AUTHORITYTO CONSTRUCT/ MODIFY PREVENTION OF SIGNIFICANT DETERIORATION PERMIT ISSUED PURSUANT TO THE REQUIREMENTS AT40 CFR 

### §52.21 U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION IX PSD PERMIT NUMBER: SE 98-01 PERMITTEE: High Desert Power Project, LLC FACILITYLOCATION: 19000 Perimeter Road, Victorville, CA 92394
This Permit is issued pursuant to the Prevention ofSignificant Deterioration (PSD) requirements ofthe Clean Air Act, as amended, 42 U.S.c. §§ 7401 -7671, et. seq.), and the Code ofFederal Regulations (CFR) Title 40, Section 52.21. The United States Environmental Protection Agency Region IX (EPA) is issuing an approval to construct/modify operation to the High Desert Power Project (HDPP), an existing 720 megawatt power generating facility located in the city of Victorville, California, as described herein, in accordance with the permit application (and plans submitted with the permit application), the federal PSD regulations at 40 CFR § 52.21, and other terms and conditions set forth in this PSD Permit. Failure to comply with any condition orterm set forth in this PSD Permit is subjectto enforcement action pursuant to Section 113 ofthe Clean AirAct. This Permit does not relieve the Permittee from the obligation to comply with any other applicable provisions ofthe Clean Air Act (including40 CFRParts 51, 52, 60, 61, 63, and 72 through 75), federal, state, orMojave Desert Air Quality Management Districtrules and regulations. This PSD Permitbecomes effective onthe date ofissuancepursuantto 40 CFR §124.15(b)(3). 

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# /D Deborah 10rdan Date 

# .F- Director, Air DivisionHIGH DESERT POWERPROJECT PREVENTION OF SIGNIFICANT DETERIORATION PERMIT SE 98-01 PROPOSED REVISIONS TO PERMIT CONDITIONS

PROJECT DESCRIPTION The High Desert Power Project (HDPP) has apower generating capacity of720 megawatts and consists ofthree existing natural gas-fired combined cycle combustion turbines (CT) each with dedicated heat recovery steam generators (HRSG), associated airpollution control devices, and auxiliary equipment. EPA Region IX issued an initial PSD permit for the construction and operation ofHDPP on February 15,2001. The facility began commercial operations in April 2003 and is located at 19000 PerimeterRoad, Victorville, California. For this permit revision, HDPP has requested revisions to the initial PSD permit to incorporate minorchanges. Theproposed changes include adding an alternative startup scenario, revising the continuous monitoring systems permit language such that it is consistent with the Acid Rain regulations (40 CFR Part 75), and allowing additional use ofEPA Test Methods. Otherminor changes are administrative in nature such as deleting obsolete language and clarifications. The new alternative startup scenario will give HDPP more flexibility for startup while also reducing the existingpermitted startup emission limits for carbon monoxide and nitrogen oxide. The equipment affected by these revisions is listed below. EQUIPMENTDESCRIPTION UnitID EquipmentDescription

CT1 Siemens Westinghouse 501F natural gas turbine (190 MW) equipped with a HRSG and duct burner (160 MMBtu/hr); dry low NOxburners; CO oxidation catalyst; and a Selective Catalytic Reduction system. Steam turbine generator shared with units CT2 and CT3. CT2 Siemens Westinghouse 501F natural gas turbine (190 MW) equipped with a HRSG and duct burner (160 MMBtu/hr); dry lowNOxburners; CO oxidation catalyst; and a Selective Catalytic Reduction system. Steam turbine generator shared with units CT1 and CT3. CT3 Siemens Westinghouse 501F natural gas turbine (190 MW) equipped with a HRSG and ductburner (160 MMBtu/hr); dry lowNOxburners; CO oxidation catalyst; and a Selective Catalytic Reduction system. Steam turbine generator shared with units CT1 and CT2. STG ToshibaTCDF steamturbine generator (330 MW)

High Desert Power Project Final PSD Permit (SE 98-0I) March 20I0 2PERMIT CONDITIONS I. Permit Expiration This Authority to Construct shall become invalid (1) ifconstruction 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 ormore, or (3) ifconstruction is not completed within a reasonable time. II. Notification ofCommencementofConstruction and Startup The Regional Administrator shall be notified in writing ofthe anticipated date of initial startup (as defined in 40 CFR 60.2(0» ofeach facility ofthe source not more than sixty (60) days nor less than thirty (30) days priorto such date and shall be notified in writing ofthe actual data ofcommencement ofconstruction and startup within fifteen (15) days ofsuch date.
III. Facilities Operation All equipment, facilities, and systems installed orused to achieve compliance with the terms and conditions ofthis Authority to Construct shall at all times be maintained in good working order and be operated as efficiently as possible so as to minimize airpollutant emissions.
IV. Malfunction Reporting A. Reporting The EPA Regional Administrator shall be notified by telephone, facsimile, or electronic mail transmission within two (2) working days following the discovery any failure ofairpollutioncontrol equipment, process equipment, or ofa process to operate in a normal manner, which results in an increase in emissions above any allowable emission limit stated in Condition X-E ofthis Authority to Construct. In addition, the Regional Administrator shall be notified in writing within fifteen (15) days ofany such failure. The notification shall include a description ofthe malfunctioningequipment or abnormal operation, the date of the initial malfunction, the period oftime overwhich emissions were increased due to the failure, the cause ofthe failure, the estimatedresultant emissions in excess ofthose allowed under Condition X-E ofthese conditions, and the methods utilized to mitigate emissions and restore normal operations. Compliance with this malfunction notification provision shall not excuse orotherwise constitute a defense to any violation ofthis permit orofany law orregulation that such malfunction may cause, except as provided for in Condition IV-B ofthis permit.
High Desert Power Project Final PSD Permit (SE 98-01) March 2010 3B. Treatment ofEmissions 1. Definition ofmalfunction: A malfunction means a sudden and unavoidable breakdown ofequipment orofa process beyond the reasonable control ofthe source. 2. Emissions in excess ofthe limits in Condition X-E ofthis permit shall constitute a violation and may be the subject ofenforcement proceedings. 3. Affirmative defense: In the context ofan enforcementproceeding, emissions which are belowthe limits set forth in Condition IV(B)(3)(ii) shall not be subject to penalty ifthe Permittee retains properly signed, contemporaneous operating logs orotherrelevant evidence and can demonstrate all ofthe following:

I. A malfunction caused the emissions in excess ofthe limits in Condition X

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II. The emissions did not exceed the following levels: 16 ppm NOx (I-hour average, corrected to 15% O2) 6 ppm CO (24-hour average, corrected to 15% O2);
111. The permitted facility, including the air pollution control equipment and process equipment, was beingproperly operated at the time ofthe malfunction;

IV. Preventative maintenance was regularly performed in a mannerconsistent with good practice for minimizing emissions;

v. The excess emissions were not part ofa recurring pattern indicative of inadequate design, operation, ormaintenance;

VI. Duringthe period ofthe malfunctionthe Permittee took all reasonable steps to minimize the amount and duration ofemissions (including any bypass) that exceeded the emission standards in ConditionX-E. Reasonable steps to minimize emissions could include, but are not limited to, reducingproduction to the lowest level practical; reducing the material feed that results in the increased emissions, and switchingto alternative, less polluting fuels. Where repairs were required, repairs were made in an expeditious fashion whenthe operatorknew or should have known that applicable emission limitations were being exceeded. Off-shift labor and overtime must have been utilized, to the extentpracticable, to ensure that such repairs were made as expeditiously as possible; and

High Desert Power Project Final PSD Permit (SE 98-0I) March 20 I0 4VII. 

### The Permittee complied with the malfunction reporting requirements of Condition IV-A ofthis permit. 4. All emissions, includingthose associated with a malfunction which may be eligible for an affirmative defense, must be included in all emissions calculations and demonstrations ofcompliance with mass emission limits in Condition X-E (e.g., daily, monthly, and annual emission limits). 5. This provision is in addition to any emergency or malfunction provision contained in any applicable requirement orelsewhere in this permit.


## v. Right to Entry The Regional Administrator, the head ofthe State AirPollution Control Agency, the head ofthe responsible local Air Pollution Control Agency, and/ortheir authorized representative, upon the presentation ofcredentials, shall bepermitted: A. to enterthe premises where the source is located orwhere any records are required to be kept underthe terms and conditions ofthis Authority to Construct; and B. at reasonable times to have access to and to copy any records required to be kept underthe terms and conditions ofthis Authority to Construct; and C. to inspect any equipment, operation, ormethodrequired in this Authority to Construct; and D. to sampleemissions from the source. 

### VI. Transfer ofOwnership In the event ofany changes in control orownership ofthe facilities to be constructed or modified, this Authority to Construct shall be bindingon all subsequent owners and operators. The applicant shall notify the succeedingownerand operatorofthe existence ofthis Authority to Construct and its conditions by letter, a copy ofwhich shall be forwarded to the Regional Administrator and the State and local Air Pollution Control Agency.


### VII. Severability Theprovisions ofthis Authority to Construct are severable, and, ifany provision ofthe Authqrity to Constructis held invalid, the remainderofthis Authority to Construct shall not be affected.
High Desert Power Project Final PSD Permit (SE 98-01) March 2010 5VIII. OtherApplicable Regulations Theowner and operator ofthe proposed project shall construct and operate the proposed stationary source in compliance with all other applicable provisions of40 CFR Parts 52, 60 and 61 and all other applicable federal, state and local air quality regulations.
IX. Paperwork Reduction Act Any requirements established by this permit for the gathering and reporting of information are not subject to review by the Office ofManagement and Budget ("OMB") under the Paperwork Reduction Act because this permit is not an "information collection request" withinthe meaning of44 U.S.C. §§ 3502(4) & (11), 3507, 3512, and 3518. Furthermore, this permit and any information gathering and reporting requirements established by this permit are exempt from OMB review underthe Paperwork Reduction Actbecause it is directed to fewer than ten persons. 44 U.S.C. § 3502(4), (11); 5 C.F.R. § 1320.5(a).
X. Special Conditions A. Certification HDPP shall notify the EPA in writing ofcompliance with Special Conditions XBandX-D and shall make such notification within (15) days ofsuch compliance. This letter must be signed by the Responsible Official ofHDPP. B. Air: Pollution Control Equipment On orbefore the date ofstartup ofthe facility, and thereafter (as defined in 40 CFR 60.2), HDPP shall install, continuously operate and maintain the following airpollution controls to minimize emissions at orbelow the levels specified in Condition X-E ofthis Authority to Contruct. The aforementioned "continuous" periods ofoperation do not include periods ofstartup and shutdown, as defined in Condition X-E-3, orperiods ofmalfunction as defined in Condition IV-B-l ofthis Authority to Construct. 1. A Selective Catalytic Reduction (SCR) system oneach turbine train unit for controlofNOx. 2. An oxidation catalyst on each turbine unit for control ofCO.

High Desert Power Project Final PSD Permit (SE 98-01) March 2010 6

## c. Operating Limitations 1. HDPP shall restrict fuel use for the operation ofthe combustion turbines and supplemental duct firing to Public Utility Commission-quality natural gas with a sulfurcontent of0.2 grains/100 dscfor less on a twelve month rolling average basis. 2. The duct burners shall not be operated unless the associated turbine units are in operation. D. Continuous Emission Monitoring 1. Priorto the date ofstartup and thereafter, HDPP shall install, maintain and operate the following continuous emission monitoring systems (CEMS) on each ofthe combustion turbine train exhaust stack:

a. A continuous monitoring system to measure stack gas NOxconcentrations. The system shall meet EPA monitoringperformance specification (40 CFR 60.13 and 40 CFR 60, Appendix B). b. A continuous monitoring system to measure stack gas CO concentrations. The system shall meet EPA monitoringperformance specifications (40 CFR 60.13 and 40 CFR 60, Appendix B).

c. A continuous monitoring system to measure stack gas volumetric flow rates. The stack gas volumetric flow rates shall be calculated in accordance with the fuel flowmeter requirements of40 CFR Part 75 Appendix 0 in combination withthe appropriate parts ofEPA Method 19. 2. HDPP shall notify EPA (Attn: AIR-5) ofthe date on which demonstration for the continuous monitoring system performance commences (40 CFR 60.13). This date shall be no laterthan 60 days after startup. 3. Not less than 90 days priorto the date ofstartup ofthe facility, HDPP shall have a quality assurance (QA)project plan developed for the certification and operation ofthe CEMS. Such a plan shall conform to the EPA document "Guidelinesfor developing a Quality Assurance ProjectPlan" (QAMS 005/80). The QAprojectplan mustbe maintained on-site and be available to EPA upon request. E. Emission Limits 1. TheNOx emissions (calculated as N02) from each turbine train unit shall not exceed 18.0 lb/hr for the 3F configuration (based on 2.5 ppmvd 

### @ 15% O2, averaged over a onehourperiod).

High Desert Power Project Final PSD Permit (SE 98-0I) March 2010 72. The CO emissions from each turbine train unit shall not exceed 17.53 lb/hrfor the3F configuration (based on 4.0 ppmvd 

### @ 15% O2, averaged over a 24 hourperiod). 3. The emission limits in Conditions X-E-l and X-E-2 shall apply at all times to each turbine train unit, except during startups and shutdowns defined as follows:

a. Startup shall be defined as the period beginning with ignition and lasting until the equipment has reached a continuous operating level and operating permit limits.

I. Cold startup means a startup when the combustion turbine has not been in operation during the preceding 72 hours orthe steam turbine inner metal temperature

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II. Hot startup means a startup when the combustion turbine has been in operation during the preceding 8hours.

111. Warm startup means a startup that is not ahot or cold startup.
IV. Shutdown shall be defined as the period beginning with the lowering ofequipment from normal operating load and lasting until fuel flow is completely offand combustion has ceased. b. Transient conditions shall not exceed the following durations: i. Cold startup: 4.5 hours 11. Warm startup: 2.6 hours 111. Hot startup: 1.9 hours IV. Shutdown: 1hour

c. Emissions during startup and shutdown, verified by CEMS, shall not exceed the following: 3 FConfiguration Pollutant Cold Startup (lb) Warm Startup (lb) Hot Startup (lb) Shutdoyvn (lb) NOx 183 168 138 97 CO 3541 3596 3729 239

High Desert Power Project Final PSD Permit (SE 98-01) March 2010 8d. Alternative Cold Startup Scenario The Permittee may use the following alternative startup scenario for cold starts: one combustion turbine ("warming turbine") is used to warm the components ofthe steam turbine generator and to bring the SCRonline. The remaining two combustionturbines are then brought online quickly. Emissions during the alternative cold startup scenario shall not exceed the following: Unit 

### NOx 

### (lb/event) CO (lb/event) Startup Duration "Warming turbine" 235 4394 9.5 hours CombustionTurbine 2 138 2391 1.9 hours Combustion Turbine 3 138 2391 1.9 hours F. Performance Test 1. Pursuantto 40 CFR 60.8, within 60 days ofachieving the maximum production rate ofthe proposed equipment but not later than 180 days after initial startup ofthe equipment as defined in 40 CFR 60.2, and at such other times as specified by the EPA, HDPP shall conduct performance tests for NOx and CO and furnish the EPA (Attn: AIR-5) with a written report ofthe results ofsuch tests. The tests for Ox and CO shall be conducted once every five years, priorto the submission ofthe renewal application for each five year Title V permit term, and at the maximum operating capacity ofthe facilities being tested. In the event ofa failed annual CEMS performance specification test (Condition X-D-l), HDPP shall conduct aperformance test concurrent with the re-testing ofthe annual CEMS performance specification. Upon written request (Attn: AIR-5) from HDPP, EPA may approve the conducting ofperformance test at a lower specified production rate. After initial performance tests and upon written request and adequatejustification from HDPP, EPA may waive a specified annual test for the facility. 2. Performance tests for the emissions ofNOxand CO shall be conducted and the results reported in accordance with the test methods set forth in 40 CFR 60, Part 60.8 and Appendix A. The following test methods shall be used:

a. Performancetests for the emissions ofNOx shall be conducted using EPA Methods 1-4 and 7E. EPA Methods 19, and 20 may be used in addition to, but not as a substitution for, EPA Method 7E. b. Performance tests for the emissions ofCO shall be conducted using EPA Methods 1-4 and 10. EPA Methods 19, and 20 maybe be used in addition to, but not as a substitution for, EPA Method 10. 3. The EPA (Attn: AIR-5) shall be notified in writing at least 30 days priorto such test to allowtime for the development ofan approvableperformancetest
High Desert Power Project Final PSD Permit (SE 98-0I) March 20I0 9plan and to arrange for an observerto be present at the test. Such prior approval shall minimize the possibility ofEPA rejection oftest results for procedural deficiencies. In lieu ofthe above-mentioned test methods, equivalent methods may be used with prior written approval from the EPA. 4. Forperformance test purposes, sampling ports, platforms and access shall be provided by HDPP on the exhaust stack in accordance with 40 CFR 60.8(e). G. Recordkeeping and Reporting 1. HDPP shall maintain records ofall 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 or40 CFR 75 recorded in apermanent form suitable for inspection. The file shall be retained for at least five (5) years following the date ofsuch measurements, maintenance, reports and records. 2. HDPP shall submit a written report ofall excess emissions to EPA (Attn: AIR-5) for every calendarquarter. The report shall include the following:

a. The magnitude ofthe excess emissions computed in accordance with 40 CFR 60.l3(h), any conversion factors used, and the date and time of commencement and compilation ofeach time period ofexcess emissions. b. Specific identification ofeachperiod ofexcess emissions that occurs during startups, shutdowns, and malfunctions ofthe engine exhaust systems. The nature and cause ofany malfunction (ifknown) and the corrective action taken orpreventative measures adopted shall also be reported.

c. The date and time identifyingeach period during which the CEMS was inoperative except for zero and span checks, and the nature ofthe system repairs oradjustments. d. When no excess emissions have occurred or the CEMS has not been inoperative, repaired, or adjusted, such information shall be stated in the report.
e. Excess emissions shall be defined as anyone-hourperiod during which the average emissions ofNOxas measured by the CEMS exceeds the maximum emission limits set forth in Condition X-E. Excess emissions shall be defined as any 24-hour period during which the average emissions ofCO, as measured by the CEMS exceeds the maximum emission limits set forth in Condition X-E.

High Desert Power Project Final PSD Permit (SE 98-0I) March 2010 103. Excess emissions indicated by the CEMS shall be considered violations ofthe applicable emission limit for the purpose ofthis permit. 4. The quality assurance project plan used by HDPP for the certification and operation ofthe continuous emissions monitors, which meets the requirements of40 CFR Part 60, Appendix F, shall be available upon request to EPA. H. New Source Performance Standards The facility's combustion turbines are subjectto the New Source Performance Standards (NSPS), 40 CFR 60, Subpart GG, as well as the general provisions of Subpart A. The owner/operator shall meet all applicable requirements ofthe aforementioned NSPS Subparts.
XI. Agency Notifications A. Unless otherwise directed by EPA orthis permit, the Permittee shall submit a copy ofall test plans, reports, certifications, notifications, and other information pertainingto compliance with this permitto: Director, Air Division (Attn: AIR-5) U.S. Environmental Protection Agency, Region 9 75 Hawthorne Street San Francisco, CA 94105 E-mail: R9.AEO@epa.gov Fax: (415) 947-3579 B. The Permittee shall submitpermit applications, permit amendments, and other applicable permit information, which includes but not limited to installation of control equipment, replacement ofan emissions unit, and changes that contravene permit terms to: Director, Air Division (Attn: AIR-3) U.S. Environmental Protection Agency, Region 9 75 Hawthorne Street San Francisco, CA94105 E-mail: R9AirPermits@epa.gov Fax: (415) 947-3579

High Desert Power Project Final PSD Permit (SE 98-01) March 20I0 IIC. Copies ofall correspondence required by this PSD Permit shall be forwarded to: Air Pollution Control Officer Mojave Desert Air Quality Management District 14306 Park Avenue Victorville, CA 92392

High Desert Power Project Final PSD Permit (SE 98-01) March 2010 12