PREVENTION OF SIGNIFICANT DETERIORATION PERMIT

ISSUED PURSUANT TO THE

REQUIREMENTS AT 40 CFR §52.21

U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION 9

PSD PERMIT NUMBER: SAC 06-01

PERMITTEE: Pacific Gas & Electric Company

915 Highland Point Drive, Suite 130

Roseville, CA 95678

FACILITY NAME: Colusa Generating Station

FACILITY LOCATION: On approximately 31-acres within a 100-acre

parcel of agricultural land north ofthe City of

Williams, in Colusa County, California

(Section 35, Township 18N, Range 4W)

Pursuant to the provisions ofthe Clean Air Act (CAA), Subchapter I, Part C (42 U.s.C. Section

7470, et. seq.), and the Code ofFederal Regulations (CFR) Title 40, Section 52.21, the United

States Environmental Protection Agency Region 9 (EPA) is issuing a Prevention ofSignificant

Deterioration (PSD) air quality permit to the Pacific Gas & Electric Company (PG&E). The

Permit applies to the construction and operation of a new 660 mega-watt (MW) combined cycle

power plant called Colusa Generating Station (CGS), in Colusa County, Califorrtia.

PG&E is authorized to construct and operate the CGS power plant as described herein, in

accordance with the permit application (and plans submitted with the permit application), the

federal PSD regulations at 40 CFR § 52.21, and other terms and conditions set forth in this PSD

Permit. Failure to comply with any condition or term set forth in this PSD Permit may be subject

to enforcement action pursuant to Section 113 ofthe Clean Air Act. This permit does not relieve

CGS from the obligation to comply with applicable federal, state, and Colusa County Air

Pollution Control District (District) air pollution control rules and regulations.

This PSDPermit becomes effective on the date ofissuance pursuant to 40 CFR § 124.15(b)(3).

~~ebOrahJOrdan VDirector, Air Division

~zqlo( ae
PROJECT DESCRIPTION

The Colusa Generating Station (CGS) will consist oftwo combustion turbine generators (CT),

each vented to a heat recovery steam generator (HRSG). The facility will also consist of a single

condensing reheat steam turbine generator (STG), dry cooling tower technology, and other

associated equipment. Each HRSG will be equipped with a duct burner. Each ofthe CTs will be

equipped with dry low NOx (DLN) combustors. The facility will install selective catalytic

reduction (SCR) and oxidation catalyst systems. Pacific Gas & Electric Company (Permittee)

will construct and operate CGS. The project is subject to the Prevention of Significant

Deterioration Program for nitrogen oxides (NOx), carbon monoxide (CO), volatile organic

compounds (VOC), particulate matter (PM), and particulate matter less than 10 microns (PMlO).

EQUIPMENT DESCRIPTION

Emission Unit Id. Description

EU-l One (1) natural gas-fired CT generator rated at 172 MW, vented to a

HRSG with a 688 MMBtulhr duct burner

EU-2 One (1) natural gas-fired CT generator rated at 172 MW, vented to a

HRSG with a 688 MMBtulhr duct burner

EU-3 One (1) natur:al gas-fired 40 MMBtulhr auxiliary boiler

EU-4 One (1) 1,340 brake horsepower, diesel-fueled emergency engine to power

an electrical generator

EU-5 One (1) 300 brake horsepower, diesel-fueled firewater pump engine to

power a firewater pump

PERMIT CONDITIONS

I. Permit Expiration

As provided in 40 CFR 52.21(r), this PSD Permit shall become invalid if construction:

A. is not commenced (as defined in 40 CFR52.21(b)(9)) within 18 months after the

approval takes effect; or

B. .is discontinued for a period of 18 months or more; or

C. is not completed within a reasonable time.

II. Permit Notification Requirements

Permittee shall notify EPA Region 9 in writing or by electronic ~ail ofthe:

A. date construction is commenced, postmarked within 30 days ofsuch date.

B. actual date ofinitial startup, as defined inCondition X.E.7., postmarked within 15

days ofsuch date.

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Final PSD Permit

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C. date upon which initial performance tests will commence, in accordance with the

provisions ofCondition XF.l., postmarked not less than 30 days prior to such

date. Notification may be provided with the submittal ofthe performance test

protocol required pursuant to Condition XF.2.

D. date upon which initial performance evaluation ofthe CEMS will commence in

accordance with 40 CFR 60. 13(c), postmarked not less than 30 days prior to such

date. Notification may be provided with the submittal ofthe CEMS performance

test protocol required pursuant to Condition X.C.6.

III. Facility Operation

At all times, including periods ofstartup, shutdown and malfunction, Permittee shall, to

the extent practicable, maintain and operate the facility including associated air pollution

control equipment in a manner consistent with good air pollution control practice for

minimizing emissions. Determination ofwhether acceptable operating and maintenance

procedures are being used will be based on information available to the EPA which may

include, but is not limited. to, monitoring results, opacity observations, review of

operating maintenance procedures and inspection ofthe source.

IV. Malfunction Reporting.

A. Permittee shall notify EPA by facsimile or electronic mail at R9.AEO@epa.gov

within two (2) working days following the discovery of any failure of air pollution

control equipment, process equipment, or ofa process to operate in a normal

manner, which results in an increase in emissions above the allowable emission

limits stated in Section XD. ofthis permit.

B. In addition, Permittee shall notify EPA in writing or electronic mail within fifteen

(15) days of any such failure described under Condition IV.A. The notification

shall include a description.' ofthe malfunctioning equipment or abnormal

operation, the date ofthe initial malfunction, the period oftime over which

emissions were increased due to the failure; the cause ofthe failure, the estimated

resultant emissions in excess ofthose allowed in Section X.D., and the methods

utilized to mitigate emissions and restore normal operations.

C. Compliance with this malfunction notification provision shall not excuse or

otherwise constitute a defense to any violation ofthis permit or any law or

regulation such malfunction may cause.

V. Right ofEntry

The EPA Regional Administrator, and/or an authorized representative, upon the

presentation of credentials, shall be permitted:

A. to enter the premises where the source is located or where any records are required

to be kept under the terms and conditions ofthis PSD Permit; and

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B. during normal business hours, to have access to and to copy any records required

to be kept under the terms and conditions ofthis PSD Permit; and

C. to inspect any equipment, operation, or method subject to requirements in this

PSD Permit; and

D. to sample materials and emissions from the source(s).

VI. Transfer of Ownership

In the event of any changes in control or ownership ofthe facilities to be constructed, this

PSD Permitshall be binding on all subsequent owners and operators. Permittee shall

notify the succeeding owner and operator ofthe existence ofthis PSD Permit and its

conditions by letter, a copy ofwhich shall be forwarded to EPA Region 9.

VII. Severability

The provisions ofthis PSD Permit are severable, and, if any provision ofthe PSD Permit

is held invalid, the remainder ofthis PSD Permit shall not be affected.

VIII. Other Applicable Regulations

Permittee shall construct and operate this project in compliance with this PSD permit and

all other applicable federal, state, and local air quality regulations. This PSD permit does

not release the Permittee from any liability for compliance with other applicable federal,

state and local environmental laws and regulations, including the Clean Air Act.

IX. ~eserved

X. Special Conditions

A. Reserved

B. Air Pollution Control Equipment and Operation

1. Prior to initial startup, as defined in Condition X.E.7, Permittee shall

install, and thereafter continuously operate and maintain:

a. Dry Low NOx combustors, Selective Catalytic Reduction (SCR)

and Oxidation Catalyst units to control NOx and CO emissions

from EU-l and EU-2; and

b. An ultra low NOx burner for EU-3.

2. The aforementioned "continuous periods of operation" do not include

periods ofshakedown, startup and shutdown, as defined in Condition XE.

except as required by Condition X.B.3.

. Colusa Generating Station Page 4 of 13

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3. During any turbine startup, ammonia injection shall be initiated as soon as

the SCR catalyst temperature exceeds 500 degrees F.

4. The SCR units for EU-l and EU-2 shall be designed to meet a NOx

emission limit ofno more than 2.0 ppmvd (I-hr average) corrected to 15

percent O2, for the life ofthe SCR catalyst.

5. Permittee shall ensure that the duct burners are not operated unless the

associated turbine units are in operation.

C. Continuous Monitoring Systems

1. At the earliest feasible opportunity, in accordance with the

recommendations ofthe equipment manufacturer and the construction

contractor, Permittee shall install, and thereafter operate, maintain, certify,

and quality-assure a continuous emission monitoring system (CEMS) for

each CT which measures stack gas NOx , CO and 02 concentrations in

ppmv. The pollutant concentrations shall be corrected to 15 percent O2 on

a dry basis.

2. The NOx and O2 CEMS shall meet the applicable requirements of 40 CFR

Part 60 Appendix B, Performance Specifications 2 and 3, and 40 CFR Part

60 AppendixF, Procedure 1. The operator may use the procedures in the

Linearity Check of 40 CFR Part 75, Appendix A, section 6.2 in lieu ofthe

cylinder gas audit procedures in 40 CFR Part 60, Appendix F, Procedure 1.

3. The CO CEMS shall meet the applicable requirements of 40 CFR Part 60

Appendix B, Performance Specification 4, and 40 CFR Part 60 Appendix

F, Procedure 1, except the relative accuracy specified in section 13.2 of40

CFR Part 60 Appendix B, Performance Specification 4 shall not exceed 20

percent.

4. The performance evaluation ofthe CEMS may either be conducted

separately, as specified in 40 CFR 60.4405(b)(5), or as part ofthe initial

performance test of each emission unit.

5. The CEMS shall complete a minimum of one cycle of operations

(sampling, analyzing and data recording) for each successive IS-minute

period.

6. Permittee shall submit a CEMS performance test protocol to the EPA no

later than 30 days prior to the test date to allow review ofthe test plan and

to arrange for an observer to be present at the test. The performance test

shall be conducted in accordance with the submitted protocol, and any

changes required by EPA.

7. Permittee shall furnish the EPA a written report ofthe results of

performance tests within 60 days of completion.

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8. The stack gas volumetric flow rates shall be calculated in accordance with

the fuel flow meter requirements of 40 CPR Part 75 Appendix D in

combination with the appropriate parts ofEPA Method 19.

9. Prior to the date ofinitial startup (as defined in this PSD permit),

Permittee shall install, and thereafter maintain and operate, in accordance

with XC. 1., continuous monitoring and recording systems to measure and

record the following operational parameters:

a. The ammonia injection rate ofthe ammonia injection system.

b. Exhaust gas temperature at the inlet to the SCR reactor.

D. Emission and Operational Limits

The following emission and operational limits shall apply at all times, except as

provided below:

1. Total annual emissions from EU-l, EU-2, EU-3, EU-4 and EU-5 shall not

exceed the following:

a. 185.6 tons NOx per rolling 12-month period

b. 272.2 tons CO per rolling 12-month period

c. 48.2 tons VOC per rolling 12-month period

d. 142.2 tons PM per rolling 12-month period

e. 142.2 tons PMlO per rolling 12-month period

2. Daily emissions from each CT (EU-l and EU-2) shall not exceed the

following:

a. 1,497.3 lbs NOx per day

b. 3,829.5 lbs CO per day

c. 315.3 lbs VOC per day

d. 482.4lbs ofPM per day

e. 482.4lbs ofPMlO per day

3. Emissions from each CT (EU-l and EU-2) shall not exceed the following,

except as provided by the provisions ofCondition XE.:

a. 19.61bs ofNOx per hour or 2.0 ppmvd NOx, corre~ted to 15

percent 02, averaged over any I-hour period

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b.

c.

d.

17.91bs ofCO per hour or 3.0 ppmvd CO, corrected to 15 percent

O2, averaged over any consecutive 3-hour period

11.0lbs ofVOC per hour or 2.0 ppmvd VOC, corrected to 15

percent O2, averaged over any I-hour period

20 lbs ofPM per hour

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e. 20 lbs ofPMlO per hour

4. Emissions from EU-3 shall not exceed the following:

a. 0.48lbs ofNOx per hour or 9.0 ppmvd NOx, corrected to 3 percent

O2, averaged over' any consecutive 3-hour period

b. 1.63 lbs ofCO per J:toUr or 50.0 ppmvd CO, correctedto 3 percent

O2, averaged over any consecutive 3-hourperiod

c. 0.181bs ofVOC per hour or 10.0 ppmvd VOC, corrected to 3

percent O2, averaged over any consecutive 3-hour period

d. 0.33 lbs ofPM per hour

e. 0.33 lbs ofPMlO per hour

5. Emissions from EU-4 and EU-5 shall not exceed the following:

a. 13.88 lbs NOx per hour from EU-4

b. 1.98 lbs NOx per hour from EU-5

. 6. EU-3 shall operate no more than 3,744 hours per year.

7. EU-4 and EU-5 shall each operate no more than 50 hours per year and no

more than 1 hour per day for testing and maintenance purposes.

E. Requirements during Shakedown, Startup and Shutdown Periods

The CT emission limits in Section X.D.3. shall not apply during CT shakedown,

startup and shutdown periods. During shakedown, startup and shutdown periods,

the following requirements shall apply:

1. The CEMS shall be in operation during each startup and shutdown period.

2. No more than one CT shall be in startup mode at any time.

3. Duration of cold startups shall not exceed 270 minutes, warm startups

shall not exceed 180 minutes, and hot startups shall not exceed 90 minutes

per occurrence.

4. Duration ofshutdowns shall not exceed 30 minutes per occurrence.

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Final PSD Permit

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5. While in a startup or shutdown period, exhaust emissions for each CT

shall not exceed the limits in the following table:

co

VOC

PM/PMlO

333.3

373.6

27.7

0.40

12.0

779.10

1355.6

106.7

1.01

48.8

152.0

370.3

27.7

0.40

12.0

456.20 249.90 259.90

790.5 429.6 679.6

47.4 27.7 38.0

0.58 0.40 0.33

30.8 12.0 12.8

115.0

483.5

23.9

0.20

6.0

115.0

483.5

23.9

0.20

6.0

6. The time, date and duration of each startup and shutdown event shall be

recorded. The records shall include Ibs/hour emission calculations based

on the CEMS data. These records shall be kept for five years following the .

date ofsuch events.

7. For CTs and boilers, "initial startup" shall be defined as the first fire of

each unit.

8. Shakedown shall be defined as the period beginning withinitial startup

and ending no later than initial performance testing, during which the

Permittee conducts operational and contractual testing .and tuning to

ensure the safe, efficient and reliable operation ofthe plant.

9. Startup shall be defined as the period beginnIng with ignition and lasting

until the equipment has reached a continuous operating level and meets

permit limits specified in Condition X.D.3. Cold startup means a startup

when the combustion turbine has not been in operation during the

preceding 72 hours. Hot startup means a startup when the combustion

turbine has been in operation during the preceding 8 hours. Warm startup

means a startup that is not a hot or cold startup.

10. Shutdown shall be defined as the period beginning with the lowering of

equipment from base load and lasting until fuel flow is completely off and

combustion has ceased.

11. Compliance with the PM/PMlO and S02 emission limits that apply during

startup and shutdown periods may be demonstrated by compliance with

Condition X.ll.

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12. Compliance with the VOC limits that apply during startup and shutdown

periods shall be based on compliance with the CO limits during the startup

and shutdown periods.

F. Performance Tests

1. Within 60 days after achieving the maximum production rate the facility

will operate at, but not later than 180 days after the initial startup of

equipment, and annually thereafter (within 30 days ofthe initial

performance test anniversary), Permittee shall conduct performance tests

(as described in 40 CFR 60.8) for NOx, CO, VOC, PM, and PMlO

emissions from each gas turbine and the auxiliary boiler. The annual test

shall be performed in accordance with the requirements of40 CFR Part

60, Appendix F, Procedure 1, Section 5.1.1.

2. Permittee shall submit a performance test protocol to EPA no later than 30

days prior to the test to allow review ofthe test plan and to arrange for an

observer to be present at the test. The performance test shall be conducted

in accordance with the submitted protocol, and any changes required by

EPA.

3. Performance tests shall be conducted in accordance with the test methods

set forth in 40 CFR 60.8 and 40 CFR Part 60,Appendix A, as modified

below:

a. EPA Methods 1-4 and 7E ifNOx emissions are measured in ppmv.

b. EPA Methods 1-4, 7E, and 19 ifNOx emissions are measured on a

heat input basis.

c. EPA Methods 1-4 and 10 for CO emissions.

d. EPA Methods 25A or 25B for VOC emissions.

e. EPA Methods 1-4 and 5 for PM emissions.

f EPA Methods 1-4, 5 and 202 - as modified below, for PM10

emISSIOns:

1. EPA Method 202 test methodology must include the

following:

(A) A one-hour nitrogen purge,

(B) The alternative procedure described in section 8.1 to

neutralize the sulfuric acid,

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Final PSD Permit

September 29, 2008

(C) Evaporation ofthe last 1 ml ofthe inorganic

fraction by air drying following evaporation ofthe

bulk ofthe impinger water in a 105°C oven as

described in the first sentence ofsection 5.3.2.3.,

and

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(D) Each test run period shall be 2 hours.

11. In lieu ofMethod 202, the Permittee may use EPA

Conditional Test Methods for particulate matter: CTM-039

or CTM-040.

g. In lieu ofthe specified test methods, alternative methods may be

used with prior written approval from EPA.

4. In addition to the performance test for N02 required in condition XF.1,

the initial per~ormance test conducted after 'initial startup' shall use the

test procedures for a 'high N02 emission site,' as specified in San Diego

Test Method 100, to measure N02 emissions. The source shall be

classified as either a 'low' or 'high' N02 emission site based on these test

results. Ifthe emission source is classified as a:

a. 'high N02 emission site,' then each subsequent performance test

shall use the test procedures for a 'high N02 emission site,' as

specified in San Diego Test Method 100.

b. 'low N02emission site,' then the test procedures for a 'high N02

emission site,' as specified in San Diego Test Method 100, shall be

performed once every five years to verify the source's

classification as a 'low N02 emission site. '

5. The performance test methods specified in Condition X.F.3., may be

modified as follows:

a. Perform a minimum of 9 reference method runs, with a minimum

time per run of 21 minutes, at a single load level, between 90 and

100 percent of peak (or the highest physically achievable) load.

b. Use the test data both to demonstrate compliance with the

applicable NOx emission limit and to provide the required

reference method data for the RATA ofthe CEMS.

6. For performance test purposes, sampling ports, platforms, and access shall

be provided on the emission unit exhaust system in accordance with the

requirements of40 CFR 60.8(e).

7. Permittee shall furnish the EPA a written report ofthe results of

performance tests within 60 days of completion.

8. Upon written request from the Permittee, and adequate justification, EPA

may waive a specific annual test and/or allow for testing to be done at less

than maximum operating capacity.

9. The CEMS shall be tested annually and quarterly in accordance with the

requirements of40 CFR 60 Appendix F,Procedure 1.

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G. Recordkeeping and Reporting

'1. Permittee shall maintain recordsofthe hours of operation for EU-3, EU-4

and EU-5.

2. Permittee shall maintain records ofthe fuelused· in EU-1, EU-2, EU-3,

EU-4 and EU-5.

3. Permittee shall maintain records ofthe sulfur content ofthe diesel fuel

used in EU-4 and EU-5.

4. Permittee shall maintain all records on site of actual operating data and

emissions calculations for lblhr, lb/event, lb/day arid tpy emissions limits

required in section X.D. ofthis PSD Permit.

5. Permittee shall maintain CEMS records that contain the following: the

occurrence and duration of any startup, shutdown or malfunction,

performance testing, evaluations, calibrations, checks, adjustments,

maintenance, duration of any periods during which a continuous

monitoring system or monitoring device is inoperative, and emission

measurements.

6. Permittee shall maintain records and submit a written report of all excess

emissions to EPA semi-annually. The report is due on the 30th day

following the end ofthe calendar quarter and shall include the following:

a. Time intervals, data and magnitude ofthe excess emissions, the

nature and cause (ifknown), corrective actions taken and

preventive measures adopted;

b. Applicable time and date of each period during which the CEMS

was inoperative (monitor down time), except for zero and span

checks, and the nature ofsystem repairs or adjustments; and

c. A negative -declaration when no excess emissions occurred or when

the CEMS has not been inoperative, repaired, or adjusted.

7. Excess emissions shall be defined as any operating hour in which the 4-

hour rolling average NOx concentration, or the 3-hour rolling average CO

concentration, as measured by the CEMS, exceeds the maximum emission

limits set forth in Condition XD.3.

8. A period ofmonitor down time shall be any unit operating hour in which

sufficient data are not obtained to validate the hour for NOx, CO or O2•

9. Excess emissions indicated by the CEM system shall be considered

violations ofthe applicable emission limit for the purpose ofthis permit.

10. All records required by this PSD Permit shall be retained for five years

following the date ofsuch measurements, maintenance, and reports.

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H. New Source Performance Standards

The proposed power plant is subject to the federal regulations entitled Standards

ofPerformance for New Stationary Sources (40 CFR Part 60). The owner or

operator shall meet all applicable requirements of40 CFR Part 60 Subparts A, Dc,

IIll and KKKK.

1. Fuel Use

1. Natural Gas Usage:

a. Permittee shall use only pipeline quality natural gas to fire EU-1,

EU-2, and EU-3.

b. Permittee shall keep a monthly record ofthe quantity of natural gas

used in EU-1, EU-2, and EU-3.

c. Permittee shall sample and record the sulfur content ofthe natural

gas fuel on a monthly basis.

d. The monthly fuel sulfur content reading shall not exceed 0-75 grain

per 100 dry standard cubic feet, and the rolling 12-month average

fuel sulfur content shall not exceed 0.68 grains per 100 dry

standard cubic feet.

e. The fuel sulfur content ofthe natural gas shall be determined using

any ofthe following test methods: ASTM D1072, D3246, D4468,

D5504 or D6667.

2. Diesel Usage:

a. The sulfur content of diesel fuel used in EU-4 and EU-5 shall not

exceed 15 ppm.

XI. Agency Notifications

A. Unless otherwise directed by the EPA or this permit, the owner or operator shall

submit a copy of all test plans, reports, certifications, notifications, and other

information pertaining to compliance with this permit to:

Director, Air Division (Attn: Air-5)

EPA Region IX

75 Hawthorne Street

San Francisco, CA 94105-3901

Email: R9.AEO@epa.gov

Fax: (415) 947-3579

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Final PSD Permit

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B. The owner or operator shall submit permit applications, permit amendments, and

other applicable permit information, which includes but not limited to installation

of control equipment, replacement of an emissions unit, and changes that

contravene permit terms, to:

Director, Air Division (Attn: AIR-3)

U. S. Environmental Protection Agency Region 9

75 Hawthorne Street

San Francisco, CA 94105

C. Copies of all correspondence required by this PSD,Permit shall be forwarded to:

Air Pollution Control Officer

Colusa County APCD

100 Sunrise Blvd. #F

Colusa, CA 95932-3246

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