**SUSANA MARTINEZ**
**GOVERNOR**

**JOHN A. SANCHEZ**
**LIEUTENANT GOVERNOR** 

### New Mexico

ENVIRONMENT DEPARTMENT

Air Quality Bureau

525 Camino de los Marquez Suite 1

Santa Fe, NM 8750 5

- 1816
Phone (505) 476

- 4300

Fax (505) 476

- 4375

www.nmenv.state.nm.us **RYAN FLYNN**
**CABINET SECRETARY**

**- Designate** 

**BUTCH TONGATE**
**DEPUTY SECRETARY**

Template version: 7/1/13 

### NEW SOURCE REVIEW PERMIT

Issued under 20.2.72 NMAC

Certified Mail No: 7013 0600 0001 7154 3402 Return Receipt Requested

NSR Permit No: 0063

- M8R3 Facility Name: San Juan Generating Station

Facility Owner s : Unit 1: Public Service Company of New Mexico; Tucson Electric Power

Unit 2: Public Service Company of New Mexico; Tucson Electric Power

Unit 3: Public Service Company of New Mexico; Southern California Public Power Authority; Tri

- State Generation and Transmission Association, Inc.

Unit 4: Public Service Company of Ne w Mexico; Utah Associated Municipal Power Systems; City of Farmington, New Mexico; M

- S

- R Public Power Authority; City of Anaheim, California; Los Alamos County, New Mexico

Operator/ Permittee Name: Public Service Company of New Mexico (PNM) Mailing Addres s: Alvarado Square, Albuquerque, NM 87158

TEMPO/IDEA ID No: 1421

– PRN201 30004

AIRS No: 35

- 045

- 00902

Permitting Action : NSR Technical Revision

Source Classification: Major

- TV and Major

- PSD Facility Location: 36°48’2” N and

- 108°26’19” W County: San Juan

Air Quality Bureau Contact : Joseph Kimbrell Main AQB Phone No. (505) 476

- 43 00

November 1, 2013 Richard L. Goodyear, PE Date

Bureau Chief Air Quality BureauNSR Permit No. 0063M8R3 Page 2 of 62

TABLE OF CONTENTS

Part A FACILITY SPECIFIC REQUIREMENTS

................................ ................................ .... 3

A100 Introduction

................................ ................................ ................................ ................. 3

A101 Permit Duration (expiration)

................................ ................................ ....................... 3

A102 Facility: Description

................................ ................................ ................................ .... 3

A103 Facility: Applicable Regulations

................................ ................................ ................. 6

A104 Facility: Regulated Sources

................................ ................................ ...................... 10

A105 Facility: Control Equipment

................................ ................................ ..................... 13

A106 Facility: Allowable Emissions

................................ ................................ .................. 13

A107 Facility: Allowable Startup, Shutdown, & Maintenance (SSM)

.............................. 21

A108 Facility: Allowable Operations

................................ ................................ ................. 21

A109 Facility: Reporting Schedules

................................ ................................ ................... 22

A110 Facility: Fuel Sulfur Requirements

– not required

................................ ................... 22

A111 Facility: 20.2.61 NMAC Opacity

– not required

................................ ...................... 22

A112 Construction Options

................................ ................................ ................................ 22

A113 Compliance Plan

– Not Required

................................ ................................ ............. 29

A114 Reducing Facility Emissions

................................ ................................ ..................... 29 EQUIPMENT SPECIFIC REQUIREMENTS

................................ ................................ ............. 30 Oil and Gas Industry

................................ ................................ ................................ ..................... 30

A200 Oil and Gas Industry

– not required

................................ ................................ .......... 30 Construction Industry

................................ ................................ ................................ .................... 30

A300 Construction Industry

- not required

................................ ................................ ......... 30 Power Generation Industry

................................ ................................ ................................ ........... 30

A400 Power Generation Industry

................................ ................................ ....................... 30

A401 Turbines

- Not Required

................................ ................................ ........................... 31

A402 Boilers

................................ ................................ ................................ ....................... 31

A403 Engines

................................ ................................ ................................ ...................... 39

A404 Heaters

- Not Required

................................ ................................ ............................. 39

A405 Cooling Towers

................................ ................................ ................................ ......... 39

A406 Haul Roads/Storage piles (Coal

- Fired Plants)

................................ .......................... 40

A407 Storage Silos (activated carbon, fly ash)

................................ ................................ ... 42

Part B GENERAL CONDITIONS

................................ ................................ .......................... 43

B100 Introduction

................................ ................................ ................................ ............... 43

B101 Legal

................................ ................................ ................................ ......................... 43

B102 Authority

................................ ................................ ................................ ................... 44

B103 Annual Fe e

................................ ................................ ................................ ................ 44

B104 Appeal Procedures

................................ ................................ ................................ .... 45

B105 S ubmittal of Reports and Certifications

................................ ................................ .... 45

B106 NSPS and/or MACT Startup, Shutdown, and Malfunction Operations

................... 45

B107 Startup, Shutdown, and Maintenance Operations

................................ ..................... 46

B108 General Monitoring Requirements

................................ ................................ ........... 46

B109 General Recordkeeping Requirements

................................ ................................ ..... 48

B110 General Reporting Requirements

................................ ................................ .............. 49NSR Permit No. 0063M8R3 Page 3 of 62

B111 General Testing Requirements

................................ ................................ .................. 50

B112 Compliance

................................ ................................ ................................ ............... 53

B113 Permit Cancellation and Revocation

................................ ................................ ......... 53

B114 Notification to Subsequent Owners

................................ ................................ .......... 54

B115 Asbestos Demolition

................................ ................................ ................................ . 54

B116 Short Term Engine Replacement

................................ ................................ .............. 54

Part C MISCELLANEOUS

................................ ................................ ................................ ..... 58

C100 Supporting On

- Line Documents

................................ ................................ ............... 58

C101 Definitions

................................ ................................ ................................ ................. 58

C102 Acronym s

................................ ................................ ................................ .................. 60

P ART A FACILITY SPECIFIC REQUIREMENTS

A100 Introduction

A. This permit NSR 0063

- M8R3 supersedes all portions of Air Quality Permit 0063

- M8R2

, issued June 12 , 2013 , except the portion requiring compliance tests. Compliance test conditions from previous permits, if not completed, are still in effect, in addition to compliance test requirements contained in this permi t

.

A101 Permit Duration (expiration)

A. The term of this permit is permanent unless withdrawn or cancelled by the Department

.

A102 Facility: Description

A. This facility consists of four coal

- fired electric generating units and associated support facilities. Each coal

- fired unit burns pulverized coal and No. 2 Diesel oil in a boiler and produces high

- pressure steam which powers a steam turbine coupled

with an electrical generator. Electrical power produced by the units is supplied to the electric power grid for sale. Coal for the units is supplied by the adjacent San Juan Mine and is delivered to the facility by conveyor. For the purposes of this permit, the f our generating units at San Juan Generating Station (SJGS) are designated Unit 1, Unit 2, Unit 3, and Unit 4.

B. This facility is located approximately 3 miles north

- northeast of Waterflow, New

Mexico in San Juan County

.

C. This revision consists of implementin g the R evised New Mexico Regional Haze State Implementation Plan ( R H SIP) adopted September 5, 2013 by the New Mexico Environmental Improvement Board (EIB), which is based on a tentativeNSR Permit No. 0063M8R3 Page 4 of 62

Agreement between the State of New Mexico, P ublic Service Company of N ew Mexico (PNM)

, and the Environmental Protection Agency (EPA). The revision consists of adding a scenario (Scenario C) to the two existing scenarios in the SJGS NSR permit to incorporate the terms of this agreement. These terms include the

addition (by January 31, 2016) of SNCR control technology to reduce nitrogen oxides (NOx) emissions from Units 1 and 4 to no greater than 0.23 lb/MMBtu; a testing program to determine if additional NOx emission reductions can be achieved; and the retirement of Unit s 2 and 3 by December 31, 2017. In addition, the sulfur dioxide (SO 2 ) emission limit for Units 1 and 4 will be reduced from the

current 0.15 lb/MMBtu emission limit to 0.10 lb /MMBtu. The SO 2 emission limit

reduction will occur no later than six months fr om the date the EIB adopt ed the Regional Haze SIP. With the exception of the reduction in the permitted SO 2 limit to 0.10 lb/MMBtu, the provisions under Scenario C shall only become effective upon final approval of the R H SIP by the EPA. The descr iption of this modification is for informational purposes only and is not enforceable.

Specific Permit Conditions Modified by this R evision :

Condition

Number Pollutant Limit Condition implementation date begins or requirement end date

Table 106.A SO 2 Scenario C

– 0. 1 0 lb/MMBtu Effective date of March 5, 2014

Table 106.C See Table 106.C See Table 106.C Scenario A /B

- Ends no later than 9/20/16

Table 106.J See Table 106.J See Table 106.J Scenario A /B

- Begins no later than 9/20/16

Table 106.A Unit 1 and 4 NOx 0.23 lb/ MMBtu 01/31/16*

A112.C NA Retirement of Units 2 and 3 12/31/17

A112. C Ammonia Slip TBD 4/30/16 *

* Date will be revised if the date extends past 01/31/16 due to a delay in EPA’s SIP approval.

D. Table 102.A and Table 102.B show the total potential emissions f rom this facility

for information only, not an enforceable condition

, excluding exempt sources or

activities

.

Table 102.A : Total Potential Pollutant Emissions from Entire Facility

Pollutant Emissions (tons per year) Nitrogen Oxides (NOx) ( Pre

- construction ) 24

, 703 .0

Nitrogen Oxides (NOx) (Scenario A, SCR) 4118.0

Nitrogen Oxides (NOx) (Scenario B, SNCR) Units 1

- 4 18,941.0

Nitrogen Oxides (NOx) (Scenario C, SNCR) Units 1 and 4 9,425.0

Carbon Monoxide (CO) 35,497.0

Carbon Monoxide (CO) (Scenario C) Units 1 and 4 21,900

Volatile Organic Compounds (VOC) 248 .0

Volatile Organic Compounds (VOC) (Scenario C) Units 1 and 4 123.1

Sulfur Dioxide (SO 2 ) 12,352 .0

Sulfur Dioxide (SO 2 ) (Scenario C) Units 1 and 4 4,097NSR Permit No. 0063M8R3 Page 5 of 62

Pollutant Emissions (tons per year) Total Suspended Particulates (TSP) Total 3381 .0

Total Suspended Particulates (TSP) Total (Scenario C) Units 1

and 4 Filterable Only 1,683.0

Particulate Matter less than 10 microns (PM 10 ) Filterable 1

, 550 .0

Particulate Matter less than 10 microns (PM 10 ) Filterable (Scenario C) Units 1 and 4 1,383.0

Particulate Matter less than 2.5 microns (PM 2.5 ) Total 28 36 .0

Particulate Matter less than 2.5 microns (PM 2.5 ) Total (Scenario C) Units 1 and 4 2,810. 0

Table 102.B : Total Potential HAPS that exceed 1.0 ton per year

Pollutant Emissions (tons per year)

Ammonia (Scenario A , SCR) (NM

- TAP) 105.9

Ammonia (Scenario B, SNCR) (NM

- TAP) Units 1

- 4 525.0 Ammonia (Scenario C , SNCR) (NM

- TAP) (Scenario C) Units 1

and 4 *** 275.0 Hydrochloric acid (HCl) 21.3

Hydrofluoric Acid; (Hydrogen fluoride) 44.7

Sulfuric Acid ( H 2 SO 4 ) ( Scenario A, SCR Only) (HAP&TAP) 21. 6

Total HAPs (Scenario A, SCR Only) 88.2

Total HAPs (Scenario B, SNCR) Units 1

- 4 66.8

Total HAPs (Scenario C, SNCR) Units 1 and 4 *** 40.0

Total HAPs ** (Pre

- construction) 74.6

* HAP emissions are already included in the VOC emission total.

** The total HAP emissions may not agree with the sum of individual HAPs because only individual HAPs greater

than 1.0 tons per year are listed here.

*** Ammonia slip and resulting potential emissions will be determined based on the SNCR performance testing described in Condition A112(C)(6).NSR Permit No. 0063M8R3 Page 6 of 62

A103 Facility: Applicable Regulations

A. The permittee shall comply with all applicable sections of the requirements listed in

Table 103.A

.

Table 103.A : Applicable Requirements

Applicable Requirements Federally

Enforceable Unit

No.

20.2.1 NMAC General Provisions X Entire Facility

20.2.3 NMAC Ambient Air Quality Standards X Entire Facility

20.2.7 NMAC Excess Emissions X Entire Facility 20.2.14 NMAC Coal Burning Equipment

– Particulate Emissions X E301, E302, E303, E304

20.2.31 NMAC Coal Burning Equipment

– Sulfur

Dioxide X E301, E302, E303, E304

20.2.32 NMAC Coal Burning Equipment

– Nitrogen

Dioxide X E301, E302, E303, E304

20.2.61 NMAC Smoke and Visible Emissions X E602, E603, E604, E605,

E606

20.2.70 NMAC Operating Permits X Entire Facility

20.2.71 NMAC Operating Permit Emission Fees X Entire Facility

20.2.72 NMAC Construction Permit X Entire Facility

20.2.73 NMAC Notice of Intent and Emissions Inventory Requirements X Entire Facility

20.2.74 NMAC P ermits

– P revention of S ignificant

D eterioration (PSD) X Entire Facility

20.2.77 NMAC New Source Performance X E301, E302, E303, E304, E803, E804, E805
20.2.300 NMAC, Reporting of Greenhouse Gas

Emissions

– Effective Jan 1, 2011 X E301, E302, E303, E304

40 CFR 50 National Ambient Air Quality Standards X Entire Facility

40 C F R 60, Subpart A , General Provisions X E301, E303, E304, E803, E804, E805 40 CFR 60 Subpart D

– Standards of Performance

for Fossil

- Fuel

- Fired Steam Generators X E301, E303, E304

40 CFR 60 Subpart OOO

– Standards of Performance for Nonmetallic Mineral Processing

Plants X E803, E804, S805

40 C F R 6 3 , Subpart A , General Provisions X E301, E302, E303, E304 40 CFR 63, Subpart UUUUU, Mercury and Air

Toxics Rule (effective date April 16 ,2015) X E301, E302, E303, E304

40 CFR 64 Compliance Assurance Monitoring X E301, E302, E303, E304

40 CFR 68 Chemical Accident Prevention X Entire Facility
40 CFR 72 Subparts B, D, and I

– Acid Rain Permit Regulations X E301, E302, E303, E304NSR Permit No. 0063M8R3 Page 7 of 62

Applicable Requirements Federally

Enforceable Unit

No.

40 CFR 73 Subparts B, C, and D

– Sulfur Dioxide Allowance System X E301, E302, E303, E304

40 CFR 75 Subparts A

- G

- Continuous Emission Monitoring X E301, E302, E303, E304

40 CFR 76 Acid Rain Nitrogen Oxides Emission Reduction Program X E301, E302, E303, E304

40 CFR 77 Excess Emissions X E301, E302, E303, E304 40 CFR 82 Subpart B

– Protection of Stratospheric Ozone, Servicing of Motor Vehicles X Entire Facility

March 10, 2005 Consent Decree filed in the United States District Court, District of New Mexico X E301, E302, E303, E304

Demister Settlement Agreement X E301, E302, E303, E304 SJGS Federal Implementation Plan (FIP) published in 40 CFR 52.1628 (August 22, 2011) X E301, E302, E303, E304

Regional Haze State Implementation Plan (SIP)

under 40 CFR 51. 309 ( June 15, 2012 ) X E301, E302, E303, E304

Revised New Mexico Regional Haze State Implementation Plan (R H SIP) adopted September 5, 2013

. X E301, E302, E303, E304

B. Table 103.B list s requirements that are not applicable to this facility. This table only includes those requirements cited in the application as applicable and determined by the Department to be not applicable , or the Department determined that the requirement does not impose any conditions on a regulated piece of equipment.

Table 103.B : Non

- Applicable Requirements

Non

- Applicable Requirements (1) (2) Justification For

Non

- Applicability 40 CFR 60 Subpart K

– Standards of Performance for Storage Vessels for Petroleum Liquids X See note (2) below

40 CFR 60 Subpart Ka

– Standards of Performance for Storage Vessels for Petroleum Liquids X See note (2) below

(1) Not Applicable For This Facility: No existing or planned operation/activity at this facility triggers the applicability of these requirements. (2) No Requirements: Although th ese regulations may apply , they do not impose any specific requirements on the operation of the facility as described in this permit.NSR Permit No. 0063M8R3 Page 8 of 62

C. A pplicable requirements that give rise to emissions limits in this permit.

Table 103. C : Applicable Requirements Giving R ise to Permit Emission Limits
(for information only, not an enforceable condition)

Emission Unit Nos. Applicable Requirement Description of Requirement

E301, E303, E304 40 CFR 60.42(a)(1) PM Emission Limit

E301, E303, E304 40 CFR 60.42(a)(2) Opacity Emission Limit

E301, E303, E304 40 CFR 60.43(a)(2) SO 2 Emission Limit

E301, E303, E304 40 CFR 60.44(a)(3) NOx Emission Limit

E301, E303, E304 20.2.14.201.A NMAC PM Emission Limit

E301, E303, E304 20.2.14.201.B NMAC PM

- 2 Emission Limit

E301, E303, E304 20.2.31.109.B NMAC SO 2 Emission Limit

E301, E303, E304 20.2.32.109 NMAC NOx Emission Limit

E302 20.2.14.202.A NMAC PM Emission Limit

E302 20.2.14.202.B NMAC PM

- 2 Emission Limit

E302 20.2.31.110.A NMAC SO 2 Control Efficiency Limit

E302 20.2.32.110.C NMAC NOx Emission Limit

E301, E302, E303, E304 20.2.31.109.C NMAC SO 2 Emission Limits (Plant

- Wide)

E301, E302, E303, E304 NSR No. 63

- M6 Emission Limits for NOx, SO 2 , PM

- 10, TSP, CO, and VOC

E803 40 CFR 60.672(a) PM and Opacity Emission Limits

E804, E805 40 CFR 60.672(b) Opacity Emission Limit

E602, E603, E604, E605, E606 20.2.61.109 NMAC Opacity Emission LimitNSR Permit No. 0063M8R3 Page 9 of 62

Emission Unit Nos. Applicable Requirement Description of Requirement

E101, E102, E103, E104, E201, E406, E407, E408, E409, E410, E411, E505, E506, E507, E508, E509, E510, E701, E702, E703, E704, E705, E706, E7 07, E801,

E802 NSR No. 63

- M6 Emission Limits for NOx, SO 2 , PM

- 10, TSP, CO, or VOC

E301, E302, E303, E304 PNM self

- imposed SO 2 Emission Limits

E301, E302, E303, E304 FIP (Scenario A) NOx, Ammonia, H 2 SO 4 and HAP

Limits

E301, E302, E303, E304 SIP (Scenario B) NOx and Ammonia Limits

E301and E304 R H SIP (Scenario C) NOx and Ammonia Limits

D. Unit s E301, E303, and E304 are subject to federal new source performance standards (NSPS) found in CFR Title 40, Part 60, Subpart A

- General Provisions, and Subpart D and shall comply with both the notification requirements in Subpart A and with the specific r equirements of Subpart D.

E. New Source Performance Standards (NSPS) found in 40 CFR 60, Subpart A

- General Provisions, and Subpart OOO applies to certain pieces of equipment in the limestone handling system. Affected units shall comply with both the notif ication requirements in Subpart A and with the specific requirements of Subpart OOO.

F. Units E301, E302, E303, and E304 are subject to the applicable requirements of 20.2.14, 20.2.31, 20.2.32 NMAC. Table 10 3

. F identifies whether the boiler unit is a

new or existing unit including its vintage designation.

Table 103.F : Boiler Designation (NMAC) Information

Unit

Number Vintage 20.2.14, 20.2.31, and 20.2.32 NMAC

20.2.31 .7(H) 20.2.32 .7(O)

E301 1

-- New Coal Burning Equipment

E302

-- D Existing Coal Burning Equipment

E303 2

-- New Coal Burning Equipment

E304 3

-- New Coal Burning EquipmentNSR Permit No. 0063M8R3 Page 10 of 62

A104 Facility: Regulated Sources

A. Table 104 lists the emission units authorized for this facility. Emission units

identi fied as exempt act ivities and /or equipment (as defined in 20.2.72.202 NMAC) not regulated pursuant to the Act are not included.

Table 104 : Regulated Sources L ist

Unit No. 1 Description Manufacture Manufacture

Date Model

No. Serial

No. Capacity Control Equipment

S301/E301 Unit 1 Coal

Boiler Begin

Commercial

Operation

12/1976 Foster

Wheeler -- 08

- 1266

-- 3707

MM Btu/hr

4 Fabric Filter

SO 2 Scrubber

Scenario A: SCR

Scenario B : SNCR

Scenario C: SNCR

S302/E302 Unit 2 Coal

Boiler Begin

Commercial

Operation

11/1973 Foster

Wheeler -- 08

- 1266

-- 3688

MM Btu/hr

4 Fabric Filter

SO 2 Scrubber

Scenario A: SCR

Scenario B : SNCR

S303/E303 Unit 3 Coal

Boiler Begin

Commercial

Operation

12/1979 Babcock &

Wilcox -- RB

- 544

-- 5758

MM Btu/hr

4 Fabric Filter

SO 2 Scrubber

Scenario A: SCR

Scenario B : SNCR

S304/E304 Unit 4 Coal

Boiler Begin

Commercial

Operation

4/1982 Babcock &

Wilcox -- RB

- 545

-- 5649

MM Btu/hr

4 Fabric Filter

SO 2 Scrubber

Scenario A: SCR

Scenario B : SNCR

Scenario C: SNCR

S508/E501 Unit 1 Duct

Leaks -- -- -- -- -- G ood air pollution control practices

S509/E502 Unit 2 Duct

Leaks

S510/E503 Unit 3 Duct

Leaks -- -- -- -- --

S511/E504 Unit 4 Duct

Leaks -- -- -- -- --

S111/E101 Coal Pile A

Maintenance -- -- -- -- -- TBD

S112/E102 Coal Pile A

Maintenance -- -- -- -- -- TBD

S113/E103 Coal Pile A

Maintenance -- -- -- -- -- TBD

S114/E104 Coal Pile A

Maintenance -- -- -- -- -- TBDNSR Permit No. 0063M8R3 Page 11 of 62

Unit No. 1 Description Manufacture Manufacture

Date Model

No. Serial

No. Capacity Control Equipment

S201/E202 Coal Silo

Transfer

Point -- -- -- -- -- Enclosure

S203/E203 Coal Belt to

Pulverizers

transfer

Point -- -- -- -- -- Enclosure

S204/E201 Coal

Pulverizers Multiple Multiple Multiple Multiple 8,200,000

tpy 3 Building Enclosure

S425/E406 Unit 1 Cooling

Tower Marley Note 2 D52 6615

- 5

- 11 170,000

gpm Drift Eliminators/Design

S426E407 Unit 2 Cooling

Tower Marley Note 2 D52 6615

- 5

- 11 165, 000

gpm

S427/E408 Unit 3 Cooling

Tower Marley Note 2 Model 2 644

- 12

- 333

- 75 220, 000

gpm

S428/E409 Unit 4 Cooling

Tower Marley Note 2 Model 2 6616

- 12

- 113

- 80 227,500

gpm

S429/E410 Aux #1 /#2 Cooling

Tower Marley 1978 600

series NA 3 5,000 gpm

S518/E518 Unit 1 Fly

Ash Silo

Vent W.W. Sly Oct 2008 JM3586 NA 29 1 846 tpy Fabric Filter Baghouse

S519/E519 Unit 2 Fly

Ash Silo

Vent W.W. Sly Mar 2009 JM3586 NA 290430 tpy Fabric Filter Baghouse

S512/E505 Unit 3 Fly

Ash Silo

Vent W.W. Sly Dec 1979 JM3586 NA 25,400 scfm Fabric Filter Baghouse

S513/E506 Unit 4 Fly

Ash Silo

Vent W.W. Sly Apr 1982 JM3586 NA 25,400 scfm Fabric Filter Baghouse

S514/E507 Unit 1 Fly

Ash Silo Unloading -- -- -- -- 291846 tpy Moisture Control (Bulk Unloading)

S515/E508 Unit 2 Fly

Ash Silo Unloading -- -- -- -- 290430 tpy

S516/E509 Unit 3 Fly

Ash Silo Unloading -- -- -- -- 453424 tpy

S517/E510 Unit 4 Fly

Ash Silo Unloading -- -- -- -- 453424 tpyNSR Permit No. 0063M8R3 Page 12 of 62

Unit No. 1 Description Manufacture Manufacture

Date Model

No. Serial

No. Capacity Control Equipment

S738/E704 Front End

Loader (Around Coal Piles) -- -- -- -- -- Watering

S753/E707 Front End

Loader
(Around Gypsum

Piles) -- -- -- -- -- Watering

E702, E703,

E704

- B,

and E706 Un

- Paved

Haul Roads -- -- -- -- -- Watering

E701, E705, and

E708 Paved Road

Emissions -- -- -- -- -- Water Truck Street Sweeper

S804/E802 Lime Stone

Pile

Maintenance -- -- -- -- -- TBD

E801 Limestone

Truck Unloading __ __ __ __ __ None

S806/E803 Limestone Silo loading

__ __ __ __ __ Baghouse

E804 Limestone Hopper to

Transfer Conveyor __ __ __ __ __ None

E805 Limestone

Silo to Weigh __ __ __ __ __ None

S901 /E901 Activated

Carbon Silo -- Nov 2008

-- -- 578 scfm Dedicated Baghouse (E901)

S902 /E902 Activated

Carbon Silo -- Mar 2009

-- -- 578 scfm Dedicated Baghouse (E902)

S903 /E903 Activated

Carbon Silo -- Mar 2008

-- -- 578 scfm Dedicated Baghouse (E903)

S904 /E904 Activated

Carbon Silo -- Nov 2007

-- -- 578 scfm Dedicated Baghouse (E904)

E520 Unit 1/2

Sorbent Silo (Scenario A) TBD TBD

TBD Silo Vent Filer

E521 Unit 3

Sorbent Silo (Scenario A) TBD TBD

TBD Silo Vent Filer

E522 Unit 4

Sorbent Silo (Scenario A) TBD TBD

TBD Silo Vent Filer

1 Unit number designations starting with an “S” indicate Source and “E” Designations indicate emissions pointsNSR Permit No. 0063M8R3 Page 13 of 62

2 The manufacture date for the boilers (Units E301

– E304), the boiler specific cooling towers (Units 406

– 409),

and the coal pulverize r (Unit E201) is assumed to be the “begin commercial operations” date for the respective

boilers.

3 The coal pulverizers have a capacity of 1,600,000 tons per year of coal for each emissions unit E301 and E302. The coal pulverizers have a capacity of 2,500,000 tons per year of coal for each emissions unit E303 and E304. These capacity values are rounded to the nearest 100,000 tons per year. These values are based on historical coal use, scaled up to 100 percent unit utilization (i.e 100 percent l oad at 8760 hours per year).”

4 The Btu/hr value listed in Table 1 04 Includes a 6% safety factor added to nominal rated capacity of the boilers existing at the time of permit issuance.

A105 Facility: Control Equipment

A. Table 10 4 lists all the pollution control equipment required for this facility. Each emission point is identified by the same number that was assigned to it in the permit application.

A106 Facility: Allowable Emissions

A. The following Section list the emission units and their allowable emission limits. ( 40 CFR 50, 40 CFR 60, Subparts A and D, and OOO ; 40CFR72 Subparts B, D, and I ; 40CFR73 Subparts B, C, and D ; 40CFR75 Subparts A

- G ; 40CFR76 ; 20.2.72.210.A and B.1 NMAC)

.

Table 106.A : Maximum Allowable Emission Rates for Units E301 (1), E302 (2), E303 (3), and E304 (4)

Unit No.(s) Pollutant Maximum Allowable

Emission Rate Averaging Period Applicable Requirement Compliance

Method

E30 1

E30 2

E30 3

E30 4 CO E301

– 3000 lb/hr

E302

– 2000 lb/hr

E303

– 2000 lb/hr

E304

– 2000 lb/hr Per Compliance Method 20.2.3 NMAC, 40 CFR 50,

NSR No. 63

- M2 Quarterly Testing

E303 CO 4,837 tons/yr Monthly rolling, 12

- month

Total NSR No. 63

- M8R2 Quarterly testing

& Process

Records

E30 1

E30 2

E30 3

E30 4 NOx E301

– 1,573.7 lb/hr

E302

– 2,435.3 lb/hr

E303

– 2,444.4 lb/hr

E304

– 2,398.1 lb/hr 24

- Hour Average NSR No. 63

- M2 20.2.32 NMAC, CEMS

E30 1

E30 2

E30 3

E30 4 NOx E301

– 4871 tons/yr

E302

– 4844 tons/yr

E303

– 7564 tons/yr

E304

– 7424 tons/yr Daily rolling 365

- day Total NSR No. 63

- M2

20.2.32 NMAC, CEMS

E30 1

E30 3

E30 4 NOx 0.70 lb/MMBtu 3

- Hour Average, Rolled Hourly 40 CFR 60.44(a)(3) CEMS

E30 2 NOx 0.70 lb/MMBtu 3

- Hour Average, Rolled Hourly 20.2.32.110.C NMAC CEMSNSR Permit No. 0063M8R3 Page 14 of 62

Unit No.(s) Pollutant Maximum Allowable

Emission Rate Averaging Period Applicable Requirement Compliance

Method

E301

E303

E304 NOx 0.45 lb/MMBtu 3

- Hour Average, Rolled Hourly 20.2.32.109 NMAC CEMS

E301

E302

E303

E304 NOx 1, 5 Current

- 0.30 lb/MMBtu

Scenario A

– 0. 05 lb/MMBtu

Scenario B

– 0. 23 lb/MMBtu 30 day rolling average 5

30

- boiler operating day rolling average 1 0
30 day rolling average 1 0 0063

- M4

FIP & 0063

- M 8 CEMS & Process

Records

E301

E304 NOx 1, 11 Combined emissions from

Units 1 and 4 under Scenario

C

– 0. 23 lb/MMBtu 30

- boiler operating day rolling average 10 NSR 63M6R3 and

R H SIP CEMS & Process

Records

E301

E302

E303

E304 Opacity 8 20% 6

- Minute Average 40 CFR 60.42(a)(2) ; for E302

- NSR 63M4

and Consent Decree COMS

E30 1

E30 2

E30 3

E30 4 TSP 4

(Filterable) E301

– 174.8 lb/hr

E302

– 173.9 lb/hr

E303

– 271.6 lb/hr

E304

– 266.5 lb/hr Per Compliance Method NSR No. 63

- M2 Quarterly Testing

E30 1

E30 2

E30 3

E30 4 TSP 4

(Filterable) E301

– 765.8 tons/yr

E302

– 761.9 tons/yr

E303

– 1,189.6 tons/yr

E304

– 1,167.1 tons/yr Per Compliance Method NSR No. 63

- M2 Quarterly Testing

E30 1

E30 2

E30 3

E30 4 PM 4,7

(Filterable) 0.015 lb/MMBtu Per Compliance Method 0063

- M4 and Consent

Decree Quarterly Testing

E301

E303

E304 PM 4

(Filterable) 0.1 lb/MMBtu Per Compliance Method 40 CFR 60.42(a)(1) Quarterly Testing

E301

E303

E304 PM 4

(Filterable) 0.05 lb/MMBtu Per Compliance Method 20.2.14.201.A NMAC Quarterly Testing

E302 PM 4

(Filterable) 0.05 lb/MMBtu Per Compliance Method 20.2.14.202.A NMAC Quarterly Testing

E30 1

E30 2

E30 3

E30 4 PM

- 10 4

(Filterable) E301

– 174.8 lb/hr

E302

– 173.9 lb/hr

E303

– 271.6 lb/hr

E304

– 266.5 lb/hr Per Compliance Method NSR No. 63

- M2 Quarterly Testing

E30 1

E30 2

E30 3

E30 4 PM

- 10 4

(Filterable) E301

– 765.8 tons/yr

E302

– 761.9 tons/yr

E303

– 1,189.6 tons/yr

E304

– 1,167.1 tons/yr Per Compliance Method NSR No. 63

- M2 Quarterly Testing

E301

E302

E303

E304 PM

- 2.5 4

(Filterable) E301

– 55.6 lb/hr

E302

– 55.3 lb/hr

E303

– 86.4 lb/hr

E304

– 84.7 lb/hr Per Compliance Method 0063

- M6 Quarterly Testing

E301

E302

E303

E304 PM

- 2.5 4

(Filterable) E301

– 243.5 tons/yr

E302

– 242.2tons/yr

E303

– 378.4 tons/yr

E304

– 371.0 tons/yr Per Compliance Method 0063

- M6 Quarterly TestingNSR Permit No. 0063M8R3 Page 15 of 62

Unit No.(s) Pollutant Maximum Allowable

Emission Rate Averaging Period Applicable Requirement Compliance

Method

E301

E302

E303

E304 PM

- 2.5 4

( Total ) 0.0 34 lb/MMBtu Per Compliance Method NSR No. 63

- M 7 Annual Testing

E30 1

E30 2

E30 3

E30 4 PM

- 2.5 4

( Total ) E301

– 126.0 lb/hr

E302

– 125.4 lb/hr

E303

– 195.8 lb/hr

E304

– 192.1 lb/hr Per Compliance Method NSR No. 63

- M 7 Annual Testing

E30 1

E30 2

E30 3

E30 4 PM

- 2.5 4

( Total ) E301

– 552.0 tons/yr

E302

– 549.0 tons/yr

E303

– 858.0 tons/yr

E304

– 841.0 tons/yr Per Compliance Method NSR No. 63

- M 7 Annual Testing

E30 1

E30 3

E30 4 PM

- 2 4

(Filterable) 0.02 lb/MMBtu Per Compliance Method 20.2.14.201.B NMAC Note 2

E30 2 PM

- 2 4

(Filterable) 0.04 lb/MMBtu Per Compliance Method 20.2.14.202.B NMAC Note 2

E30 1

E30 2

E30 3

E30 4 SO 2 90% removal Annual Average 0063

- M4 CEMS

E30 1

E30 2

E30 3

E30 4 SO 2 6 0.250 lb/MMBtu 7

- day block average 0063

- M4 CEMS &

Process

Records

E30 1

E30 2

E30 3

E30 4 SO 2 E301

– 2435.0 tpy
E302

– 2423.0 tpy
E303

– 3783.0 tpy
E304

– 3711.0 tpy Per Compliance Method 20.2.3 NMAC,

40 CFR 50 CEMS

E30 1

E30 2

E30 3

E30 4 SO 2 9 0.15 lb/MMBtu 9 30

- Day Average, Rolled Daily PNM self imposed limit, NSR 63M6R2

and FIP CEMS & Process

Records

E30 1

E30 4 SO 2 12 Combined emissions from Units 1 and 4, 0.10

lb/MMBtu 12 30

- Boiler Operating Day Average, Rolled Daily NSR 63M6R3 and

R H SIP

Standard becomes effective on March 5,

2014 CEMS & Process

Records

E30 1

E30 3

E30 4 SO 2 1.2 lb/MMBtu 3

- Hour Average, Rolled Hourly 40 CFR 60.43(a)(2) CEMS

E30 1

E30 3

E30 4 SO 2 1.2 lb/MMBtu 3

- Hour Average, Rolled Hourly 20.2.31.109.B NMAC CEMS

E30 2 SO 2 Minimum

72% Control 30

- Day Average, Rolled Daily 20.2.31.110.A NMAC CEMS

E30 1

E30 2

E30 3

E30 4 VOC E301

– 11.1 lb/hr

E302

– 11.1 lb/hr

E303

– 17.3 lb/hr

E304

– 17.0 lb/hr Per Compliance Method NSR No. 63

- M2 Note 3NSR Permit No. 0063M8R3 Page 16 of 62

Unit No.(s) Pollutant Maximum Allowable

Emission Rate Averaging Period Applicable Requirement Compliance

Method

E30 1

E30 2

E30 3

E30 4 H 2 SO 4 Scenario A Only

– 0.00026

lb/ MMBtu hourly basis FIP

- 40 C.F.R. §

52.1628 Annual

Method 8A

E30 1

E30 2

E30 3

E30 4 Ammonia Slip 2 ppm design basis FIP

- 40 C.F.R. §

52.1628 SCR design

E30 1

E30 2

E30 3

E30 4 Ammonia Slip 10 ppm design basis SIP

- 40 C.F.R. § 51.309(g) SNCR design

1 Nitrogen dioxide emissions include all oxides of nitrogen expressed as NO 2 2 PNM shall show compliance with either the PM or PM 2 limits as required in 20.2.14 NMAC.

3 Test results that demonstrate compliance with CO emission limits shall also be considered to demonstrate compliance with VOC emission limits for the subject emission unit.

4 The TSP emission limits in this permit only include filterable particulate emissions since the test method only

measures filterable TSP

. PM10 and PM2.5 filterable limits will remain. PM2.5 Total limits include both

filterable and condensibles.

5 For purposes of calculating the thirty (30) day rolling average, NO

x emissions for the first three (3) hours of a cold startup after coal is fed to the boiler shall be capped at 0.30 lb/MMBtu. Cold startup is defined as a startup when the boiler is at ambient indoor temperature measured at the time fuel is first fed to the boiler.

6 The seven (7) day average emission rate of SO 2 at San Juan Units E301, E302, E303, and E304 shall not exceed

0.250 lb

- SO 2 /MMBtu for each unit, calculated as a block average as measured by SO 2 CEMS located downstream of the scrubber outlet and any scrubber by

- pass return. For purposes of calculating the block average, SO 2 emissions for the first three (3) hours of a cold startup after coal is fed to the boiler shall be capped at 0.250 lb./MMBtu. Cold startup is defined as a startup when the boiler is at ambient indoor temperature

measured at the time fuel is first fed to the boiler.

7 The PM average emission rate for each of Units E301, E302, E303 , and E304 shall not exceed 0.015 lb

PM/MMBtu, as measured by EPA Reference Method 5 or 5i stack tests, conducted at least once each calendar quarter at times and conditions specified by the Department, and according to test protocols approved by the Depar tment, but in all cases under conditions and in a manner no less stringent than described in EPA’s 2009 Clean Air Act National Stack Testing Guidance.

8 The opacity limit for San Juan Units E301, E303, and E304 as required by 40 CFR 60.D and E301, E302, E3 03

, and E304 as required by this permit shall be twenty (20) percent, averaged over any six (6) minute period except for one six (6) minute average per hour of up to twenty

- seven (27) percent opacity. This limit shall apply at all times when air pollutants are being discharged into the atmosphere, unless PNM demonstrates that any excess opacity reading: (a) was caused by a startup, shutdown, malfunction, or emergency, or (b) occurred when both the boiler and all fans that move flue gas in the unit were off. Load changes, poor coal quality, air heater cleaning, sootblowing, and high ash hoppers shall not be used as a defense for any excess opacity reading. Opacity shall be measured in the duct or, if approved by EPA, after the outlet of the baghouse and cor rected to

stack exit. (CD 9a)

9 Prior to January 31, 2013 : Compliance with the 0.15 lb/MMBtu heat input daily rolling, 30

- day average SO 2 emission limitation for Units 2 and 3 is determined by calculating at the end of each rolling 30 successive boiler operating days the arithmetic average of all hourly emission rates for SO 2 , except for data obtained during emergency conditions. Hourly emission rates will only be determined b ased on valid SO 2 CEMs data for any hour where fuel is combusted in the unit. No missing hour substitute data will be used in determining compliance with the proposed 0.15 lb/MMBtu heat input 30

- day rolling average SO 2 emission limit. “Boiler operating da y” means a 24

- hour period between 12 midnight and the following midnight (MST) during which any fuel is combusted at any time in the steam

- generating unit. If Scenario A becomes effective and the SCR isNSR Permit No. 0063M8R3 Page 17 of 62

installed, then e ffective on September 20, 2016: The SO 2 emission rate limit for each unit in the plant shall be 0.15 pounds per million British thermal units (lbs/MMBtu), as averaged over a rolling 30 boiler operating

- day period. For each unit on each boiler

- operating

- day, the hourly SO 2 emissions measured in lbs/MMBtu, shall be averaged over the hours the unit was in operation to obtain a daily boiler

- operating

- day average. Each day, the

30

- day

- rolling average SO 2 emission rate for each unit (in lbs/MMBtu) shall be determined by averaging the daily boiler

- operating

- day average emission rate from that day and those from the preceding 29 days. This method of calculating SO 2 emissions becomes effective on September 20, 2016 if SCR is installed.

1 0 Under Scenario A: Per FIP at 40CFR52.1628 d(2 ), The NOx limit for each unit in the plant, expressed as nitrogen dioxide (NO 2 ), shall be 0.05 pounds per million British thermal units (lb/MMBtu) as averaged over a rolling 30 calendar day period. For each unit, NOx emissions for each calendar day shall be determined by summing the hourly emissions measured in pounds of NOx. For each unit, heat input for each calendar day shall be determined by adding together all hourly heat inputs, in millions of BTU. Each day the thirty

- day rolling average for a unit s hall be determined by adding together the pounds of NOx from that day and the preceding 29 days and dividing the total pounds of NOx by the sum of the heat input during the same 30

- day period. The result shall be the 30 day

– rolling average in terms of lb/M MBtu emissions of NOx. If a valid NOx pounds per hour or heat input is not available for any hour for a unit, that heat input and NOx pounds per hour shall not be

used in the calculation of the 30

- day rolling average for NOx. This method of calculating NOx emissions becomes effective on September 20, 2016 if SCR is installed. Unless SCRs are installed and before the September 20, 2016 effective date, footnotes 5 and 9 remain in effect.

11. The daily NOx 30

- boiler operating day rolling average for Units 1 an d 4 will be determined based on the calculation method described in Condition A112 (C)(3).

12. The daily SO 2 30

- boiler operating day rolling average for Units 1and 4 will be determined based on the calculation method described in Condition A112 (C)(9).

B. Ta ble 106.B contains the maximum allowable emission rates for Units E301, E302, E303, and E304 combined.

Table 106.B

, Maximum Allowable Emission Rates for Units E301

- E304 Combined

Pollutant Maximum

Allowable

Emission Rate Averaging

Period Applicable Requir ement Compliance

Method

NOx 1 9,000 lb/hr 24

- Hour Average, Rolled Hourly NSR No. 63

- M2,

40 CFR Part 50 CEMS

SO 2 13,000 lb/hr 3

- Hour Average, Rolled Hourly 20.2.31.109.C NMAC CEMS

SO 2 0.55 lb/MMBtu 30

- Day Average, Rolled Daily 20.2.31.109.C NMAC CEMS & Process

Records

SO 2 0.46 lb/MMBtu Annual Average NSR No. 63

- M2 CEMS & Process

Records

1 Nitrogen dioxide emissions include all oxides of nitrogen expressed as NO 2NSR Permit No. 0063M8R3 Page 18 of 62

C. Table 106.C list the allowable emissions from duct leaks. Compliance shall be determined by implementation of a duct leak management program.

Table 106.C

, Maximum Allowable Emission Rates for Duct Leaks

Emission

Unit No. Maximum Allowable Emission Rates

TSP PM

- 10 PM

- 2.5 NOx CO SO 2 pph tpy pph tpy pph tpy pph tpy pph tpy pph tpy

E501 11.3 45.0 4.5 18.1 2.1 9.2 0.3 0.8 0.5 2.0 1.1 4.5

E502 12.4 50.0 4.9 20.0 2.1 9.2 0.4 0.8 0.4 1.5 1.2 4.9

E503 12.6 50.4 5.0 20.1 2.0 8.9

-- 0.8 0.2 1.0 1.3 5.0

E504 14.5 58.3 5.8 23.3 2.0 8.9 0.3 1.0 0.3 1.1 1.5 5.8

1 Emission rates for Duct Leaks under Scenarios A or B ends not later September 20, 2016.

D. Table 106. D list s the allowable emission limits for non

- boiler emission units. The

emissions from any individual piece of equipment shall not excee d the limits listed

in the table . (NSR 63M6R1, Condition 2.e)

Table 106.D

, Maximum Allowable Emission Rates for Non

- Boiler Emission Units

Emission

Unit No. Maximum Allowable Emission Rates in Pounds per Hour (pph) and Tons per Year (tpy)

TSP PM

- 10 pph tpy pph tpy

E101 1.6 7.0

-- 1.6

E102 1.6 7.0

-- 1.6

E103 1.6 7.0

-- 1.6

E104 1.6 7.0

-- 1.6

E201 7.3 32.0 2.8 12. 0

E202

-- 3.1

-- 1.5

E203

-- 3.1

-- 1.5

E406 10.2 44.7 2.4 10.5

E407 9.9 43.4 2.3 10.2

E408 6.4 28.2 2.5 10.9

E409 13.7 59.8 3.2 14.1

E41 0 1. 4 6.0

-- 2.3

E505 2.2 9.5 2.2 9.5

E506 2.2 9.5 2.2 9.5

E507 0.6 2.4

-- 1.1

E508 0.6 2.4

-- 1.1

E509 0.9 3.7

-- 1.8

E510 0.8 3.7

-- 1.7

E518 1.6 7.0 1.6 7.0NSR Permit No. 0063M8R3 Page 19 of 62

Emission

Unit No. Maximum Allowable Emission Rates in Pounds per Hour (pph) and Tons per Year (tpy)

TSP PM

- 10 pph tpy pph tpy

E519 1.6 7.0 1.6 7.0

Paved Roads (E701, E705, E708) 16.4 68.8 3.3 13.8

Unpaved Roads

(E702, E703, E704B, ,E706) 21.7 77.9 6.6 23.8

E801 0.7 3.1

-- 1.5

E802 2.4 10.4

-- 1.6

E803

-- 1.1

-- -- E804

-- -- -- -- E805

-- -- -- -- S901

-- -- -- -- S902

-- -- -- -- S903

-- -- -- -- S904

-- -- -- -- E520

-- -- -- -- E521

-- -- -- -- E522

-- -- -- --

“

-- “ indicates that the emissions ar e less than 1.0 pph or 1. 0 tpy and emission limits are not required for this permit.

E. Unless otherwise required by this permit or another applicable regulation, compliance with the NO x emission limits shall be determined on a unit

- specific basis using data from NO x CEMS that have been installed, calibrated, and operated in accordance with 40 CFR. 75 and any other applicable requirement

.

F. Unless otherwise required by this permit or anothe r applicable regulation, compliance with the SO 2 emission limits shall be determined on a unit

- specific basis using data from SO 2 CEMS that have been installed, calibrated, and operated in accordance with 40 CFR 75 and any other applicable requirement.

G. Ea ch affected facility as defined in 40 CFR 60 Subpart OOO of the limestone handling system, including the limestone silo, shall meet the standards for particulate matter specified in 40 CFR 60.672

.

H. In accordance with 20.2.61.109 NMAC, the owner or operator of stationary combustion equipment shall not permit, cause, suffer or allow visible emissions from the stationary combustion equipment to equal or exceed an opacity of 20 percent; provided, however, stationary combustion equipment which is regulated by Pa rts 20.2.10 NMAC through 20.2.18 NMAC, 20.2.37 NMAC, and 20.2.42 NMAC, and any other Part of Chapter 2 which specifically limits particulate emissions isNSR Permit No. 0063M8R3 Page 20 of 62

exempted from this Part. The emergency generators are subject to 20.2.61.109

NMAC.

I. The activated carb on silo baghouses shall be designed and operated so there are no

visible emissions.

(1) For mercury control, the operating procedures needed to maximize mercury removal per the consent decree requirements are not yet available to explicitly incorporate in thi s permit renewal. Once PNM, NMED and the Plaintiffs agree on the maximal mercury removal rate and procedure, then this permit will be re

opened or modified to incorporate limits and/or conditions to meet consent decree requirements. (CD 9d)

(2) The permittee s hall use the mercury (Hg) sorbent traps for two purposes: to conduct a Hg study to determine the optimal activated carbon injection rate as required by the SJGS Consent Decree, and secondly, to operate the sorbent traps as Hg continuous monitoring devices based on the applicable QA/QC requirements in Appendix A of 40 CFR 63, Subpart UUUUU (i.e. MATS regulation), which references performance specification (PS) 12b. SJGS will use the sorbent traps as continuous monitoring devices except when the Hg st udy testing is being conducted.

J. Emission limits totals are used solely for assessing annual fees in accordance with 20.2.71 NMAC. SJGS has many limits for each pollutant. This table shows the most stringent of these limits for each pollutant for which the annual fees will be based. Only pollutants for which we can assess fees are shown. (B103A) Emission totals

from NSR Permit 0063M7 will be used for fees until all units under NSR 0063M8 have been modified and new pollution controls are operational.

Table 10 6

. J : Emissions (tons per year) total for annual fees use

Unit 1 NOx 2 CO 3 VOC 4 SO 2 5 PM

E301

Scenario A

Scenario B 4,871

812 3,734 13,140 48.7 2,435 552

244

244

E302

Scenario A

Scenario B 4,844

808 3,715 8,760 48.5 2,423 549

242

242

E303

Scenario A

Scenario B 7,564 1,261 5,801 4,837 75.8 3,783 858

378

378

E304

Scenario A

Scenario B 7,424 1,237 5,691 8,760 74.5 3,711 841

371

371

Misc 6 455NSR Permit No. 0063M8R3 Page 21 of 62

Unit 1 NOx 2 CO 3 VOC 4 SO 2 5 PM

Scenario A

Scenario B 45 5

45 5

Totals*

Scenario A

Scenario B 24,703 4,118 18,941 35,497 No Change No Change 247.5 No Change No Change 12,352 No Change No Change 3,255 3,255 3,255

Scenario C TBD TBD TBD TBD TBD

Used for fees ( based on 63M7) 6,000 6,000 247.5 6

, 000 3,255

* Amounts are capped at 6,000 tpy per pollutant by regulation (20.2.71.111.C(4) NMAC).

1 Units 1,2,3,4: Tons per year NOx limits obtained by scaling up 0.3 lbs/MMBtu 30

- day average (CD 9cii; Table 106.A).

2 Units 1,2,4: Tons per year CO limits obtained by scaling up lbs/hr limits (Table 106.A). Unit 3 tpy limit from

Table 106.A. 3 Units 1,2,3 ,4: VOC totals based on average coal Btu content and revised heat input values (Application dated January 2009).

4 Units 1,2,3,4: Tons per year SO 2 limits by scaling up 0.15 lb/MMBtu SO 2 PNM self imposed limit.

5 Units 1,2,3,4: Tons per year PM limits obta ined by scaling up 0.015 lb/MMBtu (CD 9cii; Table 106.A ) plus the

PM

- 2.5 condensibles of 0.019 lb/MMBtu (NSR 63M7 ).

6 Represents sum of the non

- boiler PM (TSP) is 455 tpy (calculated from Tables 2E, by eliminating the boiler PM)

.

A107 Facility : Allowable Startu p, Shutdown, & Maintenance (SSM)

A. SJGS Units have multiple NOx limits for different averaging times. Some limits are expressed in lb/ MMBtu rather than lbs/hr. Units 1, 3 and 4 have a 3

- hr average

limit of 0.45 lb/ MMBtu . During SSM this limit may be exceeded for each of these units. The maximum NOx emission rate during SSM for these units is 0.7

lb/ MMBtu . The Unit 2 3

- hr NOx limit is 0.7 lb/ MMBtu and Unit 2 NOx emissions are not expected to exceed this rate during SSM

. The permittee shall maintain

records in accordance with Condition B109 .E. SJGS shall comply with all other emission limits established for steady state operations even during SSM events.

A108 Facility: Allowable Operations

A. This facility is authorized for con tinuous operation. No monitoring, recordkeeping, and reporting are required to demonstrate compliance with continuous hours of operation.NSR Permit No. 0063M8R3 Page 22 of 62

A109 Facility: Reporting Schedules

A. For the Title V Permit: A Semi

- Annual Report of monitoring activities is due

within 45 days following the end of every 6

- month reporting period. The six month reporting periods start on January 1st and July 1st of each year.

B. For the Title V Permit: The Annual Compliance Certification Report is due within 30 days of the end of every 12

- month reporting period. The 12

- month reporting period starts on January 1st of each year.

C. The quarterly reportable items required by this permit shall be submitted quarterly.

A110 Facility: Fuel Sulfur Requirements

– not required

A111 Facility : 20.2.61 NMAC Opacity

– not required

A112 Construction Options

This permit has three distinct permitting scenarios that are mutually exclusive, i.e., if

one scenario becomes final the other two scenario s become moot. While permitting

scenarios A , B and C are distinct, this permit includes permit modifications that are

common to all scenarios. The permitting description given below, therefore, list s the permitting elements as “Common”, “Scenario A” only

, “Scenario B” only and “Scenario

C ” only.

A. Scenario A is the permitting scenar io required to implement the SJGS Federal Implementation Plan (FIP) published in 40 CFR 52.1628 ( dated August 22, 2011

, effective September 21, 2011 ). The provisions of this FIP are under judicial review, but the FIP implementation date makes it necessary to proceed with obtaining the authority

- to

- construct air permit immediately to insure construction of the required equipment (SCR) can begin in time to meet the FIP operational deadline. Permitting changes/updates to Scenario A (FIP) only:

(1) An SCR system o n each boiler unit

. (2) An anhydrous ammonia injection system used for supplying ammonia to the SCR system consisting of ammonia delivery, storage and injection equipment.

(3) A dry sorbent injection system (DSI) consisting of DSI delivery, storage and injection e quipment.

(4) Modification of the fly ash handling system through addition of ash hoppers at the economizer outlets on each boiler unit and bypass of the existing ESP

structure.NSR Permit No. 0063M8R3 Page 23 of 62

(5) Modification of the fan system to achieve “balanced” draft configuration allowing for the elimination of emission points E510, E502, E503 and E504.

(6) EPA extended the time for compliance with the emission limit s from 3 years to 5 years, the maximum period allowed by the Clean Air Act. Therefore, SCR

shall be installed on each of the four units as expeditiously as practicable, but in no event later than 5 years from the effective date of our final rule

. The Federal register date was August 22, 2011, effective on September 20, 2011. Installation of all control equipment and compliance with new emission limits shall be not later than September 20, 2016.

B. Scenario B is intended to implement the requirements of the State of New Mexico Regional Haze State Implementation Plan, (SIP) adopted pursuant to 40 CFR 51.309, which specifies controls for SJGS that are different than the FIP. If the judicial review of the FIP results in vacatur of the FIP requirements, P NM would implement the SIP requirements which require installation and operation of an SNCR control system, rather than SCR. SNCR is represented in this permit as

Scenario B. Permitting changes/updates to Scenario B (SIP) only:

(1) A system for delivery, st orage and injection of 50 percent urea solution into the flue gas of each boiler for NOx control by SNCR.

(2) Modification of the fan system to achieve “balanced” draft configuration allowing for the elimination of emission points E510, E502, E503 and E504.

(3) In accordance with 40 CFR 51.308(e)(1)(iv), the Department determine d that SNCR shall be installed on each of the four units as expeditiously as practicable, but in no event later than 5 years after approval by the EPA of th e SIP

. As of July 6, 2012, EPA has not approved the SIP. NMED establishes the deadline date to be the same as the FIP of September 20, 2016.

C. Scenario C is intended to implement the terms of the R evised New Mexico Regional Haze State Implementation Plan (R H SIP) adopted September 5, 2013 by the New Mexico Environmental Improvement Board (EIB), which is based on a tentative Agreement between the State of New Mexico, PNM

, and the Environmental Protection Agency (EPA). These terms include the addition (by January 31, 2016) of SNCR control tech nology to reduce nitrogen oxides (NOx) emissions from Units 1 and 4 to no greater than 0.23 lb/MMBtu; a testing program to determine if additional NOx emission reductions can be achieved; and the retirement of Units 2 and 3 by December 31, 2017. In additi on, the sulfur dioxide (SO 2 ) emission limit for Units 1 and 4 will be reduced from the current 0.15

lb /MMBtu emission limit to 0.10 lb/MMBtu. The SO 2 emission limit reduction

will occur no later than six months from the date the EIB adopt ed the R H SIP. The

revised RH SIP is based on the “Term Sheet Between the U.S. Environmental Protection Agency, Public Service Company of New Mexico

, and the State of New Mexico” dated February 15, 2013, included as attachment G to the RH SIP (andNSR Permit No. 0063M8R3 Page 24 of 62

hereafter in this permit referenced as the “Term Sheet”). The following terms are taken directly from the Term Sheet and are being incorporated into the Permit as part of Scenario C :

(1) The New Mexico Environment Department (NMED) will develop and seek adoption by the New Mexico Environmental Improvement Board (NM EIB) of

a State Implementation Plan (SIP) revision. If the NM EIB approves the SIP revision after following all applicable procedural requirements including notice and public hearing, the Governor of the State of New Mexcio or her designee will submit the SIP revision to EPA for approv al with supporting administrative

and technical information and visibility modeling. The SIP revision will include the following elements:

a. Rulemaking addressing a NOx Best Available Retrofit Technology (BART) determination and enforceable emissions limits for SO 2

.
b. A five

- factor BART analysis in accordance with the BART Guidelines, and other EPA guidance, as applicable, including documentation relied upon making the BART determination. The

use of confidential business information will be minimized to the extent practical in making the analysis.

c. New Mexico’s rulemaking will require that fifteen (15) months after EPA final approval of the Revised SIP, no earlier than January 31, 2016, Public Service Company of New Mexico (PNM) will complete installation of s elective non

- catalyti c reduction (SNCR) technology o n SJGS Unit 1 and 4 and achieve an average nitrogen oxide (NOx) emission rate for Units 1 and 4 of no greater

than 0.23 lb/ MMBtu on a daily rolling 30

- day average basis. Within 30 days after this “Term S heet” is signed, PNM will submit a project schedule to the State and EPA that demonstrates the critical milestones for meeting the January 31, 2016, installation completion date. The dates tha t follow with an asterisk (*) i n paragraph d

. will be revised accordingly if the installation date extends past January 31, 2016 due to delay in EPA ’s SIP approval.

d.

i. Testing Program. PNM will commence a program of testing and evaluation, after the installation of the SNCRs. The Testing Program consisting of SNCR P erformance Testing, Fuel Performance Testing, and Long

- Term Performance Evaluation is to be completed no later than January 31, 2017*, unless the Long

- Term Performance Evaluation is delayed per the language in paragraph 1.d.iv.

ii. SNCR Performance Testing wil l be conducted to develop a targeted ammonia/urea injection rate range at various loadNSR Permit No. 0063M8R3 Page 25 of 62

levels without exceeding a to

- be

- agreed

- upon preliminary slip limit of between 5 and 10 ppm, with the goal of minimizing NOx emissions. PNM shall provide the results of the performance test , recommended final slip limit, and target

ammonia/ urea injection r ates to NMED and EPA by April 1

, 2016*. PNM will allow up to April 30, 2016* for the agencies

to either concur with PNM ’s slip limit recommendation or to

concur on a d ifferent slip limit that PNM will comply with for

Units 1 and 4.

iii. PNM will conduct Fuel Performance Testing (in conjunction with the SNCR Performance Testing) of its pre

- treated coal technology, so long as it has not been previously determined to

result in any detrimental effect to SJGS Units 1 and 4 or their operation, with the objective of further reducing NOx emissions. If the Fuel Performance Testing demonstrates that it does not: (i) measurable increase NOx emissions

, or (ii) adversely impact overall unit operations, PNM shall also use such pre

- treated coal for the 9

- month Long

- Term Performance

Evaluation Period described below. PNM will also use pre

treated coal on Units 2 and 3 when used on Units 1 and 4.

iv. Long

- Term Performance Evaluation Period. PNM will begin collecting NOx emission and ammonia/urea injection rate data from Units 1 and 4 on a daily rolling 30

- day average basis for nine continuous months beginning on May 1, 2016* and provide such data and any recomm endations on the NOx emission limit to NMED and EPA by February 28, 2017* or no later than 28 days after completing the Long

- Term

Performance Evaluat i on Period. PNM may request more time if a slip is not agreed upon by April 30, 2016*. The Long

Term Perf ormance Evaluation Period must include 60 days

between June 1 st and August 30 th and 60 days between

December 1 st and February 28 th . The Demonstrate d Emission Rate will be the highest daily rolling 30

- day average emission rate during the 9

- month Long

- Term Performance Evaluation Period (not including periods of malfunction or abnormal operating conditions) adjus ted to three significant digits

. If the Demonstrated Emission Rate is greater than or equal to 0.200

lb/ MMBtu on a daily rolling 30

- day average basi s no adjustment to the NOx emission rate for Units 1 and 4 will be

made. If the Demonstrated Emission Rate is less than 0.200

lb/ MMBtu on a daily rolling 30

- day average basis PNM will apply for a permit modification by March 31, 2017* (or no

later than 60 days after completing the Long

- TermNSR Permit No. 0063M8R3 Page 26 of 62

Performance Evaluation Period) to reduce the permitted

emission rate by 60% of the difference between 0.23

lb/ MMBtu and the Demonstrated Emission Rate, provided the revised emission rate does not adversely impact overal l unit operations. The permit modification will include the agreed upon ammonia slip limit.

e. New Mexico’s rulemaking will require that no later than six months from NM EIB adoption of SO 2 emission limit in the RH and Interstate Visibility Transport SIP revisions, PNM will comp l y with the new sulfur dioxide (“ SO 2 ”) emission rates at Units 1 and

4 of 0.10 lb/ MMBtu on a daily rolling 30

- day average basis.

f. New Mexico’s rulemaking will require that PNM diligently seek all necessary regulatory approvals to allow for retirement of SJGS Units 2 and 3 by December 31, 2017. New Mexico ’s rulemaking will require PNM to retire SJGS Units 2 and 3 by December 31,

2017.

2

. NMED and EPA intend that the Re gional Haze and Interstate Transport SIP revisions as adopted and submitted to EPA will, if approved by EPA, lead to EPA action withdrawing the federal implementation plan for SJGS. Nothing in

the Regional Haze and Interstate Transport SIP revisions as ad opted and submitted to EPA by New Mexico shall relieve SJGS from its obligations to comply with all applicable federal, state, and local laws and regulations, including laws, regulations, and compliance deadlines that become applicable

after the date of an y revisions to New Mexico ’s Regional Haze SIP that may be approved by EPA.

3. NMED also will develop and propose as part of the revised BART determination for PNM, a revision to the Visibility Interstate Transport SIP for

NOx and SO 2 . NMED’s Visibility Interstate Transport SIP revision will require

enf orceable emission limits for NO x and SO 2 consistent with the emission limits established in the Regional Haze SIP submission in accordance with Item 1.

4. PNM agrees that the natural gas combustion turbine(s) to be sited at the San Juan Generating Station to partially replace the retired Unit 2 and Unit 3 coal capacity will undergo BACT analysis and control even if not subject to major source PSD, with the goal of minimizing the visibility impact of emissions o f NOx. PNM agrees that the aggregate annual NOx emissions from any such on site replacement power shall not exceed 75 tons.

(2) In accordance with the Term Sheet, f ifteen (15) months after EPA final approval, but no earlier than January 31, 2016, PNM will complete installation of SNCR technology on SJGS Unit s 1 and 4 to achieve an average NOx emission rate for Units 1 and 4 of no greater than 0.23 lb/ MMBtu on a dailyNSR Permit No. 0063M8R3 Page 27 of 62

rolling 30

- day average. The method to calculate the NOx emission rate of Units

1 and 4 and demonstr ate compliance with the emission limit is provided below:

i. The daily rolling 30

- day average NO X emission rate for Units 1 and 4 shall be calculated for each calendar day, even if a unit is not in operation on that calendar day, in accordance with the following procedure:

ii. S tep O ne , for Units 1 and 4 , sum the hourly pounds of NO X emitted during the current boiler

- operati ng day (or most recent boiler

- operating day if the unit is not in operation), and the preceding twenty

- nine (29)

boiler

- operating days, to calculate the total pounds of NO X emitted over the most recent thirty (30) boiler

- operating day period for each coal

- fired unit;

iii. S tep T wo , for U nit s 1 and 4 , sum the hourly heat input, in MMBtu , during

the current boiler

- operating day (or most recent boiler

- operating day if the unit is not in operation), and the preceding twenty

- nine (29) boiler

operating days, to calculate the total heat input, in MMBtu, over the most recent thirty (30) boiler

- operating day period for each coal

- fired unit;

iv. S tep T hree , sum together the total pounds of NO X emitted from Units 1

and 4 over each unit’s most recent thirty (30) boiler

- operating day period (the most recent 30 boiler

- opera ting day periods for different units may be different);

v. S tep F our , sum together the total heat input from U nits 1 and 4 over each unit’s most recent thirty (30) boiler

- operating day period (the most recent

30 boiler

- operating day periods for different units may be different) ; and

vi. S tep F ive , divide the total pounds of NO X emitted from S tep T hree by the total heat input from S tep F our for U nits 1 and 4 , to calculate the daily rolling 30

- day average NO X emission rate f rom U nits 1 and 4 , in pounds

of NO X per MMBtu, for each calendar day. Each daily rolling 30

- day average NO X emission rate shall include all emissions and all heat input that occur during all periods within any boiler

- operating day, including emissions from startup, shutdown, and malfunction

. NOx pounds per hour shall be adjusted using the diluents cap as define d in 40 CFR Part 72.2 Definitions. All valid CEMS hourly data shall be used to determine compliance with the combined Unit 1 and 4 emission limitation for NOx. If the CEMs data is not valid, that CEMs data shall be treated as missing data and not used to c alculate the emission average. CEMs data does not need to be bias adjusted as defined in 40 CFR Part 75

.

(3) In accordance with the Term Sheet, n o later than March 5, 2013 (six months from NM EIB adoption of the SO 2 emission limit in the Regional Haze and Interstate Visibility Transport SIP revisions, which occurred on September 5,NSR Permit No. 0063M8R3 Page 28 of 62

2013), PNM will comply with new SO 2 emission rates at Units 1 and 4 of 0.10

lb/ MMBtu on a daily rolling 30

- day average basis. The method to calculate the

SO 2 emission rate of Units 1 and 4 and demonstrate compliance with the emission limit is provided below:

i. The daily rolling 30

- day average SO 2 emission rate for Units 1 and 4 shall

be calculated for each calendar day, even if a unit is not in operation on that calendar day, in accordance with the following procedure :

ii. Step O ne , for U nit s 1 and 4 , sum the hourly pounds of SO2 emitted during

the current boiler

- operating day (or most recent boiler

- operat ing day if the unit is not in operation), and the preceding twenty

- nine (29) boiler

- operating days, to calculate the total pounds of SO2 emitted over the most recent thirty (30) boiler

- operating day period for each coal

- fired unit;

iii. Step T wo , for U nit s 1 and 4 , sum the hourly heat input, in MMBtu, during

the current boiler

- operating day (or most recent boiler

- operating day if the unit is not in operation), and the preceding twenty

- nine (29) boiler

- operating days, to calculate the total heat input, in MMBtu , over the most recent thirty (30) boiler

- operating day period for each coal

- fired unit ;

iv. Step T hree , sum together the total pounds of SO2 emitted from Units 1 and 4 over each unit’s most recent thirty (30) boiler

- operating day period (the

most recent 30 b oiler

- operating day periods for different units may be different);

v. Step F our , sum together the total heat input from Units 1 and 4 over each unit’s most recent thirty (30) boiler

- operating day period (the most recent 30

boiler

- operating day periods for di fferent units may be different); and

vi. Step F ive , divide the total p ounds of SO2 emitted from Step T hree by the total heat input from Step F our from Units 1 and 4, to calculate the daily rolling 30

- day average SO2 emission rate for Units 1 and 4, in pounds of SO2 per MMBtu, for each calendar day. Each daily rolling 30

- day average SO2 emission rate shall include all emissions and all heat input th at occur during all periods within any boiler

- operating day, including emissions from startup, shutdown, and malfunction.

All valid CEMS hourly data shall be used to determine compliance with the

Unit 1 and 4 emission limitation on for SO 2 . If the CEMs data is not valid, that CEMs data shall be treated as missing data and not used to calculate the emission average. CEMs data does not need to be bias adjusted as defined in

40 CFR Part 75.

(4) In accordance with the Term Sheet, PNM is required to diligently seek all necessary regulatory approvals to allow for the retirement of SJGS Units 2 and 3 by December 31, 2017

. Scenario C which, if effective, will require the

retirement of Units 2 and 3. PNM shall submit a separate permit application toNSR Permit No. 0063M8R3 Page 29 of 62

address the reduction in emissions attributable to the retirement of Units 2 and 3 and revise all applicable requirements accordingly.

(5) Modification of the fan system s on Units 1 and 4 to achieve “balanced” draft configuration allowing for the elimination of emission points E510 and E504.

A113 Compliance Plan

– Not Required

A114 Reducing Facility Emissions

A. Certain terms and conditions of this permit reduce the potential emission rate of regulated equ ipment to values below those allowed prior to the date of issuance of this permit. The compliance date for construction or operation of the emission units and pollution control equipment required to achieve this reduction in potential

emission rate is in accordance with the implementation scheduled in the FIP (September 20, 2016) or SIP (September 20, 2016)

.NSR Permit No. 0063M8R3 Page 30 of 62

EQUIPMENT SPECIFIC REQUIREMENTS

O IL AND G AS I NDUSTRY

A200 Oil and Gas Industry

– not required

C ONSTRUCTION I NDUSTRY

A300 Construction Industry

- not required

P OWER G ENERATION I NDUSTRY

A400 Power Generation Industry

This section has common equipment related to most Electric Service Operations (SIC

4911).

A. This facility and Units E301, E302, E303, and E304 (boilers) are subject to and shall have complied with the requ irements of 40 CFR Part 72 by applying for and

obtainin g an Acid Rain Permit, P062AR2.

B. Acid Rain Program Monitoring Requirement: Emission Units E301, E302, E303, and E304 (boilers) are subject to and shall comply with the requirements of 40 CFR Part 75 for installation, calibration, maintenance and operation of NOx and SO 2 continuous emissions monitoring systems (NOx and SO 2 CEMS) and for continuous opacity monitoring systems (COMS). Monitoring: The permittee shall comply with the requirements at 40 CFR 75.12(a) and 75.12(b) for continuous monitoring of NOx emissions; with the requirements at 40 CFR 75.11(a) and 75.11(b)(2) for c ontinuous monitoring of SO 2 emissions; with the requirements at 40 CFR 75.14(a) for continuous monitoring of opacity; and with the requirements at 40 CFR 75.13(b) and 75.13(c) for continuous monitoring of CO 2 emissions. Recordkeeping: The permittee shal l comply with the applicable recordkeeping requirements

of 40 CFR Part 75, Continuous Emission Monitoring, subpart F, Sections 75.50 through 75.59 ; and in accordance with Section B109 of this permit. Reporting: In accordance with 40 CFR 75.

C. M ercury (Hg) Monitoring System Requirement: The permittee shall install, maintain, and operate a Hg continuous monitoring devices based on the applicable QA/QC requirements in Appendix A of 40 CFR 63, Subpart UUUUU (i.e. MATS regulation), which references performance specification (PS) 12b. Monitoring: The permittee shall continually monitor the mercury emissions using sobentNSR Permit No. 0063M8R3 Page 31 of 62

traps that are installed and maintained in accordance with the applicable QA/QC requirements in Appendix A of 40 CFR 63, Subpart UUUUU (i.e. M ATS regulation), which references performance specification (PS) 12b. Recordkeeping : The permittee shall comply with the applicable recordkeeping requirements of Appendix A of 40 CFR 63, Subpart UUUUU (i.e. MATS regulation), which references performance s pecification (PS) 12b and in accordance with Section B109 of this permit. Reporting: The permittee shall comply with the applicable reporting requirements of Appendix A of 40 CFR 63, Subpart UUUUU (i.e. MATS regulation), which references performance spe cification (PS) 12b and in accordance with Section B110 of this permit. Testing : The permittee shall follow the requirements of Subpart UUUUU and PS 12b to perform an initial RATA within 180 boiler operating days of installation of the mercury

sorbent trap system on each unit. After the initial RATA, a RATA will be performed annually to provide annual QA/QC certification. Testing shall also comply with Sections, B109, B110,

and B111.

D. PNM shall maintain, calibrate, and operate CEMS at San Juan Units E301, E303, and E304 to measure accurately and continuously opacity and the emissions of SO 2 , NOx, and the exhaust flow rate from each unit in full compliance with the requirements of 40 CFR Parts 60 and 75, including requirements for heat input rate

measu rements. Although Unit 302 is not an affected unit for purposes of NSPS 40 CFR 60, Subpart D, PNM shall maintain, calibrate, and operate CEMS at San Juan Unit E302 to measure continuously opacity and the emissions of SO 2 , NOx, and the

exhaust flow rate fro m the unit in accordance with the requirements of 40 CFR Parts 60 and 75, including requirements for heat input rate measurements.

A401 Turbines

- Not Required

A402 Boilers

A. Units E301, E302, E303, and E304 Requirement: Each boiler shall be equipped and operated wi th a baghouse, to meet the emission limits, except as otherwise allowed under the applicable provisions of 20.2.7 NMAC and 40 CFR 60 Subpart A (E301, E303, and E304 only). In addition, Control Devices associated with Emission Units E301, E303, and E304 ar e subject to the requirements of 40 CFR 60.11(d). Each baghouse associated with the boilers shall be maintained and operated in accordance with good air pollution control practices for minimizing emissions. Individual boilers shall only be operated when it s associated baghouse is achieving a control efficiency sufficient to ensure compliance with all applicable particulate emission limits listed in this permit. Monitoring: For baghouse s associated with Units E301, E302, E303, and E304, PNM shall

record t he pressure drop across each baghouse with a continuous monitoring device. The continuous monitoring device shall be designed with an alarm that records and signals to the operator any excursion outside the normal operating range of the baghouse. The nor malNSR Permit No. 0063M8R3 Page 32 of 62

operating range of the baghouse shall be determined by the manufacture or another Department approved method. Recordkeeping: In accordance with Section B109, the pressure drop for each baghouse will be recorded hourly and these records will be kept on site for review. Reporting: No reporting required in accordance with Section B110 of this permit.

B. CAM Monitoring, Units E301, E302, E303, and E304 Requirement: CAM Rule Corrective Action Requirements: (1) The units are pollutant specific emission units for SO 2 , NOx and PM and are subject to and shall comply with the requirements of 40 CFR Part 64, Compliance Assurance Monitoring, including the requirements of 40 CFR 64.7(d) for corrective actions. Each unit has CEMS for

SO 2 and NOx which are required under acid rain regulations and, therefore, exempt SO 2 and NOx from CAM requirements. (2) As a requirement of this permit the permittee is subject to and shall comply with the corrective provisions of the PM CAM Plan dated July 2010 su bmitted in the application for this permit and attached to this permit, except that the trigger points for corrective actions and excursions shall be those specified in Table 402.B. (3) In accordance with 40 CFR 64.6(b), the permittee shall submit COM dat a 12

- months after the issuance of this permit to show that the indicator range of 6% for Opacity has been set sufficiently to satisfy the requirements of 40 CFR 64 and to confirm the appropriateness of the

indicator. (40 CFR 64 and 20.2.70.302.A(7) NMAC) Monitoring: (1) The permittee shall continuously monitor opacity of the units in accordance with the specifications of 40 CFR Part 60, Appendix B for continuous opacity monitors (COMs). (40 CFR 64.6(c)(1)(ii) and 20.2.70.302.A(7)). (2) The COMs shall col lect at least one duct opacity reading every 10 seconds, except as allowed by (4) below (40 CFR 64.6(c)(1)(iii), 40 CFR 64.3(b)(4), 40 CFR 64.3(d)(3), and 20.2.70.302.A(7)). (3) The COMs shall be maintained at all times, including but not limited to mainta ining the spare parts necessary for routine repairs (40 CFR 64.6(c)(3) and 40 CFR 64.7(b)). (4) Except for applicable monitoring malfunctions, associated repairs, and required quality assurance or control activities, the permittee shall conduct the opacity monitoring at all times that each unit is operating. Data recorded during monitoring malfunctions, associated repairs, and required quality assurance or control activities shall not be used to meet the requirements of this permit that implement the requir ements of 40 CFR Part 64. All data collected during all other periods shall be used in assessing the operation of the control devices for those emission units (40 CFR 64.6(c)(3), 40 CFR 64.7(c)). (5) For the purposes of terms and conditions of this permit that implement the requirements of 40 CFR Part 64, a monitoring malfunction is any sudden, infrequent, not reasonably preventable failure of the monitoring to provide valid data. Monitoring failures that are caused in part by poor maintenance or careless operation are not malfunctions (40 CFR 64.6(c) and 40 CFR 64.7(c)).NSR Permit No. 0063M8R3 Page 33 of 62

CAM Indicators: (6) Visible emissions (opacity) as measured by COM systems meeting the 40 CFR60 Performance Specification One and located in the fabric filter outlet duct from each unit (p er an Alternative Monitoring Plan submitted to EPA). (7) Differential pressure drop across the fabric filter on each unit. (8) By

- pass damper position (open/closed) indicator. Recordkeeping: The Permittee shall comply with the requirements of 40 CFR Part 64, Compliance Assurance Monitoring, including the recordkeeping requirements of 40 CFR 64.9(b). (40 CFR 64 and 20.2.70.302.A(7) NMAC)

. Reporting: The Permittee shall comply with the requirements of 40 CFR Part 64, Compliance Assurance Monitoring, incl uding the reporting requirements of 40 CFR 64.9(a). (40 CFR 64 and 20.2.70.302.A(7))

.

Table 402.B, CAM Indicator Trigger Points for Corrective Actions and Excursions

Indicator Trigger Point 1

1 An excursion is defined as a condition when the average opacity exceeds six (6) percent for any consecutive 3

- hr period.

2 An excursion is defined as a condition when the fabric filter average differential pressure exceeds 10 inches water column (w.c) for any consecutive 3

- hr period.

3 An excursion is defined as a condition when the by

- pass damper is in the open position any time when the boiler is in operation.

1 The permittee shall use the permit modification procedures of 20.2.70.404.B NMAC to change the CAM Plan.

C. D uct L eak M anagement P rogram on Units E501, E502, E503, and E504 Requirement: The Duct leak management program shall be conducted in accordance with good air pollution control practices for minimizing emission. All remaining combustion gasses shall be exhausted through the primary stack of eac h unit. Compliance with this requirement shall be determined using data generated by the monitoring and by Department inspections of

the units.

The Expansion Joint Maintenance Program (EJMP) shall include :

a. A written procedure that identifies expansion joint inspection procedures, inspection points, inspection locations, inspection frequency and recordkeeping procedures.

b. Identification of measures and time taken to mitigate (minimize) and repair leaks including immediate and long

- term corrective actions

.

c. Quarterly assessment and evaluation of the EJMP covering the ability of the EJMP to detect and identify leaks, potential preventive maintenance measures identified to prevent or minimize leaks, and assessment of effectiveness of measures taken to minimi ze leaks. When each boiler is taken out of service for the purpose of installing the new SCR/SNCR control technologies (balanced draft conversion) , this requirement is no longer valid. If the SCR/SNCR technologies are not installed then this requirement re mains valid. Monitoring: Monitor performance of the EJMP to ensure that the program meets the requirements of this permit. At a minimum, this quarterly monitoring shall include an assessment of the program’s performance in meeting the requirements above, including anNSR Permit No. 0063M8R3 Page 34 of 62

estimate of the actual area of duct leaks present on the subject emission units. Recordkeeping: Records of the EJMP practices, quarterly inspections, and quarterly assessment of the program’s performance shall be maintained on site. Report ing: No reporting required in accordance with Section B110 of this permit.

D. Limestone Forced O xidation ( LSFO ) Scrubber Operations Requirement: The boilers (E301, E302, E303, and E304) shall be equipped and operated with

limestone scrubbers. PNM shall not exceed the emission limits. To the extent necessary to

meet the SO 2 emission limits and the SO 2 control efficiency requirements of this permit (Table

106.C ), PNM shall add dibasic acid to the limestone slurry feed of each scrubber. The

limestone scrubbers (E301, E302, E303, and E304) shall be maintained and operated in accordance with good air pollution control practices for minimizing emissions, except as otherwise allowed under the applicable provisions of 20.2.7 NMAC and 40 CFR 60 Subpart A (E301, E302, and E304 only). Compliance with these requirements shall be determined using data generated and by Department inspections of the units. Monitoring: Control Devices C09, C11, C13, and C15, associated with Emissions Units E301, E302, E303, and E304, respectively, are subject to monitoring for good air pollution control practices and proper operation and maintenance. This monitoring shall consist of

ke eping monthly records of the performance of maintenance and repair activities on these

control devices. Recordkeeping: In accordance with Section B109, records of performance on maintenance and repair activities shall be kept on site for review. Reporti ng: No reporting required in accordance with Section B110 of this permit.

E. Heat Input Requirement: Heat input to these boilers shall not increase as a result of installation of the

low

- NOx burners. Compliance with this condition shall be provided upon req uest of the Department. An increase in heat input solely due to an increase in demand is authorized. Monitoring: (1) For each boiler, the 24

- hour heat input value shall be calculated by multiplying the 24

- hour

coal flow rate with the 7

- day rolling ave rage Btu content of the coal. The 7

- day rolling average Btu content of the coal shall be derived from as delivered coal sample analysis. In the event no coal is delivered for 7 or more days, the last 7

- day rolling average will be used. (2) PNM shall kee p records of the “as

- delivered” heat content of the coal. The heat content of the coal shall be analyzed using an appropriate ASTM method, in accordance with the requirements of the coal contract. (3) For each boiler, the 365

- day rolling total heat input shall be calculated as a summation of

the 24

- hour heat input value calculated

. Recordkeeping: In accordance with Section B109, records of the “as delivered” heat content of the coal and the 365 day rolling total heat input calculations shall be maintain ed. Reporting: No reporting required in accordance with Section B110 of this permit. Upon written request by the Department, PNM shall summarize and report the 365

- day rolling total heat input values calculated in (1) above

.NSR Permit No. 0063M8R3 Page 35 of 62

F. Continuous Opacity Monitors Requirement:

(1) Units E301, E303, and E304 are subject to 40 CFR 60 Subpart D and PNM shall operate

the COM s for units E301, E303, and E304 as required in 40 CFR 60 Subpart D.

(2) Although Unit 302 is not an affected unit for purposes of NSPS 40 CFR 60, Subp art D, PNM shall install, calibrate, maintain, and operate COMs on Unit E302 per the procedures specified in 40 CFR 60 Subpart D. The COM s for Unit E302 shall be installed in a location comparable to the COM location of Units E301, E303, and E304, unless otherwise approved by the Department.

(3) For units E301, E302, E303, and E304 the permittee shall determine compliance with the opacity limits of the permit on a continuous basis, using data from the current COMS or an EPA approved COMs and an alternative lo cation. All COMs shall be certified or recertified per the procedures in 40 CFR Part 60. Monitoring: For units E301, E302, E303, and E304 the permittee shall determine compliance with the opacity limits of the permit on a continuous basis, using data from the current COMS or an EPA approved COM s and an alternative location. Recordkeeping: Records of opacity readings and QA/QC events will be maintained and records of compliance with applicable recordkeeping requirements of 40 CFR 60, Subparts A

and D. Reporting: In accordance with applicable reporting requirements of 40 CFR Part 60, Subparts A and D.

G. 20.2.31 NMAC ( Units E301, E302, E303, and E304 ) Requirement: The units are subject to and shall comply with the requirements of 20.2.31.112

NMAC for SO 2 continuous emissions monitoring (CEMS). Monitoring: SO 2 continuous emissions monitoring (CEMS). Recordkeeping: In accordance with Section B109 of this permit and compliance with applicable recordkeeping requirements of 20.2.31.113 NMAC. Reporting: No reporting is required in accordance with Section B110 of this permit.

H. Periodic Stack Test For Units E301, E302, E303, E304, and E803 Requirement: (1) Units E301, E302, E303, and E304 (boilers) are subject to periodic compliance testing for PM, TSP, PM 10 , PM 2.5 , and CO using stack tests and Emission Unit E803 is subject to periodic compliance testing for PM using stack tests. The tests for PM, TSP, PM 10 , and PM 2.5 on Emission Units E301, E302, E303, and E304 (boilers) shall be performed quarterly. The tests for CO on Emission Units E301, E302, E303, and E304 (boilers) shall be performed quarterly. The tests on Emission Unit E803 shall be performed at the discretion of the Department. (2) For Unit E303, the permittee shall demonstrate compliance with t he tons per year CO

emission limit in Table 106.A. Monitoring: (1) The permittee shall perform quarterly tests and keep records of the periodic emissions testsNSR Permit No. 0063M8R3 Page 36 of 62

in accordance with Table 402.H and Section B111 of this permit. (2) On a monthly basis, t he p ermittee shall calculate the monthly CO emissions produce d by

Unit E303 and record a 12

- month rolling t otal in tons per y ea r to demonstrate compliance with

the CO emission limit in Table 106.A. The Unit 3 CO emission rate (in pounds per MMBtu )

determined b y each stack test will represent the emission rate for the calendar month in which the stack test occurred and for each succeeding calendar month until the month prior to the next stack test. Monthly CO emissions in tons/month will be calculated by multipl ying the quarterly CO stack test result in lb/ MMBtu by the monthly Unit 3 heat input in MMBtu and divided by 2000. The first month in which a monthly CO determination will be made is the month following the month the permit is issued. The initial complianc e period will occur 12

- months following the initial monthly CO emissions determination. a) During the first 12 months of monitoring, each month the permittee shall calculate the cumulative total of CO emissions; and b) After the first 12 months of monitoring, each month the permittee shall calculate the monthly rolling 12

- month total of CO emissions in tons per year to demonstrate compliance

with the CO emission limit in Table 106.A. Recordkeeping: (1) Calculated Monthly CO emissions. (2) Monthly 12

- mont h total CO emissions In accordance with Sections B109 and B111 of this permit. Reporting: Quarterly reports of the monthly CO emissions and 12

- month CO total shall be prepared and maintained onsite. The Quarterly reports will be summarized in the semi

- annual monitoring report. In accordance with Sections B110 and B111 of this permit.

Table 40 2.H : Quarterly testing Requirements

Pollutant Reference Method

CO 1 Methods 1

- 4 and 10

PM (TSP, PM 10 , PM 2.5 ) 2,3,4 Method 1

- 5 , 5i

1 Test results that demonstrate compliance with CO emission limits shall also be considered to demonstrate compliance with VOC emission limits for the subject emission unit.

2 PNM may use Method 5 or 5i testing to demonstrate compliance with the PM 10 and PM 2.5 standards

. 3 PM 10 and PM 2.5 particulate emissions include condensable particulate matter.

4 PNM shall conduct compliance testing to determine the condensable portion of actual PM 10 and PM 2.5 emissions using EPA Method 20 2 , annually . PNM will also conduct a Method 5i test at approximately the same time it

conducts each Method 20 2 test.

I. Demister Operations Require ment: PNM shall install pressure monitoring systems across the demister elements associated with all of the scrubber modules. The monitoring systems shall have the accuracy, reliability and quality to determine whether the demisters are operating in as rep resented in the Demister Report that is associated with the 14 fps maximum velocity of the demister and based on actual pressure drop readings.

(1) Each demister will be cleaned with “clean wash water sprays” on a wash sequence which

is in automatic mod e and in continuous operation. The wash sequence will automaticallyNSR Permit No. 0063M8R3 Page 37 of 62

switch from cell to cell. (2) During plant outages, PNM will conduct manual cleaning to remove st ubborn deposits as noted during inspections

. Monitoring:

(1) PNM shall monitor hourly the pressure drop across each demister from a continuous monitoring device. The continuous monitoring device shall be designed with an alarm that records and signals to the operator any excursion equal to or above 0.5 inches W.C. across either level or 1.0 across both. (2 ) During outages of 96 hours or more, PNM shall inspect the demisters based on manufacturers’ recommendations for deposit which are not cleaned by the clean wash water spraying. Recordkeeping: (1) PNM shall record hourly the pressure drop across each demister

. (2) Record the time and dates of all 3 hour averages equal to or above 0.5 inches W.C. for either of the two (2) levels or 1.0 combined. (3) Record the corrective action taken to return the demister back to normal operation. (4) Record the findings from the demister inspections. (5) Record when manual cleaning is performed. Reporting: PNM shall provide the demister data in the quarterly report while the Consent

Decree is in effect. Once the Consent Decree is terminated t hen the quarterly reports shall be prepared and maintained onsite in accordance with Condition B110 . The Quarterly reports will

continue to be summarized in the semi

- annual monitoring report.

J. 40 CFR 60, Subpart D ( Units E301, E303, and E304 ) Requirement: The units are subject to 40 CFR 60, Subpart D and the permittee shall comply with the applicable requirements of 40 CFR 60, Subpart A and Subpart D

. Monitoring: The permittee shall comply with all applicable monitoring and te sting requirements of 40 CFR 60, Subpart D. Recordkeeping: Records of compliance with applicable recordkeeping requirements of 40 CFR Part 60, Subparts A and D. Reporting: In accordance with applicable reporting requirements of 40 CFR Part 60, Subparts A and D.

K. Coal Pulverizer U nit E201 Requirement: The coal pulverizers (E201) shall be entirely enclosed in a structure that is maintained and operated in accordance with good air pollution control practices in order to minimize particulate emissions. Monitoring: Annual operational inspection, n o less than once per calendar year, PNM shall inspect the coal pulverizers to insure operation is in accordance with good air pollution control practices in order to minimize particulate emissions

. Recordkeeping: In acco rdance with Section B109, PNM shall record the results of the inspections for the coal pulverizes. Reporting: No reporting required in accordance with Section B110 of this permit.NSR Permit No. 0063M8R3 Page 38 of 62

L. H2SO4, Sulfuric Acid Mist Units E301, E302, E303, and E304 Requirement: Only for scenario A as required by the FIP and t o demonstrate compliance with

the emission limits identified in Table 106.A

, t he following monitoring is required on a per unit basis. Monitoring: The current Method 8A test, as specified in the FIP, does not have the sensitivity to measure accurately to 0.00026 lb/ MMBtu levels. As a result, each unit shall be considered in compliance with the sulfuric acid emission limit if the results of the Metho d 8A test are at or below the level representing three times the representative detection limit (RDL) of Method 8A, which is 0.0018 lb/ MMBtu (equal to three times the RDL of 0.0006 lb/ MMBtu ). This method of demonstrating compliance is consistent with EPA’ s approach in addressing measurement imprecision and variability for electric generating units, like those at SJGS, and

for other industries as well. 77 Fed. Reg. 9304, 9390 (Feb. 16, 2012) (describing a 3xRDL approach). Once every three years from the i ssuance of this permit, PNM shall conduct a survey of test methods approved by EPA to determine if new test methods are available that can accurately measure 0.00026 lb/ MMBtu with a measurement imprecision of less than

20%. Once a new, more accurate test method becomes available, PNM shall perform the test once every calendar year on each unit to demonstrate compliance with the emission limit of

0.00026 lb/ MMBtu

. Note, CTM

- 013 (i.e., Method 8A) indicates that “the minimum detectable limit (MDL) of the

met hod is 0.50 milligrams/cubic meter,” which translates to 0.0006 lb/ MMBtu for SJGS. Recordkeeping: In accordance with Section B109, PNM shall record the methodology used to calculate the lb/MMBtu emissions and the data used to support the calculations. PN M shall record summaries of the product searches for available test methods . PNM shall record any tests performed. Reporting: I n accordance with Section B110 of this permit, the permittee shall report semi

annually a summary of the Sulfuric Acid Mist em issions in lb/MMBtu and any changes in available testing options

.

M. Ammonia Slip Units E301, E302, E303, and E304 Requirement: To demonstrate compliance with the emission limits identified in Table 106.A, PNM must confirm as part of its initial compliance demonstration following the construction of the additional control equipment authorized by this permit that the controls are designed to meet the applicable ammonia slip limits (2 ppm for SCR under Scenario A, 10 ppm for SNCR

under Scenario B and to be det ermined [See Condition A112.C(6)] for Scenario C ). Since no further emission limits apply, no additional monitoring is required. Monitoring: None Recordkeeping: In accordance with Section B109, PNM shall record the initial compliance

demonstration

. Reporting: I n accordance with Section B110 of this permit , the permittee shall report the initial compliance demonstration

.NSR Permit No. 0063M8R3 Page 39 of 62

A403 Engines

A. Units E602, E603, E604, E605, E606, and E607 (emergency generators) Requirement: Units shall burn only No. 2 Diesel Fuel Oil. Except for maintenance and testing activities, units shall only be operated during the unavoidable loss of commercial utility power. Each emergency generator shall not operate more than 500 hours per year. Compliance with this requirement shall be det ermined using hours of operation data. Monitoring: Monitor emission by maintaining records to demonstrate that only No. 2 Diesel Fuel Oil was used and that each unit did not operate more than 500 hours per calendar year during an unavoidable loss of commercial utility power. PNM shall monitor the operati ng hours of the emergency generators. Recordkeeping: In accordance with Section B109, PNM shall record the monthly and 12 month total operating hours of each emergency generator. Reporting: No reporting is required in accordance with Section B110 of this permit.

A404 Heaters

- Not Required

A405 Cooling Towers

A. Operational Requirements for Units E406, E407, E408, E409, and E410 Requirement: Cooling towers shall be maintained and operated according to manufacturer’s recommendations and good engineering practices, and the circulating water rate, total dissolved solids (TDS) content of that water, and the drift rate for the units shall not exce ed the values specified in Table 405.A below. Compliance with these limits shall be determined using data generated by the monitoring and by Department inspections of the units. Monitoring: PNM shall measure the TDS concentration of each cooling tower n o less than once each calendar quarter. Recordkeeping: In accordance with Section B109, n o less than once each calendar quarter, the permittee shall record the TDS concentration of each cooling tower. The permittee shall

then calculate and record the in dividual cooling tower PM emissions quarterly , based on the maximum capacity of the circulating water pump(s) for each unit, the actual TDS content, and the units specific drift rate. Reporting: No reporting required in accordance with Section B110 of t his permit.

Table 405.A , Circulating Rate, TDS, and Drift Rate Operational Limits for Cooling Towers

Emission

Unit No. Circulating Water Rate (gpm) TDS Content (milligrams/liter) Drift Rate (percent)

E406 170,000 6,000 0.002

E407 165,000 6,000 0.002NSR Permit No. 0063M8R3 Page 40 of 62

Emission

Unit No. Circulating Water Rate (gpm) TDS Content (milligrams/liter) Drift Rate (percent)

E408 220,000 3,900 0.0015

E409 227,500 6,000 0.002

E410 3 5,000 3,900 0.002

A406 Haul Roads/Storage piles (Coal

- Fired Plants)

A. Road Area Operational Requirements Units E701, E702, E703, E704, E705, E706,

and E707 Requirement: Road areas shall comply with the operational requirements specified in Table

406.A . Compliance is demonstrated by monitoring and by Department inspections of the units. Monitoring: The permittee shall monitor emissions by maintaining a log/records of t he times and location of water application, the times and location of sweeping, amount of water applied

to the haul road

, occurrences of visual inspections and by performing weekly visual inspections of the road area to determine that emissions are minimiz ed. Recordkeeping: In accordance with Section B109, the records will be maintained on site for

review. Reporting: No reporting required in accordance with Section B110 of this permit.

Table 406.A , Operational Requirements for Road Areas

Emission Uni t No. Operational Requirements

E701, E705, and E708 Unit shall be paved, and swept and watered as necessary, to

minimize emissions of TSP and PM 10 E702, E703, E704, E706, and

E707 Unit shall be watered as necessary to minimize emissions of

TSP and PM 10

B. Facility

- Wide Raw Material Limits Requirement: T he calendar year material processing limits in Table 406.B were calculate d

from the AP

- 42 emission factors and pounds per hour emission rates for tons processed or gallons consumed. To demonstrate compliance with annual emission limits , t he facility shall not process more than the quantities of raw materials specified in Table 406.B. Compliance with this limit shall be determined using data generated here. Monitoring: The permitte e shall monitor and record facility

- wide raw material usage on a calendar quarter basis (which coincides with the reporting periods established at Condition A109)

. PNM shall monitor the quantities of coal, diesel fuel, and limestone processed. (NSR 63M6R1, Condition 3.j) For each 24

- hour period, the permittee shall monitor the coal flows in

each boiler.NSR Permit No. 0063M8R3 Page 41 of 62

Recordkeeping: In accordance with Section B109, PNM shall maintain quarterly and annual

to

- date records of the quantities of coal, diesel fuel, and limes tone processed. Reporting: No reporting required in accordance with Section B110 of this permit.

Table 406.B, Facility

- Wide Operational Limits on Raw Materials

Material Annual Limit

Coal 8,200,000 tons

No. 2 Diesel Fuel Oil 4,112,500 gallons (4 million gpy for the coal fired boilers and 112, 500 gpy for the emergency generators)

Limestone 227,000 tons

C. Good Air Pollution Control Practices Requirement: Coal pile maintenance (E101, E102, E103, and E104), fly ash silo unloading to trucks (E507, E508, E509, E510), limestone delivery system, and limestone pile maintenance (E802) shall be operated in accordance with good air pollution control practices to minimize

emissions. Monitoring: No less than once each calendar year, PNM shall inspect the coal pile maintenance, fly ash silo unloading to trucks, limestone delivery, and limestone pile

maintenance

. Recordkeeping: In accordance with Section B109, PNM shall record the results of the inspection for the coal pile maintenance, fly ash silo unloa ding to trucks, limestone delivery, and limestone pile maintenance. Records and/or logs of control practices to demonstrate compliance with the controls in the permit application shall be maintained and summarized in

the Semi

- annual reports. Reporting: N o reporting required in accordance with Section B110 of this permit.

D. NSPS Subpart OOO (Units E803, E804, and E805 (limestone process equipment)) Requirement: Allowable emission limits Monitoring: The units are subject to and shall comply with the requir ements of 40 CFR 60, Subpart A and of 40 CFR 60, Subpart OOO, 60.675(c) for monitoring emissions. Recordkeeping: In accordance with the applicable requirements of 40 CFR 60, Subpart OOO, 60.676(f). Records of any periodic opacity determinations will be m aintained. Reporting: In accordance with the applicable requirements of 40 CFR 60, Subpart OOO. Opacity test results will be submitted to the NMED.NSR Permit No. 0063M8R3 Page 42 of 62

A407 Storage Silos (activated carbon, fly ash)

A. Activated Carbon Silo Baghouses ( Units E901, E902, E903, and E904 ) Requirement: Activated Carbon for Mercury emissions control (1) Each of the activated carbon silos shall be equipped with a baghouse operated according to manufacturer’s guidelines and specification. The baghouse shall have a design PM emission rate of 0.0092 grains/scf or less and a design baghouse exhaust flow rate of 578 scfm.

(2) The activated carbon shall be introduced into the exhaust stream prior to the baghouse used to control particulate mat t er from the resp ective boilers.

(3) Each activated carbon baghouse shall be equipped and operated with a device to continuously monitor the pressure differential across the baghouse to insure continued compliance. Monitoring: PNM shall monitor the pressure drop across eac h activated carbon silo baghouse whenever the silos are loaded. The data capture rate shall be no less than once every six minutes. At a minimum the record shall include the silo designation, date, time, pressure differential, and in the event that the pre ssure differential is not continually monitored, the silo loading status (fan on or off). Recordkeeping: PNM shall follow the General Recordkeeping requirement in Section B109. (1) PNM shall keep manufacturer’s documentation onsite indicting that each activated carbon silo baghouse was designed to control PM emissions 0.0092 grains/scf or less and design baghouse exhaust flow rate is 578 scfm. (2) PNM shall keep records of the pressure drop across each activated carbon silo baghouse. (3) PNM shall keep the manufacturer’s documentation onsite that indicates the proper range that the pressure drop should be during normal operations of each activated carbon silo baghouse. Reporting: No repo rting required in accordance with Section B110 of this permit.

B. Fly Ash/Limestone Silo Baghouses Requirement: The fly ash silo loading (E505, E506, E518, and E519) and limestone silo loading (E803) shall be equipped and operated with baghouses. The baghous es shall be equipped and operated with devices to monitor the differential pressure drop across the baghouse. The control devices shall be operated and maintained in accordance with manufacturer’s specifications, including specifications for pressure drop, in order to achieve a minimum 99.5% control of TSP, PM 10 , and PM emissions. Compliance with these requirements shall be determined using data generated and by Department inspections of the units. Monitoring: The permittee shall monitor emissions by mea suring the pressure drop across each filter, daily. PNM shall monitor and record the pressure drop across each fly ash silo baghouse (Units 505 and 506). For baghouse associated with the Units E505

, E506, E518,

E519 and E803 , PNM shall monitor the differen tial pressure drop across the baghouses daily. (Units 505 and 506). Recordkeeping: In accordance with Section B109, PNM shall record the daily pressure drop measurements for each baghouse. Reporting: No reporting required in accordance with Section B110 of this permit.NSR Permit No. 0063M8R3 Page 43 of 62

PART B GENERAL CONDITIONS

B100 Introduction

A. The Department has reviewed the permit applicatio n for the proposed

construction/modification/ revision and has determined that the provisions of the Act and ambient air quality standards will be met. Conditions have been imposed in this permit to assure continued compliance. 20.2.72.210.D NMAC, states that any term or condition imposed by the Department on a permit is enforceable to the same extent as a regulation of the Environmental Improvement Boar d.

B101 Legal

A. T he contents of a permit application specifically identified by the Department shall become the terms and conditions of the permit or permit revision. Unless modified by conditions of this permit, the p ermittee shall construct or modify and opera te the Facility in accordance with all representations of the application and supplemental submittals that the Department relied upon to determine compliance with applicable regulations and ambient air quality standards. If the Department relied on air qu ality modeling to issue this permit, any change in the parameters used for this modeling shall be submitted to the Department for review. Upon the Department’s request, the p ermittee shall submit additional modeling for review by the Department. Results of that review may require a permit modification. (20.2.72.210.A NMAC )

B. Any future physical changes , changes in the method of operation or changes in

restricted area may constitute a modification as defined by 20.2.72 NMAC,

Construction Permits. Unless th e source or activity is exempt under 20.2.72.202 NMAC, no modification shall begin prior to issuance of a permit. (20.2.72 NMAC Sections 200.A.2 and E, and 210.B.4)

C. Changes in plans, specifications, and other representations stated in the application

docum ents shall not be made if they cause a change in the method of control of emissions or in the character of emissions, will increase the dischar ge of emissions or affect modeling results. Any such proposed changes shall be submitted as a

revision or modifi cation. (20.2.72 NMAC Sections 200.A.2 and E, and 210.B.4)

D. The permittee shall establish and maintain the property’s Restricted Area as identified in plot plan submitted with the application. (20.2.72 NMAC Sections 200.A.2 and E, and 210.B.4 )

E. Application s for permit revisions and modifications shall be submitted to:NSR Permit No. 0063M8R3 Page 44 of 62

Program Manager, Permits Section New Mexico Environment Department Air Quality Bureau 525 Camino de los Marquez, Suite 1 Santa Fe, New Mexico 8750 5

- 1816

F. A t all times, including periods of startup, shutdown, and malfunction, owners and operators shall, to the extent practicable, maintain and operate the source including associated air pollution control equipment in a manner consistent with good air pollutio n control practice for minimizing emissions. (20.2.7.109, 20.2.72.210.A, 20.2.72.210.B, 20.2.72.210.C, 20.2.72.210.E NMAC) The establishment of allowable malfunction emission limits does not supersede this requirement.

B102 Authority

A. This permit is issued pur suant to the Air Quality Control Act (Act) and regulations adopted pursuant to the Act including Title 20, Chapter 2, Part 72 of the New Mexico Administrative Code (NMAC), (20.2.72 NMAC), Construction Permits and is enforceable pursuant to the Act and the air quality control regulations applicable to this source

.

B. The Department is the Administrator for 40 CFR Parts 60, 61, and 63 pursuant to the delegation and exceptions of Section 10 of 20.2.77 NMAC (NSPS), 20.2.78 NMAC (NESHAP), and 20.2.82 NMAC (MACT).

B103 Annual Fee

A. T he Department will assess an annual fee for this Facility. Th e regulation 20.2.75

NMAC set the fee amount at $1,500 through 2004 and requires it to be adjusted annually for the Co nsumer Price Index on January 1 . The current fee amount is

availa ble by contacting the Department or can be found on the Department’s website. The AQB will invoice the p ermittee for the annual fee amount at the beginning of each calendar year. This fee does not apply to sources which are

assessed an annual fee in accord ance with 20.2.71 NMAC. For sources that satisfy the definition of “small business” in 20.2.75.7.F NMAC, this annual fee will be divided by two . (20.2.75.11 NMAC)

B. All fees shall be remitted in the form of a corporate check, certified check, or money order made payable to the “NM Environment Department, AQB” mailed to the address shown on the invoice and shall be accompanied by the remittance slip

attached to the invoice.NSR Permit No. 0063M8R3 Page 45 of 62

B104 Appeal Procedures

A. A ny person who participated in a permitting action before the Department and who is adversely affected by such permitting action, may file a petition for hearing before the Environmental Improvement Board. The petition shall be made in writing to the Envir onmental Improvement Board within thirty (30) days from the date notice is given of the Department's action and shall specify the portions of the permitting action to which the petitioner objects, certify that a copy of the petition

has been mailed or hand

- delivered and attach a copy of the permitting action for which review is sought. Unless a timely request for hearing is made, the decision of the Department shall be final. The petition shall be copied simultaneously to the Department upon receipt of th e appeal notice. If the petitioner is not the applicant

or p ermittee, the petitioner shall mail or hand

- deliver a copy of the petition to the applicant or p ermittee. The Department shall certify the administrative record to

the board. Petitions for a he aring shall be sent to: ( 20.2.72.207.F NMAC)

Secretary, New Mexico Environmental Improvement Board 1190 St. Francis Drive, Runnels Bldg. Rm. N2153 Santa Fe, New Mexico 87502

B105 Submittal of Reports and Certifications

A. Stack Test Protocols and Stack Test Report s shall be submitted electronically to Stacktest.AQB@state.nm.us or as directed by the Department.

B. Excess Emission Reports shall be submitted as directed by the Department

. (20.2.7.110 NMAC)

C. Routine reports shall be submitted to the mailing address below, or as directed by the Department :

Manager, Compliance and Enforcement Section New Mexico Environment Department Air Quality Bureau 525 Camino de los Marquez, Sui te 1 Santa Fe, New Mexico 8750 5

- 1816

B106 NSPS and/or MACT Startup, Shutdown, and Malfunction Operations

A. If a facility is subject to a NSPS standard in 40 CFR 60, each owner or operator that installs and operates a continuous monitoring device required by a NSP S regulation shall comply with the excess emissions reporting requirements in

accordance with 40 CFR 60.7(c), unless specifically exempted in the applicable subpart.NSR Permit No. 0063M8R3 Page 46 of 62

B. If a facility is subject to a NSPS standard in 40 CFR 60, then in accordance with 40

CFR 6 0.8(c), emissions in excess of the level of the applicable emission limit during periods of startup, shutdown, and malfunction shall not be considered a violation of the applicable emission limit unless otherwise specified in the applicable standard.

C. If a facility is subject to a MACT standard in 40 CFR 63, then the facility is subject to the requirement for a Startup, Shutdown and Malfunction Pla n (SSM) under 40 CFR 63.6(e)(3), unless specifically exempted in the applicable subpart.

B107 Startup, Shutdown, and Maintenance Operations

A. The establishment of permitted startup, shutdown, and maintenance (SSM) emission limits does not supersede the requirements of 20.2.7.14.A NMAC. Except for operations or equipment subject to Condition B106, the p ermittee shall establ ish and implement a plan to minimize emissions during routine or predictable start up, shut down, and scheduled maintenance (SSM work practice plan ) and shall operate in accordance with the procedures set forth in the plan . (SSM work practice plan. (20.2.7 .14.A NMAC )

B108 General Monitoring Requirements

A. These requirements do not supersede or relax requirements of federal regulations.

B. The following monitor ing requirements shall be used to determine compliance with applicable requirements and emission limits. Any sampling, whether by portable analyzer or EPA reference method, that measures an emission rate over the applicable averaging period greater than an emission limit in this permit constitutes noncompliance with this permit. The Department may require, at its discretion, additional tests pursuant to EPA Reference Methods at any time, including when sampling by portable analyzer measures an emission rate greater than an emission limit in this permit; but such requirement shall not be construed as a determinatio n that the sampling by portable analyzer does not establish noncompliance with this permit and shall not stay enforcement of such noncompliance based on the sampling by portable analyzer.

C. If the emission unit is shutdown at the time when periodic monitorin g is due to be accomplished, the p ermittee is not required to restart the unit for the sole purpose of performing the monitoring. Using electronic or written mail, the p ermittee shall notify the Department’s Compliance and Enforcement Section of a delay i n emission tests prior to the deadline for accomplishing the tests. Upon recommencing operation, the p ermittee shall submit any pertinent pre

- test notification requirements set forth in the current version of the Department’sNSR Permit No. 0063M8R3 Page 47 of 62

Standard Operating Procedures For Use Of Portable Analyzers in Performance Test, and shall accomplish the monitoring.

D. The requirement for monitoring during any monitoring period is based on the percentage of time that the unit has operated. However, to invoke monitoring exemptions at B 108.D(2), hours of operation shall be monitored and recorded.

(1) If the emission unit has operated for more than 25% of a monitoring period,

then the p ermittee shall conduct monitoring during that period.

(2) If the emission unit has operated for 25% or less of a monitoring period then the monitoring is not required. After two successive periods without monitoring, the

p ermittee shall conduct monitoring during the next period regardless of the time operated dur ing that period, except that for any monitoring period in which a unit has operated for less than 10% of the monitoring period, the period will not be considered as one of the two successive periods.

(3) If invoking the monitoring period exemption in B108.D(2) , the actual operating time of a unit shall not exceed the monitoring period required by this permit before the required monitoring is performed. For example, if the monitoring period is annual, the operating hours of the unit shall not exceed 8760 hours before monitoring is conducted. Regardless of the time that a unit actually

operates, a minimum of one of each type of monitoring activity shall be conducted during any five

- year period.

E. For all periodic monitoring events, except when a federal or state r egulation is more stringent, three test runs shall be conducted at 90% or greater of the unit’s capacity as stated in this permit, or in the permit application if not in the permit, and at additional loads when requested by the Department. If the 90% capa city cannot be achieved, the monitoring will be conducted at the maximum achievable load under prevailing operating conditions except when a federal or state regulation requires more restrictive test conditions. The load and the parameters used to

calculat e it shall be recorded to document operating conditions and shall be

included with the monitorin g report

.

F. When requested by the Department, the p ermittee shall provide schedules of testing and monitoring activities. Compliance tests from previous NSR and T itle V permits may be re

- imposed if it is deemed necessary by the Department to determine whether the source is in compliance with applicable regulations or permit

conditions.

G. If monitoring is new or is in addition to monitoring imposed by an existing appl icable requirement, it shall become effective 120 days after the date of permit

issuance. For emission units that have not commenced operation, the associated new or additional monitoring shall not apply until 120 days after the unitsNSR Permit No. 0063M8R3 Page 48 of 62

commence operation. All pre

- existing monitoring requirements incorporated in this permit shall continue to apply from the date of permit issuance.

B109 General Recordkeeping Requirements

A. The permittee shall maintain records to assure and verify compliance with the terms and conditions of this permit and any other applicable requirements that become effective after permit issuance. The minimum information to be included in these

records is:

(1) equipment identification (include make, model and serial number for all tested equipment and emission controls);

(2) date(s) and time(s) of sampling or measurements;

(3) date(s) analyses were performed;

(4) the qualified entity that performed the analyses;

(5) analyti cal or test methods used;

(6) results of analyses or tests; and

(7) operating conditions existing at the time of sampling or measurement.

B. Except as provided in the Specific Conditions, records shall be maintained on

- site

or at the permit t ee’s local business office for a minimum of two (2) years from the time of recording and shall be made available to Department personnel upon request. Sources subject to 20.2.70 NMAC “Operating Permits” shall maintain

records on

- site for a minimum of five (5) years from the time o f recording.

C. Malfunction emissions and r outine and predictable emissions during startup, shutdown, and scheduled maintenance (SSM) :

(1) The permittee shall keep records of all events subject to the plan to minimize emissions during routine or predictable SSM. (20.2.7.14.A NMAC)

(2) If the facility has allowable SSM emission limits in this permit, the permittee

shall record all SSM events, including t he date, the start time, the end time, and a description of the event

. This record also shall include a copy of the manufacturer’s, or equivalent, documentation showing that any maintenance qualified as scheduled. Scheduled maintenance is an activity that occurs at an established frequency pursuant to a written protocol published by the

manufacturer or other reliable so urce. The authorization of allowable SSM emissions does not supersede any applicable federal or state standard. The most stringent requirement applies.

(3) If the facility has allowable malfunction emission limits in this permit, the permittee shall record a ll malfunction events to be applied against these limits,NSR Permit No. 0063M8R3 Page 49 of 62

including t he date, the start time, the end time, and a description of the event

. Malfunction means any sudden, infrequent, and not reasonably preventable failure of air pollution control and monito ring equipment, process equipment, or a process to operate in a normal or usual manner which causes, or has the potential to cause, the emission limitations in an applicable standard to be exceeded. Failures that are caused in part by poor maintenance or c areless operation are not malfunctions. (40 CFR 63.2, 20.2.7.7.E NMAC) The authorization of allowable malfunction emissions does not supersede any applicable federal or state standard. The most stringent requirement applies. This authorization only allo ws the permittee to avoid submitting reports under

20.2.7 NMAC for total annual emissions that are below the authorized limit.

B110 General Reporting Requirements (20.2.72 NMAC Sections 210 and 212)

A. Records and r eports shall be maintained on

- site unless specifically required to be submitted to the Department or EPA by another condition of this permit or by a

state or federal regulation. Records for unmanned sites may be kept at the nearest company office.

B. The p ermittee shall notify the Department’s Complia nce Reporting Section using

the current Submittal Form posted to NMED’s Air Quality web site under Compliance and Enforcement/Submittal Forms in writing of, or provide the Department with (20.2.72.212.A and B):

(1) the anticipated date of initial startup of each new or modified source not less than thirty (30) days prior to the date. Notification may occur prior to issuance of the permit, but actual startup shall not occur earlier than the permit issuance

date ;

(2) af ter receiving authority to construct, the equipment serial number as provided by the manufacturer or permanently affixed if shop

- built and the actual date of initial startup of each new or modified source within fifteen ( 15) days after the

st artup date; an d

(3) the date when each new or modified emission source reaches the maximum production rate at which it will operate within fi fteen (15) days after that date.

C. The p ermittee shall notify the Departm ent’s Permitting Program Manager, in writing of, or provide t he Department with (20.2.72.212. C and D ) :

(1) any change of operators or any equipment substitutions within fifteen (15) days of such change;

(2) any necessary update or correction no more than sixty (60) days after the operator knows or should have known of the condition necessitating the upd ate or correction of the permit.NSR Permit No. 0063M8R3 Page 50 of 62

D. Results of emission tests and monitoring for each pollutant (except opacity) s hall be reported in pounds per hour (unless otherwise specified) and tons per

year. Opacity shall be reported in percent. T he number of significant figures corresponding to the full accuracy inherent in the testing instrument or Method test

used to obtai n the data shall be used to calculate and report test results in

accordance with 20.2.1.116.B and C NMAC. Upon request by the Department, CEMS and other tabular data shall be submitted in editable, MS Excel format.

E. The permittee shall submit reports of ex cess emissions in accordance with

20.2.7.110.A NMAC.

B111 General Testing Requirements

A. Compliance Tests

(1) Compliance test requirements from previous permits (if any) are still in effect, unless the tests have been satisfactorily completed. Compliance tests may be re

imposed if it is deemed necessary by the Department to determine whether the source is in compliance with applicable r egulations or permit conditions. (20.2.72 NMAC Sections 210.C and 213 )

(2) Compliance tests shall be conducted within sixty (60) days af ter the unit(s) achieve the maximum normal production rate. If the maximum normal production rate does not occur within one hundred twenty (120) days of source startup, then the tests must be conducted no later than one hundred eighty (180) days after ini tial startup of the source.

(3) Unless otherwise indicated by Specific Conditions or regulatory requirements, the default time period for each test run shall be at least 60 minutes and each performance test shall consist of three separate runs using the applic able test method. For the purpose of determining compliance with an applicable emission limit, the arithmetic mean of results of the three runs shall apply. In the event that a sample is accidentally lost or conditions occur in which one of the three

runs must be discontinued because of forced shutdown, failure of an irreplaceable portion of the sample train, extreme meteorological conditions, or other circumstances, beyond the owner or operator's control, compliance may, upon the Department approval, be de termined using the arithmetic mean of the

results of the two other runs.

(4) Testing of emissions shall be conducted with the emissions unit operating at 90 to 100 percent of the maximum operating rate allowed by the permit. If it is not possible to test at th at rate, the source may test at a lower operating rate, subject to the approval of the Department.NSR Permit No. 0063M8R3 Page 51 of 62

(5) Testing performed at less than 90 percent of permitted capacity will limit emission unit operation to 110 percent of the tested capacity until a new test is

conducted.

(6) If conditions change such that unit operation above 110 percent of tested capacity is possible, the source must submit a protocol to the Department within 30 days of such change to conduct a new emissions test.

B. EPA Reference Method Tests

(1) All com pliance tests required by this permit, unless otherwise specified by Specific Conditions of this permit, shall be conducted in accordance with the requirements of CFR Title 40, Part 60, Subpart A, General Provisions, and the following EPA Reference Methods as specified by CFR Title 40, Part 60, Appendix A:

i. Methods 1 through 4 for stack gas flowrate

ii. Method 5 for TSP

iii. Method 6C and 19 for SO 2

iv. Method 7E for NO X (test results shall be expressed as nitrogen dioxide (NO 2 ) using a molecular weight of 46 lb/lb

- mol in all calculations (each ppm of NO/NO 2 is equivalent to 1.194 x 10

- 7 lb/SCF)

v. Method 9 for opacity

vi. Method 10 for CO

vii. Method 19 may be used in lieu of Methods 1

- 4 for stack gas flowrate upon approval of the Department. A justification for this proposal must be provided along with a contemporaneous fuel gas analysis (preferably on the day of the test) and a recent fuel flow meter calibration certificate (within the most recent quarter).

viii. M ethod 7E or 20 for Turbines per 60.335 or 60.4400

ix. Method 29 for M etals

x. Method 201 A for filterable PM 10 and PM 2.5 (Dry Stacks)

xi. Method 5, 5B or 5I for filterable PM 10 and PM 2.5 (Wet Stacks)

xii. Method 202 for condensable PM

xiii. Method 320 for organic Hazardous Air Pollutants (HAPs)

xiv. Method 25A for VOC reduction efficiency

(2) Alternative test method(s) may be used if the Department approves the change

C. Periodic Monitoring and Portable Analyzer RequirementsNSR Permit No. 0063M8R3 Page 52 of 62

(1) Periodic emissions tests (periodic monitoring) may be conducted i n accordance with EPA Reference Methods or by utilizing a portable analyzer. Periodic monitoring utilizing a portable analyzer shall be conducted in accordance with the requirements of ASTM D 6522

- 00. However, i f a facility has met a previously approved Department criterion for portable analyzers, the analyzer

may be operated in accordance with that criterion until it is replaced.

(2) Unless otherwise indicated by Specific Conditions or regulatory requirements, the default time period for each test run shall be as follows:

i. For quarterly monitoring, at least 20 minutes

ii. For annual monitoring, at least 60 minutes

Eac h performance test shall consist of three separate runs. T he arithmetic mean

of results of the three runs shall be used to determine compliance wi th the applicable emission limit

(3) Testing of emissions shall be conducted with the emissions unit operating at 90 to 100 percent of the maximum operating rate allowed by the permit. If it is not possible to test at that rate, the source may test at a lowe r operating rate, subject to prior approval of the Department.

(4) During emissions tests, pollutant, O 2 concentration and fuel flow rate shall be monitored and recorded. This information shall be included with the test report furnished to the Department.

(5) Pollut ant emission rate shall be calculated in accordance with 40 CFR 60, Appendix A, Method 19 utilizing fuel flow rate (scf) and fuel heating value (Btu/scf) obtained during the test.

D. Test Procedures:

(1) T he p ermittee shall notify the Department’s Program Manager , Compliance and Enforcement Section at least thirty (30) days before the test date and allow a representative of the Departm ent to be present at the test.

(2) Equipment shall be tested in the "as found" condition. Equipment may not be adjusted or tuned prior to any test for the purpose of lowering emissions, and then returned to previous settings or operating conditions after the test is complete.

(3) Contents of test notifications, protocols and test reports shall conform to the format specified by the Department’s Universal Test Notification, Protocol and Report Form and Instructions. Current forms and instructions are posted to NMED’s Air Quality web site under Compliance and Enforcement Testing.

(4) The permittee shall provide (a) sampling ports adequate for the test methods applicable to the facility, (b) safe sampling platforms, (c) safe access to sampling platforms and (d) utilities for sampling and testing equipment.NSR Permit No. 0063M8R3 Page 53 of 62

(5) The stack shall be of sufficient height and diameter and the sample ports shall be located so that a representative test of the emissions can be performed in accordance with the requirements of EPA Method 1 or ASTM D 6522

- 00 as applicab le.

(6) Where necessary to prevent cyclonic flow in the stack, flow straighteners shall

be installed

(7) Unless otherwise indicated by Specific Conditions or regulatory requirements

, test reports shall be submitted to the Department no later than 30 days after

com pletion of the test.

B112 Compliance

A. The Department shall be given the right to enter the facility at all reasonable times to verify the terms and conditions of this permit. Required records shall be organized by date and subject matter and shall at all times be readily available for inspection. The permittee, upon verbal or written request from an authorized representative of the Department who appears at the facility, shall immediately produce for inspection or copying any records required to be maintained at the facility. Upon written request at other times, the permittee shall deliver to the Department paper or electronic copies of any and all required records maintained

on site or at an off

- site location. Requested records shall be copied and delivered at the permittee’s expense within three business days from receipt of request unless the Department allows additional time. Required records may include records required by permit and other information necessary to demonstrate compliance with terms and conditions of this permit. (NMSA 1978, Sect ion 74

- 2

- 13)

B. A copy of the most recent permit(s) issued by the Department shall be kept at the permitted facility or (for unmanned sites) at the nearest company office and shall be made available to Department personnel for inspection upon request. (20.2.7 2. 210.B.4 NMAC)

C. E missions limits associated with the energy input of a Unit, i.e. lb/MMBtu, shall apply at all times unless stated otherwise in a Specific Condition of this permit. The averaging time for each emissions limit, including those based on ener gy input of a Unit (i.e. lb/MMBtu) is one (1) hour unless stated otherwise in a Specific

Condition of this p ermit or in the applicable requirement that establishes the limit.

B113 Permit Cancellation and Revocation

A. The Department may revoke this permit if the applicant or p ermittee has knowingly and willfully misrepresented a material fact in the application for the permit. Revocation will be made in writing, and an administrative appeal may be taken to the Secretary of the Department within thirty (30) days. Appeals will be handled inNSR Permit No. 0063M8R3 Page 54 of 62

accordance with the Department's Rules Governing Appeals From Compliance

Orders

.

B. The Department shall automatically cancel any permit for any source which ceases operation for five (5) years or more, or permanently. Reactivatio n of any source after the five (5) year period shall require a new permit

. (20.2.72 NMAC)

C. The Department may cancel a permit if the construction or modification is not commenced within two (2) years from the date of issuance or if, during the

construction or modification, work is suspended for a total of on e (1) year

. (20.2.72

NMAC )

B114 Notification to Subsequent Owners

A. The permit and conditions apply in the event of any change in control or ownership of the Facility. No permit modification is required in such case. However, in the event of any such change in control or ownership, the p ermittee shall notify the succeeding owner of the permit and conditions and shall notify the Department’s Program Manager, Permits Section of the change in ownership within fifte en (15) days of that change. (20.2.72. 2 12.C NMAC )

B. Any new owner or operator shall notify the Department’s Program Manager, Permits Section, within thirty (30) days of assuming ownership, of the new owner’s or operator’s name and address

. (20.2.73.200.E.3 NMAC )

B115 Asb estos Demolition

A. Before any asbestos demo lition or renovation work, the p ermittee shall determine whether 40 CFR 61 Subpart M, National Emissions Standards for Asbestos applies. If required, the p ermittee shall notify the Department’s Program Man ager, Compliance and Enforcement Section using forms furnished by the Department

.

B116 Short Term Engine Replacement

A. The following Alternative Operating Scenario (AOS) addresses engine breakdown or periodic maintenance and repair, which requires the use of a sh ort term replacement engine. The following requirements do not apply to engines that are exempt per 20.2.72.202.B(3) NMAC. Changes to exempt engines must be reported

in accordance with 20.2.72.202.B NMAC. A short term replacement engine may

be substitute d for any engine allowed by this permit for no more than 120 days in any rolling twelve month period per permitted engine. The compliance demonstrations required as part of this AOS are in addition to any other compliance demonstrations required by this p ermit.NSR Permit No. 0063M8R3 Page 55 of 62

(1) The permittee may temporarily replace an existing engine that is subject to the emission limits set forth in this permit with another engine regardless of manufacturer, model, and horsepower without modifying this permit. The permittee shall submit written notification to the Department within 15 days of the date of engine substitution according to condition B110.C(1).

i. The potential emission rates of the replacement engine shall be determined using the replacement engine’ s manufacturer specifications and shall comply with the existing engine’s permitted emission limits.

ii. The direction of the exhaust stack for the replacement engine shall be

either vertical or the same direction as for the existing engine. The replacement e ngine’s stack height and flow parameters shall be at least as effective in the dispersion of air pollutants as the modeled stack height and flow parameters for the existing permitted engine. The following equation may be used to show that the replacement e ngine disperses pollutants as well as the existing engine. The value calculated for the replacement engine on the right side of the equation shall be equal to or greater than the value for the existing engine on the left side of the equation

. The permitti ng page of the Air Quality Bureau website contains a spreadsheet that performs this calculation.NSR Permit No. 0063M8R3 Page 56 of 62

EXISTING ENGINE REPLACMENT ENGINE

[(g) x (h1)] + [(v1) 2 /2] + [(c) x (T1) ] <= [(g) x (h2)] + [(v2) 2 /2] + [(c) x (T2)] q1 q2

Where g = gravitational constant = 32.2 ft/sec 2

h1 = existing stack height, feet v1 = exhaust velocity, existing engine, feet per second c = specific heat of exhaust, 0.28 BTU/lb

- degree F T1 = absolute temperature of exhaust, existing engine = degree F + 460 q1 = permitted allowable emission rate

, existing engine, lbs/hour h2 = replacement stack height, feet v2 = exhaust velocity, replacement engine, feet per second T2 = absolute temperature of exhaust, replacement engine = degree F + 460 q2 = manufacturer’s pote ntial emission rate, replacement engine, lbs/hour

The permittee shall keep record s showing that the replacement engine is at least as effective in the dispersion of air pollutants as the existing engine.

iii. T est measurement of NOx and CO emissions from the temporary replacement engine shall be performed in accordance with Section B111

with the exception of Condition B111A( 3 ) and B111B for EPA Reference Methods Tests or SectionB111C for portable analyzer test

measurements

. C omplian ce test (s) shall be conducted within fifteen (1 5 ) days after the unit begins operation , and records of the results shall be kept according to section B109.B

. This test shall be performed even if the engine is removed prior to 15 days on site.

i. These compliance tests are not required for an engine certified under 40CFR60, subparts IIII, or JJJJ, or 40CFR63, subpart ZZZZ if the permittee demonstrates that one of these requirements causes such engine to comply with all emission

limits of this permit. Th e permittee shall submit this demonstration to the Department within 48 hours of placing the new unit into operation. This submittal shall include documentation that the engine is certified, that the engine is within its useful life, as defined and specif ied in the applicable requirement, and shall include calculations showing that the applicable emissions standards result in compliance with the permit limits.

ii. These compliance tests are not required if a test was conducted by portable analyzer or by EPA Method test (including any required by 40CFR60, subparts IIII and JJJJ and 40CFR63,NSR Permit No. 0063M8R3 Page 57 of 62

subpart ZZZZ) within the last 12 months. These previous tests are valid only if conducted at the same or lower elevation as the existing engine location prior to commencin g operation as a temporary replacement. A copy of the test results shall be kept according to section B109.B.

iv. Compliance tests for NOx and CO shall be conducted if requested by the Department in writing to determine whether the replacement engine is in compliance with applicable r egulations or permit conditions.

v. Upon determining that emissions data developed according to

B116.A.1 ( c) fail to indicate compliance with either the NOx or CO emission limits, the permittee shall notify the Department within 48 hours. Also within that time, the permittee shall implement one of the following corrective actions:

i. The engine shall be adjusted to reduce NOx and CO emissions and tested per B116.A.1(c) to demonstrate compliance with permit limits.

ii. The engine shall discontinue operation or be replaced with a

different unit.

(2) Short term replacement engines, whether of the same manufacturer, model, and horsepower, or of a different manufacturer, model, or horsepower, are subject to

all federal and stat e applicable requirements

, regardless of whether they are set forth in this permit (including monitoring and recordkeeping), and shall be subject to any shield afforded by this permit.

(3) The permittee shall maintain a contemporaneous record documenting the u nit number, manufacturer, model number, horsepower, emission factors, emission test results, and serial number of any existing engine that is replaced , and the replacement engine. Additionally, the record shall document the replacement duration in days, a nd the beginning and end date s of the short term engine replacement

. (4) The permittee shall maintain records of a regulatory applicability determination for each replacement engine (including 40CFR60, subparts IIII and JJJJ and 40CFR63, subpart ZZZZ) and sh all comply with all associated regulatory requirements.

B. Additional requirements for replacement of engines at sources that are major as defined in regulation 20.2.74 NMAC, Permits

– Prevention of Significant

Deterioration , section 7.AF

. For sources that are major under PSD, the total cumulative operating hours of the replacement engine shall be limited using the following procedure:NSR Permit No. 0063M8R3 Page 58 of 62

(1) Daily, the actual emission s from the replacement engine of each pollutant regulated by this permit for the existing engine shall be calculated and recorded.

(2) The sum of the total actual emissions since the commencement of operation of the replacement engine shall not exceed the significant emission rates in Table 2 of 20.2.74 NMAC, section 502 for the time that the replacement engine is located at the facility.

C. All records required by this section shall be kept according to section B109.

PART C MISCELLANEOUS

C100 Supporting On

- Line Documents

A. Copies of the following documents can be downloaded from NMED ’s web site under Compliance and Enforcement or requested from the Bureau.

(1) Excess Emission Form (for reporting deviations and emergencies)

(2) Universal Stack Test Notification, Protocol and Report Form and Instructions

(3) SOP for Use of Portable Analyzers in Performance Tests

C101 D efinitions

A. “Daylight” is defined as the time period between sunrise and sunset, as defined by

the Astronomical Applications Department of the U.S. Naval Observatory. (Data for one day or a table of sunrise/sunset for an entire year can be obtained at http://aa.usno.navy.mil/ . Alternatively, these times can be obtained from a

Farmer ’ s Almanac or from http://www.almanac.com/rise/ ).

B. “Exempt So u rces ” and “Exempt Activities” is defined as those sources or activities that are exempted in accordance with 20.2.72.202 NMAC. Note; exemptions are only valid for most 20.2.72 NMAC permitting action s

.

C. “Fugitive E mission” means those emissions which could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening.

D. “Insignificant Activities” means those activities which have been listed by the department and approved by the administrator as insignifica nt on the basis of size, emissions or production rate. Note; insignificant activities are only valid for 20.2.70 NMAC permitting actions.

E. “Natural Gas” is defined as a naturally occurring fluid mixture of hydrocarbons that contains 20.0 grains or less of total sulfur per 100 standard cubic feet (SCF)NSR Permit No. 0063M8R3 Page 59 of 62

and is either composed of at least 70% methane by volume or has a gross calorific value of between 950 and 1100 Btu per standard cubic foot. (40 CFR 60.631)

F. “Natural Gas Liquids” means the hydrocarbons, such a s ethane, propane, butane, and pentane, that are extracted from field gas. (40 CFR 60.631)

G. “National Ambient air Quality Standards” means , unless otherwise modified, the primary (health

- related) and secondary (welfare

- based) federal ambient air quality sta ndards promulgated by the US EPA pursuant to Section 109 of the

Federal Act.

H. “Night” is the time period between sunset and sunrise, as defined by the Astronomical Applications Department of the U.S. Naval Observatory. (Data for one day or a table of sunr ise/sunset for an entire year can be obtained at http://aa.usno.navy.mil/ . Alternatively, these times can be obtained from a

Farmer’s Almanac or from http://www.almanac. com/rise/ ).

I. “Night Operation or Operation at Night” is operating a source of emissions at night.

J. “NO2” or "Nitrogen dioxide" means the chemical compound containing one atom of nitrogen and two atoms of oxygen, for the purposes of ambient determinations.

T he term "nitrogen dioxide," for the purposes of stack emissions monitoring, shall include nitrogen dioxide (the chemical compound containing one atom of nitrogen and two atoms of oxygen), nitric oxide (the chemical compound containing one atom of nitrogen and one atom of oxygen), and other oxides of nitrogen which may test as nitrogen dioxide and is sometimes referred to as NOx or NOx. (20.2.2 NMAC)

K. “ NOx ” see NO 2

L. “Potential Emission Rate” means the emission rate of a source at its maximum capacity to emit a regulated air contaminant under its physical and operational design, provided any physical or operational limitation on the capacity of the source to emit a regulated air contaminant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored or processed, shall be treated as part of its physical and operational design only if the limitation or the effect it would have on emissions is enforceable by the department pursuant to the Air Quality Control Act or the

federal Act.

M. “ Restricted Area ” is an area to which public entry is effectively precluded. Effective barriers include continuous fencing, continuous walls, or other continuous barriers approved by the Department, such as rugged physical terrain with a steep grade that would require special equipment to traverse. If a large property isNSR Permit No. 0063M8R3 Page 60 of 62

completely enclosed by fencing, a restricted area within the property may be identified with signage only. Public roads cannot be part of a Restricted Area.

N. "Shutdown" , for requirements under 20.2.72 NMAC, means the cessation of operation of any air pollution control equipment, process equipment or process for any purpose, except routine phasing out of batch process units.

O. "S SM " , for requir ements under 20.2.7 NMAC, means routine or predictable startup, shutdown, or scheduled maintenance

. (1) "Shutdown" , for requirements under 20.2.7 NMAC, means the cessation of operation of any air pollution control equipment or process equipment

. (2) "Startup" , fo r requirements under 20.2.7 NMAC, means the setting into operation of any air pollution control equipment or process equipment

.

P. "Startup" , for requirements under 20.2.72 NMAC, means the setting into operation of any air pollution control equipment, proces s equipment or process for any purpose, except routine phasing in of batch process units.

C102 Acronyms

2SLB

................................ ................................ ................................ ........ 2

- s troke l ean b urn 4SLB

................................ ................................ ................................ ........ 4

- s troke l ean b urn 4SRB

................................ ................................ ................................ ......... 4

- s troke r ich b urn acfm

................................ ................................ ........................... actual cubic feet per minute

AFR

................................ ................................ ................................ .................... air fuel ratio

AP

- 42

................................ ................................ ........... EPA Air Pollutant Emission Factors AQB

................................ ................................ ................................ ........ Air Quality Bureau AQCR

................................ ................................ ....................... Air Quality Control Region

ASTM

................................ ............................. American Society for Testing and Materials

BTU

................................ ................................ ................................ ...... British T hermal U nit

CAA

................................ ............................. Clean Air Act of 1970 and 1990 Amendments

CEM

................................ ................................ ................. c ontinuous e missions m onitoring

cfh

................................ ................................ ................................ ........... cubic feet per hour

cfm

................................ ................................ ................................ ....... cubic feet per minute

CFR

................................ ................................ ........................... Code of Federal Regulation

C I

................................ ................................ ................................ ........ compression ignition

CO

................................ ................................ ................................ ............ carbon monoxides

COMS

................................ ................................ ...... c ontinuous o pacity m onitoring s ystem

EIB

................................ ................................ ............... Environmental Improvement Board

EPA

................................ .......................... United States Environmental Protection Agency gr./100 cf

................................ ................................ .......... grains per one hundred cubic feet gr./dscf

................................ ................................ ............. grains per dry standard cubic foot

GRI

................................ ................................ ................................ ..... Gas Research InstituteNSR Permit No. 0063M8R3 Page 61 of 62

HAP

................................ ................................ ................................ ... hazardous air pollutant hp

................................ ................................ ................................ ....................... h orsepower
H 2 S

................................ ................................ ................................ .............. hydrogen sulfide

IC

................................ ................................ ................................ .......... i nternal c ombustion

KW/hr

................................ ................................ ................................ ...... kilowatts per hour

lb/hr

................................ ................................ ................................ .............. pounds per hour

lb/MMBtu

................................ ............................. pounds per million Bri tish T hermal U nit

MACT

................................ ............................. Maximum Achievable Control Technology

MMcf/hr

................................ ................................ ...................... million cubic feet per hour

MMscf

................................ ................................ ......................... million standard cubic feet

N/A

................................ ................................ ................................ .................. n ot a pplicable NAAQS

................................ ................................ . National Ambient Air Quality Standards

NESHAP

................................ . National Emission Standards for Hazardous Air Pollu tants
NG

................................ ................................ ................................ ....................... n atural g as NGL

................................ ................................ ................................ ......... n atural g as l iquids NMAAQS

................................ ...................... New Mexico Ambient Air Quality Standards

NMAC

................................ ................................ ............ New Mexico Administrative Code

NMED

................................ ................................ ..... New Mexico Environment Department

NMSA

................................ ................................ ................. New Mexico Statues Annotated

NOx

................................ ................................ ................................ ............... nitrogen oxides

NSCR

................................ ................................ ................. n on

- selective c atalytic r eduction

NSPS

................................ ................................ ............. New Source Performance Standard

NSR

................................ ................................ ................................ ....... New Source Review

PEM

................................ ................................ .................. p arametric e missions m onitoring

PM

................................ particulate matter (equivalent to TSP, total suspended particulate)

PM 10

................................ ....................... particulate matter 10 microns and less in diameter

PM 2.5

................................ ..................... particulate matter 2.5 microns and less in diameter pph

................................ ................................ ................................ ................ pounds per hour

ppmv

................................ ................................ ......................... parts per million by volume

PSD

................................ ................................ ......... Prevention of Significant Deterioration

R ATA

................................ ................................ ........... Relative Accuracy Test Assessment

RICE

................................ ................................ .... reciprocating internal combustion engine

rpm

................................ ................................ ................................ .... revolutions per minute

scfm

................................ ................................ ....................... standard cubic feet per minute

SI

................................ ................................ ................................ ................... spark ignition

SO 2

................................ ................................ ................................ .................. sulfur dioxide

S SM

................................ ................... Startup Shutdown Maintenance (see SSM definition)

TAP

................................ ................................ ................................ ........ Toxic Air Pollutant

TBD

................................ ................................ ................................ ............. to be determined

THC

................................ ................................ ................................ .......... t otal h ydrocarbons

TSP

................................ ................................ .......................... Total Suspended Particulates

tpy

................................ ................................ ................................ ..................... tons per year
ULSD

................................ ................................ ................................ .. ultra low sulfur diesel

USEPA

................................ ..................... United States Environmental Protection AgencyNSR Permit No. 0063M8R3 Page 62 of 62

UTM

................................ ...................... Universal Transverse Mercator Coordinate system

UTMH

................................ ................................ Universal Transverse Mercator Horizontal

UTMV

................................ ................................ .... Universal Transverse Mercator Vertical

VHAP

................................ ................................ ................... volatile hazardous air pollutant

VOC

................................ ................................ .......................... volatile organic compounds