1 

## U.S. Environmental Protection Agency



# Responses to Public Comments

Draft Greenhouse Gas PSD Air Permit for the New Hope Power Company

– Okeelanta Cogeneration Plant Boiler D Project March 1 7 , 20142 

## Table of Contents

I. Introduction

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II. EPA’s Responses to Public Comments

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C omments Submitted by Golder Associates

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I. Introduction

The U.S. Environmental Protection Agency, Region 4 (EPA) proposed to issue a Prevention of Significant Deterioration (PSD) permit for Greenhouse Gases to New Hope Power Company (NHPC) for the Okeelanta Cogeneration Plant Boiler D Project (Project) on January 23, 2014. The public comment period for the proposal (Proposed Permit) began on January 23, 2014, a nd closed on February 24, 2014.

EPA announced the public comment period through a public notice published in The Sun, The Clewiston

News and The Glades (in English) on January 23, 2014, and on Region 4’s website (in English) on January 23, 2014. EPA also distributed the public notice to the necessary parties in accordance with 40 CFR Part 124, including notices sent by email on January 23, 2014. Parties notified by EPA included agencies, organizations, and members of the public for whom contact information was obtained through a number of different methods, including requests made directly to EPA through Region 4’s website (or through other means) from parties seeking notification regarding permit actions in Florida, within the jurisdiction of Florida Depar tment of Environmental Protection (FDEP), within Palm Beach County

, and other parties known to EPA that may have an interest in this action.

During the public comment period, EPA received one comment letter and no requests for public hearing. Responses to the public comments received are available in the following section of this document.

II. EPA’s Responses to Public Comments

This section summarizes all public comments received by EPA and provides our responses to those

comments. The full text of all pu blic comments and many other documents relevant to the permit can be

accessed online at http:// www.regulations.gov ( Docket #EPA

- HQ

- OAR

- 2014

- 0023 ) or on Region 4’s

website at http://www.epa.gov/region4/air/permits/ghgpermits/ghgpermits.html

. Although the commenter did not number their comments, EPA has done so in this document for clarity and ease o f

reference.

Comments Submitted by Golder Associates:

Comment 1 : Page 2. Project Location. It is requested that the description of the location be changed as follows: NHPC’s project will be located at the existing Okeelanta Cogeneration Plant located at 8001 U.S. Highway 27 South, approximately 6 miles south of the city of South Bay (Palm Beach County), Florida. Please also note that the first paragraph of the Public N otice stated in error that the plant is located “within the City of South Bay”.

Page 2. Project Description. The project description states: The facility currently operates two cogeneration boilers that combust primarily biomass (bagasse and wood), and one natural gas boiler to generate steam and electricity (Boilers A, B and C). This description is inaccurate; biomass is the primary fuel used in all three of NHPC’s boilers. Recently, Boiler A was permitted to fire natural gas in addition to biomass an d No. 2 fuel oil; however, biomass remains the primary fuel in Boiler A. It is requested that the project description be changed as follows:4

The facility currently operates two three cogeneration boilers that combust primarily biomass (bagasse and wood), and one natural gas boiler to generate steam and electricity (Boilers A, B and C).

Response 1 : EPA acknowledges the need for these correction s. The permit has been revised

. See EPA’s redline/strikeout version of the permit for all changes.

Co mment 2 : Page 6. IX. Special Conditions. B.2. EPA has proposed GHG emission limits of 157 lb CO2e per 1,000 lbs steam produced as a 30

- day rolling average for natural gas firing, and 218 lb CO2e per 1,000 lbs steam produced as a 30

- day rolling average f or No. 2 fuel oil firing. Although no derivation of these numbers is found in the permit or Preliminary Determination, they appear to be based on calculations presented in NHPC’s application, but EPA’s calculations fail to provide any margin for vendor gua rantees or degradation of the boiler’s efficiency over time. The calculation for natural gas is: CO2 emission factor = 53.02 kg/MMBtu CH4 emission factor = 0.001 kg/MMBtu x 25 = 0.025 kg/MMBtu N2O emission factor = 0.0001 kg/MMBtu x 298 = 0.0298 kg/MMBtu Total CO2e emission factor = 53.0748 kg/MMBtu x (1000 / 453.59) = 117.02 lb/MMBtu Boiler D heat input = 536 MMBtu/hr @ 400,000 lb/hr steam

Boiler D mass CO2e emissions = 536 MMBtu/hr x 117.02 lb/MMBtu = 62,723 lb/hr CO2e Boiler D CO2e emissions = 62,723 lb/hr CO2e / 400 klbs/hr steam = 157 lb CO2e per 1,000 lbs steam produced

NHPC requested that a margin be provided to account for the difference between the vendor’s guarantees and boiler’s actual heat rate, as well as the degradation in boiler efficiency that will occur over time. In NHPC’s response (Golder Associates, Inc., le tter dated May 17, 2013) to EPA’s Notice of Incompleteness (dated March 8, 2013), NHPC explained the reasoning for requesting these margins.

As shown in NHPC’s GHG PSD permit application, there have been very few GHG determinations issued by EPA for natu ral gas

- fired boilers. The determinations that have been issued have set GHG emission limits in terms of lb CO2e/MMBtu heat input. NHPC does not object to a GHG limit based on heat input (i.e., 117 lb CO2e/MMBtu heat input). Basing the GHG limit in these t erms does not involve margins for degradation or vendor guarantees, because the limit is based strictly on heat input.

EPA provides margins when issuing GHG PSD permits for natural gas fired combined cycle power plants where the GHG emission limits are b ased on the facility’s output. For instance, EPA recently issued a final permit for the Shady Hills power plant, and EPA provided an 8% margin of compliance in the GHG emission limits. This margin for compliance was based on “a 3 percent margin for the

dif ference between guaranteed heat rates and actual heat rate, and a 5 percent margin for degradation over time”. [refer to Preliminary Determination & Statement of Basis for Permit PSD

- EPA

- R4013, issued 9/23/2013, pg. 19, attached]. At a minimum, the draft p ermit for the NHPC facility should be revised to provide margins of compliance at least as large as those provided to the Shady Hills facility.

EPA’s draft permit for the NHPC facility also should be revised because it appears that EPA’s proposed

emissio n limits for the NHPC facility do not exclude GHG emissions that occur during periods of startup, shutdown and malfunction (SSM). During periods of startup and shutdown, unit efficiency is likely to be less than design, due to boiler components and auxilia ries heating up, low steam output, and limited or no electrical generation. Therefore, GHG emissions during these periods should be excluded5

from the emission limit. In the alternative, the proposed emission limits for GHG should be adjusted upward to acco unt for the SSM events.

As a practical matter, however, this latter approach would be very difficult to implement because it is difficult, if not impossible, to predict the number and duration of SSM events, and the operating conditions during such events

.

In EPA’s recent proposal to limit GHG emissions from electric utility generating units, EPA states “In proposing the standards in this rule, EPA has taken into account startup and shutdown periods. . . .” [Federal Register, Vol. 79, No. 5, January 8, 2 014, pg.1448] This statement implies that EPA adjusted the proposed standards appropriately to account for either lower or higher emissions of GHG during startup and shutdown events (i.e., measured on a lb/MW

- hr basis). The same approach should be used to adjust the GHG emission limits for the proposed NHPC boiler, or these events should be excluded from the compliance determination.

NHPC does not have actual CO2e emissions data for its proposed boiler during startup/shutdown periods because NHPC’s boiler has not yet been built. Nonetheless, it is appropriate to include a margin to account for such events when setting the GHG emission limit for NHPC’s boiler. In NHPC’s original GHG application, a total margin of 10 percent was proposed. NHPC continues to b elieve this margin is necessary and appropriate to account for all of the factors described above. Therefore, NHPC requests that the GHG emission limits for Boiler D be revised as follows: Natural gas

- 157 lb CO2e x 1.1 = 173 lb CO2e per 1,000 lbs steam produced

No. 2 Fuel Oil

- 218 lb CO2e x 1.1 = 240 lb CO2e per 1,000 lbs steam produced

Response 2 : EPA agrees that

, while the detailed calculations for the numerical emission limitations were not included in the permit documents, they were derived from the emission factors given in the application in a

similar manner to the calculation method presented by the commenter . Also included in the emission

estimate calculations provided by the applicant was a figur e of 85% thermal efficiency which was relied

upon by EPA to arrive at the BACT emission limits for Boiler D

. Regarding the commenter’s request to include a “margin o f compliance

, ” EPA agrees that previous permits have included margins of compliance . H owever, based on guidance provided in EPA’s Climate Leaders Greenhouse Gas Inventory Protocol Offset Project Methodology for Industrial Boiler Efficiency (Industrial Proc ess Applications)

, August 2008 1

, EPA believes the 85% thermal efficiency figure used to calculate the PSD

limitations take s into account any variability and boiler degr a dation margin that may be needed

. Specifically, b ased on the minimum design characteristics of the applicant’s proposed boiler and proposed energy efficiency measures ( e.g., use of an economizer and blowdown heat recover y ), the above referenced guidance indicates a thermal efficiency of 89% is achievable . Consequently, establishing Boiler D’s BACT limits based on a n 85% efficiency provide s a 4% margin of compliance for heat rate variability and boiler degradation

.

EPA acknowledges the commenter ’ s statements regarding the discussion in the preliminary

determination and statement of basis for the Shady Hills facility . The Shady Hills facility took a

limitation of 3,390 hours of operation, and will be a n intermittently operating ( peaking ) electric plant with frequent startup and shutdown events planned and separate BACT limits associated with such

events . In contrast, Boiler D has been proposed to operate 8760 hours a year, primarily providing

process steam regardless of w h ether electrical generation is a byproduct or not. Due to the difference in

1 http://www.epa.gov/climateleadership/documents/resources/industrial_boiler_protocol.pdf6

the operating scenarios of Shady Hills and NHPC’s Boiler D, EPA does not view the Shady Hills project

a s an appropriate comparison. Thus, EPA believes a 4% margin is appropriate for the New Hope project

, since it is expected to have far fewer start up and shutdown events than a peaking turbine facility ( e.g., Shady Hills)

. Furthermore, t he applicant did not submit as part of the application or supplemental information any data estimating SSM events or emissions information justifying the need for a 10% margin of compliance, as requested in the comment

. Additionally, the proposed 30

- day av eraging time associated with the use of natural gas (primary fuel) will also provide flexibility for any possible SSM

events. As d iscussed above and i n the referenced EPA guidance for boilers, the thermal efficiency figure

of 85% takes into consideration variability in heat rate s and provides an ample margin of compliance

without a change to the permit limits or minimum thermal efficiency limit. EPA will not revise the proposed BACT limits or thermal efficiency condi tions in the draft permit, as requested by the

commenter.

Comment 3 : Page 6. IX. Special Conditions. B.3. NHPC requests EPA to add a permitting note to this condition. The permitting note should state that NHPC has filed a petition for reconsideration and thereby requested EPA to revise 40 CFR Part 63, Subpart DDDDD in a manner which will exempt the NHPC boile rs, including the proposed new natural

gas

- fired boiler, from the requirements in Subpart DDDDD. [see Golder Associates/NHPC’s letter to EPA dated May 17, 2013, pg. 2 (attached)]. Further, the permitting note should acknowledge that, if Subpart DDDDD does not apply to the NHPC facility, the limitation on fuel oil usage will be changed to an eight percent (8%) annual capacity factor, which is equivalent to 700 hours at the maximum fuel oil firing rate. EPA previously stated to NHPC that such a limitation wou ld be sufficient to represent BACT. This information also should be stated in the Preliminary Determination & Statement of Basis.

Response 3 : EPA acknowledges the NHPC petition for reconsideration regarding applicability of 40 CFR Part 63, Subpart DDDDD and it is so noted in this response to the commenter and will be included in the permit

record. However, EPA has not stated that a n 8% annual capacity factor or 700 hours of fuel oil “ would be sufficient to represent BACT. ” That statement is inaccurate. C urrently, the permit allows the use of

fuel oil for a maximum of 48 hours per 12

- month rolling average and during period s of curtailment or gas supply interruption as defined in the applicable Subpart. In the event of a non

- applicability

determination of 40 CFR Part 63, Subpart DDDDD

, the applicant would be able to apply for a modification to the permit for the related permit conditions.

Comment 4 : Page 6. IX. Special Conditions. B.4. Condition B.4 is unnecessary and should be deleted. The thermal efficiency of the boiler will be inherently reflected in the GHG emission rate, which is expressed in pounds of CO2e/1,000 pounds of steam produced. If the boiler’s thermal efficiency declines , more fuel will be required to generate 1,000 pounds of steam and, in turn, higher CO2e emissions will occur. Since Condition B.4 overlaps and in effect duplicates the requirements in Condition B.2, the thermal efficiency limitation in Condition B.4

shoul d be eliminated.

If EPA chooses to retain the thermal efficiency limit, the thermal efficiency limit should be adjusted to provide a margin for compliance and thus account for the factors discussed above. Specifically, NHPC requests EPA to provide a 10 p ercent margin to the design thermal efficiency of the boiler and thereby account for the difference between the vendor guarantee and the boiler’s actual performance, as well as7

the degradation of the boiler over time, and SSM events. The adjusted limit for thermal efficiency

should be calculated as follows: 85% / 1.1 = 77% thermal efficiency on a 30

- day rolling average

Response 4 : See EPA’s response to comment # 2

. No change to the permit is necessary

, as explained above.

Comment 5 : Preliminary Determination & Statement of Basis Page 3. Introduction. The project description states: The facility currently has two cogeneration boilers that combust primarily biomass (bagasse and wood), and one natural gas boiler to generate steam and electricity (Boilers A, B and C). As discussed previously, it is requested that the description be changed as follows: The facility currently has two three cogeneration boilers that combust primarily biomass (bagasse and wood), and one natural gas boiler to generate steam and electricity (Boilers A, B and C).

Page 5. Proposed Project. 3rd paragraph: “147.74 TPY of NOx” should be revised to read “140.74 TPY of NOx”. 4th paragraph: As discussed above, a permitting note should be added to Condition B.3 of the permit, stating that NHPC has filed a petition for reconsideration with EPA and, if EPA determines Subpart DDDDD does not apply to the NHPC facility, th en the limitation on fuel oil usage will be changed to an eight percent (8%) annual capacity factor (equivalent to 700 hours at the maximum fuel oil firing rate). Last paragraph: The text should be revised because Boiler A was not converted to natural gas . The 2012 permit cited in the Preliminary Determination authorized the use of natural gas as a backup/auxiliary fuel, in addition to No. 2 fuel oil. Biomass continues to be the primary fuel used in Boiler A.

Page 8. Table 5

- 1.

The footnote to the table indicates that the PTE (TPY) is based on 100% natural gas firing. If this is the case, the following corrections should be made to Table 5

- 1:

SO2

– 1.38 TPY (not 19.54).

NOx

- 140.74 TPY (not 147.74)

Lead

– 0.00115 TPY (not 0.18) Mercury

– 1.2 lb/yr ( not 6.5)

Page 13. GHG BACT Analysis for Natural Gas Boiler For the reasons set forth above, NHPC requests that the GHG emission limits be revised. NHPC also requests that the minimum thermal efficiency requirement be deleted or revised.

Response 5 : EPA acknowledges receipt of the above comments related to the preliminary determination/statement of

basis

. Any necessary changes will be reflected appropriately in the redline/strikeout version of the permit (and summarized in the final determination) rat her than a redline/strikeout version of the preliminary determination/statement of basis.

Regarding suggested corrections to Table 5

- 1, EPA acknowledges the typographical error contained in

the table for the N O
x PTE. With that exception, the PTE numbers i ncluded in Table 5

- 1 of EPA’s preliminary determination were taken from Table 4 on page 9 of the F lorida Department of

Environmental Protection’s Technical Evaluation and Preliminary Determination (dated June 24, 2013),8

entitled “APPLICANT’S PSD A PPLICABIL ITY A NALYSIS ( TPY) ” which includes a footnote indicating the information was based on 100% natural gas usage in the boiler

.