UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION 2

290 BROADWAY

NEW YORK, NY 10007-1866

t,,.. 1 

# u 2004

Certified Mail

- Return Receipt Reguested

Mr. Carlos Reyes, Vice President

AES Puerto Rico, L.P.

Carr. #3 Km 142.0, Barrio Jobos

P. O. Box 1890
Guayama, Puerto Rico 00785

Re:

- Second Revision to the Final Prevention of Significant Deterioration of Air Quality
(PSD) Pennit for the AES Puerto Rico Cogeneration Plant (AES-PRCP)

- Administrative Permit Modification

Dear Mr. Reyes:

On October 29,2001, the Region 2 Office of the U.S. Environmental Protection Agency
(EPA) issued a revised final PSD pennit to the AES Puerto Rico, L.P. company for the

construction and operation of a 454 megawatt (net) coal-fired steam electric cogeneration facility

known as the AES Puerto Rico Cogeneration Plant (AES-PRCP) in Guayama, Puerto Rico.

On August 12,2003, AES-PRCP requested EPA to make additional changes in AESPRCP's PSD permit. Subsequently, AES-PRCP superseded the August 12, 2003 letter with the April 19, 2004 submittal. AES-PRCP's proposed changes are not expected to result in emi.ssion

increases over those allowed in the PSD pennit except for a trivial amount of 0.0210 ton/year (42 Ib/year) ofPM 1o associated with increased lime deliveries. These changes involve:

1. Updating the PM 10 emissions limit for the CFB boiler stack to account for the actual

stack test data results for condensible PM1o- The PM 10 limit will increase from 36.9 lblhr

to 73.8 Iblhr and from 0.015 lb/MMBTU to 0.03 lb/MMBTU. The existing PSD permit

allows this updating to be done administratively up to a maximum not to exceed-0.05

lb/MMBTU because no reliable PM 10 condensible data existed during the preconstruction

reVIew**process~**

2. Increasing the size of the emergency boiler feedwater pump diesel enginefronl 400 hp to

430 hp. During the testing of the emergency equipment AES-PRCP will fire the unit at or
below 400 hp so that the hourly and annual emissions will not increase above the limits in

the current PSD pennit.

Internet Address (URL). http://www.epagov

Recycled/Recyclable. Printed with Vegetable Oil Based Inks on 100% Postconsumer, Process Chlorine Free Recycled Paper3. Increasing AES-PRCP's annual usage limit of lime from 6,736 tons/year to 8,950 tons/year. This will be accomplished with an increase in truck delivering lime to the facility which will increase the PM 10 fugitive emissions by 0.0210 ton/year (42 lb/year).

4. Adding the option of using trucks to haul ash off-site for on island beneficial uses." The

PSD permit allows truck traffic on-site to haul ash rock (manufactured aggregate) from

the batch mixing area to the spread and crush area. AES-PRCP would restrict the number

of limestone delivery trucks to offset the PM 10 emissions (due to resuspension of roadway
silt) from on-site trucks hauling ash. Therefore, there will be no increase in PM 10 emissions from the combined limestone and ash truck traffic on-site.

5. Introducing a new category ofstartup that applies to startup following outages. This type

of startup can take longer than the 14 hours allowed in the PSD permit because of the requirement to dry refractory material by subjecting it to gradually increasing

temperature. This "post-outage startup" is likely to be required up to two times a year, for

an average of one startup per boiler. Allowable emissions during startup will not increase beyond the allowable lb/hr limits but will increase beyond the lb/MMBTU limits.

6. Increasing the allowed four turnovers per year in the startup fuel tank to a total of seven

turnovers per }'ear in order to accommodate the oil requirements of two post-outage

startups per year. There will be no increase in facility-wide 

### voe emissions allowed in

the pennit.

7. Changing the cover of the inactive coal yard. This entails removing the layer of dirt and

grass and installing a layer of one-foot thick compacted and hardened manufactured

aggregate (allowed to harden to a concrete-like material).

In addition to the changes requested by AES-PRCP, EPA is implementing an additional change because of the latest changes to the PSD regulations, effective March 3, 2003. EPA will

now be requiring that facility records that are required to be maintained by this pennit be kept for

a period of at least ten years (instead of the previous 5 years).

EPA reviewedAES-PRCP's proposed changes and has detennined that the changes will

not result in any increase in emissions from the facility except for a trivial amount of 42 lb/year

of PM 10 and that the facility still meets best available control technology (BACT). Furthermore,

the changes will not result in a significant impact of short term PM 10 ' S02 or 

### eo. There will be

a slight increase in the annual average PM 10 concentration near the fencelinedue to the proximity

of the ash truck roadway"but this is a trivial change. Indeed, the air quality assessment which

included the total modeled AES-PR facility plus recent ambient concentrations measured at the

Jobos monitors showed that all the impacts are well within the National Ambient Air Quality

Standards. Not only is the increase in 42 lb/year below the PM 10 significance level of 15 tons/year, but it is only 0.14% of that level. In addition, AES has agreed to immediately supplement its Title V pennit application to include the new limit along with the other changes

so that there will be an opportunity for public review. In light of these factors, EPA has made a
determination to approve AES-PRCP's requested changes to the PSD permit as administrativechanges with no public review. The changes and clarifications to the PSD pennit have been

included in Attachment I and 

## II of this pennit. Attachment 

### ill contains a summary of the air
quality impacts for S02' PM 10 and CO which are well within National Ambient Air Quality

Standards.

This detennination is final Agency action under the Clean Air Act (the Act). Under

Section 307 (b)( 1) of the Act, judicial review of this final action is available only by the filing of

a petition for review in the United States Court of Appeals for the appropriate circuit within 60 days from the date on which this final pennit decision is published in the Federal Register. Under

Section 307 (b)(2) of the Act, this final pennit decision shall not be subject to later judicial

review in civil or criminal proceedings for enforcement.

If you have any questions regarding this letter, please call Mr. Steven C. Riva, Chief,
Pennitting Section, Air Programs Branch, at (212) 637-4074

Sincerely, 

# ;f;.

er E.

Division gdan, Director

Environmental Planning and Protection

AttachmentsPage 1 of 4

Attachment I

AES Puerto Rico Cogeneration Project Project Description

General Project Description :

AES Puerto Rico, L.P. (AES-PRLP) proposes to construct and opera te a 454 megawatt (net) coal-fired steam electric cogenera tion facility located in Guayama, Puerto Rico. The AES Puerto Rico Cogeneration Project (AES-PRCP) will generate electricity for sale to the Puerto Rico Electric Power Authority (PREPA) and steam for the process and/or heating needs of one or more industries in the vicinity of the site. This cogenerati on facility will consist of two bituminous coal-fired circulating fluidized bed (CFB) boilers which together will have a maximum heat input rate of 4,922.7 million Bri tish Thermal Units per hour (MMBTU/hr) at 105% maximum continuous rating (MCR). In add ition, each CFB will be capable of generating approximately 1.8 million lb/hr of steam at 2,400 psig and 1,000 o F at the superheater outlet. These boilers will supply superheated steam to two extraction/condensing turbines to drive electric generators and supply process steam flow to industrial facilities of up to 290,000 lb/hr.

Emissions will be controlled through the use of CFB boiler and scrubber designs with limestone and lime injection, respectively, an electrostat ic precipitator and a selective non-catalytic reduction system, in conjunction with the use of low sulfur coal. No. 2 fuel oil will be used as a start-up fuel.

In addition, the facility will include one limestone dryer with a maximum heat input rate of 13 MMBTU/hr. The limestone dryer will consist of a crusher, in which a stream of heated air both classifies (separates by size fraction) the ground limestone, and dries the material. The limestone dryer will use propane and combustion controls to minimize emissions. The applicant also proposes to include a diesel generator, a dies el-engine driven boiler feed water pump and a diesel-engine driven fire wa ter pump to ensure the safe operation and shutdown of the cogeneration facility in the unlikely event of a complete loss of off-site power.

Cooling System :

The exhaust steam coming from the turbines is fed to a cooling tower. Circulating water flow in the tower will be 225,000 gallons per minute (gpm ). The cooling tower will have a drift

eliminator which will reduce drift to 0.001% of circulating water flow.

Coal and Limestone Recei ving and Handling Systems :

In order to minimize fugitive particulate emi ssions during unloading and to meet physical requirements of docking and unloading, gravity-feed be lt conveyor and self-unloading ships willPage 2 of 4

Attachment I (cont'd)

AES Puerto Rico Cogeneration Project Project Description

be employed for delivering coal to the facilit y. The coal will be transported by overland conveyor approximately 3,800 feet to the site and stored in on-s ite stockpiles. The overland conveyor between the facility a nd the harbor will be capable of supplying coal and limestone delivered by ship to the facility 's coal and limestone stockpiles.

Lime Receiving and Handling System :

The lime handling system includes equipment for st oring lime delivered to the site by truck and discharging lime to the circulating dr y scrubber reactant pr eparation system.

Trucks delivering lime to the site will be equippe d with a pneumatic transport to convey lime to the storage silo. A baghouse design vent filter and vent fan located on the silo roof will filter the air from the trucks unloading transport air and displaced air from the silo.

Solid Waste Handling and Processing :

The facility will process fly ash and scrubber residue, bed ash, and sludge from the cooling tower sidestream treatment system thickener into manuf actured aggregate. The facility will include a system to receive the solid waste streams a nd process them into conditioned by-product by gravimetrically controlled mixing of the waste stream with water. The conditioned by-product will be trucked or conveyed by belt conveyor to th e by-product processing yard. Ash in its dry form will be fully contained during removal from the CFB boilers and air emission control systems, handling, and storage. Two ash storage silos are proposed to be located at the facility: one for bed ash and one for fly ash. Two full-ca pacity mechanical exhausters will be provided for conveying ash to the silos.

Coal Storage :

*Coal will be stored at the fac ility in two outdoor piles. The inactive storage pile contains a nominal 30-day supply and is intended for use in th e event of a coal delivery interruption. This pile will be created when the plant is built, a nd will be covered with one-foot thick layer of hardened manufactured aggregate. This aggregat e will be ash mixed with water, spread with trucks, compacted and allowed to harden to a co ncrete-like material except in the event that access to this supply is needed. A 20-day active storage pile, compacted to prevent weathering, will be created by the stacking tubes.

* Denotes a July 2004 RevisionPage 3 of 4

Attachment I (cont'd)

AES Puerto Rico Cogeneration Project Project Description

Each of the two coal storage piles onsite will be lined with a geosynthetic liner. Any stormwater run-off from the coal pile areas will be collect ed in a lined pond. The water collected will be recycled and utilized within the facility as part of the zero-water-discharge design.

Limestone Storage :

A 150-day active supply of limestone will be stored in an enclosed storage area.

Dust Control Systems :

Dust control and collection systems will be insta lled at all material transfer points. The dust collection system will be either induced-draft filt er bag units or insertib le cartridge-type filters designed to be inserted direc tly into a conveyor head chute or conveyor loading skirt, as appropriate.

PSD-Affected Pollutants Emitted at the AES Puerto Rico Cogeneration Project and Their

Potential to Emit :

The AES-PRCP will have as constituents in the combustion by-products, the PSD-affected pollutants listed below which are formed in the following ways:

Nitrogen Oxides (NO

x ) - formed from the high-temperatur e oxidation of nitrogen contained in the combustion air (thermal NO

x ) and from the oxidation of nitrogen that is bound in the fuel (fuel NO

x ). The relative amounts of thermal and fuel NO

x formed depend primarily on the flame temperature and the fuel nitrogen content, respectively. The potential to emit for NO

x is 2,058 tons/year.

Sulfur Dioxide (SO 2 ) - formed from the oxida tion of organic sulfur c ontained in the fuel. Approximately 98% of the sulfur in bituminous coal is emitted as sulfur dioxides. The remaining 2% of fuel-bound sulfur is taken out as sulfat e salts in the bottom ash or in the boiler itself. The potential to emit for SO 2 is 453 tons/year.

*Particulate Matter (PM), Partic ulate Matter Under 10 Microns (PM 10 ) - consist of coal ash, unreacted limestone and reaction products of the SO 2 removal process (calcium sulfate or gypsum). The potential to emit for PM 10 is 623 tons/year.

* Denotes a July 2004 RevisionPage 4 of 4

Attachment I (cont'd)

AES Puerto Rico Cogeneration Project Project Description

Volatile Organic Compounds (VOCs) - due to incomplete combustion of organic compounds in the fuel. The potential to emit for VOC is 99.5 tons/year.

Carbon Monoxide (CO) - formed as a result of the in complete combustion of the carbon contained in the fuel. Incomplete combustion can be caused mainly by fuel-rich conditions, insufficient combustion oxygen, and/or low combus tion temperatures. The potential to emit for CO is 2,055 tons/year.

Fluorides and Sulfuric Acid Mist - released in trace amounts fr om the combustion of coal. Fluoride emissions vary de pending on the fluorine content of th e fuel. The potential to emit for fluorides is 9.8 tons/year. Simila rly, sulfuric acid mist depend primarily upon the sulfur content of the fuel and the degree of emission control. The potential to emit for sulfuric acid mist is 50 tons/year.

Fugitive Dust Emissions - derived from the material handlin g systems (coal, limestone and ash systems) including the following activities:

- unloading or loading of ships or trucks; - material transfer points; and - exposure of materials to wind (in open storage piles).

****************************************************************Page 1 of 22

Attachment II

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

The AES-PRCP as described in Attachment I is subject to the following conditions:

I. Permit Expiration

This PSD Permit shall become invalid if construction:

a. has not commenced (as defined in 40 CFR Part 52.21(b)(9)) within 18 months after the approval takes effect; b. is discontinued for a period of 18 months or more; or c. is not completed within a reasonable time.

II. Notification of Commencem ent of Construction and Startup

The EPA Regional Administrator (RA) shall be notified in writing of the anticipated date of initial startup (as defined in 40 CFR Part 60.2) of each facility of the source not more than sixty (60) days nor less th an thirty (30) days prior to such date. The RA shall be notified in writing of the actua l date of commencement of construction and startup within fifteen (15) days after such date.

III. Plant Operations

All equipment, facilities, and systems insta lled or used to achieve compliance with the

terms and conditions of this PSD Permit shall at all times be maintained in good working order and be operated as efficien tly as possible so as to minimize air pollutant emissions. The continuous emission monitoring systems required by this permit shall be on-line and in operation 95% of the time when boilers are operating.

IV. Right to Entry

The Regional Administrator and/or her auth orized representatives, upon the presentation of credentials shall be permitted:

1. to enter at any time upon the premises wher e the source is located or in which any records are required to be kept under the terms and conditions of this PSD Permit;

2. at reasonable times to ha ve access to and copy any reco rds required to be kept under the terms and conditions of this PSD Permit;Page 2 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

3. to inspect any equipment, operation, or method required in this PSD Permit; and

4. to sample emissions from the source.

V. Transfer of Ownership

In the event of any changes in control or ownership of facilities to be constructed or modified, this PSD Permit shall be binding on all subsequent owners and operators. The applicant shall notify the succeeding owner and operator of the existence of this PSD Permit and its conditions by letter, a copy of which shall be forwarded to the Regional

Administrator.

VI. Types of Fuel

AES-PRCP shall combust the following fuels:

1) Low sulfur coal with a maximum sulfur content of 1.0% by weight. 2) Distillate oil with a maximum sulfur content of 0.05% sulfur by weight (startup and emergency equipment fuel). 3) Propane.

VII. Pollution Control Equipment

AES-PRCP shall install a nd shall continuously operate the following air pollution

controls:

1) A Selective Non-Catalytic Reduction (SNCR) system (urea injection) for the control

of NO

x at the CFBs; 2) A limestone injection system and circulat ing dry scrubber, which uses lime, for the

control of SO 2 at the CFBs; 3) An Electrostatic Precipitator (ESP) for the control of PM and PM 10 at the CFBs; 4) Baghouses for the control of PM and PM 10 emissions at the limestone dryer. 5) Drift eliminators for the control of particulates from the cooling tower.Page 3 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

VIII. Best Available Control Technology (BACT) and Emission Limitations for Each of the Two Circulating Fluidized Boilers (CFBs)

1-CFB. Particulate Matter (PM), Pa rticulate Matter Under 10 Microns (PM 10 )

a.1 Emissions of PM shall not exceed 0.015 lb/MMBTU or 36.9 lb/hour, whichever is more stringent.

* a.2 Emissions of PM 10 (condensible and noncondensible) shall not exceed 0.03 lb/MMBTU or 73.8 lb/hour, whic hever is more stringent.

* a.3 Because condensible PM 10 emissions from fluidized bed boilers have not been widely quantified, there is a possibility that the actu al condensible portion of

PM 10 would cause the above emission rate to be exceeded. In the event that

AES-PRCP cannot meet the above limit because of condensible PM 10 , EPA may adjust the PM 10 emission rate to a level not to exceed 0.05 lb/MMBTU, pending

EPA = s review of the stack test results. This change in the permit will be accomplished administratively. [On April 19, 2004, AES-PRCP submitted a request under this provision. EPA granted this request. ]

b. Opacity of emissions shall not exceed 20 percent (six-minute average) except for one six-minute set per hour whic h shall not exceed 27 percent.

c. The control efficiency of particulate matter emissions shall be established during all particulate performance te sting and shall be a minimu m of 99% at all times of normal operation (daily average).

2-CFB. Nitrogen Oxides (NO

x )

a. Emissions of nitrogen oxides shall not exceed on a 24-hour rolling average basis 57 parts per million dry volume (ppm dv ) corrected to 7% oxygen, or 0.10 lb/million British thermal units (BTU), or 246.1 lb/hour, whichever is more stringent.

* Denotes a July 2004 Revision.Page 4 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

3-CFB. Carbon Monoxide (CO)

a. Emissions of CO shall not exceed 0.10 lb/MMBTU on an eight-hour average basis, 94 ppm dv corrected to 7% oxygen, or 246. 1 lb/hour, whichever is more stringent.

4-CFB. Sulfur Dioxide (SO 2 )

a. Emissions of sulfur dioxide shall not exceed on a 3-hour average basis 9.00 ppm dv corrected to 7% oxygen, or 0.022 lb/MMBTU, or 54.1 lb/hour, whichever is more stringent.

b. The maximum sulfur content of the coal shall be 1.0% S by weight. The

maximum sulfur content of the No. 2 fu el oil shall be 0.05% sulfur by weight.

5-CFB. Sulfuric Acid Mist

a. Emissions of sulfuric acid mist shall not exceed based on the average of three 1- hour stack performance tests 0.64 ppm dv corrected to 7% oxygen, or 0.0024 lb/MMBTU, or 5.9 lb/hour, whichever is more stringent.

6-CFB. Fluorides (as Hydrogen Fluoride)

a. Emissions of fluorides shall not exceed 4.78 x 10 -4 lb/MMBTU or 1.18 lb/hour, whichever is more stringent.

7-CFB. Volatile Organic Compounds (VOCs)

a. Emissions of VOCs shall not exceed based on the average of three 1-hour stack performance tests 7.70 ppm dv corrected to 7% oxygen, 0.0047 lb/MMBTU, or 11.6 lb/hour, whichever is more stringent.

8-CFB. Ammonia (NH 3 )

a. The ammonia slip associated with the urea injection shall not exceed 10 ppm dv , corrected to 7% oxygen.Page 5 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

IX. Best Available Contro l Technology (BACT) and Emission Limitations for the Limestone Dryer (LD)

1-LD. The limestone dryer operation shall be limited to a 50% capacity factor, calculated on a calendar year ba sis or 4,380 hours per calendar year.

2-LD. The limestone dr yer shall only burn propane.

3-LD. The limestone dryer shall utilize combustion controls to minimize air emissions.

4-LD. Particulate Matter (PM), Particulate Matter Under 10 Microns (PM 10 )

a.1 Emissions of PM shall not exceed 0.095 lb/MMBTU or 1.24 lb/hour, whichever is more stringent.

a.2 Emissions of PM 10 shall not exceed 0.095 lb/MMBTU or 1.24 lb/hour, whichever is more stringent.

b. Opacity of emissions shall not exceed 20 percent (six-minute average) except for one six-minute set per hour whic h shall not exceed 27 percent.

c. The control efficiency of particulate matter emissions shall be established during all particulate performance te sting and shall be a minimu m of 99% at all times of normal operation (daily average).

5-LD. Nitrogen Oxides (NO

x )

a. Emissions of nitrogen oxides shall not exceed based on the average of three 1- hour stack performance tests 0.15 lb/million British thermal units (BTU), or 1.95 lb/hour, whichever is more stringent.

6-LD. Carbon Monoxide (CO)

a. Emissions of CO shall not exceed based on the average of three 1-hour stack performance tests 0.02 lb/MMBTU, or 0.26 lb/h our, whichever is more stringent.Page 6 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

7-LD. Sulfur Dioxide (SO 2 )

a. Emissions of sulfur dioxide shall not exceed based on the average of three 1-hour stack performance tests 0.02 lb/MMBTU, or 0.26 lb/hour, whichever is more stringent.

8-LD. Volatile Organic Compounds (VOCs)

a. Emissions of VOCs shall not exceed based on the average of three 1-hour stack performance tests 0.01 lb/MMBTU, or 0.13 lb/h our, whichever is more stringent.

X. Best Available Control Technol ogy (BACT) and Emission Limitations for the Cooling Tower (CT)

1-CT. The drift rate shall be limited to 2.25 gallons/minute (0.001 % of circulating water flow). This level shall be achieved th rough the use of drift eliminators which provide surface area upon which water droplets may impact and fall back into the cooling tower.

2-CT. Particulate Matter (PM), Pa rticulate Matter Under 10 Microns (PM 10 )

a. Emissions of PM 10 shall not exceed 0.33 lb/hour.

b. Emissions of PM shall not exceed 15 lb/hour.

3-CT. Volatile Organic Compounds (VOC)

a. Emissions of VOC shall not exceed 0.5 lb/hour.Page 7 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

XI. Storage Tanks

1-ST. The AES-PRCP shall have the following storage tanks:

a. 150,000-gallon startup fuel tank. b. 2,000-gallon mobile equipment fuel tank. c. 700-gallon diesel generator tank. d. 300-gallon fire pump tank. e. 200-gallon emergency boiler feed pump tank.

* 2-ST. There shall be a maximum of seven turnovers per year in the startup fuel tank, producing approximately 83.8 lb/year of VOC emissions (AP-42).

3-ST. The remaining tanks shall contain di esel fuel and shall emit less than 5 lb/year of VOC (AP-42).

XII. Emergency Equipment

* The emergency equipment consists of a fire water pump driven by a diesel engine, a diesel generator, and a 430 hp emergency boi ler feed pump driven by a diesel engine. The equipment shall only be opera ted under the following conditions:

1-EE. The maximum annual operating hours for each of the above-named equipment shall be 200 hours/calendar year, except during emergencies. This 200-hour allowance is intended to allow for pr oper maintenance of the equipment.

2-EE. The fire pump shall be used for fi ghting fires when no electr icity is available at the facility.

3-EE. The diesel generator shall be used during emergencies for critical plant functions (i.e., emergency lighting) when no electrici ty from PREPA's grid is available at the site (this situation is characte rized as "black plant mode").

* Denotes a July 2004 RevisionPage 8 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

* 4-EE. The emergency boiler feed pump shall be used to pump coolin g water into one or both boilers if one or both turbines trip unexpectedly and are unable to utilize the steam generated by the boilers. However, during routine testing and maintenance of the 430 hp emergency boiler feedwater pump diesel engine, the load on the engine shall be physically limited to le ss than 400 hp by operating procedures and the configuration of the associated equipment so that it complies with the

emission rates listed in Condition XII.7-EE below.

5-EE. None of these three emergency equi pment shall be used during a standard startup or shutdown of the facility as well as during any dispatch load level requested by

PREPA.

6-EE. The emergency equipment shall onl y burn distillate oil with a maximum sulfur content of 0.05% S by weight.

7-EE. Emissions and total annual opera ting hours from the emergency equipment shall

not exceed:

Pollutant Fire Pump (lb/hr) Diesel Generator (lb/hr) Emergency Boiler Feed Pump (lb/hr)

NO

x 10.4 14.58 12.34

CO 5.1 0.55 2.67

SO 2 0.13 0.29 0.82

PM 10 0.3 0.68 0.82

VOC 0.5 0.06 0.99

Annual Planned Operating Hours 200 hr 200 hr 200 hr

* Denotes a July 2004 RevisionPage 9 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

8-EE. AES-PRCP shall measure the sulfur content of the fuel oil for each fuel delivery. The sulfur content of the fuel shall be measured by the most current method applicable to fuel oil promulgated by the American Society for Testing and Materials (ASTM). The results of the te sting shall be include d in the quarterly

reports.

* 9-EE. AES-PRCP shall record and mainta in records on the hours of operation for each emergency equipment and the amounts of fuel fired for each occurrence. All information shall be recorded in a permanent form suitable for inspection. The file shall be retained for at least ten y ears following the date of such measurement, calculation, and record.

XIII. Fugitive Emissions

The following activities shall be incorporated into the materials storage and handling

systems:

1. Coal Handling

a. The coal transfer from ship to boom shall be enclosed.

b. The boom transfer at the surge hopper shall be controlled by a dust suppression system.

c. All conveyors shall be enclosed and sealed.

d. The two transfer houses shall be enclosed and equipped with dust suppression systems.

e. Enclosed stacking t ubes shall be utilized.

f. The 30-day inactive coal pile shall be earth-cove red and grassed.

g. The transfer at ten (10) reclai m hoppers shall be enclosed in an underground tunnel.

* Denotes a July 2004 RevisionPage 10 of 22

Attachment II (cont'd) AES Puerto Rico Cogeneration Project

PSD Permit Conditions

h. The conveyor transfer to crusher, th e crusher, the crusher transfer to conveyor, and the powerhouse bag filters shall be enclosed and connected

to fabric filters.

i. Total PM 10 fugitive emissions from coal handling shall not exceed 1.13 tons/year.

2A. Limestone Handling (if Delivered by Ship)

a. The limestone transfer from ship to boom shall be enclosed.

b. The boom transfer at the surge hopper shall be controlled by a dust suppression system.

c. All conveyors shall be enclosed and sealed.

d. The two transfer houses shall be enclosed and equipped with dust suppression systems.

e. An enclosed stacking tube shall be utilized.

f. The 150-day pile of limestone shall be enclosed.

g. The conveyor transfer to crusher an d the crusher shall be enclosed and

connected to a fabric filter.

h. The pneumatic conveyor shall be connected to a fabric filter.

i. The transfer at reclaim hopper shal l be enclosed in an underground tunnel.

2B. Limestone Handling (if Delivered by Truck)

a. The 150-day pile of limestone shall be enclosed.

b. The conveyor transfer to crusher an d the crusher shall be enclosed and

connected to a fabric filter.Page 11 of 22

Attachment II (cont'd) AES Puerto Rico Cogeneration Project

PSD Permit Conditions

c. The pneumatic conveyor shall be connected to a fabric filter.

d. The transfer at reclaim hopper shall be enclosed in an underground tunnel.

e. Total PM 10 fugitive emissions from limestone handling (delivered by ship and truck) shall not exceed 1.66 tons/year.

3. Lime Handling

a. The pneumatic conveyor shall be connected to a fabric filter.

b. The screw feeder shall be completely enclosed.

* c. Total PM 10 fugitive emissions from lime handling shall not exceed 0.0445 ton/year.

4. Ash Handling

a. The fly ash pneumatic conveyor, the fly ash silo to mixer, the bed ash pneumatic conveyor, the bed ash silo to mixer transfer, the batch mixer,

and the transfer into truck area shall be enclosed and sealed.

b. The ash rock processing lifts shall be wetted and compacted.

c. The truck travel to spread and crush area, the transfer from truck area, the ash rock lift fracture area, the as h rock storage wind erosion, and the bulldozing area shall be wetted.

d. The reclaim hopper shall be underground and enclosed.

e. All conveyors shall be enclosed and sealed.

f. Total PM 10 fugitive emissions from ash handling shall not exceed 0.70 ton/year.

* Denotes a July 2004 RevisionPage 12 of 22

Attachment II (cont'd) AES Puerto Rico Cogeneration Project

PSD Permit Conditions

* g. Trucks may be used to haul unmixed bed ash and fly ash, conditioned ash (bed and fly ash mixed and wet) and manufactured aggregate offsite for on island beneficial uses. If so, AES-PRCP shall implement precautions to minimize fugitive emissions.

XIV. Continuous Emission Monitoring (CEM )/Continuous Opacity Monitoring (COM) Requirements

1. Prior to the date of startup and therea fter, AES-PRCP shall install, calibrate, maintain, and operate the following conti nuous monitoring systems in each of the

two flues of the fluidized bed co mbustion unit exhaust stack:

a. Continuous emission monitoring (C EM) systems to measure stack gas

NO

x (as measured NO 2 ) and SO 2 concentrations and a continuous opacity monitoring system. The systems sha ll meet EPA monitoring performance specifications (40 CFR Part 60.13 and 40 CFR Part 60, Appendix B

, Performance Specifications 1, 2, and 3, and Appendix F ).

b. A continuous monitoring system to measure stack gas volumetric flow rates. The system shall meet EPA monitoring performance specifications (40 CFR Part 52, Appendix E ). EPA may approve an alternative to this monitoring system, such as using mo nitored data for emission rates on a lb/MMBTU basis and calculated plan t heat input data on a MMBTU/hr basis, provided that EPA deems that this procedure will produce representative data.

c. A CEM system to measure CO and a continuous monitoring system to measure carbon dioxide or oxygen. Thes e systems, at a minimum, shall meet EPA monitoring performance specifications of 40 CFR Part 60, Appendix B , Performance Specifications 3 and 4, and 40 CFR Part 60, Appendix F

.

2. Not less than 60 days prior to the date of startup of the boiler(s), AES-PRCP shall submit to the EPA a Quality Assurance Pr oject Plan for the certification of the CEM systems. CEM performance tes ting may not begin until the Quality Assurance Project Plan has been approved by EPA.

* Denotes a July 2004 RevisionPage 13 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

3. AES-PRCP shall notify EPA 15 days in advance of the date upon which demonstration of the CEM system performance will commence (40 CFR Part 60.13(c)). The CEM system performance date shall be no later than the date of the initial performance testing requi red under Permit Condition XV. of this permit.

4. AES-PRCP shall submit a written report to EPA of the results of all monitor performance specification te sts conducted on the monito ring system(s) within 45 days of the completion of the tests. Th e continuous emission monitors must meet all the requirements of the applicable performance speci fication test in order for

the monitors to be certified.

5. AES-PRCP shall submit a written report of all excess emissions to EPA for every calendar quarter. All quarterly reports shall be postmarked by the 30th day following the end of each quarter and shall include the information specified

below:

a. The magnitude of excess emissions computed in accordance with 40 CFR Part 60.13(h), any conversion factor(s ) used, and the date and time of commencement and completion of each time period of excess emissions.

b. Specific identification of each period of excess emissions that occurs during startups, shutdowns, and ma lfunctions for each fluidized bed

combustion unit. The nature and cau se of any malfunction (if known) and

the corrective action taken or preventive measures adopted shall also be reported.

c. The date and time identifying each period during which the continuous monitoring system was inoperative except for zero and span checks and the nature of the system repairs or adjustments.

d. When no excess emissions have occurre d or the CEM system has not been inoperative, repaired, or adjusted, such information shall be stated in the

report.Page 14 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

e. Results of quarterly monitor perfor mance audits, as required in 40 CFR Part 60, Appendix F

.

f. Excess emissions shall be defined as:

i) any consecutive 24-hour peri od during which the average emission

of NO

x , as measured by the CEM system, exceeds the corresponding mass or concentra tion emission limit set for NO

x in

Condition VIII.2-CFB above.

ii) any eight-hour period during whic h the average emission of CO, as measured by the CEM system, exceeds the corresponding mass or

concentration emission limit set for CO in Condition VIII.3-CFB

above.

iii) any 3-hour period during which the average emission of SO 2 , as measured by the CEM system, exceeds the corresponding mass or

concentration emission limits set for SO 2 in Condition VIII.4-CFB

above.

iv) any 6-minute period during wh ich the average opacity, as measured by the CEM system, exceeds 20% opacity, except for one 27% opacity per each one-hour period.

g. For the purposes of this permit, ex cess emissions indicated by the CEM systems, except during startup or shut down, shall be considered violations of the applicable emission limits.

* 6. AES-PRCP shall maintain a file of all measurements, including CEM system performance evaluations; all CEM syst ems or monitoring device calibration checks; adjustments and maintenance perf ormed on these systems or devices; and all other information required by 40 CFR Part 60 recorded in a permanent form suitable for inspection. The file shall be retained for at least ten years following the date of such measurement, ma intenance, reports, and records.

* Denotes a July 2004 RevisionPage 15 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

7. Emissions in excess of the applicable emission limit listed under Condition VIII. of this permit, during periods of startup and shutdown, shall not be considered a violation of the applicable emission limit.

8. For the purposes of this permit, star tup and shutdown shall be defined as:

a. Startup - Circulating Fluidized Bed (CFB) boiler startup is defined as the period beginning with initial use of th e burners firing low sulfur distillate fuel oil (< 0.05% S) and ending at th e time when the load has increased to 227.15 MW, when both CFB boilers are operating, or 113.58 MW, when a single CFB boiler is operating. The duration of the st artup shall not exceed fourteen (14) consecutive hours for any given individual boiler

startup.

* b. Post-Outage Startup - CFB boiler post-outage st artup is defined as the period of time beginning with the initial use of the CFB = s startup burner after new refractory is installed in the combustor. After the new refractory is installed, it must be dried by s ubjecting it to gradually increasing temperature. The post-outage startup shall be allowed up to twice per year for an average of one startup per boiler. The duration of the post-outage startup shall not exceed 50 consecuti ve hours for any given startup. The

amount of fuel burned shall not exceed 4,200 gallons per hour, 85,000 gallons per day and a total of 175,000 gallons per startup.

c. Shutdown - CFB boiler shutdown is defi ned as the period of time beginning with the load decrea sing from 227.15 MW, when both CFB boilers are operating, or 113.58 MW, when a single CFB boiler is operating, and ending when the bed ma terial fluidizing air has been

discontinued. The duration of the shutdown shall not exceed eight (8) consecutive hours for any give n individual boiler shutdown.

* Denotes a July 2004 RevisionPage 16 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

9. At all times, including periods of startup, shutdown, a nd malfunction, AES-PRCP shall, to the extent practicable, maintain and operate the CFBs including associated air pollution control equipmen t in a manner consis tent with good air pollution control practice for minimizing em issions. Determination of whether acceptable operating and maintenance procedures are being used will be based on

information available to EPA and/or PREQB which may include, but is not limited to, monitoring results, opacity observations, review of operating and maintenance procedures, and inspection of the facility.

XV. Performance Test Requirements

1. Within 60 days after achieving the maxi mum production rate of the boilers, but no later than 180 days after in itial startup as defined in 40 CFR Part 60.2, and at such other times as specified by the EPA, AE S-PRCP shall conduct performance tests

for SO 2 , NO

x , PM, PM 10 , CO, VOCs, lead, fluorides, opacity, sulfuric acid mist, and fugitive emissions. All performance te sts shall be conducted at the maximum operating capacity of the unit(s) being tested and/or other loads specified by EPA.

2. At least 60 days prior to actual testing, AES-PRCP shall submit to the EPA a Quality Assurance Project Plan detailing methods and procedures to be used during the performance stack testing. A Quality Assurance Project Plan that does not have EPA approval may be grounds to i nvalidate any test a nd require a re-test.

3. AES-PRCP shall demonstrate that the l ead emissions from the facility do not exceed the PSD significance level of 0.6 tons per year. AES-PRCP estimates that its maximum hourly emission of lead from the CFB boilers is 0.0208 lb/hour (0.087 ton/year).

4. AES-PRCP shall use the following test me thods, or a test method which would be applicable at the time of the test and deta iled in a test protoc ol approved by EPA:

a. Performance tests to determine th e stack gas velocity, sample area, volumetric flowrate, molecular compos ition, excess air of flue gases, and moisture content of flue gas shal l be conducted using 40 CFR Part 60, Appendix A , Methods 1, 2, 3, and 4.Page 17 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

b. Performance tests for the emissions of NO

x shall be conducted using 40 CFR Part 60, Appendix A , Method 7E.

c. Performance tests for the emissions of SO 2 shall be conducted using 40 CFR Part 60, Appendix A , Method 6C.

d. Performance tests for the emissions a nd control efficiency of PM shall be conducted using 40 CFR Part 60, Appendix A , Method 5.

e. Performance tests for the emissions of PM 10 shall be conducted using 40 CFR Part 51, Appendix M , Method 201 (exhaust gas re cycle procedure) or Method 201A (constant flow rate procedure) and Method 202.

f. Performance tests for the emissions of CO shall be conducted using 40 CFR Part 60, Appendix A , Method 10.

g. Performance tests for the emissions of volatile organic compounds shall be conducted using 40 CFR Part 60, Appendix A , Method 25A and Method 18 (take the difference betw een the two results).

h. Performance tests for the emissions of fluorides shall be conducted using 40 CFR Part 60, Appendix A , Method 13B.

i. Performance tests for the emissions of sulfuric acid mist shall be conducted using 40 CFR Part 60, Appendix A , Method 8.

j. Performance tests for the emissions of lead shall be conducted using 40 CFR Part 60, Appendix A , Method 29.

k. Performance tests for the drift rate on two of the cooling tower cells shall be conducted using the isokinetic sampling systemwith the heated beakpack style method (HBIK) to confir m the specified drift rate of 2.25 gallons/minute.

l. Performance tests for the visual determination of fugitive emissions from the coal, limestone, and ash handlin g shall be conducted using 40 CFR Part 60, Appendix A , Method 22.Page 18 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

m. Performance tests for the visual dete rmination of the opacity of emissions

from the stack shall be conducte d using 40 CFR Part 60, Appendix A

, Method 9 and the procedures stated in 40 CFR Part 60.11.

5. The ammonia slip shall be met by main taining the optimum urea injection flow rate at various operating loads. The op timum urea injection fl ow rate needed to achieve the ammonia slip limit shall be determined during the performance test

and shall become a cond ition of this permit.

6. Test results indicating that emissions are below the limits of detection shall be deemed to be in compliance.

7. Additional performance tests may be require d at the discretion of the EPA for any or all of the above pollutants.

8. For performance test purposes, sampli ng ports, platforms and access shall be provided by AES-PRCP on the combustion exhaust system in accordance with 40 CFR Part 60.8(e).

9. Results of emission testing must be submitted to EPA within 60 days after completion of performance tests.

10. Operations during periods of startu p, shutdown, and malfunction shall not constitute representative conditions for the purpose of a performance test.

XVI. Other Requirements

1. Coal Sampling

Coal samples shall be taken and analyzed monthly to determine ash content (% by weight); sulfur content (% by weight); a nd heat value (BTUs per lb). These shall be measured by the most current methods applicable to coal promulgated by the American Society for Testing and Mate rials (ASTM). Reports are to be submitted to EPA every calendar quarter.Page 19 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

2.a Coal Lead Content

The lead content of the coal/fuel oil shall be monitored such that total annual lead emissions from the facility do not exceed the PSD significance level of 0.6 tons per year. AES-PRCP shall demonstrate, at least annually starting with the 400th day after facility startup and, no longer than each 365th day ther eafter, that lead emissions are below the PSD significance le vel. The lead content of the fuels shall be measured using the most current applicable ASTM method.

2.b Coal Fluorine Content

The fluorine content of the coal shall be monitored on a monthly basis such that the total annual fluoride emissions from the facility do not exceed 9.8 tons per 12- month rolling average calculated every m onth. The fluorine content of the coal shall be measured using the most current applicable ASTM method.

3. New Source Performance Standards (NSPS) Compliance

AES-PRCP shall comply with the requirements codified in:

a. Standards of Performance for Elect ric Utility Steam Generating Units (40 CFR Part 60, Subpart Da) -- boilers.

b. Standards of Performance for Coal Prep aration Plants (40 CFR Part 60, Subpart Y) -- coal handling.

c. Standards of Performance for Nonmetallic Mineral Processing Plants (40 CFR Part 60, Subpart OOO) -- limestone processing.

4. PSD Increment and NAAQS Modeling Analyses

AES-PRCP shall conduct air dispersion modeling analyses of the Prevention of Significant Deterioration of Air Quality (PSD) increments and National Ambient Air Quality Standards (NAAQS) for SO 2 which involves the combined impacts from other nearby existing sources. Th is shall be done under the following

conditions:Page 20 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

a. The modeling analyses shall conf orm with the EPA "Guideline on Air Quality Models" (40 CFR ' 51, Appendix W ), air permit regulations (40

CFR ' 51 and ' 52), and the approved disp ersion modeling protocol

submitted to EPA for the AES-PRCP.

b. The emission inventory incorporated into the modeling analysis shall include, at a minimum, the bac kground sources agreed upon by AESPRLP and EPA in the approved modeling protocol for the AES-PRCP. Also, the modeling domain shall enco mpass, at a minimum, the domain agreed upon by AES-PRLP and EPA in the approved modeling protocol for the AES-PRCP. (Refer to May 18, 1995 letter from TRC to EPA; July 22, 1995 letter from EPA to TRC; October 2, 1995 letter from ENSR to EPA and October 17, 1995 letter from ENSR to EPA.)

c. The same models, assumptions, a nd meteorological database used by AES-PRCP in the permit application shall be used for these air quality

standards.

d. AES-PRCP shall submit the modeling an alyses to EPA within three (3) to six (6) months of the effective date of this PSD permit.

5. Postconstruction Ambient Monitoring

AES-PRCP shall insta ll and maintain an SO 2 ambient monitor in a location which is approved by EPA prior to the ope ration of the facility. The SO 2 ambient monitor shall operate upon commencement ofoperation of the facility. AESPRCP shall also meet the following conditions:

a. The duration of the monitoring collection shall not exceed 365 days unless the monitor records an exceedance of the applicable NAAQS in which case EPA may extend the monitoring.

b. The monitor shall operate according to an approved EPA QA/QC plan.

c. The monitoring data shall be reco rded and submitted to EPA and PREQB on a quarterly basis. If an exceedance is measured, AES-PRCP shall notify EPA and PREQB of such an exceedance in writing within 15 days of its completion of normal QA/QC pr ocedures for the specified month.Page 21 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

6. Maximum Annual Capacity Factor

a. AES-PRCP shall not ex ceed a maximum annual capacity factor of 95% during any period of 12 consecutive months. Compliance will be demonstrated by limiting facility fuel use to a maximum of 40,966,709 MMBtu during any period of 12 consecutive months. AES-PRCP shall

maintain fuel use records to demons trate compliance with this condition.

b. A Annual capacity factor @ means the ratio between th e actual heat input to the steam generating units from fuel use during a period of 12 consecutive calendar months and the potential heat input to the steam generating units from fuels had the steam generati ng units been operated for 8,760 hours during that 12-month period at the maxi mum design heat input capacity of 4922.7 MMBtu/hr. Therefore, a maximum annual capacity factor of 95% means fuel use will not exceed 40,966,709 MMBtu during a period of 12

consecutive calendar months.

XVII. Malfunction

Any failure of air pollution c ontrol equipment, process equipment, or of a process to operate in a normal manner which results in an increase in emissions above any

allowable emission limit stated in Condition VIII of this Attachment II and actions taken on any unit must be re ported by telephone within 24 hours to:

Chief, Air Permit Division Puerto Rico Environmental Quality Board Santurce, Puerto Rico 00910 (787) 767-8071

In addition, the EPA Regional Administrator (RA) and the Puerto Rico Environmental Quality Board (PREQB) sha ll be notified in writing within (15) days of any such failure. This notifica tion shall include: a description of the malfunctioning equipment or abnormal operatio n; the date of the initial failure; the period of time over which emissions were increased due to the failure; the cause of the failure; the estimated resulta nt emissions in excess of those allowed

under Condition VIII of this Attachment II ; and the methods utilized to restore normal operations. Compliance with this malfunction notification provision shall

not excuse or otherwise constitute a defens e to any violations of this permit or of any law or regulations which such malfunction may cause.Page 22 of 22

Attachment II (cont'd)

AES Puerto Rico Cogeneration Project

PSD Permit Conditions

XVIII. Recordkeeping and Reporting Requirements

* 1. All records required to be maintained by this permit shall be kept for a period of at least ten (10) years.

2. All reports required by this permit shall be submitted to:

Chief, Air Compliance Branch Division of Enforcement and Compliance Assistance U.S. Environmental Protection Agency Region 2 290 Broadway - 21st Floor New York, New York 100007-1866

Copies of the reports shall also be submitted to:

a. Region 2 CEM Coordinator U.S. Environmental Protection Agency Region 2 Air and Water QA Team Monitoring and Assessment Branch 2890 Woodbridge Avenue - MS-102 Edison, New Jersey 08837-3679

b. Director, Caribbean Envir onmental Protection Division U.S. Environmental Protection Agency Region 2 Centro Europa Building 1492 Ponce de Leon Avenue, Suite 417 Santurce, Puerto Rico 00907-4127

c. Director, Air Permit Division Puerto Rico Environmental Quality Board

P.O. Box 11488 Santurce, Puerto Rico 00910

* Denotes a July 2004 RevisionPage 1 of 2Attachment IIIAES Puerto Rico Cogeneration ProjectAir Quality ImpactsProjected Maximum Impacts from the AES Puerto Rico Cogeneration ProjectAir Quality Impacts (Fg/m3) - October 2001POLLUTANTAVERAGINGTIMEAESPRCP'sMODELEDIMPACTSIGNIFICANCELEVELAES-PRCP+BackgroundSourcesPSDIncrementAES-PRCP+BackgroundSourcesNAAQSPSD IncrtNAAQSNO2Annual0.811NotCalculated1Not Calculated125100SO2Annual24-hour3-hour0.554.9720.01525NotCalculated1Not Calculated12091512803651300PM10Annual24-hour2.417.2153.316.644.5112.1173050150CO8-hour1-hour140.3200.55002000IncrementStandarddoes not exist140.3200.5NA10,00040,0001.Since AES-PRCP=s impacts are below the "Significant Impact Level," the facility is not required to performPSD increment orNAAQS analyses which accounts for impacts from other nearby existing sources.Page 2 of 2Attachment IIIAES Puerto Rico Cogeneration ProjectAir Quality ImpactsProjected Maximum Impacts Resulting from the July 2004 Revisionsto the AES Puerto Rico Cogeneration Project -Air Quality Impacts (Fg/m3)POLLUTANTAVERAGINGTIMEAES-PRCP'sModeledImpactPSDSIGNIFICANTIMPACTLEVEL2002/2003Maximum ActualConcentrationsfrom AmbientMonitors in JobosTotalImpacts( Addition ofColumns 3 and 5. )NAAQSNO2AnnualThis permit revision does not affect the projected NO2maximum impacts identified in theprevious chart.AnnualThis permit revision does not affect the projected SO2maximum annual impactsidentified in the previous chart.SO224-houra3-houra3.18.6525N/AN/A3651300PM10Annualb24-hourb3.613.315269429.6107.350150CO8-houra1-houra23535002000140.3200.5163.3253.510,00040,000a- Reflects only maximum short-term impacts during the post-outage startup lasting up to 50 consecutive hours.b- Reflects only maximum short- and long-term impacts due to changes affecting PM10ade in this permit revision.N/A - Not available.