# (j/IGott{er Associates

November 30, 2012 Mr. Gregg M. Worley Chief Air Permits Office United States Environmental Protection Agency, Region IV Atlanta Federal Center 61 Forsyth Street Atlanta, Georgia 30303-8960 10389556

RE: NOTICE OF INCOMPLETENESS FOR PROPOSED FLORIDA SHADY HILLS GENERATING STATION PSD APPLICATION (EPA REGION 4 LETTER DATED OCTOBER 25, 2012)
Dear Mr. Worley: This correspondence provides the additional information requested by the United States Environmental Protection Agency (EPA) concerning the Shady Hills Generating Station PSD Permit application. EFS Shady Hills LLC (Applicant or EFS Shady Hills) received the request for additional information on October 31, 2012. Golder is submitting this information on behalf of the applicant, EFS Shady Hills LLC. The additional information is presented in the same sequence as in the EPA's letter, with a restatement of each comment followed by the response in boldface italics. It should be noted that the construction ofthe project may occur in a phased construction schedule depending on market conditions.
1. The PSD application addresses the Project's applicability to the Endangered Species Act (ESA) and the National Historic Preservation Act (NHPA). In addition to these two Acts, all federal permits are potentially subject to the Magnuson-Stevens Fishery Conservation and Management Act (MSFCMA) and the Coastal Zone Management Act (CZMA). Please address the applicability of the MSFCMA and the CZMA to the Shady Hills Project and the status of any necessary assessments performed and/or communications with the appropriate federal agencies. Response: GolderAssociates (HeatherAhrens) contacted NOAA's National Marine Fisheries Service (NMFS) regarding the Magnuson-Stevens Fisheries Act. Kyle BakerandMark Sramek, NMFS Essential Fish Habitat (EFH) reviewed the project based on project information previously submitted to NMFS and have determined that there will be no impacts, or even remote impacts, to EFH. Mark Sramek stated that reference to Golder's phone conversation with NMFS, on 1118112, can be provided in our response to this request for additional information. Email documentation of Golder's conversation with Mark Sramek is provided in AttachmentA. On 11/29/12 Goldersubmitteda request to the Florida Department ofEnvironmentalProtection (FDEP) for confirmation, that based on the characteristics and location of the Project, the Project is consistent with the Coastal Zone Management Act. A copy of the request is providedasAttachmentA. 2. Section 2.1.2.1 (page 11) ofthe application states "[i]t is the Project owner's understanding that for peaking plant, the offtaker(s) will not dedicate firm natural gas transportation to the Project, and instead will operate the units on natural gas when interruptible natural gas transportation service is available." Based on the discussion in the application, the use of an interruptible natural GolderAssociates Inc. 5100 W. Lemon Street, Suite 208 Tampa, FL 33609 USA Tel: (813) 287-1717 Fax: (813) 287-1716 www.golder.com Golder Associates: Operations in Africa, Asia, Australasia, Europe, North America and South America

### Mr. Gregg Worley. EPA 

### 2 November 30, 2012 10389556 gas service is the reason why the Project includes 750 to 1,000 hours per year of fuel oil operation as backup for natural gas. The application indicates it would be redefining the source to have the Project use only natural gas as the fuel source. However, since your application considers the use of an interruptible natural gas source, we do not understand why use of 100% non-interruptible natural gas would fundamentally redefine the source. Accordingly, such an option should be included as part of the top-down best available control technology (BACT) analysis. The option of 100% non-interruptible natural gas may still be eliminated under one of the other steps of the BACT analysis. If the use of an interruptible natural gas source is fundamental to your project design, please provide additional information regarding the decision to use an interruptible natural gas source. Response: In order to deliver reliable electric service, simple cycle combustion turbine projects intended forpeaking duty operation in Florida are typically developed with the ability to operate on naturalgas (NG) as primary fuel and with fuel oil (FO) as back-up. As explained below, there are additional fixed operating costs incurred to procure firm NG transportation services (FT). In addition, provision for a back-up fuel is consistent with the recent BACT determination for York Plant Holding, LLC, a simple cycle projectproposed for York County, Pennsylvania. The primary benefit ofFO is that it enhances the reliability ofthe plant to generate electricity when needed to meet demand in the event ofNG unavailability. The inclusion ofFO-firing capability and on-site FO storage facilities in the project design also avoids the additional fixed operating costs associated with FT, which are incompatible with the expected low utilization ofa peaking facility. Typically, FT is required to be procured based on potential maximum daily quantity and on a year-round basis (i.e., 8, 760 hours), while the PSD permit limits operations to 3,390 hours, thereby disproportionately increasing the cost burden ofFT. Current tariff rates for FT are more than 2.5x higher than interruptible transportation (IT) service, which further diminishes the rationale for FT. Moreover, even with FT, there is still a possibility that NG might notbe available due to unexpected interruption ofthe transportation service on the NG pipeline and/orthe upstream NG commodity/infrastructure supply. However, EFS ShadyHills is providing consideration of 100% NG firing (based on utilization of FT, andignoring anypotentialsupply/transportation disruption) as an available control option. EFS Shady Hills has determined that using 100% NG firing is infeasible due to the mismatch between procurementrequirements andpermitted operations, andis notcost-effective, Updated Tables 

### 2 and 2a, provided in Attachment B, to include the 100% NG operation scenario. The attachedcalculations demonstrate that 100% NG operation is notcost-effective for the Base Scenario (2 units installed), considering additional costs for firm gas transportation andreduced capital and O&M cost foreliminating FO operations, relative to the incremental 

### C02e emissions reduction. For the Alternate Scenario in which only 1 unit is installed, the overall 

### C02e emissions based on maximum potential to emit would increase if only NG were utilized since ourPSD airpermit requires a reduction in NG operating hours for each FO operating hour in excess of 500 hours per year. Thus, because the Alternate Scenario would result in both higher emissions and higher costs, NG only operation is not cost-effective. Tables 

### 2 and2a have also been updated to considercost-effectiveness ofthe simple cycle technology alternatives based only on operating hours for consistency with the FDEP issued PSD permit for other criteria pollutants and since the contribution of startup/shut-down to 

### C02e emissions is de minimus.
3. Section 2.1.2.2 (page 11) the application discusses the energy efficiency of various GE combustion turbines and indicates the GE Frame 7 turbine is used as a surrogate for the performance of similar F class turbines from other vendors. Footnote 4 references a BACT analysis from the proposed Puget Sound Energy project in Washington which includes a

# ~&\Golder \tYAssociates

### Mr. Gregg Worley. EPA 

### 3 November 30, 2012 10389556 comparison of GE turbines as well as a Siemens 5000F4 (F-class turbine of similar size) and a Pratt and Whitney FT-8. Based on the Puget Sound Energy application, we see that the GE 7FA.05 is slightly more energy efficient than the F-Ciass turbines from the other vendors. However, the document is dated October 2011. Please verify that no new more efficient turbine models ofsimilar size have become available since October 2011. Response: The Applicanthas checked with theirindependent engineerand confirmed/verified that no new more efficient turbine models of similar size to the GE 7FA.05 have become available since October2011. 4. Section 2.1.5.1 (page 23) indicates the proposed GHG BACT emission limits for the turbines were derived assuming a 5% design margin and a 3% turbine performance degradation margin. Please provide documentation or an explanation on how these margins were derived, why they are appropriate for the GE 7FA.05 turbines proposed for this Project, and why turbine degradation is assumed even at the very beginning of its use. Response: A 5% margin has been included to account for design standards typical of construction contracts and equipment manufacturer's supply contracts, which contain provisions for minimum acceptable performance criteria. These include the ability for the contractor/supplier to "buy-down"performance bypaying liquidated damages ifperformance (in this case, unit heat rate) does not meet the levels guaranteed in the contract. The typical minimum acceptance threshold for heat rate is up to 105% of the contractually guaranteed value, and thus we have used a 5% margin for this component of the compliance limit calculation. This limit is appropriate for the GE 7FA.05 turbines because it reflects market standard terms andconditions which are available in commercial contracts today. Turbine degradation is included in the compliance limit even at the very beginning ofits use since the compliance limit is established as a single value over the lifetime of the unit(s). Turbine degradation occurs over time based on actual use of the unit(s), such as hours of operation, load changes, and start-up/shut-down cycles. Since the dispatch ofthe units will vary over time based on powermarket and system conditions, it is appropriate to include the degradation allowance in the compliance limits from the outset. The 3% value for turbine degradation margin reflects Applicant's experience with similar F class turbines. In addition, the Applicant's consideration of margins for CT design and performance degradation is consistent with the other BACT determinations including York Plant Holding, LLC, a simple cycleprojectproposedfor York County, Pennsylvania.
5. Section 2.1.5.1 (page 24) lists the BACT emission limits for startup and shutdown events as 21 and 28 tons C02

### e per event while firing natural gas and fuel oil, respectively. Footnote 6 ofTable 3 in the Appendix indicates these were calculated using an estimate of 338 and 339 million thermal units (MMBtu)/event, respectively. So that the permit record will include the necessary calculations for the emissions from these events, please provide an explanation for how these emission factors were derived and an estimate of how long a startup and shutdown event will last, as well as the anticipated number of startup and shutdown events that will occur in a year. Response: Calculations of estimated emissions per start-up/shut-down cycle are provided below. The emissions estimates are based on estimatedheat inputperfuelpereventand the 

### C02

### e emission factors, lb C0 2

### e/MMBtu, developedin Table 1 ofthe application.

# ~&\Golder \ZV'Associates

### Mr. Gregg Worley. EPA NATURAL GAS



### Component Startup (SU) fuel Shutdown (SD) fuel Total fuel perSU/SD event lHVto HHVconversion Fuel perSU/SD event lbC02e/mmBtu lb perSU/SD event Tons perSU/SD event Round upto nearestTon perSU/SD event

FUEL OIL



### Component Startup (SU) fuel Shutdown (SD) fuel Total fuel perSU/SD event lHVto HHV conversion Fuel perSU/SD event lbC02e/mmBtu lb perSU/SD event Tons perSU/SD event Round upto nearestTon perSU/SD event 4



## ,.. 160.5 144.0 304.5

1.11 338.0

119 40,226

20.11 21

1n.6 139.4 317.0

1.07 339.1

163 55,228

27.61 28 November 30, 2012 10389556

mmBtu (lHV) mmBtu (lHV) mmBtu {lHV) mmBtu (HHV) lb/mmBtu lb Tons Tons

mmBtu (lHV) mmBtu (lHV) mmBtu (lHV) mmBtu (HHV) lb/mmBtu lb Tons Tons


### The estimated start-up time to minimum em1ss1on compliant load (for criteria pollutants regulated under FDEP's issued Final PSD airpermit) is approximately 

### 15 minutes, and the estimatedshut-down time is 

### 15 minutes from minimum emission compliantload to no load. It is our expectation that each CT unit could incur250-300 start-up/shut-down cycles annually, but we will not constrain ourpotential off-takers' dispatch flexibility for the units by limiting the numberofannualstartsperCT. 6. Section 2.2.1 and 2.3 (pages 28-30) discusses the BACT analysis for the emergency generator and fuel gas heater, respectively and provides calculations on how the emissions form each unit will be averaged to show compliance with the proposed BACT limits. For both of these emission units, BACT has been proposed as a ton per year limit on a "calendar year annual average"; 

# AI\Golder 

# \ZIT' Associates

### Mr. Gregg Worley. EPA 

### 5 November 30, 2012 10389556 however, BACT applies at all times and EPA intends to include BACT limits on a rolling/consecutive 12-month or 365-day total basis. If necessary, please provide revised calculations based on the use of a rolling total basis. Additionally, page 29 of Section 2.3 indicates that fuel gas heater will operate 8,760 hours per year (100% of the time); however, the turbines associated with this Project will be limited (as proposed) to a maximum of 3,390 hours per year of operation. Please provide an explanation for why the new fuel gas heater would need to operate 8,760 hours per year. If necessary, please provide updated emission estimates and other relevant portions of the application based on the fuel gas heater operating fewer hours per year. Response: EFS Shady Hills accepts a compliance averaging period for both the emergency generatorandfuelgas heaterbasedon 12-month rolling/consecutive basis.
With respect to p29, Section 2.3, the fuel heater must be able to operate 6, 780 hours/yr in orderto accommodate the potential scenario ofnon-coincident operation ofeach CTfor3,390 hours. An updated Table 4. Is providedin AttachmentB. The resulting 

### C02

### e emissions equal 3,965 short tons peryear.
EFS Shady 

### Hills appreciates EPA's consideration of this additional information. If you questions, please contact Mr. Roy Belden at (203) 357-6820 or me at (813) 287-1717 in Tampa. Sincerely, GOLDER ASSOCIATES INC.

Scott Osbourn, PE Associate and Tampa Operations Manager

cc: Roy Belden, EFS Shady Hills LLC. Attachments: Attachment A-FDEP CZMA Submittal Attachment B-Updated Application Tables
DUdI/ Dave Larocca Senior Engineer

# ~&\Golder**~Associates**

### ATTACHMENT A Agency Correspondence

### Larocca, David From: Ahrens, Heather Sent: To: Friday, November 30, 2012 3:14PM Mark.Sramek@noaa.gov Cc: Larocca, David Subject: Shady Hills Generating Station ESA Consultation
Mark, On October 25, 2012, the EPA sent a request for additional information for the referenced project regarding the applicability ofthe Magnuson-Stevens Fishery Conservation and Management Act (see excerpt below): The PSD application addresses the Project's applicability to the EndangeredSpeciesAct (ESA) and the National Historic Preservation Act (NHPA). In addition to these two Acts, allfederalpermits are potentiallysubject to the Magnuson-Stevens Fishery Conservation andManagementAct (MSFCMA) and the CoastalZone Management Act (CZMA). Please address the applicabilityofthe MSFCMA and the CZMA to the ShadyHills Projectand the status ofanynecessaryassessments performedand/orcommunications with the appropriatefederal agencies.

Golder's position is thatthe MSFCMA does not apply to the Shady Hills Project since the Project is located inland in Pasco County, Florida, and fisheries habitat/resources are not present on site. Per ourtelephone conversation on November 8, 2012, NMFS agrees that the MSFCMA is not applicable to this Project. Furthermore based on the location ofthe Project, NMFS does not anticipate any impacts, even remotely, to essential fish habitat. Ifyou have any questions or concerns, please contact me at (813) 769-5307 or (813) 407-8846 to discuss further. Regards,

HeatherTodd Ahrens 1Senior Ecologist 1 Golder Associates Inc. 5100 West Lemon Street, Suite 208, Tampa, Florida, USA 33609 T: +1 (813) 287-17171 D: +1 (813) 769-53071 F: +1 (813) 287-17161 C: +1 (813) 407-88461 E: Heather Ahrens@golder.com 1 www.golder.com**Plc;;~.c** rons:dr-1 lht: Environn1t

## ,,t**bpfon~ printitt~)**  this em<iiL From: Ahrens, Heather Sent: Thursday, March 29, 2012 10:42 AM To: Kyle.Baker@noaa.gov Cc: Osbourn, Scott; Larocca, David 

### Subject: Shady Hills Generating Station ESA Consultation Kyle, Thank you fortaking time out ofyour busy schedule to discuss the referenced project with me today as well as during our original conversation on October 7, 2011. My understandingfrom our conversations is that the NMFS would make a no effect determination because the site is located inland in Pasco County, Florida, and therefore, species regulated by 1

### NMFS forthis area (i.e., gulfsturgeon and sea turtles) would not be present on site. It is also my understanding that the 

### NMFS does not send no effect determination correspondence. Please do not hesitate to contact me ifyou have any questions or concerns regarding this matter. Regards,

Heather Todd Ahrens 1Senior Ecologist 1Golder Associates Inc. 5100 West Lemon Street, Suite 208, Tampa, Florida, USA 33609 

### T: +1 (813) 287-17171 

### D: +1 (813) 769-53071 

### F: +1 (813) 287-17161 

### C: +1 (813) 407-88461 

### E: Heather Ahrens@golder.com 1www.golder.com

'**~·;** ' ,' I '

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2

### Larocca, David From: Sent: To: Cc: Subject: Attachments:
Hello Lauren, Hartman, Kelly Thursday, November 29, 2012 9:19 AM Milligan, Lauren (Lauren.Milligan@dep.state.fl.us) Larocca, David Shady Hills Generating Station Expansion Project 103-89556C001 Figure 1 SITE LOCATION.pdf; 103-89556C002 Figure 2 AERIAL.pdf

A subsidiary ofShady Hills, the Shady Hills Power Company, LLC, owns and operates the Shady Hills Generating Station located at 14240 Merchant Energy Way, Shady Hills, Pasco County, Florida. Shady Hills is proposing to expand the Shady Hills Generating Station with the addition oftwo nominal 218-megawatt (MW) simple cycle combustion turbine-electric generators and associated ancillary equipment (Project.) The proposed expansion is a major modification to the existing facility and subject to Prevention ofSignificant Deterioration (PSD) for specific air emissions. The Florida Department of Environmental Protection has issued afinal air construction permit (Air Permit No. 1010373-012-AC PSD-FL-402A) for the projectfor all applicable air pollutants except greenhouse gas (GHG}. The Shady Hills Generating Station and Project are located in unincorporated Pasco County, Florida within Section 25, Township 24S, and Range 17E (Figures 1 and 2}. The Shady Hills property is approximately 30 acres.
EPA Region IV is the permitting authority for the GHG-portion of the expansion project under a Federal Implementation Plan (FIP) that became effective on December 30, 2010. Federal law requires that a federal agency's actions be in compliance with the Coastal Zone Management Act. Golder respectfully requests that you review the project and confirm that, based on the characteristics and location of the Project, the Project is consistent with the Coastal Zone Management Act.
Ifyou have any questions, please feel free to contact me. Thank you, Kelly 

### L. Hartman 1Environmental/Land Use Planner 1 Golder Associates Inc. 5100 W. Lemon Street, Suite 208, Tampa, Florida, USA 33609 T: (813) 287-17171 D: (813) 769-5311 

## IC: (352) 514-47601 F: (813) 287-17161 E: khartman@golder.coml Work Safe, Home Safe This e-mail transmission is confidentialandmay containproprietary informationfor the express use of the intended recipient. Any use, distribution orcopying of this transmission, otherthan bythe intended recipient, is strictlyprohibited. If you are not the intended recipient, please notify the senderanddelete all copies. Electronic media are susceptible to unauthorizedmodification, deterioration, and incompatibility. Accordingly, the electronic media version of any workproductmaynot be relied upon.

### ~Please 

### consider the environment before printing this email

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## REFERENCES
1 APPROXIMATE PROJECT BOUNDARY GOLDER ASSOCIATES INC 2011 2 ROADS FLORIDA DEPARTMENT OF TRANSPORTATION, 2011 3 COUNTY BOUNDARIES FLORIDA GEOGRAPHIC DATA LIBRARY, 2008 4 USGS TOPOGRAPHIC MAP. NATIONAL GEOGRAPHIC SOCIETY, 2010 SHADY HILLS GENERATING STATION

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# 0 1 APPROXIMATE PROJECT LOCATION GOLDER ASSOCIATES INC , 2011

## ~-**~** 2 AERIAL ARC GIS ONLINEBING MAPS AERIAL, MICROSOFT CORPORATION AND ITS DATA 

# Golder O SUPPLIERS. 2010 

## "' Associates 9, Tampa,Florida

## ~~------------------------------------------------~------------------~----~--~----~--------------~

### ATTACHMENT B Updated Applications TablesTable 2. Shady Hills Expansion: Cost Effectiveness Analysis tor Alternative Simple Cycle Generation Technologies Base scenario
- Both units Installed

Plant Total OUtput (MW) 425 Number of Turbines (Unit) 2 Capacity Factor (%) 38 7"/o Fuel Operating Hoots (Hrurs) 3,390 Percentage ofoperatM:In by fuel --NG (%) 85%

-- FO (%) 15% Annual operating hours --NG (Hours/year) 2,890 --FO (Hrurs/year} 500 Net Plant Heat Rate (lHV} --NG (Btu/kWh} 8,928

-- FO (Btu/kWh} 9,708 HHV/LHV CcwwersM)n --NG 111 --FO 107 Net Plant Heat Rate (HHV) --NG (Btu/kWh} 9,910 --FO (Btu/kWh) 10,388

500 Fuel Pnce --NG ($/MMBtu)

-- FO ($/MMBtu) 20 C02e (fuel HHV basis. incl C02. N20 and CH4) --NG (lb:MMBtu} 119 --FO (lb'MMBtul 163 ;;,t.;;;""""""'""'"'•'"-m ! 617 

### I Capital Cost ($/kW)**F1~ed** Charge Rate (%) 11.0%

18.2
Fixed Operation & Mwntenance costs**(F1~ed** O&M) ($/kW-yr)**Vari~e** Operation & Maintenance costs (Vanable O&M) ($/MWh) 7.44
Energy Produced Total (MWh/yr) 1,44(1,801

-- NG 1,228,301

-- FO 212.500 Fuel Consumption Total (MMBtu!yr) 14,379,913
-· NG 12,172,463 --FO 2,207,450 C02e Emission Total (ShortTons/yr) 904,094 --NG 724,353
-· FO 179.742 Emission Dttterence to 7FA.05 (ShortTons/yr)

Capital Recovery I $/kW-yr 

# !I: 6771 1$**Fi~edO&M** $/kW-r 182 11 $ Total fixed revenue req't OlkW·Y' 

### II$ 85.911. Fuel- NG $/MWh 49.6 .$ Fuel- FO $/MWh 

# r 198.2: I$ Fuel- Weigl1ted $/MWh 

### I 

# ! 

# ":II: Fuei-Sta<tup $/MWh VariableO&M $/MWh 74 $ Total variable revenue req'1 $/MWh 

### I!• 78: II$ Capital Recovery $MM!yr 

### 1ll 28.81 $**R~edO&M** $MM/yr 7.7 .$ Fuel $MM/yr II$ 103.0 1.$ VariableO&M $MM.vr ''$ 10.7' .$ Total SMM/yr 

## II' 150.2: !s Ail-In cost of electricity $;MWh ::s 104311$ Differences v 7FA 05 Option $MM/yr 

### II I$ $/Shari Ton C02e I$

• NG =natural gas, FO =ultra low sulli.X fuel o1I.LHV =lower heat1ng value; HHV =higher heatmg value • C02e · Includes C02. N20, and CH4 and is based on 40 CFR Part 75 and Part 98factors. • S•gma Energy estimate 1s based on 2011 ovem>ght dolars. Escalated to 2015 dollars us•ng 2% Annuallnflabon Rate • 10% Contmgency built into the capital cost estimate proVIded by**S~gma** for S1mple Cycle units • FOM and VOM costs are escalate at 2% amual rate. Inputs 1n this table IS a levellzed rate over 20years horiZon. • Output and heat rate values above are net of plant auxiliary loads and Incorporate a degradation allowance over the 20 year honzon. •**F1~ed** charge rate used above for evaluation consistent wrth long-term Investment considerations Source EFS 2012. S1gma2012 Revis>on 11130112 425 425 10 38.7% 38.7% 3,390 3.390 85% 85% 15% 15% 2,890 2,890 500 500 8,312 

### i 7.971 8,489 ' 8.061 111 1.11 107 

### i 1.07 9,226 8,848 9.083 ! 8,625

5.00 5.00 20 20 119 119 163 163

1129 979 i 110% i 11.0%

288 

### i 258

7.11 i 578
1,44(1,801 1,440,801 1,228,301 1,228,301 212,500 212,500 13,262,443 12,700,820 11,332,305 10.868.007 1,930.138 1.832,813 831,519 795,965 674,357 646,728 157,161 149.237 -72,576 -108,130

1240 I$ 288 '$

### "'·~I i. 461 ! $ 184.5 I '$ 66.511$

- I$ 7.1 i$ 73.7 '$ 52.7 

### $ 12.2 

### $ 95.9 

### ;l 10.2 171.0 !• 118.7 '$ 20,I i $ 286.81 '$ 107.5 $ 258 $ 133.3 44.2 

### $ 177.0 

### $ 63.8 

### $ $ 58 $ 69.6 $ 45.7 $ 11.0 $ 91.9 $ 8.3 $ 156.9 108.9 $

6.7 

### $ 61.9 

### $ 2**~** 7FA05 100o NG Operations Comments**to ~~~~r~G**  Operat•ons 425 2 38 7% 3.390 100% 0% 3.390 () 8,928

1.11 1.07 9,910

439

119

582
11.0%

1548

707

1,440,801 1,440,801
14,278,338 14,278,338

() 849,668 849,668

() ·54,426**~**

63 9: 154.8 1 218.7 43.5 198.2 43.5 7.1 50.6 271 658 627 102 165.8 115.1 156 286.2 100% NG operations
100% NG operations

100%NG operations
Reduce delivered fuel price by FGT's CUI"Tent IT$-1 tarlft of $0.61071mm81u for tntetTuptibleTransportation 100% NG operations
100%NG operations

Reduce capttal cost by S15MM to remove FQ-flring cepabllty for 2 units (CTs, BOP, storage}

Reduce Fixed O&M by 2.5%tor 100% NG operations; add Firm Transportation tarlft charges based on FGT"s FTS-3 recourse rate of $1.5791/mmBtu for**me~** dally quantity on 365-day/yr besls,**e~pressed** one $1kW-yrbasis Reduce Variable O&M by 5%for 100% NGoperatlonsTable 2a. Shady Hills Expansion: Cost Effectiveness Analysis for Alternative Simple Cycle Generation Technologies Alternate scenario- Only 1 unit Installed

Capacity Factor Fuel Operating Hours Percentage of opera:tion by fuel

Annual operating hours
Net Plant Heat Rate (LHV)
HHV/LHV Cooversoo
Net Plant Heat Rate (HHV)

Fuel Price
C02e (fuel HHV basiS. 1ncl C02. N20 at"'d CH4l

Capital Cost Fixed Charge Rate

F1xed Operatlon & Maintenance costs (Fixed O&M}

Variable Operallon & Mrunlenance costs (Variable O&M)

Fuel Consumption

C02e Emission

Emission Dtffereoce to 7FA.OS

Capital Rec011ery FixedO&M Total fixed revenue req'1 Fuel- NG Fuel- FO Fuel- Weighted Fuel-Startup VariableO&M otal variable revenue req'1 Capital Rec011ery FixedO&M Fuet VariableO&M Total All-lncostotelectrk:Hy Oifferencesv. 7FA.050ption --NG --FO --NG

.. FO --NG
-· FO --NG --FO --NG --FO

--NG --FO

-- NG --FO

Total ··NG --FO Total --NG --FO

. (%) (Hours) (%) (%) (Hours/year) (Hours/year) (Btu/kWh) (Btu/kWh)

(Btu/kWh} (Btu/kWh}

($/MMBtu) ($/MMBtu) (lb/MMBtu) (lbiMMBtu}

($..1<.W) (%)

($/kW-yr) ($/MWh}

(MMBtu/yr)
(ShortTons/yr}

(ShortTons!yr)

$..'kW-yr 

### l!s $..'kW-r : $ $/kW-yr is $1MWh 

### Is $1MWh 

### Is $/MWh 'I$ $1MWh i

### I~ $/MWh $/MWh 

### Is $MM!yr 

### Is $MM/yr 

### IS $MM!yr !$ $MMyr 5MM/yr ! I' $/MWh 

## :I• $MM/yr 

### i $/Short Ton C02e

• NG =natural gas; FO =ultra low sulfur fuel 011; LHV =lower heat1ng value; HHV = htgher healing value • C02e- 1ncludes C02, N20, and CH4 and IS based on 40 CFR Part 75 and Part 98 factors. 27.3% 2,390 69% 31% 1,640 750 8,928 9,708 1.11 1.07 9,910 10,388

500
20 119 163

617

11.0%

182

744

5,109,223 3,453.635 1,655,588 340,322 205,517 134,805

•**S~gma** Energy est1mate IS based on 2011 ovemiQhl dolars. Escalated to 2015 dollars using 2% Annuallnflat10n Rate • 10% Cont1ngency bUilt 1ntothe caprtal cost est1mate pro111ded by**S~gma** for S1mple Cycle units • FOM and VOM costs are escalate at 2'% annual rate. Inputs Inthis table IS a levehzed rate over 20years honzon. 677 !$ 182 

### 's 85.9 

### s
49.6 

# i.**~~~-~ I~** **~4** 

### i**~** 103.6 

### Is
144 

# i: 3.9 489 

### I• 3.8 

## ,, 70.9 I' 139.6 

## I• '$ Is

• Output and heat rate values above are net of plant aux1hary loads and mcorporate a degradation allowance over the 20 year honzon • F1xed charge rate used above lor evaluation consistent With long-term Investment considerallons Source EFS 2012. Stgma 2012 ReviSion t t 1 30/12 27.3% 2.390 69% 31% 1,640 750 8,312 8,489 111 107 9.226 9,083

500
20 119 163

1129

11.0%

28.8

711

4,662,864 3,215,261 1,447.603 309,202 191,332 117,870

-31,120**123.~!** !$ 288 I $ 152.711

### s**:!.~** 

### ii**~** 8:.6 ii**~** ?til$ 96.71 !s 

### "'II' 61 I I$**4~-~** I**~~** 81.511' 160.6! 

### Is**~~-~!I:** 273% 2,390 69% 31% 1,640 750 7,971 8,061 1.11 1.07 8,848 8,625

5.00
20 119 163

979

11.0%

25.8

578

4,458,137 3.083,528 1.374,609 295,420 183,493 111,927

-44,903

107.5 258 133.2 442 177.0 859 58 91.7 22.8 55 436 2.9 74.9 147.4

4.0 887 2 x 7FA05 toooo NG OperatiOns Comments**to ~~0n"ar~G**  Operat ons 213

387% 3,390 100% 0% 3,390 0

1.11 1.07

439

582
11,0%

154.8

7.07

7,139,169 7,139.169

0 424,834 424.834

0

84,512

NA-Em1ssion Increase

NA
- Emission Increase

NA Emission Increase NA Em1ssiontncrease
NA Emtsstonlncrease 10(l'>;:.NGoperatlons 100%NGoperatlons

100% NG operations
Reduce delivered fuel price by FGT's current IT5-1 tartff of $0.6107/mmBtu lor InterruptibleTransportation 100%NG operations

100% NG operations

Reduce capital cost by $7.5MM to remove FQ-flrlng capability lor 1 unit (CTs, BOP, st01'"1tQe)

Reduce Axed O&M by 2.5% for 100% NG operations; add Firm Transportation tariff charges based on FGT's FTS-3 recourse rate of $1.5791/mmBtu for max dally quantity on 365-daylyr basis, expressed on a $/kW-yrbasis Reduce Variable O&M by 5%for 100% NGoperatlons

100% NBtural Gas Case Results in higher C02eemissions as a result higher capactly factor allowedTABLE4.ShadyHillsExpansion:GHGEmissionsfortheProposedEmergencyGeneratorandFuelGasHeaterC02Emissions(a)EmissionHeatInputOperationAnnualHeatInputFactorAnnualEmissionsUnit(MMBtu/hr)(Hr/yr)(MMBtu/yr)(lb/MMBtu)(Shorttons/yr)EmergencyGenerator9.735004,864163.0396FuelGasHeater10678067,800116.93961(a)TableC-2,SubpartC,40CFRPart98.Emissionfactorsinkg/MMBtuwereconvertedtolb/MMBtubymultiplyingby2.204.(b)C02e=C02+(21xCH4)+(310xN20)Source:Golder,2012;Revision11/30/12N20Emissions(a)EmissionFactorAnnualEmissions(lb/MMBtu)(Shorttons/yr)1.32E-033.22E-032.20E-047.47E-03CH4Emissions(a)CO,eEmissions(b)EmissionFactorAnnualEmissionsEmissionRate(lb/MMBtu)(Shorttons/yr)(Shorttons/yr)6.6E-031.61E-023982.2E-037.47E-023965