Revised October 22, 2009

Page 1 of 8 

## Revised Nevada Division of Environmental Protection

BART Determination Review of NV Energy’s Reid Gardner Generating Station Units 1 , 2 and 3

EXPLANATION: BOLD text below identifies the Guidelines for BART Dete rminations under the Regional Haze Rule in Appendix Y of 40 CFR 51.

BACKGROUND

A BART analysis was completed by CH2M HILL at the r equest of NV Energy (NVE) for units 1, 2 and 3 at the Reid Gardner Generating Station ( Reid Gardner) dated October 3, 2008. Reid Gardner consists of three BART-eligible units with a nominal generating capacity of 110 megawatts (MW) each. A fourth unit (265 MW) is not BART-eligible. The units are wall-fired boilers, which burn primarily bituminous coal. NVE ’s BART analysis is summarized below, organized according to the five step analysis conta ined in Appendix Y of 40 CFR 51, followed by NDEP’s analysis and BART determination.

NV ENERGY ANALYSIS

STEP 1 – Identify all available retrofit emissions control techniques; alternatives can be categorized in three ways:

• Pollution prevention (used of inherently lower-emit ting processes/practices);

• Use of (and where already in place, improvement in the performance of) add-on controls; or

• Combination of pollution prevention and add-on cont rols.

NVE identified the following emission reduction sce narios: Potential NO x Control Options – (Current controls consist of LNB and OFA)

• Low NO x Burners (LNB) with Over-Fire Air (OFA)

• LNB with Selective Non-Catalytic Reduction (SNCR) S ystem

• Rotating Opposed Fire Air (ROFA) with Rotamix

• LNB with Selective Catalytic Reduction (SCR) System

• ROFA with SCR Potential SO 2 Control Options – (Current controls consist of soda ash scrubber f or SO 2 )

• Dry Flue Gas Desulfurization (FGD) System

• Dry Sorbent Injection

• Furnace Sorbent Injection

• New Wet FGD System

• Improve or upgrade wet soda ash FGD system operatio n Cost-effective scrubber upgrades considered:

• Eliminate bypass reheat

• Install liquid distribution rings

• Install perforated trays

• Use organic acid additives

• Improve or upgrade scrubber auxiliary system equipm entRevised October 22, 2009

Page 2 of 8 • Redesign spray header or nozzle configuration Potential PM 10 Control Options – (Current controls consist of a mechanical collec tor. As part of the planned environmental upgrade pursuant to a 2007 consent decree, the mechanical collector is being removed and new pulse jet fabric filter is being installed for units 1 through 3.)

• Upgrade the Existing Mechanical Collector

• Electrostatic Precipitator

• Fabric Filter (presently planned for installation b y July 1, 2010)

STEP 2 – Eliminate technically infeasible options b ased on:

• Availability (commercial availability); and

• Applicability (has it been used on the same or a si milar source type).

NO x Technical feasibility for the proposed control opti ons was based on physical constraints, boiler configuration and emission reduction potenti al. Enhancing the existing or installing new LNBs and OFA is considered to be a c apital cost, combustion technology retrofit that may require boiler water wall tube re placement. Neural Net Boiler Controls should be considered as a supplementary or polishin g technology, but not a stand-alone basis. Due to previous experience with ROFA, NVE d oes not consider ROFA as a standalone technology option. No control options were e liminated.

SO 2 With the fabric filter installation, the scrubber v enturi section will be opened further to reduce draft loss through the equipment, and the sc rubber operation will be improved to primarily remove SO 2 in the scrubber vessel. Only scrubber upgrades an d new lime / limestone wet scrubber technology options can equal or exceed the removal efficiency of the current wet soda ash scrubber. Therefore, only these two alternatives were considered technically feasible. The new wet lime / limestone scrubber option is eliminated because little additional scrubber capit al or operating cost is required by improving the current wet soda ash scrubber. No ad ditional scrubber upgrades beyond those identified above were considered, as the upgr ades accomplish many of the same
purposes.

PM 10 Removal of the mechanical collector will eliminate the pressure drop and allow the full range of particulate sizing to the fabric filter. Upgrade to the mechanical collector will not yield as great a level of emission reduction as fabric filter, and therefore, the option is not technically feasible. The new electrostatic pr ecipitator is not technically feasible either because the potential level of emissions red uction is not as great as with the fabric filter installation already planned.

STEP 3 – Evaluate control effectiveness of remainin g control options:

• Make sure you express the degree of control using a metric that ensures an “apples to apples” comparison of emissions performa nce levels among options (e.g., lb SO 2

/MMBtu); andRevised October 22, 2009

Page 3 of 8 • Give appropriate treatment and consideration of con trol techniques that can operate over a wide range of emission performance l evels (evaluate most stringent control level that the technology is capa ble of achieving plus other scenarios).

NO x NVE estimates the following control efficiencies wi th each control option: 1) LNB with OFA - unit 1 at 21.3 percent, unit 2 at 23 .7 percent, and unit 3 at 6.5 percent and an emission level of 0.39 lb/MMBtu – an nual average. 2) LNB with OFA and SNCR – unit 1 at 40.9 percent, uni t 2 at 42.7 percent, and unit 3 at 29.9 percent and an emission level of 0.23 lb/MM Btu. 3) ROFA with Rotamix – unit 1 at 57.7 percent, unit 2 at 59.0 percent, and unit 3 at 38.3 percent and emission levels of 0.16 lb/MMBtu for un its 1 and 2, and 0.20 lb/MMBtu for unit 3. 4) LNB with OFA and SCR – unit 1 at 81.6 percent, unit 2 at 82.2 percent, unit 3 at 78.2 percent and an emission level of 0.07 lb/MMBtu. 5) ROFA with SCR – unit 1 at 81.6 percent, unit 2 at 8 2.2 percent, unit 3 at 78.2 percent and an emission level of 0.07 lb/MMBtu.

SO 2 The projected emission rate for an upgraded wet sod a ash FGD system is 95 percent SO 2 removal or less than 0.15 lb/MMBtu.

PM The guaranteed PM 10 control technology emission rate is 0.015 lb/MMBtu with installation of fabric filter.

STEP 4 – Impact analysis

• Cost of compliance (identify emission units, design parameters, develop cost estimates);

o Baseline emissions rate should represent a realisti c depiction of anticipated annual emissions for the source. In general, for t he existing sources subject to BART, you will estimate the anticipated annual e missions based upon actual emissions from a baseline period.

• Energy impacts;

o Direct energy consumption for the control device, n ot indirect energy impacts.

• Non-air quality environmental impacts;

o Solid or hazardous waste generation or discharges o f polluted water from a control device.

• Remaining useful life;

o Can be included in the cost analysis.

Costs of Compliance Control cost comparisons are presented for NO x and PM 10 in Tables 3-2 and 3-4, respectively of each NVE BART determination report for units 1 through 3 at ReidRevised October 22, 2009

Page 4 of 8 Gardner. An economic analysis for NO x is presented in the appendix to each BART determination report. There will be no economic im pacts due to improving the current wet soda ash scrubber operation for SO 2 . A comparison of technologies on the basis of costs, design control efficiencies, and tons of PM 10 removed was not done because fabric filter is considered to be BART.

Energy Impacts The installation of LNB with OFA for NO x control is not expected to impact the boiler efficiency to a large degree or force draft fan pow er usage. Installation of ROFA with Rotamix will result in additional power requirement s ranging from 343 to 746 kilowatts. SCR retrofit will increase pressure drop. Upgradin g the existing wet soda ash FGD system operation for SO 2 control will not require additional power. The en ergy impacts are included in the economic analysis presented in the appendix to each NVE BART determination report. Fabric filter installation f or PM 10 control is expected to result in a net energy reduction due to removal of the mechanic al collector.

Environmental Impacts CO emissions would be the same or lower than prior levels with ROFA. SNCR and SCR installation could impact the salability and dispos al of fly ash due to ammonia levels and could potentially create a visible stack plume. Tr ansport of ammonia to the site may be an issue in the event of an accidental release. No environmental impacts are anticipated in improving the wet soda ash scrubber operation or installation of fabric filter. The environmental impacts have not been quantified in t he economic analysis presented in the appendix to each NVE BART determination report.

Remaining Useful Life The remaining useful life is estimated to be 20 yea rs from the installation of BART controls for units 1, 2 and 3.

STEP 5 – Determine visibility impacts (improvements ):

• Run the model at pre-control and post-control emiss ion rates; and

• Determine net visibility improvement;

• Compare 98 th percent days for pre- and post-control runs.

Modeling for pre-control and post-control emission rates demonstrates an improvement in visibility based on the BART conclusions present ed by NVE for units 1 through 3 at Reid Gardner. The NO x emission rate (0.46 lb/MMBtu) modeled is in excess of the proposed NVE BART limit (0.39 lb/MMBtu - annual). Consequently, the modeling results show a lesser improvement in visibility tha n would be achieved with NVE’s proposed BART limit. Modeling results for other te chnically feasible control options were not presented

NDEP ANALYSIS

NDEP’s review of NVE’s October 2008 BART determinat ion reports for Reid Gardner resulted in revisions to all of NVE’s BART determinations ex cept the control technologies proposed asRevised October 22, 2009

Page 5 of 8 BART for SO 2 and PM 10 . NDEP concurs that BART for SO 2 is the existing wet soda ash FGD and BART for PM 10 is a fabric filter, for the three BART units.

Nevada utilized NVE’s cost and control efficiencies , as presented for each control technology in NDEP’s NO x BART economic analysis and control technology dete rmination. The control technologies were ordered in range of efficiency fr om highest to lowest control efficiency. NDEP’s economic analysis summary for NO x is presented in Table 1.

TABLE 1



### NDEP ECONOMIC ANALYSIS SUMMARY

Reid-Gardner Unit 1

Current Operation (Uncontrolled) ROFA w/SCR LNB w/OFA & SCR ROFA

w/Rotamix LNB w/OFA

& SNCR LNB w/OFA Capital Cost $0 $38,484,900 $35,048,000 $7,884,900 $6,945,500 $4,448,000 First Year O&M Cost $0 $1,313,191 $1,029,801 $613,952 $396,248 $80,000 First Year Debt Service $0 $4,081,555 $3,717,051 $836,241 $736,612 $471,737 Total Annual Cost $0 $5,394,746 $4,746,852 $1,450,193 $1,132,860 $551,737

Base Heat Input (MMBtu) 9,815,313 Total Heat Input allowed (MMBtu) 10,643,400 Base emissions (tons) 2,267 NOx Removal Rate % 0.0% 81.6% 81.6% 57.7% 40.9% 21.3% NOx Removed (Tons) 0 1850 1850 1308 927 483 NOx Emission Rate (Tons) 2267 417 417 959 1340 1784

NOx Emission Rate (lb/MMBtu) 0.085 0.085 0.195 0.273 0.364 First Year Cost ($/ton removed) $2,916 $2,566 $1,109 $1,222 $1,143 Incremental Cost ($/ton) $7,280 $6,085 $833 $1,308 $1,143 NOx Control

Reid-Gardner Unit 2

Current Operation (Uncontrolled) ROFA w/SCR LNB w/OFA & SCR ROFA

w/Rotamix LNB w/OFA

& SNCR LNB w/OFA Capital Cost $0 $38,484,900 $35,048,000 $7,884,900 $6,945,500 $4,448,000 First Year O&M Cost $0 $1,388,071 $1,078,551 $661,760 $418,657 $80,000 First Year Debt Service $0 $4,081,555 $3,717,051 $836,241 $736,612 $471,737 Total Annual Cost $0 $5,469,626 $4,795,602 $1,498,001 $1,155,269 $551,737

Base Heat Input (MMBtu) 10,501,749 Total Heat Input allowed (MMBtu) 10,643,400 Base emissions (tons) 2,445 NOx Removal Rate % 0.0% 82.2% 82.2% 59.0% 42.7% 23.7% NOx Removed (Tons) 0 2010 2010 1443 1044 580 NOx Emission Rate (Tons) 2445 435 435 1003 1401 1866

NOx Emission Rate (lb/MMBtu) 0.083 0.083 0.191 0.267 0.355 First Year Cost ($/ton removed) $2,721 $2,386 $1,038 $1,106 $952 Incremental Cost ($/ton) $7,001 $5,813 $860 $1,299 $952 NOx ControlRevised October 22, 2009

Page 6 of 8 Reid-Gardner Unit 3

Current Operation (Uncontrolled) ROFA w/SCR LNB w/OFA & SCR ROFA

w/Rotamix LNB w/OFA

& SNCR LNB w/OFA Capital Cost $0 $38,484,900 $35,048,000 $7,884,900 $6,945,500 $4,448,000 First Year O&M Cost $0 $1,320,114 $1,000,893 $543,568 $345,970 $80,000 First Year Debt Service $0 $4,081,555 $3,717,051 $836,241 $736,612 $471,737 Total Annual Cost $0 $5,401,669 $4,717,944 $1,379,809 $1,082,582 $551,737

Base Heat Input (MMBtu) 10,063,851 Total Heat Input allowed (MMBtu) 10,836,120 Base emissions (tons) 2,268 NOx Removal Rate % 0.0% 78.2% 78.2% 38.3% 29.9% 6.5% NOx Removed (Tons) 0 1774 1774 869 678 147 NOx Emission Rate (Tons) 2268 494 494 1400 1590 2121

NOx Emission Rate (lb/MMBtu) 0.098 0.098 0.278 0.316 0.421 First Year Cost ($/ton removed) $3,045 $2,660 $1,588 $1,596 $3,742 Incremental Cost ($/ton) $4,444 $3,688 $1,560 $1,000 $3,742 NOx Control

NDEP specifically reviewed the cost per ton of NO x removed for each unit at Reid Gardner and determined that installation of ROFA with Rotamix f or units 1 through 3 is BART for NO x , with associated first year costs of $1,038 to $1,588/ton of NO x removed, depending on the unit evaluated. These values are considered cost effect ive. The cost data from the tables above are presented graphically in Figure 1. NDEP also consi dered the Clean Air Act factors of expected emission rates, emissions performance levels, expec ted emissions reductions, energy impacts, non-air quality environmental impacts and modeled v isibility impacts in Nevada’s control technology determination. NDEP concluded, based on a review of the economic analysis, that the $/ton of NO x removed increased significantly for the LNB with OF A and SNCR, and ROFA with SCR technologies without correspondingly signi ficant improvements in visibility.

In order to determine the BART emission limits for NO x and PM 10 , NDEP established baseline emissions scenarios for NO x using acid rain data and for PM 10 using annual emissions reported to NDEP, from calendar years 2001 through 2007. ND EP used the average of the two consecutive years of the highest annual emissions t o establish the baseline emissions for NO x and PM 10 in lb/MMBtu. The control efficiencies provided in NVE’s BART analyses were then applied to the baseline NO x emission rates to calculate the BART emission limi ts. The BART emission limits for PM 10 were also calculated using the capacity factors pr esented in NVE’s BART analyses and the NDEP baseline data.

To determine the BART emission limits for SO 2 , NDEP initially (for the January 2009 FLM review draft) used acid rain data from 2001 through 2007 in establishing a baseline emissions scenario for SO 2. The SO 2 acid rain data for Reid Gardner contained periods o f invalid data which NDEP omitted from the calculation of baseline SO 2 emissions. In light of the long operational history of the SO 2 controls, NDEP then used the 98 th percentile emissions values to establish SO 2 BART emission limits of 0.25 lb/MMBtu for Reid Gard ner’s units. These BART emission limits allowed for future operation within 98 percent of historical emissions (after discard of the invalid data) and provided some flex ibility during transition to a different postBART operating scenario including operation under a balanced draft versus force draft scenario due to the installation of the fabric filter and a potential change in coal type.Revised October 22, 2009

Page 7 of 8 FIGURE 1

LEAST COST ENVELOPE

Reid-Gardner Unit 1

ROFA w/Rotamix

LNB w/OFA LNB w/OFA & SCR

LNB w/OFA & SNCR $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000

0 200 400 600 800 1000 1200 1400 1600 1800 2000
Tons of NOx RemovedAnnual Costs ($)

Reid-Gardner Unit 2

ROFA w/Rotamix

LNB w/OFA LNB w/OFA & SCR

LNB w/OFA & SNCR $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000

0 500 1000 1500 2000 2500
Tons of NOx RemovedAnnual Costs ($)Revised October 22, 2009

Page 8 of 8 Reid-Gardner Unit 3

ROFA w/Rotamix

LNB w/OFA LNB w/OFA & SCR

LNB w/OFA & SNCR $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000

0 200 400 600 800 1000 1200 1400 1600 1800 2000
Tons of NOx RemovedAnnual Costs ($)

However, based on USEPA, FLM and NGO comments on th e public review draft regarding the BART SO 2 emission limits for Reid Gardner, NDEP re-evaluate d NV Energy’s BART analyses for Reid Gardner and the use of acid rain data. In light of Nevada’s further evaluation of the acid rain data, which is not a compliance dataset, Nevad a decided to incorporate recent emissions data collected under the 40 CFR Part 60 requirements, wh ich is a compliance dataset. The BART analyses submitted by NV Energy depended on emissio ns data representing the period prior to the installation of pulse jet fabric filter (a requ irement of the consent decree described in section 6.5.2.2 of Nevada’s RH SIP).

Baghouses were installed at Reid Gardner in late 20 08 and early 2009 upstream of the FGD system, so there is now a limited emission dataset considering the performance of baghouses coupled with wet soda ash FGD and flue balancing. These data, particularly the Part 60 data, provided a higher level of confidence that the faci lity can not only comply with the 0.25 lb/MMBtu limit, but also indicated that the BART li mit can be lowered to 0.15 lb/MMBtu without jeopardizing compliance with the limit.

NDEP concludes that for NO x the installation of ROFA with Rotamix with an emiss ion level at 0.20 lb/MMBtu for unit 1 and unit 2, and 0.28 lb/MM Btu for unit 3, on a 12-month rolling average, is BART. NDEP concludes that BART for SO 2 is the existing wet soda ash FGD with emission limits of 0.15 lb/MMBtu, 24-hour average, for all three units and BART for PM 10 is fabric filter with emission limits of 0.015 lb/MMBt u, 3- hour average, for all three units.

NDEP anticipates greater visibility improvement upo n implementation of BART than shown in NVE’s October 2008 BART report, which is based on a NO x emission rate of 0.46 lb/MMBtu, an SO 2 rate of 0.40 lb/MMBtu, and a PM 10 rate of 0.03 lb/MMBtu. The total annual BART emissions are 50 percent of the modeled rates, ther efore the visibility improvement due to BART should improve significantly from that modeled.