UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthorne Street San Francisco, CA 94105·3901

November 10, 2008

Steven Spangle Field Supervisor U.S. Fish and Wildlife Service 2321 West Royal Palm Road Suite 103 Phoenix, Arizona 85021
Re: Request for Concurrence with EPA Finding ofMay Effect 

### I No Likely Adverse Effect under Section 7 ofthe ESA for the Navajo Generating Station Low-No; Burner Project Dear Mr. Spangle: By this letter , the U.S. Environmental Protection Agency, Region IX ("EPA") seeks concurrence from the U.S. Fish and Wildlife Service ("Service") under Section 7(a)(2) ofthe Endangered Species Act ("ESA") with our finding that emissions increases ofcarbon monoxide ("CO") from the Navajo Generating Station ("NGS") Low-Nf), Burner Project ("Project") may affect, but is not likely to adversely affect, the continued existence ofany endangered or threatened species or result in the destruction or adverse modification of such species' designated critical habitat. NGS has applied to EPA for a Federal Prevention of Significant Deterioration ("PSD ") permit as required by Part C ofthe Clean Air Act and regulations at 40 C.F.R. § 52.21. Background information on the PSD program and more detailed information regarding the Project are included below.
EPA is responsible for complying with ESA Section 7 requirements with respect to Federal PSD permitting and is the lead Federal Agency for Section 7(a)(2) compliance for this Project. Because the Project has the potential to affect listed species and/or critical habitat, final action on this PSD permit must not occur until EPA has determined that permit issuance will be consistent with the substantive and procedural requirements ofthe ESA.
NGS is located on the Navajo Nation Indian Reservation, approximately five miles east ofPage, in Coconino County, Arizona. The facility consists ofthree existing coal-fired steam generating units, with a combined power generation capacity of2,250 net megawatts. The three units are operated by Salt River Project Agricultural and Power District ("SRP") and co-owned by the following six entities: U.S. Bureau ofReclamation, SRP, Los Angeles Department of Water and Power, Arizona Public Service Company, Nevada Power, and Tucson Electric Power Company.
SRP has proposed the current Project as a voluntary measure to significantly reduce emissions ofoxides ofnitrogen (NOx) from all three boiler units at the NGS. The project

Printed on Recycled Paperinvolves the installation of Low-NO, Burners (LNB) with Separated Over-fire Air (SOFA) systems over a three-year period. LNB and SOFA systems reduce NO x emissions by controlling air and fuel flow to create fuel-rich and oxygen-poor conditions in the burner, and stage the addition of over-fire air beyond the burner combustion zone to complete combustion at a lower temperature which reduces the formation ofthermal NOx. Reductions in NO x achieved through staged combustion result in simultaneous increases in CO, a by-product ofincomplete combustion.
After the LNB and SOFA systems are installed on all three units at NGS , SRP estimated NO x emissions to decrease by over 20,000 tons per year ("tpy"). SRP has determined that the net emission increase ofCO resulting from the proposed Project will exceed the 100 tpy PSD significance threshold for CO, triggering Federal permitting requirements. Emissions ofall other air pollutants are expected to remain unchanged as a result of this Project and thus are not subject to PSD review.
SRP submitted an ESA Analysis for this Project to EPA in April 2008 (revised July 2008). Based on the habitat conditions surrounding the project area, only one species from the Federal Coconino County threatened and endangered species list would be expected to occur in the Project vicinity: the California condor (G ymnogyps californianusi. No breeding or nesting sites have been observed for this species in the Project area. The Project will occur within the boundaries ofthe active plant site, which is already a developed industrial area, and it is expected that the one species identified in the analysis generally avoids human contact and thus avoids the facility area

. In addition to the possible construction impacts on the listed species, SRP conducted a CO modeling analysis to determine the impact ofCO emissions increases on the 1­ hour and 8-hour average National Ambient Air Quality Standards ("NAAQS"). The modeling results showed that emissions increase s ofCO from the Project do not result in ambient concentrations that exceed the NAAQS , therefore, SRP concluded that a more detailed review would not be required for CO impacts on plants , soils , and animals

. EPA reviewed the analysis submitted by SRP and finds that the Project may affect, but is not likely to adversely affect the California condor or its critical habitat, in accordance with 50 C.F.R

. §§ 402 .13 and 402.14(b). I am writing to request written concurrence from the Service with this finding.
Ifyou have any questions regarding this Project, please contact me at (415) 972-3974 or Leslie Ramirez, ofmy staff, at (415) 972-3978. 

# ?t/IL

Gerardo C. Rios Chief , Air Permits Office

cc: John Nystedt, USFWS (via electronic mail) Brenda Smith, USFWS (via electronic mail)