Proposed Prevention of Significant Deterioration (PSD) Permit for the Chickahominy Power Station

1. Proposed Prevention of Significant Deterioration (PSD) Permit for theChickahominy Power Station Virginia State Air Pollution ControlBoard MeetingJune 21, 2019 Michael Dowd, DirectorAir and Renewable Energy DivisionTamera Thompson, ManagerOffice of Air Permit ProgramsStanley FaggertOffice of Air Permit Programs

2. Outline – DEQ Staff Presentation • State Air Pollution Control Board (Air Board) Consideration • Project Overview • Air Permit Law / Regulation Overview • DEQ Preliminary Determination (Draft Permit) • Public Comments and DEQ Response DEQ Presentation - Chickahominy Power Station

3. I. State Air Pollution Control Board (Air Board) Consideration DEQ Presentation - Chickahominy Power Station

4. Air Board Permit Review • Request for Air Board Review • During an air permit public comment period, interested persons may request direct consideration of a permit action by the Air Board • 81 requests were received for Chickahominy Power Station Permit • The DEQ Director must review the request to determine if the requirements of 9VAC5-80-25C are met • The Director determined direct consideration by the Air Board was appropriate for this permit • The Air Board is required to hold a meeting to take final action on the permit • Today’s meeting (06/21/2019) fulfills that requirement DEQ Presentation - Chickahominy Power Station

5. Air Board Decision • Information the Air Board may consider when making a decision on today’s permit action • Verbal and written comments received during the public comment period that have been included in the record • Any explanation of comments previously received during the public comment period made at the Air Board meeting • Comments and Recommendations of the Department • DEQ files DEQ Presentation - Chickahominy Power Station

6. Commenting to the Air Board • Who can comment today? • Persons who commented (1/31/2019 – 3/20/2019) may respond to any summaries of public comments prepared by DEQ for the Air Board’s consideration • Time allowed: • Speakers may have three (3) minutes each (or pooltime with other speakers for up to 15 minutes) to speak • Permit applicant allotted up to 5 minutes • Topics: • Speakers and any presentations may not providenew information DEQ Presentation - Chickahominy Power Station

7. II. Project Summary DEQ Presentation - Chickahominy Power Station

8. Chickahominy Power Station (CPS) • Balico LLC/Chickahominy Power – Merchant Plant • 1,650 MW natural gas-fired combined-cycle electric power generating facility • 3 x 1-on-1 Natural Gas Combined Cycle Configuration • 3 Combustion Turbines (Mitsubishi M501JAC Series) • 3 Heat Recovery Steam Generators (HRSG) • 3 Steam Turbines • Back-up and Ancillary Equipment • Is classified as a major stationary sourceper federal and Virginia permit regulations DEQ Presentation - Chickahominy Power Station

9. Generic 1-on-1 Combined Cycle Plant DEQ Presentation - Chickahominy Power Station

10. Location of Proposed Chickahominy Power Station Frederick Clarke Loudoun Arlington Warren Shenandoah Fairfax Alexandria City Fauquier Rappahannock Prince William Page Rockingham Culpeper Stafford Madison Highland Greene King George Orange Spotsylvania Augusta Westmoreland Bath Albemarle Caroline Louisa Charlottesville City Richmond Essex Northumberland Rockbridge Fluvanna Alleghany Nelson Accomack King And Queen Lancaster Hanover Goochland King William Amherst Middlesex Richmond City Botetourt Buckingham Powhatan Cumberland New Kent Henrico Craig Gloucester Mathews Lynchburg City Chesterfield Charles City Appomattox Amelia Salem City Northampton James City Giles Bedford Roanoke City Buchanan York Roanoke Prince Edward Prince George Campbell Montgomery Nottoway Tazewell Dickenson Bland Surry Newport News City Dinwiddie Pulaski Charlotte Hampton City Wise Franklin Lunenburg Russell Wythe Floyd Sussex Isle Of Wight Norfolk Smyth Pittsylvania Portsmouth City Halifax Brunswick Virginia Beach City Scott Washington Carroll Henry Southampton Lee Mecklenburg Suffolk City Chesapeake City Bristol City Grayson Patrick Greensville Danville City Charles City County – Approximately 0.25 miles east of the intersection of Roxbury Road and Chambers Road DEQ Presentation - Chickahominy Power Station

11. Chickahominy Power Station

12. Expanded Map View Expanded Map View CPS Property Boundary DEQ Presentation - Chickahominy Power Station Shirley Plantation Air Monitoring Station

13. Chickahominy Power Station Permit Timeline Application received February 22, 2017 Applicant public briefing held May 17, 2017 Application deemed complete on January 10, 2019 Public comment period started January 31, 2019 Public hearing held March 5, 2019 Public comment permit closed March 20, 2019 DEQ Presentation - Chickahominy Power Station

14. III. Air Permit Law / Regulation Overview DEQ Presentation - Chickahominy Power Station

15. What is an Air Permit? A legal document that imposes limits on the release of air pollutants in compliance with applicable air pollution control laws and regulations. DEQ Presentation - Chickahominy Power Station

16. Protection of Public Health Under theClean Air Act and Virginia State Air Pollution Control Law • Clean Air Act (CAA) Envisions Federal-State Partnership • EPA sets concentration based health-based National Ambient Air Quality Standards (NAAQS) • States have the primary responsibility to assure that NAAQS are protected • The State Air Pollution Control Board and DEQ implement NAAQS in Virginia under the authority of the State Air Pollution Control Law • Va. Code §10.1-1300, et seq. DEQ Presentation - Chickahominy Power Station

17. Clean Air Act - NAAQS • Reviewed by EPA every five years • CAA requires EPA to set NAAQS at a level to protect public health with an adequate margin of safety • Based on evaluation of most current health science • Must protect sensitive populations • NAAQS are established for criteria pollutants: • Ozone (O3) = VOC + NOx • Nitrogen dioxide (NO2) • Sulfur dioxide (SO2) • Particulate matter (PM10 and PM2.5) • Carbon monoxide (CO) • Lead (Pb) DEQ Presentation - Chickahominy Power Station

18. Prevention of Significant Deterioration (PSD) Permitting Regulations Virginia’s regulation (9VAC5-80-1600 et seq.) is consistent with federal regulation (40 CFR Part 51) PSD applies to sources emitting major amounts of pollution Major amount = Potential to Emit (PTE) of any PSD pollutant of at least 100 tons per year for CPS’s source category PTE of the facility is conservative since it is based on a facility running 24 hours a day, 7 days a week, 365 days a year – 8760 hours/year Once PSD is triggered for any pollutant, any other pollutant over a specified significant level is evaluated (not all pollutants have to be emitted at over 100 tpy to be evaluated) DEQ Presentation - Chickahominy Power Station

19. PSD Permit Process Continued • Pollutants triggering PSD must undergo the following evaluation: • Air Quality Analysis (computer modeling) to Assure Compliance with any National Ambient Air Quality Standard (NAAQS) • A Top-Down Best Available Control Technology (BACT) evaluation to determine the appropriate emission limitation • Sufficient monitoring and recordkeeping to demonstrate compliance with the BACT limitations DEQ Presentation - Chickahominy Power Station

20. PSD Permit Process Continued • “Permit” construction and regulate operation • Must have local zoning approval • Construction cannot start until permit is issued • Public participation process DEQ Presentation - Chickahominy Power Station

21. Best Available Control Technology (BACT) Partial Definition of BACT from 9VAC5-80-1615 C "Best available control technology" (BACT) means an emissions limitation (including a visible emissions standard) based on the maximum degree of reduction for each regulated NSR pollutant that would be emitted from any proposed major stationary source or major modification that the board, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such source DEQ Presentation - Chickahominy Power Station

22. BACT Continued • BACT is a case-by-case determination • Virginia utilizes the PSD BACT Top-Down approach established by EPA guidance • Evaluation of BACT includes the following: • Review the EPA RACT/BACT/LAER Clearinghouse to consider BACT determinations from similar permits that have been issued across the country • Research with other states having similar facilities that are permitted, have been constructed and are operational – i.e., have demonstrated the BACT limits can be met DEQ Presentation - Chickahominy Power Station

23. BACT Limitations Emission limitations are set based on the BACT analysis Most BACT limitations are numerical, but sometimes a BACT limitation may be in the form of a design, equipment, work practice or operational standard Any BACT limit must have a compliance component and be enforceable as a practical matter Limits in a PSD permit are enforceable by both the state and the Environmental Protection Agency (EPA) DEQ Presentation - Chickahominy Power Station

24. Virginia Toxics Rule • Virginia Regulation for “toxic pollutants” • Significant Ambient Air Concentration (SAAC) • Health-based standard • One-hour and annual standards DEQ Presentation - Chickahominy Power Station

25. IV. DEQ Preliminary Determination DEQ Presentation - Chickahominy Power Station

26. CPS Annual Emission Limits - Turbines *NAAQS Pollutants **Provided as a comparison DEQ Presentation - Chickahominy Power Station

27. Pollutants Triggering PSD at CPS • Nitrogen Oxides (NOx) • Carbon Monoxide (CO) • Sulfur Dioxide (SO2) • Volatile Organic Compound (VOC) • Particulate Matter having an aerodynamic diameter of 10 microns (µm) or less – PM10 • Particulate Matter having an aerodynamic diameter of 2.5µm or less – PM2.5 • Particulate Matter • Sulfuric Acid Mist (H2SO4) • Greenhouse Gases – Expressed as Carbon Dioxide equivalents (CO2e) DEQ Presentation - Chickahominy Power Station

28. Pollutants Triggering Virginia Toxics Rule at CPS • Formaldehyde – hourly and annual • Acrolein – hourly and annual • Beryllium compounds – hourly and annual • Cadmium compounds – hourly and annual • Chromium compounds – hourly and annual • Nickel compounds – hourly and annual • Lead compounds – annual only • Mercury compounds – annual only • The draft permit includes emission limits for these pollutants in a state-only section DEQ Presentation - Chickahominy Power Station

29. Air Quality Analysis (Modeling) DEQ Office of Air Quality Analysis coordinated modeling review and consulted with the Federal Land Managers (FLMs) – The FLMs did not request any additional review or otherwise object to the permit or associated modeling EPA Region 3 also had no significant comments on modeling DEQ Presentation - Chickahominy Power Station

30. Air Quality Analysis (Modeling) • Facility is not predicted to cause or significantly contribute to a violation of any NAAQS or SAAC • Computer modeling was conducted using the worst case emission profile (peak emissions) for each pollutant • Analyzed worst-case operational scenarios • Analysis accounts for background pollutant concentrations and the impacts from nearby sources (including the proposed C4GT) DEQ Presentation - Chickahominy Power Station

31. Emission Units Subject to PSD BACT • Three combined-cycle combustion turbines • Natural gas-fired combustion turbines (Mitsubishi M501 J) • Heat recovery steam generators • Three steam turbines • Two auxiliary boilers – natural gas-fired, 84 MMBtu/hr • Three small fuel gas heaters – natural gas-fired • One emergency generator – diesel-fired, 3,000 kW • One emergency firewater pump – diesel-fired, 376 hp • Fugitive emission components including circuit breakers DEQ Presentation - Chickahominy Power Station

32. Proposed BACT Controls • Combustion Turbines • Ultra low-NOx burners and Selective Catalytic Reduction (SCR) (NOx) • Oxidation catalyst (VOC, CO) • Use of natural gas only • Proper operation and maintenance • Auxiliary boiler & gas heaters • Ultra low-NOx burners • Use of natural gas only • Proper operation and maintenance • Diesel Emergency Generator & Fire Water Pump • Operating hours limited to 500 hours/yr • Use of ultra low-sulfur oil (maximum sulfur content of 0.0015% by weight) • Proper operation and maintenance DEQ Presentation - Chickahominy Power Station

33. Turbine BACT Limits in Draft Permit Noticed for Public Comment *NAAQS Pollutants **Limits apply all times except start-up, shutdown and tuning ***parts per million volume dry basis DEQ Presentation - Chickahominy Power Station

34. Alternative Operating Periods/Events BACT • Start-up and Shutdowns (SU/SD) • Tuning and On-line Water Washes (WW) • Emissions from these episodes included in the annual emission limits • But excused from the “normal” operations short-term emission limits; draft permit establishes BACT limits based on lb/event and lb/day instead • SU/SD events: exhaust temperatures outside range where NOx and CO/VOC control systems are effective DEQ Presentation - Chickahominy Power Station

35. Alternative Operating Periods/Events BACT • Tuning & WW events: control equipment is properly functioning, but the uncontrolled emission from the turbines may be elevated due to variations in operating conditions • All units must SU/SD, particularly electric generating units subject to dispatch via the system operator and variations in load • Tuning & WW: important to maintain efficient turbine operation particularly given more stringent GHG limits such as for CPS DEQ Presentation - Chickahominy Power Station

36. GHG BACT Considerations GHG is not controlled by add-on equipment GHG emissions reflect how efficiently the turbine is designed, constructed and operated Turbine function degrades over time even with good maintenance practices Starting with Dominion Greensville, where specific degradation data is available, DEQ imposes a tiered limit over time as the turbine degrades Such limits are more reflective of how the unit should operate if properly maintained and avoid providing unnecessary compliance margin DEQ Presentation - Chickahominy Power Station

37. Turbine Limits in Draft Permit Noticed for Public Comment * Rolling 12-month average that includes all periods of operation **Compliance demonstrated once every 6 years at 100% load DEQ Presentation - Chickahominy Power Station

38. V. Public Comments and DEQ Response DEQ Presentation - Chickahominy Power Station

39. Public Comment • Public Comment Period Started January 31, 2019 • Public Hearing Conducted March 5, 2019 • Public Comment Closed March 20, 2019 • Public Hearing • 9 people signed in as attendees • Oral comment provided by 3 of the 9 attendees • 2 of 3 also provided written comments DEQ Presentation - Chickahominy Power Station

40. Public Comment Continued • Written (email) comments • 103 comments (multiple submissions from the same party counted as one) • EPA Region 3 • Chickahominy Indian Tribe • Balico LLC • Regional Planning Commission • Environmental Advocacy Organizations • 96 citizen comments • Of the comments received, 81 commenters requested the State Air Pollution Control Board make the final determination on granting the permit DEQ Presentation - Chickahominy Power Station

41. Summation of Comments • Main issues raised during the comment period included • Specific: limits do not reflect BACT for GHG (CO2e) • Specific: tuning, water wash and startup/shutdown • Specific: Air Quality Analysis (modeling) Issues • General: Environmental Justice concerns • General: opposition to the use of natural gas / climate change • General: public health • Request for State Air Pollution Control Board (SAPCB) review DEQ Presentation - Chickahominy Power Station

42. Comments Related to GHG BACT Comments stated that the Dominion Greensville (Virginia) and CPV-Towantic (Connecticut) permits established more stringent CO2e limits DEQ Presentation - Chickahominy Power Station

43. DEQ Response: Comments Related to GHG BACT • DEQ disagrees that CPV-Towantic is more stringent than the CPS draft permit • Towantic: 7,220 Btu/kWh @100% load, net, 2-unit average over 12-month periods • Towantic: 809 lb/MWh @100% load, net, CO2 only, corrected to ISO conditions – “only be required during the initial performance test” • CPS Draft Permit: the initial heat rate value, 6,550 Btu/KWh, converts to 769 lb/MWh and is thus more stringent than the Towantic limit DEQ Presentation - Chickahominy Power Station

44. DEQ Response: Comments Related to GHG BACT DEQ did reconsider the draft permit’s CO2e limits based on the comment’s discussion of the Dominion Greensville permit Revised draft permit includes more stringent GHG limits on an emission basis (lb/MWh, net, 12-month rolling basis per turbine, applies at all times): DEQ Presentation - Chickahominy Power Station

45. DEQ Response: Comments Related to GHG BACT • DEQ believes these revised GHG limitations are more stringent than any other facility …and a heat rate basis (Btu/KWh, net, 100% load, per turbine, specified performance tests). DEQ Presentation - Chickahominy Power Station

46. Comments Related to Alternative Operating Periods • Comments questioned DEQ’s treatment of such events in the CPS draft permit • Questioned the need for allowances for such events (tuning and WW) since other permits don’t include them • Permit should include limits on the number of such events (all types) • Permit should require advance notice (tuning and WW) and after-the-fact reporting (all types) • Based on these comments, DEQ reconsidered the treatment of SU/SD, tuning and WW events in the CPS draft permit DEQ Presentation - Chickahominy Power Station

47. DEQ Response: Comments Related to Alternative Operating Periods • With the removal of the GE Turbine Option, on-line WW events were also removed from the revised draft (the MI turbines only perform WW events while off-line) • Tuning events are an important tool to maintain the turbines in an efficient operating condition – DEQ is being more restrictive by placing limits on tuning events • Based on comments received, DEQ added a 96 hour per year per turbine operating limit on tuning events and did insert a requirement for an advance notification to DEQ for tuning events DEQ Presentation - Chickahominy Power Station

48. DEQ Response: Comments Related to Alternative Operating Periods • Annual emission limits effectively control the number of SU/SD events allowed by the facility. For example - 80% of the annual VOC limit is already attributed to SU/SD – an increase in the number of SU/SD beyond the amount proposed in the application would result in a decrease in annual emissions due to the trade-off between normal operations and SU/SD events • DEQ did clarify that excess emission reports must include excess emissions during SU/SD and tuning events DEQ Presentation - Chickahominy Power Station

49. Comments Related to Air Quality Analysis (modeling) Issues CPS modeling did not include recently permitted C4GT facility or other nearby sources CPS modeling did not properly account for background NO2 concentrations CPS modeling did not properly account for permitted tuning and water wash events DEQ Presentation - Chickahominy Power Station

50. DEQ Response: Comments Related to Air Quality Analysis (modeling) Issues CPS did directly include the potential emissions from the C4GT facility and other nearby sources Shirley plantation ambient air quality monitoring station positioned between CPS site and industrial sources of Hopewell and represents worst-case background air quality The CPS modeling analysis included the worst-case scenario where there was a start-up for every hour of the year; the emissions analyzed in this scenario are much greater than the emissions associated with tuning or water wash events Water washes have been removed and tuning events have been limited to 96 hours per year per turbine DEQ Presentation - Chickahominy Power Station