STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY FINDINGS OF FACT

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2 STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY IN THE MATTER OF THE DECISION ON THE NEED FOR AN ENVIRONMENTAL IMPACT STATEMENT FOR THE PROPOSED PIRKL GAS, INC. PROPANE STORAGE EXPANSION PROJECT CITY OF OWATONNA, MINNESOTA FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER FINDINGS OF FACT Pursuant to Minn. R. ch. 4410, the Minnesota Pollution Control Agency (MPCA) staff prepared and distributed an Environmental Assessment Worksheet (EAW) for the proposed Pirkl Gas, Inc. Propane Storage Expansion Project (Project). Based on the MPCA staff environmental review, the EAW, 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. Project Description 1. The Project is to install four additional 45,000-gallon, above-ground propane storage tanks at an existing propane storage facility in Owatonna. Construction disturbances will be limited to small excavations necessary to install eight concrete footings on which the new tanks will rest. The concrete footings are planned to be installed in 2014, and duration of construction is expected to be less than one week. No other construction disturbances are anticipated, no demolition activities will be necessary, and no other modifications to existing facilities or processes are planned or associated with the Project. No increases in wastes are anticipated to be generated during either construction or operation of the facility. 2. The facility is located in an industrial park in the city of Owatonna. A propane storage facility has been at this location since The parcel is generally bounded by Maple Creek on the north, general commercial property to the east, a railroad line to the south, and an auction house to the west. The facility is on a parcel zoned as Light Industry, a zoning designation that generally continues to the west along the railroad tracks. The land adjacent to the east is zoned Community Business, the land to the north across Maple Creek is a cemetery, and parcels immediately to the south are also zoned Community Business. Land use outside the zoning areas listed above is zoned as various types of residential use. 3. The nearest park land is Dartt s Park, which is located approximately 1/4 mile to the east (upstream along Maple Creek). Buxton Trail runs along the south side of Maple Creek through Dartt s Park and continues along Maple Creek north of the facility property. There are no prime, unique, or other farmlands within approximately one mile of the facility. TDD (for hearing and speech impaired only): Printed on recycled paper containing at least 30% fibers from paper recycled by consumers

3 On the Need for an Environmental Impact Statement Pirkl Gas, Inc. Propane Storage Expansion Project City of Owatonna, Steele County Findings of Fact Conclusions of Law And Order Perrmitting History 4. The existing storage tanks were constructed in There has been no prior environmental review. 5. The city of Owatonna has granted a Conditional Use Permit for this project. Two 45,000 gallon tanks were permitted to be constructed immediately. The other two tanks were permitted only with the completion of a necessary environmental review by the MPCA. The approval of building permits needed for the Project has not yet been granted by the city. 6. The Project proposer requested a variance from the Minnesota Public Utilities Commissioner (MPUC) from the requirement in Minn. R. ch for a Certificate of Need for Large Liquified Petroleum Gas Storage Facilities. 7. On June 19, the MPUC issued an Order Establishing Variance Procedures (Order) for propane storage facilities. The Order identified several reasons for granting the variance, all of them related to the shortage of propane storage capacity last heating and harvest seasons in Minnesota. The shortage resulted in a series of executive actions, including a declaration of a peacetime emergency, to relieve the shortage. The limited storage capacity that gave rise to the emergency continues to exist and without the creation of additional storage capacity, will persist through the upcoming heating season, thereby continuing the emergency conditions. 8. On June 27, 2014, the MPUC approved the Project proposer s request for variance from Minn. R. ch. 7853, thereby exempting the Project from the Certificate of Need requirements for Large Liquefied Petroleum Gas Storage Facilities. Pursuant to Minn. R , subp. 15, Liquefied Petroleum Gas means synthetic gas. The exemption remains in effect until June 26, Procedural History 9. The proposed Project involves the construction of a facility designed for or capable of storing on a single site 100,000 gallons of synthetic gas. According to Minn. R , subp. 26, synthetic gas shall include ethane, propane, butane, or their mixtures, whether extracted from gas streams, lifted from oil and gas wells, or produced at refineries of fuel conversion plants. 10. Pursuant to Minn. R , subp 10(C), an EAW was prepared by MPCA staff on the proposed Project. Pursuant to Minn. R , the EAW was distributed to the Environmental Quality Board (EQB) mailing list and other interested parties on June 9, The MPCA notified the public of the availability of the EAW for public comment. A news release was provided to media in Rice, Steele, Le Sueur, and Goodhue counties, as well as other interested parties on June 6, The notice of the availability of the EAW was published in the EQB Monitor on June 9, 2014, and the EAW was made available for review on the MPCA website at 2

4 On the Need for an Environmental Impact Statement Pirkl Gas, Inc. Propane Storage Expansion Project City of Owatonna, Steele County Findings of Fact Conclusions of Law And Order 12. The public comment period for the EAW began on June 9, 2014, and ended on July 9, During the 30-day comment period, the MPCA received comment letters from the Minnesota Department of Natural Resources, the U.S. Army Corps of Engineers, and the Minnesota Historical Society. No letters were received from citizens. 13. The comment letters made no objection to the Project. The U.S. Army Corps of Engineers provided a jurisdictional determination that the Project area does not include any waters of the United States, and the Minnesota Historical Society affirmed that there are not properties on the National or State Registers of Historic Places and no known or suspected archaeological properties in the proposed Project area. A list of the comment letters received and copies of the letters are included as Appendix A to these Findings. 14. The MPCA prepared a written Responses to the Comments document that notes that none of the comments requires a response. The Responses to Comments document is included in Appendix A to these findings. Criteria for Determining the Potential for Significant Environmental Effects 15. Under Minn. R , the MPCA must order an Environmental Impact Statement (EIS) for projects that have the potential for significant environmental effects. In deciding whether a project has the potential for significant environmental effects, the MPCA must compare the impacts that may be reasonably expected to occur from the proposed project with the criteria set forth in Minn. R , subp. 7. The following factors shall be considered: a. Type, extent, and reversibility of environmental effects. b. Cumulative potential effects. The responsible governmental unit (RGU) shall consider the following factors: whether the cumulative potential effect is significant; whether the contribution from the project is significant when viewed in connection with other contributions to the cumulative potential effect; the degree to which the project complies with approved mitigation measures specifically designed to address the cumulative potential effect; and the efforts of the proposer to minimize the contributions from the Project. c. The extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority. The RGU may rely only on mitigation measures that are specific and that can be reasonably expected to effectively mitigate the identified environmental impacts of the project. d. The extent to which environmental effects can be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the project proposer, including other EISs. 3

5 On the Need for an Environmental Impact Statement Pirkl Gas, Inc. Propane Storage Expansion Project City of Owatonna, Steele County Findings of Fact Conclusions of Law And Order The MPCA Findings with Respect to Each of These Criteria Are Set Forth Below Type, Extent, and Reversibility of Environmental Effects 16. The first criterion that the MPCA must consider when determining if a project has the potential for significant environmental effects is the type, extent, and reversibility of environmental effects Minn. R , subp. 7(A). The MPCA findings with respect to this criterion are set forth below. 17. The types of impacts that may reasonably be expected to occur from the Project include the following: Traffic Floodplain Safety 18. With respect to the extent and reversibility of impacts that are reasonably expected to occur from the Project, the MPCA makes the following findings. Traffic 19. No additional parking places will be designated as part of the proposed Project, and no significant increase in traffic is anticipated on an annual basis. Inbound and outbound traffic counts will be slightly higher during the period September through March and proportionately lower the remaining months of the year. Inbound and outbound traffic will generally occur during normal working hours. No significant impacts on traffic are anticipated. According to the Owatonna City Engineer there are no necessary road improvements associated with this Project. 20. The MPCA finds that information presented in the EAW and other information in the environmental review record is adequate to address the concerns related to traffic. The impacts from traffic that are reasonably expected to occur from the proposed Project have been considered during the review process and appropriate mitigation measures are available and will be required to prevent significant adverse impacts. 21. The MPCA finds that the Project, as it is proposed, does not have the potential for significant environmental effects based on the type, extent, and reversibility of impacts related to traffic that are reasonably expected to occur from the Project. Floodplain 22. Much of the northern 2/3 of the facility parcel is within the FEMA 100-year floodplain of Maple Creek, and the northern 20 percent of the parcel is within the floodway. Development within the floodway is not allowed nor is it proposed. No other special districts or overlays exist for the facility parcel. The city of Owatonna and Owatonna City Fire Marshall have previously approved the current zoning for the area in which the facility is located, and there are no identified incompatibilities between the proposed Project and city land use or zoning. The Base Flood Elevation at the proposed site is between 1,133.8 and 1,134.3 feet North American Vertical Datum (NAVD). 4

6 On the Need for an Environmental Impact Statement Pirkl Gas, Inc. Propane Storage Expansion Project City of Owatonna, Steele County Findings of Fact Conclusions of Law And Order 23. As part of the city Conditional Use Permit, the base elevation of the proposed storage tanks will be designed to be one foot above the base flood (100-year flood) elevation. The Project proposer has stated that the base elevation of the new tanks will be at a level of 1,135.5 feet or higher. 24. Following construction, the elevation of the proposed tanks will be certified by FEMA. 25. The MPCA finds that information presented in the EAW and other information in the environmental review record is adequate to address the concerns related to the floodplain. The impacts on Maple Creek that are reasonably expected to occur from the proposed Project have been considered during the review process and appropriate mitigation measures are available and will be required to prevent significant adverse impacts. 26. The MPCA finds that the Project, as it is proposed, does not have the potential for significant environmental effects based on the type, extent, and reversibility of impacts related to the floodplain that are reasonably expected to occur from the Project. Safety 27. The City and Fire Marshall have previously approved the current zoning for the area in which the facility is located, and there are no identified incompatibilities between the proposed Project and city land use or zoning. 28. A Fire Safety Analysis (FSA) was required to be prepared for the proposed Project. The FSA was reviewed and approved by the Fire Marshall to ensure compliance with the National Fire Protection Association Liquid Petroleum Gas Code applicable to the design and location of the proposed Project. 29. The MPCA finds that information presented in the EAW and other information in the environmental review record is adequate to address the concerns related to safety. The impacts on the immediate area around the facility that are reasonably expected to occur from the proposed Project have been considered during the review process and appropriate mitigation measures are available and will be required to prevent significant adverse impacts. 30. The MPCA finds that the Project, as it is proposed, does not have the potential for significant environmental effects based on the type, extent, and reversibility of impacts related to safety that are reasonably expected to occur from the Project. Cumulative Potential Effects 31. The second criterion that the MPCA must consider when determining if a project has the potential for significant environmental effects is the cumulative potential effects. In making this determination, the MPCA must consider whether the cumulative potential effect is significant; whether the contribution from the project is significant when viewed in connection with other contributions to the cumulative potential effect; the degree to which the project complies with approved mitigation measures specifically designed to address the cumulative potential effects; and 5

7 On the Need for an Environmental Impact Statement Pirkl Gas, Inc. Propane Storage Expansion Project City of Owatonna, Steele County Findings of Fact Conclusions of Law And Order the efforts of the proposer to minimize the contributions from the project. Minn. R subp.7.b. The MPCA findings with respect to this criterion are set forth below. 32. The EAW, public comments, and MPCA follow-up evaluation did not disclose any related or anticipated future projects that may interact with this Project in such a way as to result in significant cumulative potential environmental effects. 33. No significant cumulative environmental effects have been identified to exist in the Project area nor is it expected that the Project will result in significant impacts that could combine with other environmental effects to result in cumulative potential effects. No future projects are known to exist in the Project area that could combine with the proposed Project to result in cumulative effects. No cumulative potential environmental effects are known or anticipated as a result of the proposed Project. 34. The MPCA finds that the proposed Project does not have the potential for significant environmental effects related or cumulative potential effects. The Extent to Which the Environmental Effects Are Subject to Mitigation by Ongoing Public Regulatory Authority 35. The third criterion that the MPCA must consider when determining if a project has the potential for significant environmental effects is "the extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority." Minn. R , subp. 7(C). The MPCA findings with respect to this criterion are set forth below. 36. The following permits or approvals will be required for the Project: Unit of government Type of application Status Federal Emergency Management Administration Elevation Certification Process To Be applied for (FEMA) City of Owatonna Conditional Use Permit Approved* City of Owatonna Building Permit Pending Owatonna Fire Marshall Plan Review and Approval Approved Minnesota Public Utilities Commission Request for Variance from Certificate of Need Approved 37. The above-listed permits include general and specific requirements for mitigation of environmental effects of the proposed Project. The MPCA finds that the environmental effects of the proposed Project are subject to mitigation by ongoing public regulatory authority. 6

8 On the Need for an Environmental Impact Statement Pirkl Gas, Inc. Propane Storage Expansion Project City of Owatonna, Steele County Findings of Fact Conclusions of Law And Order The Extent to Which Environmental Effects can be Anticipated and Controlled as a Result of Other Available Environmental Studies Undertaken by Public Agencies or the Project Proposer, Including Other EISs 38. The fourth criterion that the MPCA must consider is the extent to which environmental effects can be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the project proposer, including other EISs, Minn. R , subp. 7(D). The MPCA findings with respect to this criterion are set forth below. 39. The following documents were reviewed by MPCA staff as part of the environmental impact analysis for the proposed Project. Data presented in the EAW City of Owatonna s Conditional Use Permit Petroleum Tank Release Site File Closure Letter Fire Safety Analysis Report 40. This list is not intended to be exhaustive. The MPCA also relies on information provided by the Project proposer, persons commenting on the EAW, staff experience, and other available information obtained by staff. 41. The environmental effects of the proposed Project have been addressed by the design and permit development processes, and by ensuring conformance with regional and local plans. There are no elements of the Project that pose the potential for significant environmental effects 42. Based on the environmental review, previous environmental studies by public agencies or the Project proposer, and staff expertise and experience on similar projects, the MPCA finds that the environmental effects of the proposed Project that are reasonably expected to occur can be anticipated and controlled. CONCLUSIONS OF LAW 43. The MPCA has jurisdiction in determining the need for an EIS for this Project. The EAW, the permit development process, and the evidence in the record are adequate to support a reasoned decision regarding the potential significant environmental effects that are reasonably expected to occur from this Project. 44. Areas where the potential for significant environmental effects may have existed have been identified and appropriate mitigation measures have been incorporated into the Project design and permits. The Project is expected to comply with all applicable standards. 45. Based on a comparison of the impacts that are reasonably expected to occur from the Project with the criteria established in Minn. R subp. 7, the Project does not have the potential for significant environmental effects. 46. An EIS is not required. 7

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10 APPENDIX A Minnesota Pollution Control Agency Prikl Propane Storage Expansion Project, Owatonna, Minnesota Environmental Assessment Worksheet LIST OF COMMENT LETTERS RECEIVED 1. Minnesota Department of Natural Resources, letter received June 30, U.S. Army Corps of Engineers, letter received June 24, Minnesota Historical Society, letter received July 8, RESPONSES TO COMMENTS ON THE EAW 1. Kevin Mixon, Minnesota Department of Natural Resources, letter received June 30, 2014 Comment 1-1: The Minnesota Department of Natural Resources has reviewed the subject document and has no comments at this time. Response: No response required. 2. Chad Konickson, U.S. Army Corps of Engineers, letter received June 24, Comment 2-1: Based on the file review, the Corps has determined that the review area contains no waters of the United States subject to U.S. Army Corps of Engineers jurisdiction. Response: No response required. 3. Sarah J. Beimers, Manager, Minnesota Historical Society, letter received July 8, Comment 3-1: Based on review of the project information, there are no properties listed in the National or Sate Registers of Historic Places, and no known or suspected archaeological properties in the area that will be affected by this project. Response: No response required.

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