SIERRA PACIFIC INDUSTRIES, LOYALTON, CA (NSR 4-4-4, SAC 87-01-A)

Permit Conditions

I. Applicant

Sierra Pacific Industries

Railroad Avenue

Post Office Box 208 Loyalton, California 96118

II. Project Location

The project is located on Railroad Ave nue, in the town of Loyalton, Sierra County, California. This facility is locat ed in the Northern Sierra Air Quality Management District and lies within the Mountain Counties Air Basin.

The nearest Federal Class I area is the Desolation Valley Wilderness Area,

located 43.7 miles to the south.

III. Project Description

Sierra Pacific Industries (SPI) is seek ing an amendment to the Prevention of Significant Deterioration (PSD) permit i ssued in 1987 by the U.S. Environmental Protection Agency (EPA). The proposed project is the amendment of permit conditions for the cogeneration facility contained in Prevention of Significant Deterioration permit number NSR 4-4-4, SA C 89-01. The Applicant proposes to increase emission limits and averaging times of nitrogen (NO

x ) and carbon monoxide (CO). No change in the cons truction of the boiler is proposed.

The cogeneration facility includes a 20 MW, 335.7 MMBTU/hour Riley spreaderstoker boiler for the combustion of wood fu el and production of steam, a turbine generator for converting the energy of steam into electrical energy, a fuel handling and storage area, and an ash handling facility.

IV. Permit Expiration

This Approval to Modify shall become i nvalid if construction is not commenced (as defined in 40 CFR 52.21(b)(8)) within 18 months after the approval takes effect, (2) if construction is discontinued for a period of 18 months or more, or (3) if construction is not complete d within a reasonable time.V. Notification of Commencement of Construction and Startup

The Regional Administrator shall be notifie d in writing of the an ticipated date of initial startup (as defined in 40 CFR 60.2(o )) of each facility of the source not more than sixty (60) days nor less than thir ty (30) days prior to such date and shall be notified in writing of the actual da te of commencement of construction and startup within fifteen (15) days after such date.

VI. Facilities Operation

All equipment, facilities, and systems in stalled or used to achieve compliance

with the terms and conditions of this Approval to Modi fy shall at all times be maintained in good working order and be operated in a manner consistent with safety and good air pollution control practices for minimizing emissions.

VII. Malfunction Reporting

A. The Regional Administrator shall be notif ied by telephone, fax or email within 48 hours following any failure of air pollution control equipment, process equipment, or of a process to operate in a normal manner which results in an increase in emissions above any allowa ble emissions limit stated in Section

XII of these conditions.

B. In addition, the Regional Administrator shall be notified in writing within fifteen (15) days of any such failure . This notification shall include a description of the malfun ctioning equipment or abnormal operation, the date of the initial failure, the period of ti me over which emissions were increased due to the failure, the cause of the failure, the estimated resultant emissions in

excess of those allowed under Section XII.D of th ese conditions, and the methods utilized to restore normal operations.

C. Compliance with this malfunction notific ation provision shall not excuse or otherwise constitute a defense to any violations of this permit or of any law or regulations which such malfunction may cause.

VIII. Right to Entry

The Regional Administrator, the head of the State Air Pollu tion Control Agency, the head of the responsible local air pollution control agency, and/or their authorized representatives, upon the pres entation of credentials, shall be permitted:

A. to enter the premises where the source is located or in which any records are required to be kept under the terms and conditions of this PSD permit; and

B. at reasonable times to have access to and copy any records required to be

2kept under the terms and conditions of this PSD permit; and

C. to inspect any equipment, operation, or method required in this PSD permit;

and

D. to sample emissions from the source.

IX. Transfer of Ownership

In the event of any changes in control or ownership of facilities to be constructed or modified, this Approval to Construct/M odify shall be bindi ng on all subsequent owners and operators. The applican t shall notify the succeeding owner and operator of the existence of this Approva l to Construct/Modif y and its conditions by letter, a copy of which shall be forw arded to the Regiona l Administrator and the State and local Air Pollution Control Agency.

X. Severability

The provisions of this Approval to Cons truct/Modify are severable, and, if any provision of this Approval to Construct/M odify is held invalid, the remainder of this Approval to Construct/Modif y shall not be affected thereby.

XI. Other Applicable Regulations

The owner and operator of the proposed project shall operate the proposed stationary source in compliance with all other applicable provisions of 40 CFR Parts 52, 60 and 61 and all other applicable federal, state and local air quality regulations.

XII. Special Conditions

A. Certification

Sierra Pacific Industries (SPI) shall notify the EPA in writing of compliance

at the Loyalton facility with Special Conditions XII.B and XII.C below, and shall make such notification within 15 days of such compliance. This letter must be signed by a respons ible representative of SPI.

B. Air Pollution Control Equipment/Operations

SPI shall install, cont inuously operate, and maintain the following air

pollution controls to minimize emissions . Controls listed shall be fully operational upon startup of the proposed equipment.

1. The Riley spreader-stoker boiler shall be equipped with a set of multiclones and an ESP for the control of particulate emissions.

32. The Riley spreader-stoker boiler sh all be operated with high pressure

over fire air for the control of CO emissions.

3. The Riley spreader-stoker boiler sh all be equipped w ith a selective noncatalytic reduction system (SNCR) system for the control of NO

x emissions.

4. Good combustion practices.

C. Continuous Emission Monitoring

1. SPI shall install, and maintain and operate the following continuous monitoring systems in the boiler exhaust stack:

2. Continuous monitoring systems to measure stack gas, NO X , CO and CO 2 concentrations. The system sha ll meet EPA monitoring performance specifications (40 CFR 60.13; 40 CFR 60, Appendix B, Performance Specifications 2, 3, and 4; and, 40 CFR 60, Appendix F).

3. Continuous monitoring systems to measure stack gas, volumetric flow rates. The system shall meet EPA performance specifications (40 CFR Part 60, Appendix B, Performance Specification 6).

4. Prior to the date of startup, SPI sh all install, and afte r completion of the initial performance test, maintain and operate a transmissometer system for continuous measurement of the opacity of stack emissions. The system shall meet EPA monitoring performance specifications (40 CFR 60.13 and 40 CFR 60, Appendix B, Performance Specification 1).

D. Emission Limits

1. Total Riley spreader-st oker boiler annual emissions shall not exceed the following limits:

a. 222.6 tons of NO

x per rolling 12-month period.

b. 2420.1 tons of CO per rolling 12-month period.

c. 29.4 tons of VOC pe r rolling 12-month period.

d. 36.75 tons of PM per rolling 12-month period.

2. Emissions from the Riley boiler shall be limited to the more stringent of the following hourly or concentration limits, averaged over rolling multi-hour periods, except as provid ed by Special Condition XII.D3.:

4a. 50.75 lbs/hr of NO

x or 80 ppm of NO

x at 12% CO 2 averaged over a rolling eight-hour period,

b. 550 lbs/hr of CO or 1443 ppm of CO at 12% CO 2 averaged over a rolling eight -hour period,

c. 6.71 lbs/hr of VOC, av eraged over a 3-hour period,

d. 8.39 lbs/hr of PM 10 or 0.015 gr/dscf at 12% CO 2 , averaged over a 3- hour period,

e. Maximum 20% Opacity for any 6-minute average.

3. Emissions during transient operation shall not exceed:

a. 65 lbs/hr of NO

x or 102 ppm at 12% CO 2, averaged over 8 hours, for periods aggregating to no more than 100 hours per year,

b. 772.42 lbs/hr of CO or 1998 ppm, at 12% CO 2 , averaged over 8 hours, for periods aggregating no more than 100 hours per year,

c. The following are transient operating conditions for the Riley boiler:

(1) Excess emissions indicated by the CEM system shall be considered violations of the applicable emission limit for the Periods of startup or shutdow n typically 8 hours in duration. The average is 6 times per year.

(2) Changing power load on the turbine/generator due to the outside electrical demand. The average is 15 to 30 times per year depending on transmission line maintenance intervals. (3) Changing power load on the turbine/generator due to changing weather and transmission line failures. The average is 15 times

per year.

(4) Cleaning firebox grates. This averages 6 times per day for

about 30 minutes each time.

(5) Changing fuel types. This can occur about three times a week

and lasts about 2 hours when t uning on the boiler settings.

(6) Annual source testing when require d to operate at loads above or below the existing daily demands.

5E. Revised Emission Limits

EPA may set a new allowable emissi ons rate or a more appropriate averaging period for any of the above pollutants after reviewing the first four quarters of continuous emission monitoring data required under Special

Condition XII.C.

If any emission limit is revised, the di fference between the emission limit set

forth above and a revised lower emissi on limit shall not be allowed as an

emission offset for future construction or modification.

F. Performance Tests

1. Within 60 days after achieving th e maximum production rate of the proposed equipment, but no later than 180 days after initial startup of equipment as defined in 40 CFR 60. 2, and at such other times as specified by the EPA, SPI shall conduct performance tests for NO

x , CO, VOC, particulate matter (PM-10), and opacity and furnish the Northern Sierra AQMD and the EPA a written report of the results of such tests.

The tests for NO

x , CO, VOC and PM-10 shall be conducted on an annual basis and at the maximum op erating capacity of the unit being tested. Upon written request fr om SPI, EPA may approve the conducting of performance tests at a lower specified production rate. Also, after initial performance tests and upon written request and adequate justification from SPI, EPA may waive a specified annual test for the Riley spreader-stoker boiler.

2. Performance tests for NO

x , CO, VOC, PM-10, and opacity shall be conducted and the results reported in accordance with the test methods set forth in 40 CFR 60, Part 60.8 a nd Appendix A. The following test

methods shall be used:

a. Performance tests for emissions of NO

x shall be conducted using

EPA Methods 1-4 and 7e.

b. Performance tests for emissions of CO shall be conducted using EPA

Methods 1-4 and 10.

c. Performance tests for emissions of VOC shall be conducted using EPA Method 1-4, 18 and 25A. Methods 18 and 25A may both be used simultaneously to quantify the annual methane emissions (using Method 18) and subtract this am ount from the annual total VOC emissions (as determined from Method 25A).

d. Performance tests for emissions of PM-10 shall be conducted using

EPA Methods 1-4 and Method 5.

6e. Performance tests for opacity sh all be conducted using EPA Method

9.

f. The EPA shall be notified in writing at least 30 days prior to such

tests to allow time for the review a nd approval of the test plan and to arrange for an observer to be presen t at the test. Such prior notice shall minimize the possibility of EPA rejection of test results for procedural deficiencies. In li eu of the above mentioned test methods, equivalent methods may be used with prior written approval from the EPA.

3. For performance test purposes, sampling ports, platforms, and access shall be provided by SPI on the boiler exhaust system in accordance with 40 CFR 60.8(e).

G. Recordkeeping and Reporting

1. SPI shall maintain a file of a ll measurements, including continuous monitoring systems evaluations; all continuous monitoring systems or monitoring device calibration checks; adjustments and maintenance performed on these systems or devices; performance and all other information required by 40 CFR 60 recorded in a permanent form suitable for inspection. The file shall be retained for at least two years following the date of such measur ement, maintenance, reports and

records.

2. After the first complete four quart ers of operation following receipt of the PSD permit, SPI shall submit to EPA all continuous monitoring system measurements for the last four quarters required by Special Condition XII.C to EPA Region 9, AIR-3.

3. SPI shall notify EPA of the date on which demonstration of the continuous monitoring system pe rformance commences (40 CFR 60.13 (c)). This date should correspond to the scheduled source test date.

4. SPI shall submit a written report of all excess emissions to EPA for every calendar quarter in accordance with 40 CFR 60.7(c) and (d). The report shall include the following:

a. When no excess emissions have occurred or the continuous monitoring system has not been inop erative, repaired, or adjusted, such information shall be stated in the report.

b. Excess emissions shall be defined as any 8-hour period during which the average emissions of NO X , CO, or O 2 , as measured by the CEM,

7exceeds the maximum emission limits set forth in Special Conditions XII.C.2, XII.C.3 and XII.C.4, above.

. (1) Excess emissions indicated by the CEM system shall be considered violations of the applicable emission limit for the purposes of this permit.

. (2) Not less than 90 days prior to the date of st artup of the facility, SPI shall submit to the EPA a qua lity assurance project plan for the certification and operati on of the continuous emission monitors. Such a plan shall conform to the EPA document "Guidelines for Developing a Quality Assurance Project Plan" (QAMS 005/80).

H. New Source Performance Standards

The Riley spreader-stoker boiler is subject to the Standards of Performance for New Stationary Sources (NSPS) 40 CFR 60, Subparts A, and Db, including all emission limits and a ll notification, testing, monitoring, and reporting requirements.

I. Fuel Use

1. The biomass fuel consists of a mixture of agricultural residues, including but not limited to rice hul ls, in-forest residues from logging and chipping operations, and urba n wood wastes from private and municipal landfills. The wood re sidue should be non-chemically treated, free of plastic, non-wood construction materials and resin

binders. Urban woodwaste must be less than 1 % by weight of plastic, rubber, and other non-wood combustibles.

2. The annual input of biomass fuel to the Riley boiler shall not exceed 367,044 tons at 55% moisture content.

3. Treated wood, coal or coal byproducts shall not be used as fuel by this facility.

4. Sierra Pacific Industries shall reco rd and maintain records of the amounts of natural gas and biomass fuel fired each calendar quarter, and the plant hours of operation. All in formation shall be recorded in a permanent form suitable for inspection. The file shall be retained for at least two years following the date of such measurements, calculation

and record.

8XIII. Agency Notifications

All correspondence as require d by this Authority to Cons truct shall be forwarded

to:

Director, Air Division U.S. Environmental Protection Agency

75 Hawthorne Street San Francisco, CA 94105

Chief, Stationary Source Division

California Air Resources Board

P.O. Box 2815 Sacramento, CA 95814

Air Pollution Control Officer Northern Sierra Air Quality Management District

Air Pollution Control Officer

200 Litton Drive

P.O. Box 2509 Grass Valley, CA 95945

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