## CLASS I APPLICATION TECHNICAL REVIEW

FOR:



### Nevada Power Company Reid Gardner Generating Station Clark County, Nevada

Minor Revision to Class I Operating Permit #AP4911-0897
FIN # A0379

Application Log Numbers – Permit Reopen ing (Consent Decree Requirements)

BY

STATE OF NEVADA DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES DIVISION OF ENVIRO NMENTAL PROTECTION BUREAU OF AIR QUALITY

Tobarak Ullah, P.E. Staff Engineer

December 11, 2007

### 1.0 INTRODUCTION

The Nevada Division of Environmental Protec tion, Bureau of Air Po llution Control (NDEPBAPC) has issued a letter to Nevada Power Company, Reid Gardner Ge nerating Station (NPC) on April 3, 2007 and confirmed on September 12, 2007 regarding the reopening and revision of the NPC’s existing Operating Permit #AP4911-0897. In a letter and Order, dated April 3, 2007, NDEP-BAPC required NPC to install natural ga s igniters on Units 1-4 at Reid Gardner Generating Station no later than July 1, 2009, and install baghouses on Units 1-3 Reid Gardner Generating Station no later than July 1, 2010. These requirements were also found in the Reid
Gardner Consent Decree entered between NPC, NDEP-BAPC and the United States Environmental Protection Agency on April 3, 200 7, which was approved by the United States District Court on June 14, 2007. NDEP-BAPC’s April 3 rd letter informed NPC that NDEPBAPC would reopen Reid Gardner Operating Permit AP4911-0897 in order to include the required gas igniters and baghouses into the pe rmit. The Operating Permit has been reopened pursuant to NDEP-BAPC’s April 3 rd notice and Nevada Admi nistrative Code 445B.325.

Paragraph 74 of the Reid Gardner Consent Decree states that no later than six months after the commencement of operation of any of the newly installed gas igniters or baghouses required by the Consent Decree NPC “shall apply to include the requirements . . . into either a federally enforceable permit (other than a Title V permit) or an amendment to the SIP.” Due to the fact that NDEP-BAPC has already reopened the Reid Gardner Operating Permit to include the gas igniters on Reid Gardner Units 1-4 and the baghouses on Reid Gardner Units 1-3 it is unnecessary for NPC to submit an application for th eir inclusion into the Reid Gardner Operating Permit. Additionally, since NDEP-BAPC has a consolidated construction and Title V permit program, it is unnecessary to separately apply for a construction permit and roll it over to the Title V operating permit.

Paragraph 75 of the Reid Gardner Consent D ecree states that “the incorporation of the requirements of this Consent Decree into the Op erating Permit shall be in accordance with state Title V rules, including applicable administrative amendment provisions of such rules.” As stated above, NDEP-BAPC’s reopening of the Reid Gardner Operating Permit meets the guidelines outlined in the Reid Gardner Consen t Decree and makes the application by NPC for permit changes pursuant to Paragraph 74 of th e Reid Gardner Consent Decree unnecessary.

In addition to the above mentioned permit change s to incorporate the ba ghouses and gas igniters into the Reid Gardner Operating Permit, ND EP-BAPC is also incorporating the new SO2 limitations found in Paragraph 23 of the Reid Gardner Consent Decree. Accordingly, it is unnecessary for NPC to apply to NDEP-BAPC for these changes pur suant to Paragraph 74 of the Reid Gardner Consent Decree as NDEP-BAPC has already begun the process to incorporate them into the operating permit.

These permit revisions will go through the public part icipation process as follows: There will be a 30-day public comment period established to receive comments on the draft permit; followed by the 45-day EPA review under NDEP-BAPC’s Title V program.

The existing Class I (Title V) PSD permit is for operating four (4) steam generating boilers (coal-fired) and other related systems including coolin g water and treatment systems; coal processing systems; fly ash systems; flue gas desulfurization systems; fuel storage and transfer systems; etc. (a total of 20 systems); and ten (10) other in significant activit ies. Certain non-boiler related activities at the facility ar e permitted by the Clark County Department of Air Quality Management (CC-DAQM) since the fac ility is located in Clark County.

The facility is located in Clar k County, Nevada approximately one mile southwest of the city of Moapa, Nevada and approximately 50 miles north of the city of Las Vegas. The Standard
Industrial Classification (SIC) number for the facility is 491 1 (Electric Services), since the primary product is electric power for sale.

The facility operations are loca ted in Hydrographic Area 218 (Calif ornia Wash). The California Wash is currently designated as unclassifiable an d/or attainment for all criteria air pollutants. However, a short distance from Basin HA218 is Basin HA212 (Las Vegas Valley) which is designated as non-attainment for CO and PM 10 . The facility triggered the minor source baseline
date for PM 10 , NO
x and SO 2 . The facility began operation in 1965 with boiler Unit #1, boiler Unit #2 in 1968 and boiler Unit #3 in 1976. PSD permitting requirements were triggered with
the addition of a fourth coal-f ired boiler (Unit #4) permitted by US EPA in 1980 and constructed
in 1983.

NPC has already met the consent decree requireme nts for Unit #4. A minor revision permit was issued on June 18, 2007 for the installation of a Rotating Opposed Fired Air (ROFA) combustion system on Steam Boiler Unit #4 (B-04). The pur pose of the ROFA system will be to reduce NOx emissions (approximately 855.71 tons/yr) from Unit #4. The operating scenario for the Steam Boiler Unit #4 (B-04) will be 100% coal fire d with natural gas igni ters. The natural gas will be combusted for the purposes of startup, shutdown and/or flame stabilization only

.

NPC has certified (re: NPC’s letter dated Oct ober 17, 2007) that installation of natural gas igniters have also been completed on Units #1 a nd #3. The natural gas will be combusted for the purposes of startup, shutdown and/or flame stabilization only

.



### 2.0 STATE-ISSUED ORDE R AND CONSENT DECREE REQUIREMENTS

NDEP’s Order : Pursuant to Order dated April 3, 2007, NPC is required to install gas igniters on Units 1-4 at Reid Gardner no later than July 1, 2009, and install ba ghouses on Units 1-3 at Reid Gardner no later than July 1, 2010 [re: NDEP-BAPC’s letter da ted September 12, 2007, Reid Gardner Generating Station Permit Reopening]. NPC is required to comply with follo wing requirements as listed in
the Order:

1. Igniter Installation Project : NPC shall replace the fuel oil igniters for Units 1-4 by installing natural gas igniters in Units 1-4; replace the Burner Management System for Units 1-4 as necessary to operate natural ga s igniters; construct a natural gas pipelineconnecting the Facility to the Kern River Natural Gas Pipeline; and undertake any other modifications at the Facility necessary to operate natural gas ign iters in Units 1-4.

NPC shall complete construction of the Ignite r Installation Project re quired herein no later than July 1, 2009. On or after July 1, 2009, NPC shall not use oil for start-up or flame stabilization of any EGU at the Facility.

2. Installation and Operation of Baghouses : NPC shall complete construction and begin operation of three separate baghouses at the Facility, for Units 1, 2, and 3, respectively. The completion of construction and commence ment of operation of all of the baghouses shall occur on or before July 1, 2010.

If construction of any one of the three baghouses has not been completed on or before July 1, 2010, NPC may shut down and cease operation of any one of the Units not operating a Baghouse at the Facility.

If NPC does not receive approval from the P ublic Utilities Commission of Nevada (PUCN) for the installation and operation of the Baghouses for Units 1-3, NPC may decommission
Units 1-3. If NPC chooses to decommission Un its 1-3 due to disapproval of the Baghouse installation and/or operation, NP C shall provide written notice to the NDEP-BAPC that it
intends to decommission Units 1-3 no later th an November 30, 2007, or within one year of the PUCN decision on NPC’s Integrated Res ource Plan, whichever is sooner; and, NPC shall shut down and permanently cease operation of Units 1-3 on or before November 30,
2008.

3. Monitoring, Recordkeeping and Reporting . NPC shall comply with the monitoring, recordkeeping, and reporting re quirements set forth in the Facility Operating Permit.

Consent Decree Requirements : Reid Gardner Consent Decree was agreed to between the NPC, NDEP-BAPC and the United States Environmental Protection Agency on April 3, 2007, which was entered by the United States District Court on June 14, 2007. NPC is required to comply with following requirements
as listed in the Consent Decree:

1. Igniter Installation Project : NPC shall replace the fuel oil igniters for Units1-4 at the Facility by installing natural gas igniters in Units1-4; re place the Burner Management System for Units 1-4 as necessary to operate natural gas igniters; construct a natural gas pipeline connecting the Facility to the Kern River Natural Gas Pipe line; and undertake any other modifications at the Facility necessary to operate natural gas igniters in Units 1-4.

NPC shall complete construction of the I gniter Installation Proj ect required by this Paragraph no later than twenty-four months (24) after the Effective Da te of this Decree. Beginning twenty-four (24) months after the E ffective Dated of this Decree NPC shall not use oil for start up or flames stabilization of any EGU at the facility.”

2. Installation and Operation of Baghouses : By no later than thirty-six (36) months after theEffective Date of this Decree NPC shall co mplete construction a nd begin operating three separate Baghouses at the Facility, for Units 1, 2, and 3 respectively.

If construction of any one of the three Baghouses is not completed by within thirty-six (36)
months after the Effective Date of this D ecree NPC may, in its di scretion, shut down and cease the operation of any one of the Units not operating a Baghouse at the Facility. NPC may, at its discretion, recommence operation of a Unit shutdown pursuant to this paragraph, provided that cons truction of a baghouse for the Unit is complete and the baghouse is operational.

If NPC does not receive approval from the PU CN for the installation and operation of the Baghouses for Units 1-3 in its Integrated Res ource Plan, NPC may, in its sole discretion,
choose to decommission Units 1-3. If NPC c hooses to decommission Units 1-3 pursuant to this Paragraph, the fo llowing shall apply:

i. NPC shall notify the EPA and NDEP in wr iting, pursuant to Sec tion XVI (Notices),
that it intends to decommission Units 1-3 no later than November 30, 2007, or within one year of the PUCN decision on NPC’s Integrated Resource Plan, whichever is sooner; and ii. NPC shall shut down and permanently cease operation of Units 1-3 on or before November 30, 2008.”

3. Monitoring, Recordkeeping and Reporting . NPC shall comply with the monitoring, recordkeeping, and reporti ng requirements set forth in the Operating Permit.

4. SO 2 Limitations and Operating Permit Modification a. Beginning on the Effective Date of the D ecree, measured separately, Units 1, 2 and 3
shall not have SO 2 emissions in excess of 0.40 LB/ MMBtu, based on a 10-day rolling average period. b. Compliance with the SO 2 emission limitations in this Paragraph shall be
demonstrated with SO 2 CEMS and the procedures established in the appropriate section of NPC’s Operating Permit. c. In accord with Section XII (Permits), NPC shall modify its Operating Permit to
include the SO 2 emissions limitations required by this Paragraph.



### 3.0 DESCRIPTION OF PROCESS

3.1 OVERVIEW The project consists of (4) coal-f ired external combusti on boilers that serve to produce electricityfor sale for various locations in Nevada. Units #1-3 are similar in design and output and share support processes. Unit #4 is a larger, newer un it and has its own support systems separate from
those of units #1-3.

Table 2.1 Boiler Overview:

Unit Manufacture
d Manufacturer / Model Annual Op. Hours MMBtu/hr MW (maximum)

#1 1965 Foster-Wheeler External wall-fired (FFFSG) 8,760 1,215 110

#2 1968 Foster-Wheeler External wall-fired (FFFSG) 8,760 1,215 110

#3 1976 Foster-Wheeler External wall-fired (FFFSG) 8,760 1,237 110

#4 1983 Foster-Wheeler External wall-fired (FFFSG) 8,760 2,956 295



### 4.0 APPLICABLE REQUIREMENTS
Applicable requirements are those re gulatory requirements that apply to a stationary source or to
emission units contained within th e stationary source. Certain activities at the Reid Gardner station are regulated and/or permitted by the Clar k County Health District, Department of Air Quality Management. The County-level regulations will apply to conditions outside the scope of this Class I operating permit and will not be discussed in this technical review.

In Nevada’s program, the regulations governing th e emissions of air pollutants from which the applicable requirements originate are derived from four categorie s of regulations. These four categories consist of the require ments contained in the Nevada Revised Statutes (NRS), the Nevada Administrative Code (NAC ), the Approved State Implem entation Plan (ASIP) and the Code of Federal Regulations (CFR, containe d within various Parts within Title 40).

4.1 STATE STATUTE AND ADMINISTRATIVE CODE The Nevada Revised Statutes (NRS) and the Ne vada Administrative Code (NAC) require that where state regulations are more stringent in comparison to Federal regulations, the State regulations are applicable. The Reid Gardne r Station will be subject to NAC and NRS.

4.1.1 NEVADA REVISED STATUTES The Nevada Revised Statutes (NRS) are th e statutory authority for the adoption and implementation of administrative regulations. Reid Gardner is subject to NRS stipulated in NRS 445B.100 through 445B.640, which refer to the control of air pollution. The NRS specifies the

State Environmental Commission is the governing body given the pow er to adopt administrative regulations. Because the NRS is the enabling stat utory authority, very few specific requirements are contained in the statutes. Rather, the NR S provides broad authority for the adoption and implementation of air pollution regulations.

4.1.2 NEVADA ADMINISTRATIVE CODEThe Nevada Administrative Code (NAC) are admi nistrative regulations th at contain specific requirements relating to the cont rol of air pollution. Reid Gardner is also subject to the NAC 445B.001 through 445B.3791, inclusive that govern the control of air pollution from regulated

facilities in Nevada. The State Environmenta l Commission adopts these regulations. The NAC requires that, where State regulations are more stringent in comparison to Federal regulations that the State regulations are applicable.

4.2 NEVADA APPLICABLE SIP (ASIP) The Applicable State Implementation Plan (ASIP) is a document that is prepared by a State or local air regulatory agency and required to be submitted to the USEPA for approval. Title I of the Clean Air Act is the statutory authority for the USEPA regulations that require a State to
submit a SIP. The contents of the SIP are intended to show how a State, through the implementation and enforcement of the regulatio ns contained in the SIP, will either show attainment of the National Ambient Air Quality Standards (NAAQS) will be achieved or how a
State will continue to maintain compliance with the NAAQS. In general, the regulations contained in the AS IP closely parallel the cu rrent NAC regulations. However, because the ASIP is currently on the process of being updated, compliance with all of the current NAC regulatory requirements does not necessarily ensure compliance with all of the current ASIP regulatory requirements. All of the equipment considered in this application must meet, at minimum, the standards set forth in the ASIP.

4.3 CODE OF FEDERAL REGULATIONS The Code of Federal Regulations (CFR) are regul ations adopted by the USEPA and published in the Federal Register pursuant to the authority granted by Congress in the Clean Air Act. The CFR addresses multiple topics, including but not limited to: permitting requirements, performance standards, testing methods and monitoring requirements.

4.3.1 NEW SOURCE PERF ORMANCE STANDARDS The Reid Gardner facility is subject to performance standards under the New Source Performance Standards, 40 CFR Part 60.

NSPS Overview. System Applicability

#1 Not applicable based on construction date of 1963.#2 Not applicable based on construction date of 1965.

#3 Applicable. Subpart D boiler. Standards of Performance for Fossil-fuelfired steam generators for which cons truction is commenced after August 17,1971.

#4 Applicable. Subpart Da boiler. Standards of Performance for Electric Utility Steam Generating units for which construction is commenced after September 18, 1978. Coal unloading and conveying systems Applicable to Unit #3 and Unit #4 equipment. Subpart Y. Standards of Performance for Coal Preparation Plants . (commencing construction or modification after October 24, 1974)
Coal Silos Applicable to Unit #1-4 equipment. Subpart Y. Standards of Performance for Coal Preparation Plants . (commencing construction or modification after October 24, 1974) Coal crushing and screening station Not applicable, constructed prior to applicability date of October 24, 1974 for Subpart Y.
No. 2 Distillate fuel oil storage tank Not applicable due to installation date of 1964.

Soda ash, fly ash
and lime tanks/silos Not applicable; no NSPS categories.

No other emission units, except t hose previously mentioned in the table above are currently subject to NSPS requirements at Reid Gardner.

4.3.2 PREVENTION OF SIGNIFICANT DETERIORATION REGULATIONS (PSD) 40 CFR Part 52.21 specifies that PSD review is re quired for any new major stationary source or any major modification. A major source is defined as any polluta nt emitting activ ities, which belong to the same two-digit S ource Industry Cla ssification and:

1. emits 100 tons/yr or more of a regulated air contaminant as one of the listed categories of sources listed in 40 CFR 52.21; or 2. emits 250 tons/yr or more of a regulated air contaminant and belong to any other
category source.

The facility is a fossil fuel-fir ed steam electric plant with mo re than 250 MMBtu/hr heat input and has a total potential to emit of regulated po llutants that exceeds 100 tons/year. Therefore, the facility is a PSD source. Any modification to the facility that incr eases the emissions above the applicable significant emission threshold will require a new PSD/NSR review of the source.

It should be noted that the ba seline date for the hydrographi c area was triggered May 21, 1979. As such, additional emissions from this facility will consume increment. A PSD review is not required for this permit action because it is being conducted pursuant to a consent decree approved by the United States District Court and a State-issued order.

4.3.3 NATIONAL EMISSION STANDARDS FOR HAZARDOUS AIR POLLUTANTS
The federal National Emission Standards for Haza rdous Air Pollutants (NESHAP) provisions are

contained in 40 CFR Parts 61 and 63. The Re id Gardner Title V permit application andNDEP/BAPC HAPs calculations dictat e that the facility is not ma jor for HAPs and subject to 40 CFR parts 61 and 63. However, the USEPA is cu rrently studying the levels and impacts of mercury emissions from large coal combusti on sources in the U.S. Until new NESHAP requirements for coal burning boilers are ma ndated by the USEPA, there are no underlying HAP or NESHAP requirement conditions for the proposed Title V operating permit.

4.3.4 COMPLIANCE ASSURAN CE MONITORING The USEPA has promulgated requirements for sources to provide detailed monitoring plans that will ensure compliance with all applicable requirements. These monitoring requirements are contained in 40 CFR Part 64. Section 64.2 specifies that these monitoring requirements apply to a “pollutant specific emission unit at a major source” if all of the following are satisfied:

- The unit is subject to an emission limit or standard;

- The unit uses a control device to achieve compliance with any such emission limitation or standard; and

- The unit has the potential pre-control devi ce (uncontrolled) emission equal to or greater than 100% of the amount, in tons per year, required for a source to be classified as a major source.

- Part 64.5 requirements specify that a CAM plan be submitted by a facility if it has not submitted a Part 70 application by April 20, 1998, or that the Part 70 application was not deemed complete by that date.

According to permit records, the initial Reid Gardner Title V application was received by NDEPBAPC on January 3, 1996. Therefore, the current permit action does not require a CAM plan. However, when Reid Gardner renews its permit or reque sts a significant revision , a CAM plan will be required.

4.3.5 ACID RAIN PROGRAM The Clean Air Act Amendments of 1990 (Title V) established a requirement to reduce the emissions of pollutants cont ributing to acid rain (SO 2 and NO
x ). The USEPA is responsible for developing regulations and implementing the requir ements of the acid rain provisions of the

Clean Air Act. The four boilers at the Reid Gardner facility are applicable to the regulations and allowances of Phase II of the Acid Rain Program . The requirements are incorporated into the new Title V permit for reference.

4.3.6 ACCIDENTAL RELEASE PROGRAM
The Chemical Accident Preven tion Provisions are c ontained in 40 CFR, Part 68. The Reid Gardner Station is required to comply with the Chemical Accident Prev ention Provisions, if the facility stores any chemicals regulated by 40 CF R, Part 68, in quantities greater than their respective threshold quantity.

4.3.7 PROTECTION OF STRATOSPHERIC OZONE The Protection of Stratospheric Ozone Provisions are contained in 40 CFR, Part 82. The Reid Gardner Station is required to comply with 40 CFR, Part 82, if the facility operates anyequipment or store any products regulated by 40 CFR, Part 82. The permit application states that 40 CFR Part 82 requirements are not applicable because the facility do es not service its own air conditioning equipment or store any regulated products.

4.3.8 EMERGENCY EPISODES PLAN NAC 445B.230.1 requires a plan for the reduction of em issions from any facility that is able to cause or permit the emission of 100 tons or more per year of a regulated pollutant from a stationary source. The facility is required to prepare and submit to NDEP-BAPC a plan for reducing or eliminating emissions in accordance w ith the episode stages of alert, warning and emergency as defined in the air quali ty plan for the State of Nevada.

On February 11, 2000, NPC submitted a revised emerge ncy episodes plan (EEP) for the facilities owned and operated by NPC in Clark County, Nevada , including Reid Gardner. The plan was determined acceptable by NDEP-BAPC

.

4.4 DUST CONTROL PLAN The NDEP-BAPC requires that permit holders who disturb 20 acres or mo re of topsoil must submit a dust control plan as one of the necessary measures to prevent particulate matter from becoming airborne (ASIP 445.734). The dust control pl an is a written plan signed by a facility’s responsible official that outlines the methods a facility will use to minimize fugitive dust.

The Reid Gardner facility disturbs more than 20 acres of topsoil th rough activities such as unpaved roads and coal storage piles. The topsoil disturbance activities are directly related to the boiler systems and therefore fall under the jurisdiction of NDEP-BAPC.

In addition, the previously issued PSD permits for boiler Units #3 and #4 outline specific dust control requirements that will be carried into the Title V permit. These include :

- the main road to the facility be paved;

- roads within the facility be grav eled and treated with surfactant;

- coal conveyors be completely enclosed; and

- coal stock piles be compacted and treated w ith chemical dust suppressant as required.



### 5.0 AMBIENT AIR IMPACT

5.1 AIR DISPERSION MODELING The facility is located in H ydrographic Area (HA) 218 (California Wash). However, a short

distance from Basin HA218 is Basi n HA212 (Las Vegas Valley). The Reid Gardner facility has triggered the minor source baseline date for PSD in these basins. The facility is triggered for

PM 10 , NO
x and SO 2 . No modeling is conducted because th ese permit revisions are pursuant to consent decree approved by the United States Di strict Court and a State-issued order.

### 6.0 CONCLUSIONS / RECOMMENDATIONS

The operating permit has been modified pursuant to the requirements contained in the Consent Decree and State-issued order, and will undergo the full public participation requirements of Nevada’s approved Part 70 program. Upon comple tion of these requirements, the Decree and Order requirements will be contained in the Cl ass I Operating Permit as required by the Consent

Decree.

_________________________________________________ Tobarak Ullah, P.E. Date Staff Engineer

_________________________________________________ Matthew A. DeBurle, P.E. Date Supervisor, Class I Permitting Branch

Attachments : (1) Draft Air Quality Operating Permit #AP4911-0897



# Attachment 1

Draft Air Quality Operating Permit

[ Note : Changes are in Red. ]