STATEOFDELAWAREDEPARTMENTOFNATURALRESOURCESANDENVIRONMENTALCONTROLOFFICEOFTHE89KINGSHIGHWAYPHONE:(302)739-9000SECRETARYDOVER,DELAWARE19901FAX:(302)739-6242Secretary’sOrderNo.2009-A-0032Re:APPROVALOFFINALREGULATIONAMENDING7DEADMIN.CODE1146(ELECTRICGENERATINGUNIT(EGU)MULTIPOLLUTANTREGULATIONTABLE5-1)DateofIssuance:September1,2009EffectiveDate:October10,2009UndertheauthorityvestedintheSecretaryoftheDepartmentofNaturalResourcesandEnvironmentalControl(Department),thefollowingfindings,reasonsandconclusionsareenteredasanOrderoftheSecretaryintheabove-referencedmatter.ProceduralHistoryOnFebruary22,2009,theDepartment’sissuedStartActionNotice#2009-04,whichapprovedDivisionofAirandWasteManagement,AirQualityManagementSection’s(AQMS)requesttobegintheformalregulatorydevelopmentprocesstoamend7DEAdmin.CodeRegulation1146(Regulation).AQMSpreparedaproposedregulationrevisingTable5-1(AnnualS02MassEmissionsLimits)toincreasethemassannuallimitsforConectivDelmarvaGeneration,Inc.’s(Conectiv)electricgenerationstation’sunit5(Facility)locatedinEdgeMoor,NewCastleCounty(Facility).Therevisionwouldincreasethesulfurdioxide(SO2)annuallimitfrom2,427tonsto4,600tons.TheDepartmenthadtheproposedregulationpublishedintheMay1,2009DelawareRegisterofRegulationsandnoticewaspublishedinnewspapersofgeneralVe€44ia’zeJ‘7t4t’a’zedefted4CCCCiiëU1ãtion.ThëDepartmentalsoprovidhlicnoticeofãMãyi26[2QJ9jiiIlihearingtobeheldinAQMS’officeinDoverbeforepresidingHearingOfficerRobertP.Haynes.InaJune29,2009technicalresponsememorandum(TRM)toMr.Haynes,AQMSexplainedindetailtheoperationalhistoryandbasisfortheproposedamendment,namely,thattheproposedamendmentshouldnotresultinanyactualincreaseintheFacility’sairemissionsofS02undernormaloperatingconditions.IntheHearingOfficer’sReport,datedAugust25,2009,(Report)andattachedheretoasAppendixA,Mr.HaynesrecommendstherecordincludeAQMS’TRM,thetranscriptandthehearingexhibits.Mr.Haynesreviewedthepubliccommentsontheproposedamendment,whichraisedcertainquestionsthatwereansweredbytheTRM.Mr.Haynesfoundamplesupportintherecommendedrecordfortheproposedamendment.HerecommendsapprovaloftheproposedamendmentinAppendixBtotheReport,whichisthesameproposedamendmentaspublishedintheMay1,2009DelawareRegisterofRegulations.FindingsTheReportrecommendsthattheproposedregulationbeadoptedasreasonableandadequatelysupportedontherecommendedrecorddeveloped.IagreewiththeReportanditsrecommendationsandincorporateitaspartofthisOrder.ThereasonfortheproposedamendmentwastheresolutionoflitigationthatchallengedRegulation1146,whichimposedsignificantemissionslimitsonDelaware’slargestsourcesofstationaryairpollutants,namely,largeelectricgeneratingunits.Thus,resolvingthechallengetoRegulation1146isanimportantbenefittoDelawarebecausewhentheDepartmentapprovedRegulation1146itcitedthesubstantialpollutionreductions,including2CC.loweringairemissi-onscifsulfur-dioxideby5i-%,nitrogenoxidesemissionsby24%,andmercuryemissionsby82%.Thus,thisstate-widesignificantenvironmentbenefitcouldbethreatenedifRegulation1146wassuccessfullychallengedonappealbyConectiv.IfindthattheDepartment’sexpertsinAQMSexplainedindetailthereasonssupportingtheproposedamendment,whichwerethesettlementoflitigationbetweenConectivandtheDepartmentthatresolvedConectiv’sappealoftheDepartment’sRegulation1146,asadoptedbySecretary’sOrderNo.2006-A-0056(November15,2006).Moreover,theDepartment’sagreedtothesettlementbecauseitsexpertsconcludedthattheproposedamendmentwouldnotresultinanymoreemissionsbeingreleasedthanunderthecurrentS02limitthatissubjecttotheamendment.TheexpertsbasedtheiropiniononananalysisoftheFacility’soperatinghistoryandtheeconomicsofusinglowsulfurfueloiltogenerateelectricity.IagreewiththeDepartment’sexpertsandfindthattheproposedregulationiswell-supportedandreflectsthetermsofthereasonablesettlementtoresolveConectiv’slitigationofRegulation1146.Regulation1146wasanimportantactiontheDepartmenttooktoreduceairemissionsofharmfulpollutantsfromDelaware’slargeststationarysourcesofairpollution,namely,largeelectricgeneratingunits.ThesettlementwithConectivresolvedtheuncertaintythattheDepartmentfaceintheappealthatcouldhaveresultedinhavingRegulation1146possiblyoverturnedbythecourt.IalsofindthattheDepartment’sexpertsinAQMShaveindependentlydeterminedthattheproposedrevisionundernormaloperatingconditionwillnotresultinmoreS02airemissionstooccur.Thisforecastinlittleactualchangeinairemissionsisreasonablybasedupontheexperts’analysisoftheFacility’soperatinghistoryandtheeconomicsofburninglow3Csulfuroiltogenerateelectricity.Thus,theDepartment’sexpertsconcludethattheoperatinghistoryandeconomicsinthefuturewillkeeptheFacilityfromoperatingacapacitylevelthatwillcauseittoemitS02anywherenearthehigher4,600tonsperyearlimit.Regulation1146requirestheFacilitytobumlow(.5%)sulfurresidualoil,whichwillfurtherprotecttheenvironmentandimposeoperatingrestrictionsontheFacility’susebaseduponeconomicsversusotherfuelsusedtogenerateelectricity.Therecordalsohasinformationontheothertermsofthesettlementthatsupporttheamendmentasbeneficialtotheenvironment,suchasadvancingthedateforlowermercuryemissionsfromtheFacility.TheDepartment’sfailuretoapproveoftheproposedamendmentcouldconstitutepossiblegroundsforConectivtoclaimthattheDepartmentwasnotcomplyingwiththetermsoftheDecember2008settlement.TheDepartmentconsidersthatthesettlementisreasonabletoresolvethelitigationonmutuallyacceptabletermsthatwillresultinlittleriskofS02emissionsoccurringmorethaninthecurrentlevels.Thus,Ifindthattheproposedregulationshouldbeadoptedasreasonableandwell-supportedbythetechnicalanalysisintherecord.ConclusionsFortheabove-statedreasons,IconcludethattheDepartmentshouldapproveasafinalregulationtheproposedamendmenttoRegulation1146toreflectthetermsofthesettlementofthelitigationofRegulation1146.Consequently,thefollowingisordered:1.TheDepartment,actingthroughthisOrderoftheSecretary,herebyapprovesasafinalregulationtheproposedregulationthatamendsTable5-1andtherecorddevelopedtosupportit,asdescribedintheReport;and44C______2.TheDepartmentshallhavethisOrderpublishedintheDelawareRegisterofRegulationsandinnewspapersinthesamemannerasthenoticeoftheproposedregulationandservenoticeofthisactionuponthoseinterestedpersonasdeterminedbytheDepartment.CollinP.O’Mara,Secretary5

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