ADAGE Mason LLC. November 12, 2010

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1 ADAGE Mason LLC November 12, 2010 VIA HAND DELIVERY Barbara A. Adkins, AICP Department Manager Mason County Department of Community Development Post Office Box 279 Shelton, WA / ext. 286 Re: Mason County Revised SEPA Checklist and Supporting Documents Dear Ms. Adkins, ADAGE Mason LLC, ( ADAGE ) submitted a State Environmental Policy Act ( SEPA ) Checklist on June 28, 2010, in connection with our proposed Biomass Facility. ADAGE requested early notice in the event that Mason County determined it was likely to issue a Determination of Significance under SEPA. By letter dated September 10, 2010, Mason County Department of Community Development responded to ADAGE s request for early notice. The September 10, 2010 letter outlined the issues that led to its determination and instructed ADAGE to submit its revised application no later than November 12, 2010, and suspended the SEPA Review during that period. In response to your letter of September 10, 2010 please find the ADAGE Revised SEPA Checklist and supporting documents. This Revised SEPA Checklist is a stand alone document and is submitted as a complete replacement of the original SEPA Checklist submitted on June 28, In addition, attached to this cover letter is a legal memorandum regarding the interpretation of applicable Mason County and Washington State laws and regulations concerning solid waste. We understand the issues outlined in the September 10 letter to be the comprehensive feedback of the County as well as the supporting agencies on the ADAGE proposal. To further enhance our understanding ADAGE representatives were invited to meet with Mason County Staff and other commenting agencies on October 6, 2010, to gain clarification to the points raised in the September 10 letter. You will see in our Revised Checklist that ADAGE has developed Shelton Office, 1620 Olympic Highway North, Suite 4, Shelton, WA 98584

2 Ms. Barbara A. Adkins November 12, 2010 Page 2 significant additional information and mitigations regarding these issues. In some cases, ADAGE has adopted new design approaches to allay County concerns through complete or improved mitigations. Following are representative examples of changes to the original SEPA Checklist submitted on July 28 and expanded information sections, new studies, and a new design approach in several significant areas leading to greater mitigations for this project. The redesign of East Capital Prairie road that completely avoids all wetlands and wetland buffers. In addition, the redesign will move the road well into the plant site providing well over 300 of treed buffer from the road to the western boundary of the site. This mitigation adds additional buffer between the plant site and residential areas. Reduction in the amount of vegetation cleared from 75 to 56.5 acres, a 25% reduction. This reduction from the initial SEPA submittal, resulting from a redesign and consolidation of the fuel yard, allows for an increased buffer of undisturbed forest on the project site to over 30 acres. This improvement adds additional mitigation for noise, aesthetics, and lessens impact to wildlife on the site. Reduction of the amount of impervious surface from 34 to 22 acres, a 35% reduction. This was made possible by eliminating daily on site fuel grinding. This decision provides significant additional noise mitigation for the project and allows the project to meet the more stringent Washington State noise standards. This reduction in impervious surface provides additional mitigation in protection of groundwater. A new study requested by the County to characterize the effects of mobile source emissions from truck and auto traffic related to the operation of the ADAGE facility. This study, similar to a study completed for the Port of Olympia and recommended by Dr.Yu, provides a comprehensive analysis of the impact of diesel PM 2.5 emissions on locations of interest along Wallace Kneeland and John s Prairie Road. Expanded analysis of fuel supplies that documents the long term and sustainable supply of fuel for the ADAGE facility. An expanded Traffic Impact Analysis to answer County staff concerns on long range road maintenance planning, truck supply routes, and traffic intersection issues that may require future upgrades.

3 Ms. Barbara A. Adkins November 12, 2010 Page 3 Development of a Best Management Practices Report to assure standards and procedures are in place to protect groundwater at the site. This report was prepared by Robinson / Noble, a well respected team of local hydro-geological engineers with significant experience in the Johns Prairie area. ADAGE has also added expanded sections to our Revised Checklist to address specific issues raised by the county or other agencies, such as: Air quality and odor Protection of local water supplies and the associated aquifer Protection from accidental spills Noise from construction and idling trucks as well as other topics identified by the County. We appreciate the opportunity to work with Mason County staff on this significant economic development opportunity. We respectfully submit the attached SEPA checklist and supporting documentation for your consideration and look forward to further dialogue with you and your team. Sincerely, F. Reed Wills, President Cc: Mason County Board of County Commissioners

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11 RCW EIS Requirement Technical Guidance # NSR TG Date Issued: January 26, 2004 Revised: November 1, 2010 Category: Applicability Determination Guidance Objective: To better understand RCW as it applies to a wood fueled boiler. Purpose: To establish Agency criteria for determining when wood material is solid waste under RCW Technical Guidance: RCW establishes laws governing primarily the handling of solid waste; however, portions of this statute establish requirements specific to solid waste incinerators. In particular, RCW explicitly requires that an environmental impact statement (EIS) be prepared before any solid waste incinerator is operated. RCW reads as follows: Solid waste incineration or energy recovery facility Environmental impact statement requirements. No solid waste incineration or energy recovery facility shall be operated prior to the completion of an environmental impact statement containing the considerations required under RCW 43.21C.030(2)(c) and prepared pursuant to the procedures of chapter 43.21(c) RCW. This section does not apply to a facility operated prior to January 1, 1989, as a solid waste incineration facility or energy recovery facility burning solid waste. ORCAA engineering staff has concluded that there are two criteria that must be met for this requirement to apply. They are: 1. Will the facility use a fuel burning device? 2. Will the facility use solid waste as defined in RCW as fuel, or will the facility use incineration as a means to dispose of solid waste (again, as defined in RCW 70.95). Criterion 1: Will the facility use a fuel burning device? If the answer is yes, go to Criterion 2. If the answer is no, RCW is not applicable. RCW defines incineration as a process of reducing the volume of solid waste operating under federal and state environmental laws and regulations by use of an enclosed device using controlled flame combustion. Then, energy recovery is defined as a process operating under federal and state environmental laws and regulations for converting solid waste into usable energy and for reducing the volume of solid waste. Given these definitions, ORCAA engineering staff has determined that any fuel burning device is a possible solid waste incinerator under RCW (This determination is based, in part, on PCHB case ). The fuel burning device would then become a solid waste incinerator under this statute once it combusts solid waste. This leads to the second criteria. RCW Applicability Page 1 of 3 11/03/2010

12 Criterion 2: Will the facility use a boiler fuel that is a solid waste? If the answer is yes, then RCW applies. If the answer is no, then it does not apply. If a facility is going to use a combustion device to dispose of solid waste, in other words there is no energy recovery, then it is clearly a solid waste incinerator. Likewise, if an energy recovery unit is going to combust municipal solid waste (i.e. trash), then it is clearly a solid waste incinerator. However, in many cases it is more difficult to determine whether the unit is a solid waste incinerator or not. In these cases the important question to answer is whether the fuel is solid waste or just plain boiler fuel. Here is some guidance to help determine when a boiler fuel is solid waste and when it is boiler fuel. The term solid waste is defined in RCW as follows: Solid waste" or "wastes" means all putrescible and nonputrescible solid and semisolid wastes including, but not limited to, garbage, rubbish, ashes, industrial wastes, swill, sewage sludge, demolition and construction wastes, abandoned vehicles or parts thereof, and recyclable materials. By definition, to be a solid waste, the material must first be a waste of some kind. Waste is commonly defined as follows: Discarded material. An unusable or unwanted substance or material, such as a waste product. Something, such as steam, that escapes without being used. Garbage; trash. By these definitions, a waste is something that is discarded and unusable. Therefore, if something has not been discarded and has a use or value, it is not a waste (i.e. if trim ends from a plywood mill are sold as fuel, they are not a waste). However, if they are discarded into the solid waste stream (sent to a landfill and then recovered, they would be a waste). ORCAA consulted with the Washington Department of Ecology (Al Newman from the Air Program). He said that the definition of wood waste goes beyond the type of fuel, but also where the fuel has come from. For example, if plywood scraps are being purchased as fuel by the hog fuel boiler owner, then it is not solid waste. However, if someone is paying the hog fuel boiler owner (i.e. a tipping fee) to take the plywood scraps then it is considered solid waste. (Free plywood scraps are not solid waste.) Additionally, ORCAA sought guidance from EPA, and found a set of criteria that EPA has established to address this very issue. This can be viewed at Similar to the Department of Ecology, the EPA considers things like whether the material has value (both heat value and monetary value) and whether it has entered the solid waste stream. The question of whether a facility operates a solid waste incinerator should be made on a case by case basis. However, in general, using the common definition of waste, considering the interpretation of wood waste used by the Department of Ecology, and EPA guidance ORCAA has determined that the following test is helpful for determining whether a material is solid waste or fuel. RCW Applicability Page 2 of 3 11/03/2010

13 Test for Determining Whether Non-Hazardous Materials Used as Fuel in Combustion Units are Solid Waste 1. Is the Material a Traditional Fuel? If the answer is yes, the material is not a waste If the answer is no, please answer the next question 2. Has the Material Been Discarded in the First Instance (i.e. disposed, abandoned, thrown away)? If the answer is yes, the secondary material is a waste Has the material been sufficiently processed? If the answer is yes, see the legitimacy criteria If the answer is no, the secondary material is a waste If the answer is no, please answer the next question 3. Is the Material Managed within the Control of the Generator? If the answer is no, secondary material is a waste unless Administrator has granted a non-waste determination If the answer is yes, see the legitimacy criteria 4. Does the Material Satisfy the Legitimacy Criteria below? Is the material managed as a valuable commodity? Does the material have a meaningful heating value? Does the material contain contaminants at levels comparable to or lower than traditional fuels which the combustion unit is designed to burn? If the answer to one of the legitimacy criteria questions is no, the secondary material is a waste (sham recycled and therefore considered to be disposed ) If the answer to all of the legitimacy criteria questions is yes, the secondary material is not a waste. RCW Applicability Page 3 of 3 11/03/2010