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E-M:/ Indeck power plant in Niles, MI

Enviro-Mich message from "Alex J. Sagady & Associates" <ajs@sagady.com>

[Federal Register: May 4, 2005 (Volume 70, Number 85)]
[Page 23155-23156]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



[MI 86-01; FRL-7907-9]

Notice of Final Determination for the Final Determination for the Indeck-Niles Energy Center, L.L.C. located in Niles, MI

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of final action.


SUMMARY: This notice announces that on September 30, 2004, the
Environmental Appeals Board (EAB or Board) of the United States EPA
denied a petition for review of a Federal Prevention of Significant
Deterioration (PSD) permit issued to Indeck-Niles L.L.C. (Indeck) by
the Michigan Department of Environmental Quality (MDEQ).

DATES: The effective date for the EAB's decision is September 30, 2004.
Pursuant to Section 307(b)(1) of the Clean Air Act, 42 U.S.C.
7607(b)(1), judicial review of this permit decision, to the extent it
is available, may be sought by filing a petition for review in the
United States Court of Appeals for the Sixth Circuit within 60 days of
May 4, 2005.

ADDRESSES: The documents relevant to the above action are available for
public inspection during normal business hours at the following
address: Environmental Protection Agency, Region 5, 77 West Jackson
Boulevard (AR-18J), Chicago, Illinois 60604. To arrange viewing of
these documents, call Laura L. David at (312) 886-0661.

Protection Agency, Region 5, 77 W. Jackson Boulevard (AR-18J), Chicago,
Illinois 60604. Anyone who wishes to review the EAB decision can obtain
it at <A HREF="http://www.epa.gov/eab/orders/indeck2004.pdf";>http://www.epa.gov/eab/orders/indeck2004.pdf</A>.

SUPPLEMENTARY INFORMATION: In the Board's September 30, 2004 Order Denying Review, the Board made the following findings. On November 2, 2000, Indeck-Niles, L.L.C. applied to MDEQ for permission to construct a new 656-MW simple-cycle natural gas-fired electrical generating facility, to be transformed into a 1,076-MW combined-cycle facility approximately twelve to eighteen months after startup of the simple- cycle facility. Indeck proposed to site the new facility (Indeck-Niles Energy Center) in the southwestern corner of the State of Michigan, in Cass County, northeast of the City of Niles, Michigan, and not far from South Bend, Indiana. That portion of the State was designated as attainment or unclassifiable for carbon monoxide (CO), nitrogen dioxide (NO<SUB>2</SUB>), sulfur dioxide (SO<SUB>2</SUB>), ozone (measured as volatile organic compounds (VOCs)), and particulate matter (PM) at the time of permit issuance. In the first phase of the project, Indeck proposed to install four natural gas-fired combustion turbines for operation in simple-cycle mode. In the second phase, Indeck proposed to convert the four simple- cycle turbines into combined-cycle units through the addition of heat recovery steam generators and natural gas-fired duct burners to increase steam output. The conversion would take place within twelve to eighteen months after operation of the simple-cycle turbines commences. The steam produced would be piped to two steam condensing turbines to produce additional power. In this configuration, the proposed facility has the potential to emit NO<SUB>X</SUB>, CO, VOCs, and PM in quantities sufficient to trigger the requirement for emissions limitations reflecting Best Available Control Technology (BACT). Accordingly, as part of the permit application process, Indeck conducted BACT analyses for the relevant pollutants and proposed BACT emissions limits for the pollutants of concern. In December 2001, MDEQ approved Indeck's analyses and issued a permit to the company for the proposed facility (New Source Review Permit to Install No. 364-00). However, a number of individuals timely petitioned the Board for review of that permit, which prevented the permit from going into effect at that time. On March 11, 2002, the Board issued an order denying the individuals' petition for review and the permit therefore became final on that date. Notably, however, Indeck failed to commence construction of its new facility within eighteen months of issuance of the final PSD permit. Under the State of Michigan's air pollution control regulations (which are based on the Federal PSD rules), such a lack of action within the prescribed time frame renders the permit void (Mich. Admin. Code r. 336.1201(4)). A year and a half later, in June 2003, Indeck requested that MDEQ reissue the PSD permit for the proposed Indeck-

[[Page 23156]]

Niles Energy Center, largely as originally conceived. Indeck did not
revise or supplement its initial BACT analyses, performed in November
2000, but instead relied on the information contained therein as the
best available information for the permit review. One difference
between the original permit and the present one relates to the
NO<SUB>X</SUB> control technology. In its original permit application,
Indeck had proposed to equip each of the four natural gas-fired
combustion turbines with dry low-NO<SUB>X</SUB> burners and a selective
catalytic reduction system to achieve a NO<SUB>X</SUB> BACT emissions
limit, during combined cycle operations, of 3.5 parts per million dry
volume at 15% oxygen averaged over a twenty-four hour rolling time
period. Those proposals became part of the original permit. In the new
permit, those air pollution control measures are still included;
however, Indeck has also agreed to install a catalytic oxidation system
on each of the four combustion turbine/dry low-NO<SUB>X</SUB> burner
pairs, which is a more stringent technology option than previously
proposed, in order to achieve the BACT limits for CO and VOCs
    MDEQ subsequently reviewed and approved Indeck's BACT analyses.
Accordingly, MDEQ issued a draft PSD permit to Indeck in January 2004,
containing proposed terms and conditions to regulate the proposed power
plant. MDEQ also published a notice inviting public comment on the
draft permit and establishing a 30 day comment period. On February 25,
2004, MDEQ held a public hearing on the draft permit at the Niles High
School Auditorium in Niles, Michigan. The Department received
approximately sixty written and twelve oral comments on the draft
permit from interested parties, including comments from Mr. Douglas
Meeusen (``Petitioner''). After reviewing the public comments on the
draft permit, MDEQ issued a final permit (Permit to Install No. 364-
00A) on April 21, 2004, for Indeck's construction of the Niles Energy
Center, along with a document responding to the comments on the draft
    On May 20, 2004, Petitioner filed PSD Appeal No. 04-01 with the
Board. In his appeal, Petitioner raised concerns about the startup and
shutdown frequency of the proposed facility's combustion turbines.
Under Indeck's PSD permit, each turbine is allowed to operate in
startup/shutdown mode a maximum of 500 hours per twelve-month rolling
time period, as determined at the end of each calendar month, or a
total of 2,000 hours for the four turbines annually. The Petitioner
challenged special condition 5.8 of the permit which provides that
Indeck mustprepare a plan (``emission minimization plan'') to minimize
air pollutant emissions during startup and shutdown periods, as well as
malfunction periods, and obtain MDEQ's approval of this plan prior to
initiating operation of the combustion turbines and duct burners. The
Petitioner pointed out that, in his comments on the draft version of
the permit, he had asked MDEQ to provide for public scrutiny of the
emissions minimization plan and to follow all the directives given to
MDEQ by the EAB in a previous decision regarding Tallmadge Energy
Center, Order Denying Review in Part and Remanding in Part (PSD Appeal
No. 02-12, EAB May 21, 2003), regarding a similar emissions
minimization plan. The Petitioner argued that MDEQ ignored the
Tallmadge requirements and, as a consequence, the plan called for in
Indeck's PSD permit lacks the requisite degree of specificity to allow
for meaningful comment by Petitioner and other members of the public.
    At the request of the Board, MDEQ submitted a response to the
merits of the petition for review on June 25, 2004. In response, MDEQ
distinguished the factual circumstances of this case from those in
Tallmadge Energy Center. First, MDEQ noted that the Tallmadge permit
explicitly exempted that facility from complying with all BACT emission
limits during startup, shutdown, and malfunction periods and instead
made the facility's operations contingent on the permittee's submittal
of a plan describing how it would minimize emissions during those
periods. Indeck's permit, MDEQ noted, does not contain such explicit
exemption from all BACT limits. To the contrary, MDEQ observed that
Indeck's permit incorporates annual BACT emission limitations
(expressed in terms of tons per year) that must be met at all times,
including during startup, shutdown, and malfunction periods, and it
also contains restrictions on the amount of time the turbines can be in
startup/shutdown mode and sets forth a minimum load requirement of
ninety percent that defines when startup is completed. Second, MDEQ
responded to any latent concerns that might exist about the Indeck
permit's exclusions of the facility from short-term (i.e., hourly,
daily) BACT concentration limits during startup and shutdown periods.
Specifically, MDEQ explained that due to the nature of operations
during startup and shutdown, involving lower and inconsistent
combustion temperatures, the proposed facility will not be capable of
always meeting the short-term concentration limits in those periods. In
addition, MDEQ stated that, unlike the situation in Tallmadge, Indeck's
permit does not ``rely on a startup, shutdown and malfunction plan to
establish permitting requirements in lieu of emission limits that
satisfy BACT.'' In MDEQ's view, the permit required Indeck to submit a
plan to minimize emissions during these periods. MDEQ, however, did not
consider that plan a substitute for the BACT limits contained in the
permit. Since Indeck's PSD permit does not completely exempt startup/
shutdown from BACT limitations, the Board declined the basis for
invoking Tallmadge Generating Station and Rockgen Energy Center (an
electric power generating case out of the State of Wisconsin and cited
as precedent in Tallmadge). The Board remanded the PSD permits in both
of those cases because the permits contained blanket exemptions from
BACT emissions limits during startup and shutdown periods, contrary to
the directives of the Clean Air Act (CAA), as interpreted by EPA
policymakers. In the Indeck case, however, the PSD permit explicitly
establishes BACT emissions limits for NO<SUB>X</SUB>, CO, VOCs, and
particulate matter, on a tons per twelve-month rolling time period
basis (as determined at the end of each calendar month), including all
periods of startup, shutdown, and malfunction. The permit also has a
provision limiting total startup/shutdown event time to 2,000 hours per
year (500 hours per individual turbine) and defining ``startup'' as
``the period of time from initiation of combustion firing until the
unit reaches steady state operation (loads greater than 90 percent).''
In these circumstances, EAB determined that it would be inappropriate
to construe Tallmadge and Rockgen as establishing bright-line rules for
every case in which the PSD permit contains a startup/shutdown
emissions minimization plan.
    On September 30, 2004, for the foregoing reasons, the Board denied
the petition for review of PSD Permit No. 364-00A.

    Dated: April 22, 2005.
Norman Niedergang,
Acting Regional Administrator, Region 5.
[FR Doc. 05-8874 Filed 5-3-05; 8:45 am]


Alex J. Sagady & Associates        http://www.sagady.com

Environmental Enforcement, Permit/Technical Review, Public Policy,
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