UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION IX

75 Hawthorne Street 0

San Francisco, CA 94105

PRO1

NOV 202015

Steven Spangle

Field Supervisor

U.S. Fish and Wildlife Service

2321 West Royal Palm Road

Suite 103

Phoenix, Arizona 85021

Re: Request for Concurrence with EPA Finding of May Affect/Not Likely to Adversely

Affect under Section 7 of the ESA for the Navajo Generating Station Refined Coal

Treatment System Project

Dear Mr. Spangle:

The Salt River Project Agricultural Improvement .and Power District (SRP) has applied to

the U.S. Environmental Protection Agency, Region IX (EPA) for a federal Tribal Minor New

Source Review (NSR) permit, as required by Clean Air Act (CAA) regulations at 40 CFR

49.154, for the Navajo Generating Station (NGS) Refined Coal Treatment System Project (RCTS

Project). By this letter, EPA seeks written concurrence from the U.S. Fish and Wildlife Service

(Service) under section 7(a)(2) of the Endangered Species Act (ESA) with our finding that our

proposed issuance of a Tribal Minor NSR permit for the RCTS Project may affect, but is not

likely to adversely affect, any federally-listed endangered or threatened species or designated

critical habitat for such species. Background information and more detailed information

regarding the RCTS Project are provided below.

EPA is responsible for complying with ESA Section 7 requirements with respect to

federal Tribal Minor NSR permitting, and is the lead federal agency for Section 7(a)(2)

compliance for the RCTS Project. EPA will not take final action on SRP’s Tribal Minor NSR

permit application for the RCTS Project until we have determined that our action will be

consistent with the substantive and procedural requirements of the ESA.

On February 20, 2015, EPA received an application from SRP for a Tribal Minor NSR

permit for the construction and operation of a Refined Coal Treatment System (RCTS) within the

existing NGS plant boundaries on pre-disturbed land (see attachment #1). SRP has an existing

coal conveyor belt system that transfers untreated coal from railcar unloading piles to pulverizers

for crushing. The crushed coal is then fed into one of three existing boilers for combustion in

order to generate steam and produce electricity. The RCTS Project for which the Tribal Minor

NSR permit is sought would consist of the construction and operation of a new RCTS, which

will add calcium bromide and cement kiln dust to the coal prior to its being pulverized and

combusted. This RCTS will consist of two new coal feed belt conveyors that would divert coal
Page 2 of 4— Mr. Spangle

from the existing conveyor system to two new mixing pugmills, where the coal will be mixed

with the additives. The treated coal will then be fed back into the existing conveyor system by

two new return belt conveyors to be pulverized and finally combusted.

The new belt conveyors will be controlled by two high-efficiency dust collectors. Cement

kiln dust will be delivered by truck and stored in three 150-ton silos and two 20-ton day bins,

which will be controlled by baghouses. Some PM, PM10 and PM2jemissions increases from

existing unpaved roads can be expected in conjunction with the RCTS Project due to fugitive

dust emissions associated with the increased delivery truck traffic. There are also expected to be

some emissions increases in PM, PM10 and PM2.5from the boilers due to the increased ash

content of the coal. The construction and operation of the RCTS will be within the existing

footprint of the NGS.

The RCTS Project will result in emissions increases of particulate matter (PM), and

particulate matter less than or equal to 10 micrometers in diameter (PM10)above the thresholds

for minor source permitting under the CAA Tribal Minor NSR program. The RCTS Project will

also increase emissions of particulate matter less than or equal to 2.5 micrometers in diameter

(PM2.5),but at levels below the minor source permitting threshold. The increase in emissions

from the changes will not exceed applicable CAA Prevention of Significant Deterioration (PSD)

thresholds. Therefore, the RCTS Project does not trigger PSD review, but the increase in

emissions of PM and PM10 require SRP to obtain a minor NSR permit under the Tribal Minor

NSR program for the Project.

We note that SRP previously submitted an ESA Analysis to EPA for a different project at

the NGS, known as the Low-NO Burner Project, in April 2008 (revised July 2008) (2008 ESA

Analysis) (see attachment #2), in conjunction with a PSD permit application for that project. This

2008 ESA Analysis explained that, based on the habitat conditions surrounding the Low-NO

Burner Project area, only one species from the federal threatened and endangered species list for

Coconino County was expected to occur in the project vicinity: the California condor

(Gymnogyps californianus). The 2008 ESA Analysis further explained that no breeding or

nesting sites were observed for this species in the Low-NO Burner Project area. The Low-NOt

Burner Project occurred within the boundaries of the active plant site, which was already a

developed industrial area, and as the one species identified in the analysis generally avoids

human contact, it would be expected to avoid the facility area. In addition to considering the

possible construction impacts from the Low-NO Burner Project on the listed species, SRP

conducted a carbon monoxide (CO) modeling analysis to determine the impact of CO emissions

increases on the 1-hour and 8-hour average National Ambient Air Quality Standards (NAAQS).

The modeling results showed that emissions increases of CO from the project would not result in

ambient concentrations that exceeded the NAAQS, and therefore SRP concluded that a more

detailed review would not be required for CO impacts on plants, soils, and animals. EPA

reviewed the analysis submitted by SRP and found that the Low-NO Burner Project may affect,

but was not likely to adversely affect, the California condor or its critical habitat, in accordance

with 50 CFR 402.13 and 402. 14(b), and requested the Service’s written concurrence with this

determination in a letter dated November 10, 2008 (see attachment #3).
Page 3 of 4— Mr. Spangle

During the course of this informal ESA consultation on the Low-NO Burner Project, the

Service noted that the Navajo Nation Fish and Wildlife Department had identified three other

federally-listed species that might occur in the action area for the Low-NO Burner Project: the

Mexican spotted owl (Strix occidentalis lucida), Welch’s milkweed (Ascelpia welshii), and

Navajo sedge (Carex specuicola), all of which were listed as threatened under the ESA. EPA

agreed to include these three species in its informal ESA consultation for the Low-NO Burner

Project, and requested concurrence that the action at issue may affect, but was not likely to

adversely affect, the three additional species. The Service replied in written concurrence with

EPA’s not likely to adversely affect finding on November 13, 2008 (see attachment #4).

With respect to the RCTS Project that is currently under consideration for CAA

permitting, as part of its Tribal Minor NSR permit application, SRP provided a short analysis of

potential impacts of the Project on federally-listed species and critical habitat. SRP provided a

list of 21 species that are federally-listed as endangered or threatened in Coconino County or

which have been identified as candidate species, and stated that there is no designated critical

habitat in the RCTS Project area (SRP Tribal Minor NSR Application at 4-2 — 4-3). As with the

Low-NO Burner Project, SRP stated that based on the habitat conditions surrounding the RCTS

Project area, the only federally-listed threatened or endangered species expected to be in the

vicinity of the Project area is the California condor. SRP stated that the California condor has

been observed in Page, Arizona, and at Wahweap Marina, both approximately 5 miles west of

the RCTS Project area, and that no breeding or nesting was observed. SRP stated that California

condors have not been observed within the NGS property boundary, and reiterated that the NOS

property is a developed site that lacks breeding and foraging habitat for the species.

In addition, in conjunction with its permit application, SRP conducted a PM10and PM2.5

modeling analysis for the Project to determine the potential impact of emissions increases on the

annual and 24-hour PM10 and PM2.5NAAQS (see attachment #5). Secondary NAAQS, as

defined in CAA section 109(b)(2), must “specify a level of air quality the attainment and

maintenance of which in the judgment of the Administrator, based on [the] criteria, [are]

requisite to protect the public welfare from any known or anticipated adverse effects associated

with the presence of [the] pollutant in the ambient air.” Welfare effects as defined in section

302(h) [42 U.S.C. 7602(h)] include, but are not limited to, “effects on soils, water, crops,

vegetation, manmade materials, animals, wildlife, weather, visibility and climate, damage to and

deterioration of property, and hazards to transportation, as well as effects on economic values

and on personal comfort and well-being.”

The modeling conducted by SRP showed that maximum concentrations of PM10 and

PM2.5occur at the facility boundary and that increases of these pollutants do not exceed the

Significant Impact Levels (SILs) outside the existing facility boundary and do not result in

ambient concentrations that exceed any applicable NAAQS. SRP reasoned that the Project would

have no effect on the California condor as the emissions outside the facility boundaries would

not exceed the SILs, nor would it have any impact on other species beyond the site due to the

fact that emissions would be below the SILs beyond the boundary for the NGS. EPA has

determined that that the PM10 and PM2.5emission increases from the Project, given their

magnitude, would not be expected to have an adverse effect on any listed species or critical

habitat.
Page 4 of 4— Mr. Spangle

In considering the potential impacts of the Project on federally listed species and critical

habitat, we reviewed the listed species analysis in SRP’s permit application for the Project, and

we also reviewed the 2008 ESA Analysis for the Low-NO Burner Project for the NGS. It

appears that ‘since the 2008 ESA Analysis was conducted, two additional species have been

added to the federal list of threatened and endangered species for Coconino County: the Northern

Mexican Garter Snake (Thainnophis eques megalops) and the Narrow-headed Garter Snake

(Thamnophis rufipunctatus), both of which were identified in the 2015 listed species analysis

provided by SRP as part of its permit application. In recent communications between EPA and

Service staff, the Service indicated that were no listed species or critical habitat in the RCTS

Project area about which they had specific concerns with respect to the Project, including the

Northern Mexican Garter Snake and the Narrow-Headed Garter Snake, which are not found in

the vicinity of the NGS.

Based on the information provided with SRP’s Tribal Minor NSR permit application for

the RCTS Project, including the PM modeling report, the 2008 ESA Analysis, our recent

communications with the Service concerning the RCTS Project, the fact that the Construction

and operation of the RCTS Project will occur and the analysis above, EPA has concluded that

our proposed Tribal Minor NSR permit action for the Project. specifically including

consideration of the Project’s increase in PM emissions, may affect, but is not likely to adversely

affect, the California condor or any other federally-listed threatened or endangered species or

designated critical habitat for such species, in accordance with 50 CFR 402.13 and 402.14(b). I

am writing to request the Service’s written concurrence with this finding.

Attachments include the complete application and modeling report for the proposed

action, as well as correspondence between EPA and the Service concerning the 2008 Low-NOx

Burner Project at NGS. If you have any questions regarding this RCTS Project, please contact

me at (415) 972-3974 or Larry Maurin, of my staff, at (415) 972-3943.

Sincerely,

Gerardo’ . Rios “ Chief, Air Permits Office

Attachments

Cc (w/attachments):

Kyle Heckel, SRP (via electronic mail)

Carrie Marr, USFWS (via electronic mail)

Brenda Smith, USFWS (via electronic mail)

Gloria Tom, Director, NNDFW (via electronic mail)