March 16 , 2012

Mr. Gerardo Rios Chief, Permits Branch

Air Division

– AIR 3 EPA Region 9
75 Hawthorne Street San Francisco, CA 94015

Subject: PSD Permit Application for Pio Pico Energy Center

Dear Mr. Rios:

Kiewit Power was requested by Pio Pico Energy Center to provide information regarding the comparison of using the currently planned General Electric LMS100 machines for peaking and intermediate load versus using a fast start/rapid response combined cycle plant in the same duty cycle . The f ollowing
information is based on information readily available to the public from various gas turbine
manufacture r s and from independent design studies performed by Kiewit. Final ana lysis ma y va ry depending upon actual site conditions and the specific engineering details developed during detailed design. Additional details regarding fast start combined cycle technology being developed by various turbine suppliers should be obtained d irectly from the suppliers of the respective gas turbines or integrated combined cycle plants. It should also be noted that t he contents of this letter are the professional opinion of the author and are expressly and specifically limited to the Pio Pico project. Any responsibility for extrapolation of the analysis contained in this letter to other situations or projects without the direct involvement of the author are hereby disclaimed.

Combined cycle technology has traditionally been utilized in intermediate to base load operating facilities. This is primarily due to the high relative cost to start an F class gas turbine and the ancillary systems for a combined cycle plant. Historicall y, t his startup cycle has varied in duration from 75

- 90 minutes for a hot start (overnight shutdown) to over 240 minutes for a cold start (multiple day shutdown). Recently, technology has been developed to improve the time require d to safely start these

t ypes of plants. This new technology primarily consists of design modifications in the HRSG to allow faster heating of boiler components

, and the use of terminal attemporators to de

- couple the bottoming cycle from the gas turbine startup. This technology has been in development for several years but t o our knowledge, none of these fast start facilities have been placed in operation in the United States. The first of these types of combined cycle facilities is expected to become operational in early 2013.

For this analysis, Kiewit comp ared a 3xLMS100 facility with a generic F class 1x1 combined cycle plant

. Each of these facilities would offer approximately 300 MW o f generation capability at base load. In regards to quick start capability, the LMS100 mac hine is capable of achieving full load (100MW) in lessMr. Gerardo Rios

March 1 6 , 2012 Page 2

KIEWIT INDUSTRIAL GROUP, INC. 9401 Renner Boulevard, Lenexa, KS 66219 (913 ) 928

- 7000 (913) 928

- 7997 fax than ten minutes from a cold start. This capability would allow the plant to produce up to the full capacity of 300 MW in this 10 minute time frame. The 1x1 combin ed cycle quick start facility would likely be capable of achieving a partial load (1 00

- 1 50MW) of the gas turbine in about 10 minutes.

However

, a significant portion of the facility output would not be available until the steam turbine is warmed and operating. This process would take signif icantly longer than the 10 minutes stated above for the LMS100 facility. The combined cycle gas turbine is capable of achieving full load operation in

r oughly 20 minutes ( about 200MW ) and full load (about 300 MW) for the entire combined cycle unit in

60

- 75 minutes for a hot start. It is important to remember that the combined cycle efficiency benefits of such a plant are not realized until both the gas turbine and HRSG/steam turbine are operating at full load. A cold start for the facility would be exp ected to take closer to 2 hours before the steam turbine would be operating at base load.

Operating combined cycle projects using F class gas turbines as peaking facilities, where numer ous starts are required, would result in significantly higher operatio n and maintenance costs versus LMS100 technology . This is due to the significantly larger electrical load and gas consumption to start the larger machine along with the resultant impacts of multiple starts to turbine service intervals as discussed
below

.

Another aspect for consideration is the ability of the facility to offer a great range of load flexibility and turndown. A combined cycle configuration sized to provide 300 MW would consist of an F class gas
turbine (nominal 200 MW for gas turbine only ) and steam turbine sized to provide approximately

100MW . As such it would only be capable of reducing output in combined cycle mode to approximately 150 MW (50%

- 60% load on the GT, with corresponding reduction in steam turbine output) allowing for
much l ess flexibility than the three LMS100 machines. The plant using multiple LMS100 machines will have the ability to vary load on each individual turbine and have the capability to reduce load to a single unit operating at 50% for an overall plant minimum ou tput of approximately 50MW. This will result in a plant that offers much greater load range flexibility during operation (50 MW to 300 MW for the LMS100 configuration, vs. 150 MW to 300 MW for the F

- class combined cycle configuration)

.

The ability to quickly change load is critical for peaking load facilities and is another area that the LMS100 has a significant advantage over a larger frame machine. Typically

, an F class gas turbine can change load at a maximum ramp rate of up to approximately 30 MW/min. The LMS100, however, can change load at a rate of up to 50 MW/min per machine. For a facility utilizing three LMS100, the total ramping capability for the plant is nearly 150 MW/min which greatly increases the plant’s ability to track
sudden load changes on the grid due to fluctuating demand and intermittent renewable generation.

We have recently reviewed the construction and equipment costs for both the LMS100 machines and the quick start combined cycle plants . In our estimation the cost of con structing the combined cycle units is approximately 25%

- 30% greater than the cost for the facility using the LMS100 machines on a $/kW basis . In addition, if a combined cycle unit were started 500 times per year (as may be required
under PPEC’s contract w ith San Diego Gas and Electric), expensive, hot gas path inspections and maintenance outages may be required once every 1.5

- 2 years, instead of 24,000 hours (roughly 3

- 4 years for a typical intermediate loaded combined cycle operating 6,000

- 8,000 per year) between suchMr. Gerardo Rios

March 1 6 , 2012 Page 3

KIEWIT INDUSTRIAL GROUP, INC. 9401 Renner Boulevard, Lenexa, KS 66219 (913 ) 928

- 7000 (913) 928

- 7997 fax outages. This increase in maintenance requirements would result in a much higher total operating cost than expected for the LMS100 whose criteria for hot gas path inspections is not determined based on equivalent starts.

In our opinion the LMS100 machines offer much greater peaking capability and flexibility at a significantly lower cost for the Pio Pico Project. Quick start combined cycle machines will offer greater efficiency when operated in combined cycle mode

, but do not appear to meet the operational needs for this facility.

Please contact me if you require further information.

Very truly yours,

Jason Dedrickson, P.E. Vice President, Natural Gas Market