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Calpine Stony Brook Energy Center 2, Inc.

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

Applicant: Calpine Stony Brook Energy Center 2, Inc., 2 Atlantic Avenue, 3rd Floor, Boston, MA 02110

Application Number: DEC # 1-4722-02441/00005

Project Description: Calpine Stony Brook Energy Center 2, Inc.(the Applicant) proposes to construct and operate a 79.9 MW electric generating station (the project) adjacent to the existing Nissequogue Cogen Partners (NCP) cogeneration facility located on the SUNY campus. The project will be constructed in two phases which are both described below, and the draft permits if issued, will authorize both phases. This project is a modification of the existing NCP facility.

Phase 1 entails the construction and operation of a General Electric (GE) LM 6000 PC SPRINT Combustion Turbine Generator (CTG) and associated balance-of-plant systems and facilities. The CTG will operate in a simple cycle mode during the summer of 2003 and is rated at 49.7 MW.

In Phase 2, the CTG will be converted to operate in a combine-cycle mode by the addition of a Once Through Steam Generator (OTSG) with duct burners, a steam turbine generator (STG), a condenser with an associated two-cell cooling tower and associated balance-of-plant systems and facilities. A steam interconnection will be incorporated during the latter portion of Phase 2 that will allow the transfer of steam between this project and the existing NCP during periods of high electrical demand and low steam loads on the SUNY campus. The total new electrical power from this project at the completion of Phase 2 will be limited to a net output of 79.9 MW to the electric grid.

The CTG and duct burners will be fueled exclusively by natural gas. The CTG will utilize a water injection system and selective catalytic reduction (SCR) to control emissions of nitrogen oxides (NOx). An oxidation catalyst will be used to control emissions of carbon monoxide (CO) and volatile organic compounds (VOCs). Emissions from the CTG and duct burners will exhaust through a single 125-foot stack.

Public Notice: DEC Staff has made a tentative determination that the proposed construction of a 79.9 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 project which is subject to control pursuant to the PSD requirements is particulate matter (PM & PM10). Although Phase 1 of the project does not trigger PSD applicability, the Phase 2 conversion of the facility will result in emissions of PM/PM10 above the PSD applicability thresholds.

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 maximum concentrations of PM10 as well as all regulated 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, and acid rain regulation at 40 CFR Parts 72 and 75, and 6NYCRR Part 201 permitting requirements. The operating restrictions and emission limitations proposed in the application have been incorporated as special permit conditions on the project's 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 adjacent to the site of an existing power generating facility, the Nissequogue Cogen Partners (NCP) cogeneration facility located on the SUNY campus. The proposed site is a 1.5 acre parcel that is located wholly within the SUNY physical plant services complex that is approximately 12 acres in size. The project will be located on Gymnasium Road, approximately 650 feet east of NYS Route 25A in Stony Brook, Town of Brookhaven, Suffolk County, Long Island.

The entire project area is zoned "B Residence 1 District" by the Town of Brookhaven. The project will be bounded on the west by the existing NCP facility, on the east by buildings housing the SUNY physical plant services personnel, on the south by additional plant service buildings, and on the north by the SUNY warehouse and Gymnasium road.

NYS Public Service Law: This project is subject to review pursuant to New York State Public Service Law (PSL) section 68, and requires a Certificate of Public Convenience and Necessity (CPCN) from the Public Service Commission to construct and operate a 79.9 MW natural gas-fired combined- cycle facility. The Petition for the CPCN was filed on January 23, 2003.

Other Regulatory Provisions: In addition to the specific regulations cited above, the application is being processed by DEC Staff pursuant to Environmental Conservation Law (ECL) Article 3, Title 3 (General Functions), 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/ Part 201-5 preconstruction permit, and a Phase II acid rain permit pursuant to 40 CFR Part 72 as incorporated by reference at 6 NYCRR §200.10

SEQRA Status: Pursuant to the State Environmental Quality Review Act ("SEQR", ECL Article 8 and 6 NYCRR Part 617), Long Island Power Authority (LIPA), as lead agency, has determined that the project will not result in significant adverse environmental impact. LIPA issued a Negative Declaration on January 21, 2003.

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. 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) emissions. The public comment period on the draft PSD permit will run from the date of publication of this public notice until March 8, 2003. Comments must be postmarked no later than March 8, 2003. 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) NYSDEC Region 1, SUNY Campus, Loop Road, Building 40, Stony Brook, NY 11790-2356. Contact John Pavacic. Tel:631-444-0365.

(3) Emma S. Clark Memorial Library, 120 Main Street, Setauket, NY 11733. (631) 941-4080

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