# ______

ManagerneiiSn



### LEGAL NOTICE

The 

### Department of 

### Natural Resources and Environmental ‘—q 

### Control (DNREC), 

### Air Quality Management section will conduct 

## a public hearing on a proposal to amend 

### the

- State of Delaware.Regulations Governing the Control of 

### Air Pollution

- Regulation No. 1146 

### “ELECTRIC GENERaT 1MG UNiT (EGIJ) 

### MULTI-POLUJTANT REGULATION”

RegulatIon 1146 provldessulfur dioxide (S02), nitrogen oxides (Nox), and mercury emissions iimitIons for Dela_. ware’s coal-fired and residual fuel oil-fired EGUs with nameplate capacity ratings greater than or equal to 25 (‘“\

, megawatts (MW). Among the limitations established by. ç1 Regulation 1146 is an annual S02 mast emissions cap of 

## a—.... CD 2427 tons per year for Cclnectlv Delmarva Generation’s 

## ‘c- 5

‘ Edge Moor UnIt 5 The 502 mass cap isidentlfied in Ta- 

### ‘c.z-’ ble 5-1 of Regulation 1146. Edge Moor Unit 51s aresidu

# V

al fuel-oil fired EGU with a nameplate rating of 446 MW.
Regulation 1146 was promulgated In November 2006, and

on December 5, 2006 Conectiv appealed essentially all of c1 the Regulation 1146 provisIons that applied to the Edge Moor facility. On December 17, 2008, Conectiv and. DNREC signed an agreement that resolves the appeal. The purpose of this proposed amendmeht i to satisfy one provision of that agreemenb modify the S02 mass emis sions limit associated with Edge Moor Unit 5 (as constrained in 1146’s Table 5-1) from 2427 tons per year to 4600 tons per year, beginning in calendar year 2009. No other changes tO 1146 are being proposed, Including no change to the existing requirement for Unit 5 to bum only• low sulfur oil.

-

The public hearing on this proposed amendment will be held Tuesday, May 26, 2009; beginnlrig at 615 pm In the Priscilla Building Conference Room, 156 South State 

## Street, Dover, DE.:

interested parties ‘may submit comments in writing on this proposed amendment prior to the public hearing and/or comments may be presented either orally or in writing at the public hearing. If you are unable to attend the public hearing or wish to submit your comments in advance of the public hearIng, please address your com ments to: Bob Clausen, 156 S. State St., Dover, DE 19901; by fax (302-739-3106); or by e-mail: robert.clau sen@state.de.us. The public comment period will remain open until at least May 30, 2009 for written comments.

For additional information please call Bob Clausen or Ron Amirlkian, In Dover at (302) 739-9402. The proposed regulation can be viewed on the Department’s website atttnI/www.awm.delaware.oov1Info/ReosIPagesIAQMNOTICE OF PUBLIC HEARING CD CD

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PlansRegs.aspx.

V Air Quality Management Section Division of Air and Waste Management 156 S. State 

### Street Dover, DE 19901 318946 DSN 4/26/09CC-

CMailing:TheNewsJournalP0Box15505Wilmington,DE19850SundayNewsJournalStreetTheNewsJournalTheNewsJournal950W.BasinRoadNewCastle,DE19720(302)324-2500 The News Journal AFFIDAVIT

OF PUBLICATIONSTATEOFDELAWARECOUNTYOFNEWCASTLEPersonallyappearedbeforemethis27thdayofApril,2009:I,KristinSegner,oftheNEWSJOURNALCOMPANY,adailynewspaperprintedandpublishedintheCountyofNewCastleCounty,StateofDelaware,who,beingdulyswornstatesthattheadvertisementofS/DDNRECAirOualityManagementSection—LegalNotice-NoticeofPublicHearingwaspublishedinTHENEWSJOURNALonN/Aand/orTHESUNDAYNEWSJOURNALonApril26,2009LegalCoordinatorTitleSworntobeforemethis27thdayofApril,2009JacquelineHawkNOTARYPUBLtCStateofDelawareCommissionExpires11/071201C)CPublic

# n•DNREC-AirQuality_______ManagementSection‘EAL’NOTICE’NOTICEOFPUBLICHEARINGTheDepartmentofNaturalResourcesandEnvironmentalControl(DNREC).AirQualityManagementsectionwillconductapublichearingonaproposaltoamendtheStateofDelawareRegulationsGovernintheControlofAirPollution-RegulationNo.114ELECTRICGENERATINGUNIT(EGU)MULTIPOLL!JTANTREGULATION.’Regulation1146providessulfurdioxide(S02),nitrogenoxIdes(NOx),andmercuryemissionslimitationsforDelaware’scoal-firedandresidualfueloil-firedEGUswithnameplatecapacityratingsgreaterthanorequalto25megawattsMW).AmongthelimitationsestablIshedbyRegulation1146IsanannualS02massemissionscapof2427tonsperyearforConectivDelmarvaGeneration’sEdgeMoorUnit5.TheSO2masscapisidentifiedInTable5-1ofRegulation1146.EdgeMoorUnitisaresidualfuel-oilfiredEGUwithanameplateratingof446MW.Regulation1146waspromulgatedInNovember2006,andonDecember5,2006ConectivappealedessentiallyalloftheRegulation1146provisionsthatappliedtotheEdgeMoorfacility.OnDecember17,2008,ConecttvandDNREGsignedanagreementthatresolvestheappeal.Thepurposeofthisproposedamendmentistosatisfyoneprovision,ofthatagreement:modifytheS02massemissionslImItassociatedwithEdgeMoorUnIt5(as.ConstralnedIn1146’sTable.5-1)from2427tonsperyearto46(10tonsper.year,beglnnlng’togalendar,year2009.Nootherchangesto’1146arebeingproposed,IncludingnochangetotheexistIngrequirementforUnit5tobumonlylowsulfuroil.ThepublIchearingonthisproposedamendmentwillbeheldTuesday,May26,2009,begInningat6:15pminthePriscillaBuildingConferenceRoom,156SouthStateStreet,Dover,DE.Interestedpartiesmaysubmitcommentsinwritingonthisproposedamendmentpriortothepublichearingand/orcommentsmaybepresentedeitherorallyorinwritingatthepublichearing,Ifyouareunabletoattendthepublichearingorwishtosubmityour.commentsinadvanceofthepublichearing,pleaseaddressyourcommentsto:BobClausen,156S.StateSt.,Dover,DE19901;byfax(302-739-3106);orbye-mail:robert.clausen@state.de.us.ThepubliccommentperiodwillremainopenuntilatleastMay30,2009forwrittencomments.ForadditionalInformationpleasecallBobClausenorRonAmirikian,inDoverat(302)739-9402.TheproposedregulationcanbeviewedontheDepartment’swebsiteathttp:Ilwww.awm.delaware.oov/InfolBoos,‘ageslAQMPlansRecjs.aspx.AirQualityManagementSectionDivisionofAirandWasteManagement156S.StateStreetDover,DE199014/26-NJC1THESTATEOFDEAWAREDEPARTMENTOFNATURALRESOURCESANDENVIRONMENTALCONTROLDIVISIONOFAIRQUAILTYCONTROLInRe:ProposedAmendmentsto7DelawareAdministrative)Code,Regulation1146TRANSCRIPTOFPROCEEDINGSDNREC156SouthStateStreetDover,DelawareMay26,20096:18p.m.HEARDBEFORE:ROBERTP.HAYNES,ESQ.APPEARANCES:ROBERTCLAUSEN-DNRECRONAMIRIKIAN-DNRECWILCOX&FETZER1330KingStreet,Wilmington,Delaware19801(302)655—0477www.wilfet.corn\%____________________________WILCOX&FETZERLTD.RegisteredProfessionalReporters0RIGI1\ii\I...1

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0116 1 extremiy

tight deadlines,

with limited
space 2 avai-l-able, in-o-r-de-r

to comply
wi-th
the 3 regulation’s

time tables

for compliance. 4

In order

to preserve

its rights,

the 5 company

also elected

to file

an appeal

of the 6 regulation pending

the outcome

of its engineering 7

and technical analyses. 8

Following

the completion

of these 9 studies

and promulgation

of

a final regulation

by 10 DNREC,

the company filed

a compliance

plan with 11

the Department

in June, 2007, that shows some 12 innovative

and advanced technologies

in order

to 13 meet
the Department’s

final emission limitations. 14

The company

has elected

to retrofit 15 advanced

dry sorbent injection systems

on the two 16 coal-fired

units

at Edgemoor, Edgemoor
units

3 17

and

4, for sulfur dioxide control. 18

In addition,

the company

will

be 19 reducing

the sulfur

in fuel content

of the 20 residual

oil

it receives

for use

in unit number 21

5. Nox emissions

from
all three units will 22 further

be controlled through advanced combustion 23 technologies

and post—combustion

control systems. 24 Each

of the coal fired units will also

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\1capitaloperatinginvestmentsandadvanced2pu11uLionc-o-ft-r-o-lsprovidetheneededf1exiThiTity3toensurecontinuedviabilityofthesefacilities4atgreatlyreducedemissionrates.5Assuch,Conectivrespectfully6requeststhattheDepartmentadopttheproposed7changestoregulationnumber1146.Thankyou8verymuch.9MR.HAYNES:CanIask,I’llaskthe10Department,howwasthe4600numberarrivedat?11Wasthatacompromisenumber,oristheresome——12MR.CLAUSEN:Itwasacompromise13number,andbasicallyitallowedtheunit,asStu14mentioned,witha.5percentsulfurfuel,tocome15uptowhatisbasicallyanhistoricnumberof16capacityfactorfortheunit.Thatcapacity17factorissomewhereontheorderof45percenton18anannualbasis,andIthinkthe4600essentially19correspondstothatvalue.20MR.HAYNES:Butbasedonyourprior21commentsintotherecord,youindicatedthat22basedonthehistoricandeconomics,thatyoudid23not—-theactualoperatingperformancegoing24forwardshouldnotbechangingthatmuch?WILCOX&FETZERLTD.RegisteredProfessionalReportersI q

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And we’ll keep
the public comment 2 recordopen

untii

the end

of tThe morith, andthöë 3 public comments

will also

be part

of the record. 4

Thank

you all for coming. 5

(Hearing concluded

at 6:50 p.m.) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24\_______________WILCOX&FETZERLTD.RegisteredProfessionalReporters22123456789101112131415161718192021222324REPORTER’SCERTliICATEI,JULIANNELaBADIA,RegisteredDiplomateReporterandNotaryPublic,doherebycertifythattheforegoingrecord,pages1through21inclusive,isatrueandaccuratetranscriptofmystenographicnotestakenonMay26,2009,intheabove—captionedmatter.INWITNESSWHEREOF,Ihavehereuntosetmyhandandsealthis1stdayofJune2009,atWilmington.JulianneLaBadia,RDR,CRRWILCOX&FETZERLTD.RegisteredProfessionalReportersC’P.O. Box 6066 Newark,

DE 19714-6066

(- conectiv enere’v

JUN

Qj 2009 VIA EMAIL
AND

US MAIL A New Generation

of Energy May
29, 2009 Mr. Robert Haynes, Esquire Hearing Examiner Delaware Department

of Natural Resources & Environmental

Control 89 Kings Highway Dover,

DE 19901 RE: DNREC Proposal

to Amend Regulation

No. 1146 Electric Generating

Unit Multipollutant Regulation Dear Mr. Haynes, As

a follow-up

to the recent public hearing regarding

the Delaware Department

of Natural Resources

& Environmental Control’s (DNREC’s

or the Department’s)
proposal to amend Regulation

No. 1146 (Electric Utility Generating

Unit Multipollutant Regulation), Conectiv Delmarva Generation (Conectiv

or the Company)
would
like

to submit some additional comments regarding erroneous

and inaccurate information

that

is contained

in certain comments submitted

by

a member

of the public. In particular,

the Company would
like

to respond

to Mr. John Austin’s email

to the Department’s

Mr. Robert Clausen, dated May
21, 2009 (entered

into the May
26, 2009 hearing record

as Exhibit Number

6).

In his email correspondence,

Mr. Austin states that the DNREC proposal

will allow

the Company

to run Unit

5 “at higher capacity utilization and without

a reduction

of emissions

until Jan

1, 2012 when
the emission

rate must

be cut from

.37 lb/MMBTU

to .26 lb/MMBTU

by other provisions

of Regulation
1146.” Conectiv would
like

to take this opportunity

to correct

this statement.

First, Unit

5 is an electric generating facility

that burns residual

oil
as its primary

fuel.

As such,
the SO 2 lb/MMBTU emission

rates stated

in Mr. Austin’s email

are not applicable,

as they pertain only

to coal fired electric generating facilities. Regulation

No. 1146, Section

5.5 requires that residual

oil fired units (such

as Edge Moor Unit

5) limit
the sulfur content

of the residual

fuel
oil received

to no more than 0.5%

by weight, effective January

1, 2009. Prior

to the adoption

of Regulation

No. 1146, Edge Moor Unit

5 was permitted

to receiveMr.RobertHaynesCCDNRECMay29,2009Page2_____________________fueloilwithasulfurcontentofnomorethan1.0%.Assuch,existingDNRECRegulationNo.1146alreadyprovidesuptoa50%reductioninshortterm,permittedSO2emissionsfromthefacility.TheproposedamendmenttoRegulation1146doesnotalterthefuelsulfurlimitof0.5%byweight.AsexplainedintheCompany’scommentsprovidedatthehearing,theDepartment’sProposaltoamendtheannualpotentialtoemitSO2emissionsfromEdgeMoorUnit5from2427tpyto4600tpywouldensurethatConectiv’smultimilliondollarpollutioncontrolinvestmentsonthisUnit(includingthoseforNOxcontrol)couldaccommodateoperationofthisUnitathistoricannualcapacityoperatinglevelsshouldcircumstancesorneedsdictate.TheCompanywouldaskthatthisletterbeenteredintothehearingrecord.ThankyouforgivingConectivanopportunitytoprovideforthisclarification.Shouldyouhaveanyquestionsregardingthismatter,pleasefeelfreetocontactmeat451-5319.Sincerely,JttkLStuartWidomSr.EnvironmentalConsultantConectivDelmarvaGenerationCC:Mr.RobertClausen-DNREC,AQMSMr.RonAmerikian-DNREC,AQMSCClausenRobertL.(DNREC,From:ausIin4102000@yahoo.comSent:Thursday,May21,20095:08PMTo:ClausenRobertL.(DNREC)Cc:MarkellJack(Governor);RogaiskyJoseph(Governor);Collin.OMarra@state.de.usSubject:CommentonRegu’ation1146ChangeIntheMayDelawareRegister,DNRECproposestoincreasethemassemissionlimitofEdgemooreUnit5from2427tons/yearS02to4600tons/yearS02.TheregulatorychangeagreedtobyDNRECallowsUnit5toberunathighercapacityutilizationandwithoutareductionofemissionsuntilJan1,2012whentheemissionratemustbecutfrom.37lb/MMBTUto.26lb/MMBTUbyotherprovisionsofRegulation1146.Evenwiththecutinemissionrate,Unit5cannowberunatsuchincreasedcapacityutilizationtopotentiallynegatethebenefitsofanyemissionratereduction.UsingtheEPA’sregulatoryimpactanalyses,reviewedby0MB,costbenifitsforhealthandenvironmentalbenefitsof$7300/tonS02reduced,thisbacksidefrom2427tonsto4600tonsS02coststhepeopleofDelaware$15.86Millionperyearinincreasedhealthcostsassociatedwithasthma,cardiovasculardisease,andlungdisease.(46002427)*$7300=$15.86MillionThepromulgatedregulationshouldhavebeendefendedwithallnecessaryresources,butwasnot.Onceagain,DNREChassteppedbackformdefendingapromulgatedregulation,thatimprovedhumanhealthandtheenvironmentinfavorofasettlementwithsignificantadversepubliccosts.Theincreasedemissionswillalsoresultintheformationofadditionalfineparticulatematter(PM2.5)makingitunlikelyNewCastleCountywillbeinattainmentofNationalAmbientAirQualityStandards.WhenwillDNREC’smissionstopbeingthefurtheranceof“corporatepolluters”,butrathertheprotectionofthequalityofourairandwaterandthehealthandsafetyofourfamilies?1CCC.

C HEARING OFFICER’S REPORT TO:

The Honorable
Collin

P. O’Mara Secretary, Department

of Natural Resources

and Environmental

Control FROM:

Robert

P. Haynes, Esquire Senior Hearing Officer, Office

of the Secretary Department

of Natural Resources

and Environmental

Control RE: PROPOSED REGULATION

TO AMEND

7 DE ADMIN. CODE 1146 (ELECTRIC GENERATING

UNIT (EGU) MULTIPOLLUTANT REGULATION) DATE:

August

25, 2009 I. PROCEDURAL HISTORY On February

22, 2009,

the Secretary

of the Department

of Natural Resources

and Environmental

Control (Department), approved

the Division

of Air and Waste Management’s

Air Quality Management
Section (AQMS) request

for Start Action Notice (SAN)

No. 2009-04, which commenced

the regulatory development
process

to amend Regulation

1146

in the Department’s Regulations Governing

the Control ofAir Pollution, as codified

at

7 DE Admin. Code §11O1

et seq. (Regulation).

AQMS drafted

the proposed regulation

to amend Table

5-1

in order

to reflect

a settlement

that resolved Conectiv Delmarva Generating,

Inc’s appeal

of Regulation

1146 (Conectiv))

The Department
agreed

in the settlement

to amend Regulation
1146’s Table

5-1

in order

to allow Conectiv’s

Edge Moor Unit

S’s (Facility)

an annual sulfur dioxide (S02) limit increase
from 2,647 tons

to 4,600 tons. On May

1, 2009,

the Department

had published

in the Delaware Register

of Regulations

the proposed amendment

to Regulation

1146, which

if approved would change Table
5-1,

as referenced

in Section

5.0. The Department

also provided public‘ConectivfiledanappealwiththeEnvironmentalAppealBoardatEABDocketNo.2006-05, whichwasremovedbystipulationtobeheardbyNewCastleCountySuperiorCourtinDocketNo.07C-0l-204FS.C

n notice

of the proposed amendment

in newspapers

of general circulation

and provided notice

of

a public hearing

in order

to receive public comments

on the proposed amendment.

The Department

held

a public hearing

on May
26, 2009

at AQMS’ Dover office,

and the public comment period remained

open until June

2, 2009

as required

by Delaware’s Administrative Procedures

Act,
29 Del.

C. §10118(a). Public comments

were received

in writing

and orally

at the public hearing. AQMS’ experts
who attended

the hearing answered

the questions.

I requested AQMS

to prepare

a post-hearing technical response memorandum,

which

I received

and attach hereto

as Appendix

A 11. SUMMARY

OF THE RECOMMENDED
RECORD I determine

that the record

is complete

to support

a final decision

on the proposed amendment

and recommend

the following documents

be included

in the record:

1)

a twenty-one

page verbatim transcript

of the public hearing,

2) Department’s
exhibits admitted

at the public hearing

and described

by Bob Clausen,

the Department’s

expert

in AQMS
who drafted

the proposed regulation;

3) the written public comments including those received
from John Austin (DNREC

Ex

6) and from Conectiv (DNREC

Ex

7, and 4) AQMS’s TRM. The hearing transcript contains

Bob Clausen’s explanation

for the proposed amendment

as consistent

with
the Department’s December

2008 settlement

with Conectiv

of an appeal

it filed

to challenge Regulation

1146.

He explained

that Regulation

1146 established

limits

for nitrogen oxides (NOX), sulfur dioxide (S02)
and mercury
from

air emissions

from large electrical generating

units, which included

the Facility.

He indicated

that the. settlement’s increase

in the Facility’s annual limit from 2CC2,427tonsofS02to4,600wouldnothaveanegativeeffectofairqualitythatwouldaffectthepublic.ThebasisforhisopinionwasananalysisoftheFacility’shistoryoperationandtheestimateoffutureoperationsusingthelowsulfur(0.5%)residualfueltogenerateelectricityatthe446megawattoil-firedsteamgeneratingunitthatwasbuiltin1973.HenotedthattheoperatingcapacityoftheFacilityhadbeendecliningoverthelastfewyearsbecauseofthecostoffuelusedtogenerateelectricity.TheoperatingcapacityfactorfortheFacilitynowisapproximately10%.TheTRMexplainstheassumptionsandanalysistheDepartment’sexpertsappliedindeterminingthatriskthattheFacilitywouldemitS02atthehigherauthorizedlevelswasverylowandthattheotherreasonsforthesettlementsupportedtheproposedamendmentasareasonablecompromise.BillZak,aco-founderoftheenvironmentalgroupknownasCitizensforCleanPoweraskedseveralquestionsconcerningtheS02emissionsandthesettlement.TheDepartmentrepresentativesfromAQMSexplainedthattheS02limitincreasewasnotexpectedtoresultinanymoreS02airemissionsundernormaloperatingconditions,butwouldallowforincreasesiftheFacilitywasneededtooperateatahighercapacityfactorduetotheneedfortheFacility’selectricityduringunusualconditions,suchasaprolongedshutdownofanuclearunit.StuartWidom,aseniorenvironmentalconsultantrepresentingConectiv,spokeandprovidedwrittencommentsfortherecord.HiscommentsindicatedthatConectivsupportedtheproposedamendmentbaseduponthesettlementoftheappealofRegulation1146.HeexplainedthattheproposedamendmentwouldprovideConectivwiththeabilitytooperatetheFacilityatitsoperatingcapacityhistoriclevelswhenthepollution3C

Ccontrolequipmentwasinstalledandusinglowsulfurfuel.HenotedthatthesettlementwasbaseduponaJune2007engineeringstudyrequiredbyRegulation1146andthatthisstudysetforththeinnovativeandadvancedtechnologiesthatConectivwouldinstalltolowertheemissionstocomplywithRegulation1146’slimits.Conectivelectedtoretrofitthetwocoal-firedunitsatEdgeMoorforS02controlandbyloweringthesulfurcontentoftheresidualoilfrom1%to0.5%andinstallingadvancedburnertechnilogiesandpostcombustioncontrolsystems.ThesettlementalsoincludedConectiv’sagreementtomovetheRegulation1146dateforlowermercurylimitsfrom2013to2012.Thebasisforthe4,600tonsintheproposedamendmentwastheFacilityoperatingatanannualcapacityfactorofapproximately45%,butthiswasbasedonhistoricusebeforefuelcostincreasedandusingthelessexpensive1%sulfurcontentfuel.Thus,Mr.Clausenconcludedthattheproposedamendmentallowsahigherlimit,butinrealitytheexpectedoperatingfactorshouldremainlowbasedupontheestimatedfuelcostandoperatingtheFacilityaspartofaneconomicdispatchedsystem.III.RECOMMENI)EDFINDINGSANDDISCUSSIONIfindandrecommendthattherecordissufficientlycompletetosupportafinaldecisionthattheproposedregulationisreasonableandwell-supportedtoapprovetheproposedamendmentasafinalamendmenttoRegulation1146.IfindthattheproposedamendmentwouldallowtheFacilitytooperateandemitmoreS02onanannualbasisifitscurrentoperatingcapacityincreasedfromthecurrentlevelofapproximately10%toapproximately45%.IagreewiththeeconomicanalysisandrelyontheexpertjudgmentofAQMS’expertsthatitisunlikelythattheFacilitywilloperateathighercapacityfactorthanithasinrecentyears.Nevertheless,itisprudenttoincreasethelimitinorderto4C.0resolvethelitigationofRegulation1146.Thus,theproposedamendmentissupportedbythetangiblebenefitsfromthesettlementoftheappealofRegulation1146.Thepubliccommentsquestionedtheincreasein.S02emissionsbasedupontheincreaseinthelimitinTable5-1,buttheDepartmentexpertsindicatethatthereislittleriskthattheFacilitywillactuallyincreaseitsS02emissions.Iagreewiththewellsupportedanalys’isinAppendixAandthatthebenefitsofa•settlementalsoshouldbefactoredintotheDepartment’sRegulation1146.ThesettlementremovedtheriskofanadverseresultthatcouldhaveoverturnedRegulation1146entirely,whichisaresultthatwouldnotbegoodfortheenvironmentorpublichealth.Inaddition,thesettlementwillrequireConectivtomeetmercurylimitssoonerthanotherwiserequiredbyRegulation1146.Thus,totheextenttheproposedamendmentallowsonpapertheFacilitytoemitmoreS02emissions,therealityintheFacility’shistoricandexpectedfutureoperationsandthecostofgeneratingelectricityfromlowsulfuroilsupporttheproposedamendmentasconsistentwiththesettlement.Irecommendtherecordbeadoptedbaseduponthepublichearingtranscript,hearingexhibits,andAQMS’memorandum,whichexplainsin/detailsthereasoningandanalysisfortheproposedamendment.Ifindthattherecorddevelopedatthehearing,andAQMS’detailedtechnicalresponsedocument,willprovidedocumentarysupportforafinaldecisiontoadopttheproposedamendmenttoRegulation1146asafinalregulation,assetforthinAppendixBhereto.Ifindthatthepurposeoftheproposedregulation’samendmenttoRegulation1146isconsistentwiththeDepartment’sstatutorypurposetoprotecttheenvironment.Theamendmentisbaseduponacompromisesettlementandthatshouldbefactoredinthereasonsfortheamendment.TheDepartment’stechnicalexpertshaveconcludedthatthe5CproposedamendmentwillnotresultinanymaterialchangeinactualS02emissionsfromtheFacility.Theproposedamendment’slimitwasacceptabletotheDepartment’sexpertsandtoConectiv,whichreceivedsomedegreeofregulatoryprotectionshouldtheFacilitypossiblyexceedthecurrentannuallimitbaseduponanincreasedneedforelectricityfromtheFacility.Insum,IfindthattheDepartmentprovidedample,well-documentedtechnicalsupportforproposedRegulation1146intherecord,andthatthereisasoundandreasonablebasisfortheexerciseoftheDepartment’sstateauthoritytoissueafmalregulationthatwillprotectDelaware’senvironment,publichealthandwelfare.IV.RECOMMENDEDCONCLUSIONSBasedontherecorddeveloped,Ifindandconcludethattherecordsupportsapprovaloftheproposedregulation,assetforthinAppendixBhereto,asanamendmenttotheRegulations.Inconclusion,IrecommendtheSecretaryadoptthefollowingfindingsandconclusions:1.)TheDepartmenthasjurisdictionunderitsstatutoryauthoritytomakeadeterminationinthisproceeding;2.)TheDepartmentprovidedadequatepublicnoticeoftheproceedingandthepublichearinginamaimerrequiredbythelawandregulationsasdiscussedinthisreport;3.)TheDepartmentheldapublichearingontheproposedregulationandplaninamannerrequiredbythelawandregulations;4.)TheDepartmentconsideredalltimelyandrelevantpubliccommentsinmakingitsdeterminationontheproposedregulationandplan;6C’5.)TheDepartment’sfinalregulation,aspublishedintheMay1,2009,DelawareRegisterofRegulations,iswellsupportedbyinformationintherecordandshouldbeallowedtogointoeffecttendaysafterpublicationinthenextavailableissueoftheDelawareRegisterofRegulations;andthat6.)TheDepartmentshallsubmittheapprovedamendmenttoRegulation1146totheDelawareRegisterofRegulationsforpublicationinitsnextavailableissue,andsuchothernoticeasthelawrequiresandtheDepartmentdeterminesisappropriate.S______RobertP.Haynes,EsqiyreSeniorHearingOffic,(7CCAppendixADivisionTechnicalResponseMemorandumCCCDNRECAirQualityManagementSectionResponsetoPublicCommentRevisiontoRegulationNo.1146ElectricGeneratingUnit(EGU)Multi-PollutantRegulationJune29,2009TableofContentsEmailfromaustin4102000@yahoo.comdatedMay21,20093VerbalCommentsfromConectiv,commentsfromPublicHearing7LetterfromConectiv,signedbyStuartWidomanddatedMay29,20097(NflCommentsfromaustin4102000@Jyahoo.comEmailDatedMay21,2009Comment:TheMay21,2009emailfromaustin4102000@yahoo.comcitestheproposedchangeinRegulation1146’sEdgeMoorUnit5’sS02massemissionslimitfrom2427tons/yearto4600tons/year,andstatesthattheregulatorychangewillallowEdgeMoorUnit5torunatahighercapacityutilizationuntilJanuary1,2012whentheemissionratemustbecutfrom0.37lb/MMBTUto0.26Ib/MMBTUbyotherprovisionsofRegulation1146.Theemailgoesontostatethatevenwiththatratecut,theincreasedcapacityutilizationhasthepotentialtonegatethebenefitsofanyS02ratereduction.Response:Theemailincorrectlystatesthe502emissionratelimitationsofRegulation1146thatareapplicabletoEdgeMoorUnit5.TheS02ratelimitsof0.37Ib/MMBTUand0.26Ib/MMBTUfromRegulation1146areapplicabletolargecoal-firedelectricgeneratingunits.AsEdgeMoorUnit5isalargeresidualoil-firedelectricgeneratingunit,502emissionratereductionsareachievedbyRegulation1146’srequirementstoswitchfromaresidualfueloilwithamaximumsulfurcontentof1.0%toaresidualfueloilwithamaximumsulfurcontentof0.5%.ThelowersulfurfueloillimitofRegulation1146isunaffectedbytheproposedregulatoryamendmentofthisproceeding.Regulation1146requiredaffectedunitstobeginreceivingonlythe0.5%maximumsulfurfueloileffectiveJanuary1,2009.Regulation1146’sresidualoilsulfurcontentmaximumlimitof0.5%sulfurdoesnotchangeovertime.Therequirementtoconverttothe0.5%maximumsulfurfueloileffectivelyreducedaresidualfueloilfiredelectricgeneratingunit’spotential502emissionrateby50%(relativetothepreviouslyallowable1.0%maximumsulfurfueloil).Therefore,foranygivenhourofunitoperation,thelowerfueloilsulfurcontentrequirementsofRegulation1146willalwaysresultinlower502emissionsthanwhenEdgeMoorUnit5combustedthesameamountof1.0%sulfurresidualfueloil.WhiletheDepartmentagreesthatthattherevised502caphasthepotentialtopermitahighercapacityutilization,itistheDepartment’sopinionthatitisunlikelythatEdgeMoorUnit5willoperateinthefutureatcapacityfactorsthatwouldenabletheunittoapproachthe4600ton/year502emissionlevel.ElectricgeneratingunitssuchasEdgeMoorUnit5tendtooperateonaneconomicdispatchbasis,beingpredominatelycalledupontooperatewhenitiseconomicallyadvantageoustodoso.Forfossilfuelfiredunits,wherethecostoffuelisasignificantcontributortothecostofelectricgeneration,theunittypicallyoperateslesswhenthecostoffuelrisesforthatunitinrelationtotheotherfossilfuelfiredunitsintheregion.Residualfueloilcostshaverisensignificantlyinrecentyears.Chart1illustratestherelativeaveragecostsofnaturalgas,residualoil,andcoalfuelsinthemid-Atlanticregioninrecentyears.CCItshouldbepointedoutthatthefuelpricesnotedinChart1reflectaveragepricesinthemid-Atlanticregion,andmaynotbeaccurateforanygivenfacilitysuchasEdgeMoor.However,thepricetrendsandrelationshipsbetweenthefuelswouldbeexpectedtobesimilar.FromChart1itcanbeseenthatwhileallthreefuelshaveincreasedinprice,therateofincreaseinresidualfueloilpriceisgreaterthanthatoftheotherfuels.Thiswouldtendtomakearesidualoil-firedelectricgeneratingunitlesseconomicallyattractiveforoperationandtendtoreduceitsannualoperatingcapacityfactor.Chart2reflectstheactualheatinputcapacityfactorofEdgeMoorUnit5andtheaveragemid-Atlanticresidualfueloilpriceforthepastfewyears.Again,theresidualfueloilpricemaynotbecorrectforEdgeMoor,butitisexpectedthatthepricetrendswouldbesimilar.FromChart2itcanbeseenthatEdgeMoorUnit5’sannualoperatingcapacityfactorshavetendedtodropoffwithsignificantincreasesinresidualfueloilcostsandhavegenerallytrendeddownwardwiththegeneraltrendupwardofresidualfueloilprice.ChartI-AverageMid-AtlanticFuelCosts4-0C,—Lia)a)1412108642.0—•—NGPrice—i---REQPrice—h—CoalPriceYear2CC’Asaresidualfueloil-firedelectricgeneratingunit’s502emissionsvarywithitscapacityfactor,itwouldbeexpectedthatreductionsincapacityfactorwouldresultinareductioninannual502emission.Chart3reflectsEdgeMoorUnit5’sactualannualoperatingcapacityfactorandactual502emissionoverthepastseveralyears.ItcanbeseeninthechartthatforEdgeMoorUnit5thetrendsofS02emissionscloselyfollowthetrendsofannualoperatingcapacityfactor.Astheabovechartsshow,forEdgeMoorUnit5,afossil-fuelfiredelectricgeneratingunitsannualcapacityfactortendstofollowtrendsinfuelcosts,andtheunit’sannualS02emissionsfollowsthetrendsincapacityfactor.Itisgenerallybelievedthatitisunlikelythatresidualfueloilcostswillagainapproachthoselowcostsseeninthelate1990’s.Becauseofthetrendingoftherelationshipbetweenfuelcost/unitcapacityfactor/unit502emission,theDepartmentbelievesthatthetrendinresidualfuel-oilcostswilltendtolimittheannualoperatingChart2-EdgeMoorUnit5CapacityFactorandAvg.RFOPrice40C.)—.Q20L10<014C)12.S.10Q.86<420<p\\Year—D—CapFact—±—RFOPriceChart3-EdgeMoor5S02EmissionsandCapacityFactor(1997-2008)0C.250000.v4000Ecw3000o2000COO—CCC0C40.1a—.(Co0.0(CoCL1C3020100-—S02——CapFactCCcapacity-factorforEdge-MourUn5-and-therebyltmitthe-annual-SQ-2-emissunfrom-theunitto-mucllessthan4600tonsperyear.Finally,thechangeismadeinthecontextofasettlementofpendinglitigationthatchallengestheregulationandthesettlementresolvesthechallengeandtheDepartmentdeterminesthatonbalancetheresolutionwillbebeneficialtotheenvironmentandpublichealthgiventheunlikelypossibilitythatthelimitswillbeexceededbaseduponthepastandpresentoperationoftheboiler.Comment:TheMay21,2009emailfromaustin4102000@yahoo.comcitesaEPAcost/benefitmethodologyandutilizesthatmethodologytocalculatethecostimpactofanincreaseinS02emissionsfrom2424tons/yearto4600tons/year.TheemailstatestheincreaseinS02emissionsiscalculatedtoresultin$15.86millionperyearinincreasedhealthcostsassociatedwithasthma,cardiovasculardisease,andlungdisease.Response:TheDepartmentdoesnotdisputethecalculationmethodologyidentifiedintheMay21,2009email.However,asdiscussedabove,theDepartmentdoesnotanticipatethattherewillbeanincreaseinEdgeMoorUnitS’sannualcapacityfactorthatwillresultinanincreaseintheactualannualS02massemissionsfromtheunit.Comment:TheMay21,2009emailfromaustin4102000@yahoo.comstatestheincreasedS02emissionsresultingfromthisproposedrevisionwillresultintheformationofadditionalfineparticulatematter,makingitunlikelyNewCastleCountywillbeinattainmentonNationalAirQualityStandards.Response:TheDepartmentdoesnotdisputethat502cancontributetofineparticulateemissionsfromcombustionsources.Regulation1146specificallyaddressesemissionsofNOx,502,andHgfromlargecoal-firedandresidualoil-firedelectricgeneratingunitslocatedinDelaware.DuringtheinitialdevelopmentofRegulation1146,theDepartmentreceivedcommentsfromthepublicsuggestingthattheDepartmentalsoaddressEGUemissionsoffineparticulatematterduetoitsimpactonthepublichealth.Atthattime,theDepartmentindicatedthatitwouldconsiderthosecommentsandaddressthemseparatelyfromtheRegulation1146developmentprocess.Subsequentlyastartactionnotice,2008-27,hasbeenapprovedtobeginthedevelopmentofanewregulationtoaddressfineparticulatematteremissionsfromcoal-firedandresidualoil-fireelectricgeneratingunitswithanameplatecapacityratingof25MWorgreaterinNewCastleCounty.SucharegulationwillincludeaddressingfineparticulatematteremissionsfromEdgeMoorUnit5andaddressCflCommentsfromConectivVerbalCommentsDuringPublicHearingComment:DuringthePublicHearingfortheproposedamendmenttoRegulation1146,ConectivrepresentativeStuartWidonpresentedbackgroundinformationandcommentinsupportoftheproposedamendmenttoRegulation1146.Conectiv’sbackgroundstatementsalsoprovidediscussionoftheuseof“advancedandinnovative”emissioncontroltechnologiesbeinginstalledConectiv’sEdgeMoorunitsinresponsetotherequirementsofRegulation1146.Response:WhiletheDepartmentisappreciativethatConectivsupportsthisamendmenttoRegulation1146thatthatisbeingproposedtoresolvethependinglitigation,theDepartmentdoesnotagreewiththecharacterizationthattheemissioncontrolsbeinginstalledatEdgeMoorinresponsetoRegulation1146represent“advancedandinnovative”controls.WhiletheDepartmentisoftheopinionthatthecontrolsbeinginstalledatEdgeMoorwillattaintheemissionlimitsreflectedinRegulation1146,theDepartmentfeelsthatsuchcontrolsareallcommerciallyavailable,well-provenemissioncontrolsapplicabletoretrofitinstallationforunitswithawiderangeinsizeandoperatingcharacteristics.ItistheDepartment’sopinionthatmoreadvancedcontrolsarealsocommerciallyavailableandwell-proveninretrofitapplicationsthatwouldallowattainingtheemissionlimitsofRegulation1146withalargecomfortmargin.CommentsfromConectivLetterdatedMay29,2009Comment:InaletterdatedMay29,2009,Conectiv’sStuartWidomsubmittedcommentsregardingtheproposedamendmenttoRegulation1146.WhiletheMay29,2009Conectivletterdidnotprovideanyspecificcommentregardingtheactualproposedamendment,itdidprovidecommentregardingthecommentsoftheMay21,2009emailfromaustin4102000@yahoo.comthatwasenteredintotherecordduringtheMay26,2009publichearingregardingtheproposedamendmenttoRegulation1146.Specifically,theMay29,2009ConectivletterpointedouttheerrorsintheMay21,2009emailfromaustin4102000@yahoo.com,statingthattheemaildiscussedRegulation1146’sS02emissionlimitationsapplicabletocoal-firedunitswhicharenotapplicabletotheEdgeMoorUnit5residualoil-firedunit.TheConectivletterpointsoutthataon1146’srequirementforuseof0.5%sulfurfueloilresultsinuptoa50%reductioninshorttrm.,prmitted502reductionsfromtheunit.ConectivfuthercommentedintheIerthattheincreaseofEdgeMoorUnit5’sannual502massemissionlimitfrom2427ton/yearto4600ton/yearwouldaccommodateoperationoftheunitathistoricannualcapacityoperatinglevelsshouldcircumstancesorneeddictate.Response:TheDepartment-agreeswithConectiv’scominerrtsregardingthemiss-applicationofS02emissionratesintheMay21,2009emailfromaustin4102000@yahoo.com.TheDepartmentaddressedthisissueinsomedetailearlierinthisdocumentintheresponsesectiontotheMay21,2009emailfromaustin4102000@yahoo.com.TheDepartmentalsoagreeswiththeConectivcommentthattheproposedamendmenttotheEdgeMoorUnit5annualS02massemissioncapofRegulation1146willpermittheunittooperateathistoricannualcapacityfactorsshouldcircumstancesorneedarise.AppendixBRecommendedFinalRegulation

# fl

fl

4?RegulationNo.1146:ElectricGeneratingUnit(EGU)Multi-PollutantRegulationTable5-1AnnualSO2MassEmissionsLimitsControlPeriodSO2MassEmissionsLimitUnit(tons)EdgeMoor31391EdgeMoor42410EdgeMoor54600IndianRiver11082IndianRiver21130IndianRiver31759IndianRiver43657McKeeRun3439CC