Notes from Site Visit at the Jackson Power Facility on September 24, 2009

EPA conducted a site visit at the Jackson Power Facility located in Jackson, MI on Thursday, September 24, 2009 to learn about the opera tions at the plant. It should be noted that at the time of the site visit the plant was calle d Kinder Morgan Power Pl ant, but the plant has since changed its name to Jackson Power Facility. Table 1, located at the end of this memorandum, identifies the si te visit participants.

This memorandum describes the informati on collected during the site visit.

Plant Overview

 The Jackson Power Facility (JPF) is owne d by AlphaGen Power LLC and operated by JPM Michigan Operator LLC (JPMMO).

 JPF is a “demand dispatch” facility with p eaking and intermediate load capacity. JPF provides 100% of the facility capacity for demand dispatched energy conversion services to a single customer under a long term Capacity Sale and Tolling Agreement. The customer is the JPF Power Selling Entity (PSE) participa ting in the Midwest Independent Transmission System Operator (MISO) market as an electricity wholesaler. Due to depressed regional mfg / industrial power demand in 2009, JPF was not dispatched as often as in 2007 and 2008. The plant’s typical peaking ope rations since the January 2009 launch of the MISO Ancillary

Services Market have included starting all units in the morni ng at a plant minimum (say 150- 200 MWs), operating on automatic generation co ntrol (AGC) to follow system demand for regulation or spinning reserve to satisfy peaki ng demand transients through some portion of a day or into the evening, and then shutting down before midnight.

 JPF is located in zoned industrial property at the edge of residential Jackson, MI, within the City limits. The plant employs 22 personnel res ponsible for operation an d maintenance of the facility.

 JPF’s 550 MW combined cycle system is unique from other facilities because it employs a proprietary integrated hybrid combined cy cle system of six aer o-derivative (LM6000PC) combustion turbine generator sets with one industrial (Frame 7EA) combustion turbine generator set, all equipp ed with heat recovery steam generators in a single combined cycle facility sharing two steam turbine generato r sets. The JPF was designed to serve an “intermediate” and peaking market niche.

 JPF is a successful peaking plan t because of its ability to qu ickly produce power. The plant is attractive to its capacity and to lling customer because of the high ramp rate available with this specific combined cycle system (30 MW/mi nute). If the plant is “cold”, meaning it has not been run in 24 hours, it is able to start- up and ramp to full power in just under three hours. If the plant is “warm”, it requires just under two hours to start-up and ramp to full

power.

 JPF was strategically built close to a natural ga s line that runs across Michigan. JPF is a single fuel “Pipeline Natural Gas” fired facili ty. JPF is interconnected to the 138KV High Voltage transmission system via two approxima tely one mile long high voltage lines whichPage 2

were constructed for the interconnection. All capacity sale and to lling customer power delivery is via this interconnect.

 AlphaGen Power’s Lessee operates the JPF unde r the CSTA with their customer. As described by JPF plant personnel, the plant Oper ator is protected by c ontract with the owner and the owner is protected by contract with th e capacity sale and tolling customer. The customer “owns” the JPF’s capacity to convert natural gas fuel to el ectricity, and purchases the fuel used to run the plant. JPF personnel ex plained that if JPF were a merchant plant, it would need to purchase its own fuel, and likel y would have been out of business due to natural gas prices. The owner covers the plant’s operation and ma intenance (O&M) costs and also pays the property tax for the plant.

 The CSTA customer has contracted for the abil ity to supply facility Dependable Capacity

when demanded. This means that even when th e plant is not running, JP F is potentially still making a profit because it is availa ble to run. If a unit is down for maintenance or repair, JPF is potentially vulnerable to a loss because th e power that could be generated from that combustion or steam turbine is no longer available.

 The CSTA customer participates in the MISO market daily and demands dispatch of the JPF in response to market opportunity. The JPF combined cycle system does not operate every day, and when it does operat e, it is typically for only part of the day.

 The MISO market views JPF as a single comb ined cycle system that provides varying amounts of power as needed. JPF responds to demand dispatch or ders identifying the configuration in which the facility must run (num ber of units to be on-line) but JPF offers the flexibility to operate only part of the combined cycle system (e.g., part of the combustion turbines and only one of the two steam turbin es). When operating, each individual generator set must remain above its design minimum capacity (e.g. LM6000PC minimum is 11 to 12 MWs each); however, not all turbines must be run to generate the power.

 JPF was a brownfield development. As part of the overall project development, the City of Jackson wanted the entire former Goodyear Ti re and Rubber Factory to be razed. Although the JPF occupies only 15-acres of the approxi mately 70 acre former Goodyear brownfield, and Kinder Morgan Power Company (the EPC) only procured approximately 30 acres of the brownfield to develop the JPF, the overall proj ect responded to the City’s desire to tear down the Goodyear plant. JPF occupies about 15 acr es of the total Goody ear brownfield with approximately 15 additional acres of ‘buffer’ land included in the contiguous JPF site. The remaining roughly half of the property continues to be owne d by the post Goodyear property owner from whom the JPF site was purchased.. As part of the Development Agreement with the City of Jackson, existing wa ter and sewage infrastructure from the Goodyear plant was made readily available to JPF, and JPF a pplied for and obtained a permit for regulated Wastewater discharges to the local Publicly Owned Treatment Works (POTW). They have never had a reason to develop a different draina ge system (i.e., discharge to surface water).

 The JPF was constructed from September 2001 when the Constructor mobilized until September 2002, and upon successful demonstration of Dependable Capacity achieved Substantial Completion, closed on the sale of the facility to AlphaGen Power and went commercial under the CSTA on the 01 July 2002 Commercial Operation Date (COD). Final Completion was achieved in September 2002, and the constructor demobilized.Page 3

 Most equipment for the plant was built off s ite. The Frame 7EA generator set had to be mostly assembled on site due to its design.

 The 550 MW JPF combined cycle plant cost on the order of $250 million to build. JPF was built to use natural gas as its fuel due to a number of market factors driving such independent power plant ventures. In general combined cycle na tural gas fired plants enjoy better thermal efficiency producing more kW/BTU than with coal, and are more flexibly responsive in peaking markets availably to the independent power industry. The plant required less capital investment than a coal pl ant: the same size coal plant would have cost about $1.5 billion at the time. Recently a Michig an utility announced a plan to build an 800 MW clean coal plant at a cost of about $4 billion.

Combined Cycle System

 JPF uses only a low sulfur fuel (Pipeline Natural Gas) at the facilit y. JPF does not use liquid fuel because it would add complexity to the air permitting process while also impacting a number of other market considerations limiting potential ROI for such additional investment.

 JPF stated that the approximate electric ge nerating capacities of th e components of the combined cycle system are as follows: 40 to 50 MW for each of the six aeroderivative combustion turbines, 70 to 90 MW for the Fr ame 7EA combustion turbine, and 105 MW for

each of the two steam turbines. JPF stated that 10 MW of heat recovery steam is potentially available from each 50 MW combustion turbine. Three MW of this 10 MW steam is put

back into the turbine for NO X suppression, and 1.5 MW of this 3 MW consumed is gained

back in additional power generation.

 JPF uses steam for NO X suppression because it is less dama ging to the engine than water. The water can erode ceramic coatings in the en gine’s hot section, poten tially requiring hot section maintenance at $15,000 hour intervals ve rsus the $25000 hour interval expected with steam injection. Steam is injected into th e combustor through the fuel nozzles around the circumference of the combustor. The boundary layer cooling from the steam supplied in the combustor helps keep the mass air flow through the combustor from cracking to NOx.

 JPF operates one Frame 7EA combustion turbine th at runs most efficiently at full capacity but is capable of turndown to 50% capacity wh ile maintaining NOx emi ssion control. An older design, this engine is less effici ent than the LM6000s because of several factors including counter flow and hot e nd drive design characteristics. If this engine was installed for simple cycle operation it would have a poor heat rate. At JPF where the engine is installed in a combined cycle system, the combined cycle heat rate of this unit is consistent with the remainder of the facility.

 When installed at JPF, the Frame 7EA engi ne was a relatively old technology, but was selected for the relatively new proven DLN-1 “dry low NO X ” capability

 The aero-derivative engines are more efficient than the previously discussed Frame 7EA because they were originally built to be effi cient for aircraft and incorporate a number of technology improvements includi ng cold end drive design.Page 4

 GE Aero Energy offers several enhancemen ts for aero-derivative combustion turbine generator sets to improve the engine’s operating environment in order to make it as efficient as possible and to increase its life span. JPF ch ills the air flowing through these engines to help maintain engine performance in the stationary ground level power generating application on hot days. In order to accomplish this , JPF chills the air that enters the engine through the filter house to 48 or 50 degrees F by chilling the water that flows through the

radiators before the filters.

 JPF burns cleaner fuel than an aircraft engine . Burning natural gas in stead of kerosene, as would be burned in an aircraft, also increases the life span and reliability of the jet engine.

 GE Aero Energy incorporates a filter house on each engine to keep foreign objects from entering and possibly damaging the engine.

 Other differences between the aircraft engine and the stationary power combined cycle system are the replacement of the aircraft Turbo Fan (the propeller) with the 50MW electrical generator and a small low pressure compressor (which functions as a supercharger)

 The GE aero-derivative engine is a variable geometry engine. Variable stator vanes in the variable speed core engine High Pressure Co mpressor are programmed to create the proper angle of attack for air delivered to subseque nt rotating blades impr oving stall margins during transient acceleration and deceleration allowing th e core engine (gas generator) to be more responsive to load changes on the electrical generator

 Acceleration in the core engine generates an increase in hot gase s available to do work in the Low Pressure Turbine which is driving the ge nerator at synchronous speed. The increase in hot gases allows the generator to do mo re work, which results in more power.

Water Use and Wastewater Generation/Treatment

 JPF receives all of its water from the City of Jackson. A municipal water tower, located nearby helps provide gravity head and surge cap acity to maintain the JPF raw water tank and makeup water supply to the primary JPF dema nd which is the evaporative cooling tower process. When running at full capacity on a ho t (design) day, JPF requires a maximum of about 5.4 million gallons per day of city water. Average daily demand is far less.

 JPF stated that the wastewater generated is similar to other combined cycle systems. The steam turbines and related equipment are simila r to all other steam turbines. A water flow diagram for the plant is provided in Attachment 1 of this memorandum.

 The cooling water requirement is provide d by mechanical draft cooling towers.

 JPF operates a main cooling tower and an a uxiliary cooling tower. The auxiliary cooling

tower is used in the summer to cool the c ondensers of the mechanical chillers providing chilled water for the aeroderivative engines. Th is Auxiliary Circulating water needs to be cooler than the cooling water for the boiler system which is cooled by the main cooling tower. There are underwater agita tors in the corners of the coo ling tower structure to prevent the water from freezing in the winter if the plant is idle and not rejecting heat to the cooling

towers.Page 5

 JPF uses an Electro-Brom bromine product, whic h is generated from electrolysis on site as the biocide for the cooling tower systems. JPF does not use bleach for a number of reasons, one of which is because the plant is located in a residential area and bleach truck deliveries can be avoided reducing hazard mishap potential.

 JPF originally added sulfuric acid to the cool ing towers, but found that the sulfuric acid caused a fast rate of leaching of arsenic from the copper/ch rome/arsenic (CCA) pressuretreated lumber used in the c ooling tower construction. Afte r JPF switched to the alkaline chemistry, the leaching was slowed, increasing the margin by which JPF is able to meet the POTW’s permit limits for arsenic in the plant outfall..

 Cooling tower blowdown, the main wastewater gene rated at the plant, is discharged to the POTW. The blowdown is generated continuously when the plant is running, but the flow rate varies significantly depending on power pr oduction and thermal loading of the Cooling

Towers.

 There are two sets of sumps/drains at the JPF site: a low quality and a high quality sump.

 The low quality sumps collect water from all floor drains, the catch basins for the oil below the transformers, and the catch basins underneath th e steam turbines (there just in case of an oil leak). Should this low quality drain system become contaminated by an oil leak before detection and mitigation, the oily water discharg e is most likely to be intercepted in the low quality sump secondary containment system, but if not the outfall of the low quality sumps passes through the oil/water separator before di scharge via the plant outfall to the POTW. JPF monitors the oil water sepa rator level alarms continuously via the DCS, and the POTW outfall is continuously monitored at the DCS fo r pH, temperature, and flow, and is also continuously or periodically sampled and analyzed for other permit limits.

 The high quality sump collects boiler blowdown (from the heat recovery steam generators (HRSGs) and steam piping condensate drains. This water is sent to the cooling tower as make-up. Additionally, condensate from the com bustion turbine filter house chilling is sent to the cooling tower at as much as 300 gpm during hot humid near design summer

conditions.

 JPF staff stated that the combustion turb ine compressors are washed with 4,000 or 5,000 gallons of water and detergent about two to four times per year to clean the compressor blades to maintain efficiency. Dirt and hydro carbon (road vehicle exha ust, etc.) residue can build up on compressor blades, decreasing the e fficiency of the engine. The water wash drains to the low quality sump, and is discharg ed to the POTW via the oil water separator.

 JPF stated that the combustion turbine combusto rs are not cleaned on-si te. With clean natural gas fuel only there are virtually no combustion by-products/resi dues, and contaminants able

to enter the combustor via th e filter house and engine compre ssor is usually incinerated during operation.

 JPF stated that cleaning of the HRSGs is not necessary due to maintenance of good chemistry via continuous inje ction and blowdown.Page 6

 The JPF steam turbine condensers are clean ed about once per year. Wash water and

recoverable foam balls are used to clean soft deposits (slime) formed on the water side of

condenser tubes. The wash water is combin ed with the low quality sump water and ultimately discharged to the POTW.Table 1. Site Visit AttendeesNameOrganization (Representing)TelephoneE-mailWayne Frey Jackson Power Company, LLC(517) 841-5710 wayne_frey@kindermorgan.comRon Jordan EPA/Office of Water(202) 566-1003 jordan.ronald@epa.govJezebele AliceaVirellaEPA/Office of Water (202) 566-1755 alicea.jezebele@epa.govSarah Holman ERG (Contractor to EPA) (703) 633-1661 sarah.holman@erg.comElizabeth Sabol ERG (Contractor to EPA)(703) 633-1659 elizabeth.sabol@erg.com