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State of Wisconsin

CORRESPONDENCE/MEMORANDUM

DATE: January 11, 2013

TO: Review File for Permit No. 12-SDD-047

FROM: Steve Dunn – AM/7

SUBJECT: Response to Comments on Draft Permit No. 12-SDD-047

Draft Permit No. 12-SDD-047 was public noticed on October 10, 2012. During the public 

comment period comments were received on the draft permit form the applicant, USEPA and 

David Bender (representing the Sierra Club and Midwest Environmental Defense Center). The 

comments received from USEPA and Mr. Bender are summarized in this document along with 

the Department’s response to those comments. This memo also contains a list of significant 

changes made to the draft permit.

A. The following comments were received from USEPA

Comment: Page 23 of the Preliminary Determination document indicates that that facility was 

allowed to use a different time period than the 24-month period because... "the units are new 

(operating only since October 2009 for unit 1 and July 2010 for unit 2) and they did not operate 

at a representative rate during the first few months to the first year of operation. The applicant 

has proposed the period of October 2010-September 2011." WDNR granted this request since 

the units were "not operating normally due to the need for startup and shakedown work." 

However, the baseline period used to calculate the Best Available Control Technology (BACT) 

limit for Carbon Monoxide (CO) was from December 2009 until December 2011, which includes 

the time period that WDNR determined is not representative of normal operation for other 

pollutants in the netting analysis. Please explain why this time period is representative for CO 

and not representative for other pollutants, or make the necessary changes to your analyses to

correct this discrepancy.

Response: The Department has examined the CO emission rates for the October 2010-

September 2011 period. Using only the CO rates from this time period yields an average CO 

emission rate of 0.017 lb/MMBTU with a standard deviation of 0.005. This is compared to the 

average rate of 0.018 lb/MMBTU and standard deviation of 0.006 using all of the available CO 

date. While this does lead to a slight reduction in the average CO emission rate, it does not 

change the Department’s BACT conclusion. As mentioned in the Preliminary Determination, 

the BACT emission rate is based on both the actual CO emissions from the boilers and on the 

Department’s conclusion that the use of subbituminous coal is likely to increase boiler CO 

emissions.
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Comment: Page 19 of the Preliminary Determination document states that an air quality 

analysis is not required because "[a]ll potential emissions for the emissions units covered in the 

draft permit are either the same or lower than the emissions rates which were modeled in 

previous construction permit for this facility." It seems that the construction permit referenced is 

permit #03-RV-166-R5, which was issued in October 2009. Under NR 405.09 the source must 

show that its allowable emissions and all other applicable emissions increases and decreases will 

not cause or contribute to a violation of National Ambient Air Quality Standards or increment. 

"All other applicable emissions" include an up-to-date inventory of emissions in the area of

concern that were not included in the original modeling analysis. Additionally, since certain 

modeling requirements have changed since 2009, WDNR should ensure that the permit for this 

major modification adequately reflects all of the new requirements. For example, since this 

modification will have a significant emissions increase in Volatile Organic Compounds (VOC) 

and Nitrogen Oxides (NOx) it should conduct an ozone impacts analysis. Please complete an 

ozone impact analysis and update the previous modeling to include the latest meteorological 

data, emissions data, and any new models required since the 2009 modeling (such as 1-hr 

nitrogen dioxide and sulfur dioxide) or provide justification that no changes to the above have 

occurred since the previous modeling. 

Response: As stated in s. NR 405.02(1)(b), Wis. Adm. Code, “[t]he department may presume 

that source-specific allowable emissions for the unit are equivalent to the actual emissions of the 

unit”. This has been the policy for Wisconsin since the early days of the PSD program, because 

this is seen as a conservative estimator of the impact of the increase. To maintain consistency 

with this policy, only those increases of allowable emissions would trigger a review of increment 

and NAAQS under the PSD program. In the specific case of We Energies-Elm Road Generating 

Station, as there is no increase of allowable emission, the impact of the “increase” is less than the 

Significant Impact Level (SIL) for the respective pollutant and therefore the corresponding 

NAAQS. This is reflected in the department’s April 2011 publicly available modeling guidance. 

http://dnr.wi.gov/topic/AirPermits/documents/ModelingReqsAllPollutantsMemo.pdf

Per guidance contained in the 1990 NSR manual and transmitted to Wisconsin in 1989 via a 

letter from USEPA Region V (presented below), if a source demonstrates that the impact of the 

proposed project is below the SIL, the air quality analysis portion of the PSD review is satisfied. 

For We Energies-Elm Road Generating Station, it has been demonstrated that the impact of the 

emissions regulated under the proposed permit will have an impact less than the SIL, so the zero 

allowable emission increase will not and cannot cause or contribute to a violation of the 

NAAQS. The analysis has not been ‘waived’; rather the zero pound per hour allowable emission 

increase was found to have an impact less than the SIL.
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In addition, the Department has prepared an ozone impact analysis for the proposed project. 

However, the NOx increase from the project has been offset by decreases at the Oak Creek 

facility and the VOC emissions increase is only 35 tons/year.
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Comment: 173(a)(3) of the Clean Air Act states that the permit program required by 172(b)(6) 

shall provide that a permit may be issued if.."the owner or operator of the proposed new or 

modified source has demonstrated that all major stationary sources owned or operated by such 

person..in such state are subject to emission limitations and are in compliance, or on a schedule 

for compliance...". At this time the Paris Generating Station in Kenosha, which is also operated 

by WE Energies, is not in compliance and a compliance schedule has not yet been finalized. The 

Paris Generating Station is not in compliance because of modifications done in 2000-2002 to 

replace turbine blades. The modifications were determined, after the fact, to be major 

modifications and may have triggered PSD review. A draft permit incorporating the compliance 

schedule for the Paris Generating Station (#230094810-P02) was public noticed on October 5, 

2012 and has not yet been issued. Until the compliance schedule is finalized, the permit for WE 

Energies Elm Road Generating Station (#12-SDD-047) may not be issued.

Response: The Department concurs with the commenter that permit no. 12-SDD-047 may not 

be issued until the WE Paris facility is in compliance or on a schedule for compliance with all 

applicable emission limitations. In order to meet this requirement, the Department and WE 

Energies have entered in a Consent Order (agreement) that specifies that units 1 and 4 at the 

Paris facility may not operate until brought into compliance with ch. NR 428 and ch. NR 405, 

Wis. Adm. Code. In order to comply with these requirements as these units are presently 

configured, the units have been deactivated and will not operate until compliance with these 

Adm. Code requirements is achieved.

Units 2 and 3 at the Paris facility are on an enforceable schedule to achieve compliance with ch. 

NR 405, Wis. Adm. Code requirements. This schedule allows the Units to continue operation 

while the Department processes the construction permit application for these facilities.

Based on the Paris facility meeting all emission limitations or being on an enforceable schedule 

to meet all such limitations, the Department concludes that permit no. 12-SDD-047 may be 

issued in compliance with this requirement.

Comment: Page 13 of the Preliminary Determination document states that the GHG BACT 

analysis will include CO2, methane, and nitrous oxide, but there is only a proposed GHG BACT 

emission limit for CO2 and not for methane or nitrous oxide. Since the regulated NSR pollutant 

is defined as GHG, the GHG emission limit(s) should account for not only CO2, but for all of the 

GHGs that are emitted. Please also clarify how compliance will be demonstrated for the each of 

the GHGs.

Response: The three greenhouse gases of concern for this facility are carbon dioxide (CO2), 

methane and nitrous oxide. Of these pollutants, CO2 accounts for a minimum of 97.9% of the 

greenhouse gas potential based on USEPA emission factors for these pollutants. The Department 

has included a method for directly measuring CO2 emissions (a CEM) as the compliance 

requirement for all greenhouse gas emissions. The Department is unaware of any continuous 

monitoring equipment available for measuring methane or nitrous oxide emissions from coal-
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fired boilers. Thus, the Department determines that measurement of these emissions is infeasible 

for this boiler.

However, the Department is proposing to change the greenhouse gas emission limitation from 

only a CO2 limitation to include limitations for methane and nitrous oxide. For methane, the 

Department believes that methane emissions are related to poor or incomplete combustion. As a 

surrogate for poor combustion, the Department will require that the proposed CO BACT be 

achieved as part of the greenhouse gas BACT emission limitation. For nitrous oxides, the 

Department is proposing the overall NOx emission limitation as a surrogate for nitrous oxides. 

Thus, complying with the NOx LAER limitation is now included as an emission limitation and 

compliance demonstration requirement for greenhouse gases.

Comment: Page 14 of the Preliminary Determination document states that building a CO2 

pipeline would cost millions of dollars to construct and concludes that carbon capture and 

sequestration (CCS) is economically infeasible for controlling GHGs for this project. In order to 

support this conclusion, please include in the permit record your CCS cost analysis (e.g., an 

annualized cost per ton of CO2 removed, or a capital cost comparison to the total cost of the 

project) along with the rationale for why the costs are economically infeasible.

Response: Based on information supplied by the applicant, the total capital cost of the two Elm 

Road boilers was approximately $750,000,000. The estimated cost of installing a carbon capture 

system is $3.54 billion and the cost of constructing a pipeline to ship the captured carbon dioxide 

to a final storage site would be $750 million. Even if these numbers are twice the actual costs, 

the cost of installing a carbon capture system would be approximately $2 billion or more than 

twice the cost of the boilers themselves. The Department does not believe this represents an 

economically feasible control option both due to the cost being so much larger than the cost of 

the boilers and due to the sheer magnitude of dollars that would be required to control carbon 

dioxide emissions.

Comment: The permit contains a Lowest Available Emission Rate (LAER) emission limit for 

VOC, however the preliminary determination does not address how the LAER limit was 

selected. Please include the analysis used in preparing the LAER determination in the permit 

record.

Response: LAER is not required for this emission limitation. This was an error in the draft 

permit. The emission limitation is unchanged from the draft permit.

Comment: Please correct the typographical error in condition I.A.15.b.(3). Current language 

reads, "The permittee shall perform the compliance emission tests required under condition 

I.A.15.b.(l) every 60 within 60 days of the anniversary date of the initial test as long as the 

permit remains valid." It appears that a unit of time is missing. If appropriate, please change the 

language to, "... every 60 months within 60 days of the...". 

Response: This has been corrected.
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Comment: It appears that permit condition I.A.2.c.(7) is repeated in I.A.2.c.(l 1). If appropriate, 

remove condition I.A.2.c.(l 1) to avoid repetition. 

Response: This has been corrected.

Comment: It appears that two permit conditions were both labeled I.A.2.b.(5). If appropriate, 

please change the label of the condition on page 7 to I.A.2.b.(6) to improve clarity. 

Response: This has been corrected.

B. The following comments were received from Mr. David Bender

Comment: The Department did not adequately consider the use of natural gas as BACT for the 

facility.

Response: The Department believes its analysis of natural gas is in conformance with USEPA 

policy and the PSD regulations. The Department believes that the basic design of this facility is 

a coal fired electric utility boiler. The reasons for this conclusion are elaborated upon in the 

Preliminary Determination for this permit.

The Department does not concur that converting or simply using another type of coal justifies the 

evaluation of the conversion of this facility to natural gas as an option under the BACT analysis 

of alternative control technologies.

Comment: The Department needs to evaluate the use of only bituminous coal in lieu of the use 

of subbituminous coal as BACT for GHG’s from these boilers. 

Response: The proposed project covered under this permit is use of and possible physical 

changes to the existing boilers to allow for the maximum use of subbituminous coal. This 

conversion may lead to higher CO emissions, lower NOx emissions and higher GHG emissions. 

In addition, the use of subbituminous coal is projected to be significantly less expensive than the 

use of bituminous coal. Based on information provided by the applicant, the use of 

subbituminous coal at a 50% mix with bituminous coal and at an 80% capacity factor yields a 

fuel savings of $40,000,000.

The applicant has stated that the primary of this project is to reduce operating costs by using 

subbituminous coal. Based on a review of the permit application and discussions with the 

applicant, the Department agrees that this is the primary purpose of the proposed project. A 

BACT that eliminates subbituminous coal usage represents a change to the fundamental project 

and need not be further considered in any BACT analysis

Comment: WE’s methodology of using standard deviations is not statistically valid.
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Response: The Department has made no determination as to the validity of WE’s statistical 

methodologies. The Department has examined Elm Road’s measured emission rates and 

emissions rates achieved at other facilities and made a determination as to the emission rates it 

believes are achievable over the operational period of these units. The Department believes the 

emission rates selected represent BACT or LAER (as applicable) for all pollutants reviewed 

under this application.

Comment: WDNR must include limits sufficient to protect the 1-hour NOx and SO2 NAAQS. 

Response: The Department concurs with the commenter that the Department has not made a 

finding in this permit review or in a previous permit review that facility-wide emissions will 

meet the 1-hour N20 and SO2 NAAQS. The Department does not concur that its actions are not 

in conformance with its own modeling guidance. In response, the response to USEPA’s 

comment on this matter is copied herein:

As stated in s. NR 405.02(1)(b), Wis. Adm. Code, “[t]he department may presume that 

source-specific allowable emissions for the unit are equivalent to the actual emissions of 

the unit”. This has been the policy for Wisconsin since the early days of the PSD 

program, because this is seen as a conservative estimator of the impact of the increase.

To maintain consistency with this policy, only those increases of allowable emissions 

would trigger a review of increment and NAAQS under the PSD program. In the specific 

case of We Energies-Elm Road Generating Station, as there is no increase of allowable 

emission, the impact of the “increase” is less than the Significant Impact Level (SIL) for 

the respective pollutant and therefore the corresponding NAAQS. This is reflected in the 

department’s April 2011 publicly available modeling guidance. 

http://dnr.wi.gov/topic/AirPermits/documents/ModelingReqsAllPollutantsMemo.pdf

Per guidance contained in the 1990 NSR manual and transmitted to Wisconsin in 1989 

via a letter from USEPA Region V (presented below), if a source demonstrates that the 

impact of the proposed project is below the SIL, the air quality analysis portion of the 

PSD review is satisfied. For We Energies-Elm Road Generating Station, it has been

demonstrated that the impact of the emissions regulated under the proposed permit will 

have an impact less than the SIL, so the zero allowable emission increase will not and 

cannot cause or contribute to a violation of the NAAQS. The analysis has not been 

‘waived’; rather the zero pound per hour allowable emission increase was found to have 

an impact less than the SIL.

Comment: WDNR must provide limits to protect the PM2.5 NAAQS. 

Response: The area is which the Elm Road facility is located is presently a PM2.5 nonattainment area. Thus, no modeling can demonstrate that the PM2.5 NAAQS will be met. 

However, as required under ch. NR 408, Wis. Adm. Code, We Energies must offset the 

increases in PM2.5 from this proposed project with actual reductions in PM2.5 emissions from 

existing operations. Due to these offsets, the Department believes that this proposed project will 
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not exacerbate the exceedance of an ambient air quality standard and meets the requirements of 

both ch. NR 408, Wis. Adm. Code and applicable state statutes

Comment: The NOx LAER/BACT emission rate is too high. 

Response: NOx emissions are subject to a LAER control requirement under ch. NR 408, Wis. 

Adm. Code. LAER requires that the facility achieve the lowest emission rate achieved within 

the same class of source. The Department concurs that there are 100% subbituminous coal fired 

boilers that are achieving a lower NOx emission rate than that required in the final permit. 

However, We Energies Elm Road boilers are mixed fuel boilers, allowed and expected to burn a 

combination of bituminous and subbituminous coal.. The Department is unaware of any mixed 

fuel boilers that are achieving a lower emission rate than that required in this permit.

The Department expects that the boilers in this permit will operate as mixed fuel boilers for the 

foreseeable future (based on the applicant’s submittals). Thus, the LAER needs to cover the 

NOx emissions expected from a boiler using mixed fuel. The Department has no empirical data 

that indicates that NOx emissions are reduced in proportion to the percentage of subbituminous 

coal combusted relative to bituminous coal (i.e. a 50/50 coal mix does not necessarily yield an 

emission rate half way between a rate achievable with 100% subbit and 100% bituminous coal). 

In addition, the Department has attempted to set limits in this permit that are independent of the 

type of coal combusted. This was chosen based on the lack of data on the impact of mixed fuel 

on emissions and also to simplify compliance demonstration.

However, the Department is also concerned that at high subbituminous coal combustion rates 

that the 0.065 lb/MMBTU NOx emission limitation would not represent the lowest achievable 

emission rate. For example, the permittee could operate the SCR at a lower efficiency by 

maintaining SCR operations at a level that meets the 0.065 lb/MMBTU rate when a higher 

control efficiency could be achieved. In order to address this concern, the Department has added 

a requirement to the NOx LAER that the applicant develops, seek department approval for, and 

implement a plan for operating the SCR at maximum efficiency no matter what coal mix is 

combusted. This is designed to address the commenter’s, and the Department’s concern, that 

when higher amounts of subbituminous coal are combusted that the SCR operations can be 

reduced and the maximum emission reductions not be achieved.

Finally, the LAER determination for NOx also include a total tons/year of NOx emission 

limitation. This limitation is equivalent to 0.05 lb NOx/MMBTU at full boiler operation. This 

level was included in both the original and now final LAER determination to address the 

potential for reduced NOx emissions for combustion of subbituminous coal.

Comment: The PM2.5 limit does not represent LAER.

Response: The Department has placed only a PM emission limitation on these boilers because 

there is no method for testing for PM2.5 or PM10 emissions alone. This is due to these boilers 

being equipped with a wet FGD. In order to achieve a LAER emission rate for PM2.5, the 
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Department is requiring the operation of a baghouse and a wet ESP. In addition, the Department 

has established a total particulate matter emission limitation that is as low, to the best of the 

Department’s knowledge, as any that is required for any coal-fired utility in the U.S.. The 

Department believes that the control equipment in combination with the low PM emission rate 

represents LAER for PM2.5 emissions.

Comment: The CO BACT compliance margins are not justified.

Response: The CO BACT emission rate is based on actual boiler operations, the emission rates 

required of other facilities, and the fact that the use of subbituminous coal is likely to raise CO 

emission rates. This increase in CO emissions is likely due to the lower BTU content of 

subbituminous coal in comparison to bituminous coal. The opposite affect is generally observed 

with NOx emissions as subbituminous coal combustion, as noted previously be the commenter, 

will generally lead to lower NOx emissions in comparison to bituminous coal combustion.

Comment: There is no basis for the proposed opacity BACT. 

Response: The Department has proposed an opacity BACT of 10%. This is as stringent as the 

opacity BACT that has been proposed for other boilers in the State. Unlike these other boilers, 

the WE Elm Road boilers are equipped with a wet FGD. The use of a wet FGD negates the use 

of a continuous opacity monitor on the exit from the stack due to interference from condensed 

moisture. Thus, compliance with this limitation is demonstrated prior to the wet FGD, which 

serves both as an SO2, and to a limited extent, particulate matter control device. This 

compliance demonstration methodology (i.e. measuring opacity prior to the wet FGD using a 

continuous opacity monitor) increases the stringency of the limitation since it is measured prior 

to all emission control devices.

At the request of the applicant, the Department included a 6-minute period per hour where the 

opacity would be allowed to rise to 20%. This was included to allow for incomplete control 

prior to the FGD. The Department believes this is reasonable given the unusual compliance 

demonstration methodology required for the Elm Road facility.

The Department is unaware of any similar boilers with more stringent opacity limitations then 

that proposed for the Elm Road facility.

Comment: The GHG limitation is too high and unsupported by any data or analysis. 

Response: The Department has determined a BACT emissions rate for GHG by examining 

operational data form the Elm Road boilers, the Elm Road boilers themselves and the GHG 

BACT emissions rates required for other similar sources. 
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The Department has identified add-on controls and efficient operations as BACT options for 

GHG. The Department, as discussed in an earlier comment response, is not examining the 

prohibition on combusting subbituminous coal as a BACT option for GHG. The Department 

believes that this would be a redefinition of the project since the sole purpose of this proposed 

project is to maximize combustion of subbituminous coal to lower power generation costs.

A discussed in a previous response to comments made by USEPA, the Department has found 

that possible add-on controls for CO2 emission controls are not cost-effective. The Department 

also examined controls for methane emissions and N20 emissions. The Department found that 

methane emissions controls are not cost-effective. For N20, the Department has relied on its 

NOx LAER analysis as the control analysis for N20. This is done even though N20 is not a 

component of NOx. The Department is assuming that lowering overall NOx emissions should 

also lower overall N20 emissions. However, it is likely that this will have only a minimal 

impact, at best, on N2O emissions.

The next step in the BACT analysis is to evaluate what other emission control options are 

available. For CO2 and methane, the available control is efficient operation and good 

combustion (good combustion also yields efficient operation). For methane, the Department has 

identified CO as a surrogate for good combustion. The Department has relied on its CO BACT 

analysis as the method of limiting methane emissions that may occur due to poor combustion. 

Thus, the CO BACT has been included as BACT emission limitation for methane.

For CO2, the remaining control option is efficient operation. The Elm Road boilers are less than 

5 years old and are supercritical pulverized coal boilers. These boilers are equipped with the 

latest heat recovery, burner and operational control technology. The paper cited by the 

commenter is from 1999 and applies to retrofits of older existing boilers. These types of retrofits 

are not relevant to a newer supercritical boiler. Thus, the Department concludes that the 

operations and construction of the boiler are sufficient to generate efficient operation.

The final question in determining the GHG (CO2) BACT for these boilers is a determination as 

to the CO2 emission limitation for the boilers The CO and NOx emission rates are established by 

their respective BACT and LAER determinations.

The Elm Road boilers achieved an average GHG emission rate of 2,203 lb (net) MW-hr and an 

average net heat rate of 10,795 BTU/KWh during the period examined in the permit review 

(calendar years 2010 and 2011; net output). This is based on CEM data. As has been noted in 

the application , WE has demonstrated that the heat input rates determined using CEM data are 

7-15% different than the rates determined using fuel input data. The fuel input data was used to 

develop the EIA (Energy Information Administration) data and it is not directly comparable to 

the CEM data used in this application.
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In order to determine an appropriate BACT emission limitation, the Department has examined 

both the operational data for Elm Road and the BACT determinations made for other coal-fired 

boilers. To the Department’s knowledge, the only two coal-fired boilers that have GHG BACT 

determinations are two Iowa facilities. These determinations are a limitation of 2,927 lb 

CO2/MWh for one facility and 2,347 lb CO2.MWh for the other facility. The Department has 

proposed an emission limitation of 2,570 lb CO2/MWh for the Elm Road facility. Based on 

these other determinations, the Elm Road GHGBACT determination is within the range of the 

BACT determinations for other coal fired boilers.

In the permit application, the applicant has provided information that indicates that boiler 

efficiency and expected CO2 emission rates per unit of electrical output are dependent on boiler 

load. The implication of this information is that if the boilers do not operate at 100% or close to 

100% rating that boiler efficiency will drop. Based on this information and the actual operating 

data, the Department has identified the 2570 lb CO2 BACT emission limitation. This limitation 

allows for boiler operational variability based on aging of the boiler and allows the boilers to 

operate at less than 100% load. This type of load factor is justified in that WE Energies does not 

control the dispatch of these boilers. These boilers, and all utility boilers in WI, have their 

dispatch controlled by the Midwest ISO. Since the level of operation is outside of WE’s control, 

the Department has included this consideration in deciding the BACT emission limitation. The 

Department believes the limitation in the draft permit and the final permit represents BACT for 

GHG emissions. As mentioned previously, the CO2 limitation remains unchanged, but the 

limitations for CO and NOx have been included as part of the GHG BACT determination.

C. The following is summary of significant changes to the permit 

- Facility name and responsible official

- the number of days allowed to complete particulate matter stack testing

- the performance monitoring for the wet ESP. Tis has been changed and enhanced in the final 

permit.

- a requirement to perform stack testing for PM10 and PM2.5 when an EPA approved test 

method is developed.

- compliance demonstration language for the PM2.5 emission limitations has been added. The 

purpose of these additions is to clarify the compliance demonstration language.

- The ch. NR 417, Wis. Adm. Code, sulfur dioxide limitation was added to the permit

- compliance demonstration language for the SO2 emission limitations has been added. The 

purpose of these additions is to clarify the compliance demonstration language.
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- compliance demonstration language for the NOx emission limitations has been added. The 

purpose of these additions is to clarify the compliance demonstration language.

- the NOx LAER permit requirement were changed to add the development of an SCR operation 

plan to the requirements.

- compliance demonstration language for the CO emission limitations has been added. The 

purpose of these additions is to clarify the compliance demonstration language.

- BACT for greenhouse gases was changed to include emission limitations for CO and NOx

- compliance demonstration requirements for boilers B25-B28 were clarified

Other than the change to the NOx LAER and greenhouse gas BACT requirements, these changes 

have been made based on comments and discussions with the permit applicant.