## NMED EXHIBIT 15 PROPOSED ORDER AND STATEMENT OF REASONS FOR ADOPTION OF SIP REVISIONSEIB No. 13

- 02 Statement of Reasons and Order Page 1 of 6 STATE OF NEW MEXICO BEFORE THE ENVIRONMENTAL IMPROVEMENT BOARD IN THE MATTER OF PROPOSED REVISIONS TO THE STATE IMPLEMENTATION PLAN FOR THE SAN JUAN GENERATING STATION BEST AVAILABLE RETROFIT TECHNOLOGY DETERMINATION No. EIB 13
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____________________________________________________________________________ ORDER AND STATEMENT OF REASONS FOR ADOPTION OF SIP REVISIONS

______________________________________________________________________________ This matter comes before the New Mexico Environmental Improvement Board (“Board”) upon a petition filed by the New Mexico Environment Department (“NMED” or “ Department ”), proposing amendments to New Mexico’s St ate Implementation Plan ( “ SIP ” ) for regional haze, in order to adopt a determination of the Best Available Retrofit Technology ( “ BART ” ) and associated emission limits for the San Juan Generating Station (“SJGS”) , operated by Public Service Company of New Mexico (“PNM”)

. A public hearing was held in Farmington, New Mexico on September 5 [and 6], 2013, with a quorum of the Board present during the hearing. The Board heard technical testimony from the Department and other parties and admitted exhibits in to the record. On September __, 2013 , the Board deliberated and voted to adopt the proposed amendments for the reasons that follow: I. STATEMENT OF REASONS
1. The federal Clean Air Act ( “ CAA ” ) requires states to su bmit State Implementation Plans ( “ SIPs ” ) to ad dress visibility impairment caused by regional haze at certain National Parks and Wilderness Areas (“ mandatory federal Class I areas”) , in accordance withEIB No. 13

- 02 Statement of Reasons and Order Page 2 of 6 regulations promulgated by the U.S. Environmental Protection Agency ( “ EPA ” ). CAA §§ 169A & 169B (42 U.S.C. §§ 7491 & 7492 ).
2. The EPA regulations governing SIP submittals under CAA Sections 169A and 169B are codified at 40 C.F.R. §§ 51.308

– 51.309 (“Regional Haze Rule Sections 308 and 309”).
3. In December 2003 the Board approved a SIP developed by NMED to comply with the Requirements of Regional Haze Rule Section 309 with respect to mandatory federal Class I areas located on the Colorado Plateau. The Department has implemented this “Section 309 SI P” continuously since that time.
4. In June 2011 the Board approved certain revision s to the 2003 regional haze SIP and adopted additional SIP provisions pursuant to 40 C.F.R. § 51.309(g) , which extended the scope of the regional haze SIP to all mandatory federal Class I areas within the State.
5. The 2011 SIP contained source

- specific BART determinations pursuant to 40 C.F.R. § 51.308(e) for the SJGS for particulate matter (“PM”) and nitrogen oxides (“NOx”), and determined that no other sources in New Mexico were subject to BART requirements. The BART pro visions of the SIP were contained in Chapter 10 and the documentation of the SJGS BART determination was contained in Appendix D of the SIP.
6. In August, 2011, the EPA promulgated a federal implementation plan (“FIP”) containing a different NOx BART determin ation for the SJGS. 76 Fed. Reg. 52,388 (Aug. 22, 2011).
7. Petitions filed by New Mexico, PNM, and WildEarth Guardians challenging different aspects of the FIP are currently pending in the United States Court of Appeals for the Tenth Circuit.EIB No. 13

- 02 Statement of Reasons and Order Page 3 of 6 8. I n November, 2012, the EPA approved all elements of New Mexico’s 2011 regional haze SIP, except for the NOx BART determination for the SJGS, on which EPA took no action. 77 Fed. Reg. 70,693 (Nov. 27, 2012).
9. Pursuant to 20.1.300.A NMAC, any person may petition the Boar d for amendment of regulations within the jurisdiction of the Board.
10. On May 21, 2013 NMED filed a petition with the Board for a public h earing in this
matter

. The petition proposed revis ed versions Chapter 10 and Appendix D of the regional haze SIP. The purpose of the revisions is to make a new BART determination for the SJGS based on a scenario referred to as the “State Alternative,” which is contained in a tentative agreement between NMED, EPA, and PNM known as the “Term Sheet.” The Term Sheet is inten ded to address pollution control requirements for the SJGS with respect to regional haze and interstate transport for visibility.
11. On June 15, 2013 , at a meeting conducted in compliance with the Open Meetings Act and other applicable requirements, the Boa rd granted the Department’s request for a hearing and schedule d the hearing for September 5

– 6, 2013. The Board appointed member John Volkerding as the Hearing Officer.
12. On June 28, 2013, public notice of the hearing was published in the New Mexico Register, in the Farmington Daily Times (in English and Spanish) , and in the Albuquerque Journal (in English and Spanish ) . The notice stated that the Board may make a decision on the proposed SIP revisions at the conclusion of the hearing, or may

convene at a later date to consider action on the proposal.
13. NMED filed a Notice of Intent to Present Tec hnical Testimony (NOI) on August 16,
2013 , in accordance with the 20.1.1 NMAC.EIB No. 13

- 02 Statement of Reasons and Order Page 4 of 6 14. The following parties also filed NOIs:

15. A hearing was in this matter was held i n Farmington, New Mexico on September 5 [& 6],
2013 , at which a reasonable opportunity for all persons to be heard was provided.
16. The Board has the authority to adopt the proposed SIP revisions pursuant to N

. M

. S

. A

. 1978 , §§ 74

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- 5.B & C

. 17. Implementation of t he State Alternative will abate air pollution.
18. CAA § 169A(g)(2) requires that BART determinations shall take into consideration “[1] the costs of compliance, [2] the energy and nonair quality environmental impacts of compliance, [3] any existing pollution control technology in use at the source, [4] the

r emaining useful life of the sourc e, and [5] the degree of improvement which may reasonably be anticipated to result from the use of such technology.” 19. In considering the proposed SIP revisions, the Board is required by the Air Quality Control Act, NM SA 1978, Section 74

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- 5.E. to give weight it deems appropriate to all facts and circumstances, including but not limited to (1) character and degree of injury to or interference with health, welfare, visibility and property; (2) the public interest, incl uding the social and economic value of the sources and subjects of air contaminants; and (3) technical practicability and economic reasonableness of reducing or eliminating air contaminants from the sources involved and previous experience with equipment a nd methods available to control the air contaminants involved.
20. EPA has promulgated guidelines for States to use in making BART determinations, which are codified at 40 C.F.R. Part 51, Appendix Y. Pursuant to CAA § 169A(b)(2),EIB No. 13

- 02 Statement of Reasons and Order Page 5 of 6 use of the guidelines is mand atory for BART determinations for fossil fuel fired power plants with total generating capacity in excess of 750 megawatts.
21. NMED’s determination that the State Alternative constitutes BART for NOx for the SJGS complies with the guidelines at 40 CFR Part 5 1 Appendix Y and properly weighs the statutory factors of CAA § 169A(g)(2)

. 22. The Board concludes that the BART guidelines at Appendix Y provide an appropriate

me thodology to consider to the factors specified by NMSA 1978, Section 74

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- 5.E . The Department ’s application of Appendix Y to the BART determination for the State Alternative appropriately weighs the Section 74

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- 5.E factors.
23. In addi tion, in accordance with N.M.S.A, Section 74

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- 5.E (2), the Board concludes that the public interest will be served by implementation of the State Alternative. Specifically, in addition to satisfying the NOx BART requirements of the CAA, implementation of the State Alternative will result in significant reductions in sulfur dioxide, particulate matter, carbon dioxide, and mercury; significant reductions in coal

as h generated and water consumed

. 24. In accordance with NMSA 1978 Section 74

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- 5(C)(1)(a), the proposed SIP revisions and regulations are no more stringent than but at least as stringent as required by the federal act and federal regulations pertaining to visibility protection in mandatory class I areas.
25. The notice and hearing requirements of NMSA 1978 Section 74

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- 6 and 20.1.1 NMAC were satisfied in this rulemaking process.
26. The proposed amendments are adopted for a ny or all of the reasons stated above.EIB No. 13

- 02 Statement of Reasons and Order Page 6 of 6 II. ORDER By majority vote of a quorum of the Board members, the proposed revisions to New Mexico’s regional haze SIP at Chapter 10 and Appendix D, as contained in NMED’s May 21, 2013 petition and request for hearing , were approved by the Board on September ___, 2013 . The Department shall submit these SIP revisions as expeditiously as possible to the EPA for approval

. To the extent that any provision within Chapter 10, Section 10.5 (Implementation of the State Alter native) is not self

- executing, the Department shall take appropriate actions to implement that provision using its applicable powers and authorities, including but not limited to enforcement authority under N.M.S.A. 1978, 74

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- 12 and permitting authority u nder N.M.S.A. 1978, § 74

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- 7 , and implementing regulations.

Dated:

On Behalf of the Board