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 andWildlife Service 2321 WestRoyal Palm Road Suite 103 Phoenix, Arizona 85021


### Re: Requestfor Concurrence with EPA Finding ofMay Affect/NotLikely to Adversely Affectunder Section 7 ofthe ESA for the Navajo Generating Station Refined Coal Treatment System Project

Dear Mr. Spangle:
The Salt RiverProject Agricultural Improvement.and PowerDistrict (SRP) has applied to the U.S. Environmental Protection Agency, Region IX (EPA) for a federal Tribal MinorNew Source Review (NSR) permit, as required by Clean Air Act (CAA) regulations at 40 CFR 49.154, forthe 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) ofthe Endangered Species Act (ESA) with our finding that our proposed issuance ofaTribal MinorNSR permit forthe 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 providedbelow.

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 forthe RCTS Project. EPA will nottake 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 ofthe ESA.

On February 20, 2015, EPA received an application from SRP for a Tribal Minor NSR permitfor the construction and operation ofa Refined Coal Treatment System (RCTS) within the existing NGS plantboundaries on pre-disturbed land (see attachment#1). SRP has an existing coal conveyorbelt system thattransfers untreated coal fromrailcarunloading piles to pulverizers for crushing. The crushed coal is then fed into one ofthree existing boilers for combustion in orderto generate steam and produce electricity. The RCTS Project for which the Tribal Minor NSR permitis sought would consist ofthe construction and operation ofa new RCTS, which will add calciumbromide and cementkiln dust to the coal priorto its being pulverized and combusted. This RCTS will consist oftwo new coal feed belt conveyors that would divert coalPage 2 of4—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 backinto the existing conveyor systemby 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 deliveredby truck and stored in three 150-ton silos and two 20-ton day bins, which will be controlled by baghouses. Some PM, PM 10 and PM 2 j emissions increases from existing unpaved roads can be expected in conjunction with the RCTS Project due to fugitive dust emissions associated with the increased delivery trucktraffic. There are also expected to be
some emissions increases in PM, PM 10 and PM 2

. 5 from the boilers due to the increased ash content ofthe coal. The construction and operation ofthe RCTS will be within the existing footprint ofthe NGS.
The RCTS Projectwill resultin emissions increases ofparticulate matter (PM), and particulate matterless than or equal to 10 micrometers in diameter (PM 10 ) above the thresholds forminor source permitting underthe CAA Tribal MinorNSR program. The RCTS Project will also increase emissions ofparticulate matter less than or equal to 2.5 micrometers in diameter (PM 2

. 5 ), but at levels below the minor source permitting threshold. The increase in emissions from the changes will not exceed applicable CAA Prevention ofSignificant Deterioration (PSD) thresholds. Therefore, the RCTS Project does not triggerPSD review, but the increase in emissions ofPM and PM 10 require SRP to obtain a minorNSR permitunderthe Tribal Minor NSR program forthe Project.

We note that SRP previously submitted an ESA Analysis to EPA for a differentproject at the NGS, known as the Low-NO BurnerProject, in April 2008 (revisedJuly 2008) (2008 ESA Analysis) (see attachment#2), in conjunction with a PSD permit application forthatproject. This 2008 ESA Analysis explained that, based on the habitat conditions surrounding the Low-NO BurnerProject area, only one species from the federal threatened and endangered species list for Coconino County was expected to occurin the project vicinity: the Californiacondor 

### (Gymnogyps californianus). The 2008 ESA Analysis furtherexplained that no breeding or nesting sites were observed forthis species in the Low-NO BurnerProject area. The Low-NOt BurnerProject occurred within the boundaries ofthe 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 avoidthe facility area. In addition to considering the possible construction impacts from the Low-NO BurnerProject on the listed species, SRP conducted a carbon monoxide (CO) modeling analysis to determine the impact ofCO emissions increases on the 1-hour and 8-hour average National Ambient Air Quality Standards (NAAQS). The modeling results showed that emissions increases ofCO from the project would notresult in ambient concentrations that exceededthe NAAQS, and therefore SRP concluded that a more detailed review would notbe 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 Californiacondor orits critical habitat, in accordance with 50 CFR402.13 and402. 14(b), andrequested the Service’s written concurrence with this determination in a letter dated November 10, 2008 (see attachment#3).Page 3 of4—Mr. Spangle
During the course ofthis informal ESA consultation on the Low-NO BurnerProject, the Service noted that the Navajo Nation Fish and Wildlife Departmenthad identified three other federally-listed species that might occurin the action areaforthe Low-NO BurnerProject: the Mexican spotted owl 

### (Strix occidentalis lucida), Welch’s milkweed (Ascelpia welshii), and Navajo sedge (Carex 

### specuicola), all ofwhich were listed as threatened under the ESA. EPA agreed to include these three species in its informal ESA consultation forthe 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 repliedin written concurrence with EPA’s notlikely 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 ofits Tribal MinorNSR permit application, SRP provided a short analysis of potential impacts ofthe Project on federally-listed species and critical habitat. SRP provided a list of21 species that are federally-listed as endangered orthreatenedin 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 MinorNSR Application at4-2

—4-3). As with the Low-NO BurnerProject, SRP stated thatbased on the habitat conditions surrounding the RCTS Project area, the only federally-listed threatened or endangered species expected to be in the vicinity ofthe Project areais the Californiacondor. SRP stated thatthe Californiacondorhas been observed in Page, Arizona, and atWahweap Marina, both approximately 5 miles west of the RCTS Project area, and thatno breeding ornesting was observed. SRP stated that California condors have notbeen observed within the NGS property boundary, and reiterated that the NOS property is a developed site that lacks breeding and foraging habitat forthe species.

In addition, in conjunction with its permit application, SRP conducted a PM 10 and PM 2

. 5 modeling analysis forthe Projectto determine the potential impact ofemissions increases on the annual and 24-hour PM 10 and PM 2

. 5 NAAQS (see attachment

### #5). Secondary NAAQS, as defined in CAA section 109(b)(2), must “specify a level ofair quality the attainment and maintenance ofwhich in thejudgment ofthe Administrator, based on [the] criteria, [are] requisite to protectthe 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 ofproperty, 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 ofPM 10 and PM 2

. 5 occur at the facility boundary and that increases ofthese pollutants do not exceed the Significant Impact Levels (SILs) outside the existing facilityboundary and do not result in ambient concentrations that exceed any applicable NAAQS. SRPreasoned that the Projectwould have no effect on the Californiacondor as the emissions outside the facility boundaries would not exceed the SILs, nor would ithave any impact on other species beyond the site due to the factthat emissions would be below the SILs beyond the boundary forthe NGS. EPA has determined thatthatthe PM 10 and PM 2

. 5 emission increases from the Project, given their magnitude, would notbe expected to have an adverse effect on any listed species or critical habitat.Page 4 of4—Mr. Spangle

In considering the potential impacts ofthe Project on federally listed species and critical habitat, we reviewedthe listed species analysis in SRP’s permit application forthe Project, and
we also reviewed the 2008 ESA Analysis for the Low-NO BurnerProjectforthe NGS. It appears that ‘since the 2008 ESA Analysis was conducted, two additional species have been added to the federal list ofthreatened and endangered species for Coconino County: the Northern Mexican Garter Snake (Thainnophis eques megalops) and the Narrow-headed Garter Snake (Thamnophis rufipunctatus), both ofwhich were identified in the 2015 listed species analysis providedby SRP as part ofits permit application. In recent communications between EPA and Service staff, the Service indicated thatwere no listed species orcritical habitat in the RCTS Project area aboutwhich 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 ofthe NGS.
Based on the information provided with SRP’s Tribal MinorNSRpermit application for the RCTS Project, including the PM modeling report, the 2008 ESA Analysis, ourrecent communications with the Service concerning the RCTS Project, the fact thatthe Construction and operation ofthe RCTS Project will occur and the analysis above, EPA has concluded that
ourproposed Tribal MinorNSR permit action forthe Project. specifically including consideration ofthe Project’s increase in PM emissions, may affect, butis not likely to adversely affect, the California condor or any otherfederally-listed threatened or endangered species or designated critical habitat for such species, in accordance with 50 CFR402.13 and 402.14(b). I
am writing to requestthe 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 BurnerProject at NGS. Ifyou have any questions regarding this RCTS Project, please contact
me at (415) 972-3974 orLarry Maurin, ofmy 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 (viaelectronic mail) Brenda Smith, USFWS (via electronic mail) GloriaTom, Director, NNDFW (via electronic mail)