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- 87582 NHPC PSD \ EPA RAI \ Final \ NHPC EPA RAI.docx Golder Associates Inc. 6026 NW 1st Place Gainesville, FL 32607 USA Tel: (352) 336

- 5600 Fax: (352) 336

- 6603 www.golder.com
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Golder, Golder Associates and the GA globe design are trademarks of Golder Associates Corporation May 17 , 2013 1 2 3

- 87 582 Via Electronic Delivery Ms. Kelly A. Fortin , Acting Chief, Air Permits Section United States Environmental Protection Agency Region 4 Atlanta Federal Center 61 Forsyth Street Atlanta

, Georgia 30303

- 8960

RE: RESPONSE TO NOTICE O F INCOMPLETENESS PROPOSED NATURAL GAS BOILER NEW HOPE POWER COMPA NY OKEELANTA COGENERATI ON PLANT

Dear Ms. Fortin :

New Hope Power Company ( NHPC ) and Golder Associates Inc. (Golder) have received the notice of incompleteness (NOI) dated March 8, 2013, for the proposed new natural gas boiler at the Okeelanta cogeneration facility

. The responses to the comments made in the NOI are addressed below , in the same order a s they appear in the NOI

.

Comment 1. The application addresses the Project ’ s applicability to the Endangered Species

Act (ESA), the National Historic Preservation Act (NHPA), the Magnuson

- Stevens Fishery Conservation and Management Act (MSF CMA), and the Coastal Zone Management Act (CZMA)

. Please provide the status of any assessments performed and/or communications with the appropriate federal agencies (other than the efforts already noted in your application).

Response : The list below includes the federal agencies contacted and the status of the agencies ’

determinations:

 National Park Service (NPS): Based on the proposed emission increases and the distance from Everglades National Park, the NPS does not anticipate that air quality related values (AQRV s ) will be adversely affected in this park. Therefore, the NPS is not requesting that the applicant complete a Class I AQRV modeling analysis ( see attached e mail from Andrea Stacey, NPS Air Resource Division, dated March 6, 2013). This determination by the NPS concludes the ir assessment of the project ’ s applicability to the NHPA.

 U.S. Fish & Wildlife Service (USFWS): The U

. S . Environmental Protection Agency ( EPA ) , USFWS, and NHPC participated in a teleconference on April 9, 2013 discussi ng the effect , if any, the project will have on endangered or threatened species in the project area, including everglades snail kite, endangered wood stork, threatened northern crested caracara, and threatened eastern indigo snake. Based on the teleconfer ence discussion, the EPA will make a “ no effect ” determination for the project , and the USFWS will issue a concurrency respons e to the EPA ’ s determination ; therefore

, the proposed project will not affect any endangered or threatened species

. This determina tion by EPA and USFWS concludes the assessment of the p roject ’ s applicability to the ESA.Ms. Kelly A. Fortin May 17, 2013

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 National Oceanic and Atmospheric Administration ( NOAA ) /National Marine Fisheries Service (NMFS): Per a telephone conversation on February 26, 2013 with David Bernhart , Assistant Regional Administrator of Protected Resources Division, NOAA/NMFS is waiting on the EPA ’ s determination before proceeding. If the EPA determines the project has “ no effect ” on the marine resources NOAA/NMFS is concerned about, the project does not need concurrence from NOAA. If the EPA determines the project “ may affect ” marine resources, there will need to be consultation with NOAA. As stated by the USFWS during the April 9, 2013 teleconference, the project will not affect marine resources due to the project ’ s distance from the nearest seacoast (approximately 40 miles). The EPA ’ s determination of “ no effect ” will conclude the assessment of the project ’ s applicability to the MSFCMA and CZMA.

Comment 2. It is our understanding that this project is potentially s u bject to 40 CFR 63

Subpart DDDDD, which may result in the change i n amount of proposed fuel oil use for the boiler

. If this NESHAP does apply, please identify the requirements, define the exp ected fuel use scenarios, and provide any necessar y revisions to the PSD permit application as a result from the revised fuel use (e.g., emissions calculations and proposed BACT limit).

Response : It has not yet been determined whether the proposed Boiler D at NHPC will be subject to 40 CFR 63 Subpart DDDD D (Boiler MACT)

. The existing boilers at the NHPC facility fit within EPA ’ s definition of an electric generating unit (EGU)

. Likewise, the proposed Boiler D will fit within the definition of an EGU

. Prior to 2013, all of the proposed and final versions of the Boiler MACT provided that EGUs, like the ones at the NHPC f acility, are not subject to the Boiler MACT rule

. However, in the final rule published on January 31, 2013, the exemption for EGUs was c hanged

. Under the 2013 final rule, EGUs are exempt from the Boiler MACT only if the EGUs are “ covered by ” 40 CFR 63 Subpart UUUUU, which covers only coal

- and oil

- fired EGUs

. The existing EGUs at the NHPC Facility are not “ covered by Subpart UUUUU ” , and ne ither will the proposed Boiler D.

NHPC recently filed a petition requesting EPA to reconsider its recent changes to its exemption for EGUs. Specifically, NHPC requested EPA to retain the former exclusion under Subpart DDDDD for all EGUs, not just those “ co vered by Subpart UUUUU ”

. The Utility Air Regulatory Group (UARG) also filed a petition requesting EPA to reconsider this issue

. It is unclear when EPA will rule on the merits of NHPC ’ s petition. In the event that the proposed Boiler D is determined to be s ubject to Boiler MACT, NHPC will accept federally enforceable operating limits so that the proposed boiler will be classified and regulated under Boiler MACT as a “ unit designed to burn gas 1 ”

. Accordingly, fuel oil will not be burned for more than 48 hour s during any calendar year, except during periods of gas curtailment or gas supply interruptions of any duration

. This classification will not change any of the proposed BACT limits for the proposed Boiler D.

If it is determined that Boiler MACT will not b e applicable to the proposed natural gas

- fired boiler, NHPC would like to retain the flexibility to burn natural gas as well as fuel oil up to the 10 percent and 15 percent thresholds, as stated in NHPC ’ s application.

Comment 3. Appendix A provides factors and some calculations used to derive the proposed

G HG best available control techn ology (BACT) limits contained in the application. A C O 2 emission factor is given, however, the basis for this, and other assumptions used in Appendix A, was not found

. Pleas e provide the basis for these calculations and assumptions, and please include complete emissions calculations for the planned operating scenarios of the proposed natural gas fired boiler (Boiler D).

Response : The proposed BACT limit s were derived using de sign data for the proposed Boiler D as well as operational data for the NHPC boilers and electrical generators and steam supplied to the Okeelanta sugar mill

. An explanation of the information provided in Appendix A of the GHG application isMs. Kelly A. Fortin May 17, 2013

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. To determine a GHG emission limit in terms of pounds per megawatt

- hour ( lb/MW

- hr ) , it is necessary to determine the total MW

- hr output from Boiler D due to both electrical generation and useful thermal energy.

Boiler D Design Data:

Steam Production Maxi mum 1

- hour: 440,000 lb/hr steam Maximum 24

- hour: 400,000 lb/hr steam

Steam Enthalpy Steam Conditions: 1,500 psig, 905°F = 1,515 psia, 905°F, Enthalpy = 1,460 Btu/lb Feedwater Conditions: 1,349 psig, 350°F = 1,364 psia, 350°F, Enthalpy = 322 Btu/lb Net Enthalpy: 1,460 Btu/lb

– 322 Btu/lb = 1,138 Btu/lb steam

Heat Input Calculation (based on 85 percent thermal efficiency for natural gas or No. 2 fuel oil) Maximum 1

- hour: 440,000 lb/hr steam x 1,138 Btu/lb x 1/0.85 = 589 MMBtu/hr Maximum 24

- hour: 400,000 lb/hr steam x 1,138 Btu/lb x 1/0.85 = 535.5 MMBtu/hr Annual Rate: 535.5 MMBtu/hr x 8,760 hr/yr = 4,691,238 MMBtu/yr

The CO 2 emission factor s for natural gas firing (53.02 kg/MMBtu) and for No. 2 fuel oil (73.96 kg/MMBtu)

are from 40 CFR 98, Subpart C, Tab le C

- 1.

NHPC Operating Data:
Crop Season Operation

– Natural Gas Firing
During the crop season, the NHPC boilers with the new Boiler D will generat e nominally 70 MW of electricity from 1,200,000 lb/hr steam. Boiler D ’ s portion of this is 300,000 lb/hr (25% ), or 17.5 MW. All boilers combined will send 270,000 lb/hr of high pressure steam to the Okeelanta sugar mill

. This is steam not used for additional electrical energy production. Boiler D ’ s portion of this will be 25%, or 67,500 lb/hr. The net enthalpy of this steam will be 1,336 Btu/lb, which equates to 90.2 MMBtu/hr. All boilers combined will send 390,000 lb/hr of low pressure steam to the Okeelanta sugar mill. This is steam not used for additional electrical energy production. Boiler D ’ s portion of this will be 25%, or 97,500 lb/hr. The net enthalpy of this steam will be 1,177 Btu/lb, which equates to 114.8 MMBtu/hr.
Therefore, the total useful thermal output from Boiler D will equate to 204.9 MMBtu/hr, or 60.1 MW (204.9 x 0.2928)

. The total gross output of Boiler D is then the gross electrical output (17.5 MW) plus 75% of the thermal output (60.1 MW x 0.75 = 45.1), or 62.6 MW.

The CO 2 emission rate based on 300,000 lb/hr steam for Boiler D (46,906 lb/hr) was then divided by the total gross output of 62.6 MW to obtain the final CO 2 limit of 750 lb CO 2 /MW

- hr.
The table in Appendix A then accounts for the margins for guarantee and degrada tion for the boiler.

Other Operating Scenarios

The lb/MW

- hr limits for the other operating scenarios shown in Appendix A of the application were calculated in the same manner, considering off

- season steam production, and No. 2 fuel oil firing.

Comment 4. S ection 2.2.1.1 of the application discusses clean fuel options and states that

natural gas is the lowest carbon content fossil fuel on a pound per British thermalMs. Kelly A. Fortin May 17, 2013

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unit (lb/Btu) basis

. However, according to Appendix A, the proposed GHG BACT for Boiler D is the use of natural gas as the primary fuel and No. 2 fuel oil for up to 15% of the operating hours

. It is unclear whether 100

- percent

- utilization of natural gas was considered as a BACT option

. If it was considered, what are the grounds for not selecting it and instead selecting a less clean fuel (i.e., No. 2 fuel oil) for partial operation? Please revise your application to address this discrepancy with your BACT analysis.

Response : In Section 2.2.5 of the application, GHG emission limits are presented fo r both natural gas firing and No. 2 fuel oil firing, as well as for crop season operation and for off

- crop season operation

. The boiler will be fired primarily with natural gas, with No. 2 fuel oil as a backup fuel. NHPC is not proposing 100

- percent firing of natural gas because NHPC desires to retain a backup fuel in the event that there is a curtailment or loss of the natural gas fuel supply. No. 2 fuel oil firing will be limited to no more than 15% on an annual heat input basis. Based on this limitation, it does not appear there is justification to further limit No. 2 fuel oil firing based on BACT.

Comment 5. Appendix A indicates the proposed GHG BACT emission limits for Boiler D were

derived using a 8 5% of thermal efficiency number while assuming a 5% de sign margin and a 5% performance degradation margin

. Please provide documentation or an explanation on how these margins were derived, why they are appropriate for the proposed boiler, and why boiler degradation is assumed even at the beginning of its use given the design thermal efficiency of 85% reflected in Section 2.2.5 (page 11) of the application.

Response : NHPC has not yet selected the boiler manufacturer ; therefore

, no manufacturer ’ s design information is yet available

. However, a 5 percent margin has been included to account for design standards typical of construction contracts and equipment manufacturer ’ s supply contracts, which contain provisions for minimum acceptable performance criteria

. These include the ability for the con tractor/supplier to

“ buy

- down ” performance by paying liquidated damages if performance (in this case, unit heat rate) does not meet the levels guaranteed in the contract

. A typical minimum acceptance threshold for heat rate may be up to 105 percent of the contractually guaranteed value, and thus a 5 percent margin for this component of the compliance was used in the BACT limit calculation. Therefore, t his margin was used for the proposed boiler because it reflects market standard terms and conditions which are available in commercial contracts today

. Boiler degradation is included in the compliance limit even at the very beginning of its use since the compliance limit is established as a single value over the lifetime of the boiler.

Boiler degradation occurs over time based on actual use of the unit, and is dependent on hours of operation, number of load changes, and start

- up/shut

- down cycles

. Since the operation of the boiler will vary over time based on market conditions and plant steam demands, it is appro priate to include the degradation allowance in the compliance limits from the outset

. The 5 percent value for boiler degradation margin reflects experience with similar boilers.

Comment 6. Section 2.2.5 states an oxygen or C O 2 monitor will be installed on the boiler as part

of a digital control system; however, the application has not proposed the use of a continuous emission monitoring system (CEMS) for monitoring of GHG emissions

. Please include further discussion to provide details regarding the suitability of the monitoring, recordkeeping and reporting proposed to ensure compliance with the GHG BACT limitations for all operating scenarios anticipated.

Response : CO 2 CEMS is not warranted for the boiler because only natural ga s and No. 2 fuel oil will be burned in the boiler. Use of the standard emission factors and standard heating values for these fuels would not result in substantially different CO 2 emission rates than would result from continuous measurement of the CO 2 emis sions. Steam production and steam pressure and temperature will beMs. Kelly A. Fortin May 17, 2013

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- 87582 NHPC PSD \ EPA RAI \ Final \ NHPC EPA RAI.docx measured continuously, as well as the amount of steam sent to the Okeelanta sugar mill, allowing the useful thermal output from the boiler to be monitored for input into the GHG emission ra te calculation s

. Therefore

, a CO 2 CEMS is not warranted.

Thank you for your consideration of this information. If you have any questions, please do not hesitate to call me at (352) 336

- 5600.

Sincerely,

GOLDER ASSOCIATES IN C.

Philip D. Cobb, Ph.D., P.E. David A. Buff, P.E., Q.E.P. Senior Project Engineer Principal Engineer

cc : Matt Capone

Attachments

PC / DB/ tz

### EMAIL FROM NPS AIR RESOURCE D IVISION

MARCH 6, 20131 

### Sealey, Kristen

From: Stacy, Andrea <andrea_stacy@nps.gov> Sent: Wednesday, March 06, 2013 9:32 AM To: Sealey, Kristen Cc: Don Shepherd; Susan Johnson Subject: Re: FW: PSD Greenhouse Gas Emissions Notification - New Hope Power Company, Florida



### Kristen,

Thank you for submitting the following information regarding the New Hope Power Company’s Okeelanta Cogeneration Plant, located in Palm Beach County, Florida. New Hope is proposing to add a natural gas fired boiler to its 140 MW Electric Generating Unit. Based on the proposed emission increases and the distance from Everglades National Park, the NPS does not antic ipate that air quality related values (AQRV) will be adversely affected in this park. Therefore, we are not requesting that the applicant complete a Class I AQRV modeling analysis. However, we are potentially interested in reviewing the GHG and criteria pollutant BACT analyses. Please advise us of the review time frame fo r these documents. We also request that you submit a copy draft permit and draft engineering analyses to the NPS when these documents become available.

Please note that our determination regarding the need for a Class I AQRV analysis does not indicate our agreement with any Class I modeling protocols, results or conclusions that applicants might make independent of Federal Land Manager review. Furthermore, we are only addressing the need for an AQRV analysis in Everglades NP; independent determinations will need to be made for Class I areas managed by other federal agencies (i.e. FWS, USFS). The state and/or EPA may have a different opinion regarding the need for a Class I increment analysis.

Finally, please contact me if the emissions or nature of the project change significantly so that the NPS may reevaluate the need for a Class I AQRV analysis. Thank you for involving the NPS in this project review, feel free to contact me if you have any questions.

Regards,

Andrea Stacy

On Tue, Feb 26, 2013 at 12:28 PM, Sealey, Kristen < Kristen_Sealey@golder.com > wrote:

Hello Andrea,

Per your request, attached you will find the applicatio ns submitted to the EPA (Greenhouse Gas) and the FDEP (Prevention of Significant Deterioration). The FDEP appl ication includes tables presenting the maximum 24-hour emissions for the various fuels.

Thank you,2 Kristen

Kristen Sealey | Project Engineer | Golder Associates Inc. 6026 NW 1st Place, Gainesville, Florida, USA 32607 T: +1 (352) 336-5600 | D: +1 (352) 224-1147 | F: +1 (352) 336-6603 | E: Kristen_Sealey@golder.com | www.golder.com

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This email transmission is confidential and may contain proprietary information for the exclusive use of the intended recipient . Any use, distribution or copying of this transmission, other than by the intended recipient, is strictly prohibited. If you are not the intended recipient, please notify the sender and delete all copies. Electronic media is susceptible to unauthorized modification, deterioration, and incompatibility. Accordingly, the electronic m edia version of any work product may not be relied upon.

Golder, Golder Associates and the GA globe design are trademarks of Golder Associates Corporation.
Please consider the environment before printing this email.

From: Sealey, Kristen Sent: Thursday, February 07, 2013 3:31 PM To: andrea_stacy@nps.gov Subject: FW: PSD Greenhouse Gas Emissions Notification - New Hope Power Company, Florida

Hello Ms. Stacy,

I’m following up to confirm you received the email below rega rding the proposed boiler at New Hope, and that the project is in the queue for PSD GHG review. Can you send me an em ail confirming receipt of the project notification and provide an approximate timeframe for the review process?

Thank you,

Kristen

Kristen Sealey | Project Engineer | Golder Associates Inc. 6026 NW 1st Place, Gainesville, Florida, USA 32607 T: +1 (352) 336-5600 | D: +1 (352) 224-1147 | F: +1 (352) 336-6603 | E: Kristen_Sealey@golder.com | www.golder.com

Work Safe, Home Safe

This email transmission is confidential and may contain proprietary information for the exclusive use of the intended recipient . Any use, distribution or copying of this transmission, other than by the intended recipient, is strictly prohibited. If you are not the intended recipient, please notify the sender and delete all copies. Electronic media is susceptible to unauthorized modification, deterioration, and incompatibility. Accordingly, the electronic m edia version of any work product may not be relied upon.

Golder, Golder Associates and the GA globe design are trademarks of Golder Associates Corporation.3 Please consider the environment before printing this email.

From: Sealey, Kristen Sent: Wednesday, January 30, 2013 4:10 PM To: ' andrea_stacy@nps.gov ' Cc: Buff, Dave; Cobb, Phil Subject: PSD Greenhouse Gas Emissions Notificatio n - New Hope Power Company, Florida

Hello Ms. Stacy,

New Hope Power Company (NHPC) operates an electric cogeneration facility located adjacent to the Okeelanta Corporation sugar mill and refinery in Palm Beach County, Fl orida. NHPC is requesting authorization to add a natural gas-fired boiler to the facility. The new boiler will have a nominal steam generating ca pacity of 400,000-pound per hour (lb/hr), fired primarily by natural gas (No. 2 fuel oil as backup only), and will be permitted for 8,760 hr/yr operation. The construction of the new boiler requires prevention of significant deterioration (PSD) approval by U.S. EPA for emissions of greenhouse gases (GHG). Federal statutory r equirements that may apply to the project are:

 Endangered Species Act

 Coastal Zone Management Act

 National Historic Preservation Act

 Magnuson-Stevens Fishery Conservation and Management Act

 Federal Land Manager

In addition, the project may affect PSD Class I areas (Everg lades National Park)and other ar eas administered by the U.S. Fish and Wildlife Service. Indian tribal lands may also be affected.

The attached fact sheet provides additional information on the pr oject including a project description, a site map, emission tables, and air quality impact assessments as it relates to the aforementioned statutory requ irements. We ask that you review this information to determine if the proposed project will comply with the rules and policies administered by your agency.

Thank you in advance for your assistance with this PSD GHG review and approval. If you need additional information, please feel free to contact me by email or telephone at 352-336-5600.4 Kristen Sealey | Project Engineer | Golder Associates Inc. 6026 NW 1st Place, Gainesville, Florida, USA 32607 T: +1 (352) 336-5600 | D: +1 (352) 224-1147 | F: +1 (352) 336-6603 | E: Kristen_Sealey@golder.com | www.golder.com

Work Safe, Home Safe

This email transmission is confidential and may contain proprietary information for the exclusive use of the intended recipient . Any use, distribution or copying of this transmission, other than by the intended recipient, is strictly prohibited. If you are not the intended recipient, please notify the sender and delete all copies. Electronic media is susceptible to unauthorized modification, deterioration, and incompatibility. Accordingly, the electronic m edia version of any work product may not be relied upon.

Golder, Golder Associates and the GA globe design are trademarks of Golder Associates Corporation.
Please consider the environment before printing this email.

-- Andrea Stacy National Park Service Air Resources Division 12795 W. Alameda Pkwy P.O. Box 25287 Denver, CO 80225 andrea_stacy@nps.gov 303-969-2816 (phone) 303-969-2822 (Fax)