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Inter-Power (DEC) - Recommended Decision June 2, 1992

Recommended Decision, June 2, 1992

STATE OF NEW YORK
BOARD ON ELECTRIC GENERATION
SITING AND THE ENVIRONMENT Case 80010

Application by Inter-Power of New York, Inc., for a Certificate of
Environmental Compatibility and Public Need to construct and operate a 210 Mw fluidized bed,
coal fired cogeneration facility in the Town of Halfmoon, Saratoga County, New York.

Daniel E. Louis, Administrative Law Judge

Report on Remand by Associate Examiner

This report is submitted independent of the presiding examiner's recommended decision, at her request, due to the expedited schedule ordered by the Siting Board. It is intended that this report be considered by the Board in addition to the presiding examiner's recommended decision in rendering a determination on this project.

This report is supplied to all active parties of record so that exceptions may be filed with the Board.

I. Introduction

A. Proceedings

This case was remanded by the Siting Board in June 1991 to complete an air emission inventory, model those air emissions and evaluate the results consistent with applicable regulations and law. This report addresses: a revised emission inventory of relevant sulfur dioxide (SO2) sources; the computer modeling thereon; the boiler changes at the General Electric facility in Waterford, New York; the impacts on ambient air quality and at Lye Brook; and updates to the Health Risk Assessment.

The Siting Board has previously considered air quality and health related issues based upon the record created prior to June 1991. Those public deliberations ultimately resulted in project design changes which affect air emissions. Specifically, the project's emissions were decreased from 603.3 pounds of SO2 per hour (0.26 lb/mmBtu) to 510.4 pounds per hour (0.22 lb/mmBtu). Nitrogen dioxide (NO2) emissions were decreased from 371.2 pounds per hour (0.16 lb/mmBtu) to 278.4 pounds per hour (0.12 lb/mmBtu). The stack height was increased from 350 feet to 400 feet.

These net changes result in decreased air quality impacts because the ambient concentrations were quantitatively reduced. (tr. 10859). These project design changes and the revised air emission inventory and the modeling thereon, were evaluated in the remand proceeding. Inter-Power's maximum stack emissions, as revised based upon the Board's earlier vote to certify the plant and based upon all three boilers operating at 100% capacity, are set forth below in Table 1. The most current engineering design details in addition to the above are as follows: Stack Diameter-16.1 ft; Exit Velocity-60.0 ft/sec; Volumetric Flow-735,000 ACFM; Exit Temperature-416.5 degrees K; Generating Capacity 210 Mw; Heat Input-2,320 x 106 Btu/hr; Steam Production-1.71 x 106 16/hr; Heating Value-11,000 Btu/lb minimum; Firing rate-up to 99.0 tons/hr; Sulfur Content-1.87% maximum and Ash Content 20% maximum. (Ex. 328) Bracketed material indicates the emissions based upon the initial application.

TABLE 1
POLLUTANT lb/mmBtu ANNUAL EMISSIONS (tpy) ANNUAL EMISSIONS (lb/hour)
New Previous New Previous
SO2 0.22 2236 [2642] 510.4 [603.3]
NOx 0.12 1219 [1626] 278.4 [371.2]
CO (0.10) 2032 [same] 464.0 [same]
PM10 152 [same] 34.8 [same]
NMHC 38 [NA] 8.6 [NA]
Selective Non-Catalytic Reduction (SNCR); Urea injection will be used for NOx control.

(Sulfur dioxide will be controlled by dry limestone injection and a fabric filer baghouse using a pulse jet cleaning mechanism. Mercury and trace metals will be controlled through use of the fabric filter and limestone injection into the furnace.)

Not presented in this report is a summary of the many procedural disputes addressed by the hearing examiners throughout these proceedings. To the extent these procedural matters may be further considered by the Board, the rulings of the presiding and associate examiner made in this remand are incorporated by reference.

Also not included in this report are the matters concerning the need issue which includes information regarding the power contract between Inter-Power and Niagara Mohawk, a change in available capacity in New York, newly projected long run avoided costs and these costs' implications on the economics of the plant. Pursuant to the direction of the Board on May 8, 1992 the parties will address the 'need' issue in their briefs on exception to the presiding and associate examiner's reports. Consequently, this report does not address any balancing between the need for the project and the environmental impacts.

B. Record Development

The revised air emission inventory was not in final form at the time the Intervenors filed their testimony in September 1991. Subsequent changes to the inventory were made in November 1991 at which time the base line inventory was established. Modeling was subsequently completed and submitted by the applicant in December 1991. The state agencies filed supplemental testimony in February 1992. Intervenor parties did not, with limited exception, file additional testimony to that filed in September 1991. (Mass. letter/reply brief at 2) Accordingly, the majority of the Intervenors air quality related testimony was grounded in an inventory that was updated after this testimony was filed.

The record of this proceeding contains Intervenors' numerous motions respecting these later inventory revisions, the rulings thereon and the Board's Order directing the hearing to continue in reviewing the latest inventory information and the modeling thereon.

II. The Air Emission Computer Modeling

A. Overview

Computer modeling is used to project impacts from a source taking into consideration a host of factors in the physical world. The modeling outcomes then are nothing more that the synthesis of the input information and the parameters of the computer program. The output represents a projected concentration of a pollutant, which in reality may or may not ever occur. The following discussion explains how modeling fits into the regulatory scheme.

By way of introduction, the PSD program is intended to protect the air quality from deteriorating in areas that comply with the National Ambient Air Quality Standards ("NAAQS"). Pollution from existing sources reduces the margin which remains for new sources to pollute without causing violation of the NAAQS. The baseline of existing pollution which would be used to evaluate the available increments for new sources was established at the outset of the PSD program. Increment expansion sources are those that have reduced their operations after the commencement of the PSD program and allow more increment to be consumed by others. Increment offsetting sources are those new facilities that replace existing sources in situations where the latter retains operating capability. (Ex. 280 at 15-18)

In this case, the air quality modeling consisted of a PSD increment consumption analysis for the Capital District, a Class II area, a PSD increment consumption analysis for the Lye Brook Wilderness area, a Class I area, and a NAAQS compliance demonstration. A table presenting the NAAQS and PSD standards follows below.

TABLE 2
APPLICABLE STANDARDS
3-Hour (ug/m3) 24-Hour (ug/m3) Annual (ug/m3)
SO2 NAAQS 1,300 365 80
SO2 Class II Increment 512 91 20
NO2 Class II Increment ---- ---- 25
SO2 Class I Increment 25 5 2
NO2 Class I Increment ---- ---- 2.5

The modeling programs used in 1989 and 1991 differed in that an updated ISC computer model was used in 1991 and that additional 'nearby' and 'other' sources were used for estimating annual NAAQS impacts. The new modeling uses the same air quality impact models [i.e. the RTDM, Complex I and ISC models] with the exception of an updated ISC model whose use is not significant to the outcome. (Ex. 304 at 2-3) Inter-Power's December 1991 modeling supplement was approved by DEC staff.

The NAAQS for SO2 and NO2 are the same as the New York State standards codified in 6 NYCRR Part 257. The primary standards embodied in the NAAQS establish levels designed to protect public health. The secondary standards embodied in the NAAQS establish the acceptable limits of environmental impacts.

The majority of the guidance used to assess the modeling procedures and protocols applied in this case was taken from the USEPA's publication entitled "Guideline On Air Quality Models (Revised)" and the USEPA's New Source Review Workshop Manual of 1990. These documents are important because they form the methodology used in evaluating this project.

Under the modeling schemes contained in the USEPA guidance or workshop manual, modeled exceedances of various standards may require alternative or refined modeling. The guidance allows the use of models that would more accurately depict projected, but conservative air quality impacts. That approach is justified in order to balance the overall modeling approach with reality. The methodology or protocol allows adjustments or refinements to the overall modeling scheme in order to more accurately project impacts. Guideline on Air Quality Models (Revised) section 11.0 'Regulatory Application of Models', section 10.1.1 'Modeling Uncertainty'. Also, New Source Review Workshop Manual section II.D3. 'Screening Procedures: Level 3". In addition to the USEPA guidance and workshop manual directives, supplemental modeling guidance from USEPA was also used on a case-by-case basis. Again, the approach is to render a more accurate, although conservative, estimate of air quality impacts.

Because the USEPA guidance information is sometimes not clear, and indeed one EPA region may differ in its use from another EPA region (July 5, 1988 USEPA Emison Memo) applicants often seek approval of a selected methodology prior to running the modeling, if time permits. When specific requests to utilize different models and protocols are not timely answered by the USEPA, applicants sometimes forge ahead at the risk of re-running or modifying a modeling protocol criticized by USEPA. (tr. 10528)

B. Nearby and Other Sources

When completing a National Ambient Air Quality (NAAQS) inventory, sources are classified as 'nearby' or 'other'. Depending upon which sources are included in either classification impacts on the overall modeling result. Including more sources in the 'nearby' class would increase the about of emissions in the ambient air quality and thus would not be as favorable to an applicant compared to the 'other' designation.

All 'nearby' sources are required to be explicitly modeled. (NSR Manual at C.59) Nearby sources involves the use of maximum permitted allowable emissions in concert with design and operating levels. Sources classified as 'other' means sources which do not fit into the classification of 'nearby' and such source emissions are modeled based upon actual levels.

USEPA requires the use of various computer modeling to assess air quality impacts from a proposed source. This is necessary due to the complexity of the physical universe which surrounds us. To achieve a reasonable estimate of impacts on ambient air quality, USEPA has provided an outline or guidance methodology to be used in projecting these impacts. Even with such methodology, case-by-case information can result in deviations from the guidance protocol used by USEPA. Use of the protocol sometimes results in overestimating emissions by double counting background concentrations and emissions from a specific source. In most cases, computer modeling also has a built-in conservatism which tend to overestimate pollution concentrations.

The EPA modeling protocol is designed to present a reasonable approximation of physical reality. The protocol is not sophisticated enough to assure precision and so to provide a margin of safety there are many unrealistically conservative assumptions that are built into the model. It is well accepted by EPA, however, that particular applications of the model can be varied if better reflect reality so long as the predictive value of the model is not impaired.

The decision to amend the protocol is a frequent occurrence in the review of new source application. It is only done with the approval of the regulatory agency after an applicant has demonstrated that circumstances exist warranting a change and that the change still can be expected be reflective of actual conditions.

The flexibility in the protocol allows inclusion of sources in the cumulative analysis that have been identified as having possible interaction with a source under review. DEC staff's screening computer program eliminated sources that the Intervenors' consultants thought should be included. The reason these sources were eliminated was because of Inter-Power's modeling that exactly delineated the significant impact area if Inter-Power were to be certified. Because of this exactly drawn significant impact area, it was easy to identify those sources to be included into 'nearby' or 'other'. Intervenors' consultants sources of concern were outside of this area and thus would not interact with Inter-Power's emissions. Of the 43 sources Intervenors' said should be included, 35 were included by the DEC staff, 8 were evaluated (Ex. 268), three were discounted because they were shut-down, had no emission points, were under a 100 tpy threshold or were without valid permits.

Intervenors' fault the improper use of 'nearby' and 'other' classifications when evaluating the annual NAAQS impacts. They argue that by not screening for these sources consistent with USEPA guidance the applicant eliminated sources from its modeling that should have been included. (Mass Reply letter/brief at 3).

However, the protocol approach used to evaluate annual impacts is more stringent than the intent of the guidelines and was resolved on March 5, 1992 (Ex. 405 and 406) If all sources were treated as 'nearby' Inter-Power's, annual sulfur dioxide impacts would comply with federal air quality standards.

It is important to note that the 'other' designation still allows for overestimation in emissions. This is because background sources, which include 'other' sources are already counted. In addition, even using actual emissions can overstate usage since the source may not be operating at all hours of the year at 100%. Consequently, this double counting and overestimating from 'other' sources provides some conservatism in modeling outcomes.

Nearby includes maximum hours of operation emissions times annual operating hours. The result under this circumstance is to again overestimate the amount of pollution because all sources do not operate at the maximum allowable permitted at all times. The result of using these emission numbers is to overstate the emissions from the source, and after modeling, overstate the impacts.

Inter-Power did additional modeling to alleviate any concerns USEPA might have by re-running the models with more conservative input data. Based upon USEPA's finding fault with Inter-Power's initial September 1991 approach (USEPA August 12, 1991 letter to Inter-Power) Inter-Power has resubmitted its justification using its more conservative modeling above which includes sources that would normally be excluded from review. (February 4, 1992 letter to USEPA, Ex. 405 at 1). The DEC staff agree with the approach undertaken by the applicant. The net sum of this approach is to overstate all emissions and Inter-Power's plant still meets acceptable limits.

As addressed later in this report, the modeling projects that Inter-Power will contribute to a NAAQS violation and thus must secure an offset. The General Electric Silicone Products Division (GESPD) has agreed to reduce its emissions from using 1.5 % sulfur in fuel content to 1.3% thus eliminates the modeled NAAQS violation. This further lessens the resulting impacts that might be caused by changing point sources from 'nearby' to 'other'.

C. Major and Minor Sources

Intervenors argue that air emission sources classified as minor or less than 100 tpy were impermissibly excluded by DEC staff from the inventory. (Mass Initial brief at 18) The regulatory authority most often referenced on this dispute is EPA's New Source Review Workshop Manual at C.31 and 40 CFR Part 52. The manual allows flexibility in judging whether a source should be considered major or minor. (Ex. 380 at 11/14/91 letter) Because one could debate whether a 100 tpy source should have been included in some instances, DEC staff required Inter-Power to model these referenced sources at a 100 tpy level as a conservative measure to fully characterize the regional air emissions in measuring cumulative impacts. (tr. 9346). (DEC I brief at p. 6). This led to the inclusion of ten sources that would have been otherwise eliminated. Sources less than 100 tpy were not included in the modeling. Including 100 tpy sources in determining any NAAQS violation is not specifically authorized by the federal PSD regulations in 40 CFR section 52.21. (IP Initial brief at 15). Accordingly, employing more conservative information that normally could be excluded must result in increased air quality impacts projected by Inter-Power. Such a result not favorable to an applicant lessens any arguments about improper elimination of these smaller sources.

D. Fuel Use

Intervenors assert that DEC staff has given Inter-Power an 'artificial credit' by allowing 1.5% sulfur in fuel content to be used in assessing background emissions instead of 2% sulfur in fuel content. (Mass I brief at p. 16). They state that the federally enforceable New York State Implementation Plan (SIP) limits sulfur in fuel content to 2.0% and thus any lower limit may not be federally enforceable. (tr. 10867). Intervenors further rely on a USEPA letter of August 12, 1991 to support their proposition that a 'blanket' exception to using 2% sulfur in fuel content oil should not be allowed when modeling for the PSD increment expansion. (Ex. 280)

New York air sources are utilizing 1.5% sulfur in fuel content in accordance with state regulation. (6 NYCRR Part 225-1, Table 2) Since such is the case, 1.5% sulfur in fuel limits, while not federally enforceable, would be enforceable through state regulation, 6 NYCRR Part 225. Moreover, the State Acid Deposition Control Act (SADCA) adopts a strategy to require use of 1.5% sulfur in fuel limits to improve environmental quality, further supporting the use of this lower limit in any modeling.

With regard to the USEPA August 12, 1991 letter respecting a case-by-case review of not using 2% sulfur in fuel content, such review was completed by Inter-Power and DEC staff, as was proposed by DEC to USEPA on August 29, 1991. (Ex. 407). In later correspondence with USEPA, they favorably reviewed the November 1991 inventory, which includes the use of 1.5% sulfur in fuel content use. (Ex 382 and 403) USEPA's reliance on the November inventory using the 1.5% sulfur in fuel limitation strongly implies the acceptability of that limitation. I find the use of the lower sulfur fuel limit appropriate to the modeling program since that fuel limit is duly codified in state regulation and SADCA.

Intervenors' assert that actual fuel use of facilities is in excess of 1.5% and therefore Inter-Power cannot rely on the 1.5% sulfur in fuel limitation for modeling. (CCE Reply brief at 23) The actual fuel use information indicates excessive sulfur in fuel ranging from 1.51% to 1.57% at five of the thirteen facilities inventoried. Although these limitations are in excess of the 1.5% sulfur content, these exceedances do not appear to be significant in view of the conservatism in the modeling program. Assuming arguendo they are significant to the modeling, emissions reduction from the Norlite facility would reasonably discount or offset this small increase in the sulfur content in fuel.

E. Excessive Emissions

Intervenors also assert that emissions in excess of a facility's permitted limits should have been used in the inventory and not the maximum permitted emissions allowed by DEC. (Ex. 413). They argue that the net effect of using the maximum permitted emissions and not excessive emissions from these plants when modeling air quality, would necessarily result in skewing the modeling results favorably toward the applicant.

Sources emitting in excess of permitted limits are subject to DEC staff enforcement and compliance actions. These have begun (DEC letter of November 18, 1991 to USEPA), and to date have resulted in a number of these sources revising their emissions. If these excessive emissions were to be used in a modeling program the net effect would be to penalize a new applicant for the non-compliant activities of others. Accordingly, it is reasonable to exclude that portion of the emissions which exceed permit limits for purposes of a corrected inventory.

F. Sulfur Dioxide Emission Rate

Intervenors' assert that Inter-Power incorrectly used a 3-hour averaging period with an emission rate of 0.22 lb/mmBtu instead of a more conservative 1-hour averaging period using the 0.26 lb/mmBtu rate. (CCE Initial Brief at 12) The 3-hour averaging period is the standard and not the 1-hour averaging period; therefore Inter-Power used the correct averaging period in modeling. They also used the correct emission rate since the Board required a 0.22 lb/mmBtu limit in earlier phases of this proceeding. (DEC Reply Brief at 10)

G. Background Sulfur Dioxide Emissions

Inter-Power previously used a background concentration of 160 ug/m3 in its initial modeling for the 3-hour averaging period. This background concentrations was changed in the remand proceeding to 26 ug/m3 SO2 for the 3-hour averaging period. (tr. 11199) The 160 ug/m3 background concentration was taken from an average of the maximum actual monitored background. The 26 ug/m3 was derived by taking the worst case result from a computer modeled output and finding the averages thereon. (tr. 11199). If the 160 ug/m3 background concentration was used with the addition of the new inventory information, the NAAQS violations would increase by 25%.

The use of the 26 ug/m3 background concentrations was derived from hourly observed background values. Use of the hourly background values is more representative of the actual background than averaging the highest values at any monitoring station. The methodology used to determine the hourly background levels of 26 ug/m3 was detailed in the 1988 application, although the applicant did not use that methodology until the remand hearing.

H. GESPD Incinerators

GESPD operates three on site incinerators which produce SO2. (tr. 11990-92) These units will be restricted in operation through a permit modification proposed by DEC which restricts SO2 emissions to below 100 tpy each. (May 7, 1992 letter to DEC brief). This modification eliminates these sources as significant contributors to the background or cumulative emissions.

I. Downwash

Downwash is the phenomenon of increased impacts in the immediate vicinity of a source having too short a stack relative to the height of the surrounding buildings. DEC staff and the applicant approach the issue by saying that only two sources, GE Silicone and Tagson Paper are in need of modeling since these sources in fact impact a significant impact level by exceeding a designated air quality concentration. Other sources that do not impact a significant impact level are not required to be modeled by DEC staff. (CF Mass. Reply letter brief at 2 with Ex. 405 at 9).

USEPA has yet to approve of this methodology and uncertainty led Inter-Power to further refine its approach. As an extra precaution, Inter-Power ran further computer runs on downwash sources previously reviewed in its earlier application. These runs show these sources to be outside of the SIL and thus it would be acceptable not to include them in any further modeling. (Ex. 405 at 10). Inter-Power's analysis was submitted to USEPA on February 4, 1992 in response to USEPA's comments on downwash that are adverse to Inter-Power. (Ex. 382 at 2). The only information that contradicts Inter-Power's approach is the USEPA's letter of December 12, 1991 (Ex. 382) which letter is based upon Inter-Power's September 1991 testimony. The new analysis preformed by Inter-Power demonstrates that even if 'other' sources were modeled they fall outside of the significant impact area and thus, on that basis downwash was appropriately modeled.

Intervenors offered a video tape of sources at the Watervliet Arsenal and elsewhere to support the assertion that these sources are not constructed consistent with good engineering practice. The video tape cannot be used for that purpose since it is impossible to determine from the video tape that these sources were inappropriately recorded in the DEC or independent auditors source inventory. Consequently, the video tape cannot be used with any reliability.

III. Environmental and Health Impacts

A. NAAQS Violations and Offsets

The following Table compares the previously modeled impacts with the latest ones. The bracketed material contains the previous impacts recorded before the inventory revision and remodeling. (compare Ex. 406-A148 with the initial application table 6-43)

TABLE 3
NAAQS Standards Maximum Impact (ug/m3) Maximum Impact,
Background & All Planned
Sources & Inter-Power
(ug/m3)
New Previous New Previous
SO2 3/hr. 1300 ug/m3 175.72 [211.0] [374.2]
SO2 24/hr. 365 ug/m3 29.59 [ 35.5] [135.2]
SO2 Annual 80 ug/m3 3.80 [ 4.7] [ 30.4]
NO2 Annual 100 ug/m3 2.07 [ 2.9] [ 26.3]

Modeling based upon the November base line inventory reveals several locations where Inter-Power significantly contributes to modeled violations of the NAAQS. (tr.11963). This occurs at times when other plants are also operating and thus the incremental loading from Inter-Power is enough to exceed the significant impact level thereby triggering a need for offsets.

The air modeling revealed that Inter-Power would need to obtain SO2 emission offsets from the GESPD to eliminate a modeled NAAQS violation. Inter-Power proposes to secure an offset from GESPD in the form of reduced sulfur in fuel limitations from 1.5% to 1.3% at GESPD emission points Nos. 2 and 3. (ex. 397, tr. 11769). This would result in a reduced impact of 0.94 ug/m3 and is thus below a significance level of 1 ug/m3 established in USEPA guidance.(Ex. 416). GESPD has agreed to this reduction. (Ex. 396)

The background concentrations in the vicinity of the site can also be reduced dramatically by reducing the nearby Norlite SO2 air emissions. DEC staff has secured a permit modification from Norlite to reduce its SO2 emissions from 300 lb/hour to 30 lb/hour per kiln. (Ex. 405-A37 and A38) With this reduction, the emissions from Inter-Power are not projected to cause or contribute to a violation of the NAAQS limit of 1300 ug/m3. In fact, receptor #124 has already recorded a total background SO2 concentration of 1290.94 ug/m3 resulting from other sources (Ex. 398). The NAAQS study revealed 10 existing sources that have differing levels of impacts. Accordingly, these are and will continue to be investigated by DEC staff. (Ex. 348 and also Ex. 413, 413a, 420 and 421) Adjustments made at these sources will be included as SIP revisions.

In addition to the Norlite emission reduction, other facilities contributing to the air shed modeled at receptor #124 can also be expected to have their emissions reduced. While Norlite is by far the largest contributor, other plants such as the Watervliet Arsenal and Coated Abrasives are large contributors to the impacts at receptor #124.

The addition of Norlite's reduction adds another level of reduced emissions that impact the receptors and thus inclusion of Norlite in addition to the offsets above, allows compliance with NAAQS.

There is no overlap of annual SO2 impact areas based upon additional computer modeling. When this overlap is calculated at receptor #184 which is impacted by the Inter-Power source, the concentration is reduced to 54.2 ug/m3 which is below the worst case annual 'standard' of 54.9 ug/m3. Consequently, no offsets are required for annual SO2 impacts.

As a comparative gauge of Inter-Power's air quality impact in the region, we can review the projects' consumption of the available PSD increments and its contribution to nitrogen oxide concentrations. A summary of the maximum consumption of available PSD increment in the Class II Capital District area is attached as Table (Ex. 406-A150). Nitrogen oxides annual average impacts are presented in Table (Ex. 399-A155) attached to this report. Both tables show the relative concentration contributions.

Vermont argues to reduce the emissions from 0.22 lb/mmBtu to 0.208 lb/mmBtu or otherwise reduce emissions by 5.6% through use of a lower sulfur content coal of about 1.7%. Based upon the NAAQS compliance above, there is no need for further emission reductions to satisfy NAAQS or any impacts on the Lye Brook Wilderness area in Vermont, discussed below. In fact, USEPA has issued a draft determination on May 18, 1992 stating the acceptability of the PSD modeling results in relation to Lye Brook. Official Notice is taken of the USEPA Region II PSD determination made on May 19, 1992 to approve Inter-Power's PSD application and further, that the Federal Land Manager has agreed that Inter-Power's permit conditions resolve any concerns about the facility's impact on Bourn Pond located in the Lye Brook Wildness Area. (Attachment II, draft PSD permit to May 19, 1992 letter)

B. General Electric Silicone Products Division (GESPD)

New information about GESPD's intention to use a gas fired boiler was not previously considered by the examiners' or the Board. The new GESPD boiler configuration is important since Inter-Power had claimed in the previous rounds of hearing that its lower emissions would offset the GESPD emissions and thus environmental benefits would result. In previous hearings, it was projected that the installation of Inter-Power would "backdown" the GESPD oil units. Thus the air emissions of those units would be less and the pollution impact to the near-field would also be less. This claimed benefit would be reduced given that the GESPD is switching to natural gas fuel. Using natural gas reduces SO2 emissions to below those of the previous two oil fired units. The revelation that GESPD was to switch to natural gas was a contributing factor in the Board's decision to revoke its vote to certify the proposed plant.

GESPD plans to change its boiler configuration from two number 6 oil-fired units (using 1.5% S/oil) with a total rated capacity of 124 mmBtu/hour, to one large natural gas fired unit. Low sulfur number 2 oil (at 0.5% S/oil) will be used as a backup fuel due to the limited availability of natural gas at the GESPD. The proposed new natural gas fired boiler at emission point #6, is rated at 308 mmBtu/hour, and would increase GESPD's total energy capacity by about 50% although GESPD would only require an increase of 10% to meet existing (1992) production goals. (tr.10622). Recent GESPD plant expansion, however will ultimately consume the increase in boiler capacity, and, after GESPD determines Inter-Power to be a reliable steam supplier, GESPD would then rely on Inter-Power to supply its steam needs. (tr. 10941)

Two exhibits (Ex. 346 and 347) portray the comparative emissions between the oil and gas fired units with and without Inter-Power. Overall, the SO2 emissions projected as potential emissions resulting from the larger gas fired units are comparable to those projected for the two smaller oil fired units.

The oil units were previously calculated to emit 1710 tpy SO2, (1246 tpy SO2 actual). With Inter-Power on-line the emissions would be reduced to 1539 tpy SO2. The revised SO2 emissions would be 2376 tpy SO2. Replacing the oil units with the new gas boiler would yield 1729 tpy SO2. With Inter-Power on line the emissions would be reduced to 1556 tpy SO2. (Ex. 346). The difference between the oil and gas units with Inter-Power on line is 171 tpy SO2 and 173 tpy SO2, respectively. (Ex. 346)

The differences are more dramatic however regarding NOx. Using the methodology above, the NOx will increase by about 570 tpy with the gas fired units in operation. Using the same methodology again but with actual rather than maximum potential emissions results in emissions being reduced by 173 tpy SO2 and 103 tpy NOx. The net reduction remaining after including Inter-Power's operation would be 562 tpy SO2 and 551 tpy NOx. (Ex. 347). Thus, these emissions are comparable.

Intervenors argue that the reductions in SO2 and NOx cited above are inflated since GESPD would not be expected to have its boilers reduced in operation by at least 90% with Inter-Power on line. To support project opponents' contention that a 10% standby is too low, they cite references to General Electric's Mr. Lindner who stated at hearing that he could not determine what percentage of GE's operation would be necessary for standby operation.

These arguments should not be held to support the proposition that the net emission reductions projected above and contained in Exhibits 346 and 347 are inflated. Rather, the projections appear to be reasonable based upon the expected operation at GESPD. In fact, GESPD witness Lindner fully expects the expanded GE operation to utilize the increased capacity of its new natural gas fired boiler until Inter-Power is on line. In addition, the contract between Inter-Power and GESPD states that the standby status is actually about 5% of GESPD steam requirements and thus even a greater reduction of SO2 and NOx would be realized based upon GESPD's own expectations. Moreover, Inter-Power is supplying steam to GESPD at a 40% discount in cost which is a strong incentive to utilize a 10% or even less hot standby status as confidence grows in Inter-Power's ability to supply steam reliably. Based upon these reasons, the SO2 and NOx emission reductions presented above represent a reasonably conservative estimate of emission levels to be emitted.

C. Lye Brook Wilderness Area (Bourn Pond)

The Lye Brook Wilderness Area is classified as a Class I area for purposes of a PSD analysis. Inter-Power took a very conservative approach to modeling impacts at Lye Brook by using models that are recognized by the USEPA to be very conservative (i.e. overstated) in assessing air quality impacts. In addition to its own modeling effort, Inter-Power used the specific air quality model suggested by Vermont, the complex terrain model, which resulted in air quality impacts less than those found by Inter-Power. Use of the complex terrain model is discussed more fully below. In any event, Inter-Power is projected to contribute a 0.168 ug/m3 SO2 impact to Lye Brook in addition to the background impacts projected in the previous hearing. The previous hearing projected impacts from Inter-Power of 0.3 Kgs/ha-yr SO2 at an emission rate of 0.26 lb/mmBtu SO2. The reduced emission rate of 0.22 lb/mmBtu SO2 and the increased stack height modeled along with the information from the revised inventory, results in the sum of the SO2 impacts to be lower than those previously evaluated in the prior hearing. (tr. 10394).

The table below summarizes the maximum consumption of available PSD increment in the PSD Class I, Lye Brook Wilderness area.

TABLE 4
Averaging Period PSD Increment (ug/m3) Increment Consumed (ug/m3) Inter-Power's Contribution (ug/m3) Percentage of Increment Consumed
SO2 3-hr. 25 14.30 7.05 66%
SO2 24-hr. 5 2.29 1.19 44%
SO2 Annual 2 0.361 0.168 10%
NO2 Annual 2.5 0.148 0.091 4%

(compare Ex. 406-A152/Ex. 386 Table C with Application Table 6-36 at Page 6-200). Note that the previous percentages of the increment consumed is 70% for the 3-hour, 53% for the 24-hour, 10% for the annual and 5% for the nitrogen oxides at annual.

Even though the sulfur dioxide reductions are less than those previously evaluated, USEPA has required that 2,236 tpy of sulfur dioxide be eliminated through offsets to protect the Lye Brook Wilderness Area. The net result is to completely offset the amount of sulfur dioxide from Inter-Power. (USEPA draft permit at Attachment II, page 13 of 14) The import of this condition negates any remaining arguments about Inter-Power's impact on this sensitive receptor.

D. Health Risk

The initial health risk assessment (HRA) evaluated in the prior proceeding demonstrated that the health-related impacts from Inter-Power were within acceptable limits though it noted that there might be impacts on heavily-exercising individuals with respiratory difficulties at the maximum impact point. It was noted that the area of maximum impact was Rice Mountain which is located somewhat east of the proposed site and that while the project would also contribute a small percentage of SO2 and NO2 to the air shed occupied by other emitters, only a few sensitive persons such as asthmatics would be affected.

Employing updated air inventory data results in an increase in the number of times when sensitive individuals would be affected by the concentration of pollutants in the air. The new modeling also results in changing the point of maximum impact from Rice Mountain to the Alcove Reservoir located south of the proposed plant. Further, the new information reveals that the emissions from Inter-Power would contribute a small percentage of SO2 and NO2 to the air shed occupied by other sources. Specifically, Inter-Power's contribution to the calculated maximum 3-hour SO2 levels is less than 3% and to the calculated maximum 24-hour levels is less than 5%. (tr. 10934). The number of times Inter-Power's emissions, including background and other planned sources emissions would exceed the 24-hour NAAQS is six days and two days for the 3-hour NAAQS, versus four days modeled in the initial application. The actual increase in the number of NAAQS violations revealed in the new inventory and subsequent modeling stems from sources other than Inter-Power.

Intervenors' expert witness medical doctor argues that the maximum permitted values for SO2 and NO2 used to judge the acceptability of the plant with the NAAQS limits should also be used in the HRA. Without Inter-Power in operation and including the existing emissions at the GESPD and the other planned sources proposed in the region, and modeling these at their proposed maximum emission rates, would lead to significant health impacts; thus NYSDOH argues that the NAAQS modeling is highly conservative and that a better estimate should be based upon use of actual and estimated air quality.

Had the HRA's projections considered the NAAQS information instead of actual measured background data, the HRA's reported impacts would have undoubtedly increased. The NYSDOH's conclusion that the NAAQS exceedances result from other sources and that the applicant contributes only 3% to the total concentration is based upon a combination of actual background and estimates of increases and not overconservative NAAQS modeling information. It seems prudent to rely on actual information with additional estimates rather than highly conservative NAAQS information to give a more accurate picture. This rationale is supported in that the NYSDOH recognized the difficulty in analyzing a project where the majority of the pollution impacting a receptor is from other sources. In attempting to evaluate the degree of impact at the Alcove reservoir, the NYSDOH stated that the facility as proposed might not be the preferable option from strictly a public health perspective. (tr. 10930-10997).

The facts above provides sufficient information for the Board to evaluate in balancing the merits of the project with the associated health-related impacts.

IV. Summary Conclusions

The modeling preformed by Inter-Power, as checked by the DEC staff and in some instances by the USEPA, is acceptable. The modeling effort reflects conformity with modeling protocols and the guidances, and where the modeling or protocol was adjusted, the adjustment was consented to or advised by the DEC staff. Even though USEPA has not given final approval to all of the adjustments made, sufficient reasonable information exits in the record to rely upon the modeling results presented in the Article VIII application. In addition, USEPA's recent announcement of its intention to issue the PSD permit to Inter-Power gives further support to Inter-Power's modeling. (USEPA May 19, 1992 letter to Inter-Power)

The GESPD has agreed to reduce its sulfur in fuel limitations from 1.5% to 1.3% at GESPD emission points Nos. 2 and 3 which will offset Inter-Power's sulfur contribution. The Norlite SO2 contribution to the air shed will also be reduced by modifying its existing permits thereby accounting for a 90% reduction in SO2. Such reduction will be included in the New York State Implementation Plan.

The health risks associated by the Inter-Power project will contribute to instances of respiratory difficulty to exercising asthmatics at the maximum point of impact. These estimates are based upon less conservative information of expected actual background and estimates rather than the modeled concentrations resulting from use of NAAQS modeling.

Discussion

The imprecise nature of the modeling projections and the inherent flexibility in the USEPA protocol confound rather than clarify the issues. I am left to evaluate air dispersion modeling evidence that is theoretical in nature and are projections as to what really exists or will exist in the future. I am asked to rely on a USEPA protocol for guidance since air dispersion modeling is grounded in that information. But that methodology contains numerous exceptions to the rule, either by design or omission, that allows alternative methods to be considered. Given the nature of air dispersion modeling and the protocol, the party best able to support their position are more favorably considered.

The Intervening parties presented information through its consultants that predated much of the modeling re-analysis. Much of the more recent information supplied by the state agencies and the applicant was supported by USEPA whose protocol and commentary was used to evaluate the modeling. When deviations from the protocol are sanctioned by USEPA, then contrary information must be given less weight unless an alternative can be justified. When deviations from the protocol are not sanctioned by USEPA and they remain silent, the weight of the evidence must fall to the party who more fully supports the alternative rationale. After marshalling the evidence and putting in its proper perspective, the weight of the evidence more fully supports project proponents.

For the New York State Department
of Environmental Conservation

_____________/s/_____________
Daniel E. Louis
Administrative Law Judge

Dated: June 2, 1992
Albany, New York

cc: Board Members
Active Parties

TABLE (EX. 406-A150)
SUMMARY OF MAXIMUM CONSUMPTION OF AVAILABLE
PSD INCREMENT IN CLASS II AREAS(c)
Averaging Period PSD Increment Increment Consumed(a) HCP Percentage(b)
3-hr. SO2 512 -53.32 175.72 31%
24-hr. SO2 91 -11.82 29.59 29%
Annual SO2 20 2.39 3.80 22%
Annual NO2 25 0.95 2.07 9%
TABLE (EX. 399-A155)NO2 ANNUAL AVERAGE IMPACT SUMMARY
Impacts at Halfmoon
Maximum Location (ug/m3)
Impacts at All Sources
Maximum Location (ug/m3)
Concentration Due to Halfmoon 2.07 0.11
Concentration Due
to Other Sources
9.17 51.69
Background 19.30 19.30
Total 30.54 71.10
NAAQS 100.00 100.00

STATE OF NEW YORK
BOARD ON ELECTRIC GENERATION
SITING AND THE ENVIRONMENT

Case 80010 - Application by Inter-Power of New York, Inc., for a Certificate of
Environmental Compatibility and Public Need to construct and operate a 210 Mw fluidized bed,
coal fired cogeneration facility in the Town of Halfmoon, Saratoga County, New York.

Daniel E. Louis, Administrative Law Judge

Report on Remand by Associate Examiner

This report is submitted independent of the presiding examiner's recommended decision, at her request, due to the expedited schedule ordered by the Siting Board. It is intended that this report be considered by the Board in addition to the presiding examiner's recommended decision in rendering a determination on this project.

This report is supplied to all active parties of record so that exceptions may be filed with the Board.

I. Introduction

A. Proceedings

This case was remanded by the Siting Board in June 1991 to complete an air emission inventory, model those air emissions and evaluate the results consistent with applicable regulations and law. This report addresses: a revised emission inventory of relevant sulfur dioxide (SO2) sources; the computer modeling thereon; the boiler changes at the General Electric facility in Waterford, New York; the impacts on ambient air quality and at Lye Brook; and updates to the Health Risk Assessment.

The Siting Board has previously considered air quality and health related issues based upon the record created prior to June 1991. Those public deliberations ultimately resulted in project design changes which affect air emissions. Specifically, the project's emissions were decreased from 603.3 pounds of SO2 per hour (0.26 lb/mmBtu) to 510.4 pounds per hour (0.22 lb/mmBtu). Nitrogen dioxide (NO2) emissions were decreased from 371.2 pounds per hour (0.16 lb/mmBtu) to 278.4 pounds per hour (0.12 lb/mmBtu). The stack height was increased from 350 feet to 400 feet.

These net changes result in decreased air quality impacts because the ambient concentrations were quantitatively reduced. (tr. 10859). These project design changes and the revised air emission inventory and the modeling thereon, were evaluated in the remand proceeding. Inter-Power's maximum stack emissions, as revised based upon the Board's earlier vote to certify the plant and based upon all three boilers operating at 100% capacity, are set forth below in Table 1. The most current engineering design details in addition to the above are as follows: Stack Diameter-16.1 ft; Exit Velocity-60.0 ft/sec; Volumetric Flow-735,000 ACFM; Exit Temperature-416.5 degrees K; Generating Capacity 210 Mw; Heat Input-2,320 x 106 Btu/hr; Steam Production-1.71 x 106 16/hr; Heating Value-11,000 Btu/lb minimum; Firing rate-up to 99.0 tons/hr; Sulfur Content-1.87% maximum and Ash Content 20% maximum. (Ex. 328) Bracketed material indicates the emissions based upon the initial application.

TABLE 1
POLLUTANT lb/mmBtu ANNUAL EMISSIONS (tpy) ANNUAL EMISSIONS (lb/hour)
New Previous New Previous
SO2 0.22 2236 [2642] 510.4 [603.3]
NOx 0.12 1219 [1626] 278.4 [371.2]
CO (0.10) 2032 [same] 464.0 [same]
PM10 152 [same] 34.8 [same]
NMHC 38 [NA] 8.6 [NA]
Selective Non-Catalytic Reduction (SNCR); Urea injection will be used for NOx control.

(Sulfur dioxide will be controlled by dry limestone injection and a fabric filer baghouse using a pulse jet cleaning mechanism. Mercury and trace metals will be controlled through use of the fabric filter and limestone injection into the furnace.)

Not presented in this report is a summary of the many procedural disputes addressed by the hearing examiners throughout these proceedings. To the extent these procedural matters may be further considered by the Board, the rulings of the presiding and associate examiner made in this remand are incorporated by reference.

Also not included in this report are the matters concerning the need issue which includes information regarding the power contract between Inter-Power and Niagara Mohawk, a change in available capacity in New York, newly projected long run avoided costs and these costs' implications on the economics of the plant. Pursuant to the direction of the Board on May 8, 1992 the parties will address the 'need' issue in their briefs on exception to the presiding and associate examiner's reports. Consequently, this report does not address any balancing between the need for the project and the environmental impacts.

B. Record Development

The revised air emission inventory was not in final form at the time the Intervenors filed their testimony in September 1991. Subsequent changes to the inventory were made in November 1991 at which time the base line inventory was established. Modeling was subsequently completed and submitted by the applicant in December 1991. The state agencies filed supplemental testimony in February 1992. Intervenor parties did not, with limited exception, file additional testimony to that filed in September 1991. (Mass. letter/reply brief at 2) Accordingly, the majority of the Intervenors air quality related testimony was grounded in an inventory that was updated after this testimony was filed.

The record of this proceeding contains Intervenors' numerous motions respecting these later inventory revisions, the rulings thereon and the Board's Order directing the hearing to continue in reviewing the latest inventory information and the modeling thereon.

II. The Air Emission Computer Modeling

A. Overview

Computer modeling is used to project impacts from a source taking into consideration a host of factors in the physical world. The modeling outcomes then are nothing more that the synthesis of the input information and the parameters of the computer program. The output represents a projected concentration of a pollutant, which in reality may or may not ever occur. The following discussion explains how modeling fits into the regulatory scheme.

By way of introduction, the PSD program is intended to protect the air quality from deteriorating in areas that comply with the National Ambient Air Quality Standards ("NAAQS"). Pollution from existing sources reduces the margin which remains for new sources to pollute without causing violation of the NAAQS. The baseline of existing pollution which would be used to evaluate the available increments for new sources was established at the outset of the PSD program. Increment expansion sources are those that have reduced their operations after the commencement of the PSD program and allow more increment to be consumed by others. Increment offsetting sources are those new facilities that replace existing sources in situations where the latter retains operating capability. (Ex. 280 at 15-18)

In this case, the air quality modeling consisted of a PSD increment consumption analysis for the Capital District, a Class II area, a PSD increment consumption analysis for the Lye Brook Wilderness area, a Class I area, and a NAAQS compliance demonstration. A table presenting the NAAQS and PSD standards follows below.

TABLE 2APPLICABLE STANDARDS
3-Hour (ug/m3) 24-Hour (ug/m3) Annual (ug/m3)
SO2 NAAQS 1,300 365 80
SO2 Class II Increment 512 91 20
NO2 Class II Increment ---- ---- 25
SO2 Class I Increment 25 5 2
NO2 Class I Increment ---- ---- 2.5

The modeling programs used in 1989 and 1991 differed in that an updated ISC computer model was used in 1991 and that additional 'nearby' and 'other' sources were used for estimating annual NAAQS impacts. The new modeling uses the same air quality impact models [i.e. the RTDM, Complex I and ISC models] with the exception of an updated ISC model whose use is not significant to the outcome. (Ex. 304 at 2-3) Inter-Power's December 1991 modeling supplement was approved by DEC staff.

The NAAQS for SO2 and NO2 are the same as the New York State standards codified in 6 NYCRR Part 257. The primary standards embodied in the NAAQS establish levels designed to protect public health. The secondary standards embodied in the NAAQS establish the acceptable limits of environmental impacts.

The majority of the guidance used to assess the modeling procedures and protocols applied in this case was taken from the USEPA's publication entitled "Guideline On Air Quality Models (Revised)" and the USEPA's New Source Review Workshop Manual of 1990. These documents are important because they form the methodology used in evaluating this project.

Under the modeling schemes contained in the USEPA guidance or workshop manual, modeled exceedances of various standards may require alternative or refined modeling. The guidance allows the use of models that would more accurately depict projected, but conservative air quality impacts. That approach is justified in order to balance the overall modeling approach with reality. The methodology or protocol allows adjustments or refinements to the overall modeling scheme in order to more accurately project impacts. Guideline on Air Quality Models (Revised) section 11.0 'Regulatory Application of Models', section 10.1.1 'Modeling Uncertainty'. Also, New Source Review Workshop Manual section II.D3. 'Screening Procedures: Level 3". In addition to the USEPA guidance and workshop manual directives, supplemental modeling guidance from USEPA was also used on a case-by-case basis. Again, the approach is to render a more accurate, although conservative, estimate of air quality impacts.

Because the USEPA guidance information is sometimes not clear, and indeed one EPA region may differ in its use from another EPA region (July 5, 1988 USEPA Emison Memo) applicants often seek approval of a selected methodology prior to running the modeling, if time permits. When specific requests to utilize different models and protocols are not timely answered by the USEPA, applicants sometimes forge ahead at the risk of re-running or modifying a modeling protocol criticized by USEPA. (tr. 10528)

B. Nearby and Other Sources

When completing a National Ambient Air Quality (NAAQS) inventory, sources are classified as 'nearby' or 'other'. Depending upon which sources are included in either classification impacts on the overall modeling result. Including more sources in the 'nearby' class would increase the about of emissions in the ambient air quality and thus would not be as favorable to an applicant compared to the 'other' designation.

All 'nearby' sources are required to be explicitly modeled. (NSR Manual at C.59) Nearby sources involves the use of maximum permitted allowable emissions in concert with design and operating levels. Sources classified as 'other' means sources which do not fit into the classification of 'nearby' and such source emissions are modeled based upon actual levels.

USEPA requires the use of various computer modeling to assess air quality impacts from a proposed source. This is necessary due to the complexity of the physical universe which surrounds us. To achieve a reasonable estimate of impacts on ambient air quality, USEPA has provided an outline or guidance methodology to be used in projecting these impacts. Even with such methodology, case-by-case information can result in deviations from the guidance protocol used by USEPA. Use of the protocol sometimes results in overestimating emissions by double counting background concentrations and emissions from a specific source. In most cases, computer modeling also has a built-in conservatism which tend to overestimate pollution concentrations.

The EPA modeling protocol is designed to present a reasonable approximation of physical reality. The protocol is not sophisticated enough to assure precision and so to provide a margin of safety there are many unrealistically conservative assumptions that are built into the model. It is well accepted by EPA, however, that particular applications of the model can be varied if better reflect reality so long as the predictive value of the model is not impaired.

The decision to amend the protocol is a frequent occurrence in the review of new source application. It is only done with the approval of the regulatory agency after an applicant has demonstrated that circumstances exist warranting a change and that the change still can be expected be reflective of actual conditions.

The flexibility in the protocol allows inclusion of sources in the cumulative analysis that have been identified as having possible interaction with a source under review. DEC staff's screening computer program eliminated sources that the Intervenors' consultants thought should be included. The reason these sources were eliminated was because of Inter-Power's modeling that exactly delineated the significant impact area if Inter-Power were to be certified. Because of this exactly drawn significant impact area, it was easy to identify those sources to be included into 'nearby' or 'other'. Intervenors' consultants sources of concern were outside of this area and thus would not interact with Inter-Power's emissions. Of the 43 sources Intervenors' said should be included, 35 were included by the DEC staff, 8 were evaluated (Ex. 268), three were discounted because they were shut-down, had no emission points, were under a 100 tpy threshold or were without valid permits.

Intervenors' fault the improper use of 'nearby' and 'other' classifications when evaluating the annual NAAQS impacts. They argue that by not screening for these sources consistent with USEPA guidance the applicant eliminated sources from its modeling that should have been included. (Mass Reply letter/brief at 3).

However, the protocol approach used to evaluate annual impacts is more stringent than the intent of the guidelines and was resolved on March 5, 1992 (Ex. 405 and 406) If all sources were treated as 'nearby' Inter-Power's, annual sulfur dioxide impacts would comply with federal air quality standards.

It is important to note that the 'other' designation still allows for overestimation in emissions. This is because background sources, which include 'other' sources are already counted. In addition, even using actual emissions can overstate usage since the source may not be operating at all hours of the year at 100%. Consequently, this double counting and overestimating from 'other' sources provides some conservatism in modeling outcomes.

Nearby includes maximum hours of operation emissions times annual operating hours. The result under this circumstance is to again overestimate the amount of pollution because all sources do not operate at the maximum allowable permitted at all times. The result of using these emission numbers is to overstate the emissions from the source, and after modeling, overstate the impacts.

Inter-Power did additional modeling to alleviate any concerns USEPA might have by re-running the models with more conservative input data. Based upon USEPA's finding fault with Inter-Power's initial September 1991 approach (USEPA August 12, 1991 letter to Inter-Power) Inter-Power has resubmitted its justification using its more conservative modeling above which includes sources that would normally be excluded from review. (February 4, 1992 letter to USEPA, Ex. 405 at 1). The DEC staff agree with the approach undertaken by the applicant. The net sum of this approach is to overstate all emissions and Inter-Power's plant still meets acceptable limits.

As addressed later in this report, the modeling projects that Inter-Power will contribute to a NAAQS violation and thus must secure an offset. The General Electric Silicone Products Division (GESPD) has agreed to reduce its emissions from using 1.5 % sulfur in fuel content to 1.3% thus eliminates the modeled NAAQS violation. This further lessens the resulting impacts that might be caused by changing point sources from 'nearby' to 'other'.

C. Major and Minor Sources

Intervenors argue that air emission sources classified as minor or less than 100 tpy were impermissibly excluded by DEC staff from the inventory. (Mass Initial brief at 18) The regulatory authority most often referenced on this dispute is EPA's New Source Review Workshop Manual at C.31 and 40 CFR Part 52. The manual allows flexibility in judging whether a source should be considered major or minor. (Ex. 380 at 11/14/91 letter) Because one could debate whether a 100 tpy source should have been included in some instances, DEC staff required Inter-Power to model these referenced sources at a 100 tpy level as a conservative measure to fully characterize the regional air emissions in measuring cumulative impacts. (tr. 9346). (DEC I brief at p. 6). This led to the inclusion of ten sources that would have been otherwise eliminated. Sources less than 100 tpy were not included in the modeling. Including 100 tpy sources in determining any NAAQS violation is not specifically authorized by the federal PSD regulations in 40 CFR section 52.21. (IP Initial brief at 15). Accordingly, employing more conservative information that normally could be excluded must result in increased air quality impacts projected by Inter-Power. Such a result not favorable to an applicant lessens any arguments about improper elimination of these smaller sources.

D. Fuel Use

Intervenors assert that DEC staff has given Inter-Power an 'artificial credit' by allowing 1.5% sulfur in fuel content to be used in assessing background emissions instead of 2% sulfur in fuel content. (Mass I brief at p. 16). They state that the federally enforceable New York State Implementation Plan (SIP) limits sulfur in fuel content to 2.0% and thus any lower limit may not be federally enforceable. (tr. 10867). Intervenors further rely on a USEPA letter of August 12, 1991 to support their proposition that a 'blanket' exception to using 2% sulfur in fuel content oil should not be allowed when modeling for the PSD increment expansion. (Ex. 280)

New York air sources are utilizing 1.5% sulfur in fuel content in accordance with state regulation. (6 NYCRR Part 225-1, Table 2) Since such is the case, 1.5% sulfur in fuel limits, while not federally enforceable, would be enforceable through state regulation, 6 NYCRR Part 225. Moreover, the State Acid Deposition Control Act (SADCA) adopts a strategy to require use of 1.5% sulfur in fuel limits to improve environmental quality, further supporting the use of this lower limit in any modeling.

With regard to the USEPA August 12, 1991 letter respecting a case-by-case review of not using 2% sulfur in fuel content, such review was completed by Inter-Power and DEC staff, as was proposed by DEC to USEPA on August 29, 1991. (Ex. 407). In later correspondence with USEPA, they favorably reviewed the November 1991 inventory, which includes the use of 1.5% sulfur in fuel content use. (Ex 382 and 403) USEPA's reliance on the November inventory using the 1.5% sulfur in fuel limitation strongly implies the acceptability of that limitation. I find the use of the lower sulfur fuel limit appropriate to the modeling program since that fuel limit is duly codified in state regulation and SADCA.

Intervenors' assert that actual fuel use of facilities is in excess of 1.5% and therefore Inter-Power cannot rely on the 1.5% sulfur in fuel limitation for modeling. (CCE Reply brief at 23) The actual fuel use information indicates excessive sulfur in fuel ranging from 1.51% to 1.57% at five of the thirteen facilities inventoried. Although these limitations are in excess of the 1.5% sulfur content, these exceedances do not appear to be significant in view of the conservatism in the modeling program. Assuming arguendo they are significant to the modeling, emissions reduction from the Norlite facility would reasonably discount or offset this small increase in the sulfur content in fuel.

E. Excessive Emissions

Intervenors also assert that emissions in excess of a facility's permitted limits should have been used in the inventory and not the maximum permitted emissions allowed by DEC. (Ex. 413). They argue that the net effect of using the maximum permitted emissions and not excessive emissions from these plants when modeling air quality, would necessarily result in skewing the modeling results favorably toward the applicant.

Sources emitting in excess of permitted limits are subject to DEC staff enforcement and compliance actions. These have begun (DEC letter of November 18, 1991 to USEPA), and to date have resulted in a number of these sources revising their emissions. If these excessive emissions were to be used in a modeling program the net effect would be to penalize a new applicant for the non-compliant activities of others. Accordingly, it is reasonable to exclude that portion of the emissions which exceed permit limits for purposes of a corrected inventory.

F. Sulfur Dioxide Emission Rate

Intervenors' assert that Inter-Power incorrectly used a 3-hour averaging period with an emission rate of 0.22 lb/mmBtu instead of a more conservative 1-hour averaging period using the 0.26 lb/mmBtu rate. (CCE Initial Brief at 12) The 3-hour averaging period is the standard and not the 1-hour averaging period; therefore Inter-Power used the correct averaging period in modeling. They also used the correct emission rate since the Board required a 0.22 lb/mmBtu limit in earlier phases of this proceeding. (DEC Reply Brief at 10)

G. Background Sulfur Dioxide Emissions

Inter-Power previously used a background concentration of 160 ug/m3 in its initial modeling for the 3-hour averaging period. This background concentrations was changed in the remand proceeding to 26 ug/m3 SO2 for the 3-hour averaging period. (tr. 11199) The 160 ug/m3 background concentration was taken from an average of the maximum actual monitored background. The 26 ug/m3 was derived by taking the worst case result from a computer modeled output and finding the averages thereon. (tr. 11199). If the 160 ug/m3 background concentration was used with the addition of the new inventory information, the NAAQS violations would increase by 25%.

The use of the 26 ug/m3 background concentrations was derived from hourly observed background values. Use of the hourly background values is more representative of the actual background than averaging the highest values at any monitoring station. The methodology used to determine the hourly background levels of 26 ug/m3 was detailed in the 1988 application, although the applicant did not use that methodology until the remand hearing.

H. GESPD Incinerators

GESPD operates three on site incinerators which produce SO2. (tr. 11990-92) These units will be restricted in operation through a permit modification proposed by DEC which restricts SO2 emissions to below 100 tpy each. (May 7, 1992 letter to DEC brief). This modification eliminates these sources as significant contributors to the background or cumulative emissions.

III. Downwash

Downwash is the phenomenon of increased impacts in the immediate vicinity of a source having too short a stack relative to the height of the surrounding buildings. DEC staff and the applicant approach the issue by saying that only two sources, GE Silicone and Tagson Paper are in need of modeling since these sources in fact impact a significant impact level by exceeding a designated air quality concentration. Other sources that do not impact a significant impact level are not required to be modeled by DEC staff. (CF Mass. Reply letter brief at 2 with Ex. 405 at 9).

USEPA has yet to approve of this methodology and uncertainty led Inter-Power to further refine its approach. As an extra precaution, Inter-Power ran further computer runs on downwash sources previously reviewed in its earlier application. These runs show these sources to be outside of the SIL and thus it would be acceptable not to include them in any further modeling. (Ex. 405 at 10). Inter-Power's analysis was submitted to USEPA on February 4, 1992 in response to USEPA's comments on downwash that are adverse to Inter-Power. (Ex. 382 at 2). The only information that contradicts Inter-Power's approach is the USEPA's letter of December 12, 1991 (Ex. 382) which letter is based upon Inter-Power's September 1991 testimony. The new analysis preformed by Inter-Power demonstrates that even if 'other' sources were modeled they fall outside of the significant impact area and thus, on that basis downwash was appropriately modeled.

Intervenors offered a video tape of sources at the Watervliet Arsenal and elsewhere to support the assertion that these sources are not constructed consistent with good engineering practice. The video tape cannot be used for that purpose since it is impossible to determine from the video tape that these sources were inappropriately recorded in the DEC or independent auditors source inventory. Consequently, the video tape cannot be used with any reliability.

IV. Environmental and Health Impacts

A. NAAQS Violations and Offsets

The following Table compares the previously modeled impacts with the latest ones. The bracketed material contains the previous impacts recorded before the inventory revision and remodeling. (compare Ex. 406-A148 with the initial application table 6-43)

TABLE 3
NAAQS Standards Maximum Impact (ug/m3) Maximum Impact,
Background & All Planned
Sources & Inter-Power
(ug/m3)
New Previous New Previous
SO2 3/hr. 1300 ug/m3 175.72 [211.0] [374.2]
SO2 24/hr. 365 ug/m3 29.59 [ 35.5] [135.2]
SO2 Annual 80 ug/m3 3.80 [ 4.7] [ 30.4]
NO2 Annual 100 ug/m3 2.07 [ 2.9] [ 26.3]

Modeling based upon the November base line inventory reveals several locations where Inter-Power significantly contributes to modeled violations of the NAAQS. (tr.11963). This occurs at times when other plants are also operating and thus the incremental loading from Inter-Power is enough to exceed the significant impact level thereby triggering a need for offsets.

The air modeling revealed that Inter-Power would need to obtain SO2 emission offsets from the GESPD to eliminate a modeled NAAQS violation. Inter-Power proposes to secure an offset from GESPD in the form of reduced sulfur in fuel limitations from 1.5% to 1.3% at GESPD emission points Nos. 2 and 3. (ex. 397, tr. 11769). This would result in a reduced impact of 0.94 ug/m3 and is thus below a significance level of 1 ug/m3 established in USEPA guidance.(Ex. 416). GESPD has agreed to this reduction. (Ex. 396)

The background concentrations in the vicinity of the site can also be reduced dramatically by reducing the nearby Norlite SO2 air emissions. DEC staff has secured a permit modification from Norlite to reduce its SO2 emissions from 300 lb/hour to 30 lb/hour per kiln. (Ex. 405-A37 and A38) With this reduction, the emissions from Inter-Power are not projected to cause or contribute to a violation of the NAAQS limit of 1300 ug/m3. In fact, receptor #124 has already recorded a total background SO2 concentration of 1290.94 ug/m3 resulting from other sources (Ex. 398). The NAAQS study revealed 10 existing sources that have differing levels of impacts. Accordingly, these are and will continue to be investigated by DEC staff. (Ex. 348 and also Ex. 413, 413a, 420 and 421) Adjustments made at these sources will be included as SIP revisions.

In addition to the Norlite emission reduction, other facilities contributing to the air shed modeled at receptor #124 can also be expected to have their emissions reduced. While Norlite is by far the largest contributor, other plants such as the Watervliet Arsenal and Coated Abrasives are large contributors to the impacts at receptor #124.

The addition of Norlite's reduction adds another level of reduced emissions that impact the receptors and thus inclusion of Norlite in addition to the offsets above, allows compliance with NAAQS.

There is no overlap of annual SO2 impact areas based upon additional computer modeling. When this overlap is calculated at receptor #184 which is impacted by the Inter-Power source, the concentration is reduced to 54.2 ug/m3 which is below the worst case annual 'standard' of 54.9 ug/m3. Consequently, no offsets are required for annual SO2 impacts.

As a comparative gauge of Inter-Power's air quality impact in the region, we can review the projects' consumption of the available PSD increments and its contribution to nitrogen oxide concentrations. A summary of the maximum consumption of available PSD increment in the Class II Capital District area is attached as Table (Ex. 406-A150). Nitrogen oxides annual average impacts are presented in Table (Ex. 399-A155) attached to this report. Both tables show the relative concentration contributions.

Vermont argues to reduce the emissions from 0.22 lb/mmBtu to 0.208 lb/mmBtu or otherwise reduce emissions by 5.6% through use of a lower sulfur content coal of about 1.7%. Based upon the NAAQS compliance above, there is no need for further emission reductions to satisfy NAAQS or any impacts on the Lye Brook Wilderness area in Vermont, discussed below. In fact, USEPA has issued a draft determination on May 18, 1992 stating the acceptability of the PSD modeling results in relation to Lye Brook. Official Notice is taken of the USEPA Region II PSD determination made on May 19, 1992 to approve Inter-Power's PSD application and further, that the Federal Land Manager has agreed that Inter-Power's permit conditions resolve any concerns about the facility's impact on Bourn Pond located in the Lye Brook Wildness Area. (Attachment II, draft PSD permit to May 19, 1992 letter)

B. General Electric Silicone Products Division (GESPD)

New information about GESPD's intention to use a gas fired boiler was not previously considered by the examiners' or the Board. The new GESPD boiler configuration is important since Inter-Power had claimed in the previous rounds of hearing that its lower emissions would offset the GESPD emissions and thus environmental benefits would result. In previous hearings, it was projected that the installation of Inter-Power would "backdown" the GESPD oil units. Thus the air emissions of those units would be less and the pollution impact to the near-field would also be less. This claimed benefit would be reduced given that the GESPD is switching to natural gas fuel. Using natural gas reduces SO2 emissions to below those of the previous two oil fired units. The revelation that GESPD was to switch to natural gas was a contributing factor in the Board's decision to revoke its vote to certify the proposed plant.

GESPD plans to change its boiler configuration from two number 6 oil-fired units (using 1.5% S/oil) with a total rated capacity of 124 mmBtu/hour, to one large natural gas fired unit. Low sulfur number 2 oil (at 0.5% S/oil) will be used as a backup fuel due to the limited availability of natural gas at the GESPD. The proposed new natural gas fired boiler at emission point #6, is rated at 308 mmBtu/hour, and would increase GESPD's total energy capacity by about 50% although GESPD would only require an increase of 10% to meet existing (1992) production goals. (tr.10622). Recent GESPD plant expansion, however will ultimately consume the increase in boiler capacity, and, after GESPD determines Inter-Power to be a reliable steam supplier, GESPD would then rely on Inter-Power to supply its steam needs. (tr. 10941)

Two exhibits (Ex. 346 and 347) portray the comparative emissions between the oil and gas fired units with and without Inter-Power. Overall, the SO2 emissions projected as potential emissions resulting from the larger gas fired units are comparable to those projected for the two smaller oil fired units.

The oil units were previously calculated to emit 1710 tpy SO2, (1246 tpy SO2 actual). With Inter-Power on-line the emissions would be reduced to 1539 tpy SO2. The revised SO2 emissions would be 2376 tpy SO2. Replacing the oil units with the new gas boiler would yield 1729 tpy SO2. With Inter-Power on line the emissions would be reduced to 1556 tpy SO2. (Ex. 346). The difference between the oil and gas units with Inter-Power on line is 171 tpy SO2 and 173 tpy SO2, respectively. (Ex. 346)

The differences are more dramatic however regarding NOx. Using the methodology above, the NOx will increase by about 570 tpy with the gas fired units in operation. Using the same methodology again but with actual rather than maximum potential emissions results in emissions being reduced by 173 tpy SO2 and 103 tpy NOx. The net reduction remaining after including Inter-Power's operation would be 562 tpy SO2 and 551 tpy NOx. (Ex. 347). Thus, these emissions are comparable.

Intervenors argue that the reductions in SO2 and NOx cited above are inflated since GESPD would not be expected to have its boilers reduced in operation by at least 90% with Inter-Power on line. To support project opponents' contention that a 10% standby is too low, they cite references to General Electric's Mr. Lindner who stated at hearing that he could not determine what percentage of GE's operation would be necessary for standby operation.

These arguments should not be held to support the proposition that the net emission reductions projected above and contained in Exhibits 346 and 347 are inflated. Rather, the projections appear to be reasonable based upon the expected operation at GESPD. In fact, GESPD witness Lindner fully expects the expanded GE operation to utilize the increased capacity of its new natural gas fired boiler until Inter-Power is on line. In addition, the contract between Inter-Power and GESPD states that the standby status is actually about 5% of GESPD steam requirements and thus even a greater reduction of SO2 and NOx would be realized based upon GESPD's own expectations. Moreover, Inter-Power is supplying steam to GESPD at a 40% discount in cost which is a strong incentive to utilize a 10% or even less hot standby status as confidence grows in Inter-Power's ability to supply steam reliably. Based upon these reasons, the SO2 and NOx emission reductions presented above represent a reasonably conservative estimate of emission levels to be emitted.

C. Lye Brook Wilderness Area (Bourn Pond)

The Lye Brook Wilderness Area is classified as a Class I area for purposes of a PSD analysis. Inter-Power took a very conservative approach to modeling impacts at Lye Brook by using models that are recognized by the USEPA to be very conservative (i.e. overstated) in assessing air quality impacts. In addition to its own modeling effort, Inter-Power used the specific air quality model suggested by Vermont, the complex terrain model, which resulted in air quality impacts less than those found by Inter-Power. Use of the complex terrain model is discussed more fully below. In any event, Inter-Power is projected to contribute a 0.168 ug/m3 SO2 impact to Lye Brook in addition to the background impacts projected in the previous hearing. The previous hearing projected impacts from Inter-Power of 0.3 Kgs/ha-yr SO2 at an emission rate of 0.26 lb/mmBtu SO2. The reduced emission rate of 0.22 lb/mmBtu SO2 and the increased stack height modeled along with the information from the revised inventory, results in the sum of the SO2 impacts to be lower than those previously evaluated in the prior hearing. (tr. 10394).

The table below summarizes the maximum consumption of available PSD increment in the PSD Class I, Lye Brook Wilderness area.

TABLE 4
Averaging Period PSD Increment (ug/m3) Increment Consumed(ug/m3) Inter-Power's Contribution (ug/m3) Percentage of Increment Consumed
SO2 3-hr. 25 14.30 7.05 66%
SO2 24-hr. 5 2.29 1.19 44%
SO2 Annual 2 0.361 0.168 10%
NO2 Annual 2.5 0.148 0.091 4%

(compare Ex. 406-A152/Ex. 386 Table C with Application Table 6-36 at Page 6-200). Note that the previous percentages of the increment consumed is 70% for the 3-hour, 53% for the 24-hour, 10% for the annual and 5% for the nitrogen oxides at annual.

Even though the sulfur dioxide reductions are less than those previously evaluated, USEPA has required that 2,236 tpy of sulfur dioxide be eliminated through offsets to protect the Lye Brook Wilderness Area. The net result is to completely offset the amount of sulfur dioxide from Inter-Power. (USEPA draft permit at Attachment II, page 13 of 14) The import of this condition negates any remaining arguments about Inter-Power's impact on this sensitive receptor.

D. Health Risk

The initial health risk assessment (HRA) evaluated in the prior proceeding demonstrated that the health-related impacts from Inter-Power were within acceptable limits though it noted that there might be impacts on heavily-exercising individuals with respiratory difficulties at the maximum impact point. It was noted that the area of maximum impact was Rice Mountain which is located somewhat east of the proposed site and that while the project would also contribute a small percentage of SO2 and NO2 to the air shed occupied by other emitters, only a few sensitive persons such as asthmatics would be affected.

Employing updated air inventory data results in an increase in the number of times when sensitive individuals would be affected by the concentration of pollutants in the air. The new modeling also results in changing the point of maximum impact from Rice Mountain to the Alcove Reservoir located south of the proposed plant. Further, the new information reveals that the emissions from Inter-Power would contribute a small percentage of SO2 and NO2 to the air shed occupied by other sources. Specifically, Inter-Power's contribution to the calculated maximum 3-hour SO2 levels is less than 3% and to the calculated maximum 24-hour levels is less than 5%. (tr. 10934). The number of times Inter-Power's emissions, including background and other planned sources emissions would exceed the 24-hour NAAQS is six days and two days for the 3-hour NAAQS, versus four days modeled in the initial application. The actual increase in the number of NAAQS violations revealed in the new inventory and subsequent modeling stems from sources other than Inter-Power.

Intervenors' expert witness medical doctor argues that the maximum permitted values for SO2 and NO2 used to judge the acceptability of the plant with the NAAQS limits should also be used in the HRA. Without Inter-Power in operation and including the existing emissions at the GESPD and the other planned sources proposed in the region, and modeling these at their proposed maximum emission rates, would lead to significant health impacts; thus NYSDOH argues that the NAAQS modeling is highly conservative and that a better estimate should be based upon use of actual and estimated air quality.

Had the HRA's projections considered the NAAQS information instead of actual measured background data, the HRA's reported impacts would have undoubtedly increased. The NYSDOH's conclusion that the NAAQS exceedances result from other sources and that the applicant contributes only 3% to the total concentration is based upon a combination of actual background and estimates of increases and not overconservative NAAQS modeling information. It seems prudent to rely on actual information with additional estimates rather than highly conservative NAAQS information to give a more accurate picture. This rationale is supported in that the NYSDOH recognized the difficulty in analyzing a project where the majority of the pollution impacting a receptor is from other sources. In attempting to evaluate the degree of impact at the Alcove reservoir, the NYSDOH stated that the facility as proposed might not be the preferable option from strictly a public health perspective. (tr. 10930-10997).

The facts above provides sufficient information for the Board to evaluate in balancing the merits of the project with the associated health-related impacts.

V. Summary Conclusions

The modeling preformed by Inter-Power, as checked by the DEC staff and in some instances by the USEPA, is acceptable. The modeling effort reflects conformity with modeling protocols and the guidances, and where the modeling or protocol was adjusted, the adjustment was consented to or advised by the DEC staff. Even though USEPA has not given final approval to all of the adjustments made, sufficient reasonable information exits in the record to rely upon the modeling results presented in the Article VIII application. In addition, USEPA's recent announcement of its intention to issue the PSD permit to Inter-Power gives further support to Inter-Power's modeling. (USEPA May 19, 1992 letter to Inter-Power)

The GESPD has agreed to reduce its sulfur in fuel limitations from 1.5% to 1.3% at GESPD emission points Nos. 2 and 3 which will offset Inter-Power's sulfur contribution. The Norlite SO2 contribution to the air shed will also be reduced by modifying its existing permits thereby accounting for a 90% reduction in SO2. Such reduction will be included in the New York State Implementation Plan.

The health risks associated by the Inter-Power project will contribute to instances of respiratory difficulty to exercising asthmatics at the maximum point of impact. These estimates are based upon less conservative information of expected actual background and estimates rather than the modeled concentrations resulting from use of NAAQS modeling.

Discussion

The imprecise nature of the modeling projections and the inherent flexibility in the USEPA protocol confound rather than clarify the issues. I am left to evaluate air dispersion modeling evidence that is theoretical in nature and are projections as to what really exists or will exist in the future. I am asked to rely on a USEPA protocol for guidance since air dispersion modeling is grounded in that information. But that methodology contains numerous exceptions to the rule, either by design or omission, that allows alternative methods to be considered. Given the nature of air dispersion modeling and the protocol, the party best able to support their position are more favorably considered.

The Intervening parties presented information through its consultants that predated much of the modeling re-analysis. Much of the more recent information supplied by the state agencies and the applicant was supported by USEPA whose protocol and commentary was used to evaluate the modeling. When deviations from the protocol are sanctioned by USEPA, then contrary information must be given less weight unless an alternative can be justified. When deviations from the protocol are not sanctioned by USEPA and they remain silent, the weight of the evidence must fall to the party who more fully supports the alternative rationale. After marshalling the evidence and putting in its proper perspective, the weight of the evidence more fully supports project proponents.

____________/s/____________
Daniel E. Louis
Administrative Law Judge

Date:June 2, 1992
Albany, New York

cc: Board Members
Active Parties

TABLE (EX. 406-A150)
SUMMARY OF MAXIMUM CONSUMPTION OF AVAILABLE
PSD INCREMENT IN CLASS II AREAS(c)
Averaging Period PSD Increment Increment Consumed(a) HCP Percentage(b)
3-hr. SO2 512 -53.32 175.72 31%
24-hr. SO2 91 -11.82 29.59 29%
Annual SO2 20 2.39 3.80 22%
Annual NO2 25 0.95 2.07 9%
TABLE (EX. 399-A155)NO2 ANNUAL AVERAGE IMPACT SUMMARY
Impacts at Halfmoon Maximum Location (ug/m3) Impacts at All Sources Maximum Location (ug/m3)
Concentration Due
to Halfmoon
2.07 0.11
Concentration Due
to Other Sources
9.17 51.69
Background 19.30 19.30
Total 30.54 71.10
NAAQS 100.00 100.00
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