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# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 59 ) ll-C- 1 Docket Number: 

# A-90-0 6

Printed 10/28/20089:50:54 AM

Sheet 59of 276P. 2

M° s *r. ' UNITE D STATE S ENVIRONMENTA L PROTECTIO N AGENCY Offic e o f Ai rQuality Plannin g an d Standard s Researc h Triangl e Park , Nort h Carolin a 2771 1



## FE B 6 I99 0
II-C- 1 Mr . Thoma s R . Anderso n Technica l Assistan t Sav e th e Dune s Counci l Pos t Offic e Bo x11 4 Beverl y Shores , Indian a Dea r Mr . Anderson : 

### f.\

4630 1 •i i 

## MA Y- T

Thi s lette r is.i n respons e t o you r Decembe r 7 , 198 9 lette r t o Willia m K . Reilly , Administrator , U.S . Environmenta l Protectio nAgenc y (EPA) , regardin g th e propose d Clea nCoa l Technolog y (CCT ) projec t a t th e Norther nIndian a Publi c Servic e Company' s (NIPSCO's ) Baill y plant , an

d EPA' s actio no

n a n applicabilit y

decisio nfo r th e Wisconsi nElectri c Powe r Company' s (WEPCO's ) Por t Washingto nplant . Enclose d ar e th e followin g item s yo u requested : 1 . Determinatio non "lif e extension " projec t a t th e WEPC O Por t Washingto nplan t (an d relate d attachments) , date d Februar y 15 , 1989 . 2 . Respons e t o NIPSCO' s initia l reques t fo r a "no action " assuranc e lette r fo r th e Baill y demonstratio nproject , date d Jul y 14 , 1989 . 3 . Lette r t o NIPSC O providin g guidanc e concernin g th e Baill y demonstratio ni f th e projec t wer e t o b e mad e permanent , date d Januar y 5 , 1990 . 4 . Lette r t o th e Indian a Departmen t o f Environmenta l Managemen t (IDEM ) commentin g o

n thei r proposa l t o issu e a constructio npermi t fo r NIPSCO' s Baill y plant , date d Januar y 30 , 1990 . A s yo u ma y

not e i n th e Januar y

5 , 199 0 lette r t o NIPSCO , w e generall y agre e wit hIDEM' s findin g tha t a s a CC T project , new sourc e revie w

(NSR ) an

d ne w sourc e performanc e standard s (NSPS ) shoul d no t apply . Th e EP A believe s tha t CCT demonstration s suc ha s NIPSCO' s Baill y projec t offe r a valuabl e opportunit y

t o demonstrat e th e viabilit y o f innovativ e ai r pollutio ncontro l system s whic har e expecte d t o provid e environmenta l benefits . Th e CC T project s suc ha s Baill y ar e no t thoroughl y

addresse d unde r th e NSP S an d NS R regulations . Th e EP A i s currentl y

preparin g a

n interpretativ e rulin g t o b e issue d i

n lat e sprin g specifyin g condition s tha t mus t b e me t s o tha t CC T an d simila r project s ar e no t affecte d b y NS R an d NSPS . Th e attachmen t t o you r lette r include d excerpt s from Mar k T . Maassel' s Septembe r 27 , 198 9 testimony befor e th e Indian a Utilit y Regulator y

Commissio n (Cas e No . 388849 ) whic hrefer s t o th e determinatio nconcernin g WEPCO' s Por t Washingto nplant . I t i s EPA' s positio ntha t ther e i s a clea r distinctio n betwee n"lif e extension, " "like-kin d replacement " o f equipmen t project s suc h a s WEPCO' s Por t Washingto nprojec t an d "environmentall y

beneficial " contro lP. 3



### o n devic e change s suc ha s NIPSCO' s Baill y project . Th e majo r difference s betwee n th e WEPC O projec t and NIPSCO' s Baill y projec t ar e that : 1 ) NIPSC O i s proposin g ne w

control s fo r thei r Baill y plant , whil e WEPC O di d no t initiall y propos e control s fo r thei r Por t Washingto nplant ; 2 ) th e WEPC O projec t wa s expecte d t o lea d t o a substantia l increas e i noperatin g rates , hour s o f operation , an

d emission s o f th e facility , whil e NIPSCO' s Baill y demonstrat i shoul d not ; 3 ) th e WEPC O projec t appear s t o b e intende d t o increas e utilizatio no f th e plan t from 1 0 percen t t o possibl y 40-5 0 percen t o r more , whil e NIPSCO' s Baill y plan t i s currentl y

a full y

functiona l powe r plan t operatin g a t 50-6 0 percen t utilization ; and 4 ) th e WEPC O projec t wa s mainl y designe d t o exten d th e lif e o f a notherwis e 1imite d plant , whil e th e NIPSCO' s Baill y projec t i s intende d primaril y t o reduc e emissions . OnJanuar y

19 , 1990 , th e Sevent hCircui t Cour t o f Appeal s uphel d nearl y al l o f EPA' s finding s i nth e WEPC O cas e ["Wisconsin Electri c Powe r Co . v . Reillv . Nos . 88-326 4 an d 89-133 9 (7t hCir.)] . Th e cour t agree d tha t th e change s a t WEPCO' s Por t Washingto nplan t ar e "physica l changes " intende d t o exten d th e lif e o f th e facilit y an d tha t NS Ran

d NSP S shoul d b e applie d accordin g t o regulation s governin g th e calculatio no f emission s increase s followin g a physica l change . Th e cour t uphel d EPA regardin g emission s increase s fo r NSP S purposes . Onl y th e manne r i

nwhic hsignifican t emission s increase s fo r WEPCO' s Por t Washingto nplan t ar e calculate d fo r NS Rpurpose s wa s returne d fo r reconsideration . Eve nthi s aspec t o f th e decisio ni s limite d t o "like-kin d replacement " projects . Yo u als o requeste d informatio no nwha t measure s ar e bein g take nt o preven t furthe r significan t deterioratio no f ai r qualit y i nth e nonattainmen t area s i nNorthwester nIndiana , presumabl y wit hrespec t t o th e possibl e impact s o f NIPSCO' s Baill y

project . Th e IDE

M i s th e delegate d permittin g authorit y fo r NS Ran

d NSP S intha t State . Th e IDE M ha s determine d tha t NS Ran d NSP S d o no t appl y

t o th e change s a t NIPSCO' s Baill y plan t an

d solicite d comment s on tha t decisio nunti l Januar y 30 , 1990 . A s yo u ma y not e i nth e Januar y

30 , 199 0 lette r t o IDEM , EP A

ha s commente d o

nth e propose d permit . Th e comment s includ e th e condition s tha t w e believ e a sourc e shoul d mee t t o provid e a ne t environmenta l benefi t suc htha t NS Ran d NSP S provision s shoul d no t apply . I f yo u hav e any

question s concernin g ou r response , pleas e cal l Gar y McCutche no f m

y staf f a t (919 ) 541-5592 . Sincerely ,

Geral d A . Bitfiso

n <Ul Directo r Offic e of* Ai r Qualit y Plannin g and Standard s 4 Enclosure sP. 4

.- • ORGANIZE D I N 195 2 P.O . BOX 11 4 • BEVERL Y SHORES , INDIAN A 4630 1 • TELEPHON E 219/879-393 7 O R926-222 4 Decembe r 1, 198 9 Mr . Willia mK . Reilly , Administrato r Environmenta l Protectio n Agenc y 40 1 M Street , S W Washington , D.C . 2046 0 Re : WEPC O Decisio n Dea r Mr . Reilly : Th e Sav e th e Dune s Council , a conservatio n organizatio n founde d i n 195 2 t o protec t th e Indian a Dunes , i s intereste d i n a propose d Advance d Fluega s Desulfurizatio n projec t unde r th e Clea n Coa l Technolog yProgra mo f th e Departmen t o f Energy . Thi s project , calle d Pur e Air , i s t o b e attempte d a t th e Baill yElectrica l Generatin g Statio n owne d byNorther n Indian a Publi c Servic e Compan y (NI) , locate d alon g th e shore s o f Lak e Michiga n an d adjacen t t o ou r nationa l park , Indian a Dune s Nationa l Lakeshore
. Ou r purpos e i n writin g i s t o see k informatio n concernin g th e WEPC O decisio n byEP A(se e attache d information)
. Pleas e sen d a cop yo f thi s decisio n an d anyothe r informatio n abou t thi s subject
. W e als o reques t a cop yo f th e "no-action " lette r issue d b yyou r offic e concernin g thi s propose d projec t bein g exemp t fro mNe w Sourc e Performanc e Standard s (NSPS ) an d Preventio n o f Significan t Deterioratio n (PSD)
. W e hav e bee n tol d b yMs . Jud yBeck , EP A Regio n V

Indian a coordinator , tha t a 3-yea r "no-action " lette r ha s bee n issue d b

yyou r offic e concernin g thi s project
. However , w e understan d N I i s requestin g a 2 0 yea r "no-action " lette r t o avoi d revie w fo r NO x an d PM10
. Northwes t Indian a i s designate d a s "non-compliance " fo r S02 , Ozone , an d PM10
. W e reques t t o kno w wha t protectio n we , a s citizens , hav e withou t revie w fo r NSP S an d PS D shoul d thi s reques t b e granted
. W e als o reques t th e procedur e EP Aintend s t o us e t o proces s thi s propose d request , includin g inter/intr a agenc yreview
. W e awai t you r timel yrepl yt o ou r request . S inher e lyy /

.;•__«• • > v V Thoma s R . Anderso n Technica l Assistan t
cc : Jud yBeck , EP ARegio n V

### Petitioner' s Exhibi t4

INDIAN A UTILIT

Y REGULATOR

Y COMMISSIO N CAUS E NO . 3884 9

491ES111 7 DIREC T TESTIMON Y O F MAR KT . MAASSE

L

SEPTEMBE R27 , 198 9 

# IP. 6

I . - 1 9 - 

### 1 A

. I believ e such apossibilit y i s remote
. The 600 M W absorber

i s a 2 proven technology a t thi s poin t an dthere i s n o reaso n to incorporat e 3 redundanc y i n thi s par t o f th e Project

. 4 45

. Q

. Yo

u indicate dtha

t yo u wouldexamin e th e U.S

. Environmenta l 5 Protectio n Agenc y decisio n i n th e Wisconsin Electri c Powe r 6 Compan y (WEPCO ) matter
. Pleas e explai n th e WEPCO decision

. 7 A

. I

n WEPCO , th e Environmenta l Protectio n Agency (EPA ) reviewe d 8 planne dactivitie s a t th e Por t Washingto n Generatin g Station , a n 9 existin g powe r plant

. • Wisconsin Electri c Powe r Compan y 1 0 (Wisconsi n Electric ) ha

dplanne dt

o mak e capita l expenditure s to th e 1 1 powe

r plant to allo w operatio n t o return to desig n configuratio n fo r 1 2 man

y year s int

o th e future

. Afte

r reviewing Wisconsin Electric' s 1 3 proposal , th e Environmenta l Protectio n Agency determine dthat thi s 1 4 activit

y woul dsubject th e powe r plan t t o revie w unde r th e (NSPS ) 1 5 an dPreventio n o f Significan

t Deterioratio n (PSD) regulations

. Th e 1 6 EP

A ha s sinc e extende dth e logic behin dth e WEPCO decisio n t o 1 7 include change s i n operatio n an dcapital expenditure s whic h wer e 1 8 formerl y viewe da s routine

. Thus , WEPC O a s th e ter mi s commonl

y 1 9 used , no w include s th e origina

l decisio n a s wel

l a s th e extentio n o

f 20 that

logi c b y th e EPA

. A s aresul t o f thes e changes , Norther

n 2 1 Indian awas concerne dwit h th e possibilit

y that th e EP A migh t appl y 22 WEPCO t o Baill y Unit s 7 an

d8 because , o

f installatio n an doperatio n 2 3 o

f th e Norther

n Indian a- Pure Air

Project

. 2 4 46

. Q

. Wha

t woul dth e impact s b e i

f th e EP A applie dth e WEPCO decision 25 to Baill y Unit s 7 an

d8 a s th e resul t

o f th e installatio n an doperatio n 2 6 o

f th e Norther

n Indian a- Pur

e Ai r Project ? 2 7 A

. The PS D an dNSP S review s woul

dasses s th e change s i

n emission s 2 8 fro

mBaill y Unit s 7 and8 a s th e resul t o f th e capita l expenditure s fo

r

491ES111 8 ifflaS LP. 7



### 1 • contro l equipmen t o n th e plant

an dchange doperatio n o

f th e unit

. I

f 2 th e change s ar e deemed"significant " arevie w o f th e way s to contro l 3 th e emission s woul db e initiated

. The revie w woul drequire tha

t 4 Norther n Indian ainstall th e Bes t Availabl e Contro l Technologie s 5 (BACT ) t o limi t emission s o

f SO2 , NO x andparticulate

. Norther n 6 Indian abelieve s tha t th e Pure Ai r

Project i s BAC T fo r SO 2 7 emissions

. BAC T fo r NOx emission s couldquite possibly requir e 8 th e installatio n andoperatio n o f aSelective Cathalyti c Reduction 9 (SCR

) syste ma t Bailly.

. Th

e SC Ri s an expensiv e technology whic h 1 0 produce s ahazardou s waste
. Fo r exampie , Mr
. Emmel estimate d 1 1 that

th e capita

l cost s fo r aho t side SC Rfo r Unit s 7 an d8 are 1 2 approximately $10 0 million wit

h annua l operatin g cost s o

f 1 3 approximately $2 5 million per

yea r assuming aon e yea

r catalys t life

. 1 4 BAC

T fo r particulat

e emission s migh

t require the. ' Compan

y t o 1 5 upgrad e or replac e th e existing electrostati c precipitator s (ESP ) t o 1 6 allow remova l o f greater amount s o

f particulate

. Th e EP

A currently 1 7 indicate s tha t baghouse s achiev e greater particulate control

. Thus , 1 8 fo

r complianc e wit

h BACT , th e EP

A ma y mandate th e remova

l o f 1 9 th e existin g ESP s andthei r replacement

wit h baghouse s at

acos t o f 2 0 ove

r $4 0 million

. Thes e potentia l cost s an dattendan t

operating 2 1 problem s are the basi s fo r Norther n Indiana' s concer

n wit h the 22 WEFCO decision

. 2 3 47

. Q

. Ha s Norther n Indian adiscusse dthi s matter wit h th e EPA ? 2 4 A

. Yes
. W e sen t the EP A aletter requestin g areview o

f th e Baill y 25 projec t an dadeterminatio n o

f th e applicabilit

y o f th e WEPC

O 2 6 decision

. Th e EP A responde dwit

h aletter indicatin g that

they woul d 2 7 no t

tak e an y actio n a t Baill y a s lon g a s th e Pure Air

projec t was a 2 8 demonstratio n project

. Norther n Indian aha s requeste dadditiona l

491ES111 8P. 8



### L 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 

### 1 7 1 8 1 9 2 0 2 1 2 2 2 3 2 4 25 2 6 27 2 8 48 .



### 49

. Q

. A

. clarificatio n o

f thi s matter

frpm^therEPA_.but

t o date , i t

ha s not receive dan

y such clarification

. Turning to afina

l area , wil l th e installatio n andoperatio n o f th e Pur e Ai r Project affect th e lif e o f Unit s 7 an d8 ? No
. Th e installatio n an doperatio n o f ascrubber

doe s no t affect th e usefu l lif e o f apowe r plant

. The scrubber

i s apollutio n contro l devic e designe dto remove SO 2 fro mth e flue gas . It

wil l no t exten d or decreas e th e lif

e o f either Uni t 7 or Uni t 8

. Doe s thi s complet

e you r direc t testimony

. Yes
. \ 2 > 

### S



### 491ES111 8