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Public Servce

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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 of
the 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,i
Please 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