57:4%UNITEDSTATESENVIRONMENTALPROTECTIONAGENCY LREGIONIX75HawthorneStreetSanFrancisco,CA94105August5,2011EricAlbrightSeniorManagerENVIRONInternationalCorporation1902033Ave.W,Suite#310Lynwood,WA98036Subject:SierraPacificIndustries-AndersonPreventionofSignificantDeterioration(PSD)PermitApplicationDearMr.Aibright:WearewritinginresponsetoyourPSDpermitapplicationforanEnvironmentalProtectionAgencyPSDApprovaltoConstructandoperateanewcogenerationunitcapableofgeneratingapproximately24megawattsofelectricityforthegridthroughtheutilizationofbiomassfuelsatSierraPacificIndustries-Anderson.TheinitialapplicationwasreceivedonMarch29,2010andsupplementstotheapplicationonJuly1,2010andSeptember8,2010.SPI’sapplicationwasdeterminedtobeadministrativelycompleteonOctober4,2010OnJanuary11,2011,EPArequestedadditionalinformationfromSPI.SPIsubmittedadditionalmaterialonJune82011.SPI’sJune8,2011responseexplamsSPI’sbasisfornotincludingotherboilerdesignsfortheproject,suchasbubblingbedandcirculatingfluidizedbedboilers,intheanalysisofbestavailablecontroltechnology(BACT).WehavereviewedSPI’sJune8,2011submittalandfindthatitdoesnotadequatelyevaluateallavailabletechnologies.SPI’sbasisforexcludingotherboilerdesignsfortheproject,onthegroundthattodosowouldbe“redefiningthesource,”isinadequate.TheenclosuretothisletterprovidesadditionalcommentsinresponsetoSPI’sBACTanalysis.WearerequestingthatSPIprovidefurtheranalysisofBACT,includinganalysisofotherboilerdesigns.Pleasesubmittherequestedinformationregardingalternativeboilertechnologieswithin60days.Wewillnotbeabletoprocessyourapplicationuntilwereceivethisinformation.Ifyouhaveanyquestionsconcerningaclaimofconfidentialityorthereviewofyourapplication,pleasecontactOmerShalevat(415)972-3538orshalev.omer@epa.gov;orcontactmeat(415)972-3974orrios.gerardo@epa.gov.SincreJy,/,,—‘v(j/j—y—GerardoC.RiosChief,PermitsOfficeAirDivisioncc:RossBell,SCAQMDJohnWaidrop,SCAQMDDaveBrown,SierraPacificIndustriesMichaelTollstrup,CaliforniaAirResourcesBoardEnclosure:SierraPacificIndustries,Anderson--Biomass-FiredCogenerationProjectBestAvailableControlTechnology40CFR52.2l(b)(12)readsasfollows:Bestavailablecontroltechnologymeansanemissionslimitation(includingavisibleemissionstandard)basedonthemaximumdegreeofreductionforeachpollutantsubjecttoregulationunderActwhichwouldbeemittedfromanyproposedmajorstationarysourceormajormodificationwhichtheAdministrator,onacase-by-casebasis,takingintoaccountenergy,environmental,andeconomicimpactsandothercosts,determinesisachievableforsuchsourceormodificationthroughapplicationofproductionprocessesoravailablemethods,systems,andtechniques,includingfuelcleaningortreatmentorinnovativefuelcombustiontechniquesforcontrolofsuchpollutant.AccordingtoSPI’sapplication,theproposedmodificationwillresultinsignificantincreasesofoxidesofnitrogen(NOj,carbonmonoxide(CO),particulatematter(PM),inhalablecoarseparticulate(PM,o)andfineparticulate(PM2.5).’Therefore,aBACTanalysismustbeperformedforthesepollutants.SPI’sJune8,2011submissionprovidesaveragingtimesandemissionslimitsthatSPIproposesasBACTfortheprojectforthesepollutants.1.AlternativeBiomassBoilerDesignsABACTdeterminationforthisprojecthasnotbeencompleted.Ingeneral,EPArecommendsusingthetop-downprocesstosatisfytheBACTrequirementfortheappropriatecriteriapollutants.Thisanalyticalprocesshasthefollowingfivesteps:Step1:Identifyallavailablecontroltechnologies.Step2:Eliminatetechnicallyinfeasibleoptions.Step3:Rankremainingcontroltechnologies.Step4:Evaluatemosteffectivecontrolsanddocumentresults.Step5:SelecttheBACT.WedonotagreewithSPI’sposition,asstatedinitsJune8,2011submittal,thatalternativebiomassboilerdesignssuchasbubblingbedandcirculatingfluidizedbedboilersshouldbeexcludedinStepIofthetop-downanalysis.SPI’sdesireto“incorporateanew,reliableboilerwithminimalalterationtooperations...orchangestotheexistingfacility”doesnotjustifytheexclusionofappropriatealternativebiomassboilerdesigns.Inparticular,EPAbelievesthatalternativeboilerdesignssuchasbubblingbedandcirculatingfluidizedbedboilersshouldbeincludedintheBACTanalysisforthisprojectbecausetheyrepresentan“applicationofproductionprocessesoravailablemethods,systems,andtechniques,includinginnovativefuelcombustiontechniquesforthereductionofpollutantemissions,”consistentwithEPA’sBACTdefinition(seeabove).IfSPIwishestoeliminatealternativeboilerdesignsasoptions,SPIcouldpotentiallydoSPI’sapplicationalsoidentifiessignificantincreasesinGreenhouseGas(GI-IG)emissions;however,astheDeferralfor(202emissionsfromBioener’andOtherBiogenicSourcesunderthePreventionofSignfIcantDeteriorationandTitleVPrograms(76FR43490July20,2011)willmostlikelyapplytothisproject,weanticipatethatthemodificationwilllikelynotbesubjecttoBACTrequirementsforGFIGs.so consistent

with criteria’

such

as those described

in Steps

2 or

4 of EPA’s top-down

BACT analysis.

EPA

notes

that

a specific

case

of infeasibility

due

to the integration

of new equipment

or combustion

processes

with existing

facility operations

should

be descriptive and may

be made

at Step

2 of the analysis. Considerations

that

take

into account

energy, environmental,

economic

impacts,

and other

costs should

be descriptive

and made

at Step

4 of the analysis.

If SPI wishes

to exclude alternative

boiler designs

such

as bubbling

bed

and circulating

fluidized

bed boilers,

SPI should provide

detailed explanations

to justify

its position

such

as why

a fluidized

bed boiler

would

not allow

SPI

to meet

its project

needs,

or why

it

is infeasible

as mentioned

above. 2. BACT Emissions Limitations Given

that

a fluidized

bed boiler

has

not been eliminated

from consideration

for

this project,

we

are providing

feedback

regarding

the emissions limitations

you proposed

against recent emissions

limits

for

a fluidized

bed boiler. iQ

SPI proposes

a NO emission

limit

of 0.15 lb/MMBtu

on

a 3-hour averaging

period

and 0.13 lb/MMBtu

on

an annual averaging

period. Covanta

Delano,

a fluidized

bed biomass boiler

in Delano, California,

has demonstrated

compliance

with

a 0.10 lb/MMBtu

limit

for NO

on

a 24-hour

rolling average

basis. CO

SPI proposes

a CO emission

limit

of 0.35 lblMMBtu

on

a 3-hour averaging

period. Covanta

Delano

has demonstrated

compliance

with

a 0.14 lbIMMBtu

limit

for

CO

on

a 24- hour rolling

average

basis. PM/PM 10 IPM 2 . 5 SPI proposes

a PM/PM 10 /PM 2 , 5

emission

limit

of 0.0011 lb/MMBtu

on

a 3-hour averaging

period.

This

new

limit

and averaging

time present

a significant

reduction

from, what

was originally

proposed.

We

are

still reviewing

this proposed

emission limitation,

but do not have further comments

at this time. BACT

for Startup

and Shutdown SPI’s

June

8, 2011 submission

also outlines

the BACT

for startup

and shutdown

periods. We

are reviewing

the proposed

emissions limitations;

however,

we recognize

that these emissions

limitations

may change

in order

to reflect

other considerations

in supplementary material submitted

for

the BACT analysis.