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PSEG Power New York, Inc.

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
NOTICE OF DETERMINATION TO ISSUE
PREVENTION OF SIGNIFICANT DETERIORATION (PSD) PERMIT

Applicant: PSEG Power New York Inc, 80 Park Plaza, Newark, NJ 07101

Application Number: DEC # 4-0122-00044/00021; PSC Case # 97-F-2162

Project Description: The Applicant, PSEG Power New York Inc, proposes to construct and operate the Bethlehem Energy Center (BEC), a gas-fired combined cycle power generation facility consisting of three General Electric 7 FA combustion turbines (CTGs), three heat recovery steam generators (HRSGs), one steam turbine generator (STG) and associated balance-of-plant systems and facilities. The primary fuel will be natural gas and the facility will have the capacity to use low (0.04 percent) sulfur distillate oil as a secondary fuel. The nominal electric generating capacity of the proposed facility will be approximately 750 megawatts (MW).

The Applicant proposes to install an oxidation catalyst system to reduce carbon monoxide (CO) and volatile organic compounds (VOC), and a selective catalytic reduction system (SCR) to reduce NOx. The air emissions resulting from the turbines and generators will be vented through three 248 foot high exhaust stacks. The Applicant proposes to utilize evaporative mechanical draft cooling towers with a closed-loop circulating-water system.

Public Notice: DEC Staff has made a tentative determination that the proposed construction of a 750 MW natural gas-fired combined cycle facility by the Applicant, is subject to and satisfies the federal prevention of significant deterioration (PSD) requirements contained in 40 CFR §52.21. The only air pollutant for the BEC which is subject to control pursuant to the PSD requirements is particulate matter (PM & PM10). The project has netted out of PSD applicability for all other PSD pollutants in reliance on the proposed shutdown of the existing Albany Steam Station which is to be replaced by the BEC. The Albany Steam Station will be permanently retired upon commencement of commercial operation of the BEC. The air emissions resulting from the turbines and generators will be vented through three 248 foot high exhaust stacks. The DEC Staff has also verified that the emissions of particulate matter will not cause, or significantly contribute to, an exceedence of any national ambient air quality standard for PM/PM10, and will not consume more than the allowable PSD air quality increment. The projected net maximum concentrations of all other PSD - pollutants are below U.S. Environmental Protection Agency (EPA)-defined significance levels. The facility is also subject to the federal New Source Performance Standards at 40 CFR Part 60. In addition to the operating restrictions and emission limitations proposed in the application, which have been incorporated as special permit conditions, DEC Staff has imposed further limitations on the project PM/PM10 emissions to ensure compliance with all applicable regulations and requirements, as provided in the "fact sheet" in the administrative record.

Project Location: The facility would be located on the site of an existing power generating facility, the Albany Steam Station, on State Route 144 in Glenmont, Town of Bethlehem, Albany County, on an 84 acre parcel owned entirely by the Applicant. The entire project area is zoned for Heavy Industrial use. The BEC will be bounded on the west by State Route 144, on the east by the Hudson River, on the south by an unused oil terminal owned by Niagara Mohawk, and on the north by unused property owned by Niagara Mohawk.

NYS Public Service Law: This project is subject to review pursuant to New York State Public Service Law (PSL) Article X (Siting of Major Electric Generating Facilities) and requires a Certificate of Environmental Compatibility and Public Need (Certificate) from the New York State Board on Electric Generation Siting and the Environment to construct and operate a 750 MW natural gas-fired combined cycle facility. The Article X application was filed on July 2, 2001.

Other Regulatory Provisions: In addition to the specific regulations cited above, the Article X application is being processed by DEC Staff pursuant to Environmental Conservation Law (ECL) Article 3, Title 3 (General Functions), ECL Article 17 (Water Pollution Control), ECL Article 19 (Air Pollution Control), and Title 6 of the New York Compilation of Codes, Rules and Regulations (6 NYCRR) Part 201 (Permits and Registrations), Subpart 231-2 (Requirements for Emission Sources Subject to §§ 172 and 173 of the Clean Air Act , 42 USC §7502 and §7503 on or after November 15, 1992) and Part 621 (Uniform Procedures). A separate notice will be issued concurrently, which will provide an opportunity for the public to comment on the 6 NYCRR Part 201-6.1 preconstruction permit, and the State Pollutant Discharge Elimination System (SPDES) draft permit.

SEQRA Status: DEC has determined that the proposed action is a Type II action 6 NYCRR §617.5(c)(35). A comprehensive environmental review is being conducted pursuant to PSL Article X.

Tentative DEC Staff Position: DEC Staff has reviewed the PSD application and determined it is complete pursuant to 6 NYCRR Part 621. Staff has determined that all statutory and regulatory criteria can be met through the imposition of special conditions. A draft PSD permit is being made available for public comment. The emissions limits and special permit conditions imposed on the Applicant's construction and operations reflect those proposed by the Applicant in its PSD permit application (Volume 5, Appendix L.2 of the Article X application, revised June, 2001). A draft PSD permit and fact sheets are available for review.

Public Comments/Appeal Procedure: DEC invites public comment regarding this tentative determination. DEC's final determination will be made only after full consideration of all public comment received. Comments are to be limited to PSD concerns and must be in writing, and must be accompanied with adequate supporting information. The PSD aspects, as noted above, address the proposed particulate matter (PM and PM10). The public comment period on the draft PSD permit will run from the date of publication of this public notice until October 22, 2001. Written comments about DEC Staff's tentative PSD determination must be filed with the DEC project manager at the address provided below.

The final determination may be appealed administratively within 30 days of the Applicant's receipt of the final PSD permit determination. Only those persons who file comments on this PSD preliminary determination may petition the EPA Environmental Appeals Board for administrative review of the PSD determination. Persons who fail to file comments may petition for review only to the extent of any changes from the draft to the final permit decision regarding PSD issues. If no comments are received and DEC makes no changes to the PSD determination from the draft to the final decision, no opportunity for further review or appeal will be available.

The procedures for administrative review are defined in 40 CFR Part 124. Any such petition for review shall include a statement of the reasons supporting that review and shall adhere to the standards outlined in 40 CFR §§ 124.19

Upon completion of the administrative review process (if applicable), the final decision will become the final agency action and will be published in the Federal Register. Those who appealed for administrative review may petition for judicial review within 60 days following the final EPA decision.

Document Availability: All filed application materials and the draft PSD permit and attendant fact sheets are available for public inspection at the following DEC offices between 9:00 AM and 4:00 PM, Monday through Friday:

(1) NYS Department of Environmental Conservation, Division of Environmental Permits, 625 Broadway, Albany, New York 12233-1750. Contact: Kevin Kispert, Project Manager, at (518) 402-9161; and

(2) NYS Department of Environmental Conservation, Region 4 Headquarters, 1150 North Westcott Rd., Schenectady, NY 12306. Contact: Michael T. Higgins at (518)357-2069

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