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Senior Manager

ENVIRON International Corporation

19020 33 Ave. W, Suite #310

Lynwood, WA 98036

Subject: Sierra Pacific Industries-Anderson Prevention of Significant Deterioration (PSD) Permit

Application

Dear Mr. Aibright:

We are writing in response to your PSD permit application for an Environmental Protection

Agency PSD Approval to Construct and operate a new cogeneration unit capable of generating

approximately 24 megawatts of electricity for the grid through the utilization of biomass fuels at Sierra

Pacific Industries- Anderson. The initial application was received on March 29, 2010 and supplements to

the application on July 1, 2010 and September 8, 2010. SPI’s application was determined to be

administratively complete on October 4, 2010 On January 11, 2011, EPA requested additional

information from SPI. SPI submitted additional material on June 8 2011.

SPI’s June 8, 2011 response explams SPI’s basis for not including other boiler designs for the

project, such as bubbling bed and circulating fluidized bed boilers, in the analysis of best availablecontrol technology (BACT). We have reviewed SPI’s June 8, 2011 submittal and find that it does not

adequately evaluate all available technologies. SPI’s basis for excluding other boiler designs for theproject, on the ground that to do so would be “redefining the source,” is inadequate. The enclosure to

this letter provides additional comments in response to SPI’s BACT analysis. We are requesting that

SPI provide further analysis of BACT, including analysis of other boiler designs.

Please submit the requested information regarding alternative boiler technologies within 60 days.

We will not be able to process your application until we receive this information. If you have anyquestions concerning a claim of confidentiality or the review of your application, please contact Omer

Shalev at (415) 972-3538 or shalev.omer@epa.gov; or contact me at (415) 972-3974 or

rios.gerardo@epa.gov.

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Gerardo C. Rios

Chief, Permits OfficeAir Division

cc: Ross Bell, SCAQMD

John Waidrop, SCAQMD

Dave Brown, Sierra Pacific Industries

Michael Tollstrup, California Air Resources Board
source or major modification which the Administrator, on a case

by

case basis, taking

into account energy, environmental, and economic impacts and other costs, determines is

achievable for such source or modification through application of production processes oravailable methods, systems, and techniques, including fuel cleaning or treatment or

innovative fuel combustion techniques for control of such pollutant.

According to SPI’s application, the proposed modification will result in significant increases

of oxides of nitrogen (NOj, carbon monoxide (CO), particulate matter (PM), inhalable

coarse particulate (PM,o) and fine particulate (PM2.5).’Therefore, a BACT analysis must be

performed for these pollutants. SPI’s June 8, 2011 submission provides averaging times and

emissions limits that SPI proposes as BACT for the project for these pollutants.

1. Alternative Biomass Boiler Designs

A BACT determination for this project has not been completed. In general, EPA

recommends using the top-down process to satisfy the BACT requirement for the appropriatecriteria pollutants. This analytical process has the following five steps:

Step 1: Identify all available control technologies.

Step 2: Eliminate technically infeasible options.

Step 3: Rank remaining control technologies.

Step 4: Evaluate most effective controls and document results.

Step 5: Select the BACT.

We do not agree with SPI’s position, as stated in its June 8, 2011 submittal, that

alternative biomass boiler designs such as bubbling bed and circulating fluidized bed boilers

should be excluded in Step I of the top-down analysis. SPI’s desire to “incorporate a new,

reliable boiler with minimal alteration to operations. . .or changes to the existing facility” does

not justify the exclusion of appropriate alternative biomass boiler designs. In particular, EPA

believes that alternative boiler designs such as bubbling bed and circulating fluidized bed

boilers should be included in the BACT analysis for this project because they represent an

“application of production processes or available methods, systems, and techniques,including innovative fuel combustion techniques for the reduction of pollutant emissions,”

consistent with EPA’s BACT definition (see above).

If SPI wishes to eliminate alternative boiler designs as options, SPI could potentially do

SPI’s application also identifies significant increases in Greenhouse Gas (GI-IG) emissions; however, as the

Deferralfor (202 emissionsfrom Bioener’ and Other Biogenic Sources under the Prevention ofSignfIcant

Deterioration and Title V Programs (76 FR 43490 July 20, 2011) will most likely apply to this project, we anticipate

that the modification will likely not be subject to BACT requirements for GFIGs.
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ow 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 10IPM2.5

SPI proposes a PM/PM 10/PM2,5emission 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.