p

y

Four Corners Electric Power Station

P.O. Box 355

Fruitland, NM 87416-0355

Re: Receipt and Preliminary Review of PSD Permit Application for the APS

— Four Corners Electric Power Station

Dear Mr. Bloomfield:

The U.S. Environmental Protection Agency Region 9 (EPA Region 9) acknowledges receipt of your application on April 28, 2014, for a permit under the Prevention of Significant Deterioration (PSD) program in 40 CFR 52.21 for the installation ofselective catalytic (SCR) reductions systems on Units

4 an5 at the Four Corner Electric Power Plant (FCPP SCR Project). We also acknowledge your withdrawal ofyour previously submitted permit application documents for this project. EPA Region 9 has begun our review ofyour new application, including supporting documentation. As ofJune 18, 2014, your application could not be determined complete. We are requesting the following items, which are needed to determine that your application is complete:

PSD Applicability

1. Baseline Actual Emissions

— Per 40 CFR 52.21 (b)(48)(i)(a), in determining the baseline actual emissions for Units

4 and 5, the average rate shall include emissions associated with startups, shutdowns, and malfunctions. The application does not explicitly state that emissions associated with startup, shutdown, and/or malfunctions were included in your emissions analysis. Please confirm that the emissions analysis includes emissions associated with startups, shutdowns, and malfunctions, with any supporting information available.

2. Baseline Actual Emissions

— Per 40 CFR 52.2 1(b)(48)(i)(b), in determining the baseline actual emission, the average rate shall be adjusted downward to exclude any non-compliant emissions that occurred while the

source was operating above any emission limitation that was legally enforceable during the chosen 24-month period. Please confirm this is the case for your emissions analysis by, for example, identifying any deviations reported as part of your title

V permit reporting requirements during the 24-month period.

3. Projected Actual Emissions

— Per 40 CFR 52.2 1(b)(41)(i), project actual emissions means the maximum annual rate, in tons per year, at which an existing emissions unit is projected to emit a regulated NSR pollutant in any one ofthe 5 years (12-month period)following the date the unit resumes regular operation after the project, or in any one ofthe 10 years following that date, ifthe project involves increasing the emissions unit’s design capacity or its potential to emit that regulated NSR pollutant and full utilization ofthe unit would result in a significant emissions increase or a significant net emissions increase at the major stationary source. The FCPP SCR Project is expected to be operational in mid-2018. This emissions analysis is subject to the 10 year period and, as such, your application should include projected emissions based on years 2018 through 2027. The application includes annual capacity factor information, in Table A-8, information for years 2014 through 2024. Please provide projected operational information for years 2025 through 2027.
Please provide additional details on the basis for the annual capacity factor information provided in the

application, so that it is clear you have considered all relevant information as required by 40 CFR

52.21(b)(41)(i).

5. Contemporaneous Emissions Increase — Your emissions analysis includes contemporaneous emission

increases associated with the addition ofthe limited-use auxiliary boiler. Please confirm the construction and

operation dates for this equipment, so that it is clear this equipment was installed during the

contemporaneous period.

Best Available Control Technology Analysis

6. Air Preheater — The FCPPH2S04source test provided in your application indicates SO3emission reductions

across the air preheater of greater than 90%. However, in your analysis of expected SO3reductions across the

air preheater after installation of SCR, a 50% reduction across the air preheater was used. The application

indicates that after SCR is installed partialloccasional bypassing ofthe economizer will be required. This

may cause the flue gas entering the air preheater to be hotter than it has been historically and may alter the

SO3reductions achieved across the air preheater as the flue gas temperature may be above the dew point for

H2S04.Please provide (1) a basis for the 50% reduction assumed and (2) a temperature profile showing the

expected changes in temperature from the inlet and outlet ofthe air preheater, before and after the installation

of SCR, and compare it to theH2S04dew point.

7. Control efficiency across the baghouse — Based on source test data, your application assumes SO3reductions

of 57.39% across the baghouse and wet FGD. However, based on information available in the literature, 90%

reduction across the baghouse is expected. Please provide a discussion on why the baghouse cannot achieve

90% reduction.

In order to move forward with our review of your application in a timely manner we respectively request a

response to these items by July 2, 2014. Your review contact for this application is Lisa Beckham with the EPA

Region 9 Air Permits Office. She may be reached at (415) 972-3811 or beckham.Iisa2epa.gov.

Sinc 7,/Rios

Chief, Permits Office

cc: Mark Hajduk, APS (via email),

Chas Spell, APS (via email),

Raju Bisht, Navajo Nation EPA (via email)