December 14, 2010

Mr. Mike Fluharty Basin Electric Power Cooperative

1717 East Interstate Ave. Bismarck, ND 58503-0564

RE: Final Title V Operating Permit #OP4256-00

Dear Mr. Fluharty:

The Department of Environmental Quality has prepared the enclo sed Final Operating Permit #OP4256- 00, for the Basin Electric Power Cooperative – Culb ertson Generating Station located in Section 5, Township 28 North, Range 57 East, Roosevelt Count y, 7.2 miles northeast of Culbertson, Montana. Please review the cover page of the attached permit for information pertaining to the action taking place

on Permit #OP4256-00.

If you have any questions, please contac t Paul Skubinna, the permit writer, at (406) 444-6711 or by email at pskubinna@mt.gov.

Sincerely,

Vickie Walsh Air Permitting Program Supervisor Air Resources Management Bureau (406) 444-9741 Paul Skubinna Environmental Engineer Air Resources Management Bureau (406) 444-6711

VW:PS:

Enclosure Cc: Christopher Ajayi, US EPA Region VIII 8P-AR Carson Coate, US EPA Region VIII, Montana OfficeSTATE OF MONTANA Department of Environmental Quality Helena, Montana 59620

AIR QUALITY OPERATING PERMIT OP4256-00

Issued to: Basin Electric Power Cooperative

1717 East Interstate Ave. Bismarck, ND 58503-0564

Final Date: December 14, 2010 Expiration Date: December 14, 2015

Effective Date: December 14, 2010

Date of Decision: November 12, 2010 End of EPA 45-day Review: November 8, 2010 Proposed Issue Date: September 23, 2010

Draft Issue Date: August 19, 2010

Application Deemed Technically Complete: November 6, 2008 Application Deemed Administratively Complete: September 4, 2008 New Application Received: September 4, 2008

AFS Number: 030-085-0061A

Permit Issuance and Appeal Processes: In accordance with Montana Code Annotated (MCA) Sections 75-2-217 and 218 and the Administrative Rules of Montana (ARM), ARM Title 17, Chapter 8, Subchapter 12, Operating Permit Progr am, this operating permit is hereby issued by the Department of Environmental Quality (Department) as effective and final on December 14, 2010. This cover sheet must

be attached to the Date of Decision issued on November 12, 2010, and the permit must be kept on-site at the above named facility.

OP4256-00 i Date of Decision: 11/12/10

Effective Date: 12/14/2010OP4256-00 ii Date of Decision: 11/12/10

Effective Date: 12/14/2010 Montana Air Quality Operating Permit Department of Environmental Quality

SECTION I. GENERAL INFORMATION .......................................................................................... 1

SECTION II. SUMMARY OF EMISSIONS UNITS ........................................................................ 2

SECTION III. PERMIT CONDITIONS ............................................................................................. 3

A. F ACILITY -W IDE ........................................................................................................................... 3

B. EU001: GE LMS100

– 100 MW C OMBUSTION T URBINE ........................................................... 6

SECTION IV. NON-APPLICABLE REQUIREMENTS ................................................................ 11

SECTION V. GENERAL PERMIT CONDITIONS ....................................................................... 12

A. C OMPLIANCE R EQUIREMENTS ................................................................................................... 12

B. C ERTIFICATION R EQUIREMENTS ............................................................................................... 12

C. P ERMIT S HIELD ......................................................................................................................... 13

D. M ONITORING

, R ECORDKEEPING

, AND R EPORTING R EQUIREMENTS ......................................... 14

E. P ROMPT D EVIATION R EPORTING ............................................................................................... 15

F. E MERGENCY P ROVISIONS .......................................................................................................... 15

G. I NSPECTION AND E NTRY ........................................................................................................... 16

H. F EE P AYMENT ........................................................................................................................... 16

I. M INOR P ERMIT M ODIFICATIONS ............................................................................................... 17

J. C HANGES N OT R EQUIRING P ERMIT R EVISION .......................................................................... 17

K. S IGNIFICANT P ERMIT M ODIFICATIONS ...................................................................................... 18

L. R EOPENING FOR C AUSE ............................................................................................................. 19

M. P ERMIT E XPIRATION AND R ENEWAL ......................................................................................... 19

N. S EVERABILITY C LAUSE ............................................................................................................. 19

O. T RANSFER OR A SSIGNMENT OF O WNERSHIP ............................................................................. 20

P. E MISSIONS T RADING

, M ARKETABLE P ERMITS

, E CONOMIC I NCENTIVES .................................. 20 Q. N O P ROPERTY R IGHTS C ONVEYED ........................................................................................... 20

R. T ESTING R EQUIREMENTS .......................................................................................................... 20

S. S OURCE T ESTING P ROTOCOL .................................................................................................... 20

T. M ALFUNCTIONS ........................................................................................................................ 20

U. C IRCUMVENTION ....................................................................................................................... 20

V. M OTOR V EHICLES ..................................................................................................................... 21

W. A NNUAL E MISSIONS I NVENTORY .............................................................................................. 21

X. O PEN B URNING ......................................................................................................................... 21

Y. M ONTANA A IR Q UALITY P ERMITS ............................................................................................ 21

Z. N ATIONAL E MISSION S TANDARD FOR A SBESTOS ..................................................................... 22

AA. A SBESTOS

.............................................................................................................................. .... 22

BB. S TRATOSPHERIC O ZONE P ROTECTION

– S ERVICING OF M OTOR V EHICLE A IR C ONDITIONERS 22

CC. S TRATOSPHERIC O ZONE P ROTECTION

– R ECYCLING AND E MISSION R EDUCTIONS .................. 22

DD. E MERGENCY E PISODE P LAN ...................................................................................................... 23

EE. D EFINITIONS

.............................................................................................................................. 23

APPENDIX A INSIGNIFICANT EMISSIONS UNITS ................................................................. A-1

APPENDIX B DEFINITIONS AND ABBREVIATIONS .............................................................. B-1

APPENDIX C NOTIFICATION ADDRESSES ............................................................................. C-1

APPENDIX D AIR QUALITY INSPECTOR INFORMATION .................................................. D-1

APPENDIX E ACID RAIN APPLICATION .................................................................................. E-1OP4256-00 1 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Terms not otherwise defined in this permit or in the Definitions and Abbrev iations Appendix of this permit have the meaning assigned to them in the referenced regulations.

SECTION I. GENERAL INFORMATION

The following general information is provided pursuant to ARM 17.8.1210(1).

Company Name: Basin Electric Power Cooperative

Mailing Address: Culbertson Generation St ation; 1717 East Interstate Avenue

City: Bismarck State: North Dakota Zip: 58503

Plant Location: Section 5, Township 28 North, Ra nge 57 East, Roosevelt County, 7.2 miles northeast of Culbertson, Montana

Responsible Official: Mike Fl uharty Phone: (701) 223-0441

Facility Contact Person: Jerry Menge Phone: (701) 355-5655

Primary SIC Code: 4911

Nature of Business: Power Generation

Description of Process: The generation plant houses a single, simple-cycle, General Electric (GE) LMS100 aeroderivative combustion turbine and an electric generator driven by the turbine. The turbine draws in combustion air which is compressed and mixed with natural gas. The fuel-air mixture is ignited to produce compressed hot combustion gases which expa nd and rotate a shaft which turns a generator to produce electricity. Gross generation capacity of the turbine is 100 megawatts (MW) The turbine combusts natural gas which will be supplied by an existing pipeline running through the Basin Electric

property.OP4256-00 2 Date of Decision: 11/12/10

Effective Date: 12/14/2010 SECTION II. SUMMARY OF EMISSIONS UNITS

The emissions units regulated by this permit are the following (ARM 17.8.1211):

Emissions Unit

ID Description Pollution Control Device/Practice

EU001 General Electric LMS100 ( 100 MW) Simple Cycle Combustion

Turbine Water/Steam Combus tion Injection, Pipeline Quality Natural Gas, Catalytic Oxidation, Hours of Operation LimitsOP4256-00 3 Date of Decision: 11/12/10

Effective Date: 12/14/2010 SECTION III. PERMIT CONDITIONS

The following requirements and conditions are applicab le to the facility or to specific emissions units located at the facility (ARM 17.8.1211, 1212, and 1213).

A. Facility-Wide

Conditions Rule Citation Rule Des cription Pollutant/Parameter Limit

A.1 ARM 17.8.105 Testing Require ments Testing Requirements

------- A.2 ARM 17.8.304(1) Visible Ai r Contaminants Opacity 40%

A.3 ARM 17.8.304(2) Visible Ai r Contaminants Opacity 20%

A.4 ARM 17.8.308(1) Particulate Matter, Airborne Fugitive Opacity 20%

A.5 ARM 17.8.308(2) Particulate Matter, Airborne Reasonable Precautions

------- A.6 ARM 17.8.308 Particulate Matter , Airborne Reasonable Precaution,

Construction 20%

A.7 ARM 17.8.309 Particulate Matter, Fuel Burning Equipment Particulate Matter E= 0.882 * H -0.1664 Or

E= 1.026 * H -0.233

A.8 ARM 17.8.310 Particul ate Matter, Industrial

Processes Particulate Matter E= 4.10 * P 0.67 or E= 55 * P 0.11 - 40

A.9 ARM 17.8.322(4) Sulfur Oxide Emissions, Sulfur in

Fuel Sulfur in Fuel (liquid or solid fuels) 1 lb/MMBtu fired

A.10 ARM 17.8.322(5) Sulfur Oxide Emissions, Sulfur in

Fuel Sulfur in Fuel (gaseous) 50 gr/100 CF

A.11 ARM 17.8.324(3) Hydrocarbon Emissions,

Petroleum Products Gasoline Storage Tanks

-------

A.12 ARM 17.8.324 Hydrocarbon Emissions,

Petroleum Products 65,000 Gallon Capacity

-------

A.13 ARM 17.8.324 Hydrocarbon Emissions,

Petroleum Products Oil-effluent Water Separator -------

A.14 ARM 17.8.342 NES HAPs General Provisions SSM Plans Submittal

A.15 ARM 17.8.1212 Reporting Requi rements Prompt Deviation Reporting -------

A.16 ARM 17.8.1212 Reporting Require ments Compliance Monitoring

------- A.17 ARM 17.8.1207 Reporting Require ments Annual Certification

-------

Conditions

A.1. Pursuant to ARM 17.8.105, any person or pers ons responsible for the emission of any air contaminant into the outdoor atmosphere shall, upon written request of the Department, provide the facilities and necessary equipment (including instruments and sensing devices) and shall conduct test, emission or ambient, for such pe riods of time as may be necessary using methods approved by the Department.

Compliance demonstration frequencies that list “as required by the Department” refer to ARM 17.8.105. In addition, for such sources, complia nce with limits and conditions listing “as required by the Department” as the frequency, is verified annually using emission factors and engineering calculations by the Department’s compliance in spectors during the annual emission inventory review; in the case of Method 9 tests, compliance is monitored during the regular inspection by the compliance inspector.

A.2. Pursuant to ARM 17.8.304(1), Basin Electric shall not cause or authorize emissions to be discharged into the outdoor atmosphere from an y source installed on or before November 23, 1968, that exhibit an opacity of 40% or gr eater averaged over 6 consecutive minutes, unless otherwise specified by rule or in this permit.

A.3. Pursuant to ARM 17.8.304(2), Basin Electric shall not cause or authorize emissions to be discharged into the outdoor atmosphere from any source installed after November 23, 1968, that exhibit an opacity of 20% or greater averaged over 6 consecutive minutes, unless otherwise specified by rule or in this permit.OP4256-00 4 Date of Decision: 11/12/10

Effective Date: 12/14/2010 A.4. Pursuant to ARM 17.8.308(1), Basin Electric shall not cause or authorize the production, handling, transportation, or storage of any material unless reasonable precautions to control emissions of particulate matter are taken. Such emissions of airborne particulate matter from any stationary source shall not exhibit an opacity of 20% or greater averaged over 6 consecutive minutes, unless otherwise specified by rule or in this permit.

A.5. Pursuant to ARM 17.8.308(2), Basin Electric sha ll not cause or authorize the use of any street, road or parking lot without taking reasonable precautions to control emissions of airborne particulate matter, unless otherwise specified by rule or in this permit.

A.6. Pursuant to ARM 17.8.308, Basin Electric shall not operate a construction site or demolition project unless reasonable precautions are taken to cont rol emissions of airborne particulate matter. Such emissions of airborne particulate matter from any stationary source shall not exhibit an opacity of 20% or greater averaged over 6 con secutive minutes, unless otherwise specified by rule or in this permit.

A.7. Pursuant to ARM 17.8.309, unless otherwise specifie d by rule or in this permit, Basin Electric shall not cause or authorize particulate matter caused by the combustion of fuel to be discharged from any stack or chimney into the outdoor at mosphere in excess of the maximum allowable emissions of particulate matter for existing fuel burning equipment and new fuel burning equipment calculated using the following equations:

For existing fuel burning equipment (ins talled before November 23, 1968):

E =0.882 * H -0.1664

For new fuel burning equipment (insta lled on or after November 23, 1968):

E =1.026 * H -0.233

Where H is the heat input capacity in million BTU (MMBtu) per hour and E is the maximum allowable particulate emissions rate in pounds per MMBtu.

A.8. Pursuant to ARM 17.8.310, unless otherwise specifie d by rule or in this permit, Basin Electric shall not cause or authorize particulate matter to be discharged from any operation, process, or activity into the outdoor atmosphere in excess of the maximum hourly allowable emissions of particulate matter calculated using the following equations:

For process weight rates up to 30 tons per hour: E = 4.10 * P 0.67
For process weight rates in excess of 30 tons per hour: E = 55.0 * P 0.11 – 40

Where E = rate of emissions in pounds per hour and P = process weight rate in tons per hour.

A.9. Pursuant to ARM 17.8.322(4), Basin Electric shall not burn liquid or solid fuels containing sulfur in excess of 1 pound per million BTU fired, unless othe rwise specified by rule or in this permit.

A.10. Pursuant to ARM 17.8.322(5), Basin Electric shall not burn any gaseous fuel containing sulfur compounds in excess of 50 grains per 100 cubic feet of gaseous fuel, calculated as hydrogen sulfide at standard conditions, unless otherwi se specified by rule or in this permit.

A.11. Pursuant to ARM 17.8.324(3), Basin Electric shall not load or permit the loading of gasoline into any stationary tank with a capacity of 250 gallons or more from any tank truck or trailer, except through a permanent submerged fill pipe, unless such tank is equipped with a vapor loss control device or is a pressure tank as described in AR M 17.8.324(1), unless otherwise specified by rule or in this permit.OP4256-00 5 Date of Decision: 11/12/10

Effective Date: 12/14/2010 A.12. Pursuant to ARM 17.8.324, unless otherwise specifie d by rule or in this permit, Basin Electric shall not place, store or hold in any stationary tank, reservoir or other container of more than 65,000 gallon capacity any crude oil, gasoline or petroleum distillate having a vapor pressure of 2.5 pounds per square inch absolute or greater under actual storage conditions, unless such tank, reservoir or other container is a pressure tank maintaining working pressure sufficient at all times to prevent hydrocarbon vapor or gas loss to the at mosphere, or is designed and equipped with a vapor loss control device, properly installed, in good working order and in operation.

A.13. Pursuant to ARM 17.8.324, unless otherwise specifie d by rule or in this permit, Basin Electric shall not use any compartment of any single or mu ltiple-compartment oil-effluent water separator, which compartment receives effluent water containi ng 200 gallons a day or more of any petroleum product from any equipment processing, refining, treating, storing or handling kerosene or other petroleum product of equal or greater volatility than kerosene, unless such compartment is equipped with a vapor loss control device, cons tructed so as to prevent emission of hydrocarbon vapors to the atmosphere, properly installed, in good working order and in operation.

A.14. Pursuant to ARM 17.8.342 and 40 CFR 63.6, Basin El ectric shall submit to the Department a copy of any startup, shutdown, and malfunction (SSM ) plan required under 40 CFR 63.6(e)(3) within 30 days of the effective date of this operating pe rmit (if not previously submitted), within 30 days of the compliance date of any new National Em ission Standard for Hazardous Air Pollutants (NESHAPs) or Maximum Achievable Control Tech nology (MACT) standard, and within 30 days of the revision of any such SSM plan, when a pplicable. The Department requests submittal of such plans in electronic form, when possible.

A.15. Basin Electric shall promptly report devia tions from permit requirements including those attributable to upset conditions, as upset is defi ned in the permit. To be considered prompt, deviations shall be reported to the Department using the schedule and content as described in Section V.E (unless otherwise specified in an applicable requirement) (ARM 17.8.1212).

A.16. On or before February 15 and August 15 of each year, Basin Electric shall submit to the Department the compliance monitoring reports required by Section V.D. These reports must contain all information required by Section V. D, as well as the information required by each individual emissions unit. For the reports due by February 15 of each year, Basin Electric may submit a single report, provided that it contains all the information required by Section V.B & V.D. Per ARM 17.8.1207,

any application form, report, or compliance certification submitted pursuant to ARM Title 17, Chapter 8, Subchapter 12 (including semiannual monitoring reports), shall contain certification by a responsible official of truth, a ccuracy and completeness. This certification and any other certificati on required under ARM Title 17, Chapter 8, Subchapter 12, shall state that, “based on information and belief formed after reasonable inqui ry, the statements and information in the document are true, accurate and complete.”

A.17. By February 15 of each year, Basin Electric shall submit to the Department the compliance certification required by Section V.B. The annual certification required by Section V.B must include a statement of compliance based on th e information available which identifies any observed, documented or otherwise known inst ance of noncompliance for each applicable requirement. Per ARM 17.8.1207,OP4256-00 6 Date of Decision: 11/12/10

Effective Date: 12/14/2010 any application form, report, or compliance certification submitted pursuant to ARM Title 17, Chapter 8, Subchapter 12 (including annual certifications), shall c ontain certification by a responsible official of truth, accuracy and completeness. This certification and any other certification required under ARM Title 17, Chapter 8, Subchapter 12, shall state that, “based on information and belief formed after reasonable inquiry, the statements and information in the document are true, accurate and complete.”

B. EU001: GE LMS100 – 100 MW Combustion Turbine

Condition(s) Pollutant/Parameter Permit Limit Compliance Demonstration Method Frequency Reporting Requirements

B.1, B.2, B.7, B.13, B.14, B.15, B.16, B.17, B.22, B.23, B.24, B.25, B.26, B.27, B.28, B.29, B.30,

B.31 NOx 78.50 lb/hr – 1 hr

average NOx CEMS Continuous Semiannual

25 ppmvd at 15%

O 2 – 1 hr average Method 7 Start-up and Biannually

Install, Operate and

Maintain Control Equipment Record Keeping Ongoing

B.3, B.8, B.14, B.21, B.23, B.25, B.28, B.29, B.30,

B.31. CO 21.50 lb/hr – 3 hr

average Method 10 Start-up and Biannually Semiannual

Install, Operate and

Maintain Control Equipment Record Keeping Ongoing

B.4, B.19, B.28, B.29, B.30, B.31. VOC 1.33 lb/hr – 1 hr

average Method 18/25 As required by the Department

and Section

III.A.1 Semiannual

Install, Operate and

Maintain Control Equipment Record Keeping Ongoing

B.5, B.9, B.20, B.21, B.25, B.30, B.31. PM/PM 10 /PM 2.5 6 lb/hr – 1hr

average Fuel

Restrictions/ Record Keeping Ongoing Semiannual

B.9, B.21, B.25, B.30,

B.31. SO 2 Fuel Restriction Record Keeping Ongoing

B.6, B.21, B.25, B.30,

B.31. Hours of Operation 3,400 Rolling 12-

Month Record Keeping Ongoing

B.10, B.21, B.25, B.30,

B.31. Stack Height At least 85.6 feet in height (from final grade) Log any

instances of stack existing

below 85.6 feet Ongoing

B.9, B.11, B.20, B.21, B.25, B.30,

B.31. Opacity 20% Record Keeping Ongoing

Fuel Restriction

B.12, B.15, B.16, B.17, B.20, B.26, B.30., B.31 40 CFR 60, Subpart KKKK 40 CFR 60, Subpart

KKKK 40 CFR 60, Subpart KKKK 40 CFR 60, Subpart KKKK 40 CFR 60, Subpart KKKK

B.13, B.15, B.22, B.24, B.27, B.30.,

B.31 Acid Rain 40 CFR Part 72-78, as applicable As applicable As a pplicable SemiannualOP4256-00 7 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Conditions

B.1. Emissions of nitrogen oxides (NOx) from the turb ine generator shall not exceed 78.50 pounds per hour (lb/hr) based on a 1-hour average, effective during all periods of operation, including startup and shutdown (ARM 17.8.752).

B.2. Emissions of NOx from the turbine generator sh all not exceed 25 parts per million dry volume (ppmvd) at 15% oxygen (O 2 ), based on a 1-hour average, effective during all periods of operation, including startup and shutdown (ARM 17.8.340 and 40 CFR 60, Subpart KKKK).

B.3. Emissions of carbon monoxide (CO) from the turb ine generator shall not exceed 21.50 lb/hr based on a 3-hour average, effective during a ll periods of operation, including startup and

shutdown (ARM 17.8.752).

B.4. Emissions of volatile organic compounds (VOCs) from the turbine generator shall not exceed 1.33 lb/hr based on a 1-hour average, effective dur ing all periods of operation, including startup

and shutdown (ARM 17.8.752).

B.5. The combined sum of filterable and condensable emissions of particulate matter with an aerodynamic diameter of 10 microns or less (PM 10 ) from the turbine generator shall not exceed 6.00 lb/hr based on a 1-hour average, effective dur ing all periods of operation, including startup and shutdown (ARM 17.8.752).

B.6. Operation of the turbine generator, including st artup and shutdown, shall not exceed 3,400 hours per rolling 12-month time period (ARM 17.8.749).

B.7. Basin Electric shall operate and maintain a wa ter-injection system to control NOx emissions during the combustion process. Water-injection shall commence within 10 minutes of turbine startup and shall continue until 10 minutes or less prior to shutdown (ARM 17.8.752).

B.8. Basin Electric shall install, operate, and maintain a catalytic oxidizer to control emissions of CO and VOCs (ARM 17.8.752).

B.9. Basin Electric shall combust only pipeline qualit y natural gas in the turbine generator (ARM 17.8.752).

B.10. The turbine shall exhaust into a stack that is at least 85.6-feet tall from grade (ARM 17.8.749).

B.11. Basin Electric shall not cause or authorize em issions to be discharged into the outdoor atmosphere from any sources installed after Novemb er 23, 1968, that exhibit an opacity of 20% or greater averaged over 6 consecutive minutes (ARM 17.8.304).

B.12. Basin Electric shall comply with all applicab le standards and limitations, and the reporting, recordkeeping and notification requirements c ontained in 40 CFR 60, Subpart KKKK (ARM 17.8.340 and 40 CFR 60, Subpart KKKK).

B.13. Basin Electric shall comply with all applicab le standards and limitations, and the reporting, recordkeeping, and notification requirements of the Acid Rain Program contained in 40 CFR Parts 72-78 (40 CFR Part 72 through 40 CFR Part 78).OP4256-00 8 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Compliance Demonstration

B.14. Basin Electric shall test the turbine generator, using natural gas as a fuel, for NOx and CO, concurrently, within 180 days of initial startup of the turbine ge nerator, or according to another testing/monitoring schedule as may be approved by the Montana Department of Environmental Quality (Department), to demonstrate compliance with the NOx and CO emission limits contained in Sections III.B.1, III.B.2, and III.B.3. The testing shall continue on an every 2-year basis, or according to another testing/monitoring schedule as may be approved by the Department (ARM 17.8.105 and ARM 17.8.749).

B.15. Basin Electric shall monitor compliance with the requirements of Sections III.B.1 and 40 CFR 60, Subpart KKKK by maintaining, calibrating, and operating a CEMS for the measurement of NOx and a diluent gas (oxygen (O 2 ) or carbon dioxide (CO 2 )) monitor on each generating unit stack; by reporting all excess emissions per 40 CFR 60, Subpart KKKK; and by conducting performance tests in accordance with the requirements of 40 CFR 60, Subpart A; 40 CFR Part 60, Appendix B (Performance Specifications #2, #3, #4 and/or #4A); 40 CFR 60, Subpart KKKK and 40 CFR Part 72-78, as applicable (ARM 17.8. 105; ARM 17.8.749; 40 CFR 60, Subpart KKKK).

B.16. Basin Electric shall install, certify, maintain , and operate a continuous emission monitoring system (CEMS) consisting of a NOx monitor and a diluent gas (O 2 or CO 2 ) monitor, to determine the hourly NOx emission rate in ppm (ARM 17.8.749, ARM 17.8.340, ARM 17.8.1213 and 40 CFR 60, Subpart KKKK).

B.17. Basin Electric shall comply with all applicable requirements of 40 CFR 60, Subpart KKKK, including requirements for CEMS installation, certification, quality assurance, and relative accuracy and performance testing (ARM 17.8.340 and 40 CFR 60, Subpart KKKK).

B.18. Basin Electric shall develop a quality assurance plan for all CEMS and on-going quality assurance requirements for the gas CEMS that c onforms to 40 CFR Part 60, Appendix F (ARM 17.8.1213).

B.19. As required by the Department and Section III. A.1, Basin Electric shall perform a Method

18/Method 25 test in accordance with the Montan a Source Test Protocol and Procedures Manual (ARM 17.8.106) to monitor compliance with the emissions limitations in Section III.B.4 (ARM 17.8.1213).

B.20. Monitoring compliance with the PM/PM 10 /PM 2.5 limitations in Section III.B.5, the opacity

limitations in Section III.B.11 and fuel limita tions in Section III.B.9 and other NSPS-based requirements in Section III.B.12 shall be satisfied by burning pipeline qua lity natural gas in the generating unit (ARM 17.8.749, ARM 17.8.1 213 and 40 CFR 60, Subparts A and KKKK).

B.21. Monitoring compliance with the hours of opera tion limits in Section III.B.6; the control equipment requirements in Sections III.B.7 and 8, the fuel requirements in Section III.B.9, and the stack height requirement in Section III.B. 10 shall be accomplished through recordkeeping as described in Sections III.B.23 and B.II.25 (ARM 17.8.1213).

B.22. Compliance monitoring for the applicable requirements contained in 40 CFR 72-78 shall be accomplished as described in 40 CFR Parts 72-78 (40 CFR Part 72 through 40 CFR Part 78).OP4256-00 9 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Recordkeeping

B.23. Basin Electric shall maintain a log recording the results of the oxidation catalyst inspections (as required by the manufacturer) and any maintena nce performed on the water injection, and oxidation catalyst units. Each log entry must in clude the date, the time, the results of the inspection, and the initials of the documenting person nel. The log must be maintained on-site and must be submitted to the Depart ment upon request (ARM 17.8.1212).

B.24. Basin Electric shall maintain a file of all measurements from the CEMS and performance testing measurements, including: all CEMS performance ev aluations; all CEMS or monitoring device calibration checks and audits; all adjustments and maintenance performed on these systems or devices. These shall be recorded in a permanent fo rm suitable for inspection and shall be retained on-site for at least 5 years following the date of such measurements and reports. Basin Electric shall supply these records to the Department upon request (ARM 17.8.749 and ARM 17.8.1212).

B.25. Basin Electric shall maintain on site a log docum enting the following operational parameters and conditions. All log entries shall include th e initials of the documenting personnel (ARM 17.8.1212).

a. Date and time turbine start-up events be gin and turbine shut-down events end;

b. Date, time and duration of operation of the turb ine, during which, the water injection system was not operated;

c. Date, time and duration of operation of the turbine, during which, the catalytic oxidation control system was not operated;

d. Basin Electric shall document, by month, the hours of operation for the turbine generator, including startup and shutdown. By the 25th day of each month, Basin Electric shall total the hours of operation for the previous month. The monthly information will be used to verify compliance with the rolling 12-m onth limitation. The informa tion for each of the previous months shall be submitted along with the annual emission inventory (ARM 17.8.749).

e. Date, time and duration that any fuel other than pipeline quality natural gas is combusted in

the turbine: and

f. Any project, site modifications or site improveme nts that results in changes to stack height.

B.26. Basin Electric shall comply with all applicable recordkeeping requirements contained in 40 CFR 60, Subpart KKKK (40 CFR 60, Subpart KKKK).

B.27. Basin Electric shall comply with all applicable recordkeeping requirements contained in 40 CFR Part(s) 72-78. Basin Electric shall submit a summa ry of any required reports to the Department along with the semiannual compliance monitori ng reports required by Section III.A.16 and Section V.D. (40 CFR 72-78).

B.28. All compliance source test recordkeeping shall be performed in accordance with the test method

used and the Montana Source Test Protocol and Procedures Manual, and shall be maintained on site (ARM 17.8.106 and ARM 17.8.1212).OP4256-00 10 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Reporting

B.29. Any compliance source test reports must be s ubmitted in accordance with the Montana Source

Test Protocol and Procedures Manua l (ARM 17.8.106 and ARM 17.8.1212).

B.30. The annual compliance certification required by Section V.B must contain a certification statement for the above applicable requirements (ARM 17.8.1212).

B.31. The semiannual monitoring report shall provide (ARM 17.8.1212):

a. A summary of results of any source testing that was performed during that semiannual period,

b. Date and time turbine start-up events be gin and turbine shut-down events end,

c. Date, time and duration of operation of the turbin e during which, the water injection system is not operated,

d. Date, time and duration of operation of the turbine, during which, the catalytic oxidation control system was not operated,

e. The hours of operation for the turbine generator, including startup and shutdown,

f. Any instance in which fuel other than pipe line quality natural gas was used (including information required in the log), and

g. Any instance in which a project or site improvement or modification renders the stack height

less than 85.6 feet.OP4256-00 11 Date of Decision: 11/12/10

Effective Date: 12/14/2010 SECTION IV. NON-APPLICABLE REQUIREMENTS

The permit application for Basin Electric’s Title V Operating Permit #OP4256-00 identified applicable requirements: non-applicable requirements for indivi dual or specific emission units and facility-wide operations were not listed.OP4256-00 12 Date of Decision: 11/12/10

Effective Date: 12/14/2010 SECTION V. GENERAL PERMIT CONDITIONS

A. Compliance Requirements

ARM 17.8, Subchapter 12, Operating Permit Program §1210(2)(a)-(c)& (e), §1206(6)(c)&(b)

1. The permittee must comply with all conditions of the permit. Any noncompliance with the terms or conditions of the permit constitutes a violation of the Montana Clean Air Act, and may result in enforcement action, permit modification, revocation and reissuance, or termination, or denial of a permit renewal application under ARM Title 17, Chapter 8, Subchapter 12.

2. The filing of a request by the permittee for a pe rmit modification, revocation and reissuance, or termination, or of a notification of planned ch anges or anticipated noncompliance does not stay any permit condition.

3. It shall not be a defense for a permittee in an enforcement action that it would have been necessary to halt or reduce the permitted activity in order to maintain compliance with the conditions of the permit. If appropriate, this factor may be considered as a mitigating factor in assessing a penalty for noncompliance with an applicable requirement if the source demonstrates that both the health, safety or environmental impacts of halting or reducing operations would be more serious than the impa cts of continuing operations, and that such health, safety or environmental impacts were unf oreseeable and could not have otherwise been

avoided.

4. The permittee shall furnish to the Department, w ithin a reasonable time set by the Department (not to be less than 15 days), any information that the Department may request in writing to determine whether cause exists for modifying, revoking and reissuing, or terminating the permit, or to determine compliance with the permit. Upon request, the permittee shall also furnish to the Department copies of those records that are required to be kept pursuant to the terms of the permit. This subsection does not impair or otherwise limit the right of the permittee to assert the confidentiality of the information requested by the Department, as provided in 75-2-105, MCA.

5. Any schedule of compliance for applicable requirements with which the source is not in compliance with at the time of permit issuance sh all be supplemental to, and shall not sanction noncompliance with, the applicable requirements on which it was based.

6. For applicable requirements that will become e ffective during the permit term, the source shall meet such requirements on a timely basis unless a more detailed plan or schedule is required by the applicable requirement or the Department.

B. Certification Requirements

ARM 17.8, Subchapter 12, Operating Pe rmit Program §1207 a nd §1213(7)(a)&(c)-(d)

1. Any application form, report, or compliance cer tification submitted pursuant to ARM Title 17, Chapter 8, Subchapter 12, shall contain certifica tion by a responsible official of truth, accuracy and completeness. This certification and any other certification require d under ARM Title 17, Chapter 8, Subchapter 12, shall state that, based on information and belief formed after reasonable inquiry, the statements and inform ation in the document are true, accurate and complete.OP4256-00 13 Date of Decision: 11/12/10

Effective Date: 12/14/2010 2. Compliance certifications shall be submitted by February 15 of each year, or more frequently if otherwise specified in an applicable requirement or elsewhere in the permit. Each certification must include the required information for th e previous calendar year (i.e., January 1 – December 31).

3. Compliance certifications shall include the following:

a. The identification of each term or condition of the permit that is the basis of the certification;

b. The identification of the method(s) or other means used by the owner or operator for determining the status of compliance with each term and condition during the certification period, consistent with ARM 17.8.1212;

c. The status of compliance with each term a nd condition for the period covered by the certification, including whether compliance during the period was continuous or

intermittent (based on the method or means identified in ARM 17.8.1213(7)(c)(ii), as described above); and

d. Such other facts as the Department may require to determine the compliance status of the

source.

4. All compliance certifications must be submitted to the Environmental Protection Agency, as well as to the Department, at the addresses liste d in the Notification Addresses Appendix of this permit.

C. Permit Shield

ARM 17.8, Subchapter 12, Oper ating Permit Program §1214(1)-(4)

1. The applicable requirements and non-federally enforceable requirements are included and specifically identified in this permit and the permit includes a precise summary of the requirements not applicable to the source. Compliance with the conditions of the permit shall be deemed compliance with any applicable re quirements and any non-federally enforceable requirements as of the date of permit issuance.

2. The permit shield described in 1 above shall rema in in effect during the appeal of any permit action (renewal, revision, reopening, or re vocation and reissuance) to the Board of Environmental Review (Board), until such time as the Board renders its final decision.

3. Nothing in this permit alters or affects the following:

a. The provisions of Sec. 7603 of the FCAA, including the authority of the administrator under that section;

b. The liability of an owner or operator of a source for any violation of applicable requirements prior to or at the time of permit issuance;

c. The applicable requirements of the Acid Rain Program, consistent with Sec. 7651g(a) of the FCAA;

d. The ability of the administrator to obtain in formation from a source pursuant to Sec. 7414 of the FCAA;OP4256-00 14 Date of Decision: 11/12/10

Effective Date: 12/14/2010 e. The ability of the Department to obtain info rmation from a source pursuant to the Montana Clean Air Act, Title 75, Chapter 2, MCA;

f. The emergency powers of the Department un der the Montana Clean Air Act, Title 75, Chapter 2, MCA; and

g. The ability of the Department to establish or revise requirements for the use of reasonably available control technology (RACT) as defined in ARM Title 17, Chapter 8. However, if the inclusion of a RACT into the permit pursuant to ARM Title 17, Chapter 8, Subchapter 12, is appealed to the Board, the permit shie ld, as it applies to the source’s existing permit,

shall remain in effect until such time as the Board has rendered its final decision.

4. Nothing in this permit alters or affects the ability of the Department to take enforcement action for a violation of an applicable requirement or permit term demonstrated pursuant to ARM 17.8.106, Source Testing Protocol.

5. Pursuant to ARM 17.8.132, for the purpose of s ubmitting a compliance certification, nothing in these rules shall preclude the use, including the exclusive use, of any credible evidence or information relevant to whether a source would have been in compliance. However, when compliance or noncompliance is demonstrated by a test or procedure provided by permit or other applicable requirements, the source sha ll then be presumed to be in compliance or noncompliance unless that presumption is overcom e by other relevant credible evidence.

6. The permit shield will not extend to minor perm it modifications or changes not requiring a permit revision (see Sections I & J).

7. The permit shield will extend to significant perm it modifications and transfer or assignment of ownership (see Sections K & O).

D. Monitoring, Recordkeeping, and Reporting Requirements

ARM 17.8, Subchapter 12, Oper ating Permit Program §1212(2)&(3)

1. Unless otherwise provided in this permit, the permittee shall maintain compliance monitoring records that include the following information:

a. The date, place as defined in the permit, and time of sampling or measurement;

b. The date(s) analyses were performed;

c. The company or entity that performed the analyses;

d. The analytical techniques or methods used;

e. The results of such analyses; and

f. The operating conditions at the time of sampling or measurement.

2. The permittee shall retain records of all require d monitoring data and s upport information for a period of at least 5 years from the date of the monitoring sample, measurement, report, or application. Support information includes a ll calibration and maintenance records and all original strip-chart recordings for continuous monitoring instrumentation, and copies of all reports required by the permit. All monitoring data, support information, and required reportsOP4256-00 15 Date of Decision: 11/12/10

Effective Date: 12/14/2010 and summaries may be maintained in computerized form at the plant site if the information is made available to Department personnel upon request, which may be for either hard copies or computerized format. Strip-charts must be mainta ined in their original form at the plant site

and shall be made available to Department personnel upon request.

3. The permittee shall submit to the Department, at the addresses located in the Notification Addresses Appendix of this permit, reports of any required monitoring by February 15 and August 15 of each year, or more frequently if othe rwise specified in an applicable requirement or elsewhere in the permit. The monitoring report submitted on February 15 of each year must include the required monitoring information for the period of July 1 through December 31 of the previous year. The monitoring report submitted on August 15 of each year must include the required monitoring information for the period of Ja nuary 1 through June 30 of the current year. All instances of deviations from the permit requi rements must be clearly identified in such reports. All required reports must be certified by a responsible official, consistent with ARM

17.8.1207.

E. Prompt Deviation Reporting

ARM 17.8, Subchapter 12, Oper ating Permit Program §1212(3)(c)

The permittee shall promptly report deviations from permit requirements, including those attributable to upset conditions as defined in the permit, the pr obable cause of such deviations, and any corrective actions or preventive measures taken. To be consid ered prompt, deviations shall be reported to the Department within the following timeframes ( unless otherwise specified in an applicable requirement):

1. For deviations which may result in emissions potentially in violation of permit limitations:

a. An initial phone notification (or faxed or elect ronic notification) describing the incident within 24 hours (or the next bus iness day) of discovery; and,

b. A follow-up written, faxed, or electronic report w ithin 30 days of discovery of the deviation that describes the probable cause of the repor ted deviation and any corrective actions or preventative measures taken.

2. For deviations attributable to malfunctions, deviations shall be reported to the Department in accordance with the malfunction reporting requirements under ARM 17.8.110; and

3. For all other deviations, deviati ons shall be reported to the Depa rtment via a written, faxed, or electronic report within 90 days of discovery ( as determined through routine internal review by the permittee).

Prompt deviation reports do not need to be resu bmitted with regular semiannual (or other routine) reports, but may be referenced by the date of submittal.

F. Emergency Provisions

ARM 17.8, Subchapter 12, Operating Perm it Program §1201(13) and §1214(5), (6)&(8)

1. An “emergency” means any situation arising from sudden and reasonably unforeseeable events beyond the control of the source, including acts of God, which situation requires immediate corrective action to restore normal operation and causes the source to exceed a technologybased emission limitation under this permit due to the unavoidable increases in emissions attributable to the emergency. An emergenc y shall not include noncompliance to the extent caused by improperly designed equipment, lack of reasonable preventive maintenance, careless or improper operation, or operator error.OP4256-00 16 Date of Decision: 11/12/10

Effective Date: 12/14/2010 2. An emergency constitutes an affirmative defense to an action brought for noncompliance with a technology-based emission limitation if the pe rmittee demonstrates through properly signed, contemporaneous logs, or othe r relevant evidence, that:

a. An emergency occurred and the permittee can identify the cause(s) of the emergency;

b. The permitted facility was at the time being properly operated;

c. During the period of the emergency the permittee took all reasonable steps to minimize levels of emissions that exceeded the emission standards or other requirements in the permit; and

d. The permittee submitted notice of the emergency to the Department within 2 working days

of the time when emission limitations were ex ceeded due to the emergency. This notice fulfills the requirements of ARM 17.8.1212(3)(c ). This notice must contain a description of the emergency, any steps taken to mitiga te emissions, and corrective actions taken.

3. These emergency provisions are in addition to any emergency, malfunction or upset provision contained in any applicable requirement.

G. Inspection and Entry

ARM 17.8, Subchapter 12, Oper ating Permit Program §1213(3)&(4)

1. Upon presentation of credentials and other requirements as may be required by law, the permittee shall allow the Department, the admini strator, or an authorized representative (including an authorized contractor acting as a representative of the Department or the administrator) to perform the following:

a. Enter the premises where a source required to obtain a permit is located or emissionsrelated activity is conducted, or where record s must be kept under the conditions of the permit;

b. Have access to and copy, at reasonable times, any records that must be kept under the conditions of the permit;

c. Inspect at reasonable times any facilities, em ission units, equipment (including monitoring and air pollution control equipment), practices, or operations regulated or required under the permit; and

d. As authorized by the Montana Clean Air Act and rules promulgated thereunder, sample or monitor, at reasonable times, any substances or parameters at any location for the purpose of assuring compliance with the permit or applicable requirements.

2. The permittee shall inform the inspector of all workplace safety rules or requirements at the time of inspection. This section shall not limit in any manner the Department’s statutory right of entry and inspection as provided for in 75-2-403, MCA.

H. Fee Payment

ARM 17.8, Subchapter 12, Opera ting Permit Program §1210(2)(f) and ARM 17.8, Subchapter 5, Air Quality Permit Application, Operation, and Open Burning Fees §505(3)-(5) (STATE ONLY)OP4256-00 17 Date of Decision: 11/12/10

Effective Date: 12/14/2010 1. The permittee must pay application and operating fees, pursuant to ARM Title 17, Chapter 8, Subchapter 5.

2. Annually, the Department shall provide the permittee with written notice of the amount of the fee and the basis for the fee assessment. The air quality operation fee is due 30 days after receipt of the notice, unless the fee assessment is appealed pursuant to ARM 17.8.511. If any portion of the fee is not appealed, that portion of the fee that is not appealed is due 30 days after receipt of the notice. Any remaining fee, which may be due after the completion of an appeal, is due immediately upon issuance of the Board’s decision or upon completion of any judicial

review of the Board’s decision.

3. If the permittee fails to pay the required fee (or an y required portion of an appealed fee) within 90 days of the due date of the fee, the Depart ment may impose an additional assessment of 15% of the fee (or any required portion of an appeal ed fee) or $100, whichever is greater, plus interest on the fee (or any required portion of an appealed fee), computed at the interest rate established under 15-31-510(3), MCA.

I. Minor Permit Modifications

ARM 17.8, Subchapter 12, Opera ting Permit Program §1226(3)&(11)

1. An application for a minor permit modification need only address in detail those portions of the permit application that require revision, updatin g, supplementation, or deletion, and may reference any required in formation that has been previously submitted.

2. The permit shield under ARM 17.8.1214 will not extend to any minor modifications processed pursuant to ARM 17.8.1226.

J. Changes Not Requiring Permit Revision

ARM 17.8, Subchapter 12, Operating Permit Program §1224(1)-(3), (5)&(6)

1. The permittee is authorized to make changes w ithin the facility as described below, provided the following conditions are met:

a. The proposed changes do not require the permittee to obtain a Montana Air Quality Permit under ARM Title 17, Chapter 8, Subchapter 7;

b. The proposed changes are not modifications under Title I of the FCAA, or as defined in ARM Title 17, Chapter 8, Subchapters 8, 9, or 10;

c. The emissions resulting from the proposed cha nges do not exceed the emissions allowable under this permit, whether expressed as a rate of emissions or in total emissions;

d. The proposed changes do not alter permit term s that are necessary to enforce applicable

emission limitations on emission un its covered by the permit; and

e. The facility provides the administrator and the Department with written notification at least 7 days prior to making the proposed changes.

2. The permittee and the Department shall attach each notice provided pursuant to 1.e above to their respective copies of this permit.OP4256-00 18 Date of Decision: 11/12/10

Effective Date: 12/14/2010 3. Pursuant to the conditions above, the permittee is authorized to make Section 502(b)(10) changes, as defined in ARM 17.8.1201(30), without a permit revision. For each such change, the written notification required under 1.e above shall include a description of the change within the source, the date on which the change will occur, any change in emissions, and any permit term or condition that is no longer applicable as a result of the change.

4. The permittee may make a change not specifically addressed or prohibited by the permit terms and conditions without requiring a permit revision, provided the following conditions are met:

a. Each proposed change does not weaken the enforceability of any existing permit conditions;

b. The Department has not objected to such change;

c. Each proposed change meets all applicable requirements and does not violate any existing permit term or condition; and

d. The permittee provides contemporaneous wr itten notice to the Department and the administrator of each change that is above the level for insignificant emission units as defined in ARM 17.8.1201(22) and 17.8.1206(3), and the written notice describes each such change, including the date of the change , any change in emissions, pollutants emitted, and any applicable requirement that would apply as a result of the change.

5. The permit shield authorized by ARM 17.8.1214 shall not apply to changes made pursuant to ARM 17.8.1224(3) and (5), but is applicable to terms and conditions that allow for increases and decreases in emissions pursuant to ARM 17.8.1224(4).

K. Significant Permit Modifications

ARM 17.8, Subchapter 12, Operati ng Permit Program §1227(1), (3)&(4)

1. The modification procedures set forth in 2 below must be used for any application requesting a significant modification of this permit. Signi ficant modifications include the following:

a. Any permit modification that does not qualify as either a minor modification or as an administrative permit amendment;

b. Every significant change in existing pe rmit monitoring terms or conditions;

c. Every relaxation of permit reporting or recor dkeeping terms or conditions that limit the Department’s ability to determine compliance with any applicable rule, consistent with the requirements of the rule; or

d. Any other change determined by the Department to be significant.

2. Significant modifications shall meet all require ments of ARM Title 17, Chapter 8, including those for applications, public participation, and re view by affected states and the administrator, as they apply to permit issuance and renewal, excep t that an application for a significant permit modification need only address in detail those porti ons of the permit application that require revision, updating, supplementation or deletion.

3. The permit shield provided for in ARM 17.8.1 214 shall extend to significant modifications.OP4256-00 19 Date of Decision: 11/12/10

Effective Date: 12/14/2010 L. Reopening for Cause

ARM 17.8, Subchapter 12, Oper ating Permit Program §1228(1)&(2)

This permit may be reopened and revised under the following circumstances:

1. Additional applicable requirements under the FCAA become applicable to the facility when the permit has a remaining term of 3 or more years. Reopening and revision of the permit shall be completed not later than 18 months after promulgation of the applicable requirement. No reopening is required under ARM 17.8.1228(1)(a) if the effective date of the applicable requirement is later than the date on which th e permit is due to expire, unless the original permit or any of its terms or conditions have been extended pursuant to ARM 17.8.1220(12) or 17.8.1221(2);

2. Additional requirements (including excess emission requirements) become applicable to an affected source under the Acid Rain Program. Upon approval by the administrator, excess emission offset plans shall be deemed incorporated into the permit;

3. The Department or the administrator determines th at the permit contains a material mistake or

that inaccurate statements were made in estab lishing the emission standards or other terms or conditions of the permit; or

4. The administrator or the Department determines that the permit must be revised or revoked and reissued to ensure compliance w ith the applicable requirements.

M. Permit Expiration and Renewal

ARM 17.8, Subchapter 12, Operating Permit Pr ogram §1210(2)(g), §1220(11)&(12), and §1205(2)(d)

1. This permit is issued for a fixed term of 5 years.

2. Renewal of this permit is subject to the same procedural requirements that apply to permit issuance, including those for application, content, public participation, and affected state and

administrator review.

3. Expiration of this permit terminates the permittee’s right to operate unless a timely and administratively complete renewal applicati on has been submitted consistent with ARM 17.8.1221 and 17.8.1205(2)(d). If a timely and administratively complete application has been submitted, all terms and conditions of the permit, including the application shield, remain in effect after the permit expires until the pe rmit renewal has been issued or denied.

4. For renewal, the permittee shall submit a comple te air quality operating permit application to the Department not later than 6 months prior to the expiration of this permit, unless otherwise specified. If necessary to ensure that the terms of the existing permit will not lapse before renewal, the Department may specify, in wr iting to the permittee, a longer time period for submission of the renewal application. Such written notification must be provided at least 1 year before the renewal application due date established in the existing permit.

N. Severability Clause

ARM 17.8, Subchapter 12, Opera ting Permit Program §1210(2)(i)&(l)

1. The administrative appeal or subsequent judicial review of the issuance by the Department of an initial permit under this subchapter sha ll not impair in any manner the underlying applicability of all applicable requirements, a nd such requirements continue to apply as if a final permit decision had not been reached by the Department.OP4256-00 20 Date of Decision: 11/12/10

Effective Date: 12/14/2010 2. If any provision of a permit is found to be i nvalid, all valid parts that are severable from the invalid part remain in effect. If a provision of a permit is invalid in one or more of its applications, the provision remains in effect in all valid applications that are severable from the invalid applications.

O. Transfer or Assignment of Ownership

ARM 17.8, Subchapter 12, Oper ating Permit Program §1225(2)&(4)

1. If an administrative permit amendment involves a change in ownership or operational control, the applicant must include in its request to the Department a written agreement containing a specific date for the transfer of permit responsib ility, coverage and liability between the current and new permittee.

2. The permit shield provided for in ARM17.8.1214 shall not extend to administrative permit

amendments.

P. Emissions Trading, Marketable Permits, Economic Incentives

ARM 17.8, Subchapter 12, Op erating Permit Program §1226(2)

Notwithstanding ARM 17.8.1226(1) and (7), mi nor air quality operating permit modification procedures may be used for permit modificati ons involving the use of economic incentives, marketable permits, emissions trading, and other si milar approaches, to the extent that such minor permit modification procedures are explicitly provide d for in the Montana State Implementation Plan or in applicable requirements promulgated by the administrator.

Q. No Property Rights Conveyed

ARM 17.8, Subchapter 12, Oper ating Permit Program §1210(2)(d)

This permit does not convey any property rights of any sort, or any exclusive privilege.

R. Testing Requirements

ARM 17.8, Subchapter 1, General Provisions §105

The permittee shall comply with ARM 17.8.105.

S. Source Testing Protocol

ARM 17.8, Subchapter 1, General Provisions §106

The permittee shall comply with ARM 17.8.106.

T. Malfunctions

ARM 17.8, Subchapter 1, General Provisions §110

The permittee shall comply with ARM 17.8.110.

U. CircumventionOP4256-00 21 Date of Decision: 11/12/10

Effective Date: 12/14/2010 ARM 17.8, Subchapter 1, General Provisions §111 The permittee shall comply with ARM 17.8.111.

V. Motor Vehicles

ARM 17.8, Subchapter 3, Emission Standards §325

The permittee shall comply with ARM 17.8.325.

W. Annual Emissions Inventory

ARM 17.8, Subchapter 5, Air Quality Permit A pplication, Operation and Open Burning Fees §505 (STATE ONLY)

The permittee shall supply the Department with annual production and other information for all emission units necessary to calculate actual or estimated actual amount of air pollutants emitted during each calendar year. Information shall be gathered on a calendar-year basis and submitted to the Department by the date required in the emi ssion inventory request, unless otherwise specified in this permit. Information shall be in the units required by the Department.

X. Open Burning

ARM 17.8, Subchapter 6, Open Burning §604, 605 and 606

The permittee shall comply with ARM 17.8.604, 605 and 606.

Y. Montana Air Quality Permits

ARM 17.8, Subchapter 7, Permit, Construction a nd Operation of Air Contaminant Sources §745 and

764 (ARM 17.8.745(1) and 764(1)(b) are STATE ENFORCEABLE ONLY until approval by the EPA as part of the SIP)

1. Except as specified, no person shall construct, inst all, modify or use any air contaminant source or stack associated with any source without first obtaining a permit from the Department or Board. A permit is not required for those sources or stacks as specified by ARM 17.8.744(1)(a)-(k).

2. The permittee shall comply with AR M 17.8.743, 744, 745, 748, and 764.

3. ARM 17.8.745(1) specifies de minimis chang es as construction or changed conditions of operation at a facility holding a Montana Air Quality Permit (MAQP) issued under Chapter 8 that does not increase the facility’s potential to emit by more than 5 tons per year of any pollutant, except (STATE ENFORCEABLE ONLY until approved by the EPA as part of the SIP):

a. Any construction or changed condition that would violate any condition in the facility’s existing MAQP or any applicable rule contained in Chapter 8 is prohibited, except as provided in ARM 17.8.745(2);

b. Any construction or changed conditions of operation that would qualify as a major modification under Subchapters 8, 9 or 10 of Chapter 8;OP4256-00 22 Date of Decision: 11/12/10

Effective Date: 12/14/2010 c. Any construction or changed c ondition of operation that would affect the plume rise or dispersion characteristic of emissions that w ould cause or contribute to a violation of an ambient air quality standard or ambient air increment as defined in ARM 17.8.804;

d. Any construction or improvement project with a potential to emit more than 5 tons per year may not be artificially split into smaller pr ojects to avoid Montana Air Quality Permitting;

or

e. Emission reductions obtained th rough offsetting within a facility are not included when determining the potential emission increase fro m construction or ch anged conditions of operation, unless such reductions are made federally enforceable.

4. Any facility making a de minimis change pursuant to ARM 17.8.745(1) shall notify the Department if the change would include a change in control equipment, stack height, stack diameter, stack gas temperature, source location or fuel specifications, or would result in an increase in source capacity above its permitted opera tion or the addition of a new emission unit. The notice must be submitted, in writing, 10 days prior to start up or use of the proposed de minimis change, or as soon as reasonably prac ticable in the event of an unanticipated circumstance causing the de minimis change, and must include the information requested in ARM 17.8.745(1) (STATE ENFORCEABLE ONLY until approval by the EPA as part of the SIP).

Z. National Emission Standard for Asbestos

40 CFR, Part 61, Subpart M

The permittee shall not conduct any asbestos abat ement activities except in accordance with 40 CFR 61, Subpart M (National Emission Standard for Hazardous Air Pollutants for Asbestos).

AA. Asbestos

ARM 17.74, Subchapter 3, General Provisions and Subchapter 4, Fees

The permittee shall comply with ARM 17.74.301, et seq. , and ARM 17.74.401, et seq . (State only)

BB. Stratospheric Ozone Protection – Servic ing of Motor Vehicle Air Conditioners

40 CFR, Part 82, Subpart B

If the permittee performs a service on motor vehicles and this service involves ozone-depleting substance/refrigerant in the motor vehicle air conditioner (MVAC), the permittee is subject to all the applicable requirements as specified in 40 CFR 82, Subpart B.

CC. Stratospheric Ozone Protection – Recycling and Emission Reductions

40 CFR, Part 82, Subpart F

The permittee shall comply with the standards for recycling and emission reductions in 40 CFR 82, Subpart F, except as provided for MVACs in Subpart B:

1. Persons opening appliances for maintenance, service, repair, or disposal must comply with the required practices pursuant to §82.156;OP4256-00 23 Date of Decision: 11/12/10

Effective Date: 12/14/2010 2. Equipment used during the maintenance, service, re pair or disposal of appliances must comply with the standards for recycling and r ecovery equipment pursuant to §82.158;

3. Persons performing maintenance, service, repair or disposal of appliances must be certified by an approved technical certification program pursuant to §82.161;

4. Persons disposing of small appliances, M VACs and MVAC-like (as defined at §82.152) appliances must comply with recordkeep ing requirements pursuant to §82.166;

5. Persons owning commercial or industrial process re frigeration equipment must comply with the leak repair requirements pursuant to §82.156; and

6. Owners/operators of appliances normally containing 50 or more pounds of refrigerant must keep records of refrigerant purchased and adde d to such appliances pursuant to §82.166.

DD. Emergency Episode Plan

The permittee shall comply with the requirements c ontained in Chapter 9.7 of the State of Montana Air Quality Control Implementation Plan.

Each major source emitting 100 tons per year located in a Priority I Air Quality Control Region, shall submit to the Department a legally enforceable Em ergency Episode Action Plan (EEAP) that details how the source will curtail emissions during an ai r pollutant emergency episode. The industrial EEAP shall be in accordance with the Department ’s EEAP and shall be submitted according to a timetable developed by the Department, following Priority I reclassification.

EE. Definitions

Terms not otherwise defined in this permit or in the Definitions and Abbrev iations Appendix of this permit, shall have the meaning assigned to them in the referenced regulations.OP4256-00 24 Date of Decision: 11/12/10

Effective Date: 12/14/2010 APPENDICESOP4256-00 A-1 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Appendix A INSIGNIFICANT EMISSIONS UNITS

Disclaimer: The information in this appendix is not Stat e or Federally enforceable, but is presented to assist Basin Electric, the permitting auth ority, inspectors, and the public.

Pursuant to ARM 17.8.1201(22)(a), an insignificant emission unit means any activity or emissions unit located within a source that: (i) has a potential to emit less than five tons per year of any regulated pollutant; (ii) has a potential to emit less than 500 pounds per year of l ead; (iii) has a potential to emit less than 500 pounds per year of hazardous air pollutants listed pursuant to section 7412 (b) of the FCAA; and (iv) is not regulated by an applicable requirement, other than a generally applicable requirement that applies to all emission units subject to Subchapter 12.

List of Insignificant Activities:

The following table of insignificant sources and/or activities were provided by Basin Electric.

Emissions Unit ID Description

IEU01 Haul Road Fugitive EmissionsOP4256-00 B-1 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Appendix B DEFINITIONS and ABBREVIATIONS

"Act" means the Clean Air Act, as amended, 42 U.S. 7401, et seq

.

"Administrative permit amendment" means an air quality operating permit revision that:

(a) correct s typographical errors; (b) identifies a change in the name, address or pho ne number of any person identified in the air quality operating permit, or identifies a similar minor administrative change at the source; (c) requires more frequent monitoring or reporting by Basin Electric; (d) requires changes in monitoring or reporting requi rements that the Department deems to be no less stringent than current monitoring or reporting requirements; (e) allows for a change in ownership or operationa l control of a source if the Department has determined that no other change in the air qua lity operating permit is necessary, consistent with ARM 17.8.1225; or (f) incorporates any other type of change which the Department has determined to be similar to those revisions set forth in (a)-(e), above.

"Applicable requirement" means all of the following as they a pply to emissions units in a source requiring an air quality operating permit (including requi rements that have been promulgated or approved by the Department or the administrator through rule making at the time of issuance of the air quality operating permit, but have future-effective compliance dates, provided that such requirements apply to sources covered under the operating permit):

(a) any standard, rule, or other requirement, including any requirement contained in a consent decree or judicial or administrative order entere d into or issued by the Department, that is contained in the Montana state implementa tion plan approved or promulgated by the administrator through rule making under Title I of the FCAA; (b) any federally enforceable term, condition or ot her requirement of any Montana Air Quality Permit issued by the Department under Subchapters 7, 8, 9 and 10 of this chapter, or pursuant to regulations approved or pr omulgated through rule maki ng under Title I of the FCAA, including parts C and D; (c) any standard or other requirement under Section 7411 of the FCAA, including Section 7411(d); (d) any standard or other requirement under Section 7412 of the FCAA, including any requirement concerning accident prevention u nder Section 7412(r)(7), but excluding the contents of any risk management plan required under Section 7412(r); (e) any standard or other requirement of the aci d rain program under Title IV of the FCAA or regulations promulgated thereunder; (f) any requirements established pursuant to Section 7661c(b) or Section 7414(a)(3) of the FCAA; (g) any standard or other requirement governing solid waste incineration, under Section 7429 of the FCAA; (h) any standard or other requirement for cons umer and commercial pr oducts, under Section 7511b(e) of the FCAA; (i) any standard or other requirement for tank vessels, under Section 7511b(f) of the FCAA; (j) any standard or other requirement of the regulations promulgated to protect stratospheric ozone under Title VI of the FCAA, unless the administrator determines that such requirements need not be contained in an air quality operating permit; (k) any national ambient air quality standard or in crement or visibility requirement under part C of Title I of the FCAA, but only as it would ap ply to temporary sources permitted pursuant to Section 7661c(e) of the FCAA; orOP4256-00 B-2 Date of Decision: 11/12/10

Effective Date: 12/14/2010 (l) any federally enforceable term or condition of any air quality open burning permit issued by the Department under Subchapter 6.

"Department" means the Montana Department of Environmental Quality.

"Emissions unit" means any part or activity of a stationary source that emits or has the potential to emit any regulated air pollutant or any pollutant listed unde r Section 7412(b) of the FCAA. This term is not

meant to alter or affect the definition of the te rm "unit" for purposes of Title IV of the FCAA.

"FCAA" means the Federal Clean Air Act, as amended.

"Federally enforceable" means all limitations and conditi ons which are enforceable by the administrator, including those requirements developed pursuant to 40 CFR Parts 60 and 61, requirements within the Montana state implementation plan, and any permit requirement established pursuant to 40 CFR 52.21 or under regulations approved pursuant to 40 CFR 51, Subpart I, including operating permits issued under an EPA approved program that is incorp orated into the Montana state implementation plan and expressly requires adherence to any permit issued under such program.

"Fugitive emissions" means those emissions which could not reasonably pass through a stack, chimney, vent, or other functionall y equivalent opening.

"General air quality operating permit" or "general permit" means an air quality operating permit that meets the requirements of ARM 17.8.1222, covers multip le sources in a source category, and is issued in lieu of individual permits being issued to each source.

"Hazardous air pollutant" means any air pollutant listed as a hazardous air pollutant pursuant to Section 112(b) of the FCAA.

"Non-federally enforceable requirement" means the following as they apply to emissions units in a source requiring an air quality operating permit:

(a) any standard, rule, or other requirement, including any requirement contained in a consent decree, or judicial or administrative order entered into or issued by the Department, that is not contained in the Montana state implementa tion plan approved or promulgated by the administrator through rule making under Title I of the FCAA; (b) any term, condition or other requirement contai ned in any Montana Air Quality Permit issued by the Department under Subchapters 7, 8, 9 an d 10 of this chapter that is not federally enforceable; (c) does not include any Montana ambient air quality standard contained in Subchapter 2 of this chapter.

"Permittee" means the owner or operator of any source s ubject to the permitting requirements of this subchapter, as provided in ARM 17.8.1204, that hol ds a valid air quality operating permit or has submitted a timely and complete perm it application for issuance, renewal, amendment, or modification pursuant to this subchapter.

"Regulated air pollutant" means the following:

(a) nitrogen oxides or any volatile organic compounds; (b) any pollutant for which a national ambient ai r quality standard has been promulgated; (c) any pollutant that is subject to any standa rd promulgated under Section 7411 of the FCAA; (d) any Class I or II substance subject to a standard promulgated under or established by Title VI of the FCAA; orOP4256-00 B-3 Date of Decision: 11/12/10

Effective Date: 12/14/2010 (e) any pollutant subject to a standard or othe r requirement established or promulgated under Section 7412 of the FCAA, including but not limited to the following:

(i) any pollutant subject to requirements under Section 7412(j) of the FCAA. If the administrator fails to promulgate a standard by the date established in Section 7412(e) of the FCAA, any pollutant for which a subject source would be major shall be considered to be regulated on the date 18 months after the applicable date established in Section 7412(e) of the FCAA; (ii ) any pollutant for which the requirements of Section 7412(g)(2) of the FCAA have been met but only with respect to the individual source subject to Section 7412(g)(2) requirement.

"Responsible official" means one of the following:

(a) F or a corporation: a president, secretary, treasurer, or vice-president of the corporation in charge of a principal business function, or a ny other person who performs similar policy or decision-making functions for the corporation, or a duly authorized representative of such person if the representative is responsible for the overall operation of one or more manufacturing, production, or operating facilities applying for or subject to a permit and

either:

(i) the facilities employ more than 250 persons or have gross annual sales or expenditures exceeding $25 million (in second quarter 1980 dollars); or (ii ) the delegation of authority to such re presentative is approved in advance by the Department.

(b) F or a partnership or sole proprietorship: a ge neral partner or the proprietor, respectively. (c) For a municipality, state, federal, or other pub lic agency: either a pr incipal executive officer or ranking elected official. For the purposes of this part, a principal executive officer of a federal agency includes the chief executive officer having responsibility for the overall operations of a principal geographic unit of the agency (e.g., a regional administrator of the environmental protection agency). (d) For affected sources: the designated representative in so far as actions, standards, requirements, or prohibitions under Title IV of the FCAA or the regulations promulgated thereunder are concerned, and the designated representative for any other purposes under this subchapter.OP4256-00 B-4 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Abbreviations:

ARM Administrative Rules of Montana ASTM American Society of Testing Materials BACT Best Available Control Technology BDT bone dry tons

BTU British Thermal Unit CFR Code of Federal Regulations

CO carbon monoxide DEQ Department of Environmental Quality dscf dry standard cubic foot dscfm dry standard cubic foot per minute EEAP Emergency Episode Action Plan EPA U.S. Environmental Protection Agency EPA Method Test methods contained in 40 CFR 60, Appendix A

EU emissions unit

FCAA Federal Clean Air Act gr grains HAP hazardous air pollutant IEU insignificant emissions unit

Mbdft thousand board feet Method 5 40 CFR 60, Appendix A, Method 5 Method 9 40 CFR 60, Appendix A, Method 9

MMbdft million board feet

MMBTU million British Thermal Units NOx oxides of nitrogen

NO 2 nitrogen dioxide

O 2 oxygen Pb lead PM particulate matter PM10 particulate matter less than 10 microns in size psi pounds per square inch

scf standard cubic feet

SIC Source Industrial Classification

SO 2 sulfur dioxide

SOx oxides of sulfur

tpy tons per year U.S.C. United States Code

VE visible emissions VOC volatile organic compoundOP4256-00 C-1 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Appendix C NOTIFICATION ADDRESSES

Compliance Notifications:

Montana Department of Environmental Quality Permitting and Compliance Division Air Resources Management Bureau

P.O. Box 200901 Helena, MT 59620-0901

United States EPA Air Program Coordinator Region VIII, Montana Office

10 W. 15 th Street, Suite 3200 Helena, MT 59626

Permit Modifications:

Montana Department of Environmental Quality Permitting and Compliance Division Air Resources Management Bureau

P.O. Box 200901 Helena, MT 59620-0901

Office of Partnerships and Regulatory Assistance Air and Radiation Program US EPA Region VIII 8P-AR 1595 Wynkoop Street Denver, CO 80202-1129OP4256-00 D-1 Date of Decision: 11/12/10

Effective Date: 12/14/2010 Appendix D AIR QUALITY INSPECTOR INFORMATION

Disclaimer: The information in this appendix is not State or Federally enforceable, but is presented to assist Basin Electric, permitting authority, inspectors, and the public.

1. Directio n to Plant: The station is located 7 miles northeast of Culbertson, Montana. Go north on Route 16 approximately 4.5 miles, turn east (right) on a gravel road and travel 4.8 miles, turn south (right) on section-line gravel road. Basin Creek is situated on the left side of the southbound sectionline gravel road, diagonally southeast across the ro ad from Northern Border Compressor Station #3.

2. Safety Eq uipment Required: Hardhat, steel-toed shoes/boots, and hearing protection are required at the facility. A Basin Electric employee will conduct a safety briefing for any inspector prior to entering the plant area.

3. Facility Plot Plan:OP4256-00 D-2 Date of Decision: 11/12/10

Effective Date: 12/14/2010Appendix E ACID RAIN APPLICATION

OP4256-00 E-1 Date of Decision: 11/12/10

Effective Date: 12/14/2010OP4256-00 E-2 Date of Decision: 11/12/10

Effective Date: 12/14/2010OP4256-00 E-3 Date of Decision: 11/12/10

Effective Date: 12/14/2010OP4256-00 E-4 Date of Decision: 11/12/10

Effective Date: 12/14/2010