1 

### Maurin, Lawrence

From: Heckel Kyle C <Kyle.Heckel@srpnet.com>

Sent: Monday, December 07, 2015 8:35 AM

To: Maurin, Lawrence

Cc: Rios, Gerardo; Lyons, Ann; McKaughan, Colleen; BECKHAM, LISA; Ramaley Karilee S

Subject: RE: NGS Refined Coal Treatment Syst em - Request for more information

Attachments: Memo to EPA R9 -- NGS Refined Coal Trea tment System - Response to EPA re....pdf

Follow Up Flag: Follow up

Flag Status: Flagged

Larry,

Thank you for your review of the Tribal Minor NSR permit application submitted by SRP for the Refined Coal

Project. The following is provided in response to your request for additional information.

Response to Request 1:

The Refined Coal Project is driven by a federal tax credit under Title 26 U.S. Code §45 which was established to

incentivize the production of “Refined Coal” to reduce emissions of mercury (Hg) and nitrogen oxides (NOx) through the

application of calcium bromide and cement kiln dust. Applying calcium bromide to coal prior to combustion provides for

a reduction in Hg emissions and the application of cement kiln dust is helpful for reducing NOx emissions. The proposed

Refined Coal Project at NGS is designed to be capable of treating 100% of the coal being combusted at the facility.

The Refined Coal Project and the MATS Hg Control Project are entirely separate from each other with regards to

applicability to PSD and Tribal Minor NSR regulations. As noted above, the driver for the Refined Coal Project is a federal

tax credit while the driver for the MATS Hg Control Project is compliance with the EPA’s MATS regulation. Due to these

separate project drivers, the Refined Coal Project would move forward in the absence of the MATS regulation and the

MATS Hg Control Project would move forward in the absence of the aforementioned federal tax credit. Further, the

Refined Coal system will be constructed from equipment that is completely separate from the control equipment

associated with the MATS Hg Control Project.

While the Refined Coal Project is expected to result in a reduction of Hg emissions, it will not be relied upon for

compliance with the MATS Hg limits. When the Refined Coal system is in operation, the MATS Hg control system may

scale back on the total calcium bromide applied to the coal. However, the capacity of the MATS Hg control system has

been designed to comply with the MATS Hg limits independently and in the absence of the Refined Coal system. Once

the federal tax credit expires, the Refined Coal system will cease operation and will likely be removed from NGS while

the MATS Hg control equipment will remain in place to comply with the MATS Hg limits.

Response to Request 2:

To provide additional information detailing why the projects are separate with respect to applicability of the PSD or

Tribal Minor NSR Regulations, we have consulted with Mr. Makram Jaber of Hunton and Williams. The attached

memorandum from Mr. Jaber explains why the Refined Coal Project and the MATS Hg Control Project should be

permitted separately following EPA guidance.

If you need additional information or have any additional questions, please let me know.

Thanks,

Kyle2 Kyle Heckel

Salt River Project

Sr. Environmental Engineer

602

‐ 236

‐ 5493

Mail Station PAB352

‐ PO Box 52025

‐ Phoenix, AZ 85072

From: Maurin, Lawrence [mailto:Maurin.Lawrence@epa.gov]

Sent: Friday, November 20, 2015 11:01 AM

To: Heckel Kyle C

Cc: Rios, Gerardo; Lyons, Ann; McKaughan, Colleen; BECKHAM, LISA

Subject: NGS Refined Coal Treatment System

‐ Request for more information

Hi Kyle,

We would like to request more information relating to the application for a minor modification at Navajo Generating

Station (NGS) that SRP submitted on February 20, 2015 for the Refined Coal Treatment System Project. We would like

you to provide additional information supporting why SRP considers this project and another recent project at NGS as

separate projects with respect to applicability of the PSD regulations at 40 CFR 52.21 and Tribal Minor NSR regulations

listed in 40 CFR 49.151

‐ 159. The other project at issue is the Mercury Control System for which an application was

submitted in May 2015 as an Administrative Amendment and for which we issued a revision to NGS’s PSD permit on

August 21, 2015. We recognize that you sent an email on April 21, 2015 that generally summarized the phone

conversation you had with Lisa Beckham here in our office and described these as two separate projects. However, we

believe additional information beyond that email is needed for our record.

Specifically we need more clarification on the following:

1. Please describe the purpose of the Refined Coal Treatment System Project and its relation to, or lack thereof,

with the Mercury Control System used for MATS compliance. Particularly, address any expected impacts this

project would have on MATS compliance, and the fact that both projects include the application of calcium

bromide. It is unclear what benefit, if any, is achieved through the application of cement kiln dust. What

percentage of the total coal combusted at NGS is expected to be treated in the Refined Coal Treatment System

Project?

2. Please include any other information you think is relevant to explain why the projects are separate with respect

to applicability of the PSD or Tribal Minor NSR Regulations.

Don’t hesitate to contact me if I can help clarify our request.

Thank you,

Larry

Larry Maurin

Air Permits Office (AIR

‐ 3)

U.S. Environmental Protection Agency, Region 9

75 Hawthorne Street

San Francisco, CA 94105

(415) 972-3943 (phone) / (415) 947-3579 (fax)

Maurin.Lawrence@epa.gov