretches as far as Dallas/Fort 19 Worth and the Big Bend area. 20 Our understanding of the legislation 21 that was recently passed, including Governor 22 Bush's "voluntary" reduction program, is that 23 Alcoa does not have to reduce its sulfur dioxide 24 emissions, currently, about 60,000 tons 25 annually. We believe the current requirements KENNEDY REPORTING SERVICE, INC. (512)474-22335


### 1 for reductions in nitrogen oxide are also far 2 from adequate to protect our air quality. Isn't 3 it a bit ironic, an oxymoron to pass a law and 4 then make it voluntary? 5 Alcoa has said it will no longer be a 6 "grandfathered" facility since it has agreed to 7 obtain a permit under Bush's voluntary program. 8 But even Alcoa's officials admit a permit will 9 not require them to make any significant 10 reductions in emissions. Alcoa still stands by 11 its position that if forced to clean up its 12 emissions, such as installing sulfur dioxide 13 scrubbers, it would be forced to shut down due 14 to cost. This from a company with over $15 15 billion a year in revenues and who just agreed 16 to spend $5 billion to acquire Reynolds 1 7 Aluminum. 18 In 1971 when the Clear Air Act was 19 passed, Alcoa's Rockdale plant was grandfathered 20 with the understanding that eventually, it would 21 voluntarily conform to the same emission 22 standards as other industries. Now, almost 30 23 years later, Alcoa still pours out a plume of 24 pollution that stretches across this great state 25 and by all indicators, plans to continue doing KENNEDY REPORTING SERVICE, INC. (512)474-22336 

### 1 so for the ne}Gt 40 

### years. 2 The citizens of Texas have entrusted 3 the TNRCC to safeguard the air they breath and 4 the water they drink. Neighbors For Neighbors 5 urges the TNRCC and other state agencies, such 6 as the Railroad Commission, to take all possible 7 steps to ensure that old plants, such as the 8 Alcoa Rockdale facility, clean up their 9 emissions. 10 

### is enough. Fifty years of pollution from Alcoa Thank you. 11 12 

### Mr. Wehner. MR. CAMERON: Thank you,

13 14 

### Ms. Ann Mesrobian? MS. MESROBIAN: My name is Ann 15 

### Mesrobian. I am Conservation Chair of the 16 

### Bastrop County Environmental Network, a 501 17 

### (c) (3) all volunteer members supported advocacy 18 

### organization serving Bastrop County since 1990. 19 

### I am in full support of the Neighbors For 20 

### Neighbors comments that were just submitted. 21 

### There's tremendous need for us to take a firm 22 stand on these old-dinosaur plants, Alcoa in 23 

### particular. 24 

### Our community is threatened greatly by 25 

### the plants to continue the mining of this KENNEDY REPORTING SERVICE, INC. (512)474-22337 

### 1 archaic fuel to be burned ln a substandard 2 facility, and I understand that the rulemaking

.. 

### 3 here today is not entirely able to deal with all 4 the problems we have out there because of so 5 many restrictions that were put on it during the 6 legislative session. But I really urge the 7 TNRCC when considering any requests for leniency 8 or special consideration of alternatives to 9 actually out right reducing their emissions, 10 that you take a hard look at this. Please 11 consider that in your deliberations. Thank you. 12 13 14 MR. CAMERON: Mr. David Savage? MR. SAVAGE: Thank you.
My name is David 15 Savage. I'm with Baker and Botts representing 16 the Texas Industry Project Coalition of the 17 industry across Texas. I appreciate the 18 opportunity to appear here before the Commission 19 today and make comments on the proposed rules 20 implementing the portions of Senate Bill 766, 21 having to do with the VERP requirements. 22 I have only one very specific comment 23 about a portion of the rule. It has to do with 24 proposed Section 116.812, which is on Page 60 of 25 the draft rules, at least the version we have KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 here this morning. In particular, it has to do8



### 2 with the proposed language included in 3 116.812(b) (3), which lists qualifying and PERC 4 projects for the VERP applications, and in 5 particular, the language indicates that a 6 qualifying PERC project is one in which 7 reductions emissions are made from permit levels 8 or from levels less than required under permits. 9 And a particular comment we want to 10 make is to request a clarification probably in 11 the preamble of the rule that this type of 12 project requiring only to reducing emissions 13 below a permitted level, but below a. 

### permitted 14 exempt level, that is below a level that is 15 currently authorized in an existing standard 16 exemption. The thought here is that there's 17 really no difference between those two types of 18 emission reductions. They're just included

-- 19 the applicable limits included in a standard 20 exemption as opposed to a permitted limit, but 21 they're in reality the same thing. 22 We think simply a statement in the 23 preamble clarifying that would be acceptable if, 24 in fact, the Commission intends in the future to 25 reclassify emissions made pursuant to current KENNEDY REPORTING SERVICE, INC. (512)474-22339 

### 1 standard exemptions as permits by rule, which we 2 think is the Commission's intent. In that case, 3 the language in (b) (3) referring to a permit, 4 would include those under current standard 5 exemptions. They would be permits by rule. 6 

### If that was not the Commission's 7 intention, and there is going to be an ongoing 8 discussion in the future between new standard 9 exempt emissions called permits by rule and old 10 standard exempt emissions, still called standard 11 exemptions, then we would suggest particular 12 language amending (b) (3) to clarify that section 13 in the course of my comments today. And in 14 particular, the language or the proposed 15 language would read, in that event, the 16 following: The reduction of emissions from a 17 permitted or permit exempt facility that emits 18 air contaminates to a level significantly below 19 the levels necessary to comply with the 20 facility's permit or permit exemptions. 21 you very much. Thank

22 MR. CAMERON: C. Austin, please. 23 And, Ms. Austin, I understand that you had 24 comments concerning both Senate Bill 766 and 7? 25 MS. AUSTIN: Yes, thank you. Ilm 

### KENNEDY REPORTING SERVICE, INC. (512)474-22331 

### just an ordinary citizen. 1 1

### m here not 10

2 

### representing any organization, but I'm aware of 3 

### a number of industrial plants across the state 4 

### that are emitting significant pollutants and 5 

### that are grandfathered. Notably one in Corpus 6 

### Christi where some friends of mine live, and in 7 

### Beaumont, Texas where I used to live, the Dupont 8 

### plant. And now I hear about Alcoa, and I know 9 

### that there are more that I've heard of from my 10 

### friends in the air pollution control activist 11 

### organizations. 12 

### And I just would like to say in general 13 on both of these bills that we've grandfathered 14 enough companies for enough time. Our air is 15 dirty enough. Austin and San Marcos and a 16 

### number of other cities are having ozone problems 17 already. We need to cease to make the loop 18 

### holes larger and continuing to tighten up on the 19 

### permitting and loop whole and regulations. 20 

### Thank you. 21 22 

### MR. CAMERON: Dr. Neil Carman? Thank you, ma'am.

23 MR. CARMAN: Good afternoon. My 24 name is Neil Carman with the Lone Star Chapter 25 of the Sierra Club. I'm the Clean Air Program KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 11
1 Director. I'll try to keep my comments real 2 brief. We've had a very bad ozone season, as 3 I'm sure that the folks in the Agency are well 4 aware. It looks like at this point that we're 5 running about 15 to 20 percent ahead of the 6 number of ozone violations that we had statewide 7 last year in 1998, and I think the point is that 8 we need to get all the reductions that we can 9 get. 10 And so, I think there is a burden on 11 the Agency to take a look at the draft rules as 12 to where they could be tightened up and to try 13 to seek the most stringent reductions possible. 14 In the Houston area, for example, the Agency 15 doesn't necessarily require best available 16 control technology. Well, it does require I 

### 17 should say BACT, but it should probably be 18 requiring LAER, which is, of course, more 19 stringent, if we want to comply with the Ozone 20 National Ambient Air Quality Standards. 21 One of the areas of concerns that I 22 have about the rules is the purchase and 23 destruction of high emitting automobiles or 24 other mobile sources, and the concern I bring is 25 the fact that in California there was a suit KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 12
1 filed against the state's Cash for Clunkers 2 Program because what they found is that the 3 vehicles that were being purchased by several of 4 the oil companies out there, in lieu of 5 reductions at the refineries, that the 6 vehicles

-- while they were junked in a sense, 7 they were being left at several different scrap 8 yards. And there was gasoline in the fuel 9 tanks, and so -- and these were in minority 10 neighborhoods. 11 And the concern of the citizens out 12 there that resulted in the lawsuit is that 13 basically the pollution in a sense was being 14 moved from one location to another. So, what we 15 need to ensure with this program here as an 16 alternative in lieu of reducing, you know, 17 grandfathered stack emissions, is that we need 18 to make sure that the vehicles that are going to 19 be removed are, in fact, destroyed, that they're 20 not being piled up in a community's 21 neighborhood, that's already suffering from 22 environmental racism. We have a lot of sites in 23 Texas where I would be very concerned about 24 these vehicles being left, such as in Beaumont 25 or Texas City, the Houston area, Corpus Christi KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 13
1 because there's already a lot of industrial 2 sites where communities suffer, I think, an 3 undue burden. 4 

### So, I don't think it's real clear in 5 the rules as to what the requirements are for 6 the destruction of the automobiles. I'm 7 concerned that it could be interpreted as just 8 removing them from the roads. So, I think the 9 Agency needs to make sure that there is some 10 kind of a certification process that the 11 vehicles are not left in a scrap yard for five 12 years with gasoline in the fuel tanks and these 13 vehicles are piled up, or I think there could be 14 a legal action. 15 In the case of California, I would also 16 emphasize that there was at least one state 17 official who was in charge of that program who 18 said it was -- the program didn't work, and 19 that's because of this problem that I've 20 described. Also, I'm very concerned about the 21 need for public participation on behalf of folks 22 who live near grandfathered plants. As in the 23 case of Alcoa, the people out there, as far as 24 I'm aware, have never been allowed to have a 25 public hearing over the emissions from that KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 plant. And you can go around the state

-- and14

2 with a lot of these large industrial facilities 3 where people may be interested"in a public 4 hearing, maybe not. 5 

### I just think it's very important that 6 the citizens in many of the communities around 7 the state do have that option if

-- you know, if 8 the Agency is willing to go along with that, but 9 I think that's real important because people 10 

### have been making a lot of complaints about 11 these

-- the emissions from these plants for 12 decades. And because so many of the facilities 13 were grandfathered, I think it was difficult for 14 the Agency to tackle some of the emission 15 problems at some of those plants. 16 I also wanted to point out that I think 17 some of these alternatives have some benefits, 18 but I think the bottom line is that some of 19 these large facilities, which have tons and tons 20 of nitrogen oxide emissions, it's clear cut that 21 we need to get all the reductions possible, if 22 areas like Houston, Dallas and so on, are going 23 to comply with the one-hour ozone standard. And 24 of course, we've got the eight-hour ozone 25 standard, assuming that it's not totally shot KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 down by the courts. If it is upheld, then, of15

2 course, we're going to have even, you know, more 3 nonattainment areas In the state that violate 4 that standard. 5 

### And in cases like Austin, well, maybe 6 we don't have a lot of industrial emissions In 7 this area. We do receive impacts from Gulf 8 Coast facilities, whether it's coming from 9 Houston or Corpus Christi or other areas. So, 10' 

### in this whole eastern air shed, i 

### think it's 11 really critical to get the maximum reductions 12 possible, and I'm not sure I'm not totally 13 convinced that the language in the regulations 14 is going to really result in that. So

-- and 15 even though there are a number of different 16 alternatives like, you know, companies could do 17 some car pooling and other kinds of programs, 18 I'm real concerned that there's not a good 19 enforceability about some of these alternatives. 20 I think it puts a tremendous burden on the 21 Agency to be doing a tremendous amount of 22 paperwork review rather than simply requiring 23 companies to get the reductions at the plants 24 rather than through some of these other 25 alternatives. KENNEDY REPORTING SERVICE, INC. (512)474-22331 

### Anyway, thank you very much. Illl be16

2 also submitting some written comments with some 3 of these details and additional comments. 4 5 6 

### MR. CAMERON: Mr. Pete Altman? MR. ALTMAN: Thank you.

Good morning. My 7 name is Peter Altman. I'm the Director of the 8 Sustainable Energy and Economic Development 9 Coalition, which is a nonprofit network with 10 1800 members statewide. The membership is made' 11 up of Texans who are committed to making our 12 state more sustainable. 13 I want to focus my comments today on 14 the health effects of air pollution from sources 15 that are affected by SB 7, as well as SB 766, as 16 well as what you who formulate these rule can do 17 to help minimize those effects. We know that 18 thousands of children and adults are exposed to 19 air pollution over the years from grandfathered 20 plants and other sources and that the 21 contaminants that these people are exposed to 22 include smog-forming emissions, as well as toxic 23 emissions. 24 With SB 7 and SB 766, we have a chance 25 to reduce these emissions, but we have to make KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 17
1 sure that the way these are longer implemented 2 will actually help improve public health. SB 3 766 requires you to develop that program with 4 the goal of protecting public property and 5 public health. It is, therefore, imperative to 6 make sure that health will be adequately 7 protected from plants that earn a permit through 8 the program. And one very important step you 9 can take to make sure that the rules comply with 10 this goal is to demand**stric~** 

### and cumulative 11 health effects reviews for plants that get 12 permits through SB 766, and also those plants 13 that are achieving reductions under Senate Bill 14 7. 

### 15 I'm aware that doing strict and 16 cumulative health effects reviews will counter 17 certainly to the current thinking and 18 implementation of SB 766, but I would argue that 19 ln abbreviated reviews, such as has been floated 20 in the rules, would be insufficient to meet the 21 goals of law. An abbreviated review not only 22 discounts that a**~lant ~ay**  

### be having negative 23 health impacts on surrounding and distant 24 communities, it really can be interpreted as a 25 willingness to overlook the health impacts that KENNEDY REPORTING SERVICE, INC. (512)474-22331 

### a plant may be having. It doesn't make sense 18



### 2 for the State of Texas to get ready to say that 3 we will sanction this plant, that we will 4 sanction this pollution source without careful 5 consideration of how it may be affecting the 6 surrounding community simply because it has been 7 polluting for 30 or more years, and simply 8 because there may already be health effects. 9 We've never had an opportunity to find 10 

### out whether or not these plants are safe, and 11 

### this is the opportunity to do so. With respect 12 

### to the need to do a cumulative health effect 13 

### review, it1s well documented that many air 14 

### contaminants have a greater impact on health 15 

### when they act in combination compared to when 16 

### they act individually. These synergistic 17 

### effects may be far greater than if the body were 18 

### only exposed to one contaminate at a time. 19 

### Therefore, it's necessary that we do a 20 cumulative health effects review before giving a 21 

### voluntary plant a permit to operate, and I want 22 to show you an illustration of why the 23 

### cumulative effects review are so important. 24 25 

### MR. CAMERON: MR. ALTMAN: Mr. Altman? Yes. KENNEDY REPORTING SERVICE, INC. (512)474-22331 

### MR. CAMERON: I'm not quite sure19

2 that the

-- we can enter the charts into this 3 type of testimony. 4 

### 5 some -- 6 

### MR. ALTMAN:

MR. CAMERON: We can provide you

-- if you can 7 yes. We can handle that, but we're not 8 structured to enter this type of graphical data 9 into the court reporter's testimony. 10 

### 11 12 MR. ALTMAN: MR. CAMERON: MR. ALTMAN: I understand. Okay. This is a map that we 13 made. Seed Coalition, Sierra Club and Texas 14 Campaign for the Environment mapped out the 15 location of grandfathered plants, as well as 16 schools in several counties in Texas. This is 17 Nueces County, and the colored blocks show the 18 grandfathered plants' site. And then the 19 schools are marked and named here on the map. 20 The big circles indicate a two-mile 21 perimeter around about the border of the 22 plant. And you can see several schools where 23 kids spend eight hours a day. That's why we 24 focused on them because that way we knew where 25 the kids were. They are within the perimeter of KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 20
1 two miles of several plants at a time. 2 (Indicating) Here, here, throughout this, and 3 so we know that thousands of kids, in fact, in 4 the eight counties we studied in Texas, 240,000 5 kids go to a school within two miles of a 6 grandfathered plant. 7 And we know that roughly half that 8 number in those counties are being exposed to 9 emissions from more than one plant at a time, 10 and most of them, s-ince most plant

### s ern.it nlore 

### 11 than just one pollutant, are being exposed to 12 more than one pollutant at a time. This is a 13 detail from Houston, and you can see how extreme 14 the situation gets where there are schools 15 within two miles of five or six plants. And 16 this really illustrates the need to look at the 17 cumulative effects because these plants are 18 emitting a variety of emissions, some that are 19 toxic, some that just contribute to smog, and 20 the impacts of toxic emissions. They could be 21 neurological disorders, reproductive, 22 developmental, lots of long-term health effects 23 on these children that will be with them 24 throughout their lives. 25 Companies will tell you that a full KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 21
1 health effects review is too much to ask, but 2 these companies are getting off easy by being 3 allowed to turn in their grandfathered status 4 for a new permit without having to meet our most 5 strict current emission standards. The least we 6 can do, therefore, if we have any commitment to 7 public health in Texas, is to make sure that 8 before we give a plant its new permit is 9 before we give a plant its new permit that we 1'0 

### make sure it is safe for the surrounding 11 community, the children, as well as their 12 families. The alternative is that we just 13 rubber stamp plants that we know are 14 contributing to the dangerous air pollution that 15 is choking our families. 16 Not requiring strict and cumulative 17 health effects reviews will extend a shameful 18 legacy of dirty air and sick families that will 19 embarrass Texas in the eyes of the nation. 20 That's it, and I'll also be submitting some 21 written comments. Thanks. 22 MR. CAMERON: Thank you, 23 Mr. Altman. If you have the graphical data that 24 goes along with it, please submit that. 25 MR. ALTMAN: I will submit that. KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 2 MR. CAMERON: Mr. Tom Smith? Thank you. 22

3 

### MR. SMITH: Good afternoon. My 4 name is Torn Smith. Most people call me Smitty. 5 lIm Director of Public Citizens Texas Office. 6 We're a nonprofit consumer and environmental 7 organization. 8 We thank you for holding these public 9 hearings, not only here in Texas, but across the 10·· state to get people's testimony on what they 11 think about your grandfathered emissions rules, 12 as well as the emissions rules for power plants. 13 Let me talk about three things today. The power 14 plant rules, the grandfathered facilities rules 15 and then the program specifically about 16 renewable energy that y'all have in

-- developed 17 as part of the grandfathered facilities project 18 emission reduction credit provisions. 19 

### First, let me say that we think there's 20 a real opportunity here to hit a home run for 21 air quality in Texas and to dramati9ally reduce 22 the emissions that are causing us to have air 23 quality attainment problems in our urban areas. 24 What the Legislation gave you was an opportunity 25 to reduce emissions from grandfathered KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 23

1 facilities, grandfathered power plants by 2 roughly 50 percent, and then two other options, 3 as well. It said that it was necessary to 4 reduce air emissions from in an additional 5 increment from power plants in order to meet 6 national ambient air quality standards. 7 have the authority to do so. Y'all

8 

### And in a tentative way in July, in this 9 hearing room, you-all put out the proposal that 10 we ought to reduce emissions in the 60-county 11 area east of I-35 and north of I-37 to .14 12 pounds per MMB to you. Had you done so and had 13 

### you maintained that, it's our belief that 40 to 14 70 percent of the ozone exceedences in the 15 Dallas/Fort Worth area in '97 and '98 would have 16 been avoided. And while that's not going to 17 clear the air over the Dallas/Fort Worth area, 18 we believe it would have reduced emissions by as 19 much as 80,000 tons and would have made a 20 tremendous down payment on air quality in the 21 Dallas/Fort Worth area. 22 And we would urge you to reinstate 23 those rules at your -- that rulemaking at your 24 earliest possible opportunity because as your 25 data and the data from the ozone transportation KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 24
1 assessment group clearly documents, this is by 2 far the most cost-effective way to reduce ozone 3 emissions in the state and is far less costly 4 than any of the other alternatives that are 5 being discussed, including inspection and 6 maintenance and reducing emissions from 7 grandfathered facilities or reformulating 8 gasoline or buying low emissions vehicles. This 9 is the cheapest, fastest and perhaps, the most 10 dependable way to reduce**a~r** 

### emissions. 11 Secondly, we would like to suggest that 12 you assure that all the grandfathered power 13 plants meet today's best available control 14 technologies for a wide variety of emittance, 15 not just nitrogen oxides and sulfur dioxides. 16 And on Page 40 of your proposed rulemaking, you 17 ask the question: Do we have the authority and, 18 indeed, the obligation to require that a 19 grandfathered power plant undergoing this review 20 meet federal new source performance standards 21 and NSP standards. And the answer, we believe, 22 is clearly yes. It's important that you look 23 beyond just nitrogen oxides and sulfur dioxides 24 and look at toxins, heavy metals and 25 particulants. KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 25
As you're all aware, critically aware, 2 particularly the coal-fired plants are the 3 largest single industrial sources of these 4 emissions with the exception of Alcoa in the 5 state of Texas, and it's absolutely critical 6 that given the regulatory agenda that you have 7 coming down from Washington and the burdens you 8 have before you in the next decade in this 9 state, that you examine these

-- you take this 10 opportunity to require them to get a federal 11 permit as -- and meet the federal standards when 12 you permit them. 13 Another issue we'd like to visit with 14 that you allude to in your rules is how much 15 credit do you get under the grandfathered power 16 plants section for emissions reductions, and how 17 long should those emissions reductions be good 18 for? We have a real hard time as a state trying 19 to figure this out because at one level it's our 20 goal to reduce emissions as much as possible, 21 and yet, we also have another goal which is to 22 inset the largest reductions possible. And if 23 you were to say simply that your credit is only 24 good for the year in which you make the 25 reductions, what may end up happening is you may KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 26
1 not be able to get the larger reductions that 2 would really help clear the air through 3 additional reductions made at a permitted power 4 plant or at

-- that chooses to opt in to the 5 credit trading program or the vast reductions 6 you might get if some of these utilities decided 7 to retire some of their power plants. 8 

### So, what we would like to suggest is 9 you give additional years of credit for those 10 that make additional reductions, three years, 11 perhaps, on a permitted power plant and five 12 years, perhaps, on a retired power plant, and 13 that, we think, will significantly induce the 14 companies or give them an additional incentive 15 to make additional reductions. And I'll make 16 this point twice. And the last one I'd like to 17 make on the power plants piece is that we would 18 urge you to make sure that citizens have real 19 notice of the upcoming hearings that are 20 required under the provisions of this bill, and 21 what you're required to do under the law but not 22 limited to, is to give notice to the 23 municipality adjacent to the plant. 24 Now, I've scratched my head and tried 25 to figure out what that might be for Fairfield, KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 27
1 adjacent to Big Brown or to Limestone, and these 2 are tiny, little towns, but the people who are

- 

### 3 most affected aren't the people who live in 4 those tiny, little towns. They're the people 5 who live upwind and who have

-- or downwind, 6 rather, and those people who are affected by 7 transport. And, again, you have minimal 8 requirement of notifying the municipalities, but 9 there'S nothing to say that you, under your 10 general autnority, can't take the additional 11 responsibility of notifying those people who 12 would be affected, especially as you and the 13 Legislature have determined that there is 14 significant transport from these power plants 15 all the way into the Dallas/Fort Worth area. It 16 is incumbent on you to be responsible enough to 17 notify people in that area of an opportunity to 18 be heard on these power plant reduction permit 19 hearings. 20 

### Now, on other grandfathered issues, 21 there are about five things I'd like to speak to 22 on this. As Pete has spoken to, perhaps the 23 greatest opportunity you have in writing your 24 rules is defining what kinds of public health 25 reviews are necessary, and it's clear from your KENNEDY REPORTING SERVICE, INC. (512)474-223328


### 1 request for comments that this is an area that 2 has caused you-all a great deal of puzzle. Do 3 you simply give a -- if somebody comes in and 4 applies for best available control technology to 5 say, you don't need a public health review? We 6 think that's probably appropriate to minimize 7 the cost there! but what about those that come 8 in this middle level or with 10-year best 9 available control technologies. We think it's 10**incumb~nt** 

### on you if they're using less than the 11 best to require a full-scale public health 12 review! and in addition! especially if they are 13 a facility that emits toxins or heavy metals or 14 is in an area where there is significant 15 concentration of other facilities or which is 16 or in an area which is adjacent to a school! a 17 nursing home or a day care center. 18 

### It is absolutely incumbent in all three 19 of these particular situations that you look at 20 the cumulative effects and you require not only 21 a full-scale health effects review! but that you 22 require monitoring to be done at those 23 facilities to

-- and really get a good picture 24 of what the total emission load is in that 25 community at the time that you're beginning to KENNEDY REPORTING SERVICE! INC. (512)474-2233

### 29
1 do a permit so that you-guys have a real good 2 idea of what's going on. Y'all have the 3 authority, as I understand it, to require 4 certain kinds of monitoring data under these 5 rules and under your general rules. And it 6 makes sense for you to have that knowledge 7 because as we're well aware, and you more 8 painfully than I, 

### you don't have the adequate 9 data to make the permitting requirements on 10··

### them. At the time they file for a permit, it's 11 our belief you can ask them to do that 12 monitoring. 13 Secondly, we think you need to reduce 14 the emissions by the maximum amount possible. 15 As you're painfully aware, the statute says if 16 you -- these guys get to use 10-year-old best 17 available control technologies, unless they're 18 in a nonattainment area or near a nonattainment 19 area in which they get to use something called 20 generally available controlled technologies. 21 One area where I think you can, by rule, define 22 terms of art that will help you make that 23 generally available control technology as tough 24 as possible is in determining what we mean when 25 we describe within the area as defined by the KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 30
1 statute, and how you define that is critical 2 because as you're well aware, in an area like 3 Dallas or Austin or Houston or Beaumont, there 4 may be only one other comparable plant of a 5 similar

-- that uses -- that produces similar 6 emissions. And if you define the area to mean 7 the 60-county area, you're going to have a 8 significantly larger universe of plants with 9 which to choose, and we would urge you to do 10 that because I think it will help you reduce air 11 emissions dramatically. 12 Another point that I'd like to make is 13 that we should assure that we're not giving 14 emission credits for phantom reductions. As you 15 know, the statute allows you to issue these 16 PERCs for

-- to those facilities that cannot 17 otherwise make reductions, but it isn't clear as 18 to when that test applies. We would urge you to 19 be as tough as possible saying that you have 20 exhausted not only your opportunities to use 21 best available control technologies, but 22 generally available control technologies and 23 have a tough test for what cost-effectiveness 24 is. 25 We're very concerned about the fact KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 31
1 that many of these programs that are outlined 2 under the PERC program are, in fact, generally 3 phantom reductions. Neil has talked about the 4 programs where you crush high-emission vehicles. 5 In California and other states, what often times 6 happens is these are not the vehicles

-- the 7 vehicles chosen are those that have been scooped 8 up off the streets by the police or as abandoned 9 vehicles for

-- and not vehicles that are 10· necessarily running. Others may**~e** 

### vehicles 11 which are not used in the daily course of 12 business but are used infrequently as backup 13 vehicles, the old truck that sits out behind 14 is the trash truck that many Texans have to hall 15 the trash to the dump or to go to the 16 lumberyard, and somebody offers them a good 17 chunk of money for it. And they say, well, this 18 is a better way to get rid of this vehicle than 19 any of my other options, but they're not solving 20 the problem. And unless you figure out a way to 21 take a look at the real use on those vehicles, 22 you're going to end up not having solved the 23 problem and just giving an emissions reduction 24 credit for phantom reduction. 25 Similarly, car-pooling is another KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 option or telecommuting. As a person who's 32

2 joined many a car-pool in my life, I have great 3 intensions, and will frequently show up and 4 say for the first week with rigor, on time, 5 cup of coffee and ride into work with my 6 buddies. By the second week, I'm missing a day. 7 By the third week, by God, I've got to go to the 8 doctor, I r

### ve got to go to the grocery store, 9 I've got to go to the video store and make it 10 maybe once, and you 

### get**t~e** 

### Test of idect. 11 Car-pools have not worked unless there are 12 significant penalties and incentives granted to 13 the ridership, and unless there are significant 14 penalties for the people who are providing the 15 emissions reductions, you will have phantom 16 reductions from car-pools and telecommuting. 17 That program, if it used at all, needs to have 18 teeth, and what you 

### have in your rules are 19 inadequate to develop that. 20 

### Lastly, we're very excited about the 21 opportunity here to use renewable energy as a 22 reduction credit program. Others will talk in 23 greater detail than I about this, but I think 24 the big thing that I'd like to say here is that 25 the intent that is in the rule, that there be KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 33
1 significant reductions that are quantifiable and 2 verifiable, is one that we all agree with. The 3 problem we see is that what you propose in the 4 

### rules is a reduction in a specific power plant. 5 

### We think there may be some other alternatives 6 

### that would get to the goal we all have, and 7 

### that

-- and what we're suggesting here is that 8 maybe the way to get there is to 9 contrast what's going to happen. is to

If you go out and you go to the utility 11 and say, we want to trade renewable energy for 12 emissions reduction at Alcoa. The utility is 13 going to say, okay, I'll reduce my permit over 14 here at Parkdale or a plant that they don't use 15 very much, they might use 5 percent of the time, 16 and so they're going to take the emissions 17 reduction out of that 90 percent of the time. 18 They're not really using the plant, and so 19 you'll get virtually no reduction. So, we think 20 that maybe the way to do it is to give credit 21 based on the reduced amount of megawatts sold 22 from the average system power within the service 23 area of the utility that has traditionally 24 provided electricity in that community, such as 25 TU, so that you get a real mix of what the KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 34
1 average emissions are over time that would be 2 displaced. 3 And a second question that we would 4 like to ask that you think about is whether or 5 not there should be an opportunity to buy and 6 retire credits in the SB 7 program. That might 7 be another way to solve this problem and 8 actually give permanent reductions in emissions. 9 And then the last point I'd like to make is to 10· assure that the fees that you charge are 11 adequate to do the job! and this is again, an 12 area where you have significant regulatory 13 authority. I think that we want to give people 14 an incentive to use best available control 15 technologies, so maybe a hundred bucks is not a 16 bad idea for a proposal. But we think it is 17 clearly inadequate to only propose to charge 18 $450 to process an application under the new 19 generally available control technology standard. 20 That's going to take a tremendous amount of 21 analysis to conduct, and it's well.-- any 22 application under the project emission control 23 technology provisions. 24 We think that the application process 25 ought to offer an incentive to gut our fee or KENNEDY REPORTING SERVICE! INC. (512)474-2233

### 35
1 offer an incentive to use the best available 2 control technologies. So, we would certainly 3 suggest a fee that would be adequate to really 4 compensate you for the work you're going to have 5 to do to process it and either do it on an 6 hourly basis or perhaps, on an emissions tonnage 7 basis or, perhaps, just come up with high 8 numbers like 10,000, 100,000. You get the idea. 9 I'm not sure what y'all have the courage to get 10 away with, but I would urge**yo~** 

### to think big in 11 terms of numbers. 12 It's clear that the statute glves you 13 the authority to do that, and we think that the 14 application processing ought to be adequate 15 fee ought to be adequate to cover your expenses. 16 And it's important to realize that your expenses 17 are going to be high on this, and weill support 18 you in every way we can. Those are my comments. 19 I'd be happy to answer any questions you may 20 have. 21 MR. CAMERON: Thanks. If we have 22 any questions, we'll address them after the 23 hearing. 24 MR. SMITH: Okay. And we will be 25 submitting these to you in greater detail and KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 writing. Thank you for your time. 36

2 

### MR. CAMERON: Thank you. 3 

### 4 me. 5 

### And, finally, Mr. Torn Smith. Let me change pages. Mr. Sam Enfield? Pardon

6 

### MR. ENFIELD: Good afternoon. My 7 name, as you say, is Sam Enfield. I am in the 8 wind power development group at FPL Energy. FPL 9 Energy is a major independent power producer and 10-one of the leading wind power developers in the 11 country, but 1 1

### m really here today on behalf of 12 the Texas Renewable Power Coalition, which is 13 consistent of four of the five largest wind 14 power developers in the country and the three 15 largest (inaudible) manufactures. 16 

### We carne together earlier this year 17 really

-- and reflect, I think, the fact that 18 the wind power industry has very much focused 19 its attention on Texas. It's probably the most 20 important market in the country right now, 21 particularly with the passage of SB 7 and the 22 renewables mandate. 23 Some Texas

-- the members of the

That's 24 Coalition have**develope~ 14~~~gawatts**  

### of wind 25 generating plants over the last year. KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 about $140 million investment. The renewable 37

2 mandate within SB 7 will bring on line an 3 additional 2,000 megawatts of renewables, much 4 of which we hope will be wind power, will 5 obviously include some other resources. 6 

### So, it

-- Texas, with one of the very 7 best wind resources in the country and a robust 8 electric power market is very much in the sites 9 of my industry, and we're very much present. 10 Although, most: of members are Hot Texas Lirnl::>, 11 we're very much present and focused on this 12 market. As I said, we've been concentrating 13 heavily on SB 7 and the renewables mandate, but 14 we have been observing this program as it has 15 been developed and are very hopeful that we can 16 contribute a cost-effective alternative for 17 pollution control in Texas. 18 This will be particularly so if the 19 production tax credit for wind is extended, 20 which directly assists our project economics. 21 It will also be significantly the case if Texas 22 and financing and property tax exemptions, which 23 accrue to pollution control equipment, also is 24 extended to renewable equipment in general or 25 wind equipment, if it is used through the KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 through this program, the 766 program. 38


### I think 2 that will make

-- take it a considerable degree 3 to making wind cost-effective. 4 There are obviously practical 5 considerations that need to be addressed if 6 renewables are going to meet the objective for 7 this program. Location is one. Wind, for 8 example, most of the good wind sites in this 9 state are in West Texas or in the Panhandle. 1.0 Those may· not be the air sheds wne:ct:::: 

### the 11 pollution reductions are most important, but we 12 have traditionally transmitted our power over 13 distances. And if we can deliver power to 14 customers within air sheds and displace 15 generation within those air sheds, then I think 16 we may be able to offer something to you. 17 In general, I think we share one major 18 peril objective. Yours is to achieve long-term 19 pollution reductions. Wind power and 20 renewables, in general, operate best and are 21 most cost-effective when procured in a long-term 22 contract mode. So, long-term commitments are 23 important to us, as they are important to you, 24 and hopefully we may be able to work out a way 25 where those two parallel objectives can be met KENNEDY REPORTING SERVICE, INC. (512)474-223339


### 1 to the benefit of your program. 2 

### That's all I wanted to say today. It's 3 mostly I wanted you to be aware that this 4 industry is very much focused on this. We'll 5 submit comments and be happy to work with the 6 staff over the development of the rule to see if 7 we can offer a cost-effective alternative for 8 your program. 9 

### Thank you. MR. CAMERON: That concludes the 10 list of speakers that are indicated on the 11 sign-up form if they wish to speak. Is there 12 anyone else in the audience who did not indicate 13 so who would wish to speak at this time or who 14 came in late who might wish to offer some 15 comments? 16 17 more. MR. CARMAN: I'd like to make one

18 MR. CAMERON: Okay. Could you 19 state your name for the court reporter? 20 

### MR. CARMAN: My name is Neil 21 Carman with the Sierra Club, again. Under Rule 22 116.811, Section 2, where it talks about the 23 measurement of emissions, I'm very interested in 24 this part of the rule because we know there is a 25 tremendous amount of uncertainty with respect to KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 1 the emissions inventory. 40
You could go back 20, 2 25 years, and they would have said we -- the 3 inventory has so much uncertainly, and I still 4 go to meetings around the state where, you know, 5 we're really not sure how accurate the inventory 6 

### is. It could be a hundred percent high, or it 7 could be low. 8 

### 9 it says: And under the measurement of emissions, The VERP may have provisions for 10 measuring the emissions·of air contaminates as 11 determined by the Commission. This may include 12 the insulation of sampling ports on exhaust 13 stacks, and so forth. I think although, 14 there's already a considerable amount of 15 monitoring being required for

-- a.number of the 16 criteria includes like NOx and S02, I wonder if 17 there may be some significant sources in these 18 grandfathered facilities where there has been 19 no, you know, current stack testing or 20 monitoring that's being conducted. And I think 21 that the Agency needs to look real close at the 22 applicant the permit applications of some of 23 these facilities because we know of the 24 tremendous uncertainties in the emissions 25 inventory as a whole and even with respect to KENNEDY REPORTING SERVICE, INC. (512)474-2233

### 41
1 the inventories for a lot of the plants, and so 2 much of the inventory is often based upon 3 emission calculations and estimates. So, I just 4 would urge the Agency to be very, you know, 5 

### strict with the application of that measurement 6 of emissions because I think if somebody comes 7 in and they're understating their emissions, 8 then I think that's very important because then 9 that means that there's a need to get more 10- significant reductions than what they:re 11 claiming_ 12 And, you know, when we look at a 13 facility like Alcoa, which has over 100,000 tons 14 of grandfathered emissions, you know, just 15 through simple errors in the calculation or 16 estimation methods, they could be off by a few 17 percent, and I think, you know, we're after 18 every pound of reductions possible, so - - and 19 every ton. 20 21 Mr. Carman. Thanks. MR. CAMERON: Thank you,

22 Is there anyone else? Very good. I 

### 23 would remind you-all that the close of comment 24 period for Senate Bill 766 comments is October 25 11th at 5:00 p.m., and also, if you want to get KENNEDY REPORTING SERVICE, INC. (512)474-223342


### 1 a copy of the rules as adopted, please make sure 2 we have your address either on the sign-up sheet 3 

### or a business card before you leave. 4 

### If there's no one else who wishes to 5 

### speak, I will close the hearing. 6 7 8 9 10' 

### 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 

### (Hearing adjourned: 1:00 

### p.m.)

KENNEDY REPORTING SERVICE, INC. (512)474-22331 2 

### C E R T I F I CAT E 43

3 STATE OF TEXAS 4 COUNTY OF TRAVIS 5 6 

### I, JANIS SIMON, a Certified Shorthand 7 Reporter in and for the State of Texas, do 8 hereby certify that the above-mentioned matter 9 occurred as hereinbefore set out. 10 I FURTHER CERTIFY THAT the proceedings 11 of such were reported by me or under my 12 supervision, later reduced to typewritten form 13 under my supervision and control and that the 14 foregoing pages are a full, true, and correct 15 transcription of the original notes. 16 IN WITNESS WHEREOF, I have hereunto set 17 my hand and seal this 18th day of October 1999. 18 19 20 21 22 

### 23 24 25 Janis Simon Certified Shorthand Reporter CSR No. 7076

- Expires 12/31/01 Kennedy Reporting Service, Inc. 800 Brazos, Suite 340 Austin, Texas 78701

KENNEDY REPORTING SERVICE, INC. (512)474-2233INDEXOFORALTESTIMONY

October5,1999,Irving,1:00pm

ReferenceNumber

0-1

0-2

0-3

0-4

0-5

0-6

0-7

0-8

0-9

0-10

0-11

0-12

0-13 Submittedby

JimHarder,GarlandPowerandLight Subject:SB7 ToddMain,TexasCampaignfortheEnvironment Subject:SB7 ValerieChase Subject:General PeterAltman,SustainableEnergyandEconomicDevelopment Coalition(SEED) Subject:SB766 RepresentativeLonBurnam Subject:SB7 Dr.NeilCarman,SierraClub Subject:SB766 TomSmith,PublicCitizensTexasOffice Subject:SB7andSB766 AnneRowe Subject: SB766 ShawnGlacken,TXU Subject:SB7 StanleySpruiell,U.S.EnvironmentalProtectionAgency Subject:SB7 ElaineWiant,LeagueofWomenVotersofTexas Subject:SB7andSB766 JimDuncan, Subject:SB7andSB766 MollyRookeSeay Subject:SB70-14

0-1

0-2 JimSaye Subject:General

October5,1999,Irving,4:00pm

FoyMoss Subject:General StanleySpruiell,U.S.EnvironmentalProtectionAgency Subject:SB766

## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: Irving 

## Date: October

## 5,1999(1p.m.) 

## Concerning: ElectricIndustryRestructuring

## (SB7)

NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne)



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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: Irving 

## Date: October5,1999(1p.m.) 

## Concerning: ElectricIndustryRestructuring

## (SB7)

NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne)

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: Irving 

## Date: October5, 1999(1p.m.) 

## Concerning: ElectricIndustryRestructuring

## (SB7)

NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne) 

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: Irving 

## Date: October

## 5,1999(1p-=-=.ffi==.y-)

_ Concerning: ElectricIndustryRestructuring

## (SB7)

NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne) 

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: 

## Irving Date: 

## October5,1999(1p.m.)



# . 

# , Concerning: 

## ElectricIndustryRestructuring(SB7)

NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne)

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: 

# Irving Date: 

# October5,1999(1p.m.)

, 

# , Concerning: 

# ElectricIndustryRestructuring(SB7)

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## TexasNaturalResource ConservationCommission PublicHearingRegistration Location: 

## Irving Date: 

## October5,1999(1p.m.) Concerning: 

## ElectricIndustryRestructuring(SB7)

NarqeandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne) 

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location: Irving 

## Date: October5,1999(4p.m.) 

## Concerning: AirPermits

-VERP(SB766)

NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted?

,- (CircleOne)
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### T5<**7~0.3** 

### 3'TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION AUSTIN, TEXAS IN THE MATTER OF: PROPOSED REVISIONS TO 30 TAC CHAPTER 319

PUBLIC HEARING TUESDAY, OCTOBER 5, 1999

BE IT REMEMBERED THAT at 1:00 p.m., on Tuesday, the 5th day of October, 1999, the above-entitled matter came

on for hearing at the City of Irving Central Library AUditorium, located at 801 West Irving Boulevard in Irving, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings were reported by Curtis High, CSR in and for the State of Texas:



## (""'1"7\1'"

## '71"''""\1"7\**~~_l:\: _\.....'~**  

# arecordof excellence
800Brazos • Suite340 • Austin,Texas 78701 • 512-474-22331 2 3 4 2 PRO C E EDIN G S TUESDAY, OCTOBER 5, 1999 (1:00 P.M.) MR. CAMERON: Good afternoon. Appreciate 5 your patience, we're starting a little bit late. I would 6 like to go ahead and open up this hearing concerning the 7 implementation of -- or especially concerning hearings on 

# , 8 proposed amendments to 30 Texas Administrative Codes, 9 Chapters 101 and 116. 10 Can everybody hearme all right? Is that 11 better? Okay, I'll try and talk louder into the microphone. 12 These proposed amendments are referenced 13 under Texas Natural Resource Conservation Commission Rule 14 Log Number 99033-116. Like to acknowledge very quickly the 15 presence ofthe Honorable Lon Burnam, State**Represent~tive** 16 from FortWorth. Welcome. 17 And I'd like to welcome everyone to this 18 hearing. We are going to do things a little bit differently 19 today. This hearing is scheduled at 1:00 o'clock. We also 20 have a hearing at 4:00 o'clock scheduled to receive 21 testimony on the implementation of Senate Bill 766, which is 22 also proposed amendments in Chapter 116. 23 Forthe convenience ofeveryone here today, 24 and for the ones who might also showup at 4:00 o'clock, we 25 will be taking testimony on either Bill at this hearing as3 1 well. Forthose ofyou who are familiar with the structure, 2 this hearing is set up for receipt oforal testimony only. 3 I will begin calling speakers. The

-- there's no 4 cross-examination or questioning the staffduring the 5 hearing. For 30 minutes prior to the opening of the hearing 6 we were present for questions and we'll be glad to stick 7 around for as long as necessary to answer any questions you 8 mighthave afterwe close the hearing. 9 I would also ask those ofyouwho have not 10 registered, please do so, and ifyou wish to receive a copy 11 ofthe rules as they are adapted by the Commission, please 12 supply your name and address on the registration form or 13 supply one ofour staffmembers here with a business card. 14 My name is Beecher Cameron. I'm with the 15 Regulation Development section. Also ofthe TNRCC staff, 16 Mr. Brian Christian from Intergovernmental Relations and 17 Mr. David Schanbacher from our Executive Director's Office. 18 with that out ofthe way I think I'll proceed directly ahead 19 and call our first speaker, and that would be Mr. Jim 20 Harder. 21 Would you come forward, please, and please 22 spell your name for the Court Reporter and please talk 23 directly from this lectern here. 24 MR. HARDER: My name is Jim Harder. I'mwith 25 Garland Power and Light. Garland Power and Light is a4 1 municipal utility that serves the citizens ofGarland, 2 Texas. Garland, Texas, population about 205,000 residents. 3 We have all our energy requirements are supplied by our 4 units that produce power and energy in the vicinity of 5 Garland. 6 Our units are within whatwe would call the 7 four four county nonattainment area except for oneunit 8 thatwe jointly own with three othermunicipal utilities and 9 that is Gibbons Creekwhich is down in Grimes County, Texas. 10 We presently have four small units that are under 25 11 megawatts. We have one unit of 150 megawatts that is 12 permitted and thenwe have three otherunits that are 13 presently grandfathered that apparently will come within the 14 provisions of SB 7 as passed by the legislature. 15 We believe that the intent of SB 7 as passed 16 was that the legislature was looking at reducing the 17 emissions from grandfathered units 50 percent. As the Bill 18 is written and as is being interpreted by TNRCC they are 19 stating that the 50 percent reduction must come from the 20 1997 levels of emissions, which creates a tremendous 21 hardship for us in Garland. 22 During that '97 time level we had two ofour 23 units down for maintenance outages. They were down for 24 overhauls, and consequently ifyou take the allocated tons 25 basedupon the '97 levels, one ofour units, unitNumber 5,5 1 ifyou compare what the levels ofNOxemissions in '98 and 2 compare itback to the allocated 50 percent level for '97, 3 we would have to have an 80, 84 percentreduction in NOx 4 levels on that unit. Another unit owned, the Number 1, we 5 would have to have almost a 60 percentreduction in NOx 6 levels. 7 We believe that this provisionfs onerous to 8 us and we are asking that an investigation be made to 9 whether they could go -- some provision could be made to go 10 back to other types of legislation thathas been passed over 11 not only the state here, but across the country where you 12 average five year production levels to come to some type of 13 reasonable level to reach your -- your baseline for your 14 reductions that are requested. This is one point that we 15 want to make as far as our comments on 5B 7. That is a 16 major point. 17 The second thing that we want to bring out to 18 your attention is the fact thatunder 5B 7, the 5B 7 19 legislation is concernedwith the NOx level, or addresses 20 the NOx levels from the grandfathered units. Butunder the 21 proposed interpretation of 5B 7 by TNRCC, they are 22 addressing photochromics that go back to both the NSPS and 23 hazardous**air~pollutants** levels which are not addressed in 24 5B 7 at all. We question this interpretation and we ask 25 that that be

-- that we be relieved from those type of6 1 provisions, and at least thatwe be given an explanation of 2 why this is beingrequired. 3 The third mainpoint that we want to bring, 4 and this is a very, very importantpoint, is thatunder the 5 deregulation Bill, SB 7 that was passed by the state 6 Legislature, the PUChas been mandated to carry out the 7 whole provisions ofderegulation and getting the utilities 8 and power marketers, IPP's, et cetera, to jointly come up 9 with a set ofprovisions that where the regulation would be 10 enacted. 11 The -- under SB 7 and the PUC mandate there 12 are certain very, very important units within the 13 Dallas/FortWorth areawhich are being designated must run 14 units, and what these units -- simply stated is that if 15 these units aren't running during the summer time period 16 there will be a voltage collapse, or anotherway to put it, 17 powerblackouts in the Dallas/FortWorth area. 18 Our units at the at Garland are designated 19 those must run units. Ifthese units are forced to shut 20 down because of onerous legislation that over -- over does 21 what really the legislature intended, these units together 22 with certain otherunits in the City ofDenton and other 23 units for TXU, iftheywere forced to shut down it's just 24 not a matter ofwill Dallas/FortWorth go black, itwill go 25 black. It will shut down during summer because these units7 1 are extremely important. They are peakunits that are used 2 during the summerperiods -- summerperiods. 3 The fourth point I would 

### liKe to make, I 4 really address this to the TNRCC staff, is that our 5 interpretation of SB 7, particularly if.you look at section 6 39.002, our interpretation ofthe section is that the -- the 7 requirement for grandfatheredunits does not apply to 8 municipal utilities that opt out ofderegulation, and until 9 such time that Garlandparticularly opts into deregulation 10 we feel that we would not be required to comply with -- with 11 SB -- with these SB 7 requirements, andwe againwould like 12 an interpretation ofthat from you because our lawyers have 13 made that their opinion. Andwith that I will close. 14 MR. CAMERON: Thankyou, Mr. Harder. I have 15 to apologize a bit for the brightness ofthe stage. We're 16 trying to get the lights under control, but right now it 17 feels a bit like a floor show. 18 Mr. ToddMain. 19 MR. MAIN: Good afternoon. I'm the Director 20 ofthe Texas Campaign for The Environment which is a 21 statewide citizens group. We're going to submitwritten 22 comments, but I wanted to justtouch on a couple of 23 importantpoints.**~he** first one concerns section 24 116.811(1), which is the section that addresses requiring 25 companies seeking a voluntary emission reductionpermit to8 1 undergo an abbreviatedhealth effects review. TheTexas 2 Campaign for The Environment supports not an abbreviated 3 health effects review, but a full health effects reviewthat 4 includes an analysis ofthe cumulative impacts that come 5 from multiple sources of emissions and from mUltiple 6 categories. 7 For 30 years now grandfatheredpolluters have 8 gone without any sort ofpublic health review and yetwe 9 know that they produce some ofthe largest amounts of 10 chemicals that contribute to the ozone problem inmany of 11 our nonattainment areas. Ifthe Commission is going to use 12 an abbreviatedhealth review we suggest that you setthe bar 13 for significant reductions. Protecting the public health is 14 more important thanprotecting these oil facilities. 15 The secondpoint we would like to make is 16 regarding section 116.811(3), which is defining generally 17 vehicle control technologies for facilities in the same 18 area. We would suggest that you expand the geographic area 19 to include the entire air shed, notjustthe counties for 20 most of the grandfathered facilities. We suggest thatyou 21 also expand this to include the entire TCAS region which is 22 essentially east ofI-35 where the majority ofthese 23 facilities are located. 24 Thirdpoint, section 116.812 deals withperks 25 or project emissionreduction credits. We are concerned9 1 that the ratio of exchange be consistent with the federal 2 standards. We recommend that it be similar to or greater 3 than a 1.2 ratio to 1; or in other words, for every credit 4 ofreduction that you're going to receive you must have a 5 greater actual reduction in alternative methods. 6 We know that the experience of some ofthese 7 programs in other areas ofthe country have been a real 8 failure, and we're very concerned that rather than making 9 reductions to actually clean the air we're going to do 10 things that sort of look good and feel good, but don't bring 11 any serious reductions. 12 The fourth point concerns Section 116.816, 13 and this concerns the deferral ofreductions in emissions of 14 certain contaminants ifthe applicant makes reductions in 15 other specific air contaminants. During the last 16 legislative session this**particula~** provision was commonly 17 referred to as the Alcoa loophole. 18 We are very concerned becauseAlcoa 19 represents the largest single polluter in the state that is 20 grandfathered and we're afraid that this will allow Alcoa to 

### 21 continue to produce 60,000 tons of S02 that it emits into 22 the air every year in exchange for smaller cuts in NOx 23 emissions. This is an important issue for ourmembers in 24 the Dallas/FortWorth area because the plumes that have 25 been -- plume studies that have been done from Alcoa show10 1 that it is a contributor to the problems that we have in the 2 Metroplex. 3 The other thing that's of concern to us is 4 that there is a provision there that if it's a significant 5 economic hardship they are allowed to -- to look at some of 6 these deferrals, and this is particularly incredulous to us 7 given that inthe legislative sessionAlcoa suggested that 8 $100 million investment in scrubbers wouldput them.out of 9 business, yet we also find out thatthey justpaid $5.6 10 billion in cash whentheyjustboughtReynolds Aluminum. 11 The two criterias that we would like to 12 suggest that you add to your evaluation metrics: The first 13 one would be to look at the impact oftransports that 14 pollution has on nonattainment areas whichwould include for 15 the Dallas/FortWorth areamany ofthe powerplants and 16 chemical facilities in EastTexas, as well as Alcoa and Big 17 Brown. 18 The second criteriawe would like to suggest 19 is that you include somethingthatwe have called a truth in 20 hardship provision inthat ifa company is going to claim 21 economic hardship that they be asked to prove their case. 22 Because right now citizens are already bearing the hardship 23 in economic costs ofthe airpollution in the form ofhigher 24 gasoline prices, more pollution control equipment for their 25 cars, and the health care costs that corne from all ofthe11 1 asthma that our children are experiencing. 2 The fifth point I would like to make concerns 3 Section 116.841, and this concerns hearing requirements for 4 the initial issuance ofvoluntary emission reduction 5 permits. There's a concern in here that there's a criteria 6 that ifa request for notice and comment period is 7 consideredunreasonable, they don't have to have a hearing. 8 And the questionwe have is that ifa citizen is impacted by 9 this pollution, how can there be an unreasonable request? 10 And then we flesh this out a little bit more, because too 11 often our experience has been this is a way to cut down on 12 public comment -- content and pUblic input into the process, 13 and that's deeply concerning to us. 14 The lastpoint I would like to make concerns 15 Section 116.850, and this concerns the fees that you're 16 offering for people to come into the program, and what is 17 being suggested is that ifpeople come in they're allowed to 18 have a $450 flat fee ifthey propose controls that are at 19 least as stringent as tenyear old BACT. 20 And it occurs to us that this is exactly the 21 wrong kind ofincentive to offer, and that whatwe ought to 22 do is use the marketmechanismwhichwe have found to be so 23 effective in our economy and have a sliding scale. We would 24 suggest that ifyou're going to make greater reductions, you 25 should reduce

-- you should have reduced fees.12 1 Right now inTexas the money thatwe allocate 2 f.or setting up monitoring stations and for evaluating 3 different levels of

-- differentkinds**of~pollutants** is 4 woefully inadequate, and wewould suggest that one ofthe 5 areas that we can put some ofthis money is into increase 6 the monitoring situation. Thankyou, very much. 7 MR. CAMERON: Thankyou, Mr. Main. 8 I want to make one other announcement. We 9 have extra copies ofthe proposal available up front. I 10 don't know ifthey ran out of supply on the table or not, 11 but ifyou need extra copies please raise yourhand and let 12 them know to put some more out and make sure that you get 13 one. 14 I'm speaking ofSenate Bill 7 implementation, 15 or Senate Bill 766. Like to calIonMs. Valerie Chase, 16 please. 17 MS. CHASE: lImnotmuch ofa pUblic speaker, 18 but I will do the best I can. I come to you today as a lung 19 cancer patient diagnosed justtwo months ago, August 6th. I 20 have a small tumor in my upper left lobe thatmeasures 21 probably around 4 x 4 x 5 centimeters. It's also involving 22 the lymph nodes in the mediastinum area around the aorta and 23 esophagus, and I have metastases that have gone to my brain, 24 three tiny ones, but thatmeans that I am a lung cancer 25 Stage IV.1 13 Thatmeans five years from now I have.a one 2 percentprobability ofbeing here. The doctor said 3 untreated I might lastthree to sixmonths. I'mundergoing 4 radiation for both mybrain and my lung, andmight extend it 5 six to one year. IfI'mvery healthy and lucky and take 6 care ofmyself I might last a year, two years. I don't 7 know. I know I'm going to die, but I'mnot giving into it. 8 I'm doing everything I need to do for the health, and I'm

Life is a miracle. Life is a gift. This 9 10 going to make the best ofthis whatever time I'mgiven.

11 cancer is a gift to me inmany ways. I'll tell youhow. 12 Oh, one thing I shouldtell you, I'm on steroids to keep the 13 inflammation down for the radiation. So if I shake like I'm 14 someonewho has Parkinson's disease, it's the steroids. If 15 I motormouth, it's the steroids. My energy level is way, 16 way up high, butmy motor coordination isn'tworth a damn. 17 Excuse my French. 18 Letme tell you a little bit about my life 19 story. I was born in 1931. I grewup in Central 20 Connecticut in the Hartford area, summered on Long Island 21 Sound and had a wonderful childhoodwith the winter sports 22 in the '30's when they had a lot of snow. I skied. I 23 sledded down the hill. I tobogganed. I justhad a 24 wonderful childhood. Itwas a greatplace to grow up. 25 I went to college at Brown University in a14 1 bachelor of science chemistry course. I switchedmajors 2 after my brother came downwith schizophrenia, the brother 3 next in line, to psychology. I went to Duke University on a 4 Ph.D. psychology program. I married in 1955 another 5 psychologist whose specialtywas aviation crew training. I 6 worked from 1956 to 1960 as a psychologist out ofthe 7 Nebraska state Capitol Building inmany ofthe state 8 institutions like the boys and girls training school and the 9 home for the dependent and neglected children, and most of 10 my work was at the home for the mentally retarded and 11 epileptic colony. 12 My son and daughter were born in 1961 and two 13 in Modesto, Californiawhere their father was working on the 14 SAC B-52 crew training simulator. I've been on a B-52 and 15 I've been on a KC-130, the plane that refuels those B-52's. 16 In 1964 we moved to Arizonawhere he was working on a 17 contractproject for Techstron and Panam. In 1966 to '72 we 18 were in Texas in Richland Hills. Their father was working 19 on another degree at TCU. 20 From '72 to '79 he was working at the Army 21 Aviation School at FortRucker, Alabama, and I was a real 22 estate broker. '79 we movedbackto Texas. My daughter 23 wanted to go to A&M, and she did, and I'm an Aggiemorn, 24 and she has a Master's degree in nuclear engineering and 25 radiation healthphysics. My sonwanted to be an15 1 aeronautics engineer. He went to UTA. 2 Me.anwh;ile, I divorced in 1980. 1983 to 1986 3 I worked for the DFWAirport Board as a terminal operations 4 agent. I live right next to the eastproperty line ofthe 5 airport now, in an apartment there. Wonderful view ofthe 6 planes taking off. I'm in a dead spot between the 7 crosswinds and the north/south runway, and it's a really 8 pretty place. 9 I have been

-- I .have worked for many 10 different organizations here in the metroplex: Mobil oil on 11 Stemmons, Mobil Tech Center inAddison onMidway. I have 12 worked through GTE Communications Corporation as a 13 contractor, Sprint as a contractor, and currently I am not 14 able to work because ofthe -- this illness. 15 I was atM.D. Anderson yesterday for a second 16 opinion to evaluate my treatmentplan and they gave 17 confirmation and allegation that I'm on a good treatment 18 planwith the Irving Cancer Center. They are greatpeople 19 there. They are very supportive people, and it seems that 20 the program I'm onwith the supportgroup and that the 21 American Cancer Society thinks I'm in the rightplace for me 22 right now. I'm getting good treatment. The best treatment 23 that is available for my condition. 24 I don'tknow how long I'm going to be doing 25 this, but I have been a member ofthe Sierra Club. I've16 1 followed the TNRCC hearings. Many meetings with

-- on the 2 Midlothian hazardous wastematerial, burning permits, 3 permitting. Which I feel very strongly impacts the 4 Metroplex because 67 percentofthe time the wind is blowing 5 from the south and blows all that crud across Dallas, 6 Arlington. I lived inArlington for eight years. Then I 7 moved here to Irving to be closer to GTE. Five minutes, 8 five miles and I'm atwork. 9 I'mvery, very concerned ofthe number of 10 people who have asthma and children that have asthma because 11 12 of all the pollution. years, first in 1986. I've been treated for allergies for I wentto the Environmental Health 13 Center. They did a real goodjob oftesting for all the 14 different pollutants in foods and stuff. I went on the shot 15 program. 16 Again, lastDecember I went to Connecticutto 17 visit. Came back at the first ofthe year and developed the 18 most horrendous bronchial infection as well as sinus 19 infections. Terrible sinus headaches. I thought -- it felt 20 like the flu because I justached allover. I had the flu 21 shot in October. I had thepneumonia

-- pneumococcus 22 pneumonia shot at the same time. Couldn'tbe the flu unless 23 itwas a different strain offlu. I was**~oughing,** sick for 24 months. Sixmonths. I was visiting the doctor's office at 25 least once a month.1 17 I have a spinal condition, spinal arthritis, 2 two protruding discs. The doctor wanted -- neurosurgeon 3 wanted a myelogram. I went in for a myelogram and I was 4 bleeding so badly they said they couldn't do it. They 5 called in a respiratory therapist. He gave me a treatment. 6 In about an hour the wheezing was settled down enough so 7 that they could do themyelogram, but before I left the 8 hospital I was given an inhaler, Albuterol. Amonth later 9 they add another inhaler, Pulmacort. 10 I asked for a referral to an allergist in 11 April. The doctor says, "You're not ready for ityet. Take 12 this Claritin antihistamine for about a month or six weeks. 13 Then we'll see aboutthe allergist." It was the end ofMay 14 before I got to see the allergist. In June when I got the 15 inhalants test done and the next day the food test done. 16 When the test results were finished for the 17 inhalants: Trees, pollens, molds, smoke, whatever, they 18 usually highlighted the ones that were highly reactive. My 19 page was totally yellow highlight. The doctorwalked in the 20 office and said, "Moveto the South Pole. You're allergic 21 to everything." So I started the shot program. The foods, 22 I was allergic to the standardAmerican diet: Justmilk, 23 wheat, most all the meats, most all the seafood, most all 24 the shellfish, broccoli, a lot ofvegetables and I'm 25 vegetarian. I haven'thad meat in a long, long time. I go18 1 with fresh fruits, fresh grains, lots of legumes and 2 cereals, whole cereals. I shop atWhole Foods Market. Buy 3 organically raised products. 4 MR. CAMERON: Ms. Chase, I don'twish to 5 limit your testimony, ma'am, butwe have about 11 other 6 people signedup to speak andwe need to move on to the 7 subtance ofyour testimony. Thankyou. 8 MS. CHASE: Well, at any rate, I've told you 9 about how my how I discovered this cancer. When I went 10 in for a shot I had this lymphnode -- a lymph lump here 11 about a year. That's when they sentme to the

-- to get a 12 chest x-ray and that's when the tumor was discovered. I've 13 done everything I can think ofto take care ofmyself 14 environmentallyto makemyselfclean. The one thing I can't 15 control is the air. I can't control what is in the air. 16 It's imperative that any review for the 17 grandfathers

-- fathered energyproducers have a very, very 18 strong health impact statement, very complete. Make them 19 clean up the air. We've got enoughpollutants in the air. 20 Itwould be the equivalent of4,000 -- 4 million vehicles 21 here in the DFW area. 80,000 pounds ofpollutants go up 22 from these plants. We need that cleaned up. Thank you. 23 MR. CAMERON: Thankyou, Ms. Chase. Can you 24 get down the stairs all right? 25 MS. CHASE: Yes.1 19 MR. CAMERON: All right. And I apologize, I 2 have Peter, and I cannot read the last name, to represent 3 the SEED Coalition. Can you come forward, please, and state 4 and spell your name? 5 6 MR. ALTMAN: You want me to come up there? MR. CAMERON: Yes, please. 7 MR. ALTMAN: My name is PeterAltman. 1 1m 8 Director of the stable Energy and Economic Development 9 Coalition, which is a statewide environmental group. I 10 wanted to again focus my comments on the health impacts of 11 airpollution, and I thought I would start by discussing the 12 results of a report that has been released today called "Out 13 ofBreath," and this is a report, I do have copies available 14 for those who are interested, that is being released 15 nationwide. Itwas written by a consulting firm calledABT 16 Associates which does statistical analysis on health 17 effects, impact statements for the Environmental Protection 18 Agency, as well as a number of other international agencies. 19 The "Out ofBreath" report pertains to the 20 development ofthese rules and how we treat air pollution 21 because for the first time it tells us how many people are 22 sent to the hospital and emergency rooms when the air 23 pollution is bad. It tells us how manypeople have so much 24 trouble breathing because of ozone that they need immediate 25 orprolongedmedical attention.20 1 These figures have never been available 2 before, and as I started to read through them I found them 3 to be shocking when I startedrealizing behind each number 4 is another person who does somethingwe all need to do, goes 5 outside and breathes, and whathappens is they find 6 themselves unable to breathe. statewide the study found 7 that nearly 14,000 peoplejustduring the ozone seasonhave 8 to go to the emergency roombecause ozone gives them such 9 breathing difficulties. 10 Around here in theMetroplex there are nearly 11 3,000 people during the ozone seasonwho will have to go to 12 the emergency room in order to get help with breathing. 13 Another 1200 will have to be admitted to the hospital for a 14 prolongedperiod oftime until they are able once again to 15 breathe on their ownwithout the need for medications and 16 monitoring by medical professionals. 17 There is a young child that I thought ofwhen 18 I first looked at this reportnamedJosh Seanborn who 19 couldn't be here today because he is at home sick and is not 20 supposed to be outside in the air because he's trying to 21 recover from pneumonia. This is a childwho is a severe 22 asthmatic and has testified a number oftimes, and he misses 23 about five or six weeks of school a year due to his 24 difficulty breathing. He usedto spend all ofthat time in 25 the hospital until his motherbecame so practiced at giving21 1 him the injections and the other medications necessary to 2 enable himto breathe. So nowhe simply spends those weeks 3 out of school at home resting and trying to breathe. 4 This report and the stories ofpeople like 5 Josh show the-tangiblepUblic health and economic costs of 6 air pollution and, therefore, tell us why we must include in 7 health effects reviews for grandfatheredplants, whether 8 they are being required to cleanup orwhether they are 9 volunteering to trimtheir emissions, why we need to have 10 the strictestpossible health effects review, and that that 11 review has to examine the effective ozone on the pUblic. 12 And ifa plant is emittingVOC's or nitrogen 13 oxides into the air it is contributing to ozone, and it is 14 therefore contributing to asthma attacks, and respiratory 15 distress and cardiovascularproblems ofthe kind that send 16 thousands ofpeople to the hospital and to the emergency 17 room, and that is a publichealth effect that these health 18 effects reviews need to be taking into account. Because 19 these effects are real, and they are measurable, and they 20 are taking the breath away from Texans. 21 In addition, when we look at what kinds of 22 reductions we're going to ask ofthese plants, the 23 grandfatheredplants under SB 766, and as the agency 24 considers whether or notto impose further reductions on 25 nongrandfatheredpowerplants in the East Texas region we22 1 need to keep inmind somethingJeff Sadis testified to in 2 March ofthis year. 3 Sadis saidthatwe need all the reductions we 4 can get. No one source is themagic solution to make our 5 ozone problems go away. We need all the reductions we can 6 get from all the sources we have ofozone pollution. And 7 thatmeans thatwhen a grandfatheredplant volunteers to get 8 a permit it shouldn'tbe an easy ride because our life and 9 breath is depending on cleaning up those plants. 10 And itmeans that as the agency considers 11 what to do about the nongrandfatheredplants in the 60 12 county East Texas regionwe encourage you -- encourage you 13 as strongly as possible to require them to comply with the 14 .14,nitrogen.oxide emissions rate. Currently what is in the 15 rule for the health effects review for SB 766 for -- is 16 unacceptable. Conducting an abbreviatedhealth effects 17 review is not going to result in a system that is protective 18 ofthe pUblic health. That concludes my comments. Thank 19 you. 20 MR. CAMERON: Thank you, Mr. Altman. 21 I will call Representative Lon Burnam, 22 please. 23 MR. BURNAM: Thankyou. I was reminded when 24 Mr. Harderwas talking about the intents of Bill 7 as passed 25 is thatmost legislation is a whole lot like your typical23 1 accident at an intersection. Depends on what angle you're 2 looking at it andwhat yourperspective is, and your 3 understanding is as exactly what that intent is. 4 I have a perspective that I guess is unique 5 in this room at any rate, because I am a member ofthe Texas 6 Legislature and I sat in on any number ofmeetings during 7 the course ofthe session talking about, well, if it is 8 inevitable that the utility companies are going to get away 9 with the biggest consumer rip-off in history, which they did 10 from the economic standpoint, are we going to be able to do 11 anything to protectpublic health in the process? 12 So from the very first committee meetings in 13 January in the legislative study group we talked about the 14 political landscape, and the reality ofwhatwas driving 15 deregulation, and what the Governor wanted versus whatwas 16 in the pUblic interest. Some ofus that have been involved 17 in electric utility regulation for over a quarter ofa 18 century have been saying for over a quarter ofa century, 19 "When it's all said and done they will get away with the 20 biggest rip-off in consumer history because they will 21 transfer those expenses for those nuclear powerplants to

-- 22 not to management, not to shareholders, but the rate 23 payers." 24 They've gotten away with that. There's no 25 debate over that part ofthe implementation ofthe Bill.24 1 The trade-off that the legislature study group, my 2 colleagues, my committeemembers, themajority on the state 3 Affairs Committee ofthe Texas House ofRepresentatives, the 4 trade-off ofthe majority ofthemembers ofthe Texas House 5 ofRepresentatives, all ofus consciously went into this 6 thing, "Hell, no, we won't go unless we do something about 7 the public health issues involved in deregulation," andwe 8 went. We went along with the legislation. 9 But we want you to fully understand thatwe 10 are also watching and aware thatthe day-to-day lobbying 11 process behind the scenes inAustin is such that the utility 12 companies are getting theirwaywith you again. 13 I'mreally gladValerie was here. I have 14 known Valerie for a number ofyears and she is all too much 15 a personal reminder ofthe issues discussed in the bookby 16 Dr. Samuel Epstein, The Politics ofCancer. There are 17 literally thousands ofTexans dying today because ofwhat we 18 have let the grandfathered facilities get away with for over 19 30 years. 20 There are literally thousands ofmy fellow 21 asthmatics undermedical treatment today because ofwhatwe 22 have letprivate sectorprofit interests get away with. I 23 couldn't be clearer as someonewho is very close in this 24 legislative process whatyour responsibilities are as 25 employees ofTexas Natural Resources Conservation commission25 1 in implementing this legislation. I hope I don't have to be 2 there day in and day out to protectthe Bill against the 3 lobbyists' interests because I'm afraid thatthat's what 4 it's going to take. 5 I want to thank all ofthe consumer and 6 public health advocates in the room for beinghere today. 7 Many ofyou have been atthis for a long time. We all know 8 what is at riskhere and I appreciate your being here. To 9 the staff, I'm really just asking you do what's right. Look 10 out for public health, notprivate profit. Thankyou. 11 12 13 Burnam. 14 15 (Applause.) MR. CAMERON: Thank you, Representative

Neil Carman. Dr. Neil Carman, please. DR. CARMAN: I'mthe Clean Air Program 16 Director for the Lone star Chapter ofthe Sierra Club. My 17 first comment is with respectto 116.811(1), and that is 18 where itmentions the distance to schools. I think the 19 distance that's being used in the proposed rule is 3,000 20 feet, a little bit over a half-a-mile. 21 I propose that the distance the agency 22 considers be expanded to up to two miles because there are 23 some schools down in the Houston ship channel area, for 24 example, that are some distance away from some very large 25 grandfathered sources. And 

### in speakingwithparents of26 1 childrenwho go to some ofthese schools there, they do have 2 air pollutionproblems. Sometimes it's difficult for the 3 kids to go out andplay outside because they are asthmatic 4 or the kids, they get sick and they have to go home andmiss 5 days of schools, so I think that distance needs to be 6 expanded in certain cases like that. 7 Secondly, with respect to NESHAP's, the 8 National Emission Standards for Hazardous Air Pollutants, 9 under which is being proposedunder 116.811(5} and (6), 10 and I think elsewhere. I think it's very important for this 11 regulation to have NESHAP's in there because the EPA is 12 proposing utility map regulations for HAP emissions, 13 hazardous air pollutants. 14 The EPA is also looking at urban air toxics 15 rules and those are going to impact the Dallas/FortWorth 16 area, Houston and other large urban areas in Texas. So we 17 need to get those toxics out ofthe air, and I'm going to be 18 sUbmitting a pUblishedpaperby scientists with my comments 19 next week, but the hazardous airpollutants include many 20 toxic metals such as arsenic, mercury, beryllium, cadmium 21 and others. 22 They also include toxics such as hydrochloric 23 acid, hydrogen fluoride and others, and a few organic HAP's 24 as well. These are not the kind ofthings that we shouldbe 25 putting into the air, because we knowwhat goes up comes27 1 down. Besides impacting our urban areas they also impact

-- 2 to some extent they make a contribution to visibility and 3 hazeproblems, but even in a broader sense they impact our 4 ecological systems. 5 Many ofthese hazardous air pollutants are 6 certainly not benign in any sense. They harm a lot ofother 7 living creatures. These toxics also can impact our 8 agriculture. And so, in otherwords, we may be consuming 9 them in the drinking water and in the foods we eat. So 10 these are not the kinds ofthings we want in the air. That 11 part ofthe rule is very good, and at some point in the near 12 future the EPA will be promulgating NESHAP's with respect to 13 utilities. 14 Another comment I wanted to make is on the 15 definition ofa near nonattainment area under 116.16. The 16 agency is asking for input and I thinkwhat needs to be 17 considered is a near nonattainment area should be an area 18 where a city has at least one ormore eighthour ozone 19 exceedants in a year. Also, it should be I thinkthe 20 several county area, and I will be submitting somemore 21 details on that. 22 I'm also concerned about the public notice 23 section under 116.603(a) where it

-- the commission's going 24 to beresponsible for pUblishing notice. I think it's very 25 good that the notice be

-- may be published on the standard28 1 permits where there will be statewide applicability. The 2 notice wouldbepUblished inthe largest newspaper ofdaily 3 circulation found in a whole number ofcities. 4 I'mreallywondering ifthat -- this isn't 5 somewhat ofan economic burden on the agency. Maybe some of 6 this cost should bepassed onto the companies, that they 7 should really pUblish these notices. I think that's 8 something the agency ought to look at because ofthe 9 potential costs. 10 Another thing I didwant to comment on is 11 this "Out ofBreath" report. There is a diagram in here, 12 which I don't know, maybe some ofyou have seen. What this 13 shows here is a -- the OzoneTransportAssessment Group 14 region. It's about a 37 state area, primarily from the 15 central to the easternportion ofthe united states. 16 And itmodeled for the year 1997, from April 17 through October, the peak onehour ozone levels on a daily 18 basis in this whole area, andyou can see that there's a 19 very large black area here inTexas. That's primarily this 20 eastern air shed. Part of it fits into the Texas CleanAir 21 strategy region, the TCAS, but some of it goes outside. 22 What this shows is that we've got a very 23 serious ozone problem in the entire eastern air shed ofthe 24 state ofTexas, andpeoplekeep wondering, "Well, is itjust 25 the cars in the Dallas/FortWorth Metroplex or the Houston29 1 area?" No. The pollutionmoves around and it's coming from 2 counties that are in attainment such as Ellis County to the 3 southwhere there's some very large sources. Fromthe east 4 ofthe Dallas area and the Central Texas area where there 5 are very large sources. 6 So this modeling I think is a verypowerful 7 indication. There's modeling studies that have been done 8 for I think about the last three years through OTAG that are 9 indicating we have some very large sources of nitrogen 10 oxides that need to be betterregulated and those emissions 11 reduced. 12 One other comment I wanted to make is that I 13 thinkthat the companies also need to in certain cases do 14 some type ofbettermonitoring oftheir emissions. But in 15 addition to perhaps thatmonitoring, ifit's not being done 16 that is, that perhaps there should also be some ambient air 17 monitoring for at least a period ofmaybe several months to 18 a year to make sure that the emissions reductions that are 19 being attained are indicating thatthere is a public health 20 benefit, although I realize that sometimes the emissions may 21 not corne down real close to some ofthese plants. 22 Anyway, I wouldrecommend that the agency 23 consider the need for more ambient airmonitoring where it's 24- appropriate. Thanks. 25 MR. CAMERON: Thankyou, Dr. Carman.1 2 30 TomSmith, please. MR. SMITH: Tom Smith, mostpeople knowme 3 better as Smitty. I'mDirector ofPublic citizens Texas 4 Office, and I appreciate the opportunity to visit with you 5 today. We had appeared yesterday before a similar hearing 6 down inAustin, and visitwith you kind ofextensively about 7 the concerns that Public citizen, which is a national 8 environmental and consumer organization with about 4,000 9 members here in Texas, have about many ofthe issues before 10 you on the grandfathering permit

-- facilities permitting 11 process thatyouhave in the rules. 12 Today I'm going to spendmost ofmy time 13 talking about electric utilities and the opportunity thatwe 14 thinkyouhave here. The reason, as Representative Burnam 15 outlined, that the electric utilities sector was singled out 16 for special treatment in this particularBill is simple. 17 Reducing emissions from the electric generating sector of 18 our industry is by far the least costly way ofreducing the 19 emissions that are plaguing the Dallas/FortWorth area'and 20 many ofour otherurban air sheds in Texas. 21 As Mr. Altman showedyou, the office

-- the 22 OTAG group, the Ozone Transport Assessment Group, has found 23 that for about $1500 a tonyou could reduce emissions from 24 powerplants, and that many ofthe other alternatives such 25 as enhanced inspection andmaintenance on our automobiles,31 1 which is a programwe tried in the Dallas area, are about 2 $1800 a ton, and then many ofthe other things we as 3 citizens are being asked to do such as buying low emission 4 vehicles or reformulated gasoline are in the $30,000 per ton 5 range. 6 And so whenyou look at the costs of each of 7 the sectors

-- to each ofthe sectors, this is by far the 8 least costly way ofreducing emissions, and certainly is 9 significantly less costly thanmany ofthe other industrial 10 sources. For example, reducing emissions from a process 11 heater or the systemthat is used to heat petroleum to 12 create the crackingprocess in the refining industry is at 13 about $25,000 a ton. 14 Ifyou look on down the line however, you 15 find that there are a number ofother less

-- far less 16 expensive methods ofreducing emissions: Metal processing, 17 reducing emissions at the Alcoa facility for example is only 18 about $6,000 a ton, and cementmanufacturing is only about 19 $3,000 a ton. So while powerplants are by far the least 20 expensive ways, many ofthe other emissions reductions you 21 can get from reducing emissions at other grandfathered units 22 are also significantly less expensive than reducing 23 emissions through buying reformulated gasoline or low 24 emission vehicles. 25 Butto go directly to the issue ofpower32 1 plants, one ofthe things that we have found that

-- is a 2 high degree ofcustomerwillingness to pay. Seventy-six 3 percent of all people surveyed two years ago by Public 4 citizen indicatedthey would be willing to pay up to $2 a 5 month on their average electric bill to reduce emissions 6 from this sector. 7 What we found was we could reduce

-- a study 8 done by the Public utilities Commission, the Texas Natural 9 Resources and Conservation commission found that you could 10 reduce in the Dallas/FortWorth area emissions from Texas 11 utilities power plants by 98

-- by 70 percent for 98 cents a 12 month on the average consumer's electric bill. That's a 13 bargain by comparison to an inspection andmaintenance on 14 your automobile at $13, or buying reformulated gasoline, 15 which we estimate additionally at an initial $24 a year. So 16 it's clear to us as consumer organizations that the least 17 costly way to reduce emissions is from power plants. 18 What you have before you, however, are a 19 number ofchallenges in implementing this Bill. Whilethe 20 legislature said, "We want you to reduce emissions by 50 21 percentwhen you permit these for NOx and for sulfur 22 dioxide, andwe want you to give a permit to any ofthese 23 old grandfathered power plants," they left a great deal of 24 discretion to you as to what else should be required in 25 terms of a permitrequirement.33 1 And it seems to us to be implicit in the law 2 thatwhen you are permitting thesepowerplants that you not 3 only look at the NOx and the SOx, but also look at the other 4 emissions that come from their stacks: For the sulfur, the 5 particulates, the heavy metals; many ofwhich are going to 6 be sUbject to regulatory initiatives or are already sUbject 7 to regulatory initiatives by the EPA and require them to 8 meet current federal New Source Performance Standards. 9 The statute spoke to this in several 10 different ways. It said for example in the

-- that a 11 utility could get a stranded costrecovery or a cost 12 recovery for those reasonable costs incurred in order to get 13 a permit or in order to meet a National AmbientAir Quality 14 Standard. And that's the kinds ofthings that we are -- in 15 seeing that the federal government is proposing as 16 regulations on sulfur, on small particulate matter and for 17 otherkinds ofpollutants that are affecting air quality. 18 So it clearly gave you the authorization to 19 do that, to give people costrecovery -- or for the Public 20 utilities Commission to authorize cost recovery for those 21 investments necessary to meet the National AmbientAir 22 Quality Standard. The challenge to you is defining and to 23 certifying to the PUC that those expenditures are necessary 24 in orderto meet the National Ambient Air Quality Standards. 25 So what is in your rUles, andwe support, are34 1 requirements that say that they have to meet the new federal 2 New Source Performance Standards andNESHAP standards. We 3 think thatthose are essential in order to help clearthe 4 air, notjust ofNOx, or nitrogen oxides and the sulfur 5 dioxides, but the other emissions that are plaguing our 6 city

-- our cities. 7 The second question that came up today is 8 whethermunicipalities are required to meet these standards 9 should they own a grandfathered facility. And ifyou look 10 at Section 39.262, when it talks about emissionreductions 11 from grandfathered facilities it says specifically that an 12 electric generating facility means a facility that generates 13 electricity for compensation and is owned or operated by a 14 person in this state, including a municipal corporation, 15 electric cooperative orriver authority, and it applies 16 particularly to anybody who's got a grandfathered facility 17 as ofJanuary 1st, 1999, at the time our legislature began 18 this debate, which many of the emissions that we discussed 19 earlier pertain to. 20 So we think that in looking at the emission 21 reductions you should not only look at the widest range of 22 those things we know are coming down the federal pike, at 23 the kinds ofemissionreductions that are necessary to meet 24 all National AmbientAir Quality Standards, at emission 25 reductions from powerplants whether ownedby

-- investor35 1 owned, but also municipality. 2 And a third thing thatyouhave the 3 authorization to lookto is making additional reductions, if 4 necessary, in order to getthe airquality good enough to 5 breathe andmeet National AmbientAir Quality standards. 6 And you've taken a first step inJulywhen you said, "We 7 want to reduce emissions to .14 pounds perMMBtu," which is 8 the level specified as a rate in the statute for 9 grandfathered facilities. 10 Butnowhere in the statute does it limit you 11 to that level, and as the debate goes on overhow tough it 12 is to balance the air emissions in the Dallas/FortWorth 13 area to come up with a working set, ithas occurred to many 14 ofus that perhaps you are looking at too high a level, and 15 that perhaps a level similarto whatwe're seeing in as best 16 available control technology for many ofthese plants is 17 more reasonable. Alevel perhaps of .05 pounds perMMBtu 18 which would dramatically reduce even further the emissions 19 from these old grandfatheredunits and from any other power 20 plant in the 60 county region. 21 Again, we think these may be the cheapest 22 reductions that are available to us to clear the air, and 23 there's nothing in the statute, as we read it, that limits 24 you to .14 pounds perMMBtu and we would suggestyou look 25 further. Be happy to submit these comments and others in36 1 writing to you by the deadline ofnextMonday, and I would 2 be happy to answer any questions you may have at this point. 3 MR. CAMERON: No, sir, no'questions. We'll 4 look forward to yourwritten comments. 5 6 7 8 MR. SMITH: Thankyou all, verymuch. MR. CAMERON: Thankyou, Mr. smith. I have Anne Rowe. MS. ROWE: My name's Anne Rowe. TNRCC 9 Commissioners and staff, I would like to make a few general 10 comments as a Dallas citizen about the issues concerning 11 powerplant cleanup and grandfathered facilities. I'm a 12 resident ofDallas and I've lived here since 1979 for all 13 but two years. For two years I lived in a suburb of 14 Atlanta, Georgia andmy personal business interests are in 15 real estate andmyhusband's are linked to the home building 16 industry in North Texas. 17 My sonwho is 11 suffers from asthma and over 18 the years I've come to believe thathis situation is 19 worsened ifnot caused by the air in Dallas. Whenhe was 20 three he was diagnosedwith asthma and hospitalized for five 21 days. Those were difficult days as I learnedhow to use a 22 breathing machine, to give medicines and chesttherapy. As 23 the years have unfolded I have discovered thathis asthma is 24 worse in the summer in the heatwhen he's outside and on 25 ozone days, and that it disappears when we travel away from37 1 Dallas to rural places. 2 For two years we lived in a suburb ofAtlanta 3 andmiraculously all the medicines were left in a moving box 4 not to be touched until two weeks after ourreturn to 5 Dallas. Fortunately, as he has gotten older the asthma has 6 become easierto deal with, but I strongly believe the 7 quality ofthe air inDallas affects his ability to function 8 as a normal athletic person. 9 The Metroplex is a dynamic and vibrant 10 economic magnet. The influx ofnewresidents is astounding, 11 a testament to the strong economy and the relatively better 12 climate here. The area is populated by remarkable business 13 and civic leaders who have a positive can do attitude. As 14 we see the throngs ofpeople mired in traffic on our 15 highways surrounding theMetroplexwe can only recognize 16 that this influx -- this mass influx ofpeople will 17 exacerbate the existing pollutionproblems here. 18 IfDallas and the surrounding Metroplex are 19 to continue to thrive andprosper then rigorous, progressive 20 and proactive solutions to the air situationmust be 21 achieved, and soon, before it cripples the growth and 22 prosperity ofthis region. I urge the TNRCC to be strong. 23 To do possibly not the easy thing, but an unpopular and 24 controversial, knowing that in the long-termthat is the 25 best for the area, its residents, the health and economy,38 1 and the state ofTexas. 2 I urge you-all to push for the most stringent 3 regulations governing powerplant cleanup and grandfathered 4 facilities. Just as civic leaders ofthis region created 5 vast water supplies and goodwater systems for Dallas, our 6 air needs to be clean and safeguarded. Clean airwill only 7 serve to enhance and complimentthe growth ofthe metroplex. 8 Eyes are on Texas and its government stewards. We are an 9 example for other areas and how Texans handle its 10 environmental problems should be a prototype for a strong 11 economy without environmental expense. 12 I believe this is an issue that should not

-- 13 that should be acted on quickly with speed and resolution. 14 I urge the TNRCC to adopt the measures laid outbythe SEED 15 Coalition and other environmental groups targetingpower 16 plants and grandfathered facilities, and create the means**~7** for the quickest andmost expedient solution to the air 18 pollutionproblem in North Texas. 19 Leave no stone unturned and no facility or 20 group immune from the clean air standards in cleanup. In 21 particular, require that the current, best available control 22 technology be used for all plants that contribute to our 23 unsafe air, require that all plants contributing to the 24 Metroplex situationmeet the standards used in federal law 25 and use a wide net in a wide geographic area. Reward those39 1 plants in some way for any extra efforts thatthey make 2 towards clean air initiatives. 3 In making your decisions please remember that 4 safeguarding the pUblic health is paramount. Thatpollution 5 comes from a wide geographic area and several sources, and 6 facilities far away from Dallas tend to contribute to our 7 nonattainment situation. Use the most stringent ofrules 8 and have the courage to be tough. Thankyou. 9 10 (Applause) MR. CAMERON: Thank you, Ms. Rowe. 11 I have Shawn Glacken, please. 12 MS. GLACKEN: My name is Shawn Glacken, and 13 I'm Environmental Programs Manager for Texas utilities. 14 Senate Bill 7 as passed by the Texas Legislature establishes 15 an innovative, flexible and cost-effective approach to 16 obtaining NOx and S02 reductions. Under Senate Bill 7 TXU 17 will be making a 25 percentreduction on S02 and a 50 18 percent reduction in NOx from its olderpowerplants. 19 Electric utilities in Texas already have some ofthe lowest 20 NOxrates in the country withNOxrates averaging 40 percent 21 below the national average. 22 When the new Senate Bill 7 NOxreductions are 23 achieved NOx rates for utilities in Texas will be among the 24 top five states in the U.s. for the lowest electric utility 25 NOxrates. TXU will be making NOxreductions ofover 5040 1 percent in Dallas/FortWorth. We have already begun 2 upgrading our units and have made most ofthe reductions 3 well before May, 2003. We will, .in fact, be making 4 reductions at everypowerplant on our system. 5 TXU continues to support a permanent and fair 6 air quality solution to ensure cleaner air and economic 7 prosperity. It is important for a fair solution to include 8 reductions from all NOx sources. TXU is doing its part to 9 reduce emissions. We believe there are provisions in 10 TNRCC's proposedpermitting process that are overly 11 burdensome, intensive

-- review intensive and ultimately 12 time consuming without coincidingwith environmental 13 benefit. 14 We will be submitting specific 15 recommendations in ourwritten comments that will result in 16 a more streamlinedpermitting process. We will also be 17 sUbmitting specific recommendations on a proposed allowance 18 trading system. TNRCC's programhas provisions that vary 19 significantly from EPA's proven and successful federal 20 allowance trading program. These differences will only 21 limit trade and raise costs and reduce benefits ofa 22 flexible free market approach. 23 We commend the legislature onpassage of 24 Senate Bill 7 andwe encourage the TNRCC to implement it in 25 a cost-effectivemanner. Thank you for the opportunity to41 1 present our comments. 2 MR. CAMERON: Thank you. 3 Stanley Spruiell, please. 4 MR. SPRUIELL: Again, I'm Stanley Spruiell. 5 I'mwith the Environmental ProtectionAgency, Region 6 in 6 Dallas. Ofcourse we have jurisdictionwithin Texas and the 7 five -- four surrounding states, and ofcoursewe have been 8 reviewing the proposed regulations on Senate Bill 7, andwe 9 will be providing formal comments within the deadline, and I 10 just want to go through a few ofthe highlights of our 11 comments or letter. It's currently being drafting. 12 And of course on balance EPA does support the 13 concept of Senate Bill 7 in that we do encourage the 14 reduction of emissions within the State ofTexas. We 15 believe this is helpful, itwill benefitthe environment and 16 for those reasons we do

-- we will support it. We do have 17 some comments and some concerns we want to raise, you know, 18 and we will be providing them in detail in our comment 19 letterjust to ensure that the rules are consistent with the 20 requirements ofthe Federal Clean AirAct. 21 Of course some ofthemwill be our concern is 22 how the reductions are going to be used in the state 23 because, you know, one side the reductions are used to help 24 benefit the area, to help attain andmaintain compliance 25 with the National AmbientAir Quality Standards.42 1 of course we understand that, you know, from 2 a lot of industries wemay canuse some ofthese reductions 3 to use as offsets and net credits for the net against future 4 growth. Of course we believe that there could be a balance 5 in it. I think rightnow we would support, you know, any 6 rule that requires -- or, you know, would allow the uses to 7 be, you know, for the benefit ofthe overall environment. 8 We would certainly, youknow, hope thatTexas will clarify 9 this in their final rule. 10 Another area ofcourse that we wantto look 11 at, you know, deals with the assurance that the reductions 12 will be used and are consistentwith federal requirements, 13 and certainly with the trading that's going on some units 14 may be able to bUymore credits. Certainly EPAwould 15 interpret the rules as not to allow some to buy enough 16 credits to exceedwhat's already -- youknow, it's already 17 allowed. 18 Of course there are several rules like the 19 resource performance standards and a lot ofthe permit 20 requirements, and ofcourse although these may not apply to 21 the grandfathered facilities, they could apply to some of 22 the nongrandfathered facilities which might choose to opt 23 in, and of course those sources should continue to meet 24 whatever federal requirements are in existence. 25 Even grandfathered units should be restricted43 1 only to whatever is in there EPAhas approved in the 2 federal -- state implementationplan for Texas. Thatwould 3 include any requirements ofthe existing rules that EPAhas 4 approved as well as any requirements -- and I started to say 5 permits. Iftheywere grandfathered they probablywould not 6 have any permits. But itwould also include any 7 requirements under the control strategy in nonattainment 8 areas, as well as any otherrequirement that EPAhas 9 approved to assure the attainment andmaintenance ofthe 10 National AmbientAir Quality Standards. 11 In closing I would probably indicate there's 12 also a requirement for sulfur dioxide emissions and they 13 also define -- talk about coal-firedutilities. Ofcourse 14 one thing I would suggestthat you clarify in the rule is -- 15 concerns utilities which might not -- whichmight fire coal 16 in combination with other fuels, and as well as utilities 17 that may have a capability of firing coal butmay not at the 18 time they submit theirpermit application, you know, be 19 firing coal. 20 EPAwould think -- at least right nowwe 21 interpret this as meaning any unit that's firing 100 percent 22 coal, or a combination, or even a unit that's capable even 23 though itmight not presently be firing coal. And that 24 concludes the formal comments I have for this hearing. We 25 will be submitting a formal comment letter which will44 1 include these as well as some other comments. I thankyou, 2 very much. 3 4 5 MR. CAMERON: Thankyou. ElaineWiant, please. MS. WIANT: I'mElaineWiant, and I'mhere 6 representing the League ofWomenVoters ofTexas. The 7 League ofWomenVoters ofTexas appreciate the opportunity 8 to comment on these proposedregulations. We support 9 strategies designed to ach}eve**~i~Dificant** reduction in the 10 amount ofpollution generatedby power plants and other 11 grandfatheredplants in Texas. This will reduce exposure to 12 the harmful effects ofpollution, to betterprotectpUblic 13 health and prolong the lives ofthe most vulnerable people: 14 The elderly, children and those with respiratory problems. 15 With regard to SB 7 implementation the League 16 urges that, one, the rules require all grandfathered power 17 plants in nonattainment areas or in the 60 county area east 18 of Interstate 35 and north of Interstate 37 to use the best 19 available control technology standards or federal resources 20 performance standards for otherpollutants such as carbon 21 monoxide, particulates andvolatile organic compounds. This 22 will ensure that we achieve significant andmeasurable 23 reductions in emissions ofairpollution. 24 TWo, we urge thatthe rules be expandedto 25 require all powerplants that are in areas with unsafe air45 1 or that contribute to those nonattainment areas to meet the 2 same standard. Plants notmeeting these standards 3 contribute to the pollution, but not the cleanup efforts of 4 the state. Airpollutiondoes not recognize political 5 boundaries such as canbe drawn. Regional strategies are 6 the only effective approaches to cleaning up the airwe 7 breathe. 8 Three, weurge that the rule should require 9 that the notice ofpUblichearings appear in all news media 10 in all affected areas, notjust in the local newspaper in 11 the area. The pUblichas a right to know about pollution 12 levels, dangers to health and environment, and proposed 13 resource managementpolicies and options. citizens must be 14 given every opportunityfor equal input into the permitting 15 process. 16 And finally we urge that the TNRCC restrict 17 pollution trading inways that ensures significant 18 reductions in airpollutions. 19 In regardto the SB 766 implementation the 20 League ofWomenVoters urges thatthe TNRCC require that the 21 permitting process for grandfathered plants include a full 22 public health effects review and opportunities for the 23 public to contestthe issuance ofa plant permit ifthe 24 powerplantposes harmful health or environmental effects 25 that need to be addressed.46 1 Since this programrepresents the first time 2 thatmany facilities will come under review, citizens must 3 be given every opportunity for meaningful input into the 4 permitting process. At the very least those grandfathered 5 facilities located within two miles of a school, nursing 6 home or a day-care center or those not using the ACT should 7 be required to give a full pUblic health effects review. 8 Two, we urge that the rules give adequate 9 notice to the pUblic aboutproposed permits for 10 grandfathered facilities and that the fees adequately fund 11 the administration ofan effective program. In order to 12 facilitate pUblic involvement officials shouldmake a 13 special effort to ensure that the pUblic has adequate 14 informationto participate effectively. Adequate funding is 15 needed to ensure opportunities for public education and 16 effective pUblic participation in all aspects ofthe 17 decision-making process. 18 Three, we urge that the TNRCC limit the use 19 of standardpermits to only minor sources ofpollution. 20 Standard exemptions receive much less scrutiny than regular 21 permits and do not allow for adequate pUblic input into the 22 permit review process. 23 24 restrict And finally, we urge that the TNRCC strictly monitor a project that is allowed to 25 take the place of emission reductions normally required in47 1 permit application. These projects must result in a 2 quantifiable emissions reductions in the same air shed as 3 the plant trying to get a permit. We also urge provisions 4 for penalties orretraction ofthe permit ifthe reductions 5 fail to occur. Thankyou. 6 7 8 9 10 (Applause) MR. CAMERON: Thankyou. Mr. JimDuncan, please. MS. CHASE: Sir. MR. CAMERON: Yes, ma'am. 11 MS. CHASE: Can anything to be done about 12 that rattling in the speaker? 13 MR. CAMERON: I wish there could be. I've 14 been trying to deal with this system ever since we came in 15 and so far I've been unsuccessful. I think Brian is going 16 to go checkthe facilities right now. You're right, it's a 17 bit of a pain. It's almost as bad as the lights. 18 Mr. Duncan. 19 MR. DUNCAN: Thankyou. My name is Jim 20 Duncan. I'm from FortWorth, Texas. Like Representative 21 Burnam said out at the press conference, the people who 22 really shouldbe here, aren't. We're kind ofpreaching to 23 the converted. Prefer it to all be packed. But I do want 24 to thank everybody for being here, listening and expressing 25 your own opinions.48 1 The utilities and the other grandfathered 2 facilities in Texas have a really good record ofpromising 3 to clean up their emissions, butwhen the rubber really hits 4 the road their

-- the results are usually far less than 5 promised. It's shameful that these pollutions are so 6 blatantly ignored and side-stepped, promises any 7 responsibilities to the pUblic. 8 It's also shameful that the industrymust be 9 compensated before they will agree to clean up their 10 emissions. Once again putting profits ahead ofhealth and 11 safety ofthe pUblic. Allowing them to crush cars orreduce 12 fleet emissions is fine, but it's basically a copout ofthe 13 original intent which is to clean up their emissions. 14 On the issue of emission reduction credits, 15 these reductions can come -- can be earned from a number of 16 fairly simple and forward thinking methods, primarily 17 allowing any person or group to purchase and retire NOx or 18 sulfur dioxide credits that can be tradedunder the 19 auspicious ofthe trading programs established in this 20 legislation. Notjustthe utilities, notjustthe polluters 21 should be able to bUy these. We should be able to buy them 22 andmake them unavailable to the polluters. 23 The electric utilities should offer

-- should 24 be required to offer meaningful incentives for its customers 25 to replace inefficient appliances and light fixtures with49 1 cost-effective and energy-saving equipment. Things as 2 simple as compact fluorescent light bulbs; issuing 3 substantial rebates to individuals andbusinesses who take 4 the initiative of installing renewable energy generating 5 systems. We have solarwind, hydrogen fuel cells; all these 6 for the most part are existing and good, safe, efficient 7 processes. 8 The basic legislation shouldmandate that 9 electric utilities participate in any distributed generation 10 project, pUblic orprivate, thatmeets established Texas PUC 11 guidelines. This should be a basic part of legislation. It 12 should be available to any person or group, even in areas of 13 the state that are in full attainment. They should be able 14 to reap the benefits ofgenerating their own cleanpower. 15 The utilities should be required to pay a fair and equitable 16 price for the nonpolluting powerthat they do purchase from 17 these independent electric powerproducers. 18 Currently the utilities are required to buy 19 power that virtually anyone generates, butwe get about ten 20 cents on the dollar compared to the price that the utilities 21 charge us for their dirty power. The requirements that the 22 utilities have in order for a person to become an 23 independentpowerproducer andjoin in the distributed 24 generationproject contains so many burdensome requirements 25 that it's started a movement in otherparts ofthe country50 1 where these power -- independentpowerproducers are 2 bypassing the utility requirements and justhooking up to 3 the grid simply because they are generating more powerthan 4 they can use. 5 It's reallyjustthat simple. All ofthese 6 methods have been successfully implemented in other states 7 and regions. Their success canbe attributed to the desire 8 and the demand ofthe pUblic and the private sector for more 9 energy efficient options. The utilities on the otherhand 10 have workedwith amazing success in enhancing their 11 stockholder's financial security while ignoring the 12 admittedly costly emissions issues. The longer they put it 13 offthe more costly it's going to be as I thinkthey're 14 finding out. 15 The electricity consumers ofthe

## u.s. are for 16 the most partunaware ofthe true costs ofthe electricity 17 that they bUy from the utilities. As ifthe tax subsidies 18 paid to these utilities overthe decades is not enough, the 19 rate payers are now being saddled with the utilities 20 unrecoverable costs fromtheirunprofitable investment 21 schemes like Comanche Peak. We will probably be stuckwith 22 their cleanup costs in the future, our childrenwill. 23 The thing that bothers me the most is that 24 after being

-- Texas being a leader in energy production for 25 most ofthis current century, Texas has become a net energy51 1 importing state, which simplymeans that we're buying more 2 energy from outside the state than we're producing within 3 Texas. This is due to narrowly focused energypolicies as 4 well as tremendous growth and demand for that power over the 5 last 20, 25 years. 6 The opportunity -- ifyou think back, if 7 you're aware inthe r20's and '30's in Texas andmost ofthe 8 nation, rural populations, which was just about everybody, 9 the ones who had electricity generated their own. The wind 10 generators were real popular. Really was a big boon to the 11 settling ofthe country to be able to generate your own 12 electric power. 13 When the electric utilities started to get 14 powerful and spread out and putup lines, the customers who 15 wanted the utility powerwere forced to disable their 16 independentgenerating equipment, so they couldn't have it 17 bothways. That seems to be the mentality that the 18 utilities have keptup with the balance of the century. 19 The opportunity to reverse this disturbing 20 and costly move away from energy self-sufficiency is now, 21 and this legislationprovides a chance to implement a lot of 22 these changes in our life-styles. Just having the choice of 23 electricityproviders is of little use. There is not true 24 competition, including options for clean and renewable 25 electric power from a variety of sources.52 1 I'm sure thatthe electric utilities realize 2 the implications ofthe tremendous success ofthe breakup of 3 the AT&T telephone monopoly. Maybe we need to look at 4 something like that in the electric utilitymonopoly. The 5 separation ofthe electric generation facilities from the 6 distribution grid, whilemaking the grid accessible to any 7 qualified electric producer, would enhance competition, 8 while doing wonders for the economic health ofbusinesses 9 providing the infrastructure to these independentpower 10 producers, not to mention bring down the cost ofelectricity 11 and cleanup the air, which is whywe are all here. 12 Alarge array ofco-generated

-- 13 co-generating industrial sites as well as traditional and 14 renewable energy sources will eliminate the fear ofmassive 15 power blackouts that existwith the current inefficient, 16 centralizedpower system. The technology to safely feed 17 electricity onto the grid from scatteredproduction sources 18 has been available for years. 19 The future in electric powermust include 20 clean air. Coal is not a cleanpower source. Nuclear is 21 too expensive and will endup costing more for plant 22 decommissioning than it is for the construction. That is 23 until we're passed along the costhere for the third time 24 for Comanche Peak. The bottom line is nonpolluting 25 renewable electric energy sources is the answer. It's the53 1 future and everybody canhave it. Thankyou for the 2 opportunity to speak. 3 4 (Applause) MR. CAMERON: Thankyou. 5 MollyRooke Seay, please. 6 MS. ROOKE SEAY: I'mMolly Rooke Seay. I 7 live in Dallas and I'mhere speaking as an individual. I am 8 an activist in environmental organizations because I am 9 concerned about the environment, about pUblic health, and I 10 urge you to listen to the comments and read the comments 11 carefully ofthe environmental and public interest groups 12 who submit their comments to you. 13 I am also a shareholder in several electric 14 utility companies. But it's more the concerns ofthe pUblic 15 interest and environmental groups that I am concerned with, 16 and the polls showthat -- even the polls taken by the 17 electric utility companies show that the interest is in 18 favor of cleaning up the dirty power plants and other 19 industrial grandfathered sources, and so I urge you to keep 20 that in mind as you receive your comments, that you may not 21 be hearing in great numbers. 22 In fact, I'm sure you won't be hearing in 23 great numbers fromprivate citizens. Most ofthemhaven't a 24 clue that any ofthis is going on. They don't know how to 25 get involved. They don'tknow what the process is orhow to54 1 get involved in it. So I hope thatyou will look at having 2 more pUblic notice, real notice ofpUblic hearings and**ke~p** 3 in mind that evenwhen you do putnotice out that it's hard 4 to get the attention ofthepUblic through a small ad you 5 may place in a newspaper, especially if it's not in all the 6 community newspapers as well in some of these communities 7 besides in the large newspapers for the large cities. 8 I'mjustgoing to be speaking generally about 9 issues. Like I said, I wantyou to be looking at the 10 comments that will be prepared and submittedto you of a 11 more technical nature and more complete than what I will be 12 saying today. I want you primarily to be looking at the 13 public interests and public health aspects ofthe 14 implementation ofthese rules, and to use all the authority 15 and power that you have to write the strongest rules 16 possible to protectpUblic health. 17 And urge you not to allow any ofthe 18 reductions that could be allowed through the switching of 19 one kind ofreduction or a claim for reduction other than 20 actually reducing emissions at any ofthese plants. 21 Anything other than actually reducing emissions I think is a 22 great idea, but should be just on top of it ifthey want to 23 do the right thing, andwouldn't that be nice ifcompanies 24 decided to do what's right for pUblic health. 25 I also hope that you will be requiring that55 1 the grandfatheredpowerplants meet today's best available 2 control technology or new federal source performance 3 standards for otherpollutants, as well as including carbon 4 monoxides, and particulates, and all fluoro organic 5 compounds. And I think this is especially important in

__ 6 areas like the Dallas/FortWorth area where we're getting 7 lots ofthe transport from these powerplants into our area. 8 And especially these from EastTexas whichhave been shown 9 to contribute significantlyto our ozone exceedences in the 10 Dallas/FortWorth area. 11 I am sorry to say that this last summerwith 12 it being sohot andwith the air pollution and ozone being 13 so high it's the first summer that I everhad breathing 14 difficulties to the extent that I startedusing an inhaler, 15 and I hate to seriously considermoving away from the area. 16 I do like ithere except for the air quality, and urge you 17 just to do everything that you can within your power, and 18 you have a great deal ofpower in the rule making to do the 19 strongest andbestthatyou can to protectpublic health. 20 Thank you. 21 22 (Applause) MR. CAMERON: Gene Burke, if I'mpronouncing 23 it correctly, had a questionmark on the presentation of 24 testimony. I would ask ifyouwish to present anything at 25 this time.1 MR. BURKE: No, thankyou. 56

2 MR. CAMERON: Has anyone else who has 3 registeredwho did not register to speak, do theywish to do 4 so now? 5 MR. SAYE: Sir, I wouldjust like to make a 6 comment or two. I've beenretired for about

-- 7 MR. CAMERON: Sir, could I get you to come 8 forward and state your name for the record? 9 10 11 MR. SAYE: Anywhere you wantme? MR. CAMERON: Come on up. MR. SAYE: All right. Not anywhere. Jim 12 Saye, I'm old and I'm retired, and I'm going to go on, but I 13 still have fun. I justwant to make two comments. One is 14 howmany ozone days, not alerts, do we have? I read in the 15 paper itwas eight in eightmonths. 16 17 MR. CAMERON: I'mnot certain. MR. SAYE: No? Well, that's not verymuch. 18 Two, I belong to an engineering organization 19 and there's discussion between oil companies and power 20 companies to use thepower companies' gases to getmore oil 21 out ofthe ground. It's the carbon dioxide that does it, 22 and it's being done now, only they drill carbon dioxide 23 wells in Colorado, ship it to West Texas and itpushes the 24 oil through. That's the only two things I had. 25 MR. CAMERON: Is it?1 57 MR. SAYE: Youmay not have to reduce the 2 gases, justget rid ofthem in the ground. 3 4 MR. CAMERON: Thankyou, sir. MR. SAYE: Oh, another thing. Ifyou need 5 gas, not coal, Russia has an area ofthe biggest gas in the 6 world. It's 1200 trillion cubic feet. Now, a big gas field 7 is 66 trillion, so this is immense. It's north ofthe 8 Arctic Circle, but it's there. Itwill be used**som~day.** 9 MR. CAMERON: Okay. Is there anyone who 10 mighthave come in late who wouldwant to speak? Very good. 11 I would like a couple ofthings. Ifyou're wishing a copy 12 ofthe adopted rules I do need to get your address either on 13 the registration form or a business card as we leave the 14 room. Also, ifyou have anywritten testimony and/or 15 graphical testimony you would like to submit I will be up 16 there at the entrance as well to collect that. 17 I would remind everyone that the close of 18 commentperiod for this proposal is 5:00 p.m., October 11th. 19 And ifno one else is wishing to speak I will close the 20 hearing now. Thankyou. 21 (Public Hearing concluded at approximately 3:00 p.m.) 22 23 24 2558 1 C E R T I F I CAT E 2 THE STATE OF TEXAS) 3 COUNTY OF ----) 4 I, curtis High, a certified ShorthandReporter in 5 and for the State ofTexas, do hereby certify thatthe 6 above-mentioned matter occurred as hereinbefore set out. 7 I FURTHER CERTIFY THAT the proceedings of suchwere 8 reported by me or undermy supervision, laterreduced to 9 typewritten form undermy supervision and control and that 10 the foregoing pages are a full, true, and correct 11 transcription ofthe original notes. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 INWITNESS WHEREOF, I havehereunto setmyhand and seal this 

### 1...7;f t..

day of 

# 0('-r{)IS£;1J , 1999.

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# ..,. CURTIS HIGH, Texas CSR 484 Expiration Date: 12/31/ 600 North Pearl, suite 640 Dallas, Texas 75201 (214) 220-2449TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION AUSTIN, TEXAS IN THE MATTER OF: ) PROPOSED REVISIONS TO 30 TAC ) CHAPTER 319 )

PUBLIC HEARING TUESDAY, OCTOBER 5, 1999

BE IT REMEMBERED THAT at 4:00 p.m., on Tuesday, the 5th day of october, 1999, the above-entitled matter came

on for hearing at the City of Irving Central Library Auditorium, located at 801 West Irving Boulevard, in Irving, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings were reported by curtis High, CSR in and for the State of Texas:



# arecordof excellence
800Brazos • Suite340 • Austin.Texas 78701 • 512-474-22332 PRO C E EDIN G S TUESDAY, OCTOBER 5, 1999 (4:00 P.M.) MR. CAMERON: Good afternoon. I would like 1 2 3 4 5 to go ahead and open this open this hearing concerning 6 proposed amendments to 30 Texas Administrative Code, Chapter 7 116, implementing the requirements of Senate Bill 766 from 8 the last legislative session. My name is Beecher Cameron 9 with the RegulationDevelopment Section. Also other staff 10 members here tonight areMr. Kerry Drake, Mr. Brian 11 Christian, Mr. David Schanbacher and Patrick Crimmins. 12 We're going to do something a little bit 13 different atthis hearing tonight. Earlier this afternoon 14 at 1:00 o'clock, we held a hearing concerning the 15 implementation of Senate Bill 7, also passed during the last 16 legislative session. At thathearing we took comments not 17 only on Senate Bill 7, but also on the sUbject ofthis 18 hearing, Senate Bill 766. We will continue that process 19 here and accept comments on bothpieces of legislation. 20 For those ofyou who are not familiar with 21 this format, this is a hearing structured for the receipt of 22 oral testimony only. There's no questioning of the staffor 23 cross-examination ofthe witnesses. As we did before the 24 meeting, we will be gladto stick around after the hearing 25 is closedto answer any questions on the proposal that you3 1 mighthave. 2 I would also askthat ifyou have not 3 registered, please do so. Also, ifyou would like to 4 receive a copy ofthe rules as they are finally adopted by 5 the commission, please provide us your address either on the 6 registration form or by a business card. Andwith that, I 7 will go ahead and call our first commenter, Mr. FoyMoss. 8 Come up to the lectern, please, and ifyou 9 couldprovide the spelling ofyour name for the Court 10 Reporter. 11 12 MR. MOSS: I'm sorry. MR. CAMERON: Ifyou could provide the 13 spelling ofyour name for the Court Reporter for the record. 14 MR. MOSS: Yes, I'm FoyMoss. I apologize I 15 justgot out

-- Foy E. Moss, 1216 ParkRow Place, Irving, 16 Texas. I'm a native Texan and it concerns me greatly some 17 ofthe things I've read in the paper over the pollutants 18 that are put out, the EPA coming around making requirements 19 on the people ofTexas and talking about limiting the 20 ability to drive our automobiles andwhat will be taking 21 place. 22 I'm encouraged by some ofthe things I do

-- 23 I apologize, I don'tknow ifI'mtalking on Senate Bill 7 or 24 766. Itmakes no difference; the topic is basically the 25 same. I would like to see the ability to continue the4 1 growthwithin the region. I realize this may be limited in 2 the future, but I think there are a lot things that Texans 3 can do and I thinkwe better all get together on this thing 4 andwe betterbe doing itpretty quick. 5 All I have are a few suggestions ifyou-all 6 will bearwithme. I'll give a list of several ofthem, and 7 in no particular order. These are just as they kind ofcame 8 to me. You know, from some ofthe things that I've been 9 seeing that TUhas got about one year to get their 10 facilities up to standards. They may have several years. I 11 don't knowwhat the big long hangup is. Whether the new 12 plant is pretty efficient, older ones are dirty as all 13 get-out. Ifone is dirty, clean itup or shuther down. We 14 don't have that choice. That's my position. 15 Why are we starting school before Labor Day? 16 Air-conditioning demand is outrageous starting school in 17 July. My oldest daughter is a school teacher. I think 18 waiting until Labor Day as the temperature starts to 19 decrease a little bit. It's a minor point, but those little 20 generators over there are running lickety-splittrying to 21 meet the demand. 22 What else can we do to eliminate some ofthe 23 driving around theMetroplex, North Texas? I look around, I 24 see the malls going like crazy seven days a week. Maybe we 25 need to shutthose puppies down. I'mtalking about retail5 1 establishments on Sundays andMondays. You can't get it 2 done in five days, you're not going to get itdone. Alot 3 ofpeople use an excuse to go to the mall justto hang out. 4 Well, let's put an end to it. 5 The driving age. When I was 16 I had a 6 driver's license. Somepeople got it at age 14. You 7 realize howmany peoplewe cantake offthe road ifyou 8 raise the driving age to 18, or a high school graduate? I 9 think it's a common sense approach. Number two, itmight 10 help the drug situation if some ofthese kids don't have 11 access to automobiles, then they would go. 12 I think cars -- we need to get some cars off 13 the road that don't have insurance. I read in the paper 14 that 25 percent of the cars on the road don'thave 15 insurance. Driving is a privilege, it is not a right. If 16 you don't have insurance, state law says you're supposedto, 17 you're offthe road. 18 Same thing goes for inspection stickers and 19 current license plates. There's a lot of funny stuffgoing 20 on in inspection stickers

-- inspection stations; false ones 21 and everything else. I think the State ofTexas could go 22 well to have licensed employees running whether it's 23 D.P.S. officers or who, conducting the regulation of 24 inspection by these officers and they also checkthe 25 insurance, the tags, et cetera, tagged in to the state6 1 computer showing all valid insurance. No more ofthese 2 funny cards that don'treallyhave validpolicies backing 3 themup. 4 Why arewe busingkids? I see the Dallas 5 County School District Dallas County school, whatever, 6 has all these big yellow school buses running allover. If 7 we didn't have busing, I don'tknowhowmuch pollutionwould 8 be eliminated from all these buses going around. 9 Same thing goes with schools. I think the 10 teachers should be assigned to schools as close to their 11 homes as possible. If schools are required to bus somebody, 12 why use those things, why notuse DART? Start school justa 13 little bit later than the beginning time, 8:30 or 9:00 14 o'clock. That lets the people go to work a little bit 15 earlier and then still use these same particular vehicles to 16 get the kids to their proper schools ifthat is necessary. 17 Why do we have freeways that aren't 18 efficient? We have four lane freeways and all of a sudden 19 you got two lanes splitting off, andtwo lanes from another 20 one splitting in, and now you got four lanes and you got to 21 feed into three on the new freeway. I thinkthese 22 bottlenecks need to be'looked at and figure outhowwe can 23 keep traffic moving at a hundred precent 100 percent ofthe 24 time. 25 The other one that comes down, I'mback on7 1 insurance. I apologize. This came in no particular

-- just 2 as I came up with these ideas. Wehave people that go out 3 and buy insurance on a monthly basis. I think they ought to 4 buy an insurance policy on a 12 month basis or a sixmonth 5 basis. You pay itup front 100 percent ofthe time. Ifyou 6 don't pay your insurance bill

-- there's a lot ofpeople who 7 are going right now, they justdon'thave insurance. 8 Bypaying it 100 percentup front, the only 9 time you get a refund is ifyou sell your car and you can 10 prove to the state or to the insurance company that you no 11 longer own that car, you get a prorated refund. Cars from 12 Mexico entering the state ofTexas shouldbe required to 13 have a Texas inspection and also Texas insurance. Couple of 14 things there: Make sure the car is not going to be

-- or 15 truck is not polluting the state's air unnecessarily. 16 I would like to ask some experts, but since 17 we're not taking testimony, I askthe question: Should we 18 be limiting fireplaces

-- woodburning fireplaces, both in 19 construction and in theiruse exceptunder threatening life 20 events, severe freeze, no energy, itbeing restricted, 21 et cetera? These are just a few ofthe ideas that kind of 22 popped into mind. 23 And then I gotto thinking, Texas is a big 24 state. Alot ofpeople are going totally across the 25 country, either east, west, north, south, et cetera. I-35,8 1 we probably ought to move 1-35 to the west going through 2 Mineral Wells, Wichita Falls, et cetera, and have all the 3 trucks to drive on 1-35 unless they have some stop along the 4 way, whether itbe in Dallas, et cetera. 5 The same goes for 1-20. We've got it close 6 to the south oftheMetroplex currently. Itmay need to be 7 moved further to the south to help the smog situationhere 8 in the Metroplex. Just a suggestion. 1-30 might ought to 9 follow the northern part ofthe state Highway 82 over across 10 Clarksville up to Gainesville, et cetera, and then intersect 11 with 1-35, the new 1-35, and then come back in atMineral 12 Wells. Again, get this traffic out ofthe Metroplex. It's 13 going to free up our freeways, help on the pollution. 14 We need auto racing, drag strips, et cetera, 15 burning some oftheir super-duper fuels? I really question 16 that one. I also would like to see auto manufacturers being 17 required to have an overdrive transmission, have this thing 18 kicking in at least at speeds of 55 miles anhour. I had a 19 Buickwagon once upon a time and the overdrive did notkick 20 in until 60 miles an hour. I'mnot going to tell you the 21 miles per gallon that was lost because I had to obey the law 22 and drive 55 miles an hour, and supposedly itwas for

-- not 23 safety, but gas economy, et cetera. My fuel savings dropped 24 five miles to the gallon as a result. 25 I thinkTexas needs to withdraw its bidto9 1 the Olympics. We don't need the extra cars driving into the 2 area andwe also don't need the extra flights coming into 3 DFW, those guys are polluting too. 4 So I calIon the Feds to increase the 5 spending on highways and freeways to help eliminate some of 6 the problems ofcongestedhere, to allow automobiles to run 7 at a fuel efficient speedratherthan sitting in a parking 8 lot onLBJ Freeway at 5:00 o'clocktraffic. I don't think 9 they're very -- speed limits don't matterwhen you're 10 sitting in a parking lot. I think a car idling at ten miles 11 anhourpollutes more than a car doing 55 miles an hour. 12 These are only suggestions. I hope they're 13 helpful. We're in it together. Thank you. 14 MR. CAMERON: Thank you, Mr. Moss. 15 stanley Spruiell. 16 MR. SPRUIELL: I want to thank the Texas 17 Natural Resource Conservation commission for the opportunity 18 to speak and, you know, present some preliminary comments on 19 the Senate Bill 766 proposed regulation. We are in the 20 process ofreviewing it and we do plan to submit detailed 21 comments before the -- the deadline. 22 I do wantto give a few preliminary comments, 23 you know, aboutwhatwe will probably be commenting on in 24 our letter. Of course first ofall just in general EPA does 25 support the overall concept of766, which is to achieve10 1 reductions, because we believe the airquality can benefit 2 from giving protection to the Bill as operated and, you 3 know, implemented correctlytheway it is designed to. 4 We do have some comments and, you know, I 5 will try to hit on some ofthe highlights. Youknow, 6 certainly, I mean, the Bill, you know

-- youknow rules do 7 have a potential for, you know, obtaining substantial 8 reductions in the air pollutants and certainly, you know, 9 EPAwould understand that these reductions would be credited 10 under the state implementationplan process for, you know, 11 helping to attain and to maintain compliancewith the 12 National AmbientAir Quality standards, which is the 13 standard EPAhas adopted for protection ofthe health and 14 welfare ofthe citizens ofthe United states. 15 Of course ifTexas or, you know, industry 16 or -- wants to use some ofthese reductions for the purpose 17 say ofnetting, you know, certainly the Act does

-- lack 18 sources to net out some ofthe major new source review 19 processes. Certainly, you know, as long as they are 20 credible, whichmeans one ofthe requirements wouldhave to 21 be surplus, meaning in addition to any other applicable 22 requirements. Just simply reducing just to meet what's 23 already requiredunder the regulations, youknow, is not 24 credible for netting. It's not credible for offsetting any 25 proposed increases that wouldhave**occurred~**11 1 Ofcourse, you know, the other thing too is, 2 you know, I'm sure is credibility ofanykind ofdecrease is 3 establishing the appropriate baselinewhich is used in the 4 planning purposes for demonstrating attainment and 5 maintenance ofthe airquality standards. So, again, that 6 needs to be clearly specified in the proposed

-- you know, 7 in the final rules. 8 Because one thing too, we have**notic~d** too, 9 is that it talks about grandfathered facilities, but nowhere 10 in the proposed rule didwe see, youknow, where there was a 11 clear definition of a grandfathered facility and by

-- I 12 thinkwhat we understand is that it's a facility that was in 13 existence before the permit regulations were adopted and 14 does not require a permit. Youknow, that needs to be clear 15 and defined; either, you know, placed in the rules or there 16 should be like some reference to where it is if it is 17 already presently defined. 18 Another comment I would anticipate we would 19 make in our comments deals with the

-- the use ofthe best 20 available control technology for the voluntary emission 21 reductions, you know, which requires best available control 22 technology. You know, since this ten year old, you know, 23 best available control technology are back, or if it's in an 24 area that's not meeting the National AmbientAir Quality 25 Standards, it's like a general achievable technology.12 1 Of course some concerns thatwe have, 2 certainlywhile we, you know, commend the state for 3 including these requirements, there could be a few cases 4 where source is already meeting that level of control and 5 then wants to apply for a, you know, voluntary emission 6 reductionpermit. Andhowwould the state treat a source 7 like this? Would it require an additional level of 8 reduction? 9 And then another question would be is a 10 source is -- a grandfathered source is currently operating 11 at only a fraction of its designed capacity, then they apply 12 the best available control technology, but then later they 13 ramp up to their full capacity, and even though they are 14 applying best available control technology, they could 15 potentially be emitting higher than what they were before 16 they got their reduction permit. So, again, you know, the 17 question that Texas might have to look at is do they want to 18 keep them at their current level of operation when they 19 apply for this permit. 20 Now, that's essentially the comments I have. 21 I certainly will be giving these in, you know, more detail 22 in our letter, plus we'll have some additional comments 23 we'll probably include as well. I thankyou, very much. 24 MR. CAMERON: Thankyou. 25 I have no other indications on the sign-up13 1 sheet anyone wanted to speak. Is there anyone who 2 registered to

-- anyone who's registeredwho did not 3 register to speakwish to speak orwish to talk now? Very 4 well. 5 I will remind you that the close of comment 6 period on this proposal is on October the 11th at 5:00 p.m. 7 and, again, I'll askyou ifyou have notprovided an address 8 for a copy ofthe final rule, please do so. No indication 9 of speakers, I'll call the hearing closed. 10 (Public Hearing concluded at approximately 4:30 p.m.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2514 1 CERTIFICATE 2 THE STATE OF TEXAS) 3 COUNTY OF 4 I, curtis High, a certified ShorthandReporter in 5 and for the State ofTexas, do hereby certify that the 6 above-mentionedmatter occurred as hereinbefore set out. 7 I FURTHERCERTIFY THAT theproceedings of suchwere 8 reported byme or undermy supervision, later**reduc~d** to 9 typewritten form undermy supervision and control and that 10 the foregoing pages are a full, true, and correct 11 transcription ofthe original notes. 12 INWITNESS WHEREOF, I havehereunto setmy hand and 13 seal this .....:-L. 

### /J I day of

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## ---:;a:...-C::E:...-~..;../..::o'--'-/"'--3E=__=_/L/_=_ , 1999

. 14 15 16 17 18 19 20 21 22 23 24 25

# "---/--I-:::::f~~--e::;z::::.~,**~"f!** CURTIS HIGH, Texas/CSR'**4~~/** ExpirationDate:**12/31/~U** 600 North Pearl, Suite 6 0 Dallas, Texas 75201 (214) 220-2449INDEXOFORALTESTIMONY

October7,1999,Houston,9:00am

ReferenceNumber

0-1

0-2

0-3 Submittedby

JaneLaping,MothersforCleanAir Subject:SB7andSB766 BenCannine,ReliantEnergy Subject:SB7 FredManhart,Entergy Subject:SB7

0-1

0-2

0-3 October7,1999,Houston,12:00pm

BrandtMannchen Subject:SB766 MarkMuhich,SierraClub Subject:SB766 GeorgeSmith,SierraClub Subject:SB766**~--------** 

## -- TexasNaturalResourceConservationCommission PublicHearingRegistration Location:Houston 

## Date: October7,1999(9:00 a.m.) 

## Concerning: ElectricIndustryRestructuring(SB7)

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# TexasNaturaiResourceConservationCommission PublicHearingRegistration Location:Houston 

# Date: October7,1999(9:00 a.m.) 

# Concerning: ElectricIndustryRestructuring(SB7)

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# TexasNaturalResourceConservationCommission PublicHearingRegistration Location:Houston 

# Date: October7,1999(12:00p.m.) 

# Concerning:PermittingofGrandfatheredFacities (SB766)

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location:

# Houston Date: 

# October7,1999(12:00p.m.) Concerning:

# PermittingofGrandfatheredFacities (SB766)

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Yes No Yes NoTRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION

PROPOSED REVISIONS TO 30 TAC CHAPTERS 101 AND 116 AND THE STATE IMPLEMENTATION PLAN

PUBLIC HEARING OCTOBER 7, 1999

BE IT REMEMBERED that the above matter came on for hearing on the 7th day of October, 1999, beginning at 9:00 a.m. before Mr. Beecher Cameron, at the City of Houston Pollution Control Building Auditorium, 7411 Park Place Boulevard, Houston, Texas, whereupon the following proceedings were had:**l~1~1** 

## '"1**'1~1l\'"**

### ---~-~---



# arecordof excellence
800Brazos . Suite340 . Austin,Texas 78701 . 512-474-22331 THURSDAY, OCTOBER 7, 1999 2

2 3 4 MORNING SESSION:



### * * * * * MR. CAMERON: 9:00 A.M.

Good morning, 5 everyone. I'd like to go ahead and open this 6 hearing concerning proposed amendments to 7 30 Texas Administrative Code, Chapters 101 and 8 116. These are amendments that will implement 9 the emission control and permitting requirements 10 of Senate Bill 7, recently passed during the 11 last legislative session. My name is Beecher 12 Cameron with the regulation development division 13 at the TNRCC. 14 If you haven't already, I would ask 15 that you please sign the registration form out 16 by the entranceway and make an indication if you 17 desire to give comments or not. Also, if you 18 wish to receive a copy of the rules as they are 19 adopted by the Commission, we will need your 20 address on there either on the form or in the 21 form of a business card. 22 We're doing something a little bit 23 differently at these groups of hearings today. 24 This morning we're holding the hearing 25 concerning the implementation of Senate Bill 7.

KENNEDY REPORTING SERVICE, INC. (512) 474-22333
1 At noon, we will start a hearing concerning the 2 implementation of Senate Bill 766. Senate 3 Bill 766 concerns the voluntary permitting 4 program of grandfathered facilities and the 5 beginning of the restructure of the TNRCC 6 permitting system. We will take comments on 7 both pieces of legislation at both hearings. 8 So, if you're here today just to offer comments 9 on 7, you may also offer comments on 766. At 10 noon, we'll also take comments on 7 and 766. 11 That being said, I'm going to go ahead 12 and call our first speaker, and we will move 13 14 along. Ms. Jane Laping. MS. LAPING: Thank you for this 15 opportunity to comment on Senate Bill 7 16 concerning the issuance of grandfathered utility 17 permits and voluntary emission reduction permits 18 of Senate Bill 766. On behalf of the 500 19 members of Mothers for Clean Air and the 20 children we represent in the Houston/Galveston 21 area, we feel that our children have suffered 22 long enough**f~om** the pollutants emitted by 23 grandfathered facilities and believe it is time 24 to require these facilities to become part of 25 today's permitting system.

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 4
Governor Bush, in the 1999 legislature, 2 did not pass a bill requiring mandatory 3 compliance with modern pollution control 4 technologies for all grandfathered plants, 5 therefore we expect the following to be put in 6 place. In regard to Senate Bill 7, we need the 7 strictest pollution reductions possible. That 8 means, No. I, all grandfathered power plants 9 must meet today's best available control 10 technology, BACT, or new federal source 11 performance standards for pollutants such as 12 carbon monoxide, sulfa dioxide, particulates, 13 and volatile organic compounds. This is 14 especially important in areas such as the 15 Houston/Galveston region where we have not been 16 able to demonstrate how we will come into 17 compliance with the ozone standard and where we 18 are bordering on violating the particulate 19 matter standard. 20 No.2, all power plants, not just 21 grandfathered plants, must meet the strictest 22 pollution reductions possible. All power plants 23 that are in or that contribute to areas with 24 unsafe air must meet the 0.14 pounds per 25 millimeter BTU standard used in federal laws.

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 In regard to Senate Bill 766, the 5

2 voluntary grandfather pollution bill, we need 3 voluntary permits to be as strict as possible 4 and protective of public health. That means, 5 No.1, a full health effects review for any 6 plant that proposes to volunteer for a permit is 7 necessary. The proposed health effects review 8 is abbreviated and not adequate to protect 9 public health. At the very least, grandfathered 10 plants within two miles of a school, a nursing 11 horne, or a day-care center and any facility not 12 using BACT, grandfathered or not, should undergo 13 a full health effects review. We recommend that 14 the health review include a separate analysis 15 for children because they are at an increased 16 risk of suffering from air pollution because of 17 their size, development, and exposure. 18 The strictest allowable reductions on 19 voluntary plants are necessary. If BACT is not 20 used, generally available control technology 21 must result in real reductions. The director of 22 the TNRCC has testified that if today's BACT 23 were used, we could see a 50 percent reduction 24 in pollution, and if 10-year-old BACT were used, 25 we would only see a 25 percent reduction.

KENNEDY REPORTING SERVICE, INC. (512) 474-22336
1 Phantom reductions should not be rewarded with 2 emissions reductions or credits. Plants must 3 show real emission cuts in order to qualify for 4 a permit. 5 No.2, reductions must occur in the 6 same airshed as the plant trying to get the 7 permit. Projects with the clean air or other 8 benefit must result in quantifiable emissions 9 reductions before they qualify. Real penalties 10 or retraction of the permit must occur if the 11 reductions fail to happen. 12 Emissions from grandfathered facilities 13 are not limited to a localized area, but in the 14 Houston/Galveston area, due to prevailing 15 southeasterly winds, had an impact on a much 16 larger region than the area surrounding the 17 plant. Consequently, the adverse health impacts 18 affect not just thousands but millions of 19 people, including 900,000 children in Harris 20 County alone. Approximately 200,000 children 21 already have compromised respiratory systems 22 that are made worse by breathing poorly 23 controlled industrial and power plant emissions. 24 We urge you to carefully consider our 25 comments on Senate Bill 7 and Senate Bill 766 in

KENNEDY REPORTING SERVICE, INC. (512) 474-22337

1 light of the many innocent young lives that 2 could be affected by your decision. Thank you 3 for this opportunity to comment. 4 MR. CAMERON: Thank you. And I 5 was reminded, if you have written comments that 6 you'd like to submit as well today, you need to 7 leave them up here with me at the desk here or 8 with one of the staff members. I'd like to call 9 Mr. Ben Carmine. 10 MR. CARMINE: My name is Ben 11 Carmine. I'm manager of air resources for 12 Reliant Energy. Reliant Energy appreciates the 13 opportunity to provide comments on TNRCC's 14 proposed rules to implement the sections of 15 Senate Bill 7, addressing emission reductions 16 from and permitting of grandfathered facilities. 17 I'll make several brief comments today, but 18 we'll file more detailed written comments by the 19 11th. 20 The NOx allowance program established 21 by Senate Bill 7 should remain independent of 22 future SIP requirements. Merging this program 23 with SIP requirements was not intended by the 24 legislature and will create a confusing and 25 unworkable emissions trading program.

KENNEDY REPORTING SERVICE, INC. (512) 474-2233 An8
1 allowance reconciliation period should also be 2 included in the rules to allow facilities time 3 to calculate end of year emission totals and to 4 buy or sell allowances as necessary to balance 5 accounts. We propose a 60 day reconciliation 6 period which is consistent with the EPA acid 7 rain program. 8 The two-step permitting approach for 9 grandfathered electric generating units included 10 in the proposed rules exceeds the statutory 11 requirements of Senate Bill 7. The apparent 12 requirement to permit reductions for NOx and 13 SO-2 under Senate Bill 7 and emissions of other 14 pollutants under provisions in Senate Bill 766 15 should be revised. We believe that permits 16 issued under Senate Bill 7 should address all 17 other relevant pollutants at current control 18 levels, with recognition of incremental 19 increases in certain pollutants associated with 20 NOx emission controls. 21 The proposed rules should not prescribe 22 emission control technologies or operating 23 procedures for these controls. Senate Bill 7 24 establishes a cap and trade program that 25 specifically allows electric generating units to

KENNEDY REPORTING SERVICE, INC. (512) 474-22339

1 determine what controls, if any, that we use to 2 achieve the emission reductions. Senate Bill 7 3 provides a compliance that's determined at the 4 end of the annual control period. 5 Reliant Energy supports the emission 6 reduction and permitting initiatives of Senate 7 Bill 7, and we have already achieved much of the 8 NOx reductions required by the legislation. 9 However, we believe the TNRCC's proposed 10 regulations to implement these initiatives are 11 inconsistent with the statute and are more 12 complicated than necessary. I appreciate the 13 opportunity to provide these comments. Thank 14 you. 15 MR. CAMERON: Thank you, 16 Mr. Carmine. Mr. Fred Manhart. 17 MR. MANHART: Good morning. My 18 name is Fred Manhart. My position is 19 environmental administrator with Entergy Texas. 20 Ordinarily I'd be making these comments at your 21 Beaumont hearing that you're going to have this 22 afternoon, but due to some schedule conflicts, 23 I'm going to go ahead and do what I need to do 24 here. 25 Entergy is a full service,

KENNEDY REPORTING SERVICE, INC. (512) 474-223310
1 investor-owned electric utility company with 2 generation, transmission, and distribution 3 operations in Southeast Texas, and we also have 4 similar operations in the states of Arkansas, 5 Louisiana, and Mississippi. We operate 6 fossil-fueled power plants in Jefferson, Orange, 7 and Montgomery Counties. I'd like to present 8 our views on SB 7, the electric industry 9 deregulation bill, that now is, of course, law. 10 Senate Bill 7 or SB 7, as we call 11 it provides for an innovative, flexible, and 12 cost-effective approach to obtaining NOx and 13 SO-2 emission reductions. TNRCC's proposed 14 rules to implement SB 7, however, would limit 15 much of the flexibility and cost-effectiveness 16 of SB 7. Entergy has important concerns about 17 the proposed SB 7 implementation rules in 18 Chapter 101, Subchapter H, Division 2, and 19 Chapter 116, Subchapter I. 20 Regarding allowances, the proposed 21 rules should not attempt to merge SB 7 22 requirements with anticipated SIP reductions. 23 Such a merger overly complicates the allowance 24 and permit process. The agency rules should be 25 consistent in the use of EPA acid rain database

KENNEDY REPORTING SERVICE, INC. (512) 474-223311
1 as the basis for allowances for both 2 grandfathered facilities and electing electric 3 generating facilities. It's critical for EGFs 4 to have a reconciliation period to allow for 5 reconciliation of their allowances following the 6 end of a control period. We recommend using the 7 same length of time for reconciliation that is 8 used by the EPA in its acid rain program. 9 Restrictions on the use of transfer of 10 allowances should be in accordance with the 11 requirements and language of SB 7, and no more 12 restrictive than is provided by the law. 13 The electric utility industry believes, 14 with regard to permitting, that SB 7 supports a 15 flexible process very similar to the federal 16 acid rain program. The TNRCC, however, seems to 17 be proposing a permitting program that is 18 review-intensive, command and control in nature 19 that was patterned after the existing NSR 20 permitting program. The agency proposal is such 21 that each utility has to identify in the 22 application for what emissions controls will be 23 applied to meet the allowance for each electric 24 generating facility. SB 7 clearly provides that 25 EGFs may meet their allowances without applying

KENNEDY REPORTING SERVICE, INC. (512) 474-223312
1 emissions controls, such as by trading within 2 their company or trading among other companies. 3 The TNRCC is proposing that electing EGFs, all 4 of which are already permitted by definition, 5 need to go through yet another permitting 6 process. This doesn't seem to be contemplated 7 under SB 7, is unnecessary, and in an era of 8 limited resources for both the agency and the 9 regulated community, such an additional 10 permitting program is unwise. For an electing 11 EGF to be subject to the SB 7 permitting 12 program, the TNRCC should merely do an automatic 13 alteration of the permits for those electing 14 facilities to reflect their allowances for NOx, 15 SO-2, or both. 16 Regarding control technology, removal 17 or failure to operate existing control 18 technology is not allowed by the proposed rule. 19 This would prevent the removal or replacement of 20 existing emission control, perhaps even with 21 more efficient and more effective controls, or 22 with fuel switching in lieu of controls if that 23 provides reduction of emissions. The provisions 24 of SB 7 establishing severe and mandatory and 25 permissive penalties that apply to an EGF that

KENNEDY REPORTING SERVICE, INC. (512) 474-2233-1 3
1 emits in excess of its allowances makes it 2 unnecessary and redundant to have these same 3 types of restrictions within the permits. 4 In conclusion, the legislature has 5 spoken as to what is necessary to permit 6 grandfathered electric generating facilities in 7 Texas. The TNRCC should implement a program 8 strictly in accordance with the provisions of 9 SB 7. Entergy and our trade association, the 10 Association of Electric Companies of Texas, do 11 plan to file more detailed written comments on 12 the proposal. Thank you, and I'd be happy to 13 answer any questions you might have about these 14 remarks or about Entergy Texas. 15 16 Mr. Manhart. 17 MR. CAMERON:

MR. MANHART: Thank you,

We'll follow up with 18 formal comments. That is just a copy of my 19 remarks. 20 MR. CAMERON: Those are all the 21 registered speakers I have on the sign-up sheet. 22 Is anyone present who did not sign up to speak 23 and would like to do so at this time, or did 24 anybody come in after the hearing began that 25 would like to talk? Very good.

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 14

I would remind you again that we have 2 another hearing at
..12:00 concerning the 3 implementation of Senate Bill 766, and we'll be 4 glad to take any testimony on either one of 5 these bills at that time. I'd also remind you 6 that if you haven't provided us an address to 7 get copies of the adopted rules, please do so. 8 I would also remind you that the close of 9 comment period is October 11th at 5:00 p.m. 10 Barring any other comments, I will close the 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 hearing. Thank you. (Hearing concluded at 9:17 a.m.)

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 C E R T I F I CAT E 15

2 STATE OF TEXAS 3 COUNTY OF TRAVIS 4 I, Steven Stogel, a Certified Shorthand 5 Reporter in and for the State of Texas, do 6 hereby certify that the above-mentioned matter 7 occurred as hereinbefore set out. 8 I FURTHER CERTIFY THAT the proceedings 9 of such were reported by me or under my 10 supervision, later reduced to typewritten form 11 under my supervision and control and that the 12 foregoing pages are a full, true, and correct 13 transcription of the original notes. 14 IN WITNESS WHEREOF/ I have hereunto set 15 my hand and seal this 21st day of October, 1999. 16 17 18 19 20 21 22 23 24 25 

# .:::::::... -</ f) < ./J**'.~** A" .A 

### - 

# ._, ----------- STEVEN G. STOGELO Certified Shorthand Reporter CSR No. 6174

- Expires 12/31/00 Kennedy Reporting Service, Inc. 800 Brazos, Suite 340 Austin, Texas 78701

KENNEDY REPORTING SERVICE/ INC. (512) 474-2233TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION

PROPOSED REVISIONS TO 30 TAC CHAPTERS 101 AND 116 AND THE STATE IMPLEMENTATION PLAN

PUBLIC HEARING OCTOBER 7,1999

BE IT REMEMBERED that the above matter came on for hearing on the 7th day of October, 1999, beginning at 12:00 p.m. before Mr. Beecher Cameron, at the City of Houston Pollution Control Building Auditorium, 7411 Park Place Boulevard, Houston, Texas, whereupon the following proceedings were had:



# arecordof excellence
800Brazos . Suite340 . Austin,Texas 78701 . 512-474-22331 THURSDAY, OCTOBER 7, 1999 2

2 3 4 AFTERNOON SESSION:



### * * * * * MR. CAMERON: 12:00 P.M.

Good afternoon. I'd 5 like to go ahead and open this hearing 6 concerning proposed amendments to 30 Texas 7 Administrative Code, Chapter 116, which is the 8 implementation of Senate Bill 766, recently 9 passed during the last legislative session. For 10 those of you who have I would ask if you have 11 not signed up on our registration form, we'll 12 put it back outside on the table shortly. I Id 13 ask that you do so. Also, if you wish to 14 receive a copy of the rules as they are adopted 15 by the Commission in December, I need to get 16 your address either on the form or by way of a 17 business card. 18 We held another hearing this morning at 19 9:00 concerning the implementation of Senate 20 Bill 7, which is the permitting and emission 21 reductions at grandfathered electrical 22 generating facilities. At that hearing, we took 23 comments not only on Senate Bill 7, but 766 as 24 well. We will continue that practice here. If 25 you wish to comment on 766, please do so.

KENNEDY REPORTING SERVICE, INC. (512) 474-2233 We3
1 will also accept a comment on Senate Bill 7. 2 With those brief announcements, I think 3 I'll go ahead and calIon our first commentor, 4 Mr. Brandt Mannchen. 5 MR. MANNCHEN: Thank you. My name 6 is Brandt Mannchen, B-R-A-N-D-T, 7 M-A-N-N-C-H-E-N. I'm here representing myself. 8 I'm going to make a number of comments today on 9 Senate Bill 766, and some of these also apply to 10 Senate Bill 7. Many of them are things that 11 TNRCC can do nothing about because they're in 12 the legislation, but I think it's important to 13 go on record saying how I feel about those 14 particular conditions. 15 First, I am I do not like the idea 16 of a voluntary emission reduction permit. I 17 think we've gone almost 30 years, and it's time 18 to get all the grandfathered facilities 19 permitted or standard exempted or whatever we're 20 going to do with them. So I'm not wild about 21 this idea since we just went through two years 22 of doing the same thing, in essence, and so 23 we're going to do at least another two years 24 until the legislature decides if it wants to 25 continue this situation.

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 4
Also! I don't like the use of standard 2 permits because they're much looser than regular 3 permitting situations. The ones that I have 4 seen have been extremely

-- how should I say 5 this? not well-documented! and I would like 6 to see us get away from standard permits and go 7 to something that's more akin to a regular 8 permitting situation so that things aren't quite 9 so flexible and hard to figure out. 10 Also! I do not like emissions trading 11 or reduction credit programs! and that's for 12 a number of reasons. But one of the reasons is 13 I'm concerned about paper reductions! about 14 saying you've made some reductions when in fact 15 they haven't been made. I'm also concerned 16 about the environmental justice problems of 17 allowing a company which is emitting in a 18 certain neighborhood to get some emission 19 reduction credits from somebody else and then 20 continue to emit in that neighborhood and 21 potentially harm the health and welfare of those 22 people. So I think it's unfair from the quality 23 standpoint in our society to do that kind of 24 thing. 25 I believe we need a full health effects

KENNEDY REPORTING SERVICE! INC. (512) 474-22331 screening level review for these permits 5

not 2 a short one but a full one and I encourage 3 TNRCC to make sure that that occurs. I also 4 don't like the idea that we're not going with 5 current BACT, that we're going with ten-year-old 6 BACT, or something called GACT, which to me is 7 so nebulous and flexible that, you know, it can 8 be almost anything. If ten-year-old BACT is 9 going to reduce emissions 25 percent and GACT is 10 going to reduce somewhere between 25 and 50 11 percent, then, you know, we're not talking about 12 a lot of emission reductions. So I'd like 13 something stronger in these regulations. 14 I also don't like to purchase autos as 15 a method of reducing emissions, and there's a 16 good reason for that. It's really hard to tell 17 if that automobile has been really used and that 18 the emissions you're reducing actually, you 19 know, have been emitted in the past year. I see 20 this as potentially a way to allow people to get 21 rid of their old junk cars that they haven't 22 even been using and get money for them, and we 23 don't really get emission credits for them. So 24 I'm not wild about that idea. Actually 25 monitoring how many emissions are coming from

KENNEDY REPORTING SERVICE, INC. (512) 474-22336
1 that vehicle, it's very hard to say what it was 2 over the past year. 3 1 1m opposed to issuing permits that 4 defer reductions in emissions. The way I look 5 at it, if grandfathered facilities canlt get 6 with the VERP, then they have no business, you 7 know, coming to TNRCC and taking up your time, 8 you know. I mean, the way I look at it is if 9 they're going**t~** 'actually do something, then do 10 something, and don't defer reductions. 11 I'm also concerned how TNRCC is going 12 to determine what "unreasonable" is with respect 13 to a hearing that someone requests. That's a 14 real nebulous phrase and can be used arbitrarily 15 and capriciously. 16 I also would like the public notice to 17 be more than it is. I don't want it just in the 18 newspaper that's closest to where the source is 19 going to be; also in the largest general 20 circulation newspaper and also in the airshed, 21 you know, where these emissions could go, so 22 that everybody has the opportunity, if they 23 desire to, to make a comment on these permits. 24 I think you need to charge your full 25 cost for fees. I don't think presently that

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 that's really what you're charging. And I'm 7

2 going to encourage TNRCC this is going to 3 take a lot of work for y'all to implement this 4 program, especially for larger facilities, and I 5 would encourage you to get full cost return from 6 the companies, whatever that may be 7 appropriately priced at. Because, you know, 8 your time is not free, and the public pays your 9 salaries, and so it's only right that the 10 "polluter pays" principle comes into effect 11 here. 12 I don't like the idea that we only have 13 notice and comment hearings and not contested 14 case hearings. I would like contested case 15 hearings. 16 Under Senate Bill 7, I noted that 17 grandfathered facilities may be allowed to opt 18 out of the requirements. Again, I kind of feel 19 like once you're in, you should always be in. 20 So I'd like to encourage you to take a look at 21 that. 22 Also, I am concerned about, like, the 23 incorporation by reference not allowing that. 24 A lot of times, you know, if it's already in the 25 TNRCC records somewhere, it seems like you

KENNEDY REPORTING SERVICE, INC. (512) 474-22338

1 should be able to dig that out and not have 2 citizens go ahead and Xerox hundreds and 3 hundreds of pages of paper at a high cost, to 4 re-submit that. So I would encourage you to 5 have some flexibility in there so that if there 6 is something already submitted to TNRCC and it 7 wants to be submitted again with respect to a 8 certain situation, that you don't make people 9 kill trees and go ahead and spend all that 10 money. 11 That's about it. I appreciate the 12 opportunity to speak. Thank you. 13 MR. CAMERON: Okay. Thank you. 14 Mr. Mark Muhich. 15 MR. MUHICH: My name is Mark 16 Muhich. I'm from Galveston, Texas. I'm the 17 chair of the Sierra Club in Galveston, and I'm 18 here to implore the TNRCC to implore the 19 legislature that any sort of voluntary permit 20 any policy of voluntary permits is not going to 21 adequately address the air quality problems in 22 Texas. 23 In our conversations this morning, I 24 understand that the legislature does consult 25 with the TNRCC, and so I would

-- in writing

KENNEDY REPORTING SERVICE, INC. (512) 474-22339
1 these air quality regulations, and I would 2 strongly advise you to be able to, at the next 3 legislature, go to Senator Buster Brown or 4 whoever is the representative at the legislative 5 level and say to them that this permitting 6 voluntary permits is simply not adequate. It 7 doesn't address the severe air quality problems 8 of Texas. That's borne out by TNRCC's own 9 statistics, which show that the level of air 10 pollution generated by permitting facilities has 11 been reduced considerably in the last ten years, 12 whereas the level of emissions in grandfathered 13 facilities has stayed virtually at the same 14 level of about a million tons a year in the 15 state of Texas. This is simply not acceptable. 16 It's been going on for 30 years, and it's high 17 time that the TNRCC took the responsibility for 18 the safety and protection of the citizens of 19 Texas, that they have a right to clean air and 20 that we're not going to permit or not permit 21 these factories and facilities from belting out 22 hazardous chemicals, sulfur, and nitrous oxides. 23 I further encourage the TNRCC to 24 immediately not next September or next 25 spring begin researching the cumulative

KENNEDY REPORTING SERVICE, INC. (512) 474-223310
1 effects of all the particular grandfathered 2 facilities. As we were speakin-g;-- you indicated 3 to me that TNRCC is only authorized to look at 4 individual facilities that the particular 5 health effects pf one facility. But in Houston, 6 for example, if we have 2,000 facilities, 7 they're all generating thousands of tons of air 8 pollution in a very restricted area, it seems 9 only common sensical that the TNRCC should be 10 able to predict and monitor the health effects 11 of all the different emissions in our area. 12 13 ago I suggested to you that several years I think it was Harvard University that 14 did a study which attributed several hundreds of 15 premature deaths to pulmonary and respiratory 16 problems in Houston, including 3,000 or 4,000 17 emergency room visits, mostly due to asthma, and 18 most of those were children. 19 Again, I urge you and charge you as our 20 State regulatory authority to immediately not 21 in 2001 or 2003 or 2007 to require these 22 grandfathered facilities, which are arguably the 23 largest component of our air quality problem, to 24 achieve permits and to achieve actual verifiable 25 reductions in their emissions. Thanks.

KENNEDY REPORTING SERVICE, INC. (512) 474-223311
1 2 3 4 5 6 MR. CAMERON: Thank you. Mr. Smith. Is that George Smith? MR. SMITH: Yes. MR. CAMERON: Please corne forward. MR. SMITH: It looks like you're hearing a lot from the Sierra Club these days, 7 and this is just another part. I'm sure we'll 8 have some more written comments to make. 9 In regard to the banking and trading 10 proposals for power plants, I would urge that 11 you'd limit trading to the same airshed, the 12 same nonattainment area, the same area of 13 influence affecting the nonattainment areas so 14 that these trades pass the LAF test. 15 In regard to the voluntary emission 16 reduction permits, I would hope that you don't 17 abuse the proposal, don't allow companies to 18 gang the system. Because, ultimately, if that's 19 allowed, you'll have more suits, and it will all 20 backfire on you. In particular, you need to be 21 careful about limiting the issuance of standard 22 permits. If you just give a green light to any 23 and everybody to get a standard permit with the 24 least possible examination, you're going to reap 25 the whirlwind again, and the legislature would

KENNEDY REPORTING SERVICE, INC. (512) 474-223312
1 eventually corne back on you on that one. 2 You need to increase your fees to cover 3 your costs, your prospective costs. Indeed the 4 polluters should pay, not the taxpayers, to 5 bring these outdated units up to speed. 6 You need to clearly and properly define 7 the areas that contribute to nonattainment so 8 that important needed reductions do occur in the 9 right places. Let's make the reductions real 10 with BACT, with consideration of site and 11 technology limitations. We need to get more 12 than just 25 percent or 50 percent. We need to 13 get what is realistically possible for those old 14 plants. 15 The health effects review is important 16 to public health, and on the care committee, we 17 talked about streamlining. But we don't want to 18 streamline the public health reviews out of 19 existence. Somehow you need to have a flexible 20 system that assesses the risks and problems of 21 each plant on an individual basis based on what 22 they emit, based on what the community is 23 exposed to around that plant. It's going to be 24 hard to have a number rule or just, "Well, if 25 it's a reduction, then they don't have to do a

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 health effects evaluation." That's not very 13

2 adequate, because some reductions may not be 3 enough reduction to adequately protect that 4 5 population around there. MR. CAMERON:Thanks. Thank you, sir. 6 That is all of the indicated speakers I have. 7 Is there anyone who has registered or anyone in 8 the audience who might be present who would like 9 to speak who has not previously signed up to do 10 11 so? Very good. I would remind you again that we would 12 need your name and address to mail a final copy 13 of the adopted rule, and I would also remind you 14 that the close of comment period for this 15 particular proposal is October 11th at 5:00 p.m. 16 Also, if you have any written comments that 17 you'd like to leave with us today, we'll be glad 18 to accept those as well. Seeing no yes, sir. 19 MR. MUHICH: The period for 20 written comments closes October 11th? 21 MR. CAMERON: Yes. The cutoff 22 period is October 11th at 5:00 p.m. That's for 23 all comments. Without any other commentors, I 24 will declare the hearing closed. Thank you. 25 (Hearing concluded at 12:20 p.m.)

KENNEDY REPORTING SERVICE, INC. (512) 474-223314
1 C E R T I F I CAT E 2 STATE OF TEXAS 3 COUNTY OF TRAVIS 4 I, Steven Stogel, a Certified Shorthand 5 Reporter in and for the State of Texas, do 6 hereby certify that the above-mentioned matter 7 occurred as hereinbefore set out. 8 I FURTHER CERTIFY THAT the proceedings 9 of such were reported by me or under my 10 supervision, later reduced to typewritten form 11 under my supervision and control and that the 12 foregoing pages are a full, true, and correct 13 transcription of the original notes. 14 IN WITNESS WHEREOF, I have hereunto set 15 my hand and seal this 21st day of October, 1999. 16 17 18 19 20 21 22 23 24 25

# -~-~~---------- STEVEN G. STOGEL

. Certified Shorthand Reporter CSR No. 6174 Expires 12/31/00 Kennedy Reporting Service, Inc. 800 Brazos, Suite 340 Austin, Texas 78701

KENNEDY REPORTING SERVICE, INC. (512) 474-2233INDEXOFORALTESTIMONY

October7,1999,Beaumont,6:08pm

ReferenceNumber

0-1

0-2 Submittedby

RichardC.Harrel,CleanAirandWater,Inc. Subject:SB7andSB766 SusanParkerLeigh Subject:SB7andSB766

0-1 October7,1999,Beaumont,9:00pm

Rev.RoyMalveaux,PeopleAgainstContaminatedEnvironments Subject:SB766

## TexasNaturalResourceConservationCommission PublicHearingRegistration Location:Beaumont Date: October7,1999(6:00p.m.) Concerning:PermittingofElectricGeneratingFacilities(SB7)

NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne) 

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location:

# Beaumont Date: 

# October7,1999

# (6:00p.

# m.) Concerning:

# PermittingofElectricGeneratingFacilities(SB7)
,
NarneandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's (pleasePrint) (CircleOne) rule(s)onceadopted? (CircleOne)
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## Location:

## Beaumont TexasNaturalResourceConservationCommission PublicHearingRegistration Date: 

## October7,1999(9:00p..!...-o**m~o)** 

## _ 

## Concerning:

## PermittingofGrandfatheredFacities (SB766)

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## TexasNaturalResourceConservationCommission PublicHearingRegistration Location:Beaumont 

## Date: October7,1999(9:00p.m.) 

## Concerning:PermittingofGrandfatheredFacities (SB766)

, NameandAddress Representing PresentingOral Wouldyouliketoreceivea Testimony? copyofthecommission's

.(pleasePrint)

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## . Yes

Yes No Yes NoTRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION AUSTIN, TEXAS

IN THE MATTER OF: ) PROPOSED REVISION TO 30 TAC ) CHAPTERS 101 & 116 )

PUBLIC HEARING THURSDAY, OCTOBER 7, 1999

BE IT REMEMBERED THAT at 6:08 p.m., on 

# 'I Thursday, the 7th day of October 1999, the above-mentioned matter came on for hearing at the John Gray Center, located at 855 Florida Avenue in Beaumont, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings

were reported by Beth L. Sheen, a Certified Shorthand Reporter of:**l~l:f}l**

## '·1'l:f}ll\'-**---~-~---** 

## 81:f}

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# arecordof excellence
800Brazos • Suite340 • Austin,Texas 78701 • 512-474-22331 2 3 2

PRO C E E DIN G S THURSDAY, OCTOBER 7, 1999 (6:08 p.m.) 4 MR. CAMERON: I'd like to go ahead 5 and open this hearing concerning the proposed 6 amendments to 30 Texas Administrative Code Chapters 7 116 and 101 concerning the implementation of Senate 8 Bill 7 recently passed during the last**~egislative** 9 session. My name is Beecher Cameron with the .

# .. 10 11 Regulation Development Section. Other staff members 12 of TNRCC here tonight are Mr. David Schanbacher from 13 the Executive Director's office, Mr. Brian Christian 14 from Intergovernment Relations, and Mr. Marion 15 Everhart, who has joined us from the Beaumont 16 regional office. 17 I would ask those

-- I have the sign-up sheet in front of me. 18 19 things: I would ask two That if you wish to receive a copy of the 20 rules as they are adopted by the Commission, we'll 21 need your address either on the sign-up form or 22 through a business card or some other means like 23 that. 24 Also, if you have not registered, I 25 would request that you do so. I will have this out

KENNEDY REPORTING SERVICE, INC. (512) 474-22333

1 front after the hearing starts. 2 As I mentioned during the 3 conversation, this hearing is structured for the 

# , 4 receipt of oral testimony only. There is no cross 5 examination of presenters of testimony or cross 6 examination of the staff. 7 We are doing something a little 8 different tonight than we do during other hearings. 9 We have this hearing scheduled at 6:00 concerning 10 the implementation of Senate Bill 7. At 9:00 11 o'clock we will convene a hearing concerning the 12 implementation of Senate Bill 766. For the 13 convenience of those that are attending either one 14 of those hearings, we will allow receipt of 15 testimony on either bill at either hearing. 16 With that out of the way, we will go 17 ahead and call our first presenter. Is that 18 Mr. Richard C. Harrel? 19 20 21 22 MR. HARREL: Yes. MR. CAMERON: Okay. MR. HARREL: Just from here? MR. CAMERON: If you want to stand 23 right there, that's fine as long as everyone can 24 hear you. 25 MR. HARREL: My name is Richard C.

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 Harrel. I'm the president of the local citizens4

2 organization, Clean Air and Water, Inc., that has 3 been continuously active in this area since 1966. Clean Air and Water, Inc., is 4 5 opposed to all types of pollution. And so, of 6 course, we are always looking for reductions in air 7 emissions. We think that there never should have 8 ever been any grandfathered emissions whatsoever. 9 And it's time to do away with those now for sure. 10 We also are opposed to the right to 11 purchase emissions from other facilities and 12 especially facilities like the Old Neches River 13 Facility of Energy that has been permitted and could 14 operate if it had to forever. There is no reason 15 for that to ever have a permit at this period of 16 time. So to use that to be able to release 17 emissions from other facilities is a fallacy, and I 18 think it's sort of plain common sense that if you're 19 going to clean up the air, you're going to have to 20 reduce the total emissions that occur in the area. 21 We're having a big spurt in our 22 economy here now as far as industry is concerned, 23 and we're putting on a lot of new facilities and new increasing the emissions. 24 25 production. And undoubtedly we're going to end up Well, we're under



### KENNEDY REPORTING SERVICE, INC. (512) 474-22331 considerate. We're not in compliance with air 5

2 standards now. And so I think that if the TNRCC and 3 the Environmental Protection Agency is doing the 4 mandate that was required by the 1970 Clean Air Act, 5 I think it's time to get on with it and start 6 cleaning things up, not voluntary but mandatory. 7 There is no reason why you should have voluntary 8 agreements. It should be mandated to all 9 industries, electrical generating plants as well as 10 others. 11 That's all I have to say. 12 13 Mr. Harrel. MR. CAMERON: Thank you,

14 Ms. Susan Parker Leigh. You can 15 either do it there or in front of the microphone, 16 whichever one is comfortable. 17 MS. LEIGH: I'm a former teacher. I 18 think I can talk loud enough.

Beaumont for the past six years. 19 20 21 MR. CAMERON: MS. LEIGH: Very good. I am a resident of· I was in Port 22 Arthur for the first 20 years of my life. I lived 23 in Austin for about 25 years. I want to tell you 24 the air there is a lot cleaner than it is here. 25 I am currently a student here at

KENNEDY REPORTING SERVICE, INC. (512) 474-22336

1 LaMar University, and most mornings when I come to 2 classes the air is not fit to breathe. The air 3 outside the chemistry building that I take classes 4 in is worse than the air inside. And chemistry 5 buildings are not particularly known to be good 6 places to breathe. 7 I have a 21-year-old daughter who is 8 attending college in Nacogdoches because she could 9 not go to LaMar because of her allergies, and she 10 just could not consider this environment. 11 Having such a large area under 12 consideration spreading these emissions out is 13 ridiculous. The problem needs to be dealt with 14 locally. 15 I agree with the gentleman that said 16 this grandfathered thing needs to end. I think it 17 is time for mandatory regulations. I think that my 18 comments are appropriate for this discussion and for 19 766, also. 20 I hope that something can be done. 21 MR. CAMERON: Thank you, Ms. Leigh. 22 I have no other indicators on the sign-up sheet that 23 we have any other speakers. Does anyone wish to 24 speak now that is not presently registered to do 25 so?

KENNEDY REPORTING SERVICE, INC. (512) 474-22331 Very well. 7

I will remind everyone 2 that the close of the comment period for both of 3 these bills is 5:00 p.m., October 11th. And I would 4 also ask again that if you wish to receive a copy of 5 the final adopted rules, I will need your address. 6 Seeing no other commenters, I will 7 go ahead and close the hearing. 8 (The public hearing concluded at 9 approximately 6:15 p.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25



### KENNEDY REPORTING SERVICE, INC. (512) 474-22331 2 C E R T I F I CAT E 8

3 STATE OF TEXAS ) 4 COUNTY OF HARRIS ) 5 6 7 I, BETH L. SHEEN, a Certified Shorthand 8 Reporter in and for the State of Texas, do hereby 9 certify that the above-mentioned matter occurred as 10 hereinbefore set out. 11 I FURTHER CERTIFY THAT the proceedings of 12 such were reported by me or under my supervision, 13 later reduced to typewritten form under my 14 supervision and control and that the foregoing pages 15 are a full, true, and correct transcription of the 16 original notes. 17 IN WITNESS WHEREOF, I have hereunto set my 18 hand and seal this 18th day of October 1999. 19 20 21 22 23 24 25 

# 3;f!/j2{fdtaqf--

Certified Shorthand Reporter CSR No. 6592

- Exp. 12/31/99 Kennedy Reporting Service, Inc. 800 Brazos, Suite 340 Austin, Texas-78701

KENNEDY REPORTING SERVICE, INC. (512) 474-2233TRANSCRIPT OF PROCEEDINGS BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION AUSTIN, TEXAS IN THE MATTER OF: ) PROPOSED REVISION TO 30 TAC ) CHAPTERS 101 & 116 )

PUBLIC HEARING THURSDAY, OCTOBER 7, 1999

BE IT REMEMBERED that at 9:00 p.m., on Thursday, the 7th day of October 1999, the above-mentioned matter came on for hearing at the John Gray Center, located at 855 Florida Avenue in Beaumont, Texas, before BEECHER CAMERON, Hearing Examiner; and the following proceedings were reported by Beth L. Sheen, a Certified Shorthand Reporter of:



# arecordof excellence
800Brazos • Suite340 • Austin,Texas 78701 • 512-474-22331 2 3 2

PRO C E E DIN G S THURSDAY, OCTOBER 7, 1999 (9:00 p.m.) 4 MR. CAMERON: With that, I'd like to 5 go ahead and open this hearing on proposed 6 amendments to 30 Texas Administrative Code, Chapter 7 116

. These amendments implement the requirements of 8 Senate Bill 766 recently passed during the last 9 legislative session. 10 My name is Beecher Cameron with the 11 Regulation Development Section of the TNRCC. Other 12 TNRCC staff here tonight, Mr. David Schanbacher from 13 the Executive Director's office, Mr. Brian Christian 14 from Intergovernment Relations and Marion Everhart, 15 who is joining us from the Beaumont regional 16 office. 17 I have a sign-up sheet here in front 18 of me. I would ask those of you who have registered 19 tonight if you wish to receive a copy of the rules 20 as they are adopted by the Commission in December to 21 leave your name and address, as well, either on the 22 sign-up sheet or with a business card or by some 23 other method by which we can get a copy of the rules 24 to you. 25 As I mentioned to you earlier, this

KENNEDY REPORTING SERVICE, INC. (512) 474-22333

1 hearing is structured to receive oral testimony

stick around and answer any questions. 2 3 only. After the hearing closes, I will be glad to But during 4 the hearing, there is no questioning of the staff, 5 no cross examination of any commenters providing 6 testimony. 7 Earlier this evening at 6:00 o'clock 8 we had a hearing concerning the implementation of 9 Senate Bill 7. At that hearing we took not only 10 comments on Senate Bill 7 but comments on Senate 11 Bill 766, the subject of this hearing, as well. 12 We'll continue that practice this evening. If you 13 have any comments to offer on either one of these 14 bills we will be glad to accept them. 15 With that out of the way, we'll go 16 right into our commenters. I have one commenter 17 signed up this evening. That would be the Reverend 18 Roy Malveaux. 19 You can speak from there, sir, or 20 you can corne up to the podium, whatever is your 21 choice. REV. MALVEAUX: 22 23 Malveaux, M-a-I-v-e-a-u-x. My name is Reverend I am State Executive 24 Director of People Against Contaminated 25 Environments.

KENNEDY REPORTING SERVICE, INC. (512) 474-22334

1 I am glad to be here tonight 2 concerning senate Bill 766, .the amendments on the 3 voluntary emission reduction permit hearing. 4 Although I think that the voluntary program is a 5 start in the right direction, I do think that there 6 are some items here that cause some great concern. 7 And I shall try to be brief in mentioning just a 8 few. 9 Listed on Page 3 of this proposal, 10 second to the last paragraph, states that:**W~thin** 11 the category of permits Senate Bill 766 created two 12 new permit options. 13 I'm concerned that as the sentence 14 reads: As part of the VERP program, the Commission 15 is required to create an emissions reduction credit 16 program by use of grandfathered facilities that are 17 unable to meet the control method requirements of 18 the VERP program. 19 I view this as just another loophole 20 to allow an already unmonitored industry to yet go 21 unmonitored at all. 22 On Page 4 of this proposal, their 23 first program it says that: Section 12 of the bill 24 states that the Commission may not initiate an 25 enforcement action against a person for the failure

KENNEDY REPORTING SERVICE, INC. (512) 474-22335

1 to obtain a preconstruction permit under the Texas 2 Health Code and Safety Code. Yet another loophole. 3 It goes on to state many other loopholes. On Page 5 of that proposal, second 4 5 paragraph, stated that: For a grandfathered 6 facility in a nonattainment area, nonattainment 7 geographic areas which exceed the National Ambient 8 Air Quality Standard. And it states that these 9 regions are defined in the current rule making in 10 Chapter 10 or Chapter 101 and makes certain 11 allowances for grandfathered electric facilities. 12 It mentions emission banking. Yet another 13 loophole. 14 Perhaps one of the greatest concerns 15 is that on Page 6 it talks about the Texas Air 16 Control Act. It states that the requirements to 17 protect physical health and property is included in 18 the proposed rule, but it goes on to say that some 19 type of health effects review may be necessary and 20 appropriate. 21 And I question this and ask the 22 question who deems it necessary or who deems it 23 appropriate? What are the standards set up to say 24 whether it's necessary or whether it's appropriate? 25 I think it should be made mandatory. I think that

KENNEDY REPORTING SERVICE, INC. (512) 474-22336

1 because the criteria here is set it ought to be 2 mandatory. How else are you going to find out if 3 there is a violation occurring and that these 4 facilities are not in fact protecting physical 5 health or public health and property. And I think 6 that it ought to be made mandatory. The terminology 7 ought not to just include physical health but rather 8 human health. 9 I see another probable loophole here 10 on Page 7. They talk about monitoring. I think 11 there ought to be some real-time monitoring included 12 here in the terminology. Once again it talks about 13 modeling and health review and whether it be 14 applicable or not. And I have to ask the question 15 what are the standards by which the Commission will 16 determine whether it's appropriate, whether it's 17 applicable? Who will determine what the health 18 effects were or what is appropriate for them? What 19 standards will be used? Who will participate? Who 20 will analyze the data? Who will collect the data? 21 What tool will be used to determine if the health 22 review is appropriate or not. 23 If there is a grandfathered facility 24 operating in an area that already is suffering from 25 the burden of many toxicants or many pollution



### KENNEDY REPORTING SERVICE, INC. (512) 474-22331 sources there ought to be a health review. 7

It ought 2 to be mandatory. 3 On Page 9 it lists that in the 4 second paragraph that performance standards may be 5 required. Again, I believe this is a loophole. The 6 terminology should require that it's mandatory. So 7 there are many other areas in here which are too 8 many to name that I believe that a lot of things 9 ought to be made mandatory even in this voluntary 10 grandfathered rule. 11 The health effets on school lists 12 that

-- it only lists 3,000 feet. I think it ought 13 to list facilities that are even further away. I 14 think that the health review ought not to be 15 optional but ought to be mandatory. And I think 16 that all of the loopholes need to be closed. 17 I thank you for your time. 18 

### MR. CAMERON: Thank you, sir. I 19 have no other speakers registered on the form 20 wishing to make a presentation. I'll ask the 21 question now is there anyone who is signed up that 22 did not register to speak that would like to speak 23 at this time? 24 Okay. I remind everyone that the 25 close of comment period for this proposal is October



### KENNEDY REPORTING SERVICE, INC. (512) 474-22331 11th at 5:00 p.m. 8

And I ask again ifyou wish to 2 receive a copy of the adopted rules please provide 3 us with your address before you leave tonight. 4 5 the hearing. No other commenters, I 

### will close Thank you. 6 (The public hearing concluded at 7 approximately 9:15 p.m.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

KENNEDY REPORTING SERVICE, INC. (512) 474-22339

1 C E R T I F I CAT E 2 STATE OF TEXAS 3 COUNTY OF HARRIS 4 5 6 I, BETH L. SHEEN, a Certified Shorthand 7 Reporter in and for the State of Texas, do hereby 8 certify that the above-mentioned matter occurred as 9 hereinbefore set out. 10 I FURTHER CERTIFY THAT the proceedings of 11 such were reported by me or under my supervision, 12 later reduced to typewritten form under my 13 supervision and control and that the foregoing pages 14 are a full, true, and correct transcription of the 15 original notes. 16 IN WITNESS WHEREOF, I have hereunto set my 17 hand and seal this 18th day of October 1999. 18 19 20 21 22 23 24 25 Beth 

### L. Sheen Certified Shorthand CSR No. 6592

- Exp. 12/31/99 Kennedy Reporting Service, Inc. 800 Brazos, Suite 340 Austin, Texas 78701

KENNEDY REPORTING SERVICE, INC. (512) 474-2233