[Federal Register Volume 70, Number 85 (Wednesday, May 4, 2005)]
[Notices]
[Pages 23155-23156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8874]


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ENVIRONMENTAL PROTECTION AGENCY

[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.

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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.

FOR FURTHER INFORMATION CONTACT: Laura L. David, Environmental 
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 http://www.epa.gov/eab/orders/indeck2004.pdf.

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 
(NO2), sulfur dioxide (SO2), 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 NOX, 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 
NOX control technology. In its original permit application, 
Indeck had proposed to equip each of the four natural gas-fired 
combustion turbines with dry low-NOX burners and a selective 
catalytic reduction system to achieve a NOX 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-NOX burner 
pairs, which is a more stringent technology option than previously 
proposed, in order to achieve the BACT limits for CO and VOCs 
emissions.
    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 
permit.
    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 NOX, 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]
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