Colorado PUC E-Filings System

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO DOCKET NO. 1A E IN THE MATTER OF THE APPLICATION OF BLACK HILLS/COLORADO ELECTRIC UTILITY COMPANY, LP, FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO CONSTRUCT A POWER PLANT CONSISTING OF A 0 MW SIMPLE CYCLE COMBUSTION TURBINE AND ASSOCIATED BALANCE OF PLANT PURSUANT TO COMMISSION DECISION NO. C1-1. Colorado PUC E-Filings System DIRECT TESTIMONY AND EXHIBITS OF FRED CARL ON BEHALF OF BLACK HILLS/COLORADO ELECTRIC UTILITY COMPANY, LP April 0, 01

2 Table of Contents SECTION PAGE I. INTRODUCTION AND QUALIFICATIONS... 1 II. PURPOSE OF TESTIMONY... 1 III. AIR PERMIT... IV. IMPACT TO REGIONAL HAZE... V. IMPACT TO OZONE... VI. IMPACT TO GREENHOUSE GAS EMISSIONS... VII. CACJA COMPLIANCE, LM000 VS. LMS0... VIII. CONCLUSION... List of Exhibits Exhibit FC-1: Letter from CDPHE dated February 1, 01 Exhibit FC-: Exhibit FC-: Air Permit for the PAGS Complex in Pueblo, Colorado Comparison of Emissions (Permit Levels), Black Hills Electric Generating Units

3 DIRECT TESTIMONY OF FRED CARL I. INTRODUCTION AND QUALIFICATIONS Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. A. My name is Fred Carl. My business address is Ninth Street, P.O. Box 0, Rapid City, South Dakota 01. Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY? A. I am employed by Black Hills Service Company, a wholly-owned subsidiary of Black Hills Corporation. I am Director of Environmental Services. Q. ON WHOSE BEHALF ARE YOU TESTIFYING? A. I am testifying on behalf of Black Hills/Colorado Electric Utility Company, LP (the Company or Black Hills). Q. WHAT ARE YOUR DUTIES AND RESPONSIBILITIES AS DIRECTOR OF ENVIRONMENTAL SERVICES? A. I am responsible for the environmental permitting and compliance support efforts for all of Black Hills Corporation, including its regulated utilities subsidiaries. Black Hills/Colorado Electric Utility Company, LP is a regulated utility subsidiary of Black Hills Corporation. My employment history and expertise is provided in Appendix A. Q. HAVE YOU PREVIOUSLY TESTIFIED BEFORE THIS COMMISSION? A. Yes. 1 II. PURPOSE OF TESTIMONY Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY? 1

4 A. The purpose of my testimony is to discuss the environmental impact of substituting an LM000 1 gas-fired turbine for an LMS0 gas-fired turbine at the Company s existing Pueblo Airport Generating Station (PAGS) complex, in terms of air emissions and issues relating to the state air permit for the generating facilities at the PAGS complex. Q. WHAT IS YOUR RECOMMENDATION? A. I support the Company s application to build an LM000 gas-fired turbine at PAGS. It complies with Commission Decision No. C1-1 because it replaces MW of generating capacity retired at the Clark Station with a utility-owned resource of similar size. It is compliant with the technology presented in the Company s Colorado House Bill -1, Clean Air-Clean Jobs Act (CACJA) Plan in Docket No. M-E, as that Plan addressed natural-gas-fired replacement capacity that does not exceed the emissions associated with the available PAGS expansion slot. The Emission Reduction Plan (see Exhibit TMO- 1 in Docket No. M-E) approved by the Commission (see Decision C- ) explains on pg. 1 that replacement capacity needed due to retirement of the Clark Station will be a natural gas-fired peaking unit (as Option Two). It goes on to describe that new generation using the current expansion slot at PAGS will result in no new emissions in the air shed because the emissions associated with the expansion slot are already being counted. As substituting an 1 All references herein to LM000 or General Electric LM000 or GE LM000 do not represent a commitment to purchase; but instead, represent a proposal for a 0 MW simple-cycle, aeroderivative gas-fired turbine that will be defined by the Company s vendor selection process. The replacement capacity of Clark Station is MW as referenced in Black Hills Clean Air- Clean Jobs Act Plan (Docket No. M-E). The actual capacity is now 0 MW because one set of cables was removed from each phase of Clark Station Unit 1 in 0, reducing the unit s capability from 1 MW to 1 MW.

5 LM000 for the third LMS0 permitted at PAGS will result in reduced emissions, this proposal meets all requirements of the CACJA. III. AIR PERMIT Q. WILL THE ADDITION OF AN LM000 TURBINE IN 01, RATHER THAN AN LMS0 TURBINE, AFFECT THE COMPANY S EXISTING AIR PERMIT? A. Yes. The state air permit for the generating facilities at the PAGS complex was issued on July, 0 and is specific to the units addressed in the application for that permit and stipulated in the final permit. To date, all units described in that application have been constructed and are in operation, with the exception of one of the LMS0 turbines, designated as emission point 00 in the air permit. The commence construction deadline on that unit is currently April 1, 01 (see Exhibit FC-1, the February 1, 01 letter from Colorado Department of Public Health and Environment (CDPHE)). As the permit is unit-specific, the Company will apply to modify the permit, substituting an LM000 turbine for the currently permitted LMS0. A new commence construction deadline will be established, which will be either within 1 months after issuance of the permit modification or within 1 months of the date on which the construction was scheduled to commence as set forth in the modified permit, whichever is later. The current air permit is provided in Exhibit FC-. Q. WHAT IS REQUIRED TO RECEIVE APPROVAL TO MODIFY THE AIR PERMIT?

6 A. A pre-application development meeting will be conducted with CDPHE to review the proposal and obtain guidance on the process. In general, the Company will be required to conduct a Best Available Control Technology (BACT) review to determine recommended emission control technology and emission rates. Based upon CDPHE-approved protocols, the Company will conduct emission modeling to assess compliance with ambient air quality standards. Once the CDPHE has approved the application materials and has recommended the permit terms, it will provide the public a 0-day period to provide comments. Following review of any comments received, the CDPHE will render its final decisions. The review and decision process normally takes about a year. IV. IMPACT TO REGIONAL HAZE Q. WILL THE ADDITION OF AN LM000 TURBINE IN 01, RATHER THAN AN LMS0 TURBINE, IMPACT THE COMPANY S EMISSIONS REDUCTION PLAN FOR THE CACJA, REGIONAL HAZE OR COLORADO S STATE IMPLEMENTATION PLAN (SIP)? A. No. In accordance with the December 1, 0 order of the Commission (Decision No. C-) regarding the Company s plan to comply with the CACJA (C.R.S ), the Company will retire Clark Station by the end of 01. This retirement complies with the Company s emissions reduction plan filed under the CACJA in Docket No. M-E. The requirement to retire the Clark Station was incorporated into the Colorado Revised Regional Haze Plan (also known as the State Implementation Plan or SIP), approved by the Air Quality Commission on January, 0, and

7 subsequently approved by the state General Assembly as HB -. It was signed into law by Governor Hickenlooper on May, 0, and formal approval was granted by EPA on December 1, 01. As described throughout the testimony of CDPHE (see Direct Testimony of Paul R. Tourangeau, filed Sept., 0 in Docket No M-E) and noted in the Commission s December 1, 0 final order (see Decision No C-, Docket No M-E, pgs. 1, 1,,, ), the approved plan complies with all provisions of the CACJA and Regional Haze. The Commission found that, [d]ue to the circumstances surrounding the already-permitted expansion slot at PAGS for an additional LMS 0, the emissions at Clark Station will be considered reduced to zero and thus will not be subject to reasonably foreseeable emission regulation. Decision No. C- at. As overall emissions from an LM000 are approximately onehalf those from an LMS0, this plan will not exceed current permitted site emissions; instead, it would result in an overall net decrease at PAGS. Thus, the CACJA emission reduction requirements would still continue to be met. Also, there would be no need to modify the State s Regional Haze SIP as the requirements for Black Hills in that plan only address the closure of the Clark Station. As found by the Administrative Law Judge in Decision No. R-0-I in Docket No. A-E, neither House Bill No. - nor the SIP references the replacement capacity for the retired Clark Station units. Decision No. R- 0-I, at, Docket No. A-E.

8 Q. WILL THE ADDITION OF AN LM000 TURBINE, RATHER THAN AN LMS0 TURBINE, INCREASE REGIONAL HAZE IN THE LOCAL REGION? A. No. In the electric utility sector, the Colorado Regional Haze SIP is directed at coal-fired generating units. Regardless, both the LM000 and LMS0 gas-fired turbines are equipped with state-of-the-art emissions control technology for NOx and CO. Both units employ low NOx burners and Selective Catalytic Reduction (SCR) for control of NOx emissions and oxidation catalysts for control of CO emissions. Moreover, due to the LM000 having a smaller generating capacity (MW), emissions of the Regional Haze pollutants of concern (NOx, PM and SO ) will be approximately one-half those of an LMS0 (see Exhibit FC-). V. IMPACT TO OZONE Q. WILL THE ADDITION OF AN LM000 TURBINE, RATHER THAN AN LMS0 TURBINE, CHANGE THE COMPANY S REQUIREMENTS FOR OZONE? A. No. The PAGS site is located in an attainment area for ozone and therefore normal permitting procedures would apply. 1 VI. IMPACT TO GREENHOUSE GAS EMISSIONS Q. WILL THE ADDITION OF AN LM000 TURBINE, RATHER THAN AN LMS0 TURBINE, AFFECT THE COMPANY S REQUIREMENTS UNDER THE EPA S GREENHOUSE GAS (GHG) TAILORING RULE? A. Yes. EPA s 0 GHG Tailoring Rule will require implementation of GHG limits on a unit that is being modified in a current air permit, if that modification

9 triggers certain emission thresholds. This rule was not in place during the original air permitting of PAGS; thus, GHG was not addressed during that permitting process. Replacing an LMS0 turbine with an LM000 unit, however, would qualify the new LM000 unit for such review. Included in the permitting process would be a BACT review to determine a GHG emissions limit. Several factors are considered, including the vendor s combustion turbine estimated performance efficiencies. In September 01, Black Hills successfully permitted LM000 turbines at its new Cheyenne Prairie Generating Station in Cheyenne, Wyoming, under the EPA s Greenhouse Gas Tailoring Rule, to include restrictions on GHG. Therefore, we do not expect difficulties in obtaining a GHG permit at the PAGS complex for the same turbine technology, the LM VII. CACJA COMPLIANCE, LM000 VS. LMS Q. DO THE NINE EVALUATION FACTORS CONSIDERED BY THE COMMISSION IN THE COMPANY S PLAN FOR COMPLIANCE WITH THE CACJA CHANGE AS A RESULT OF SUBSTITUTING AN LM000 TURBINE FOR A THIRD LMS0? A. No. As presented in the direct testimony of Mr. Fredric Stoffel, Black Hills proposal to construct, own and operate an LM000 does not change any of the Commission s findings with respect to the nine evaluation factors discussed in Decision No. C- (Docket M-E, the Company s CACJA compliance plan). VIII. CONCLUSION Q. WHAT IS YOUR RECOMMENDATION?

10 A. I support the Company s application to build an LM000 gas-fired turbine at PAGS. It complies with Commission Decision No. C1-1 because it replaces MW of generating capacity retired at the Clark Station with a utility-owned resource of similar size. It is compliant with the technology presented in the Company s CACJA Plan in Docket No. M-E, as that Plan addressed natural-gas fired replacement capacity that does not exceed the emissions associated with the available PAGS expansion slot. Substituting an LM000 in place of an LMS0 not only complies with the requirement that replacement capacity not exceed the emissions associated with the available PAGS expansion slot, it results in an approximate 0% reduction in emissions. Thus, substituting an LM000 for the third LMS0 permitted at PAGS complies with the Company s approved CACJA compliance plan and meets all requirements of the CACJA. Finally, I believe the Company will be able to obtain all necessary modifications to the state air permit at the PAGS complex. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes.

11 Appendix A Statement of Qualifications Fred Carl Mr. Carl graduated from South Dakota State University with a Bachelor of Science degree in Zoology in 1 and a Master of Science degree in Biology in 1. Mr. Carl has years of experience managing environmental programs in the energy industry, cement industry and state air quality regulatory programs, including 0 years with Black Hills Corporation. His specific experience history includes six years of air quality permitting and enforcement with a state regulatory agency, nine years of environmental program management in the cement industry and 0 years with Black Hills Corporation, establishing and directing the corporate environmental compliance and management program. Major projects at Black Hills include securing seven PSD Air Permits for new coal and gas fired power generation projects in three western states and a power generation expansion project in a Carbon Monoxide and Particulate Matter nonattainment area. Environmental compliance management of Black Hills power generation projects have entailed working with seven western state agencies and three EPA Regional Offices.