MONTANA-DAKOTA • UTILITIES CO

ADivision of MDU Resources Group, loc.

400 North Fourth Street

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) of the Clean Air Act (42 U.S.c. Section 7414(a))

Dear Ms. Hinkle:

This letter provides 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 of a fuel switch to natural gas.

Questioll I Is the currellt supply Iille for lIatural gas able to accommodate the volume(s) ofgas

required to rUII the ullit solely 011 lIatural gas? !f1l0i, cOllfirm there is 110 supply Iille

nearby that CO/I provide the required volumes (mileage ofIille ji-om plallt to next

supply optioll).

Montana-Dakota Response

Although Unit I is capable of firing 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% of L&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 customer of

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) of incremental demand required by the L&C Station boiler on a fiml basis. To provide the

required natural gas on a fiml basis (support a 24 hours per day, seven days per week, 365 days per

year base 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 of mainline compression (or both). While WBl has an adjacent
Febmary 10,2012

Page 2

lateral pipeline that transports gas from a nearby 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 Border pipeline system would need to be installed to

supply the required firm natural gas transportation and gas volume to Unit 1, with the nearest

connection point being 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 of Unit 1 (expressed as percentage change in heat rate) that would result from a switch to

natural gas would be from 19% to 38% lower than that ofsimple cycle combustion turbines having

similar electric outputs. When analyzing the trends for power plant 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 of fuel at lower efficiency and availability, are called upon most often to meet

consumer demand. Unit 1 is currently designed to operate efficiently as a coal-fired utility boiler.

Iflhe operational design is changed to fire solely natural gas, Unit 1 would not operate at an

efficiency which 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 required to the boiler to accommodate the fuel

switch to natural gas?

Montana-Dakota Response

Montana-Dakota believes that the boiler can 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 per day, seven days per week, 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 the Analysisfor a

high-dust or low-dust SCR?

Montana-Dakota Response

Due to the timing ofEPA's initial request for a Reasonable 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 whether high or low-dust type systems were considered in each

case, Montana-Dakota is 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 most representative of a high-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 on page 14 ofthe Emission Control Analvsis which

reports the spray dlyer adsorption efficiency as 70 to 90% and a reported 95%

efficiencyfor the sallie control option in Table 1, page 15 ofthe Analysis?

Montana-Dakota Response

Again, due to the timing of EPA's initial request for a RP 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 of five utilities that included evaluation of SDA control. The five

utilities all evaluated SDA at a removal efficiency of95%. Although 70-90% control is the

generally anticipated range, in order to 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 a high degree of S02 control.

Finally, we are in the process of identifying and refining the scope of various 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 of gauging the level ofReasonable Progress control that may ultimately be proposed for

incorporation into the Montana RH FIP. This type of open communication would be consistent

with the types of communications 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 if you have any additional

questions.

Sincerely,

Abbie Krebsbach

Environmental Manager

Enclosure:

cc:

Statement of Availability 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, Barr Engineering Company
V~~·DAKOTA ADivision 01 MOO Resources Group, Inc.

400 North Fourth Street

Bismarck, ND 58501

(70 11222.7900

February 2, 2012

Alan Welte

Generation Manager

RE: Finn Natural Gas Supply for Lewis & Clark Station boiler

Dear Alan,

In response to your question ofwhether or not the current natural gas supply pipeline and

equipment are able to accommodate the volumes of natural gas necessary to run the Lewis &

Clark Station solely on natural gas, I offer the following summary ofmy findings.

The natural gas supply pipeline that serves the Lewis and Clark station is owned and operated by

Williston Basin Interstate Pipeline Company (WBI). Currently the pipeline does not have

adequate capacity to serve the approximately 15,120 dkt per day (630 dkt/hour x 24 hours) of

incremental demand required by the Lewis & Clark Station boiler on a finn basis. To provide

the required natural gas on a finn basis (support a 24 hours per day, seven days per week, 365

days per year base 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 or both. WBI does have an adjacent lateral that transports

gas from a nearby processing plant having adequate capacity to serve the station load, however it

could not be relied upon to provide the 365 day per year finn service because ofstation

turnarounds or other planned maintenance projects. A new natural gas supply pipeline from

Northern Border could be installed to supply the required finn transportation with the nearest

connection point approximately 22 miles from Lewis & Clark Station.

Please contact me at 222-7870 with any questions or concerns.

Sincerely,

Bob Monnan

Manager Gas Supply