# MONTANA-DAKOTA

• UTILITIES

### CO ADivisionofMDUResources Group, loc. 400North FourthStreet Bismarck, NO 5850' (701) 222·7900
February 10,2012 US. Environmental Protection Agency Region VTTT 1595 Wynkoop Street Denver, CO 80202-1129 Attention: Vanessa Hinkle, 8P-AR
Re: Response to Reqnest for Additional Reasonable Progress Information for the Montana-Dakota Utilities Company, Lewis and Clark Generating Station, Pursuant to Section 114(a) ofthe Clean Air Act (42 U.S.c. Section 7414(a))
DearMs. Hinkle: This letterprovides the responses to the questions you posed during our telephone conversation on January 19,2012 pertaining to clarifications ofthe Emission Control Analysis for Lewis & Clark Station initially filed with EPA in February 2011, as subsequently revised in June 2011, and also an additional discussion on the possible implementation ofa fuel switch to natural gas. Questioll I Is the currelltsupply Iillefor lIaturalgas able to accommodate the volume(s) of gas required to rUII the ullitsolely 011 lIaturalgas? !f1l0i, cOllfirm there is 110supply Iille nearby that CO/Iprovide the required volumes (mileage of Iilleji-omplallt to next supply optioll). Montana-Dakota Response Although Unit I is capable offiring natural gas, the natural gas supply to the facility cannot support long term full load operation. At present, natural gas is fired primarily for aIU1Ualuniform rating of generation equipment (URGE) testing, to meet additional grid demands and, as needed, during staiiup, shutdown and malfunction conditions. On an annual basis, only 4% ofL&C Station's total firing is natural gas. The natural gas supply pipeline that delivers to L&C Station is owned and operated by Williston Basin Interstate Pipeline Company (WBI). L&C Station is an interruptible natural gas customerof WBI's, and WBI has confirmed that significant infrastructure upgrades would be required to establish reliable gas supply for a fuel switch. More specifically, the WBI pipeline currently lacks adequate capacity to serve the approximately 15,120 dekathemls (dkt) per day (630 dkt/hour x 24 hours) ofincremental demand required by the L&C Station boileron a fiml basis. To provide the required natural gas on a fiml basis (support a 24 hours perday, seven days per week, 365 days per yearbase load operational design), WBT's system, with its existing transportation contracts, would require significant modifications, which would include, but not be limited to, upgrading or looping the pipeline and the installation ofmainline compression (orboth). While WBl has an adjacentFebmary 10,2012 Page 2 lateral pipeline that transports gas from anearby natural gas processing plant that may have adequate capacity to serve the station load, this source ofsupply is not viable because it carmot be relied upon to provide the 365 day per year firm service because ofstation turnarounds and other planned maintenance projects at the natural gas processing plant [n light ofthe above, a new natural gas supply pipeline from the Northern Borderpipeline system would need to be installed to supply the required firm natural gas transportation and gas volume to Unit 1, with the nearest connection pointbeing approximately 22 miles from L&C Station. It should be further noted that the utilization and viability ofL&C Station would be negatively impacted by restricting the Unit 1 fuel option to natural gas. This is because the anticipated efficiency ofUnit 1 (expressed as percentage change in heatrate) that would result from a switch to natural gas would be from 19% to 38% lowerthan that ofsimple cycle combustion turbines having similar electric outputs. When analyzing the trends forpowerplant utilization, it is evident that plants that operate at a high efficiency and high availability, 

### in comparison to similar units that fire the same type offuel at lower efficiency and availability, are called upon most often to meet consumerdemand. Unit 1 is currently designed to operate efficiently as acoal-fired utility boiler. Iflhe operational design is changed to fire solely natural gas, Unit 1 would not operate at an efficiencywhich would allow it to be competitive with simple cycle natural gas electric generating units, thus resulting in potentially no (or very limited) future utilization ofthe unit. Therefore, in addition to supply and logistical constraints, the resulting reduction in unit operational efficiency confirms that switching from coal to natural gas at L&C Station is not viable. 

### Question 2 Would there be any modifications requiredto the boiler to accommodate thefuel switch to naturalgas?
Montana-DakotaResponse
Montana-Dakotabelieves that the boilercan currently accommodate a fuel switch to natural gas. However, engineering review would be required to detennine ifthe boiler and other equipment have the capability to sustain burning natural gas for 24 hours perday, seven days perweek, 365 days per year operation, The cost and timing ofthe required engineering review is uncertain. 

### Question 3 Was the Selective Catalytic Reduction (SCR) cost calculation in theAnalysisfor a high-dustorlow-dust SCR?
Montana-Dakota Response
Due to the timing ofEPA's initial request for aReasonable Progress (RP) Regional Haze (RR) evaluation and the related response date set for the response, Montana-Dakota was not able to conduct a site specific evaluation for SCR. Therefore, the Emissions Control Analysis relied on a screening level analysis and the costs presented in the existing evaluations relied on a sUl1U11ary of BART related SCR evaluations compiled by the Federal Land Managers (FLM). Although the FLM summary does not specify whetherhigh or low-dust type systems were considered in each case, Montana-Dakotais advised that high-dust installations were the most commonly evaluated type ofSCR considered by the FLMs for coal-fired units. Montana-Dakota therefore believes the costs presented for L&C are mostrepresentative ofahigh-dust SCR system, which the Emissions Control Analysis for Lewis & Clark Station concluded was, even without additional site specific costs, cost prohibitive for NOx control.February 10, 2012 Page 3


### Question 4 Why is there an inconsistency onpage 14 

### of the Emission ControlAnalvsis which reports the spray dlyeradsorption efficiency as 70 to 90% anda reported 95% efficiency for the sallie controloption in Table 1,

### page 15 of theAnalysis? Montana-DakotaResponse Again, due to the timing ofEPA's initial request for aRP RH evaluation and the related response date set for the response, Montana-Dakota was not able to conduct a site specific evaluation for Spray Dryer Absorbers (SDA). Therefore, the same approach to the SCR evaluation, using a summary ofBART related SDA evaluations compiled by the FLMs, was used to evaluate the SDA S02 control option. The cost per kW installed ($1,382) used in the control cost worksheet was based on the FLM summary offive utilities that included evaluation ofSDA control. The five utilities all evaluated SDA at a removal efficiency of95%. Although 70-90% control is the generally anticipated range, in orderto be consistent with the FLM summary used as the cost basis, 95% control was also assumed for the L&C evaluation and represents a screening level assumption for ahigh degree ofS02 control. Finally, we are in the process ofidentifying and refining the scope ofvarious engineering and capital projects upcoming at L&C Station as necessary to ensure the projects are efficiently plaiUled and executed, while maintaining compliance with numerous existing and upcoming air regulatory requirements. Given this effort, we would like to discuss with you, at your earliest convenience, EPA's reaction to the Emission Control Analysis for Lewis & Clark Station (Feb./June 2011) as means ofgauging the level ofReasonable Progress control that may ultimately be proposed for incorporation into the Montana RH FIP. This type ofopen communication would be consistent with the types ofcommunications that have characterized state-driven RH SIP processes and, as indicated, it would provide us valuable infoffi1ation for us to consider in our internal air regulatory planning processes. Please contact Jon Madison at 701-222-7835 or me at 701-222-7844 ifyou have any additional questions. Sincerely,

Abbie Krebsbach Environmental Manager Enclosure:

cc: Statement ofAvailability from Natural Gas Supplier
Mr. Alan Welte, Generation Manager Mr. Bruce Beiswanger, L&C Station Mal1ager Ms. Andrea Stomberg, Vice President Electric Supply Mr. Joel Trinkle, BarrEngineering Company

# V~~·DAKOTA A

Division01MOOResourcesGroup, Inc. 400NorthFourth Street Bismarck, ND58501 (7011 222.7900

February 2, 2012 Alan Welte Generation Manager
RE: Finn Natural Gas Supply for Lewis & Clark Stationboiler
DearAlan,
In response to your question ofwhether ornot the current natural gas supplypipeline and equipment are able to accommodate the volumes ofnatural gas necessaryto run the Lewis & Clark Station solelyon natural gas, Iofferthe following summary ofmy findings. Thenatural gas supplypipeline that serves the Lewis and Clark station is owned and operatedby WillistonBasin Interstate Pipeline Company (WBI). Currentlythe pipeline does not have adequate capacityto serve the approximately 15,120 dkt per day (630 dkt/hour x 24 hours) of incremental demand required by the Lewis & Clark Stationboileron afinn basis. To provide the required natural gas on afinn basis (support a 24 hours perday, seven days perweek, 365 days per yearbase load operational design), WBI's system, with their existing transportation contracts, would require significant modifications such as upgrading or looping the pipeline, installation ofmainline compression orboth. WBI does have an adjacent lateral that transports gas from a nearbyprocessingplanthaving adequate capacity to servethe station load, howeverit could notbe relied upon to provide the 365 dayperyear finn servicebecause ofstation turnarounds or otherplanned maintenance projects. Anew natural gas supplypipeline from Northern Bordercouldbe installed to supply the required finn transportation with the nearest connection point approximately 22 miles from Lewis & Clark Station. Please contactme at 222-7870 with any questions orconcerns.
Sincerely,

BobMonnan Manager Gas Supply