STATE OF TEXAS

OFFICE OF THE GOVERNOR

GEORGE W. BUSH

GOVERNOR

January 3, 2000

Mr. Gregg Cooke

Region VI Administrator

U.S. Environmental Protection Agency

1445 Ross Avenue

Dallas, TX 75202-2733

Dear Mr. Cooke:

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Enclosed are proposed revisions to Texas' State Implementation Plan (SIP) that the Texas

Natural Resource Conservation Commission (Commission) adopted on December 16, 1999.

The first package of adopted amendments to Chapters 101 and 116 implement the requirements

ofSenate Bill 7, 76th Legislature, 1999, concerning the emissions banking and trading of

allowances and the permitting of grandfathered electric generating facilities. The second

package of adopted amendments to Chapter 116 implements the new procedures for standard

permits authorized by Senate Bill 766, 76th Legislature, 1999.

The public hearing certification, complete record ofthe public hearing, and accompanying order

are also enclosed. I look forward to your expeditious approval ofthese revisions to the Texas

SIP.

W.BUSH

GWB/bb:pf

Enclosures

cc: Mr. Robert J. Huston, Chainnan, Texas Natural Resource Conservation Commission

Mr. Jeffrey A. Saitas, P.E., Executive Director, Texas Natural Resource Conservation Commission

POST OFFICE Box 12428 AUSTIN, TEXAS 78711 (512) 463-2000 (VOICE)/(512) 475-3165 (TDD)
Texas Natural Resource

Conservation Commission

Public Hearings

October 1999

Concerning Revisions To

Chapters 101 and 116

Electric Industry Restructuring (SB 7)

Rule Log Number 99033-1l6-AI

Volume lof2

"
INTRODUCTION

The commission held public hearings in EI Paso and Lubbock on October 1, 1999, in Austin on October

4, 1999, in Irving on October 5, 1999, in Houston on October 7, 1999, and in Beaumont on October 7,

1999. The hearings were held to consider amendments to Chapters 101 and 116, which implement the

requirements of Senate Bill 7, concerning the permitting of grandfathered and electing electric generating

facilities.

Written comments were accepted through October 11, 1999. All testimony and comments have been

reviewed and seriously considered. This volume contains a complete record of the public hearing and is

divided into the following four sections:

o Public Notification and Proposal

o Written and Oral Testimony

o Evaluation of Testimony

o Staff Recommendations

Additional copies of this hearing record are maintained in the TNRCC central office at 12100 North

IH-35, Austin, Texas 78753. For further information, contact Beecher Cameron at (512) 239-1495.
ORAL

TESTIMONY
INDEX OF ORAL TESTIMONY

October 1, 1999, Lubbock, 6:15 pm

Reference Number

0-1

Submitted by

Dean Metcalf, Southwestern Public Service

Subject: SB 7

0-1

October 1, 1999, Lubbock, 9:15 pm

Jay Wadsworth, Lubbock Power and Light

Subject: SB 7
58 7 Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Lubbock Date: October 1, 1999

Concerning: Proposed Revisions to 30 TAC Chapter 101 and 116 and the State Implementation Plan

Name and Address Presenting Oral Would you like to receive a

Representing Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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5'87 Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Lubbock Date: October 1, 1999

Concerning: ProRosed Revisions to 30 TAC ChaRter 101 and 116 and the State ImRlementatioq Plan

Name and Address Presenting Oral Would you like to receive a

copy of the commission's Representing Testimony? rule(s) once adopted? (please Print) (Circle One) (Circle One)

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5316c Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Lubbock Date: October 1, 1999

Concerning: Proposed Revisions to 30 TAC Chapter 116 and the State Implementation Plan

Narne and Address Presenting Oral Would you like to receive a

Representing Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

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1

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~

a record ofexcellence

800 Brazos . Suite 340 . Austin. Texas 78701 . 512-474-2233
2

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 Metcalf to 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) 744-7754
3

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 of those written

22 comments.

23 The first issue that we have with the SB 7

24 concerns the use -- the consistent use of the acid rain

25 database. SPS believes that this database should be used

ROGERS, HARVEY & CRUTCHER (806) 744-7754
4

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 period match

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 off the 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) 744-7754
5

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 A general comment I'd like -- we'd like to

5 make is based on the permitting process. One of the

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) 744-7754
6

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 -- if you 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.)

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ROGERS, HARVEY & CRUTCHER (806) 744-7754
1

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.

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25

j)" .

onda

tJAnLLtt

L. Elder

f\ l1.kA

Certified Shorthand Reporter

CSR No. 7364 - Exp. 12/31/01

Rogers, Harvey & Crutcher

709 Broadway

Lubbock, Texas 79401

ROGERS, HARVEY & CRUTCHER (806) 744-7754
1

TRANSCRIPT OF PROCEEDINGS

BEFORE THE

TEXAS NATURAL RESOURCE

CONSERVATION COMMISSION

LUBBOCK, TEXAS

IN THE MATTER OF: )

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:

81DllVlG1D

a record ofexcellence

800 Brazos . Suite 340 . Austin. Texas 78701 . 512-474-2233
2

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.

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Mr. O'Grady, unless you

ROGERS, HARVEY & CRUTCHER

you're -- you're

(806) 744-7754
3

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) 744-7754
4

1 defer that question until after -- after the hearing is

2 done.

3 MR. O'GRADY: Oh, then I don't have anything

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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 of my 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 if you 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) 744-7754
Another 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, if we'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

1 is not an adequate way

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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) 744-7754
6

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

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20 9:20 p.m.)

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ROGERS, HARVEY & CRUTCHER (806) 744-7754
1

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

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~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) 744-7754
INDEX OF ORAL TESTIMONY

October 1, 1999, El Paso, 10:12 am

Reference Number

0-1

Submitted by

Mark Rodriguez, El Paso Electric

Subject: SB 7
- - -----_.. - --- - .... -- . -~_.

Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: EI Paso Date: October 1, 1999

Concerning: Proposed Revisions to 30 TAC Chapter 101 and 116 and the State Implementation Plan

Name and Address Presenting Oral Would you like to receive a

Representing Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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f) [, Texas Natural Resource Conservation Commission

?O Public Hearing Registration

Location: EI Paso Date: October 1, 1999

Concerning: Proposed Revisions to 30 TAC Chapter 116 and the State Implementation Plan

Name and Address Presenting Oral Would you like to receive a

copy of the conunission's Representing Testimony? rule(s) once adopted? (please Print) (Circle One) (Circle One)

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TRANSCRIPT 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\"·

a record ofexcellence

800 Brazos • Suite 340 • Austin, Texas 78701 • 512-474-2233
1

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) 474-2233
3

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) 474-2233
4

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.

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5

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) 474-2233
1

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

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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) 474-2233
INDEX OF ORAL TESTIMONY

October 4, 1999, Austin, 9:00 am

Reference Number

0-1

0-2

Submitted by

Gary Gibbs, Central and South West Corporation

Subject: SB 7

Dick Robertson, TXU Electric

Subject: SB 7

0-1

0-2

0-3

0-4

0-5

0-6

0-7

0-8

0-9

October 4, 1999, Austin, 12:10 pm

Mark Wehner, Neighbors for Neighbors

Subject: SB 766

Ann Mesrobian, Bastrop County Enviromnental Network

Subject: SB 766

David Savage, Baker and Botts

Subject: SB 766

C. Austin

Subject: SB 766

Dr. Neil Carman, Sierra Club

Subject: SB 766

Peter Altman, Sustainable Energy and Economic Development

Coalition (SEED)

Subject: SB 766 and SB 7

Tom Smith, Public Citizens Texas Office

Subject: SB 766 and SB 7

Sam Enfield, Texas Renewable Power Coalition

Subject: SB 766 and SB 7

Neil Carman, Sierra Club

Subject: SB 766
Texas Natural Resource Conservation Commission (j)

Public Hearing Registration

Location: Austin Date: October 4, 1999

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

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Texas Natural Resource Conservation Commission @

Public Hearing Registration

Location: Austin Date: October 4, 1999

Concerning: Air Permits - VERP (SB 7!l5f

Narne and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

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Texas Natural Resource Conservation Commission (j)

Public Hearing Registration

Location: Austin Date: October 4, 1999

Concerning: Air Permits - VERP (SB 766)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Texas Natural Resource Conservation Commission (j

Public Hearing Registration

Location: Austin Date: October 4, 1999

Concerning: Air Permits - VERP (SB 766)

Narne and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Texas Natural Resource Conservation Commission .3

Public Hearing Registration

Location: Austin Date: October 4, 1999

Concerning: Air Permits - VERP (SB 766)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

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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\"· ---~-~---

a record ofexcellence

800 Brazos . Suite 340 . 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 fron t 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.

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3

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 1 11

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.

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4

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 uni t 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.

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5

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.

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7

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.

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8

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)474-2233
1

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_l:~- .1__:;;12 ('-.:II_l: ~- .11 "\,.,\,,-1"G,.

a record ofexcellence

800 Brazos • Suite 340 • Austin, Texas 78701 • 512-474-2233
1

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)474-2233
1 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)474-2233
4

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.

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5

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 Al uminum.

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)474-2233
6

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 vol un teer 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.

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7

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

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1 here this morning. In particular, it has to do

8

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

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9

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 tha t even t, 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

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1 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

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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

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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

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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

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1 plant. And you can go around the state -- and

14

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

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

15

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.

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1 Anyway, thank you very much. Illl be

16

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 Al tman. 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

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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 communi ties, it really can be interpreted as a

25 willingness to overlook the health impacts that

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1 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.

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1 MR. CAMERON: I'm not quite sure

19

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

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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 mos t plan t s ern.i t 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

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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 heal th 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.

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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

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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 authori ty 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

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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.

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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 permi t 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

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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 addi tional 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,

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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

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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

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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 moni toring.

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

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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

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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

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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.

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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.

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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.

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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.

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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.

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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 thi s 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.

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39

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.

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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.

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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.

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42

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.

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1

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)474-2233
INDEX OF ORAL TESTIMONY

October 5, 1999, Irving, 1:00 pm

Reference Number

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

Submitted by

Jim Harder, Garland Power and Light

Subject: SB 7

Todd Main, Texas Campaign for the Environment

Subject: SB 7

Valerie Chase

Subject: General

Peter Altman, Sustainable Energy and Economic Development

Coalition (SEED)

Subject: SB 766

Representative Lon Burnam

Subject: SB 7

Dr. Neil Carman, Sierra Club

Subject: SB 766

Tom Smith, Public Citizens Texas Office

Subject: SB 7 and SB 766

Anne Rowe

Subject: SB 766

Shawn Glacken, TXU

Subject: SB 7

Stanley Spruiell, U.S. Environmental Protection Agency

Subject: SB 7

Elaine Wiant, League of Women Voters of Texas

Subject: SB 7 and SB 766

Jim Duncan,

Subject: SB 7 and SB 766

Molly Rooke Seay

Subject: SB 7
0-14

0-1

0-2

Jim Saye

Subject: General

October 5, 1999, Irving, 4:00 pm

Foy Moss

Subject: General

Stanley Spruiell, U.S. Environmental Protection Agency

Subject: SB 766
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving Date: October 5, 1999 (1 p.m.)

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Yes ® No

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Yes @ (9 No

t} - 22-tlSC.l~"~~.S

'J~\ ~Cu.. D'J Cta..~ Se.\+ Itv \"'-~ JSI:Jb'S Yes €) No
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving Date: October 5, 1999 (1 p.m.)

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

c..t"l--,.. 0 rr"...,. f'e~ "tl-I...... --t-r/ '$£.£0 Ca.1r::rc,-. 7 t- 766

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Yes €J (9 No

./V<;\\a..,.,h. G~ -;XLL c3J No cS) No
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving Date: October 5, 1999 (1 p.m.)

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving Date: October 5, 1999 (1 p-=-=.ffi==.y-) _

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving Date: October 5, 1999 (1 p.m.) . ,

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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I

Yes No Yes No

Yes No Yes No

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Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving , Date: October 5, 1999 (1 p.m.)

,

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Yes No Yes No

Yes No Yes No
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving Date: October 5, 1999 (1 p.m.)

Concerning: Electric Industry Restructuring (SB 7)

Narqe and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Yes No Yes No

Yes No Yes No

Yes No Yes No

Yes No Yes No

Yes No Yes No

Yes No Yes No
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Irving Date: October 5, 1999 (4 p.m.)

Concerning: Air Permits - VERP (SB 766)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

,- (Circle One)

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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:\: _\.....'~

a record ofexcellence

800 Brazos • Suite 340 • Austin, Texas 78701 • 512-474-2233
1

2

3

4

2

PRO C E E DIN 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 hear me 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 of the Honorable Lon Burnam, State Represent~tive

16 from Fort Worth. 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 For the convenience of everyone here today,

24 and for the ones who might also show up at 4:00 o'clock, we

25 will be taking testimony on either Bill at this hearing as
3

1 well. For those of you who are familiar with the structure,

2 this hearing is set up for receipt of oral testimony only.

3 I will begin calling speakers. The -- there's no

4 cross-examination or questioning the staff during 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 might have after we close the hearing.

9 I would also ask those of you who have not

10 registered, please do so, and if you wish to receive a copy

11 of the rules as they are adapted by the Commission, please

12 supply your name and address on the registration form or

13 supply one of our staff members here with a business card.

14 My name is Beecher Cameron. I'm with the

15 Regulation Development section. Also of the TNRCC staff,

16 Mr. Brian Christian from Intergovernmental Relations and

17 Mr. David Schanbacher from our Executive Director's Office.

18 with that out of the 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'm with

25 Garland Power and Light. Garland Power and Light is a
4

1 municipal utility that serves the citizens of Garland,

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 what we would call the

7 four four county nonattainment area except for one unit

8 that we jointly own with three other municipal utilities and

9 that is Gibbons Creek which 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 then we have three other units 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 of our

23 units down for maintenance outages. They were down for

24 overhauls, and consequently if you take the allocated tons

25 based upon the '97 levels, one of our units, unit Number 5,
5

1 if you compare what the levels of NOx emissions in '98 and

2 compare it back to the allocated 50 percent level for '97,

3 we would have to have an 80, 84 percent reduction in NOx

4 levels on that unit. Another unit owned, the Number 1, we

5 would have to have almost a 60 percent reduction 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 that has 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 that under 5B 7, the 5B 7

19 legislation is concerned with the NOx level, or addresses

20 the NOx levels from the grandfathered units. But under 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 of
6

1 provisions, and at least that we be given an explanation of

2 why this is being required.

3 The third main point that we want to bring,

4 and this is a very, very important point, is that under the

5 deregulation Bill, SB 7 that was passed by the state

6 Legislature, the PUC has been mandated to carry out the

7 whole provisions of deregulation and getting the utilities

8 and power marketers, IPP's, et cetera, to jointly come up

9 with a set of provisions 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/Fort Worth area which 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 another way to put it,

17 power blackouts in the Dallas/Fort Worth area.

18 Our units at the at Garland are designated

19 those must run units. If these 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 other units in the City of Denton and other

23 units for TXU, if they were forced to shut down it's just

24 not a matter of will Dallas/Fort Worth go black, it will go

25 black. It will shut down during summer because these units
7

1 are extremely important. They are peak units that are used

2 during the summer periods -- summer periods.

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 of the section is that the -- the

7 requirement for grandfathered units does not apply to

8 municipal utilities that opt out of deregulation, and until

9 such time that Garland particularly opts into deregulation

10 we feel that we would not be required to comply with -- with

11 SB -- with these SB 7 requirements, and we again would like

12 an interpretation of that from you because our lawyers have

13 made that their opinion. And with that I will close.

14 MR. CAMERON: Thank you, Mr. Harder. I have

15 to apologize a bit for the brightness of the 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. Todd Main.

19 MR. MAIN: Good afternoon. I'm the Director

20 of the Texas Campaign for The Environment which is a

21 statewide citizens group. We're going to submit written

22 comments, but I wanted to just touch on a couple of

23 important points. ~he first one concerns section

24 116.811(1), which is the section that addresses requiring

25 companies seeking a voluntary emission reduction permit to
8

1 undergo an abbreviated health effects review. The Texas

2 Campaign for The Environment supports not an abbreviated

3 health effects review, but a full health effects review that

4 includes an analysis of the cumulative impacts that come

5 from multiple sources of emissions and from mUltiple

6 categories.

7 For 30 years now grandfathered polluters have

8 gone without any sort of public health review and yet we

9 know that they produce some of the largest amounts of

10 chemicals that contribute to the ozone problem in many of

11 our nonattainment areas. If the Commission is going to use

12 an abbreviated health review we suggest that you set the bar

13 for significant reductions. Protecting the public health is

14 more important than protecting these oil facilities.

15 The second point 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, not just the counties for

20 most of the grandfathered facilities. We suggest that you

21 also expand this to include the entire TCAS region which is

22 essentially east of I-35 where the majority of these

23 facilities are located.

24 Third point, section 116.812 deals with perks

25 or project emission reduction credits. We are concerned
9

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 of reduction 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 of these

7 programs in other areas of the 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 of reductions in emissions of

14 certain contaminants if the 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 because Alcoa

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 our members in

24 the Dallas/Fort Worth area because the plumes that have

25 been -- plume studies that have been done from Alcoa show
10

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 in the legislative session Alcoa suggested that

8 $100 million investment in scrubbers would put them.out of

9 business, yet we also find out that they just paid $5.6

10 billion in cash when they just bought Reynolds 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 of transports that

14 pollution has on nonattainment areas which would include for

15 the Dallas/Fort Worth area many of the power plants and

16 chemical facilities in East Texas, as well as Alcoa and Big

17 Brown.

18 The second criteria we would like to suggest

19 is that you include something that we have called a truth in

20 hardship provision in that if a 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 of the air pollution in the form of higher

24 gasoline prices, more pollution control equipment for their

25 cars, and the health care costs that corne from all of the
11

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 of voluntary emission reduction

5 permits. There's a concern in here that there's a criteria

6 that if a request for notice and comment period is

7 considered unreasonable, they don't have to have a hearing.

8 And the question we have is that if a 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 last point 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 if people come in they're allowed to

18 have a $450 flat fee if they propose controls that are at

19 least as stringent as ten year old BACT.

20 And it occurs to us that this is exactly the

21 wrong kind of incentive to offer, and that what we ought to

22 do is use the market mechanism which we have found to be so

23 effective in our economy and have a sliding scale. We would

24 suggest that if you're going to make greater reductions, you

25 should reduce -- you should have reduced fees.
12

1 Right now in Texas the money that we allocate

2 f.or setting up monitoring stations and for evaluating

3 different levels of -- different kinds of~pollutants is

4 woefully inadequate, and we would suggest that one of the

5 areas that we can put some of this money is into increase

6 the monitoring situation. Thank you, very much.

7 MR. CAMERON: Thank you, Mr. Main.

8 I want to make one other announcement. We

9 have extra copies of the proposal available up front. I

10 don't know if they ran out of supply on the table or not,

11 but if you need extra copies please raise your hand and let

12 them know to put some more out and make sure that you get

13 one.

14 I'm speaking of Senate Bill 7 implementation,

15 or Senate Bill 766. Like to calIon Ms. Valerie Chase,

16 please.

17 MS. CHASE: lIm not much of a pUblic speaker,

18 but I will do the best I can. I come to you today as a lung

19 cancer patient diagnosed just two months ago, August 6th. I

20 have a small tumor in my upper left lobe that measures

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 that means that I am a lung cancer

25 Stage IV.
1

13

That means five years from now I have.a one

2 percent probability of being here. The doctor said

3 untreated I might last three to six months. I'm undergoing

4 radiation for both my brain and my lung, and might extend it

5 six to one year. If I'm very healthy and lucky and take

6 care of myself I might last a year, two years. I don't

7 know. I know I'm going to die, but I'm not 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 of this whatever time I'm given.

11 cancer is a gift to me in many ways. I'll tell you how.

12 Oh, one thing I should tell you, I'm on steroids to keep the

13 inflammation down for the radiation. So if I shake like I'm

14 someone who 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, but my motor coordination isn't worth a damn.

17 Excuse my French.

18 Let me tell you a little bit about my life

19 story. I was born in 1931. I grew up in Central

20 Connecticut in the Hartford area, summered on Long Island

21 Sound and had a wonderful childhood with 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 just had a

24 wonderful childhood. It was a great place to grow up.

25 I went to college at Brown University in a
14

1 bachelor of science chemistry course. I switched majors

2 after my brother came down with 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 specialty was aviation crew training. I

6 worked from 1956 to 1960 as a psychologist out of the

7 Nebraska state Capitol Building in many of the 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, California where 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 Arizona where he was working on a

17 contract project 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 Fort Rucker, Alabama, and I was a real

22 estate broker. '79 we moved back to Texas. My daughter

23 wanted to go to A & M, and she did, and I'm an Aggie morn,

24 and she has a Master's degree in nuclear engineering and

25 radiation health physics. My son wanted to be an
15

1 aeronautics engineer. He went to UTA.

2 Me.anwh;ile, I divorced in 1980. 1983 to 1986

3 I worked for the DFW Airport Board as a terminal operations

4 agent. I live right next to the east property line of the

5 airport now, in an apartment there. Wonderful view of the

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 in Addison on Midway. 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 of the -- this illness.

15 I was at M.D. Anderson yesterday for a second

16 opinion to evaluate my treatment plan and they gave

17 confirmation and allegation that I'm on a good treatment

18 plan with the Irving Cancer Center. They are great people

19 there. They are very supportive people, and it seems that

20 the program I'm on with the support group and that the

21 American Cancer Society thinks I'm in the right place for me

22 right now. I'm getting good treatment. The best treatment

23 that is available for my condition.

24 I don't know how long I'm going to be doing

25 this, but I have been a member of the Sierra Club. I've
16

1 followed the TNRCC hearings. Many meetings with -- on the

2 Midlothian hazardous waste material, burning permits,

3 permitting. Which I feel very strongly impacts the

4 Metroplex because 67 percent of the time the wind is blowing

5 from the south and blows all that crud across Dallas,

6 Arlington. I lived in Arlington for eight years. Then I

7 moved here to Irving to be closer to GTE. Five minutes,

8 five miles and I'm at work.

9 I'm very, very concerned of the 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 went to the Environmental Health

13 Center. They did a real good job of testing for all the

14 different pollutants in foods and stuff. I went on the shot

15 program.

16 Again, last December I went to Connecticut to

17 visit. Came back at the first of the 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 just ached allover. I had the flu

21 shot in October. I had the pneumonia -- pneumococcus

22 pneumonia shot at the same time. Couldn't be the flu unless

23 it was a different strain of flu. I was ~oughing, sick for

24 months. Six months. 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 the myelogram, but before I left the

8 hospital I was given an inhaler, Albuterol. A month 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 it yet. Take

12 this Claritin antihistamine for about a month or six weeks.

13 Then we'll see about the allergist." It was the end of May

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 doctor walked in the

20 office and said, "Move to the South Pole. You're allergic

21 to everything." So I started the shot program. The foods,

22 I was allergic to the standard American diet: Just milk,

23 wheat, most all the meats, most all the seafood, most all

24 the shellfish, broccoli, a lot of vegetables and I'm

25 vegetarian. I haven't had meat in a long, long time. I go
18

1 with fresh fruits, fresh grains, lots of legumes and

2 cereals, whole cereals. I shop at Whole Foods Market. Buy

3 organically raised products.

4 MR. CAMERON: Ms. Chase, I don't wish to

5 limit your testimony, ma'am, but we have about 11 other

6 people signed up to speak and we need to move on to the

7 subtance of your testimony. Thank you.

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 lymph node -- a lymph lump here

11 about a year. That's when they sent me 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 of to take care of myself

14 environmentally to make myself clean. 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 energy producers have a very, very

18 strong health impact statement, very complete. Make them

19 clean up the air. We've got enough pollutants in the air.

20 It would be the equivalent of 4,000 -- 4 million vehicles

21 here in the DFW area. 80,000 pounds of pollutants go up

22 from these plants. We need that cleaned up. Thank you.

23 MR. CAMERON: Thank you, 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 Peter Altman. 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 air pollution, and I thought I would start by discussing the

12 results of a report that has been released today called "Out

13 of Breath," and this is a report, I do have copies available

14 for those who are interested, that is being released

15 nationwide. It was written by a consulting firm called ABT

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 of Breath" report pertains to the

20 development of these 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 many people have so much

24 trouble breathing because of ozone that they need immediate

25 or prolonged medical 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 started realizing behind each number

4 is another person who does something we all need to do, goes

5 outside and breathes, and what happens is they find

6 themselves unable to breathe. statewide the study found

7 that nearly 14,000 people just during the ozone season have

8 to go to the emergency room because ozone gives them such

9 breathing difficulties.

10 Around here in the Metroplex there are nearly

11 3,000 people during the ozone season who 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 prolonged period of time until they are able once again to

15 breathe on their own without the need for medications and

16 monitoring by medical professionals.

17 There is a young child that I thought of when

18 I first looked at this report named Josh 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 child who is a severe

22 asthmatic and has testified a number of times, and he misses

23 about five or six weeks of school a year due to his

24 difficulty breathing. He used to spend all of that time in

25 the hospital until his mother became so practiced at giving
21

1 him the injections and the other medications necessary to

2 enable him to breathe. So now he simply spends those weeks

3 out of school at home resting and trying to breathe.

4 This report and the stories of people like

5 Josh show the-tangible pUblic health and economic costs of

6 air pollution and, therefore, tell us why we must include in

7 health effects reviews for grandfathered plants, whether

8 they are being required to clean up or whether they are

9 volunteering to trim their emissions, why we need to have

10 the strictest possible health effects review, and that that

11 review has to examine the effective ozone on the pUblic.

12 And if a plant is emitting VOC'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 cardiovascular problems of the kind that send

16 thousands of people to the hospital and to the emergency

17 room, and that is a public health 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 of these plants, the

23 grandfathered plants under SB 766, and as the agency

24 considers whether or not to impose further reductions on

25 nongrandfathered power plants in the East Texas region we
22

1 need to keep in mind something Jeff Sadis testified to in

2 March of this year.

3 Sadis said that we need all the reductions we

4 can get. No one source is the magic solution to make our

5 ozone problems go away. We need all the reductions we can

6 get from all the sources we have of ozone pollution. And

7 that means that when a grandfathered plant volunteers to get

8 a permit it shouldn't be an easy ride because our life and

9 breath is depending on cleaning up those plants.

10 And it means that as the agency considers

11 what to do about the nongrandfathered plants in the 60

12 county East Texas region we 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 abbreviated health effects

17 review is not going to result in a system that is protective

18 of the 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: Thank you. I was reminded when

24 Mr. Harder was talking about the intents of Bill 7 as passed

25 is that most legislation is a whole lot like your typical
23

1 accident at an intersection. Depends on what angle you're

2 looking at it and what your perspective 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 of the Texas

6 Legislature and I sat in on any number of meetings during

7 the course of the 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 protect public 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 of what was driving

15 deregulation, and what the Governor wanted versus what was

16 in the pUblic interest. Some of us that have been involved

17 in electric utility regulation for over a quarter of a

18 century have been saying for over a quarter of a 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 power plants 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 of the implementation of the Bill.
24

1 The trade-off that the legislature study group, my

2 colleagues, my committee members, the majority on the state

3 Affairs Committee of the Texas House of Representatives, the

4 trade-off of the majority of the members of the Texas House

5 of Representatives, all of us 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," and we

8 went. We went along with the legislation.

9 But we want you to fully understand that we

10 are also watching and aware that the day-to-day lobbying

11 process behind the scenes in Austin is such that the utility

12 companies are getting their way with you again.

13 I'm really glad Valerie was here. I have

14 known Valerie for a number of years and she is all too much

15 a personal reminder of the issues discussed in the book by

16 Dr. Samuel Epstein, The Politics of Cancer. There are

17 literally thousands of Texans dying today because of what we

18 have let the grandfathered facilities get away with for over

19 30 years.

20 There are literally thousands of my fellow

21 asthmatics under medical treatment today because of what we

22 have let private sector profit interests get away with. I

23 couldn't be clearer as someone who is very close in this

24 legislative process what your responsibilities are as

25 employees of Texas Natural Resources Conservation commission
25

1 in implementing this legislation. I hope I don't have to be

2 there day in and day out to protect the Bill against the

3 lobbyists' interests because I'm afraid that that's what

4 it's going to take.

5 I want to thank all of the consumer and

6 public health advocates in the room for being here today.

7 Many of you have been at this for a long time. We all know

8 what is at risk here 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, not private profit. Thank you.

11

12

13 Burnam.

14

15

(Applause.)

MR. CAMERON: Thank you, Representative

Neil Carman. Dr. Neil Carman, please.

DR. CARMAN: I'm the Clean Air Program

16 Director for the Lone star Chapter of the Sierra Club. My

17 first comment is with respect to 116.811(1), and that is

18 where it mentions 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 speaking with parents of
26

1 children who go to some of these schools there, they do have

2 air pollution problems. Sometimes it's difficult for the

3 kids to go out and play outside because they are asthmatic

4 or the kids, they get sick and they have to go home and miss

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 proposed under 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/Fort Worth

16 area, Houston and other large urban areas in Texas. So we

17 need to get those toxics out of the air, and I'm going to be

18 sUbmitting a pUblished paper by scientists with my comments

19 next week, but the hazardous air pollutants 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 of things that we should be

25 putting into the air, because we know what goes up comes
27

1 down. Besides impacting our urban areas they also impact --

2 to some extent they make a contribution to visibility and

3 haze problems, but even in a broader sense they impact our

4 ecological systems.

5 Many of these hazardous air pollutants are

6 certainly not benign in any sense. They harm a lot of other

7 living creatures. These toxics also can impact our

8 agriculture. And so, in other words, we may be consuming

9 them in the drinking water and in the foods we eat. So

10 these are not the kinds of things we want in the air. That

11 part of the 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 of a near nonattainment area under 116.16. The

16 agency is asking for input and I think what needs to be

17 considered is a near nonattainment area should be an area

18 where a city has at least one or more eight hour ozone

19 exceedants in a year. Also, it should be I think the

20 several county area, and I will be submitting some more

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 be responsible for pUblishing notice. I think it's very

25 good that the notice be -- may be published on the standard
28

1 permits where there will be statewide applicability. The

2 notice would be pUblished in the largest newspaper of daily

3 circulation found in a whole number of cities.

4 I'm really wondering if that -- this isn't

5 somewhat of an economic burden on the agency. Maybe some of

6 this cost should be passed on to the companies, that they

7 should really pUblish these notices. I think that's

8 something the agency ought to look at because of the

9 potential costs.

10 Another thing I did want to comment on is

11 this "Out of Breath" report. There is a diagram in here,

12 which I don't know, maybe some of you have seen. What this

13 shows here is a -- the Ozone Transport Assessment Group

14 region. It's about a 37 state area, primarily from the

15 central to the eastern portion of the united states.

16 And it modeled for the year 1997, from April

17 through October, the peak one hour ozone levels on a daily

18 basis in this whole area, and you can see that there's a

19 very large black area here in Texas. That's primarily this

20 eastern air shed. Part of it fits into the Texas Clean Air

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 of the

24 state of Texas, and people keep wondering, "Well, is it just

25 the cars in the Dallas/Fort Worth Metroplex or the Houston
29

1 area?" No. The pollution moves around and it's coming from

2 counties that are in attainment such as Ellis County to the

3 south where there's some very large sources. From the east

4 of the Dallas area and the Central Texas area where there

5 are very large sources.

6 So this modeling I think is a very powerful

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 better regulated and those emissions

11 reduced.

12 One other comment I wanted to make is that I

13 think that the companies also need to in certain cases do

14 some type of better monitoring of their emissions. But in

15 addition to perhaps that monitoring, if it's not being done

16 that is, that perhaps there should also be some ambient air

17 monitoring for at least a period of maybe several months to

18 a year to make sure that the emissions reductions that are

19 being attained are indicating that there is a public health

20 benefit, although I realize that sometimes the emissions may

21 not corne down real close to some of these plants.

22 Anyway, I would recommend that the agency

23 consider the need for more ambient air monitoring where it's

24- appropriate. Thanks.

25 MR. CAMERON: Thank you, Dr. Carman.
1

2

30

Tom Smith, please.

MR. SMITH: Tom Smith, most people know me

3 better as Smitty. I'm Director of Public 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 in Austin, and visit with you kind of extensively 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 of the issues before

10 you on the grandfathering permit -- facilities permitting

11 process that you have in the rules.

12 Today I'm going to spend most of my time

13 talking about electric utilities and the opportunity that we

14 think you have here. The reason, as Representative Burnam

15 outlined, that the electric utilities sector was singled out

16 for special treatment in this particular Bill is simple.

17 Reducing emissions from the electric generating sector of

18 our industry is by far the least costly way of reducing the

19 emissions that are plaguing the Dallas/Fort Worth area 'and

20 many of our other urban air sheds in Texas.

21 As Mr. Altman showed you, the office -- the

22 OTAG group, the Ozone Transport Assessment Group, has found

23 that for about $1500 a ton you could reduce emissions from

24 power plants, and that many of the other alternatives such

25 as enhanced inspection and maintenance on our automobiles,
31

1 which is a program we tried in the Dallas area, are about

2 $1800 a ton, and then many of the 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 when you look at the costs of each of

7 the sectors -- to each of the sectors, this is by far the

8 least costly way of reducing emissions, and certainly is

9 significantly less costly than many of the other industrial

10 sources. For example, reducing emissions from a process

11 heater or the system that is used to heat petroleum to

12 create the cracking process in the refining industry is at

13 about $25,000 a ton.

14 If you look on down the line however, you

15 find that there are a number of other less -- far less

16 expensive methods of reducing emissions: Metal processing,

17 reducing emissions at the Alcoa facility for example is only

18 about $6,000 a ton, and cement manufacturing is only about

19 $3,000 a ton. So while power plants are by far the least

20 expensive ways, many of the 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 But to go directly to the issue of power
32

1 plants, one of the things that we have found that -- is a

2 high degree of customer willingness to pay. Seventy-six

3 percent of all people surveyed two years ago by Public

4 citizen indicated they 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/Fort Worth 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 and maintenance 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 of challenges in implementing this Bill. Whilethe

20 legislature said, "We want you to reduce emissions by 50

21 percent when you permit these for NOx and for sulfur

22 dioxide, and we want you to give a permit to any of these

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 permit requirement.
33

1 And it seems to us to be implicit in the law

2 that when you are permitting these power plants 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 of which 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 cost recovery or a cost

12 recovery for those reasonable costs incurred in order to get

13 a permit or in order to meet a National Ambient Air Quality

14 Standard. And that's the kinds of things that we are -- in

15 seeing that the federal government is proposing as

16 regulations on sulfur, on small particulate matter and for

17 other kinds of pollutants that are affecting air quality.

18 So it clearly gave you the authorization to

19 do that, to give people cost recovery -- or for the Public

20 utilities Commission to authorize cost recovery for those

21 investments necessary to meet the National Ambient Air

22 Quality Standard. The challenge to you is defining and to

23 certifying to the PUC that those expenditures are necessary

24 in order to meet the National Ambient Air Quality Standards.

25 So what is in your rUles, and we support, are
34

1 requirements that say that they have to meet the new federal

2 New Source Performance Standards and NESHAP standards. We

3 think that those are essential in order to help clear the

4 air, not just of NOx , 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 whether municipalities are required to meet these standards

9 should they own a grandfathered facility. And if you look

10 at Section 39.262, when it talks about emission reductions

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 or river authority, and it applies

16 particularly to anybody who's got a grandfathered facility

17 as of January 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 of emission reductions that are necessary to meet

24 all National Ambient Air Quality Standards, at emission

25 reductions from power plants whether owned by -- investor
35

1 owned, but also municipality.

2 And a third thing that you have the

3 authorization to look to is making additional reductions, if

4 necessary, in order to get the air quality good enough to

5 breathe and meet National Ambient Air Quality standards.

6 And you've taken a first step in July when you said, "We

7 want to reduce emissions to .14 pounds per MMBtu," which is

8 the level specified as a rate in the statute for

9 grandfathered facilities.

10 But nowhere in the statute does it limit you

11 to that level, and as the debate goes on over how tough it

12 is to balance the air emissions in the Dallas/Fort Worth

13 area to come up with a working set, it has occurred to many

14 of us that perhaps you are looking at too high a level, and

15 that perhaps a level similar to what we're seeing in as best

16 available control technology for many of these plants is

17 more reasonable. A level perhaps of .05 pounds per MMBtu

18 which would dramatically reduce even further the emissions

19 from these old grandfathered units 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 per MMBtu and we would suggest you look

25 further. Be happy to submit these comments and others in
36

1 writing to you by the deadline of next Monday, 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 your written comments.

5

6

7

8

MR. SMITH: Thank you all, very much.

MR. CAMERON: Thank you, 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 power plant cleanup and grandfathered facilities. I'm a

12 resident of Dallas 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 and my personal business interests are in

15 real estate and my husband's are linked to the home building

16 industry in North Texas.

17 My son who is 11 suffers from asthma and over

18 the years I've come to believe that his situation is

19 worsened if not caused by the air in Dallas. When he was

20 three he was diagnosed with asthma and hospitalized for five

21 days. Those were difficult days as I learned how to use a

22 breathing machine, to give medicines and chest therapy. As

23 the years have unfolded I have discovered that his asthma is

24 worse in the summer in the heat when he's outside and on

25 ozone days, and that it disappears when we travel away from
37

1 Dallas to rural places.

2 For two years we lived in a suburb of Atlanta

3 and miraculously all the medicines were left in a moving box

4 not to be touched until two weeks after our return to

5 Dallas. Fortunately, as he has gotten older the asthma has

6 become easier to deal with, but I strongly believe the

7 quality of the air in Dallas affects his ability to function

8 as a normal athletic person.

9 The Metroplex is a dynamic and vibrant

10 economic magnet. The influx of new residents 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 of people mired in traffic on our

15 highways surrounding the Metroplex we can only recognize

16 that this influx -- this mass influx of people will

17 exacerbate the existing pollution problems here.

18 If Dallas and the surrounding Metroplex are

19 to continue to thrive and prosper then rigorous, progressive

20 and proactive solutions to the air situation must be

21 achieved, and soon, before it cripples the growth and

22 prosperity of this 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-term that is the

25 best for the area, its residents, the health and economy,
38

1 and the state of Texas.

2 I urge you-all to push for the most stringent

3 regulations governing power plant cleanup and grandfathered

4 facilities. Just as civic leaders of this region created

5 vast water supplies and good water systems for Dallas, our

6 air needs to be clean and safeguarded. Clean air will only

7 serve to enhance and compliment the growth of the 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 out by the SEED

15 Coalition and other environmental groups targeting power

16 plants and grandfathered facilities, and create the means

~7 for the quickest and most expedient solution to the air

18 pollution problem 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 situation meet the standards used in federal law

25 and use a wide net in a wide geographic area. Reward those
39

1 plants in some way for any extra efforts that they make

2 towards clean air initiatives.

3 In making your decisions please remember that

4 safeguarding the pUblic health is paramount. That pollution

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 of rules

8 and have the courage to be tough. Thank you.

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 percent reduction on S02 and a 50

18 percent reduction in NOx from its older power plants.

19 Electric utilities in Texas already have some of the lowest

20 NOx rates in the country with NOx rates averaging 40 percent

21 below the national average.

22 When the new Senate Bill 7 NOx reductions 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 NOx rates. TXU will be making NOx reductions of over 50
40

1 percent in Dallas/Fort Worth. We have already begun

2 upgrading our units and have made most of the reductions

3 well before May, 2003. We will, .in fact, be making

4 reductions at every power plant 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 proposed permitting process that are overly

11 burdensome, intensive -- review intensive and ultimately

12 time consuming without coinciding with environmental

13 benefit.

14 We will be submitting specific

15 recommendations in our written comments that will result in

16 a more streamlined permitting process. We will also be

17 sUbmitting specific recommendations on a proposed allowance

18 trading system. TNRCC's program has 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 of a

22 flexible free market approach.

23 We commend the legislature on passage of

24 Senate Bill 7 and we encourage the TNRCC to implement it in

25 a cost-effective manner. Thank you for the opportunity to
41

1 present our comments.

2 MR. CAMERON: Thank you.

3 Stanley Spruiell, please.

4 MR. SPRUIELL: Again, I'm Stanley Spruiell.

5 I'm with the Environmental Protection Agency, Region 6 in

6 Dallas. Of course we have jurisdiction within Texas and the

7 five -- four surrounding states, and of course we have been

8 reviewing the proposed regulations on Senate Bill 7, and we

9 will be providing formal comments within the deadline, and I

10 just want to go through a few of the 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 of Texas. We

15 believe this is helpful, it will benefit the 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 letter just to ensure that the rules are consistent with the

20 requirements of the Federal Clean Air Act.

21 Of course some of them will 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 and maintain compliance

25 with the National Ambient Air Quality Standards.
42

1 of course we understand that, you know, from

2 a lot of industries we may can use some of these 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 right now 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 of the overall environment.

8 We would certainly, you know, hope that Texas will clarify

9 this in their final rule.

10 Another area of course that we want to look

11 at, you know, deals with the assurance that the reductions

12 will be used and are consistent with federal requirements,

13 and certainly with the trading that's going on some units

14 may be able to bUy more credits. Certainly EPA would

15 interpret the rules as not to allow some to buy enough

16 credits to exceed what's already -- you know, it's already

17 allowed.

18 Of course there are several rules like the

19 resource performance standards and a lot of the permit

20 requirements, and of course 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 restricted
43

1 only to whatever is in there EPA has approved in the

2 federal -- state implementation plan for Texas. That would

3 include any requirements of the existing rules that EPA has

4 approved as well as any requirements -- and I started to say

5 permits. If they were grandfathered they probably would not

6 have any permits. But it would also include any

7 requirements under the control strategy in nonattainment

8 areas, as well as any other requirement that EPA has

9 approved to assure the attainment and maintenance of the

10 National Ambient Air 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-fired utilities. Of course

14 one thing I would suggest that you clarify in the rule is --

15 concerns utilities which might not -- which might fire coal

16 in combination with other fuels, and as well as utilities

17 that may have a capability of firing coal but may not at the

18 time they submit their permit application, you know, be

19 firing coal.

20 EPA would think -- at least right now we

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 it might 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 will
44

1 include these as well as some other comments. I thank you,

2 very much.

3

4

5

MR. CAMERON: Thank you.

Elaine Wiant, please.

MS. WIANT: I'm Elaine Wiant, and I'm here

6 representing the League of Women Voters of Texas. The

7 League of Women Voters of Texas appreciate the opportunity

8 to comment on these proposed regulations. We support

9 strategies designed to ach}eve ~i~Dificant reduction in the

10 amount of pollution generated by power plants and other

11 grandfathered plants in Texas. This will reduce exposure to

12 the harmful effects of pollution, to better protect pUblic

13 health and prolong the lives of the 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 other pollutants such as carbon

21 monoxide, particulates and volatile organic compounds. This

22 will ensure that we achieve significant and measurable

23 reductions in emissions of air pollution.

24 TWo, we urge that the rules be expanded to

25 require all power plants that are in areas with unsafe air
45

1 or that contribute to those nonattainment areas to meet the

2 same standard. Plants not meeting these standards

3 contribute to the pollution, but not the cleanup efforts of

4 the state. Air pollution does not recognize political

5 boundaries such as can be drawn. Regional strategies are

6 the only effective approaches to cleaning up the air we

7 breathe.

8 Three, we urge that the rule should require

9 that the notice of pUblic hearings appear in all news media

10 in all affected areas, not just in the local newspaper in

11 the area. The pUblic has a right to know about pollution

12 levels, dangers to health and environment, and proposed

13 resource management policies and options. citizens must be

14 given every opportunity for equal input into the permitting

15 process.

16 And finally we urge that the TNRCC restrict

17 pollution trading in ways that ensures significant

18 reductions in air pollutions.

19 In regard to the SB 766 implementation the

20 League of Women Voters urges that the 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 contest the issuance of a plant permit if the

24 power plant poses harmful health or environmental effects

25 that need to be addressed.
46

1 Since this program represents the first time

2 that many 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 about proposed permits for

10 grandfathered facilities and that the fees adequately fund

11 the administration of an effective program. In order to

12 facilitate pUblic involvement officials should make a

13 special effort to ensure that the pUblic has adequate

14 information to participate effectively. Adequate funding is

15 needed to ensure opportunities for public education and

16 effective pUblic participation in all aspects of the

17 decision-making process.

18 Three, we urge that the TNRCC limit the use

19 of standard permits to only minor sources of pollution.

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 in
47

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 or retraction of the permit if the reductions

5 fail to occur. Thank you.

6

7

8

9

10

(Applause)

MR. CAMERON: Thank you.

Mr. Jim Duncan, 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 check the 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: Thank you. My name is Jim

20 Duncan. I'm from Fort Worth, Texas. Like Representative

21 Burnam said out at the press conference, the people who

22 really should be here, aren't. We're kind of preaching 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 of promising

3 to clean up their emissions, but when 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 industry must be

9 compensated before they will agree to clean up their

10 emissions. Once again putting profits ahead of health and

11 safety of the pUblic. Allowing them to crush cars or reduce

12 fleet emissions is fine, but it's basically a copout of the

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 traded under the

19 auspicious of the trading programs established in this

20 legislation. Not just the utilities, not just the polluters

21 should be able to bUy these. We should be able to buy them

22 and make 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 with
49

1 cost-effective and energy-saving equipment. Things as

2 simple as compact fluorescent light bulbs; issuing

3 substantial rebates to individuals and businesses who take

4 the initiative of installing renewable energy generating

5 systems. We have solar wind, hydrogen fuel cells; all these

6 for the most part are existing and good, safe, efficient

7 processes.

8 The basic legislation should mandate that

9 electric utilities participate in any distributed generation

10 project, pUblic or private, that meets 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 of generating their own clean power.

15 The utilities should be required to pay a fair and equitable

16 price for the nonpolluting power that they do purchase from

17 these independent electric power producers.

18 Currently the utilities are required to buy

19 power that virtually anyone generates, but we 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 independent power producer and join in the distributed

24 generation project contains so many burdensome requirements

25 that it's started a movement in other parts of the country
50

1 where these power -- independent power producers are

2 bypassing the utility requirements and just hooking up to

3 the grid simply because they are generating more power than

4 they can use.

5 It's really just that simple. All of these

6 methods have been successfully implemented in other states

7 and regions. Their success can be attributed to the desire

8 and the demand of the pUblic and the private sector for more

9 energy efficient options. The utilities on the other hand

10 have worked with amazing success in enhancing their

11 stockholder's financial security while ignoring the

12 admittedly costly emissions issues. The longer they put it

13 off the more costly it's going to be as I think they're

14 finding out.

15 The electricity consumers of the u.s. are for

16 the most part unaware of the true costs of the electricity

17 that they bUy from the utilities. As if the tax subsidies

18 paid to these utilities over the decades is not enough, the

19 rate payers are now being saddled with the utilities

20 unrecoverable costs from their unprofitable investment

21 schemes like Comanche Peak. We will probably be stuck with

22 their cleanup costs in the future, our children will.

23 The thing that bothers me the most is that

24 after being -- Texas being a leader in energy production for

25 most of this current century, Texas has become a net energy
51

1 importing state, which simply means that we're buying more

2 energy from outside the state than we're producing within

3 Texas. This is due to narrowly focused energy policies as

4 well as tremendous growth and demand for that power over the

5 last 20, 25 years.

6 The opportunity -- if you think back, if

7 you're aware in the r20's and '30's in Texas and most of the

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 of the 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 put up lines, the customers who

15 wanted the utility power were forced to disable their

16 independent generating equipment, so they couldn't have it

17 both ways. That seems to be the mentality that the

18 utilities have kept up 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 legislation provides a chance to implement a lot of

22 these changes in our life-styles. Just having the choice of

23 electricity providers 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 that the electric utilities realize

2 the implications of the tremendous success of the breakup of

3 the AT&T telephone monopoly. Maybe we need to look at

4 something like that in the electric utility monopoly. The

5 separation of the electric generation facilities from the

6 distribution grid, while making the grid accessible to any

7 qualified electric producer, would enhance competition,

8 while doing wonders for the economic health of businesses

9 providing the infrastructure to these independent power

10 producers, not to mention bring down the cost of electricity

11 and clean up the air, which is why we are all here.

12 A large array of co-generated --

13 co-generating industrial sites as well as traditional and

14 renewable energy sources will eliminate the fear of massive

15 power blackouts that exist with the current inefficient,

16 centralized power system. The technology to safely feed

17 electricity onto the grid from scattered production sources

18 has been available for years.

19 The future in electric power must include

20 clean air. Coal is not a clean power source. Nuclear is

21 too expensive and will end up costing more for plant

22 decommissioning than it is for the construction. That is

23 until we're passed along the cost here for the third time

24 for Comanche Peak. The bottom line is nonpolluting

25 renewable electric energy sources is the answer. It's the
53

1 future and everybody can have it. Thank you for the

2 opportunity to speak.

3

4

(Applause)

MR. CAMERON: Thank you.

5 Molly Rooke Seay, please.

6 MS. ROOKE SEAY: I'm Molly Rooke Seay. I

7 live in Dallas and I'm here 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 of the 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 of the pUblic

15 interest and environmental groups that I am concerned with,

16 and the polls show that -- 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 from private citizens. Most of them haven't a

24 clue that any of this is going on. They don't know how to

25 get involved. They don't know what the process is or how to
54

1 get involved in it. So I hope that you will look at having

2 more pUblic notice, real notice of pUblic hearings and ke~p

3 in mind that even when you do put notice out that it's hard

4 to get the attention of the pUblic 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'm just going to be speaking generally about

9 issues. Like I said, I want you to be looking at the

10 comments that will be prepared and submitted to 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 of the

14 implementation of these rules, and to use all the authority

15 and power that you have to write the strongest rules

16 possible to protect pUblic health.

17 And urge you not to allow any of the

18 reductions that could be allowed through the switching of

19 one kind of reduction or a claim for reduction other than

20 actually reducing emissions at any of these plants.

21 Anything other than actually reducing emissions I think is a

22 great idea, but should be just on top of it if they want to

23 do the right thing, and wouldn't that be nice if companies

24 decided to do what's right for pUblic health.

25 I also hope that you will be requiring that
55

1 the grandfathered power plants meet today's best available

2 control technology or new federal source performance

3 standards for other pollutants, 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/Fort Worth area where we're getting

7 lots of the transport from these power plants into our area.

8 And especially these from East Texas which have been shown

9 to contribute significantly to our ozone exceedences in the

10 Dallas/Fort Worth area.

11 I am sorry to say that this last summer with

12 it being so hot and with the air pollution and ozone being

13 so high it's the first summer that I ever had breathing

14 difficulties to the extent that I started using an inhaler,

15 and I hate to seriously consider moving away from the area.

16 I do like it here 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 of power in the rule making to do the

19 strongest and best that you can to protect public health.

20 Thank you.

21

22

(Applause)

MR. CAMERON: Gene Burke, if I'm pronouncing

23 it correctly, had a question mark on the presentation of

24 testimony. I would ask if you wish to present anything at

25 this time.
1 MR. BURKE: No, thank you.

56

2 MR. CAMERON: Has anyone else who has

3 registered who did not register to speak, do they wish to do

4 so now?

5 MR. SAYE: Sir, I would just like to make a

6 comment or two. I've been retired 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 want me?

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 just want to make two comments. One is

14 how many ozone days, not alerts, do we have? I read in the

15 paper it was eight in eight months.

16

17

MR. CAMERON: I'm not certain.

MR. SAYE: No? Well, that's not very much.

18 Two, I belong to an engineering organization

19 and there's discussion between oil companies and power

20 companies to use the power companies' gases to get more oil

21 out of the 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 it pushes the

24 oil through. That's the only two things I had.

25 MR. CAMERON: Is it?
1

57

MR. SAYE: You may not have to reduce the

2 gases, just get rid of them in the ground.

3

4

MR. CAMERON: Thank you, sir.

MR. SAYE: Oh, another thing. If you need

5 gas, not coal, Russia has an area of the 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 of the

8 Arctic Circle, but it's there. It will be used som~day.

9 MR. CAMERON: Okay. Is there anyone who

10 might have come in late who would want to speak? Very good.

11 I would like a couple of things. If you're wishing a copy

12 of the 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, if you have any written 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 comment period for this proposal is 5:00 p.m., October 11th.

19 And if no one else is wishing to speak I will close the

20 hearing now. Thank you.

21 (Public Hearing concluded at approximately 3:00 p.m.)

22

23

24

25
58

1 C E R T I F I CAT E

2 THE STATE OF TEXAS)

3 COUNTY OF ----)

4 I, curtis High, a certified Shorthand Reporter in

5 and for the State of Texas, do hereby certify that the

6 above-mentioned matter occurred as hereinbefore set out.

7 I FURTHER CERTIFY THAT the proceedings of such were

8 reported by me or under my supervision, later reduced to

9 typewritten form under my supervision and control and that

10 the foregoing pages are a full, true, and correct

11 transcription of the original notes.

12

13

14

15

16

17

18

19

20

21

22

23

24

25

IN WITNESS WHEREOF, I have hereunto set my hand and

seal this 1...7;ft..day of 0(' -r{)IS £;1J , 1999.

c/~~vc/,..,. CURTIS HIGH, Texas CSR 484

Expiration Date: 12/31/

600 North Pearl, suite 640

Dallas, Texas 75201

(214) 220-2449
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 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:

a record ofexcellence

800 Brazos • Suite 340 • Austin. Texas 78701 • 512-474-2233
2

PRO C E E DIN 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 Regulation Development Section. Also other staff

10 members here tonight are Mr. Kerry Drake, Mr. Brian

11 Christian, Mr. David Schanbacher and Patrick Crimmins.

12 We're going to do something a little bit

13 different at this 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 that hearing we took comments not

17 only on Senate Bill 7, but also on the sUbject of this

18 hearing, Senate Bill 766. We will continue that process

19 here and accept comments on both pieces of legislation.

20 For those of you 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 staff or

23 cross-examination of the witnesses. As we did before the

24 meeting, we will be glad to stick around after the hearing

25 is closed to answer any questions on the proposal that you
3

1 might have.

2 I would also ask that if you have not

3 registered, please do so. Also, if you would like to

4 receive a copy of the 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. And with that, I

7 will go ahead and call our first commenter, Mr. Foy Moss.

8 Come up to the lectern, please, and if you

9 could provide the spelling of your name for the Court

10 Reporter.

11

12

MR. MOSS: I'm sorry.

MR. CAMERON: If you could provide the

13 spelling of your name for the Court Reporter for the record.

14 MR. MOSS: Yes, I'm Foy Moss. I apologize I

15 just got out -- Foy E. Moss, 1216 Park Row Place, Irving,

16 Texas. I'm a native Texan and it concerns me greatly some

17 of the 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 of Texas and talking about limiting the

20 ability to drive our automobiles and what will be taking

21 place.

22 I'm encouraged by some of the things I do --

23 I apologize, I don't know if I'm talking on Senate Bill 7 or

24 766. It makes no difference; the topic is basically the

25 same. I would like to see the ability to continue the
4

1 growth within 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 think we better all get together on this thing

4 and we better be doing it pretty quick.

5 All I have are a few suggestions if you-all

6 will bear with me. I'll give a list of several of them, and

7 in no particular order. These are just as they kind of came

8 to me. You know, from some of the things that I've been

9 seeing that TU has got about one year to get their

10 facilities up to standards. They may have several years. I

11 don't know what the big long hangup is. Whether the new

12 plant is pretty efficient, older ones are dirty as all

13 get-out. If one is dirty, clean it up or shut her 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-split trying to

21 meet the demand.

22 What else can we do to eliminate some of the

23 driving around the Metroplex, North Texas? I look around, I

24 see the malls going like crazy seven days a week. Maybe we

25 need to shut those puppies down. I'm talking about retail
5

1 establishments on Sundays and Mondays. You can't get it

2 done in five days, you're not going to get it done. A lot

3 of people use an excuse to go to the mall just to 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. Some people got it at age 14. You

7 realize how many people we can take off the road if you

8 raise the driving age to 18, or a high school graduate? I

9 think it's a common sense approach. Number two, it might

10 help the drug situation if some of these 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't have

15 insurance. Driving is a privilege, it is not a right. If

16 you don't have insurance, state law says you're supposed to,

17 you're off the road.

18 Same thing goes for inspection stickers and

19 current license plates. There's a lot of funny stuff going

20 on in inspection stickers -- inspection stations; false ones

21 and everything else. I think the State of Texas 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 check the

25 insurance, the tags, et cetera, tagged in to the state
6

1 computer showing all valid insurance. No more of these

2 funny cards that don't really have valid policies backing

3 them up.

4 Why are we busing kids? 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't know how much pollution would

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 not use DART? Start school just a

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 if that 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, and two 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 think these

22 bottlenecks need to be'looked at and figure out how we can

23 keep traffic moving at a hundred precent 100 percent of the

24 time.

25 The other one that comes down, I'm back on
7

1 insurance. I apologize. This came in no particular -- just

2 as I came up with these ideas. We have 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 six month

5 basis. You pay it up front 100 percent of the time. If you

6 don't pay your insurance bill -- there's a lot of people who

7 are going right now, they just don't have insurance.

8 By paying it 100 percent up front, the only

9 time you get a refund is if you 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 of Texas should be 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 ask the question: Should we

18 be limiting fireplaces -- wood burning fireplaces, both in

19 construction and in their use except under threatening life

20 events, severe freeze, no energy, it being restricted,

21 et cetera? These are just a few of the ideas that kind of

22 popped into mind.

23 And then I got to thinking, Texas is a big

24 state. A lot of people 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 it be in Dallas, et cetera.

5 The same goes for 1-20. We've got it close

6 to the south of the Metroplex currently. It may need to be

7 moved further to the south to help the smog situation here

8 in the Metroplex. Just a suggestion. 1-30 might ought to

9 follow the northern part of the 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 at Mineral

12 Wells. Again, get this traffic out of the 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 of their 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 an hour. I had a

19 Buick wagon once upon a time and the overdrive did not kick

20 in until 60 miles an hour. I'm not 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 it was for -- not

23 safety, but gas economy, et cetera. My fuel savings dropped

24 five miles to the gallon as a result.

25 I think Texas needs to withdraw its bid to
9

1 the Olympics. We don't need the extra cars driving into the

2 area and we 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 of congested here, to allow automobiles to run

7 at a fuel efficient speed rather than sitting in a parking

8 lot on LBJ Freeway at 5:00 o'clock traffic. I don't think

9 they're very -- speed limits don't matter when you're

10 sitting in a parking lot. I think a car idling at ten miles

11 an hour pollutes 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 of reviewing it and we do plan to submit detailed

21 comments before the -- the deadline.

22 I do want to give a few preliminary comments,

23 you know, about what we will probably be commenting on in

24 our letter. Of course first of all just in general EPA does

25 support the overall concept of 766, which is to achieve
10

1 reductions, because we believe the air quality can benefit

2 from giving protection to the Bill as operated and, you

3 know, implemented correctly the way it is designed to.

4 We do have some comments and, you know, I

5 will try to hit on some of the highlights. You know,

6 certainly, I mean, the Bill, you know -- you know rules do

7 have a potential for, you know, obtaining substantial

8 reductions in the air pollutants and certainly, you know,

9 EPA would understand that these reductions would be credited

10 under the state implementation plan process for, you know,

11 helping to attain and to maintain compliance with the

12 National Ambient Air Quality standards, which is the

13 standard EPA has adopted for protection of the health and

14 welfare of the citizens of the United states.

15 Of course if Texas or, you know, industry

16 or -- wants to use some of these reductions for the purpose

17 say of netting, you know, certainly the Act does -- lack

18 sources to net out some of the major new source review

19 processes. Certainly, you know, as long as they are

20 credible, which means one of the requirements would have to

21 be surplus, meaning in addition to any other applicable

22 requirements. Just simply reducing just to meet what's

23 already required under the regulations, you know, is not

24 credible for netting. It's not credible for offsetting any

25 proposed increases that would have occurred~
11

1 Of course, you know, the other thing too is,

2 you know, I'm sure is credibility of any kind of decrease is

3 establishing the appropriate baseline which is used in the

4 planning purposes for demonstrating attainment and

5 maintenance of the air quality 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 did we see, you know, where there was a

11 clear definition of a grandfathered facility and by -- I

12 think what 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. You know, 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 of the 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 Ambient Air Quality

25 Standards, it's like a general achievable technology.
12

1 Of course some concerns that we have,

2 certainly while 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 reduction permit. And how would 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 thank you, very much.

24 MR. CAMERON: Thank you.

25 I have no other indications on the sign-up
13

1 sheet anyone wanted to speak. Is there anyone who

2 registered to -- anyone who's registered who did not

3 register to speak wish to speak or wish 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 ask you if you have not provided an address

8 for a copy of the 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

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18

19

20

21

22

23

24

25
14

1 CERTIFICATE

2 THE STATE OF TEXAS)

3 COUNTY OF

4 I, curtis High, a certified Shorthand Reporter in

5 and for the State of Texas, do hereby certify that the

6 above-mentioned matter occurred as hereinbefore set out.

7 I FURTHER CERTIFY THAT the proceedings of such were

8 reported by me or under my supervision, later reduc~d to

9 typewritten form under my supervision and control and that

10 the foregoing pages are a full, true, and correct

11 transcription of the original notes.

12 IN WITNESS WHEREOF, I have hereunto set my hand and

13 seal this .....:-L. /J I day of __---:;a:...-C::E:...-~..;../..::o'--'-/"'--3E=__=_/L/_=_ , 1999 .

14

15

16

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25

"---/--I-:::::f~~--e::;z::::.~, CURTIS HIGH, Texas/CSR' 4~~/~"f! Expiration Date: 12/31/~U

600 North Pearl, Suite 6 0

Dallas, Texas 75201

(214) 220-2449
INDEX OF ORAL TESTIMONY

October 7, 1999, Houston, 9:00 am

Reference Number

0-1

0-2

0-3

Submitted by

Jane Laping, Mothers for Clean Air

Subject: SB 7 and SB 766

Ben Cannine, Reliant Energy

Subject: SB 7

Fred Manhart, Entergy

Subject: SB 7

0-1

0-2

0-3

October 7, 1999, Houston, 12:00 pm

Brandt Mannchen

Subject: SB 766

Mark Muhich, Sierra Club

Subject: SB 766

George Smith, Sierra Club

Subject: SB 766
~-------- -- Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Houston Date: October 7, 1999 (9:00 a. m.)

Concerning: Electric Industry Restructuring (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

We,sJ j 7~Oo.rk AY"\~(.<\" /IJ~l-iOMI PbW~

Yes No (§ No

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...--~ED M/jlllfl1trT ElfrlE/(t;'r leA/15 (feD No Yes ®
Texas Naturai Resource Conservation Commission

Public Hearing Registration

Location: Houston Date: October 7, 1999 (9:00 a. m.)

Concerning: Electric Industry Restructuring (SB 7) ,

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the conunission's

(please Print) (Circle One) rule(s) once adopted?

\. 1\ (Circle One)

~lXY\ ~l\ t~ I;=- '~'1l

\"S--'\Ue~"\ 1S'}.~ Yes .(0 B No

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Yes @ G No

5v.,'/·e 6t.JO

. Yes No Yes No

Yes No Yes No

Yes No Yes No

, Yes No . Yes .No

Yes No Yes No
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Houston Date: October 7, 1999 (12:00 p. m.)

Concerning: Permitting of Grandfathered Facities (SB 766)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

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Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Houston Date: October 7, 1999 (12:00 p. m.)

Concerning: Permitting of Grandfathered Facities (SB 766) ,

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(Please Print) (Circle One) rule(s) once adopted?

(Circle One)

t () I t.( fA) _ ,.,!!_ 5131

/ ~. {rl 1~otJr 5i)7~~ ~o Yes No

Yes No Yes No

Yes No Yes No

Yes No Yes No

Yes No Yes No

J . Yes No Yes No

Yes No Yes No
TRANSCRIPT 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\'"

a record ofexcellence

800 Brazos . Suite 340 . Austin, Texas 78701 . 512-474-2233
1 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.

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3

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.

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1

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) 474-2233
1 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.

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6

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.

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7

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

An
8

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.

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9

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.

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10

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) 474-2233
11

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.

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12

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.

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1

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) 474-2233
1 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) 474-2233
TRANSCRIPT 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:

a record ofexcellence

800 Brazos . Suite 340 . Austin, Texas 78701 . 512-474-2233
1 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 I d

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.

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We
3

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.

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1

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.

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1 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

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6

1 that vehicle, it's very hard to say what it was

2 over the past year.

3 1 1 m 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.

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1 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.

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8

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.

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9

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.

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10

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.

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11

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.

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12

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) 474-2233
1 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.

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14

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) 474-2233
INDEX OF ORAL TESTIMONY

October 7, 1999, Beaumont, 6:08 pm

Reference Number

0-1

0-2

Submitted by

Richard C. Harrel, Clean Air and Water, Inc.

Subject: SB 7 and SB 766

Susan Parker Leigh

Subject: SB 7 and SB 766

0-1

October 7, 1999, Beaumont, 9:00 pm

Rev. Roy Malveaux, People Against Contaminated Environments

Subject: SB 766
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Beaumont Date: October 7, 1999 (6:00 p. m.)

Concerning: Permitting of Electric Generating Facilities (SB 7)

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

/-

./

~~111r-ri (4 !/arr~j tlet.vIt'r-+'.M-b/:z;;G @NO G No

7£~ SwA-,J ~tt Yes ® Yes

~;~ L 6~AtW-r

T,/i//l.CC- Yes @) Yes

; 73.m"+,

J5:sttfl.. PaA<t,ro L-(,;'1h.. dI @ No c9 ®

Yes No Yes No

Yes No Yes No

Yes No Yes No
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Beaumont Date: October 7, 1999 (6:00 p. m.)

Concerning: Permitting of Electric Generating Facilities (SB 7) ,

Narne and Address Representing Presenting Oral Would you like to receive a

Testimony? copy of the commission's

(please Print) (Circle One) rule(s) once adopted?

(Circle One)

Yes No Yes No

Yes No Yes No

/'\ /\ , .... .A

IfJwffJ-~ II(d~~ fJllj ~C61V( Yes No No

~~' ~~, I (

Yes No Yes No

Yes No Yes No

J . Yes No Yes No

Yes No Yes No
Location: Beaumont

Texas Natural Resource Conservation Commission

Public Hearing Registration

Date: October 7, 1999 (9:00 p..!...-om~o) _

Concerning: Permitting of Grandfathered Facities (SB 766)

Narne and Address

. (please Print)

Representing Presenting Oral

Testimony?

(Circle One)

Would you like to receive a

copy of the commission's

rule(s) once adopted?

(Circle One)

~o CJ}-Mc.puS

~tRru~\1 \,K

.,..

,,

Yes .~~

Yes No

@ No

. Yes

Yes

Yeses

Yes

Yes

Yes

Yes

No

No

No

•

No
Texas Natural Resource Conservation Commission

Public Hearing Registration

Location: Beaumont Date: October 7, 1999 (9:00 p. m.)

Concerning: Permitting of Grandfathered Facities (SB 766) ,

Name and Address Representing Presenting Oral Would you like to receive a

Testimony? copy ofthe commission's

. (please Print) ~~IO<'~ (Circle One) rule(s) once adopted?

Ott:It.<r~J- .. A. "- (Circle One)

30HtJ f!#11-l . f 0v1 .SaJ(~ Wt:~1J , J(, G Qp "'Z(,lf Of~ $thit6li:J, ~."""A Yes Yes

Yes No Yes No

Yes No Yes No

Yes No Yes No

Yes No Yes No

I

Yes No No . Yes

Yes No Yes No
TRANSCRIPT 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}1~\? TO1:f}

a record ofexcellence

800 Brazos • Suite 340 • Austin, Texas 78701 • 512-474-2233
1

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

18 sign-up sheet in front of me.

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.

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3

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) 474-2233
1 Harrel. I'm the president of the local citizens

4

2 organization, Clean Air and Water, Inc., that has

3 been continuously active in this area since 1966.

4 Clean Air and Water, Inc., is

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 grand fathered 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) 474-2233
1 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.

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6

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 grand fathered 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) 474-2233
1 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) 474-2233
1

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) 474-2233
TRANSCRIPT 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:

a record ofexcellence

800 Brazos • Suite 340 • Austin, Texas 78701 • 512-474-2233
1

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.

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3

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.

22 REV. MALVEAUX:

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) 474-2233
4

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.

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5

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.

4 On Page 5 of that proposal, second

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 grand fathered 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) 474-2233
6

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 grand fathered 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) 474-2233
1 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 grand fathered 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) 474-2233
1 11th at 5:00 p.m.

8

And I ask again if you 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

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20

21

22

23

24

25

KENNEDY REPORTING SERVICE, INC.

(512) 474-2233
9

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