TECHNICAL FACT SHEET June 19, 2018

Transcription

1 New Covert Generating Company, LLC Page 1 Purpose and Summary TECHNICAL FACT SHEET June 19, 2018 The Michigan Department of Environmental Quality (MDEQ), Air Quality Division (AQD), is proposing to act on Permit to Install (PTI) application No from New Covert Generating Company, LLC (New Covert). The permit application is for a proposed upgrade to three existing natural gas-fired combined-cycle electric generating turbines. The proposed project is subject to permitting requirements of the Department s Rules for Air Pollution Control and state and federal Prevention of Significant Deterioration (PSD) regulations. Prior to acting on this application, the AQD is holding a public comment period and a public hearing, if requested in writing, to allow all interested parties the opportunity to comment on the proposed PTI. All relevant information received during the comment period and hearing, if held, will be considered by the decision maker prior to taking final action on the application. Background Information New Covert operates a combined-cycle power plant, located in Van Buren County, Michigan, that produces electricity for sale to the public utility grid system. The facility is proposing to modify all three combustion turbines to improve facility performance. The proposed modification will involve physical changes to the three combustion turbines that will result in the need for less cooling air and a corresponding increase in fuel consumption, exhaust flow rate and temperature, and electricity production. The facility is an existing major source under the Title V Renewable Operating Permit (ROP) program for criteria pollutants, Hazardous Air Pollutants, and Greenhouse Gases (GHGs). The New Covert power plant is currently authorized to operate under ROP No. MI-ROP-N c, effective November 12, 2014 November 12, The facility is also an existing major source under the PSD regulations. Proposed Facility and Present Air Quality The New Covert power plant consists of three independent dispatchable combined cycle units each comprised of a natural gas-fired combustion turbine (CT), a duct fired heat recovery steam generator (HRSG), and a steam turbine generator. The facility consists of the following equipment: Three advanced firing temperature Mitsubishi 501G combustion turbines Three heat recovery steam generators, supplemented with gas-fired duct burners each with a max firing rate of 256 million British thermal units per hour (MMBtu/hr). Three steam turbine generators Auxiliary equipment, including three mechanical draft evaporative cooling towers, one natural gas auxiliary boiler, one diesel emergency generator, one diesel fire water pump, one aqueous parts cleaner, and one gas heater. New Covert has proposed to upgrade the performance of all three Mitsubishi 501G combustion turbines at the plant, which will increase the gross nominal output of the plant to 1,230 megawatts (MW) total. The gross nominal output of the combustion turbines will increase from 245 MW each pre-project to 260 MW each post-project, and the HRSGs will increase from 125 MW each pre-project to 150 MW each post-project. The upgrades will involve replacing several rows of turbine blades and vanes on each turbine, and modifying the row 1 blade ring, seal

2 New Covert Generating Company, LLC Page 2 housing, and the row 2 interstage seal on each combustion turbine. Neither the HRSG duct burners, nor any of the auxiliary equipment will be modified. The New Covert plant is located in Van Buren County, Michigan, an area classified as in attainment with the National Ambient Air Quality Standards (NAAQS). Since the facility is an existing major source and is proposing a major modification in an attainment area, a PSD permit is required to ensure NAAQS will not be exceeded. Pollutant Emissions Potential emissions from the combustion turbines will increase due to the increased fuel usage and flow rates. The proposed modification will result in a significant emission rate increase of the regulated new source review (NSR) pollutants nitrogen oxides (NO x), carbon monoxide (CO), volatile organic compounds (VOC), particulate matter equal to or less than 10 microns in diameter (PM10) particulate matter equal to or less than 2.5 microns in diameter (PM2.5), sulfur dioxide (SO 2), sulfuric acid (H 2SO 4), and GHGs expressed as carbon dioxide equivalents (CO 2e). Therefore, the proposed project constitutes a major modification at an existing major source in an attainment area, and is subject to the PSD Regulations in Part 18 of the Michigan Air Pollution Control Rules and 40 CFR Emission units taken into consideration included the natural gas fired turbines and duct burners. The turbine upgrades are not expected to affect potential emissions from the auxiliary equipment, so those pieces of equipment are not subject to PSD review. The following table provides the estimated emissions for each regulated NSR pollutant: Table 1. Projected Actual Emission Summary Pollutant Baseline Projected Actual Difference Significance Level Greater than Significance? NO X Yes CO , Yes Particulate No Matter 79 PM Yes PM Yes SO Yes VOC Yes Lead* nil nil nil 0.6 No HF* nil nil nil 3 No H 2S / TRS* nil nil nil 10 No H 2SO Yes CO 2e 1,874,327 4,275,244 2,400,916 75,000 Yes *Lead, hydrogen fluoride (HF), hydrogen sulfide (H 2S) and total reduced sulfur (TRS) are not expected to be emitted in any measurable amount from the burning of natural gas.

3 New Covert Generating Company, LLC Page 3 Key Permit Review Issues Staff evaluated the proposed project to identify all state rules and federal regulations which are, or may be, applicable. The tables in Appendix 1 summarize these rules and regulations. Prevention of Significant Deterioration (PSD) Regulations The facility is an existing major stationary source under the PSD rules, and it is located in Van Buren County which is currently in attainment for all criteria pollutants. As such, a modification at the facility where the emissions of any regulated pollutant will increase by more than the significant level for that pollutant results in the modification being subject to PSD requirements for that pollutant. The proposed project is subject to PSD because the emission increase for several regulated pollutants is more than the significant level for those pollutants. Based on the potential emissions listed in Table 1 above, the project is subject to PSD review for NO x, CO, PM10, PM2.5, SO 2, VOC, H 2SO 4, and GHGs (expressed as CO2e). Review under the PSD regulations requires Best Available Control Technology (BACT), a source impact analysis, an air quality impact analysis, and an additional impact analysis for each regulated air pollutant for which the project will result in significant emissions. The BACT review determined both specific emission limits and add-on air pollution control equipment requirements. A summary of the BACT analysis and the specific BACT emission limits and add-on air pollution control equipment requirements is addressed in Appendix 2. Federal NSPS Regulations New Source Performance Standards (NSPS) were established under Title 40 of the Code of Federal Regulations (40 CFR) Part 60. The proposed turbine upgrades are considered a modification under Part 60, and the turbines will become subject to 40 CFR Part 60, Subpart KKKK, Standards of Performance for Stationary Combustion Turbines. This regulation contains a NO x emission limit, a sulfur fuel content restriction, and associated compliance requirements. Since the combustion turbines are associated with duct burner/hrsgs, the entire CT/HRSG train must comply with the NO x emission limit. Rule 224 TBACT Analysis The MDEQ Rules for Air Pollution Control require that new or modified equipment that emits toxic air contaminants (TACs) must utilize the Best Available Control Technology for TACs (T-BACT), unless the equipment meets certain exemptions. Equipment is exempt from T-BACT if it emits TACs that are particulates or VOCs and are in compliance with BACT for particulates or VOCs. Each CT/HRSG train is subject to a top-down BACT analysis for VOC, PM10, and PM2.5. The only TAC that was not covered through the PSD BACT review was ammonia (NH 3). NH 3 is released due to potential ammonia slip from the selective catalytic reduction (SCR) process utilized for NO x control on the CTG/HRSG trains. New Covert proposed an NH 3 T-BACT limit of 10 parts per million by volume at 15 percent oxygen (O 2) and on a dry gas basis (ppmvd), measured through a stack test. This is achievable through the use of an efficiently designed and managed SCR system. The AQD agreed that this constitutes T-BACT.

4 New Covert Generating Company, LLC Page 4 Rule 225 Toxic Air Contaminant (TAC) Analysis The MDEQ Rules for Air Pollution Control require the ambient air concentration of TACs be compared against health-based screening levels. AQD staff reviewed New Covert s evaluation of TAC impacts and associated air quality modeling. Following the compliance demonstration methods found in Rule 227(1)(a), (b), and (c), the review found that all TACs are demonstrated to comply with the requirements of Rule 225. Most TAC emissions were less than the maximum allowable emission rates defined by Rules 227(1)(a) or (b). The TACs that could not comply with Rules 227(1)(a) or (b) instead showed compliance via air dispersion modeling under Rule 227(1)(c). The TACs that were modeled are listed below. Table 2. Toxic Air Contaminant (TAC) Impacts Project % of Toxic Air Averaging Screening Screening CAS No. Contaminant Time Level Type* Level (µg/m 3 Impact Screening ) (µg/m 3 ) Level Formaldehyde Annual IRSL % Ammonia 1 hr ITSL % Total PAHs as hr ITSL % benzo(a)pyrene Rule 702 VOC Emissions This rule requires an evaluation of the following four items to determine what will result in the lowest maximum allowable emission rate of VOC: a. BACT or a limit listed by the department on its own initiative b. New Source Performance Standards c. VOC emission rate specified in another permit d. VOC emission rate specified in the Part 6 rules for existing sources An evaluation of these four items determined that a VOC BACT limit (Rule 702(a)) analysis would dictate the lowest maximum allowable emission rate of VOC from each CT/HRSG train. The VOC emissions from the CT/HRSG trains are also subject to a top down VOC BACT analysis under the PSD regulations. The proposed PSD BACT limit for the combined cycle units is 1 ppmvd VOC as methane at 15 percent oxygen. VOCs will be controlled by a catalytic oxidizer, with compliance demonstrated through stack testing. The PSD BACT determinations satisfy the BACT requirements per Rule 702(a). Rule 702(b) does not apply because there is no VOC limit in the applicable NSPS standard (Subpart KKKK) for the CT/HRSG trains. Rule 702(c) does not apply because the VOC limits in the existing permit were not written taking into consideration the proposed modification to the equipment. Rule 702(d) does not apply because there are no Part 6 rules that apply to gas turbines. Criteria Pollutants Modeling Analysis Computer dispersion modeling was performed to predict the impacts of air emissions from nitrogen dioxide (NO 2), CO, PM10, PM2.5, and SO 2. NO x refers specifically to nitrogen oxide and NO 2, with the larger portion being NO 2. NO 2 is a highly reactive gas and is the pollutant for which the United States Environmental Protection Agency (USEPA) established a NAAQS. For this modeling demonstration, NO x was assumed to be 100 percent NO 2, which is a conservative evaluation. Emissions from the proposed facility were evaluated against both the NAAQS and the PSD Increments. The NAAQS are intended to protect

5 New Covert Generating Company, LLC Page 5 public health. The PSD Increments are intended to allow industrial growth in an area, while ensuring that the area will continue to meet the NAAQS. The modeling analysis was performed for varying loads between 50 and 100 percent during various ambient conditions (different temperatures and humidity levels). Thirty six different scenarios were evaluated to identify the worst-case scenario for start-up/shut-down (SUSD) and normal (steady-state) operation. The first step in the evaluation is to determine the predicted impacts from the proposed project. After the impacts are determined, they are compared to the applicable PSD Significant Impact Levels (SILs). If the proposed changes to the turbines cause impacts that are less than the SIL, then no further review is required. This preliminary modeling analysis was performed for steady-state operation, and for SUSD. The following table considers the predicted impact from the proposed project for NO x, CO, PM10, PM2.5, and SO 2 and compares them to their respective SILs. Pollutant Table 3: Preliminary Modeling Analysis Averaging Significant Impact Maximum Period Levels (SILs) Impact Below SIL? (ug/m 3 ) (ug/m 3 ) NO 2 1-Hour Yes* Annual Yes CO 1-Hour 2, Yes 8-Hour No PM10 24-Hour No Annual Yes PM Hour No Annual No 1-Hour Yes SO 2 3-Hour Yes 24-Hour No Annual Yes *The impact listed in the table for pollutants other than NO 2 are for the total emissions from the turbines. This is conservative because the SIL analysis only requires an evaluation of the change in impact due to the project. For NO 2, an evaluation of the change in emissions was performed. The proposed emissions cause a predicted impact of NO 2 that is lower than the currently allowed emissions. Therefore the change in impact due to the project is negative, and no further analysis is required for the NO 2 1-hr standard. As several of the modeled impacts exceeded their respective SILs, facility-wide NAAQS and PSD Increment modeling analysis was required for them. The PSD Increments were compared against all emission increases that occurred since the baseline dates for each pollutant were set, including changes at the facility and other increment-consuming facilities nearby, and the proposed project impacts. The results, in the table below, show that predicted impacts are less than PSD Increments.

6 New Covert Generating Company, LLC Page 6 Table 4. PSD Increment Modeling Pollutant Averaging Time PSD Increment Predicted Below (µg/m 3 ) Impact (µg/m 3 ) Increment? NO 2* Annual Yes PM10 24-hr Yes PM Hour Yes Annual Yes SO 2** 24-hr Yes *The NO 2 impact was below the annual SIL; however, since it was so close to the SIL, the PSD Increment and NAAQS modeling was performed anyway. **AQD modeling showed 1-hr SO 2 impacts below SIL; however, consultant's results were above the SIL. In the NAAQS analysis, the total facility impact includes all emissions at the facility, including project emissions, and any additional nearby facilities, or off site sources. The total facility impact and the background concentrations, which is data from ambient air monitors, are summed and compared to the NAAQS. Table 5. National Ambient Air Quality Standards (NAAQS) Pollutant Averaging Time NAAQS Predicted Percent of (µg/m 3 ) Impact (µg/m 3 ) NAAQS NO 2* Annual % PM10 24-hr % PM hr % Annual % SO 2 1-hr % CO 8-hr 10,000 2, % *The NO 2 impact was below the annual SIL; however, since it was so close to the SIL, the PSD Increment and NAAQS modeling was performed anyway. **AQD modeling showed 1-hr SO 2 impacts below SIL; however, consultant's results were above the SIL. Based on the dispersion modeling analysis, the project will not cause impacts that are over the NAAQS or PSD Increments. Additional Impact Analysis An additional impact analysis is required for new major sources pursuant to 40 CFR Part 52.21(o) and Michigan Rule This analysis is necessary to evaluate the impacts from the proposed project for soils, vegetation, visibility and growth. The proposed project emissions are not anticipated to have a negative impact on soils, vegetation, wildlife, or visibility, and to have minimal impact on growth once construction is completed. Soils, Vegetation, and Wildlife The secondary NAAQS have been determined by the USEPA to be protective of soils, vegetation, and wildlife. New Covert evaluated the secondary NAAQS using dispersion modeling. All PSD pollutants with secondary NAAQS were below their respective standards. VOCs and H2SO4 were evaluated through the TAC analysis required in Michigan

7 New Covert Generating Company, LLC Page 7 Air Pollution Control Rule This evaluation showed that the impacts from the project are below their respective health-based screening levels. Visibility Assessments for visibility impacts are required only for Class I areas. The nearest PSD Class I areas to the proposed plant are more than 430 kilometer (km) away. Seney National Wildlife Refuge, in Michigan, is approximately 435 km to the north-northwest. Mammoth Cave National Park in Kentucky is approximately 563 km to the south-southwest. Otter Creek National Wilderness Area in West Virginia is approximately 563 km to the southeast. The source is sufficiently far away that the USEPA does not require further analysis as no impairment to visibility in the Class I area is expected to occur. Growth The growth analysis is a projection of the commercial, residential, industrial, and other growth that will occur in the area due to the construction and operation of the proposed source. Emissions from construction are expected to be minimal and have limited impact beyond the site boundaries. Employment due to construction will be temporary, and there will be no new permanent jobs created as a result of the proposed project. Therefore, the project is predicted to have a minimal effect on area population and commercial growth. Key Aspects of Proposed Permit Conditions Emission Limits (By Pollutant) The proposed permit includes emission limits for various pollutants in order to make the permit enforceable and to protect the air quality standards. Included are PSD BACT emission limits, as appropriate, for NO x, CO, PM10, PM2.5, SO 2, VOCs, H 2SO 4, and GHGs as CO2e. A summary of the BACT emission limits is included in Appendix 2. A T-BACT limit for NH 3 is also included in the proposed permit. Emission Control Device Requirements The proposed permit includes emission control device requirements for each of the three CT/HRSG trains: Dry low NO x burners (DLNB) and SCR are required for NO x control, and an oxidation catalyst for CO and VOC control is required in the proposed permit. Usage Limits The proposed permit only allows the combustion of natural gas in the CTs and HRSG duct burners. The natural gas is required to have a sulfur content of no greater than 0.8 grains per 100 standard cubic feet. Process/Operational Restrictions The proposed permit requires New Covert to submit an updated Malfunction Abatement Plan for the CTG/HRSG trains. The plan must include a preventative maintenance program and corrective procedures for the event of an equipment malfunction or failure. Also, the proposed permit requires New Covert to develop an additional plan that describes how emissions will be minimized during SUSD for the CTG/HRSG trains. The plan shall incorporate procedures recommended by the equipment manufacturer as well as incorporate standard industry practices. The proposed permit prohibits more than two turbines from operating in startup mode simultaneously, which corresponds with how the dispersion modeling analysis was done.

8 New Covert Generating Company, LLC Page 8 To restrict the annual emissions, the proposed permit includes a restriction of 692 hours of SUSD per year for each CT/HRSG train, and a restriction of 3,308 hours of operation per year for each duct burner. Testing, Monitoring, and Recordkeeping Requirements The draft permit includes the following requirements for the CT/HRSG Trains: o Continuous Emission Monitoring System (CEMS) devices to monitor and record NO x and CO emissions from each CTG/HRSG train are required. As part of CEMS, a monitor for either oxygen or CO 2 is also required, and records of the hourly and 24-hour rolling average NO x and CO concentration and mass emissions. o o o o o Testing for PM10, PM2.5, VOC, and H 2SO 4, and NH 3 emission rates are required. Monthly and 12-month rolling records of NO x, CO, VOC, and CO 2e emissions for each CTG/HRSG train are required. Records of the fuel usage for each CT and duct burner on an hourly and monthly basis are required. Records of the hours for SUSD events, and the date and time that each SUSD began and ended for each CTG/HRSG train are required. Records of the monthly heat rate (Btu/kWh) are required. Federal Regulations The proposed modifications to the CTs will make them subject to the NSPS for Stationary Combustion Turbines, 40 CFR Part 60 Subpart KKKK. The permit includes applicable NO x and SO 2 emission limits, and a sulfur content limit for the natural gas fuel. The permit requires monitoring of NO x using CEMS, and compliance with the SO 2 limit will be demonstrated through records of fuel usage and fuel sulfur content. Records and written reports that are required under this regulation are included in the conditions. Conclusion Based on the analyses conducted to date, staff concludes that the proposed project would comply with all applicable state and federal air quality requirements. Staff also concludes that this project, as proposed, would not violate the federal NAAQS or the federal PSD Increments. Based on these conclusions, staff has developed proposed permit terms and conditions which would ensure that the proposed facility design and operation are enforceable, and that sufficient monitoring, recordkeeping, and reporting would be performed by the applicant to determine compliance with these terms and conditions. If the permit application is deemed approvable, the delegated decision maker may determine a need for additional or revised conditions to address issues raised during the public participation process. If you would like additional information about this proposal, please contact Ms. Michelle Rogers, AQD, at

9 New Covert Generating Company, LLC Page 9 State Rule R R R R to R R to R R R R R and R R to R R R R R R R to R Appendix 1 STATE AIR REGULATIONS Description of State Air Regulations Requires an Air Use Permit for new or modified equipment that emits, or could emit, an air pollutant or contaminant. However, there are other rules that allow smaller emission sources to be installed without a permit (see Rules through below). Rule also states that the Department can add conditions to a permit to assure the air laws are met. Outlines the permit conditions that are required by the federal Prevention of Significant Deterioration (PSD) Regulations and/or Section 112 of the Clean Air Act. Also, the same types of conditions are added to their permit when a plant is limiting their air emissions to legally avoid these federal requirements. (See the Federal Regulations table for more details on PSD.) New or modified equipment that emits toxic air contaminants must use the Best Available Control Technology for Toxics (T-BACT). The T-BACT review determines what control technology must be applied to the equipment. A T-BACT review considers energy needs, environmental and economic impacts, and other costs. T-BACT may include a change in the raw materials used, the design of the process, or add-on air pollution control equipment. This rule also includes a list of instances where other regulations apply and T-BACT is not required. The ambient air concentration of each toxic air contaminant emitted from the project must not exceed health-based screening levels. Initial Risk Screening Levels (IRSL) apply to cancer-causing effects of air contaminants and Initial Threshold Screening Levels (ITSL) apply to non-cancer effects of air contaminants. These screening levels, designed to protect public health and the environment, are developed by Air Quality Division toxicologists following methods in the rules and U.S. EPA risk assessment guidance. These rules list equipment to processes that have very low emissions and do not need to get an Air Use permit. However, these sources must meet all requirements identified in the specific rule and other rules that apply. Limits how air emissions are allowed to look at the end of a stack. The color and intensity of the color of the emissions is called opacity. The particulate emission limits for certain sources are listed. These limits apply to both new and existing equipment. Material collected by air pollution control equipment, such as dust, must be disposed of in a manner, which does not cause more air emissions. Limit the sulfur dioxide emissions from power plants and other fuel burning equipment. Volatile organic compounds (VOC) are a group of chemicals found in such things as paint solvents, degreasing materials, and gasoline. VOC contribute to the formation of smog. The rules set VOC limits or work practice standards for existing equipment. The limits are based upon Reasonably Available Control Technology (RACT). RACT is required for all equipment listed in Rules through New equipment that emits VOC is required to install the Best Available Control Technology (BACT). The technology is reviewed on a case-by-case basis. The VOC limits and/or work practice standards set for a particular piece of new equipment cannot be less restrictive than the Reasonably Available Control Technology limits for existing equipment outlined in Rules through Nitrogen oxide emission limits for larger boilers and stationary internal combustion engines are listed. Air pollution control equipment must be installed, maintained, and operated properly. When requested by the Department, a facility must develop and submit a malfunction abatement plan (MAP). This plan is to prevent, detect, and correct malfunctions and equipment failures. A facility is required to notify the Department if a condition arises which causes emissions that exceed the allowable emission rate in a rule and/or permit. Allow the Department to request that a facility test its emissions and to approve the protocol used for these tests.

10 New Covert Generating Company, LLC Page 10 State Rule R to R Prevention of Significant Deterioration (PSD) Regulations Best Available Control Technology (BACT) R to R and R STATE AIR REGULATIONS Description of State Air Regulations The PSD rules allow the installation and operation of large, new sources and the modification of existing large sources in areas that are meeting the National Ambient Air Quality Standards (NAAQS). The regulations define what is considered a large or significant source, or modification. In order to assure that the area will continue to meet the NAAQS, the permit applicant must demonstrate that it is installing the BACT. By law, BACT must consider the economic, environmental, and energy impacts of each installation on a case-by-case basis. As a result, BACT can be different for similar facilities. In its permit application, the applicant identifies all air pollution control options available, the feasibility of these options, the effectiveness of each option, and why the option proposed represents BACT. As part of its evaluation, the Air Quality Division verifies the applicant s determination and reviews BACT determinations made for similar facilities in Michigan and throughout the nation. Applies to new major stationary sources and major modifications as defined in R These rules contain the permitting requirements for sources located in nonattainment areas that have the potential to emit large amounts of air pollutants. To help the area meet the NAAQS, the applicant must install equipment that achieves the Lowest Achievable Emission Rate (LAER). LAER is the lowest emission rate required by a federal rule, state rule, or by a previously issued construction permit. The applicant must also provide emission offsets, which means the applicant must remove more pollutants from the air than the proposed equipment will emit. This can be done by reducing emissions at other existing facilities. As part of its evaluation, the AQD verifies that no other similar equipment throughout the nation is required to meet a lower emission rate and verifies that proposed emission offsets are permanent and enforceable. Citation Section 109 of the Clean Air Act National Ambient Air Quality Standards (NAAQS) 40 CFR Prevention of Significant Deterioration (PSD) Regulations Best Available Control Technology (BACT) FEDERAL AIR REGULATIONS Description of Federal Air Regulations or Requirements The United States Environmental Protection Agency has set maximum permissible levels for seven pollutants. These NAAQS are designed to protect the public health of everyone, including the most susceptible individuals, children, the elderly, and those with chronic respiratory ailments. The seven pollutants, called the criteria pollutants, are carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter less than 10 microns (PM10), particulate matter less than 2.5 microns (PM2.5), and sulfur dioxide. Portions of Michigan are currently non-attainment for either ozone or SO2. Further, in Michigan, State Rules to are used to ensure the public health is protected from other compounds. The PSD regulations allow the installation and operation of large, new sources and the modification of existing large sources in areas that are meeting the NAAQS. The regulations define what is considered a large or significant source, or modification. In order to assure that the area will continue to meet the NAAQS, the permit applicant must demonstrate that it is installing BACT. By law, BACT must consider the economic, environmental, and energy impacts of each installation on a case-by-case basis. As a result, BACT can be different for similar facilities. In its permit application, the applicant identifies all air pollution control options available, the feasibility of these options, the effectiveness of each option, and why the option proposed represents BACT. As part of its evaluation, the Air Quality Division verifies the applicant s determination and reviews BACT determinations made for similar facilities in Michigan and throughout the nation.

11 New Covert Generating Company, LLC Page 11 Citation 40 CFR 60 New Source Performance Standards (NSPS) Section 112 of the Clean Air Act Maximum Achievable Control Technology (MACT) Section 112g FEDERAL AIR REGULATIONS Description of Federal Air Regulations or Requirements The United States Environmental Protection Agency has set national standards for specific sources of pollutants. These New Source Performance Standards (NSPS) apply to new or modified equipment in a particular industrial category. These NSPS set emission limits or work practice standards for over 60 categories of sources. In the Clean Air Act, Congress listed 189 compounds as Hazardous Air Pollutants (HAPS). For facilities which emit, or could emit, HAPS above a certain level, one of the following two requirements must be met: 1) The United States Environmental Protection Agency has established standards for specific types of sources. These Maximum Achievable Control Technology (MACT) standards are based upon the best-demonstrated control technology or practices found in similar sources. 2) For sources where a MACT standard has not been established, the level of control technology required is determined on a case-by-case basis. Notes: An Air Use Permit, sometimes called a Permit to Install, provides permission to emit air contaminants up to certain specified levels. These levels are set by state and federal law, and are set to protect health and welfare. By staying within the levels set by the permit, a facility is operating lawfully, and public health and air quality are protected. The Air Quality Division does not have the authority to regulate noise, local zoning, property values, offsite truck traffic, or lighting. These tables list the most frequently applied state and federal regulations. Not all regulations listed may be applicable in each case. Please refer to the draft permit conditions provided to determine which regulations apply.

12 New Covert Generating Company, LLC Page 12 Appendix 2. Best Available Control Technology Analysis (Michigan Rule and 40 CFR 52.21(j)) A requirement of PSD New Source Review is a Best Available Control Technology analysis. For this application, the top-down BACT approach per the USEPA DRAFT New Source Review Workshop Manual (October 1990) was utilized. The top-down approach considers all available emission reduction options and proceeds in a five-step process as follows: 1. Identify all control technologies; 2. Eliminate technically infeasible options; 3. Rank the remaining control technologies by control effectiveness; 4. Evaluate the most effective controls and document the results; 5. Select BACT (e.g., the most effective option not rejected is BACT). The proposed project is subject to a BACT analysis for NO x, CO, PM10, PM2.5, VOC, SO 2, H 2SO 4, and CO 2e. The following is a summary of the BACT analysis for each of the different pieces of equipment at the facility. The combined-cycle units (turbines and duct burners) are subject to BACT, per Rule 1810(3), which says that BACT applies to each emission unit that has a net emissions increase as a result of a physical change or change in the method of operation in the unit: NOx BACT Step 1: Identify NO x Control Technologies The following NO x control technologies are identified for the CT/HRSG trains: Good combustion practices Water or steam injection Lean Pre-Mix, Dry Low NO x Combustor Design (DLN) Xonon Cool Combustion (XONON) EMx (Formerly SCONOx TM ) Selective Catalytic Reduction (SCR) Dry Low NO x Combustor Design (DLN) with SCR Selective Non-Catalytic Reduction (SNCR) Non-Selective Catalytic Reduction (NSCR) Step 2: Eliminate Technically Infeasible Options Water or steam injection is not compatible with low NO x burners, which are proposed for this project, because the water or steam injection could cause damage to the combustion system and related components and would reduce the energy efficiency of the CT. SNCR is a post combustion system that injects ammonia or urea into combustion flue gases without a catalyst, to form molecular nitrogen and water. This reaction occurs at flue gas temperatures that are higher than the exhaust from the CT/HRSGs produce. At the lower exhaust temperatures, SNCR would be less effective at controlling NO x. NSCR is a post combustion system that utilizes a three-way catalytic converter to reduce emissions of NO x, CO, and VOC from the flue gas. The exhaust must have a low oxygen content (1 percent or lower) in order for CO and NO x to react to remove oxygen from the NO x molecules. The CT exhaust will have oxygen levels above 10 percent, which would render this type of control ineffective.

13 New Covert Generating Company, LLC Page 13 The AQD does not consider SNCR or NSCR to be technically feasible for the proposed equipment; this is in keeping with other applications of the similar type. The applicant ruled out Xonon and EMx (Formerly SCONOxTM) as technically infeasible. Only two sites were found in the RBLC database that proposed these technologies, and no other facilities have proposed these technologies in the last 10 years. It does not appear that Xonon or SCONOx have been sufficiently demonstrated in utility combined-cycle gas turbine operations. Therefore, the AQD does not consider these to be technically feasible control alternatives for this project. Step 3: Rank Remaining Control Technologies by Control Effectiveness The top level control option is the combination of good combustion practices, DLN burners, and SCR. Although the applicant did not rank other control technologies, this combination has been considered the top level control in many other applications in recent months and is considered the current stateof-the-art (BACT) for this type of project. Step 4: Evaluate Energy Costs, Environmental Costs, and Economic Feasibility No control options are ruled out based on costs. Step 5: Select BACT The proposed BACT control technology is the top level control option (the combination of good combustion practices, DLN burners, and SCR). The proposed DLN burner design premixes the fuel and air inside the combustor. This type of design has been referred to in other permit applications as ULNB or low-no x burner with internal FGR. This combination of controls has the highest effectiveness, out of the technically feasible options, so no control options are eliminated based on economic feasibility. The proposed BACT limit during steady-state operation (which does not include SUSD) is 2 ppmvd NO x at 15 percent O 2 on a 24-hour rolling average time period. Other recent PSD permits list NO x BACT limits ranging from 2 ppmv to 4 ppmv as BACT. The AQD concurs that BACT is the use of good combustion practices, DLN burners, and SCR with a NO x limit of 2 ppmv. The proposed permit requires a CEMS to continuously monitor NO x emissions to show compliance with the BACT limit. CO BACT Step 1: Identify CO Control Technologies The following CO control technologies are identified for the CT/HRSG trains: Thermal Oxidation Oxidation Catalyst Good Combustion Practices (Efficient Combustion) EMx (Formerly SCONOx TM ) NSCR Step 2: Eliminate Technically Infeasible Options Thermal oxidation increases the temperature of the flue gas above the auto-ignition temperature of CO and other hydrocarbons, which is 1,300 F, to induce combustion of flue gas contaminants (CO and VOC). This technology is typically designed for process streams that have high concentrations of VOC. The CT exhaust will have relatively low concentrations of CO and VOCs. Thermal oxidation would require significant amounts of additional fuel combustion. This technology is not considered a technically feasible control alternative for this project. NSCR and EMx (SCONOxTM) are ruled out as technically infeasible, for the same reasons they are infeasible for controlling NOx emissions.

14 New Covert Generating Company, LLC Page 14 Step 3: Rank Remaining Control Technologies by Control Effectiveness The technically feasible control options ranked in order from most effective to least effective are: 1. Oxidation Catalyst 2. Good Combustion Practices (Efficient Combustion) Step 4: Evaluate Energy Costs, Environmental Costs, and Economic Feasibility No control options are ruled out based on costs. Step 5: Select BACT The proposed BACT for CO is the use of an oxidation catalyst and good combustion practices. This is consistent with other recently issued permits for this type of equipment. The proposed limit during steady-state operation is 2 ppmvd CO at 15 percent O 2 on a 24-hour rolling average time period. Other recent PSD permits list CO BACT limits ranging from 2 ppmv to 4 ppmv as BACT. The AQD concurs that CO BACT is the use of an oxidation catalyst and good combustion practices with a CO limit of 2 ppmv. The proposed permit requires a CEMS to continuously monitor CO emissions to show compliance with the BACT limit. VOC BACT Step 1: Identify VOC Control Technologies The following VOC control technologies are identified for the CT/HRSG trains: Thermal Oxidation Oxidation Catalyst Good Combustion Practices (Efficient Combustion) NSCR Step 2: Eliminate Technically Infeasible Options Thermal oxidation and NSCR are not technically feasible control options for VOC, for the same reasons listed above. Step 3: Rank Remaining Control Technologies by Control Effectiveness The technically feasible control options ranked in order from most effective to least effective are: 1. Oxidation Catalyst 2. Good Combustion Practices (Efficient Combustion) Step 4: Evaluate Energy Costs, Environmental Costs, and Economic Feasibility No control options are ruled out based on costs. Step 5: Select BACT The proposed BACT for VOC is the use of an oxidation catalyst and good combustion practices. This is consistent with other recently issued permits for this type of equipment. The proposed limit during steady-state operation is 1 ppmvd VOC at 15 percent O 2 on a 24-hour rolling average time period. Most other recent permits list BACT limits ranging from 1 ppmv to 2 ppmv as BACT. Since the chosen control, catalytic oxidation, is the top-level control option for both VOC and CO, the applicant did not also evaluate BACT for the combined pollutants. The AQD concurs that BACT is the use of an oxidation catalyst and good combustion practices with a VOC limit of 1 ppmv. The proposed permit requires emissions testing to show compliance with the VOC BACT limit. NOx, CO, and VOC BACT during SUSD During SUSD operations for each CT, the emissions of NO x, CO, and VOC are higher than during steady-state operations. The combustors are not optimized for low emissions during this time, and the SCR and oxidation catalyst cannot fully function because the exhaust temperature is too low and the exhaust flow rate rapidly changes.

15 New Covert Generating Company, LLC Page 15 Startup is defined as the period of time from detection of a flame signal until the unit reaches steady state operation (i.e. loads greater than 50 percent). Shutdown is defined as beginning when the turbine output is lowered to the point that steady state operation can no longer be assured (i.e. loads less than 50 percent) and ending when a flame-off signal is detected. Based on 2017 testing data of the existing turbines, hourly limits of pounds per hour NO x and 1,164.0 pounds per hour CO were proposed for SUSD. These limits are included in the proposed permit and a CEMS to continuously monitor NO x and CO emissions will be used to show compliance with these BACT limits. VOC emissions will be measured through testing, and it is not feasible to test VOC emissions during SUSD, so no SUSD limit for VOC was included in the proposed permit. Since it is not technically feasible to operate the control equipment during SUSD, the best way to reduce NO x, CO, and VOC emissions from SUSD events is to minimize the time spent in SUSD mode. BACT for SUSD is to use best practices to minimize the frequency and duration of SUSD. The proposed permit includes a limit of 692 hours per year spent in SUSD modes per turbine, and requires the company to submit a plan for minimizing SUSD emissions, incorporating procedures recommended by the equipment manufacturer as well as standard industry practices. The AQD concurs with this as BACT for SUSD emissions of NO x, CO, and VOC. SO 2 / H 2SO 4 BACT SO 2 emissions are a result of sulfur compounds in combustion fuel. A small percentage of the SO 2 (assumed to be 10 percent for this permit application) may be oxidized across the oxidation catalyst and the SCR to form sulfur trioxide, which can react with ambient humidity (water, H 2O) to form H 2SO 4. Step 1: Identify Control Technologies The following control technologies are identified for the CT/HRSG trains: Flue Gas Desulfurization (FGD) Fuel Desulfurization Use of Clean Fuel (Natural Gas) Step 2: Eliminate Technically Infeasible Options FGD is a post-combustion control technology that uses a scrubbing liquid or dry reagent to absorb SO 2 and other acid gases, including H 2SO 4, present in the exhaust gas stream. It is most often used to control emissions from coal-fired boilers where there is much higher sulfur content. Traditionally designed as a wet system, FGD typically uses a scrubbing liquid containing an alkali reagent such as lime or limestone for the absorption of SO 2. Spent reagent must be disposed of as waste. Flue gas desulfurization systems have SO 2 removal efficiencies ranging from 50 to 99 percent. Removal efficiencies depend upon the scrubber design and the concentration of SO 2 or H 2SO 4 in the flue gas. High removal efficiencies are not feasible when SO 2 concentrations are low (<100 ppm). Equipment that has utilized this technology has had higher SO 2 emissions than what is proposed as BACT from natural gas combustion; the technology is not expected to be able to process flue gas with the low concentration of SO 2 expected from this type of equipment. This technology is not considered a feasible control alternative for this project. Fuel desulfurization includes any chemical or physical process which removes sulfur compounds from a fuel prior to its use. There are several pre-treatment technologies available, such as adsorption, biofiltration, and scrubbers. Chemical absorption is the process typically used to remove sulfur at natural gas processing plants to meet pipeline specifications for sulfur content. Amine and glycol compounds are used as reagents for removing sulfur compounds from the untreated natural gas. In many cases these reagents are regenerated for re-use. Sulfur compounds in the regeneration system exhaust gas are converted to elemental sulfur by another process. These are typically used on fuels

16 New Covert Generating Company, LLC Page 16 with much higher sulfur content than natural gas. As such, this technology is not considered a feasible control alternative for this project. Step 3: Rank Remaining Control Technologies by Control Effectiveness The only technically feasible control option for SO 2 and H 2SO 4 is the use of clean fuel (natural gas). Natural gas from the pipeline contains the lowest sulfur content of any commercially available fuel. Step 4: Evaluate Energy Costs, Environmental Costs, and Economic Feasibility No control options are ruled out based on costs. Step 5: Select BACT The use of clean fuel (natural gas), with a fuel sulfur limit of 0.8 grains per 100 standard cubic feet of natural gas was proposed as BACT for SO 2 and H 2SO 4. The AQD concurs with this determination. The proposed permit requires recordkeeping of the sulfur content in the fuel, and testing of H 2SO 4 emissions. PM10 and PM2.5 BACT Step 1: Identify PM10 and PM2.5 Control Technologies The following PM10 and PM2.5 control technologies are identified for the CT/HRSG trains: Use of Clean Fuel (Natural Gas) Good Combustion Practices Add-On Control Technologies Step 2: Eliminate Technically Infeasible Options Add-on control technologies include fabric filter control, electrostatic Precipitator (ESP), wet ESP, and venturi scrubber. These technologies are not considered technically feasible for natural gas-fired CTs because of particulate capture limitations and the very low particulate concentration levels. Step 3: Rank Remaining Control Technologies by Control Effectiveness The technically feasible control options ranked in order from most effective to least effective are: 1. Use of Clean Fuel (Natural Gas) 2. Good Combustion Practices Step 4: Evaluate Energy Costs, Environmental Costs, and Economic Feasibility No options were eliminated based on cost. Step 5: Select BACT The proposed BACT is to use clean fuel (natural gas) and good combustion practices. The proposed permit allows only natural gas as fuel and includes a limit on sulfur content in the fuel (0.8 grains per 100 standard cubic feet of natural gas), which serves to limit the formation of PM10 and PM2.5. Good combustion practices can further minimize the amount of particulate generated due to incomplete combustion in the combined-cycle units. This includes efficient tuning of the air to fuel ratio, good combustor design, and maintenance and operation according to manufacturer s specifications. The proposed BACT limits are 10.7 pounds per hour for PM10 and 10.7 pounds per hour for PM2.5. These limits are based on previous emissions testing performed on the turbines. These limits apply at all times. This conclusion is confirmed by many RBLC entries which cite BACT for natural gas fired turbines as the use of natural gas and good combustion practices. The AQD concurs with the BACT limits proposed in the application.

17 New Covert Generating Company, LLC Page 17 CO 2e BACT Step 1: Identify CO 2e Control Technologies The following CO 2e control technologies are identified for the CT/HRSG trains: Combined Cycle Power Generation Multiple Turbine/HRSG Trains Use of Clean Fuel (Natural Gas) CT Design Fuel Pre-Heating Periodic Maintenance and Burner Testing Instrumentation and Controls Minimizing HRSG Heat Exchanger Fouling Steam Turbine Design Steam Turbine Maintenance Carbon Capture and Sequestration (CCS) Step 2: Eliminate Technically Infeasible Options No options are ruled out as technically infeasible. Step 3: Rank Remaining Control Technologies by Control Effectiveness 1. Carbon Capture and Sequestration (CCS) 2. Combined Cycle Power Generation 3. Use of Natural Gas 4. Instrumentation and Controls 5. CT Design 6. Steam Turbine Design 7. Minimizing HRSG Heat Exchanger Fouling 8. Fuel Pre-Heating 9. Multiple Turbine/HRSG Trains 10. Periodic Maintenance and Burner Testing 11. Steam Turbine Maintenance Step 4: Evaluate Energy Costs, Environmental Costs, and Economic Feasibility CCS was estimated to cost over $75 per ton of CO 2 removed, with an estimated annual cost of over $321 million to remove 4.24 million tons per year. Thus, this option was ruled out as economically infeasible. Step 5: Select BACT The proposed BACT is the following energy efficiency processes, practices, and designs: Combined Cycle Power Generation Use Natural Gas Use of Multiple Turbine/HRSG Trains (3 total) CT Energy Efficiency Processes, Practices, and Designs, Including: o Efficient CT Design (compressor, combustor, and blades) o Periodic Maintenance and Tuning, following vendors recommended inspection and maintenance programs o o Reduction of Heat Loss Instrumentation and Controls (including exhaust gas temperature monitoring, turbine package temperature and pressure monitoring, combustion dynamics monitoring, vibration monitoring, air/fuel ratio monitoring, and HRSG temperature and pressure monitoring)