MINNESOTA POLLUTION CONTROL AGENCY Industrial Division Biofuels Sector

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4 MINNESOTA POLLUTION CONTROL AGENCY Industrial Division Biofuels Sector Request for Approval of Findings of Fact, Conclusions of Law, and Order and Authorization to Issue NPDES/SDS Wastewater Permit No. MN for the Proposed MinnErgy, LLC Ethanol Production Facility December 16, 2008 ISSUE STATEMENT The Minnesota Pollution Control Agency (MPCA) staff requests that the MPCA Citizens Board (Board) approve issuance of the National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) Wastewater/Stormwater Permit No. MN (Permit) for the proposed MinnErgy, LLC Ethanol Production Facility (Facility). At the November 25, 2008, Board meeting, the Board approved a negative declaration for the need for an Environmental Impact Statement (EIS) and also denied the three petitions submitted for a Contested Case Hearing (Hearing) on the Permit, but required that MPCA staff bring the Permit back before the Board for an issuance decision. The Permit was on public notice from June 11, 2008, through August 1, The 13 comment letters received during the public notice period have previously been responded to. Because there is no potential for significant environmental effects, MPCA staff now requests that the Board approves the Permit for issuance. I. BACKGROUND: On August 14, 2007, MPCA staff received an NPDES/SDS permit application for construction of the proposed Facility, reviewed and determined the application incomplete, and requested additional information. On October 17, 2007, MPCA staff received an amended permit application for the Facility, which included the proposal to construct the Facility in two phases. Phase I of the proposed Facility included a proposed discharge of noncontact utility wastewater (wastewater) up to 277,100 gallons per day to Bear Creek. The wastewater, consisting of cooling tower blowdown, reverse osmosis reject water, multi-media filter backwash, and water softener regenerate, would travel through a constructed 5.4-mile, 12-inch subsurface pipeline, buried five feet deep, to a constructed outfall to Bear Creek. The constructed outfall location is near County Road 19 and downstream of Chester Woods Park Dam. Bear Creek is not a listed water under Minn. R , subp. 7. Therefore, in accordance with Minn. R , the water use classifications for Bear Creek are by default Class 2B, 3C, 4A, 4B, 5, 6 waters.

5 The proposed constructed stormwater pond is designed to hold up to four million gallons of stormwater runoff from the Facility site. The stormwater pond design includes a manually-controlled discharge pipe to release stormwater from the base of the pond through a constructed outfall located at a natural overland feature (also an unlisted water) that eventually leads to the headwaters of Bear Creek. The distance from the stormwater constructed outfall to Bear Creek is approximately two miles. MPCA staff determined the permit application was complete, and completed the necessary permitting and water quality reviews (MPCA Review), including nondegradation review for the wastewater discharge. The MPCA Review is attached as Appendix A to the Findings of Fact, Conclusions of Law, and Order. The draft Permit contains limits for the wastewater and stormwater discharges. MPCA staff placed the Permit on notice for a period of 52 days, from June 11, 2008, to 4:30 p.m. on August 1, MPCA staff also held a public meeting on July 24, 2008, to answer questions. The MPCA received 13 comment letters and 3 petitions for a Hearing on the Permit, within the public notice period, and are found in Attachment 2. Petitions for a Hearing on the Permit must go to the Board for a final decision as to whether to grant or deny the petitions. MPCA staff provided responses to the comment letters, which are found in Attachment 3. MPCA staff brought the petitions to the November 25, 2008, Board meeting, with the request to deny the petitions. The Board denied the petitions for a Hearing. However, the Board required that MPCA staff bring the Permit back before the Board for an issuance decision. II. DISCUSSION: Many of the verbal and written comments and/or concerns regarding the draft Permit were related to: a) the possibility for the stretch of Bear Creek from Chester Woods Park dam to the confluence of Badger Creek to be restored and reclassified by the Minnesota Department of Natural Resources (DNR) as a trout stream; and b) that the proposed discharge would degrade Bear Creek such that the potential to restore and re-designate Bear Creek would be lost. Other issues raised during the comment period were the management of improperly sealed wells and the construction techniques used in the karst region to ensure protection of ground water against spills. 2

6 Regarding Bear Creek, the DNR has considerable information. DNR records from 1946 through at least 1957 indicate that Bear Creek, or parts thereof, were designated as a trout stream. In addition, DNR records indicate that the stocking of Bear Creek was attempted at least six (6) times between 1969 and 1975, as the trout population would not be sustained by natural reproduction. On May 14, 1980, the DNR Commissioner s Order 2062 removed Bear Creek from trout stream designation. In 1994, construction was completed on a dam at Chester Woods Park, in order to prevent severe flooding downstream. Recognizing that Bear Creek may one day be restored as a trout stream, the dam was constructed with a bottom draw reservoir. The DNR has indicated that this bottom draw has been effective in providing cold (less than 60 Fahrenheit) temperatures in Bear Creek immediately below the dam outfall. Cold temperatures appear to continue to the County State Aid Highway 19 crossing 1.4 miles downstream, but mean temperatures increase at this point. There is also more diurnal variation at this point. The DNR also indicates that Bear Creek does not have the physical habitat characteristics for adult trout. Finally, the DNR has stated that Bear Creek does not currently have suitable trout habitat for trout stream designation. The wastewater discharge from the proposed Facility meets the Class 2B, 3C, 4A, 4B, 5, 6 use classifications of Bear Creek, as authorized by Minn. R In accordance with Minn. R. ch and through the data collected during the Environmental Review process, the MPCA determined that the wastewater discharge from the proposed Facility would not degrade the existing uses of Bear Creek. During the Board meeting on November 25, 2008, testimony was given by MPCA staff and MinnErgy, LLC that even though Bear Creek is not classified as a trout stream, the wastewater discharge would meet the standards MPCA would establish for streams classified as trout streams. Additionally, MinnErgy, LLC indicated they would accept the stricter standards for a trout stream, should Bear Creek be reclassified by the DNR. Minn. Stat grants the MPCA the powers and duties to administer and enforce all laws relating to the pollution of any of the waters of the state. Within this statute, the MPCA is granted authority to adopt, issue, reissue, modify, under such conditions as it may prescribe, in order to prevent, control or abate water pollution,. Additionally, Minn. R , subp. 2 3

7 states: Each draft and final permit must contain conditions necessary for the permittee to achieve compliance with applicable Minnesota or federal statutes or rules, including each of the applicable requirements in parts to and to , and any conditions that the agency determines to be necessary to protect human health and the environment. Therefore, MPCA staff, after considering the public testimony that Chester Woods Park dam has a bottom draw reservoir and constructed for the purpose of preserving the potential for Bear Creek to be designated as a trout stream, and Board discussion at the November 25, 2008, meeting, propose to modify the draft Permit for the Facility to include: 1. a daily maximum temperature limit for the discharge from the proposed Facility; 2. a requirement to develop a plan for investigating improperly sealed wells on the MinnErgy property, and provide well location information MinnErgy has previously gathered within a twomile radius of the site to the Minnesota Department of Health Source Water Protection Unit; and 3. a requirement to develop and submit an excavation plan for MPCA staff review and approval, to evaluate and determine the extent of any additional fractures or Karst features identified during excavation and construction of the Facility. This plan shall include, at a minimum: a proposal to ensure that any new fractures or Karst features are protected in the rail and truck loadout areas, the tank farm containment areas, and stormwater pond; notification of MPCA staff prior to excavation/construction in those areas; written notification to MPCA staff of any fractures or Karst Features found; and evaluating any additional engineering controls and options for evaluating spill/ground water flow direction. 4

8 III. CONCLUSIONS: MPCA staff concludes that the draft Permit (Attachment 4), which was drafted and public noticed in accordance with Minn. R. chs. 7001, 7050, and 7053, and modified in response to the public and Board comments raised, may be final issued as modified. IV. RECOMMENDATION: MPCA staff recommends that, in accordance with the standard and criteria set forth in Minn. R. ch. 7001, the Board approves the issuance of the Permit, as modified. SUGGESTED STAFF RESOLUTION BE IT RESOLVED, that, in accordance with the standard and criteria set forth in Minn. R. ch. 7001, the Minnesota Pollution Control Agency (MPCA) approves and adopts the attached Findings of Fact, Conclusions of Law, and Order, which concludes that the MinnErgy, LLC Ethanol Production Facility, as analyzed in National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) Wastewater/Stormwater Permit No. MN (Permit), is protective of the environment and meets all federal and state rules and regulations. BE IT FURTHER RESOLVED that the MPCA approves and adopts the attached Findings of Fact, Conclusions of Law, and Order (Attachment 1) in support of its approval of issuance of the Permit. The Commissioner is hereby authorized to execute the Findings of Fact, Conclusions of Law, and Order on behalf of the MPCA and issue the modified Permit for the MinnErgy, LLC Ethanol Production Facility. 5

9 ATTACHMENT 1 STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY IN THE MATTER OF THE PROPOSAL TO ISSUE NPDES/SDS PERMIT NO. MN FOR THE PROPOSED MINNERGY, LLC ETHANOL PRODUCTION FACILITY EYOTA TOWNSHIP OLMSTED COUNTY, MINNESOTA FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER FINDINGS OF FACT The above-entitled matter came before the Minnesota Pollution Control Agency (MPCA) Citizens Board (Board) at a regular meeting held in St. Paul, Minnesota, on December 16, Based on the MPCA staff review, comments and information received during the comment period, and other information in the record of the MPCA, the MPCA hereby makes the following Findings of Fact, Conclusions of Law, and Order: Jurisdiction 1. The MPCA is authorized and required to administer and enforce all laws relating to the pollution of any waters of the state. Minn. Stat , subd. 1(a). 2. The MPCA has authority to issue National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) Permit No. MN (Permit). Minn. Stat. chs. 115 and 116, and Minn. R. chs. 7000, 7001, and Under the federal Clean Water Act, the MPCA is delegated the authority from U.S. Environmental Protection Agency to issue NPDES/SDS Permits. 33 U.S.C Proposed Project Description 4. MinnErgy, LLC (MinnErgy) proposes to construct an ethanol production facility (Project or Facility) in Eyota Township, Olmsted County, Minnesota. Ethanol will be produced by fermenting corn. The basic steps in ethanol production include feedstock, fermentation, distillation, alcohol recovery, and recovering residual materials. 5. Facility construction will proceed in two phases. Phase I of the project will involve construction of a facility with the capacity to produce million gallons per year (MMGPY) of undenatured ethanol (55 MMGPY denatured). Phase II of the project will add an additional MMGPY, for a total final capacity of 75 MMGPY undenatured ethanol (78.75 MMGPY denatured). MinnErgy, LLC indicated that Phase II of the project may occur within three years of commencing Phase I. The Facility will use corn as feedstock, with a demand of approximately 19.5 million bushels of corn per year (approximately 545,896 tons) at the Phase I capacity and approximately 28.0 million bushels of corn per year (approximately 783,582 tons) at the Phase II capacity. Spent grains will be produced as a co-product of ethanol production and will be dried to produce Distiller s Dried Grains with Solubles (DDGS) at a maximum annual rate of 153,533 tons per year (TPY) at the Phase I capacity TDD (for hearing and speech impaired only): (651) Printed on recycled paper containing at least 30% fibers from paper recycled by consumers

10 MinnErgy LLC., Ethanol Production Facility On the Issuance of NPDES/SDS Permit No. MN Eyota Township, Olmsted County, Minnesota Findings of Fact Conclusions of Law And Order and 220,382 TPY at the Phase II capacity. DDGS will be sold as animal feed. Alternatively, the spent grains may be left wet to produce Wet Distillers Grains with Solubles (Wetcake) with a maximum annual rate of 479,791 TPY at the Phase I capacity and 688,695 TPY at the Phase II capacity. Wetcake would also be sold as animal feed. 6. MinnErgy proposes to pump ground water at a maximum rate of 564 gallons per minute (gpm) during Phase I and 791 gpm during Phase II, alternating from two on-site wells. The estimated Facility water demand during Phase I would be MMGPY. The estimated Facility water demand during Phase II would be MMGPY. All process wastewater will be recycled for reuse within the Facility. Non-process utility wastewater (wastewater) would be discharged to Bear Creek. MinnErgy is proposing to treat sanitary wastewater with an on-site septic system. The Facility would burn natural gas for steam generation. Corn and ethanol would be transported by trucks and rail. Procedural History 7. Under the authority of Minn. Stat , and pursuant to Minn. R to , the draft Permit, incorporated herein as Attachment 4 to the Findings, was placed on public notice June 11, 2008, with the last day of the public notice period officially ending at 4:30 p.m. on August 1, An MPCA staff effluent limit review (MPCA Review) was completed for Phases I and II for the proposed Facility s wastewater discharge. The MPCA Review evaluated nondegradation and downstream impairments for the receiving waters, discharge and receiving water flows and pollutant loadings, and chemical additives to determine effluent limitations and monitoring requirements for the Permit. The MPCA Review is hereby incorporated as Appendix A to these Findings and contains the following documents: Effluent Limit Summary, Effluent Limit Review Checklist, Pre-Total Maximum Daily Loads (TMDLs) Daily Load Phosphorus Trading Permitting Strategy, Chemical Additives approval list and MSDS Sheets, MPCA Water Quality Program Nondegradation Review, MinnErgy s Pump Test Well Data, and MinnErgy s Bear Creek Water Quality Data Summary and Laboratory Reports. A draft NPDES/SDS Permit was prepared for Phase I of the Facility based on this review, which would discharge wastewater up to 277,100 gallons per day (gpd) to Bear Creek, a Class 2B, 3C, 4A, 4B, 5, and 6 water. There is also a proposed controlled discharge of stormwater with a maximum design capacity of 180,000 gpd overland to Bear Creek from a proposed stormwater pond at the Facility. All process wastewater will be recycled for reuse within the Facility. The sanitary wastewater would not be regulated under the Permit, but by the local authority for on-site systems. 9. The MPCA notified the public of the public comment period. A news release was provided to the Rochester Post Bulletin, governmental agencies, individuals listed on the MPCA s Olmsted County Interested Parties Mailing List, and individuals, as well as other interested parties, on June 11, In addition, the public notice was made available for review on the MPCA Web site at on June 12, During the 52-day public comment period, the MPCA received two comment letters from government entities, three comment letters from a representative of a single citizen s group, two letters from a single individual, one comment letter from the president of a trout association, seven comment letters from additional citizens, and one comment letter from a university professor. Requests for a Contested Case Hearing were included in 3 of the 16 comment letters. 2

11 MinnErgy LLC., Ethanol Production Facility On the Issuance of NPDES/SDS Permit No. MN Eyota Township, Olmsted County, Minnesota Findings of Fact Conclusions of Law And Order 11. The MPCA prepared responses to comments (Responses to Comments) received during the 52-day public comment period. Comment letters received have been hereby incorporated by reference as Attachment 2 to these Findings. The MPCA Responses to Comments are hereby incorporated by reference as Attachment 3 to these Findings. 12. The petitions for a contested case hearing were brought to the Board at the November 25, 2008, Board Meeting for a decision whether to grant or deny the petitions. MPCA staff recommended that the Board deny the petitions since they did not meet applicable rules. The Board denied the petitions, but directed staff to bring the Permit back to the Board for a decision on the issuance of the Permit. APPLICABLE STANDARDS 13. The Permit has been drafted in accordance with the requirements of Minn. R. chs and 7053, which are designed to protect human health and the environment. The MPCA rules prohibit any person from discharging pollutants that would cause or contribute to a violation of water quality or technology based standards. Criteria For Determining Whether To Issue an NPDES/SDS Permit 14. The MPCA s decision whether to issue the Permit is governed by Minn. R , which provides: Subpart 1. (MPCA) Action. Except as provided in subpart 2, the (MPCA) shall issue, reissue, revoke, or modify a permit if the (MPCA) determines that the proposed permittee or permittees will, with respect to the facility or activity to be permitted, comply or will undertake a schedule of compliance to achieve compliance with all applicable state and federal pollution control statutes and rules administered by the (MPCA), and conditions of the permit and that all applicable requirements of Minnesota Statutes, chapter 116D, and rules adopted under Minnesota Statutes, chapter 116D, have been fulfilled Subpart 2. (MPCA) Findings. The following findings by the (MPCA) constitute justification for the (MPCA) to refuse to issue a new or modified permit, to refuse permit reissuance, or to revoke a permit without reissuance: A. that with respect to the facility or activity to be permitted, the proposed permittee or permittees will not comply with all applicable state and federal pollution control statutes and rules administered by the (MPCA), or conditions of the permit; B. that there exists at the facility to be permitted unresolved noncompliance with applicable state and federal pollution control statutes and rules administered by the (MPCA), or conditions of the permit and that the permittee will not undertake a schedule of compliance to resolve the noncompliance; C. that the permittee has failed to disclose fully all facts relevant to the facility or activity to be permitted, or that the permittee has submitted false or misleading information to the (MPCA) or to the commissioner; D. that the permitted facility or activity endangers human health or the environment and that the danger cannot be removed by modification of the conditions of the permit; E. that all applicable requirements of Minnesota Statutes, chapter 116D and the rules adopted under Minnesota Statutes, chapter 116D have not been fulfilled; 3

12 MinnErgy LLC., Ethanol Production Facility On the Issuance of NPDES/SDS Permit No. MN Eyota Township, Olmsted County, Minnesota Findings of Fact Conclusions of Law And Order F. that with respect to the facility or activity to be permitted, the proposed permittee has not complied with any requirement under parts to or 7046 to pay permit fees; G. that with respect to the facility or activity to be permitted, the proposed permittee has failed to pay a penalty owed under Minnesota Statutes, section ; The MPCA Findings With Respect to These Criteria 15. The MPCA finds that the operation of the Facility, as restricted by the proposed and revised Permit, will comply with all applicable state and federal pollution control statutes and rules by the MPCA and with the terms and conditions of the Permit. 16. The MPCA finds that the Permit both as publicly noticed and as modified per these Findings has no potential for significant environmental effects. 17. The MPCA finds that based on testimony on November 25, 2008, the Facility, as designed, has the ability to meet a more restrictive discharge wastewater temperature limit than published in the draft Permit on June 11, Because the Facility can meet this limit, which is based on MPCA staff s best professional judgement, and determined to be appropriate in accordance with Section 402(a)(1) of the Clean Water Act. 18. The MPCA finds that it is reasonable to provide a more restrictive temperature discharge limit than published in the draft Permit on June 11, 2008, because the Facility can meet this limit and it would be protective for potential future uses of Bear Creek. The potential for the improvement of Bear Creek was noted based on the amount of information received through both written comments and public testimony, regarding the original intent and construction of a bottom-draw reservoir at Chester Woods Park Dam. 19. Therefore, though not required for protection of Bear Creek as currently classified, the MPCA finds the draft Permit, as modified to include a more stringent temperature discharge limit of 75 Fahrenheit, and reporting requirements such that the wastewater discharge from the proposed Facility would not preclude the potential for Bear Creek to eventually be restored, and redesignated by DNR as a trout stream. The MPCA finds that other permits include similar temperature limits for similar activities. 20. The MPCA also finds that, based on testimony of standard practice, the draft Permit as modified with provisions that MinnErgy prepare and submit an excavation plan to the MPCA for review and approval that evaluates and determines the extent of any additional fractures or Karst features identified during excavation and construction of the Facility s rail and truck loadout areas, the tank farm containments areas, and the stormwater pond, including a proposal to ensure that any new fractures or Karst features are protected in those areas, and additional engineering controls and options for determining spill/ground-water flow direction, is reasonable. 21. The MPCA finds that, based on comments submitted by the Minnesota Department of Health, the draft Permit as modified with requirements for MinnErgy to participate in finding and ensuring that improperly sealed wells be sealed on the site, is appropriate. 4

13 MinnErgy LLC., Ethanol Production Facility On the Issuance of NPDES/SDS Permit No. MN Eyota Township, Olmsted County, Minnesota Findings of Fact Conclusions of Law And Order 22. The MPCA also finds that, based on comments submitted by the Minnesota Department of Health, the draft Permit as modified to require MinnErgy to provide well location information within a two-mile radius of the Facility, to the Minnesota Department of Health Source Water Protection Unit, is reasonable. 23. These Findings, Conclusions of Law and Order, the Board Item and various attachments meet the directive required by the Board at the November 25, 2008, Board Meeting. CONCLUSIONS OF LAW 1. The MPCA has jurisdiction over the issuance of the Permit for MinnErgy. 2. Due, adequate, and timely public notice of the proposed Permit was given in accordance with Minn. R and that MPCA staff Responses to Comments was sufficient. 3. The requirements of Minn. R , for issuance of a permit have been met for the reasons stated in these Findings and Conclusions. The Permit should be issued as modified. 4. The Facility is expected to comply with all MPCA standards and does not have the potential for significant environmental effects. 5. Any findings that might properly be termed conclusions and any conclusions that might properly be termed findings are hereby adopted as such. ORDER The Minnesota Pollution Control Agency approves the issuance of National Pollutant Discharge Elimination System/State Disposal System Permit No. MN for the MinnErgy, LLC Ethanol Production Facility, as presented at the December 16, 2008, Board meeting. IT IS SO ORDERED Temporary Commissioner Paul Eger Chair, Citizens Board Minnesota Pollution Control Agency Date 5

14 ATTACHMENT 2 Minnesota Pollution Control Agency MinnErgy, LLC Ethanol Production Facility Draft NPDES/SDS Permit No. MN Public Notice Period June 11, 2008 August 1, 2008 LIST OF COMMENT LETTERS RECEIVED 1. Eleanor M. Jones, received by mail on June 18, Martin Johnson, received by mail on June 18, Jim Moran, received at MinnErgy public meeting on June 19, M. Johanson, received by mail June 20, Rich Peter, Director of Environmental Health, Olmsted County Public Health, received (by Steve Sommer Environmental Review) by on July 10, P.J. Wotzka written request for information including comments, received by on July 14, Flo Sandok, received (by David Beil Air Quality Engineering) on July 28, James Moran, received by on July 30, 2008 (8:37 p.m.). 9. James Moran, representing Olmsted County Concerned Citizens (OC3), received by on July 30, 2008 (11:21 p.m.). 10. Barbara Upton, received by Fax on July 31, Fran Sauer, received by July 31, Wesley M. Bussell, Mayor, city of Eyota, received by both and mail on August 1, P.J. Wotzka, received by on August 1, David (dkamis@rconnect.com)/stephanie Hendricksen, received by on August 1, Jeffrey S. Broberg, LPG, Minnesota Trout Association, hand delivered on August 1, Hugh Chester-Jones, Professor of Animal Science, University of Minnesota, Southern Research and Outreach Center, received on August 1, 2008.

15 Attachment 3 Minnesota Pollution Control Agency MinnErgy, LLC Ethanol Production Facility Proposed National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) Permit No. MN RESPONSES TO REQUESTS FOR A CONTESTED CASE HEARING AND COMMENTS ON THE DRAFT NPDE/SDS PERMIT NO. MN Written Requests for a Contested Case Hearing on the proposed NPDES/SDS Permit No. MN The Minnesota Pollution Control Agency (MPCA) received three (3) comment letters requesting a Contested Case Hearing. These comment letters are responded to below and followed by responses to general comments received on the draft NPDES/SDS Permit No. MN (Permit) for the proposed MinnErgy LLC (MinnErgy) Ethanol Production Facility (Project or Facility). 1. James Moran, Olmsted County Concerned Citizens (Comment Letter #8), received by the MPCA on Wednesday, July 30, Comment: The commenter, representing the Olmsted County Concerned Citizens, requested a Contested Case hearing be held because of concerns related to sulfates and heavy metals in the proposed nonprocess wastewater discharge (wastewater discharge), the units of measurements used for the limits and monitoring, and how the wastewater discharge would comply with the MPCA Rules for impaired waters. Mr. Moran stated that In examination of the pump test data, it was discovered that high levels of sulfates and heavy metals were present and not accounted for in either the EAW or the reference discharge permit draft. Given the reverse osmosis filtering all of these additional pollutants will be discharged into Bear Creek. In order for this permit to be issued all of these pollutants should be accounted for, documented and spelled out in ppm/pounds per day discharge language so that the general public can understand. Also, the discharge information should be put into prospective as to how it complies with the MPCA rules for discharging into an impaired creek. Response: The commenter questions the quality of the non-process utility wastewater discharge expected from the proposed Project. The process used by the MPCA staff in evaluating a proposed discharge is complex and is somewhat unique to each discharge. The primary documents for the MPCA permit staff use in setting permit conditions are the Water Quality Standards Nondegradation Review and Effluent Limit Summary Recommendations received from MPCA Water Quality Standards Review staff. These documents are the result of a number of data reviews, modeling results and rule analysis to determine the potential impacts of a proposed discharge on a receiving stream and the proper conditions to be placed in an NPDES/SDS permit. The MPCA held two public meetings (on June 19, and July 24, 2008), in the city of Eyota during the public notice period for the Environmental Assessment Worksheet (EAW), the Air permit, and the Permit. At the MinnErgy public meeting on July 24, 2008, MPCA staff discussed these concerns with the commenter, showed the commenter the Water Quality Standards Nondegradation Review and Effluent Limit Summary Recommendations, and offered to mail these documents to the commenter, which was done on July 28, These water quality standards review documents include both data received, the results of the MPCA Water Quality staff review and analysis of the information, and effluent limits and monitoring recommendations for placement in the NPDES/SDS permit.

16 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit The proposed effluent monitoring and limitations in the Permit that was placed on public notice June 11, 2008, reflect those which MPCA staff determined to be protective of the discharge receiving water and downstream waters for the use classifications of these waters, and to prevent degradation of the waters, in accordance with Minnesota Rules chapters 7050 and Although the draft NPDES/SDS permit is for the Phase I of the proposed Facility, the MPCA water quality staff evaluated the application and data submittals for both phases of the project, as both Phases were required to be in the EAW. The results are discussed on pages 25 through 28 of the EAW. The source water data submitted by the Proposer included data on sulfates and metals. In addition, the Proposer submitted, as required, a modeling of the data to show the projected discharge that accounts for all the waste streams, including those that result after the internal waste stream recycling. In addition to reviewing the data, MPCA obtained and reviewed independent flow data collected by the National Resource Conservation Service (NRCS) and the U.S. Geological Survey (USGS) for both Bear Creek and the South Fork of the Zumbro River. Then, following established procedures, MPCA staff did a low-flow regression analysis of the NRCS and USGS data, to determine the seven-day tenyear low flow (7Q10) to calculating what the lowest seven day flow in a ten year period for the receiving water. According to Minn. R. pt , subp.7, item A. minimum stream flow, discharges of sewage, industrial waste, or other wastes must be controlled so that the water quality standards are maintained at all stream flows that are equal to or greater than the 7Q10 for the critical months, except for the purpose of setting ammonia effluent limits. This is applicable to sulfates because Minn. R , subp. 5. allows for a mixing zone in the receiving water. MPCA staff determined that the maximum effluent concentration of sulfates in the effluent, after internal recycling of the water but prior to discharge for Phase I of the Facility, would be 425 milligrams per liter (mg/l). After travel through the mixing zone, the effluent in the receiving water would have maximum effluent concentration 79 milligrams per liter (mg/l). MPCA Water Quality Standards staff determined that this concentration would have no effect on the receiving stream. Additionally, according to Minn. R. pt , subp.5a., item A, Miscellanous substance, characteristic, or pollutant for the Class 2B,3C, 4A,4B, 5, 6 water, the only applicable sulfate water quality standard for sulfates is 10 mg/l (within the 4A class use for irrigation), and only when wild rice are present. Rice crops are not present in Bear Creek. As mentioned by the commenter, Bear Creek is classified as a 2B, 3C, 4A, 4B, 5, 6 water. All surface waters in Minnesota are protected for multiple uses. The reach of Bear Creek, where the proposed discharge is located, is not specifically listed in Minn. R. pt ; therefore, it is by default, an unlisted water. Minn. Rule states that all surface waters of the state that are not listed in part and that are not wetlands as defined in part , subpart 1a, are hereby classified as Class 2B, 3C, 4A, 4B, 5, 6 waters. Each general use classification is protected for specific uses, and each subclass (example 2B) is designated for a more specific purpose in that class: Class 2 waters are protected for aquatic life, recreation and industrial use, Class 2B waters are protected for cold- and warm-water fisheries; Class 3 waters are protected for industrial uses, Class 3C waters are protected for industrial cooling and materials transport without a high level of treatment; Class 4 waters are protected for agricultural uses, Class 4A waters are protected for irrigation without significant damage or adverse effects upon any crops or vegetation in the waters or area, and Class 4B waters are protected for use by livestock and wildlife without inhibition or injurious effects; Class 5 waters are protected for aesthetics and navigation, and Class 6 waters are protected for other uses. The standards for metals and elements applicable to Class 2B B, 3C, 4A, and 4B, waters are described in Minn. R , subp. 5a., item B. However, the standards for metals in Class 2 waters must be converted to dissolved metal standards for application to surface waters, as described in Minn. R. 2

17 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit , subp 2.C. The MPCA water quality staff reviewed the source water data submitted by the proposer, as well as the modeling for the proposed wastewater discharge. The MPCA Water Quality Standards staff determined that in addition to including the 5-day carbonaceous biochemical oxygen demand (CBOD 5 ), Total Suspended Solids (TSS). ph, chlorine residual effluent limits and monitoring in the draft NPDES/SDS permit, an effluent limit for Bicarbonates of 12.0 milli-equivalents (meq)/l is also required for the project discharge. This limit, before the mixing zone ratio is applied, is to ensure the discharge will meet the Bicarbonate water quality standard of 5 meq/l, after the mixing zone, as established in Minn. Rules , subp. 5, item B, Miscellaneous Substances, Characteristic, or Pollutant, for Class 4A, irrigation waters. Thus, the metals are represented in the establishment of a Bicarbonate limit, as the component measured. The draft Permit also included, as determined by the standards evaluation, monitoring for: specific conductance, in umhos/cm; Total Hardness (as CaCO3), in mg/l; Chlorides, in mg/l; Boron, in mg/l; Total Dissolved Solids, in mg/l; Sulfates, in mg/l; Total Salinity, in mg/l; and Total Phosphorus, mg/l. Monitoring is required for these parameters because the analysis shows that they would be at levels in the discharge such that they do not have the potential to exceed the water quality standards for the receiving stream, but that trends should be tracked per MPCA standard procedures. MPCA staff also reviewed the NPDES/SDS permit application information and downstream receiving waters for impaired waters and TMDLS. This review was done to determine if a) the receiving waters were impaired, and if so, for what pollutant; and b) if the proposed discharge would contain a pollutant that would add to an impaired water. From the location of the proposed Facility s wastewater discharge (SD001), Bear Creek flows westward approximately 10 miles to its confluence with the South Fork of the Zumbro River. Bear Creek currently has no listed impairments that require a Total Maximum Daily Load (TMDL) study approved under Section 303(d) of the Clean Water Act. Bear Creek was added to the 2008 turbidity TMDL listing. The turbidity listing affects the downstream portion of Bear Creek from Willow Creek to the South Fork of the Zumbro River and also from the headwaters to Willow Creek. The South Fork Zumbro River is listed as impaired for turbidity and also fecal coliform. The level of projected concentrations for total suspended solids (TSS) in the Facility s effluent discharge will be less than 22 mg/l and limited to 30 mg/l in the Permit, as required under Minn. R , subp. 1, and Minn. R , subp.1, Item B. The MPCA uses TSS as the indicator parameter for turbidity. The MPCA determined in the nondegradation review that the TSS would be at low levels such that it would not impact turbidity. The fecal coliform impairment is covered under the Lower Mississippi River Basin Regional Fecal Coliform TMDL that was approved in The Facility s effluent discharge is not expected to contain fecal coliforms, since no sewage will be discharged from the Facility. Therefore, the fecal coliform impairment is not applicable to this Facility. 3

18 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit Lake Zumbro, which is a reservoir downstream of the discharge, is impaired due to excess nutrients. There is a TMDL study underway for Lake Zumbro, but it is not yet complete. On June 24, 2008, the MPCA Citizens Board approved a pre-tmdl Phosphorus Trading Permitting Strategy (Pre-TMDL Strategy). The Pre-TMDL Strategy includes procedures for determining if a new or expanding facility, with effluent pollutant concentrations over lake or reservoir water quality standards, will need to offset additional mass through phosphorus trading. The Pre-TMDL Strategy was developed over a several year period, with external input from interested parties. Since Lake Zumbro is a reservoir, a sitespecific water quality standard can be developed for the TMDL study. It is likely that this standard falls between the existing Western Corn Belt Plains eco-regions standards for deep lakes (.065 mg/l) and shallow lakes (0.09 mg/l). The original estimate of the Facility s phosphorus discharge concentration was 0.68 mg/l. After the EAW was public noticed, but prior to the public notice of the NPDES/SDS draft Permit, MinnErgy and their consultant submitted requests for approval to change their approved chemical additives to a low-phosphorus variety. These new additives were reviewed, approved, and are included as requirements in the draft Permit. The new additive will lower the concentration and mass of the Facility s discharge. The Permit that was placed on public notice June 11, 2008, includes a special requirement for phosphorus that is based on this now-approved Pre- TMDL Strategy. Under the Permit, MinnErgy is required to ensure that the Facility s phosphorus discharge meets a water quality standard of 0.08 mg/l. This standard is the approximate midpoint between the deep and shallow lake concentration standards. This midpoint was chosen, as the process within the TMDL study will set the waste load allocations and then MPCA will make the final determination of the standard. If the water quality standard in the TMDL study is more stringent, then the NPDES/SDS Permit will be reopened and modified to include the more stringent standard. The draft Permit also includes quarterly monitoring for chronic whole effluent toxicity testing for the proposed discharge. Federal regulations at 40 CFR (d)(1) require that pollutants be evaluated for the potential to exceed water quality standards ( Reasonable Potential ) using acceptable technical procedures, accounting for variability in the effluent. Minn. R. Subp reflects those methodologies approved by EPA. As the Facility will be new, no long-term monitoring data exists, so no reasonable potential determinations can be completed, with the exception of residual chlorine, which has an effluent limit. Therefore, the quarterly monitoring for chronic whole effluent toxicity testing serves as a measurement tool to determine if additional effluent limitations are necessary under the rule. Currently, the MPCA staff analysis does not show a reasonable potential that such variability would be expected in the discharge as to create a toxic condition. However, based on the results of this required testing, the permit may be reopened and modified to include additional toxicity testing, a requirement to conduct a toxicity reduction evaluation, and/or a whole effluent toxicity limit. Finally, the Permit includes a requirement to conduct quarterly chronic toxicity testing to establish ongoing benchmarks for the proposed Facility and provides for protection of the narrative criterion in addition to the numeric limits in the Permit. The water quality-based effluent limits and monitoring requirements in the Permit are expressed using the same units of measurement as described in Minn. Rules. Part , subp. 5a. (A), (B), and (C) for the applicable water quality standards. The technology-based effluent limits and monitoring requirements in the Permit are also expressed in the same units of measurement as described in the State Water Discharge Requirements, Minn. Rules pt , subp.1 (B) and (C). For the commenter, the units, parts per million (ppm) and milligram per liter (mg/l), are the same. 4

19 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit 2. Paul Wotzka (Comment Letter #13), received by the MPCA on August 1, Comment 2-1: The commenter requests a contested case hearing of the draft NPDES/SDS permit, stating that the first material issue of fact in dispute concerns the sampling done by NRG to characterize Bear Creek; that the sampling was conducted in an inconsistent, inadequate, and incomplete manner; the sampling period does not cover the critical months of July, August, and September, when the stream temperatures are highest, flows are lowest, and diurnal dissolved oxygen (DO) swings the greatest. The comment states that other faults with the sampling of Bear Creek [by the proposer s consultant] include: no flows were made during sampling and stage levels were made inconsistently; no sampling was conducted during high flows which would have results in significantly higher values of dissolved solids, suspended sediments, and associated pollutants, and water quality parameters were inconsistent for the six samplings (for example, phosphorus and nitrogen analyses were not run during the April, May and June samplings). Response 2-1: The MPCA staff reviewed the request for the contested case hearing, and concluded that this request does not meet the criteria under Minn. R , subp. 1 (A), (B), or (C). In accordance with Minn. R , the MPCA is the authority that reviews permit applications, including data, for completeness. The MPCA has the authority under Minn. R , Determination of Compliance, to determine if the testing, sampling and analysis of the receiving water data is in compliance with procedures... Per rule: In making tests or analyses of the waters of the state, sewage, industrial wastes, or other wastes to determine water quality condition and compliance with effluent limits and nonpoint source reduction measures, samples must be collected in a manner and place, and of such type, number, and frequency, as may be considered necessary by the agency to adequately reflect the condition of the waters, the composition of the effluents, and the effects of the pollutants upon the uses specified in part The samples must be collected, preserved, and analyzed following accepted quality control and quality assurance methods and according to the procedures in Code of Federal Regulations, title 40, part 136. The agency may accept or may develop other methods, procedures, guidelines, or criteria for collecting and analyzing effluent samples and measuring water quality characteristics. Because the Proposer was requesting preliminary effluent limitations and monitoring for a discharge of its non-process utility wastewater to surface waters of the State, MPCA staff required the Proposer conduct receiving water sampling, to provide additional information to MPCA staff data review in establishing background conditions. MPCA has a longstanding practice to require this from proposers of both industrial and municipal facilities, even though background and limitations are not based just on this information. For this Project, the Proposer collected 6 sets of samples of the Bear Creek at two locations on six separate dates (November 6, 2006, November 9, 2006, April 24, 2007, May 9, 2007, May 21, 2007, and June 6, 2007), and submitted the results of these tests to the MPCA staff. The submittal also includes field log datasheets for five of the six sample sets. This data is considered to be representative of the basic background conditions of Bear Creek. The sampling methodology followed federal requirements specified in 40 CFR 136 and is consistent with sampling required of and conducted at other facilities in Minnesota. The commenter states that the sampling does not cover the critical low flow months of July, August, and September. The MPCA staff determined that the correct information was used and that merely looking at specific months is not sufficient. The Nondegradation review and Effluent Limit Summary, as provided to the commenter, included the MPCA standards review of the data, along with NRCS data, using both USGS gage data and partial stream records, for Bear Creek and the downstream 5

20 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit receiving water. As stated, MPCA staff did review the submitted data by NRG. However, as discussed in the Response to Comments, comment 2-1, as part of long-standing protocol, the MPCA staff also researched independent data regarding the flows for Bear Creek and downstream receiving waters, and conducted an independent Low Flow Correlation Analysis which includes all available flow numbers, and spans flows starting from 1984 through 1988, and the spring, summer, fall, and winter seasons. The standards review includes calculation of 7Q10 flow conditions (to determine what Bear Creek s lowest 7-day low flows in a 10 year period) would be, and comparing that with the source water quality data, to determine Bear Creek s capability to assimilate the proposed discharge and prevent degradation to the use classification of the water. wastewater effluent limitations and monitoring recommended to MPCA permitting staff. Comment 2-2: The commenter states that the second issue of material fact in dispute concerns the sampling of MinnErgy s production well during the April, 2007 aquifer pump test, used to determine amount of total and dissolved solids that would be in the proposed Facility s source water; comments on differences in sulfate and sodium readings, indicating that water quality concentrations in Jordan aquifer can dramatically increase and decrease under the influence of high volume pumping. The commenter states that a new pump test would address the questions continuous inexpensive monitoring of pumped water with conductivity, turbidity, and dissolved oxygen problems could resolve issues of water quality tests. Response 2-2: With respect to the accuracy of the MPCA s calculation of the Facility s effluent quality, MPCA staff compared the data it used in evaluating potential Facility effluent concentrations to MDH water chemistry data regarding the city of Eyota s municipal well. The MDH water chemistry data is from two data sets (i.e., 1975 and 1991 to 2008). The Facility s source water data was obtained and analyzed in accordance with state requirements, as were the Eyota well water data and MDH data. MPCA staff found the water chemistry data results for the Facility source water to be very similar to the city of Eyota well water chemistry, which is in the same lower aquifer system. In addition, the MDH data shows little variation of the well water parameters over time. In essence, the similarity of the three data sets indicate that the Proposer s sampling is representative of the constituents found in the groundwater and confirmed by MDH. This data was then used in determining effluent limits and completed the nondegradation analysis. MPCA staff use long-standing standardized procedures to model flows and calculate loads. Comment 2-3 : The comment states that he is in the process of contacting prospective witness and compiling a list of publications and studies to be introduced at a contested case hearing. Response 2-3 : The comment is noted. 3. Jeffrey Broberg, President, Minnesota Trout Association (Comment Letter #15), received by the MPCA on August 1, Comment 3-1: The commenter s letter contained a subject line referencing a Request for an Environmental Impact Statement and a contested case hearing for the NPDES Permit. Response 3-1: Reference noted. However, in reviewing the submittal, and in particular, the closing paragraph of the letter that reiterates a request for an EIS, but not for the contested case hearing, MPCA staff determined the majority of the written comments were related to the EAW, and were addressed through that process. 6

21 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit In an effort to clarify and correct general water quality statements in the submittal, the MPCA staff provide the following responses to those statements: a) The commenter stated that the pump test did not include monitoring of the water chemistry, an indication of the variability of the water stored in the complicated conduits of the karst aquifer, and an important factor in determining whether there will be changes in the water quality of the wastewater stream; additional related comments were uncertainties of where samples were taken, if from the same well or not; if samples were taken from the same well, a chemical comparison should be completed; and no water quality sampling was done pre- and post- aquifer pump test. The MPCA staff response: DNR is tasked with regulating source water volume used, through the water appropriations process. The MPCA is tasked with regulating pollutants in the discharge of wastewater, and requires the water quality sampling, analysis, and submittal, of the constituents in the source water, as part of the wastewater permitting process. The MPCA does address water quality concerns and required that the proposed Facility s source water be tested as part of the NPDES/SDS permit application process. For this Project, MinnErgy collected two sets of source water sample data from the proposed Facility s test well during the same period as the aquifer pump test, and submitted the results of these tests to the MPCA staff. The source water samples were tested for parameters that could potentially be of concern with respect to the discharge of the Facility s non-process utility wastewater to Bear Creek. The results were reviewed by MPCA and compared with water quality data for the City of Eyota s drinking water well, which Minnesota Department of Health has from 1986, and also for the period from 1991 through 2007, as part of the Safe Drinking Water Act. The MDH data shows that the water quality of the source water has not varied statistically significantly, and concentrations have remained stable over time. Therefore, water quality sampling before and after the aquifer pump test would not provide additional information regarding the source water. The effluent limitations and monitoring in the Permit are based on the MPCA s effluent limit standards and nondegradation review process that was completed by MPCA staff, using this as well as the receiving water quality information. b) The commenter states concerns about Bear Creek as it was designated in a 1970 DNR map as a Trout Stream; subsequently degraded due to farm practices tile draining, landscape disturbances; states that Chester Woods Flood Control Structure, designed and constructed in 1990s, with bottom drawdown when DNR, U.S. Army Corps of Engineers, and Natural Resource Conservation Service recognized potential for restoration of creek below dam. The commenter states concerns that DNR denied MTA s requires for classification of Bear Creek as a trout stream, and that if MPCA allows the discharge of wastewater into Bear Creek, the combination of thermal impacts, flow and water quality will mark an irreversible end to the potential to restore cold water fish species to the stream. MPCA staff response: Bear Creek has the use classifications of 2B, 3C, 4A, 4B, 5, 6. Bear Creek is not classified as a Trout Stream. The Permit was drafted based on the existing use classification, and after extensive effluent limits and nondegradation review. The wastewater discharge limits and monitoring requirements are protective and will not cause degradation of Bear Creek. The question of whether Bear Creek is suitable as a trout stream has been answered by DNR, the agency with proper jurisdiction. The MPCA has no jurisdiction over the designation of stream, but once the designation is made by the DNR, the MPCA applies the appropriate protection standards for discharges. 7

22 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit c)the commenter is concerned there is no data in EAW or NPDES permit to show the temperature [discharge] water in pipeline will actually fall, and with thickness in HDPE-pipeline, there is not enough residence time in pipeline to cool the water from 86 to 52 degrees. MPCA staff response: The temperature limit for the existing classification of Bear Creek was determined in the effluent limit standards and nondegradation review conducted by MPCA staff is protective of, and will not degrade the existing uses of Bear Creek. The commenter provided no basis for the presumption that the temperature should be 52 degrees. The MPCA must follow the rules establishing surface water use classifications and the protection standards accordingly. Comment 3-2: The comment attached to comment letter a report from DNR Trout Stamp Advisory Committee who also has concerns about impact of MinnErgy proposal on aquatic and trout stream resources. Response 3-2: Comments and attachment noted. Comments on the NPDES/SDS Permit No. MN Comments by Eleanor Jones (Comment Letter #1), received by the MPCA on June 18, Comment 1-1: The commenter indicates significant concern over the use of excessively large amounts of pure ground water. Response 1-1: The Permit for the proposed ethanol Facility is for the regulation of the wastewater and stormwater discharges, and the management and disposal of waste/byproducts. The Permit does not regulate the use of ground water (water appropriations). Because the comment is related to water appropriations, which is under the Department of Natural Resources water permits jurisdiction, and appears to be related to cumulative effects, the comment was forwarded on to the MPCA staff who prepared the mandatory Environmental Assessment Worksheet (EAW) placed on notice in the June 2, 2008, Environmental Quality Board (EQB) Monitor, and addressed through the EAW Findings of Fact and Responses to Comments (EAW Findings and Responses). Comment 1-2: The commenter mentions that there is a significantly high cancer rate in the Eyota area, asks that the Dover-Eyota High School be consulted on the students there who have had cancer, currently have cancer, or have died from the disease, and comments there are too many unanswered questions on the subject of ethanol. Response 1-2: The commenter does not indicate how these comments related to the proposed wastewater and storm water discharges. Because these comments appear to be related about cumulative health impacts, the comment was forwarded for review, to the MPCA staff that prepared the EAW, and addressed through the EAW Findings and Responses. 2. Comments by Martin Johnson (Comment Letter # 2), received by mail on June 18, Comment 2-1: The commenter indicates significant concern over the use of excessively large amounts of pure ground water. Response: See Response to 1-1 above. 8

23 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit Comment 2-2: The commenter mentions that there is a significantly high cancer rate in the Eyota area, asks that the Dover-Eyota High School be consulted on the students there who have had cancer, currently have cancer, or have died from the disease, and comments there are too many unanswered questions on the subject of ethanol. Response: See Response to 1-2 above. 3. Comments by Jim Moran, (Comment Letter # 3 ) hand delivered to MPCA at the MinnErgy public informational meeting of June 19, Comment 3-1: What are the chemical compounds and particulate matter that make up the Storm Pond? Response 3-1: The Proposer s stormwater pond will contain stormwater runoff, which is rainwater or snowmelt, soil and sediment from the facility site, and is expected to contain similar constituents as what would runoff at the existing site. Because the stormwater pond will have a manually-controlled discharge outfall to allow a discharge of the stormwater to overflow to Bear Creek, the Permit includes monitoring and effluent limits for ph, TSS, and (CBOD 5 ). The draft Permit also includes monitoring for diesel range organics, phosphorus, specific conductance, and flow. The stormwater discharge monitoring must be done, and the effluent limitations met, before the proposer could manually open the control structure to allow the stormwater to discharge. The monitoring and limitations serve to detect and measure pollutants, and to prevent degradation of surface waters. Comment 3-2: The EAW indicates that the Storm Pond will overflow overland into Chester Woods Park. Given the Karst landscape, what is to prevent this from polluting the ground waters? Response 3-2: The purpose of the stormwater pond is to collect site rainwater runoff, and to settle out solids and sediment. Some of the overland discharge will likely infiltrate into the soils and into the ground water. The purpose of the controlled discharge from the stormwater pond and the Permit discharge limit and monitoring requirements described in Response 3-1, are to prevent pollution to waters of the state, including ground waters. The stormwater pond is designed using the Minnesota s Stormwater Manual, which contains design parameters for the Karst Region. This manual, which was prepared by a number of internal and external stormwater experts, can be found on the MPCA website, in the stormwater section. The pond design will include the use of a synthetic liner underneath the pond. The liner will keep the pond s contents from infiltrating into the ground water. The Permit also requires the preparation and submittal of a Stormwater Pollution Prevention Plan (SWPPP), which includes several requirements for pollution prevention, including but not limited to facility materials inventory, housekeeping/management requirements, and response plans. The intent of requiring this SWPPP is to prevent pollutants from getting into stormwater runoff, the stormwater pond, and into surface and ground waters of the state. Comment 3-3: What will the effect on Chester Woods Park (be) if it does indeed make it there (the storm water discharge)? Response 3-3: MPCA did not find, or receive information indicating that there would be stormwater discharge effect to Chester Woods Park. Comment 3-4: Don t you really need a Dye Test to prove the way surface waters flow? 9

24 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit Response 3-4: The MPCA staff required the development and submittal extensive information regarding the hydrogeology of the proposed Facility site, as well as specific design information about the proposed stormwater pond. A dye test would not further the MPCA s information base relative to the Permit The requirements contained in the Permit are considered to be protective of both surface and ground waters of the state. 4. Comments by M. Johanson (Commenter #4), received by mail on June 20, Comment 4-1: The commenter indicates significant concern over the use of excessively large amounts of pure ground water. Response 4-1: See response to 1-1, above. Comment 4-2: The commenter mentions that there is a significantly high cancer rate in the Eyota area, asks that the Dover-Eyota High School be consulted on the students there who have had cancer, currently have cancer, or have died from the disease, and comments there are too many unanswered questions on the subject of ethanol. Response 4-2: See Response to 1-1, above. 5. Comments by Olmsted County Public Health (Commenter #5), received by on July 10, forwarded to NPDES/SDS permit writer by Steve Sommer. Comment 5-1: Sewage and other wastewater that will not be permitted to be discharged into Bear Creek should be directed to the Eyota community sewer system. The extensive Karst identified on this site, and the close proximity to the City of Eyota, should preclude the use of an onsite wastewater system. Response 5-1: The Project Proposer has not submitted a surface water discharge permit application for their onsite sewage sources, and has indicated on its NPDES/SDS industrial permit application forms that it will construct an onsite sewage disposal system. Because the estimated volume of the proposed sewage disposal system would be less than 10,000 GPD, the MPCA is not the regulatory authority for the onsite system. The proposer is responsible for application of local approvals for the disposal of sewage. MPCA has passed on the County s comment to the project Proposer. Comment 5-2: The (Facility) site should be developed consistent with the City of Eyota stormwater management requirements, and in collaboration with the City Engineer. Response 5-2: The Facility is classified as a nonexempt industrial facility under the federal and state industrial stormwater regulations; therefore, it is the industrial storm water requirements which are applicable. These state and federal industrial stormwater requirements are similar to, if not more stringent than municipal stormwater requirements. The industrial storm water chapter (chapter 7) in the draft Permit includes requirements appropriate for pollution prevention at industrial facilities. In addition, the draft Permit includes monitoring and limitations for the industrial stormwater pond controlled discharge. The MPCA has a policy of requiring monitoring and limits in ethanol facilities that have stormwater discharges, because of the type of raw and finished products at these facility sites. Comment 5-3: Provide several water quality test data or gather existing water test data for each well considered to be within the range of influence by the Eyota municipal and MinnErgy wells. This will 10

25 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit be very important to establish a baseline that can help 1) assess changes in quality through time, and b) address assertions that MinnErgy water use changed the quality of water in neighboring wells. Response 5-3: This comment was resubmitted with the July 31, 2008 letter from the Olmsted County Board of Commissioners that included the approved written comments from the County, and was addressed through the EAW process. 6. Comments and request for information from PJ (Paul) Wotzka (Comment Letter #6), received by on Monday July 14, Comment 6-1: Comment made that an MPCA representative at a City of Eyota advisory meeting stated that no water quality tests were made during the aquifer pump test, and that the statement contradicts what the same representative said one week prior, at the MPCA public informational meeting on June 19, 2008, that water quality tests were completed. The Commenter requested all water quality data that was collected pertinent to the aquifer pump test that was conducted on April, 2007 commenter was specifically interested in water quality sampling or continuous water quality data from temperature, conductivity, oxygen, or turbidity probes that may have been conducted on the MinnErgy production well, the City of Eyota s municipal wells or any observation wells utilized during the pump test, as well as any spring or stream sampling conducted during the same time in the Eyota area. The commenter also requested water quality that was collected on Bear Creek, and referenced page 27 of the Proposer s EAW that describes six water quality samples from Bear Creek in the vicinity of the proposed discharge from November 2006 June The commenter also requested the data along with any flow or stage measurements that may have been collected pertinent to samples, as well as any additional sampling that has been done in Bear Creek. Response 6-1: MPCA staff were not in attendance at any City of Eyota advisory meetings. MPCA staff that presented at the MPCA public informational meeting on June 19, 2008, did state that water quality tests were completed, which is correct. MPCA staff mailed to Paul Wotzka, on July 18, 2008, the data information requested, along with a cover letter explaining what data was sent. Because of the number of pages of information are more than 122 pages, the data is not reproduced here. The data mailed to Mr. Wotzka is as follows: Lab Analysis summaries for Bear Creek provided by the applicant, for several sampling locations; MinnErgy s test well data, and the source and estimated discharge water quality data for the discharge volume for both phase one and phase two (the draft NPDES/SDS permit is for phase one only), collected from MinnErgy s test wells during the aquifer pump test and analyzed by both MVTL and Pace Analytical Labs; the MPCA Water Quality Standards draft Nondegradation Review for the proposed wastewater discharge technical support documents for drafting effluent monitoring and limitations recommendations; and the MPCA Water Quality Standards Effluent Limits Summary recommendations, which includes requests for Chemical Additives. 7. Comment letter by Flo Sandok (Comment Letter #7), received by on July 28, Comment 7-1: The commenter states that, Karst Geography makes any disturbance to our land subject to polluting our ground water, which is an irreversible assault. The commenter goes on to list that 11

26 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit the project will be drawing water from the ground aquifer, biocides will be a byproduct of this plant, that [we} cannot rely on a computer to solve, and the only reason to tamper with this situation would be in an emergency, but building this plant is not emergent. Response 7-1: The proposed NPDES/SDS Permit No. MN is designed to protect both surface and ground waters of the state. The proposed NPDES/SDS Permit No. MN has both wastewater and stormwater discharge limits and monitoring requirements, as well as other additional requirements, that are protective of Bear Creek. Biocides proposed for the non-process utility wastewater were evaluated and limited as applicable in the proposed NPDES/SDS permit. This comment is also related to the EAW, and was responded to through that process. 8. Comments by James Moran, representing Olmsted County Concerned Citizens (Comment Letter #9), received by on July 30, 2008 ( ed at 11:21 p.m.). Comment 8-1: The commenter requested that an Environmental Impact Statement (EIS) be performed for the MinnErgy Ethanol Plant, and gave several reasons. Response 8-1: Because the comment is a request for an EIS, the comment was responded to through the EAW Findings and Responses. 9. Comments by Barbara Upton (Comment Letter #10) via the Chatfield Public Library facsimile, sent to Dave Beil, and cc to Nancy Drach (NPDES/SDS permit writer) on July 31, 2008, at 11:00 p.m. Comment 9-1: The first comment is a request that an EIS be done on the MinnErgy Project. Response 9-2: Because the comment letter is a request for an EIS, it was responded to through the EAW Findings and Responses. 10. Comments by Fran Sauer (Comment Letter #11) ed on July 31, Comment 10-1: The commenter requested that an EIS be done on MinnErgy s proposed ethanol plant in Eyota, Minnesota and that the requested NPDES/SDS [permit] be denied until said EIS is completed. Response 10-1: Environmental Quality Board (EQB) rules governing the EAW process (Minn. R , subp. 1, A-D) prohibit the issuance of approvals and permits, including the Permit, until the EAW process has been completed. Because the comment is a request for an EIS, the comment has been addressed through the EAW Findings. 11. Comments from the City of Eyota, (Commenter #12) ed by Iris Neumann, City of Eyota Account Clerk, on Friday August 1, 2008 (8:51) a.m. The same comments were also received by United States Postal Service Express mail on Friday, August 1, Comment 11-1: The first comment, which is included in a cover letter by the city of Eyota, states that there are enclosed supporting comments of errors, omissions, or concerns for the Permit for the proposed MinnErgy, Facility, these documents are the work of the Eyota Ethanol Advisory Group, and have been presented to the Eyota City Council. 12

27 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit Response 11-1: See Comment 12-3 below for the city of Eyota s formal comments submitted in NPDES/SDS Permit #MN Comments for MinnErgy, LLC Proposed Ethanol Production Facility, dated July 30, 2008, and Response 12-3, for responses to those formal comments. Comment 11-2: The second comment states that in addition to the errors, omissions, and concerns noted within this document, we also believe there is insufficient information contained within the NPDES/SDS Permit in a number of areas. Due to the potential for significant and irreversible environmental impacts to the Eyota area, city, and residents, the Eyota Ethanol Advisory Group requests an Environmental Impact Statement be completed on the proposed MinnErgy, LLC. Ethanol production facility. Response 11-2: Because the comment is requesting an EIS, and also included Resolution #08-17, City of Eyota, Resolution requesting the Minnesota Pollution Control Agency (MPCA) to require an EIS for the MinnErgy, LLC proposed ethanol facility:, the comment, requesting additional information, was addressed through that EAW Findings and Process. Comment 11-3 (Comments included in the NPDES/SDS Permit #MN Comments for MinnErgy, LLC Proposed Ethanol Production Facility submitted by the city of Eyota on July 30, 2008): The city of Eyota believes that an EIS is necessary to: a)address the karst terrain that the proposed ethanol facility will be located on and domestic waste being discharged from the plant into a septic system and not a local treatment system; the karst assessment does not address the potential for pollutants such as nitrates already affecting neighboring cities to be drawn from high aquifers-such as the Galena into the lower aquifers and eventually into our drinking water source aquifer the Jordan. The comment suggests further detailed studies in locating and sealing up of abandon[ed] and unused multi-aquifer wells. Response to 11-3: Because the Proposer is not proposing a surface water discharge of sewage, and the amount will be less than 10,000 gallons per day, the disposal of sewage is not regulated under the proposed Permit, and the Proposer must receive local approval for the disposal of sewage. The MPCA forwarded the comment to the Proposer. Because the comment is related to the EAW process, the comments were also forwarded on to the MPCA staff writer for the EAW, and addressed through the EAW Findings and Responses. Comment 11-4: The city of Eyota believes an EIS necessary to address the impact of proposed discharge to recreation discharge to recreational users as the discharge parallels 5 miles of recreational stream which abuts an approved recreational trail system approved by the Minnesota Legislature in Response to 11-4: The Permit is designed to protect both surface and ground waters of the state in accordance with the applicable requirements of Minn. R. chapters 7050 and The Permit has both wastewater and stormwater discharge limits and monitoring requirements, as well as additional requirements, that are protective of Bear Creek. Because this comment is related to the EAW process, this comment was addressed through the EAW Findings and Responses. 12. Comments by david [dkamis@rconnect.com]/stephanie Henricksen (Comment Letter #14) received by on August 1, Comment 12-1: Water use (791 gal per minute) by the proposed MinnErgy ethanol plant at Eyota is a concern; DNR should take a more hands-on approach in setting up the pump test than they have at other sites; pump test should be made to represent that the 62 domestic wells within 1.5 miles of the 13

28 MinnErgy LLC Ethanol Production Facility Eyota, Minnesota Responses to Comments on the NPDES/SDS Permit plant and wells for the City of Eyota will not be affected. Also, pump test for a plant proposed in the Dundas area somehow shifted the underground layering so commenter s well is pumping dark, rusty water which is barely useable for domestic animals; commenter now uses bottled water and haul laundry into town; consulting firm doing the water work denied connection to the pump test. Response 12-1: See Response to Comments, Response 1-1, above. 13. Comments by Hugh Chester-Jones, Professor of Animal Sciences, University of Minnesota, Southern Research and Outreach Center, (Comment Letter #16) received by on August 1, Comment 13-1: The commenter states that he has reviewed the public notice and industrial division permit documents related to the Permit. The commenter states his perspective of the MinnErgy ethanol project is that the 277,100 gallons/day of wastewater will be efficiently discharged into Bear Creek; any potential environmental concerns have been addressed with management plans in place for continuous monitoring and documentation including storm water pollution prevention. Response 13-1: The comment is noted. Comment 13-2: The commenter states that an overall evaluation of this project is that the MinnErgy Board of Governors have responded to all state permit requirements and have provided an excellent web site for public information and local area forum opportunities to keep the community well informed. Response 13-2: The comments are noted. 14

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