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## Public Servce

l' of 

### New Hampshire 780 No. Commercial Strt, Manchester, NH 03101

Pulic Servce Company of New 

## Hapsll
O. Box 330 Machester, NH 03105- 0330 (603) 669-4000

The Norteat Utities System

November 1 , 2007



### UPS Overnight
Mr. John Paul King, Environmental Scientist S. Environmental Protection Agency 

### One Congress Street Suite 1100 (Mailcode CIP) 

### Boston 

### , MA 02114-

### 2023

Re: 

### Public Service Company of New Hampshire Merrimack Station 

### National Pollutant Discharge Elimination System Permit No. NH0001465 

### Response to Information Reauest in support of NPDES Permit Reissuance
Dear Mr. King:
Public Service Company of New Hampshire (" 

### PSNH") hereby provides its response to the July 2007 information request from the United States Environmental Protection Agency (" EPA" (the " 

### Letter ). The Letter directed PSNH to provide certain information regarding PSNH' Merrimack Station in Bow , New Hampshire (the " 

### Station ), to assist EPA in its renewal of the 

### Station s existing Clean Water Act (" CWA" ) National Pollutant Discharge Elimination System permit (" 

### Permit" ), including renewal of the Station s existing CWA 9316(a) variance pursuant to EPA regulations governing such renewals. EPA extended the due date for PSNH's response to
November 2 

### 2007 , and PSNH has provided its response with this allotted timeframe

PSNH' s response to the Letter consists of two reports, both enclosed , and this correspondence (collectively, the "

### Response ): (1) Response to United States Environmental Protection Agency

CWA 

### 308 Letter, PSNH Merrimack Station Units 1 & 2 

### Bow , New Hampshire prepared by 

### PSNH 

### , Enercon Services , Inc. (" 

### Enercon 

### ) and Normandeau Associates , Inc. ("

### Normandeau dated October 2007 , and (2) Entrainment and Impingement Studies Performed at Merrimack

Generating Station from June 2005 through June 2007 prepared by Normandeau dated October 2007 (which specifically responds to the Letter 

### s Request Nos. 7 and 8). PSNH previously has provided extensive information , including the following reports prepared by

Normandeau in support of PSNH's 9316(a) variance renewal request: (1) Merrimack Station

Fisheries Survey Analysis of 1967 through 2005 Catch and Habitat Data dated April 2007; (2)

Merrimack Station Thermal Discharge Effects On Downstream Salmon Smolt Migration 

### dated

December 2006; and (3) 

### A Probabilistic Thermal Model of Merrimack River Downstream of

Merrimack Station dated April 2007.

PSNH' 

### s response to the Letter addresses the following points , with supporting data and 

### analysis by Enercon and Normandeau, each leading experts , respectively, in the fields of

engineering and biological assessment. With respect to CWA 316(b), as a threshold matter 

### the biological data from Merrimack Station s monitoring programs indicate that no adverse environmental impact ("AEI") to the aquatic ecosystems of the Merrimack River in the vicinity ofthe Station has occurred , as measured by any representative important species or critical

aquatic organism population , as a result of the Station 

### s existing CWIS operation. As a result the costs of certain of the technologies identified by EPA in the Letter - particularly 

### closed-cycle cooling configuration for one or both units at the Station - would be , by any reasonable


### measure , wholly disproportionate to any environmental benefit attributable to any such retrofit. 

### Moreover , retrofitting would present substantial negative impacts , including with respect to regional electric-system reliability and pricing, as well as industry-wide impacts that raise the specter of disruption of the electricity supply in a manner that suggests that such retrofitting may not be cost-effective. Instead, and assuming that the requisite AEI is established , the foUowing combination of technologies and operational measures would constitute the "

### best technology available " for Merrimack Station under 316(b): (1) an upgraded fish return systems for both Unit 1 and Unit 2 

### , (2) continuous operation of the Unit 1 and Unit 2 traveling screens . from April through December (these screens are not presently operated on a continuous basis), (3) one- pump reduced flow operation for Unit 2 from December 15 through March15, and (4) scheduling of Unit 2 maintenance outages to coincide with periods of high impingement and entrainment during early summer (ending June 15).
Without identifying the basis for its request , EPA also asked that PSNH identify and evaluate means by which Merrimack Station could achieve and maintain a maximum ambient temperature differential of 5 F in Hooksett Pool (Le. 

### , between Station N10 and Station S4). As reflected in PSNH' s response to the Letter , Enercon and Normandeau assessed EPA' s request and presented two options for achieving such a maximum ambient temperature differential: (1) using exclusion hours for periods when extreme low river flow conditions occur , or (2) increasing the temperature differential value. Each of these options is supported by the thermal and biological monitoring data collected by PSNH in Hooksett Pool and upper Amoskeag Pool 

### since 1967. These data provide no historical evidence that the Station s thermal discharge (1) may reasonably be considered to have caused any prior appreciable harm to the balanced indigenous population or community of shellfish , fish and wildlife that reside within , or are migratory through , the Merrimack River in the sphere of influence of Station s hydrothermal regime (Le. , the " BIP/C" ), or (2) in the future 

### , wil not assure the protection and propagation of
such BIP/C. Rather , these data confirm that the requirements in the Station s existing NPDES permit satisfy the 9316(a) variance-renewal standard , and that renewal of the Station s 9316(a) variance is again warranted.


### One. issue raised by the Letter warrants discussion. With respect to CW 316(b), the Letter appears to signal that EPA Region 1 intends to exercise its " 

### best professional judgmenf' by

relying on 

### Riverkeeper, Inc. v. EPA 475 F. 3d 83 (2nd Cir. 2007) 

### Riverkeeper If' 

### rather than by applying the United States Court of Appeals for the First Circuit' s holding in Seacoast AntiPollution League v. Castle 597 F . 

### 2d 306 , 311 (1 st Cir. 1978) (" SAPL" 

### that 9316(b) does not 

### re(ute the " use of technology whose cost is wholly disproportionate to the environmental 

### benefit to be gained. " In light of the circuit court dispute and the expected United States Supreme court challenge implicating this dispute , PSNH has throughout its response to the 

### Letter accounted for both standards. Assuming solely for purposes of PSNH's response to the

Letter that Riverkeeper /I could be applied to Merrimack Station (which PSNH does not concede), closed- loop cooling using a mechanical draft cooling tower would not be the most cost-effective technology available for minimizing AEI , if any, but rather raises significant concerns about negative impacts , particularly with respect to electric system impacts that may

reverberate throughout the industry. In light of the fact that SAPL' wholly disproportionate standard does apply, PSNH has provided all of the information necessary to conclude using 

### that standard that the costs of implementing closed-cycle cooling in one or both units at Merrimack Station would , by any reasonable measure, outweigh any environmental benefits of 

### doing so.As in previous correspondence , we would like to remind EPA of Merrimack Station s vital role in

the State of New Hampshire as a base- loaded generating station in the PSNH fleet which provides reliable, affordable electricity to more than 475, 

### 000 customers. As the Supreme Court 

### of New Hampshire has noted , PSNH " provides ' retail electric service to more than seventy percent of New Hampshire s residents, see In re Pinetree Power, Inc. 152 N. H. 92, 93 (2005), 

### and Merrimack Station is the largest electric generating facility in PSNH's fleet. As a result PSNH once again urges EPA during this permitting process to provide appropriate consideration to the critical importance of Merrimack Station in the electric grid and the potential implications and effects of any new permit limitations on electric system reliabilty and electricity pricing that squarely implicate PSNH' 

### s regulated status and , therefore , its obligation to serve 

### the majority of New Hampshire electricity consumers. It is critical that permitting requirements not constrain Merrimack Station s ability to operate as designed and especially during the peak demand period (May 1- 0ctober 31). Again , electricity is an essential service , directly correlated to public health and safety, not to mention the state s economic well-

### being. PSNH believes it is imperative that these societal prerogatives receive appropriate recognition in the permitting 

### process , in accordance with CWA provisions requiring EPA to take into account and consider energy requirements in developing NPDES permit requirements 

### , including for thermal 

### discharges.

PSNH' s concerns are echoed by both ISO New England system managers and the North American Electric Reliability Corporation (" NERC" ). In October 2006, ISO New E;ngland released its comprehensive ten-

### year Regional System Plan. This ISO study concluded that 

### New England , with its lack of new capacity and increasing electricity demand, 

### 1s facing a potentially severe electrical capacity shortage that could lead to a failure to meet established

reliabilty criteria , thereby greatly increasing the possibilty of emergency conditions (e. , rolling 

### blackouts) particularly during periods of peak demand. Shortages could occur as early as 

### 2008. Thus, the Station s role is increasingly vital to the State of New Hampshire in meeting 

### increasing demand and in averting an energy crisis in the next decade. Furthermore, of particular note and relevance to Merrimack Station , the ISO report emphasized the need for 

### resources that can respond to system contingencies. EPA may not be aware that the Station has been identified as a key resource in the electric system restoration plan because of its 

### abilty to reenergize the system in the event of a system-wide blackout. In other words , the 

### Station has a vital role in maintaining electric system equilbrium in New England. In addition 

### NERC , assigned under federal law to enforce the reliability of the U. S. power grids 

### , concluded

in its recently issued 2007 Long- 

### Term Reliabilty Assessment

### , 2007-2016 that the amount of reserve electricity generation capacity available for emergency shortages wil fall below a 15 

### percent safety margin in New England as early as 2009. The NERC report also expressly concludes that retrofitting existing power plants with cooling towers to meet CWA requirements 

### is expected to exacerbate the power supply concerns identified in the assessment. The ISO study and the NERC assessment alone establish that EPA' s issuance of a NPDES permit containing CWA Section 316 requirements that compel a reduction in Merrrimack Station capacity or otherwise impair its role in the ISO system could have significant adverse electric system impacts, including disruptions to system reliability, market pricing and voltage 

### protection. PSNH is considering an assessment of additional sector-wide or site-specifc data to further support ISO and NERC' s conclusions.
Please be advised that this Response to the Letter , in its entirety with the exception of this cover letter 

### , from which one could obtain or infer information about Merrimack Station operating procedures and schedule is " confidential business information " under 40 C. F.R. Part 

### , Subpart B and New Hampshire taw. Therefore , PSNH asserts a claim of business confidentiality with regard to this information and requests that EPA handle these documents in full accordance with 40 C. R. Part 2 , Subpart B. f,iPlease be further advised that PSNH maintains the positions it has previously stated , in

correspondence to and discussions with EPA Region 1 staff , with respect to EPA's interpretation and application of certain aspects of EPA's regulations implementing CWA 9316(b) ("Phase II Regulations ). While EPA has suspended the Phase II Regulations pending

further rulemaking, PSNH understands that challenges to the Riverkeeper, Inc. v. EPA, 475 F.3d 83 (2nd Cir. 2007) decision continue. PSNH respectfully reserves its rights with respect to the application of CWA 9316 , including with respect to 9316(b) via Section 402 NPDES permits

to the Station.

As always , we stand ready to meet with you and technical personnel to discuss PSNH' 

### response. To that end 

### , we suggest a meeting in the near future, ideally with NHDES staff also 

### present.
Thank you for your prompt attention to this matter, and do not hesitate to contact me (603-

### 634- 2851) or Allan Palmer (603-

### 634-2439) with any questions or concerns you or your staff may 

### have.

Very truly yours 

# wJt

Willam H. Smagula , P. Director - Generation



### Enclosure

cc: Allan Palmer, PSNH Linda T. Landis , Esq, PSNH Elise N. Zoli 

### , Esq. , Goodwin Procter LLP 

### Elizabeth Tilotson , PSNH Harry Stewart , NHDES