TECHNICAL BRIEFING SHEET NRG Texas Power LLC Permit No.: HAP-14

Transcription

1 TECHNICAL BRIEFING SHEET NRG Texas Power LLC Permit No.: HAP-14 PROJECT DESCRIPTION: NRG Texas Power LLC (NRG Texas) has requested a Hazardous Air Pollutant (HAP) Major Source [FCAA 112(g)] Permit HAP-14, which would establish Case-By-Case Maximum Achievable Control Technology (MACT) requirements for the Limestone Electric Generating Station (LMS) - Unit 3 Boiler (LMS3) and auxiliary boiler (AUX) located approximately 9 miles north of Jewett, Texas on FM 39, Jewett, Limestone County, Texas. These new boilers are also subject to State Air Quality and federal Prevention of Significant Deterioration (PSD) preconstruction permitting requirements. The TCEQ has prepared draft State Air Quality Permit and PSD Air Quality Permit PSD-TX-1072, which establishes additional conditions under which the proposed facility must operate. A pending contested case hearing for permits and PSD-TX-1072 has been abated for this HAP review. LMS3 is an 800 MW boiler firing sub-bituminous coal, petroleum coke, or bituminous coal with a maximum heat input rate of 8,000 MMBtu/hr at their Limestone Electric Generating Station which has two existing solid fuel fired boilers. LMS3 will fire either 100 percent sub-bituminous coal, or a nominal blend (by weight) of 20% petroleum coke with 80% sub-bituminous, or a 40% bituminous coal with 60% sub-bituminous coal blend MACT Case-by-Case Review: NRG recognizes that the vacatur of the Clean Air Mercury Rule, along with the absence of a source category MACT standard for the proposed PC boiler, and the vacatur of the Industrial Boiler MACT (40 CFR 63 Subpart DDDDD) that applied to the auxiliary boiler necessitates the need for NRG to accomplish a case-by-case MACT analysis. NRG has provided a Clean Air Act Section 112(g) case by-case MACT analysis for LMS3 and a Section 112(j) case-by-case MACT analysis for AUX. Permit HAP-14 establishes federally enforceable MACT emission limitations for carbon monoxide [(CO) as a surrogate for organic hazardous air pollutants (HAPs)], filterable particulate matter [(PM) as a surrogate for non-mercury HAP metals], hydrogen fluoride (HF), hydrogen chloride (HCl), and mercury (Hg) for LMS3. The analysis by NRG Texas confirms that the control technologies and emissions limits proposed by NRG Texas in its June 2006 state PSD permit application for the PC Boiler meet case-by-case MACT requirements, with the exception that slightly reduced emissions limits for mercury, HF, and filterable PM are indicated due to recent emissions compliance demonstrations at similar sources. Had a case-by-case MACT analysis been an applicable requirement when the 2006 state/psd application was submitted, the emission limits proposed as BACT to the TCEQ for mercury and other hazardous air pollutants would have satisfied that requirement. The Hg emission limit of lb/gwh was reduced to the MACT floor determined to be lb/gwh when firing subbituminous coal and lb/gwh when firing only bituminous coal. Filterable PM emission limit was lowered to lb/mmbtu. The HCI emission limit remains lb/mmbtu. The HF emission limit was lowered to lb/mmbtu. CO as a surrogate for organic HAPS remains 0.15 lb/mmbtu. This permit also establishes federally enforceable MACT emission limitations for CO as a surrogate for organic HAPs and filterable PM as a surrogate for non-mercury HAP metals for AUX. MACT for HAPs is the use of good combustion practices and the use of natural gas as the fuel. CO is a surrogate for organic HAPs and was lowered to 0.04 lb/mmbtu. ADDITIONAL IMPACTS: The impact on air quality resulting from any commercial or industrial growth associated with Permit HAP-14 were accounted for the review of Draft Permit Nos and PSD-TX CONCLUSION: The Executive Director has made a preliminary decision to issue this permit.

2 SPECIAL CONDITIONS MAXIMUM ACHIEVABLE CONTROL TECHNOLOGY (MACT) APPROVAL 1. This case-by-case MACT permit (HAP-14) establishes federally enforceable MACT emission limitations for carbon monoxide (CO) (CO is a surrogate for organic hazardous air pollutants [HAPs]), filterable particulate matter (PM) (filterable PM is a surrogate for non-mercury HAP metals), hydrogen fluoride (HF), hydrogen chloride (HCl), and mercury (Hg) for the Limestone 3 Pulverized Coal Boiler (LMS3). This permit also establishes federally enforceable MACT emission limitations for CO (CO is a surrogate for organic HAPs) and filterable PM (filterable PM is a surrogate for non-mercury HAP metals) for the natural gas-fired auxiliary boiler (AUX). 2. Emission limits are based upon representations in the case-by-case MACT permit application dated May 12, 2008 and subsequent updates. 3. These facilities shall comply with all applicable requirements of Title 30 Texas Administrative Code (30 TAC) Chapter 113, 30 TAC Chapter 116, and the U.S. Environmental Protection Agency (EPA) regulations on National Emission Standards for Hazardous Air Pollutants for Source Categories in Title 40 Code of Federal Regulations Part 63 (40 CFR Part 63), promulgated for: A. Applicable General Provisions, Subpart A. B. Clean Air Act Section 112(g) case-by-case MACT determination for the PC Boiler (EPN LMS3) and a Section 112(j) case-by-case MACT determination for the Auxiliary Boiler (EPN AUX). 4. If any condition of this case-by-case MACT permit, HAP-14, conflicts with a condition of Permit and PSD-TX-1072 or any other authorization for the facilities covered by permit HAP-14, the most stringent permit condition shall govern. FUEL SPECIFICATIONS, OPERATING LIMITATIONS, PERFORMANCE STANDARDS, AND CONSTRUCTION SPECIFICATIONS 5. Fuel fired in the Unit 3 Boiler, EPN LMS3, shall be limited to a maximum heat input of 8,000 million British thermal units per hour (MMBtu/hr), averaged over a 30-day period, based on the higher heating value (HHV) of the fuel and the fuel fired shall be limited to:

3 SPECIAL CONDITIONS Page 2 A. Sub bituminous coal, bituminous coal and petroleum coke. The maximum bituminous coal/subbituminous coal blend could be up to 40 percent/60 percent by weight respectively and the petroleum coke/subbituminous coal blend could be up to 20 percent/80 percent by weight, respectively. B. Pipeline-quality natural gas. C. Use of any other fuel will require prior approval from the permitting authority. D. Upon request by the Executive Director of the Texas Commission on Environmental Quality (TCEQ) or any air pollution control program having jurisdiction, the holder of this permit shall provide a sample and/or an analysis of the fuel fired in the PC Boiler or shall allow air pollution control agency representatives to obtain a sample for analysis. 6. Emissions from the Limestone Unit 3 Utility Boiler exhausting through EPN LMS3 shall not exceed the performance standards identified in the table below. The performance standards of this permit condition shall apply at all times, except during periods of planned start-up and shutdown. During periods of planned start-up and shutdown, the holder of this permit shall not exceed the hourly mass emission limits in the maximum allowable emission rates table (MAERT), and the holder of the permit shall operate the Limestone Unit 3 Utility Boiler and associated air pollution control equipment in accordance with good air pollution control practices to minimize emissions. The permit holder shall retain records of planned start-up and shutdown periods in which the emission specifications identified below are exceeded and shall identify all measures taken to mitigate emissions. Initial compliance with the performance standards of this special condition shall be demonstrated in the initial determination of compliance stack sampling utilizing EPA Reference Method testing and shall be determined based upon the average of three stack sampling test runs. Continuous compliance thereafter shall be either via Continuous Monitoring Systems (CMS) for the pollutants monitored by CMS or via stack sampling described by Special Condition No. 11. Compliance with the HAP emission limits for non-mercury HAP metals and organic HAPs shall be demonstrated by using the surrogate s filterable particulate matter (PM) for non-mercury HAP metals and CO for organic HAPs. The averaging periods identified in Table A below shall be the basis for continuous compliance.

4 SPECIAL CONDITIONS Page 3 A. Standards demonstrated by Continuous Monitoring Systems (CMS) Pollutant 1 Performance Standard Compliance Averaging Period CO 0.15 lb/mmbtu 2 30-day rolling Hg to lb/gwh* 12-month rolling * When firing subbituminous coal, or a blend of subbituminous coal and petroleum coke, an output-based emission limit of lb/gwh, based on a monthly rolling 12-month average. When firing a blend that includes both subbituminous coal and bituminous coal, a weighted, output-based emission limit, based on a monthly rolling 12-month average, computed as follows: Where: EL b = Total allowable Hg in lb/gwh that can be emitted to the atmosphere during any12-month period when a blend of fuels was burned. EL i = Hg emissions limit for the subcategory i (coal rank), lb/gwh for subbituminous coal and petroleum coke and lb/gwh for bituminous coal; HH i = GWh contributed by the corresponding subcategory i (coal rank) burned during the compliance period; and n = Number of subcategories (coal ranks) being averaged. During 12-month periods when a blend of fuels including bituminous coal is burned, the applicable Hg emission limit will vary with the amount of bituminous coal. For example, if a 60/40 blend of subbituminous and bituminous coals is burned, the Hg emission limit will be lb/gwh; for an 80/20 blend, the limit will be lb/gwh.

5 SPECIAL CONDITIONS Page 4 B. Standards demonstrated by Reference Method 3 (RM) testing Pollutant 1 PM (front-half catch) Performance Standard (lb/mmbtu) annual HCl annual HF annual Compliance Demonstration Period Notes: PM - particulate matter CO - carbon monoxide Hg - mercury HF - hydrogen fluoride HCl - hydrogen chloride lb/mmbtu - pounds of emissions per million Btu of heat input. Heat input is based on fuel HHV. RM - EPA Reference Methods, based on the average of three stack sampling runs to be conducted as prescribed by Special Condition No The holder of this permit shall operate the boilers and associated air pollution control equipment in accordance with good air pollution control practices to minimize emissions during start-up and shutdown, by operating in accordance with a written start-up and shutdown plan. The plan shall include detailed procedures for review of relevant operating parameters of the boilers and associated air pollution control equipment during start-up and shutdown to make adjustments and corrections to reduce or eliminate any excess emissions. The plan shall also address readily foreseeable start-up scenarios, including hot start-ups, when the operation of the boiler is only temporarily interrupted, and provide for appropriate review of the operational condition of the boilers before initiating start-up. 8. The 155 MMBtu/hr Auxiliary Boiler (EPN AUX) shall meet the following specifications: A. Emissions of CO shall not exceed 0.04 lb/mmbtu, averaged over 3 hours of operation except during start-up and shutdown. B. Emissions of filterable PM shall not exceed lb/mmbtu, averaged over 3 hours of operation except during start-up and shutdown. C. Fuel shall be limited to pipeline quality natural gas. D. Operation of the auxiliary boiler shall be limited to a maximum annual heat input of 135,780 MMBtu/yr, which is the equivalent of a 10 percent annual capacity factor.

6 SPECIAL CONDITIONS Page 5 9. Stack sampling ports and platform(s) as specified in the attachment entitled AChapter 2, Stack Sampling Facilities,@ or an alternate design may be required at a later date if determined necessary by the TCEQ Regional Director or the TCEQ Austin Compliance Support Division. INITIAL DEMONSTRATION OF COMPLIANCE 10. The holder of this permit shall perform initial stack sampling and other testing to establish the actual quantities of air contaminants being emitted into the atmosphere. Unless otherwise specified in this special condition, the sampling and testing shall be conducted in accordance with the methods and procedures specified in Special Condition No. 11. The holder of this permit is responsible for providing sampling and testing facilities and conducting the sampling and testing operations at his expense. The TCEQ Executive Director or his designated representative shall be afforded the opportunity to observe all such sampling. A. For the PC Boiler, EPN LMS3: (1) Demonstrate compliance with the performance standards of Special Condition No. 6 and the hourly emission rates of the MAERT, using the average of three one-hour stack sampling test runs for each contaminant. (2) Air contaminants to be sampled and analyzed include: CO, HCl, HF, filterable PM, and Hg. Diluents to be measured include O 2 or carbon dioxide (CO 2 ). (3) Boiler load during testing shall be maintained as follows. a. Operate at maximum firing rates for the atmospheric conditions occurring during the test as measured by millions of pounds of steam generated per hour or MW of electric generator output. If the steam generating unit is unable to operate at maximum rates during testing, then additional stack testing may be required when higher production rates are achieved. b. During 30-day average emission testing, the boiler load does not have to be at maximum, but the load must be representative of future operating conditions and must include at least one 24-hour period at full load. If the steam generating unit is unable to operate at maximum rates during testing, then additional stack testing may be required when higher production rates are achieved.

7 SPECIAL CONDITIONS Page 6 B. For the Auxiliary Boiler (EPN AUX) demonstrate compliance with the CO and filterable PM performance standards of Special Condition No. 8 using the average of three one-hour stack sampling test runs for each contaminant. C. Requests to waive testing for any pollutant specified in this condition shall be submitted to the TCEQ Office of Permitting, Remediation, and Registration, Air Permits Division. Test waivers and alternate or equivalent procedure proposals for New Source Performance Standards testing which must have EPA approval shall be submitted to the TCEQ Field Operations Support Division, MC-174. D. Sampling as required by this condition shall occur within 60 days after achieving the maximum fuel firing rate at which the PC Boiler will be operated but no later than 180 days after initial start-up. The first boiler operating day of 30-day average initial performance testing required by 40 CFR 60.48Da(f) must commence within this time. TEST METHODS AND PROCEDURES 11. Sampling Methods Required and Pre-test meeting requirements: A. Sampling shall be conducted in accordance with the appropriate procedures of the TCEQ Sampling Procedures Manual, EPA Methods in 40 CFR Part 60, Appendix A and 40 CFR Part 51, Appendix M, EPA Conditional Test Methods, and American Society for Testing and Materials (ASTM) as follows: (1) Appendix A, Methods 1 through 4, as appropriate, for exhaust flow, diluent, and moisture concentration; (2) Appendix A, Method 5 or 17, for the filterable concentration of PM (front-half catch); (3) Appendix A, Method 10 for the concentration of CO; (4) Appendix A, Method 19, for applicable calculation methods; (5) Appendix A, Method 26 or 26A for HCl and HF; (6) Appendix M, Methods 201A or Appendix A, Reference Method 5, for the filterable concentration of particulate matter less than 10 microns in diameter, PM 10 (front-half catch);

8 SPECIAL CONDITIONS Page 7 (7) ASTM D , Standard Test Method for Elemental, Oxidized, Particle-Bound, and Total Mercury in Flue Gas Generated from Coal-Fired Stationary Sources (also known as the Ontario Hydro Method), or other approved EPA methods. (8) Any deviations from those procedures must be approved by the Executive Director of the TCEQ prior to sampling. B. The TCEQ Waco Regional Office shall be given notice as soon as testing is scheduled but not less than 30 days prior to sampling to schedule a pretest meeting. (1) The notice shall include: (a) (b) (c) (d) (e) Date for pretest meeting. Date sampling will occur. Name of firm conducting sampling. Type of sampling equipment to be used. Method or procedure to be used in sampling. (2) The purpose of the pretest meeting is to review the necessary sampling and testing procedures, to provide the proper data forms for recording pertinent data, and to review the format procedures for submitting the test reports. The permit holder shall present at the pretest meeting the manner in which stack sampling will be executed in order to demonstrate compliance with emission standards found in this permit. (3) Prior to the pretest meeting, a written proposed description of any deviation from sampling procedures specified in permit conditions or TCEQ, EPA or ASTM sampling procedures shall be made available to the TCEQ. The TCEQ Regional Director or the TCEQ Field Operations Support Division, MC-174 shall approve or disapprove of any deviation from specified sampling procedures. C. Information in the initial test report for the PC boiler, EPN LMS3, shall include the following data for each test run: (1) hourly coal and petroleum coke firing rate (in tons); (2) average coal and petroleum coke Btu/lb as-received and dry weight; (3) average steam generation rate in millions of pounds per hour;

9 SPECIAL CONDITIONS Page 8 (4) average generator output in MW; (5) control device operating rates, including SCR reagent injection and solids injection rates (fresh lime, recycle lime/ash); (6) emissions in the units of the limits of this permit, lb/hr and lb/mmbtu, three-hour or 30-day average, as appropriate; and (7) any additional records deemed necessary during the stack sampling pre-test meeting. D. Three copies of the final sampling report shall be forwarded to the TCEQ within 60 days after sampling is completed. Sampling reports shall comply with the attached conditions of Chapter 14 of the TCEQ Sampling Procedures Manual. The reports shall be distributed as follows: One copy to the TCEQ Waco Regional Office. One copy to EPA Region 6 Office, Dallas. One copy to the TCEQ Austin Office of Permitting, Remediation, and Registration, Air Permits Division. CONTINUOUS DEMONSTRATION OF COMPLIANCE 12. The holder of this permit shall install, calibrate, maintain, and operate a continuous emission monitoring system (CEMS) to measure and record the concentrations of CO from EPN LMS3. Diluents to be measured include O 2 or CO 2. The CEMS data shall be used to determine continuous compliance with the CO, emission limitations in Special Condition No. 6 and the attached MAERT. 13. The holder of this permit shall install, calibrate, operate, and maintain a CEMS to measure and record the concentration of mercury from EPN LMS3, unless another means of compliance is prescribed by federal rules. The CEMS data (or data from other means prescribed by federal rules) shall be used to demonstrate continuous compliance with the emission limitations of Special Condition No. 6 and the MAERT 14. If any emission monitor fails to meet specified performance, it shall be repaired or replaced as soon as reasonably possible.

10 SPECIAL CONDITIONS Page After the initial demonstration of compliance, on-going stack sampling of EPN LMS3 for HCl, HF, and filterable PM shall be used to demonstrate ongoing compliance and shall meet the following specifications: A. Stack sampling shall be performed once annually during periods of normal operation, except as follows: (1) If the annual test does not establish compliance with a performance standard of Special Condition No. 6, the holder of this permit may conduct additional tests during the year to be averaged with the previous test(s) to demonstrate compliance; or (2) If, after two years of stack sampling, the average of the two annual stack sampling results for a pollutant is less than 70 percent of the applicable performance standard identified in Special Condition No. 6, then compliance stack sampling for such pollutant may be conducted once every three years. B. Sampling required in this special condition shall demonstrate compliance with the performance standards of Special Condition No. 6. C. Sampling required in this special condition shall be conducted in accordance with the methods, procedures, and notification protocol specified in Special Condition No. 11. D. Ongoing compliance with the HF, HCl, and filterable PM tons-per-year emission rates in the MAERT shall be demonstrated by calculating rolling 12-month annual emissions from emission factors (lb/mmbtu, HHV) obtained from the sampling required in this condition and the monthly total heat input (MMBtu, HHV) from coal and petroleum coke. E. To demonstrate proper operation of the baghouse, pressure drop shall be monitored and recorded. 16. Compliance with the applicable filterable PM and CO emission limits for the PC Boiler (EPN LMS3) will be demonstrated as follows for periods of start-up and shutdown: A. Compliance with the filterable PM emission rates in Special Condition No. 6 will be demonstrated, when firing solid fuels, if the recorded pressure drop across the baghouse meets manufacturer guidelines for proper operation during start-up and shutdown.

11 SPECIAL CONDITIONS Page 10 B. Compliance with the CO emission rate in the MAERT applicable during start-up and shutdown will be demonstrated if the CO emissions during start-up and shutdown are in compliance with the CO emission rate in the MAERT for planned start-up and shutdown. 17. Following the initial demonstration of compliance, ongoing compliance with the emission limits shall be through source operation in accordance with manufacturer s specifications, or in accordance with written procedures that are shown to maintain operating conditions necessary for emission compliance. The Executive Director of the TCEQ or his designated representative may also require direct measurement of emissions using the sampling methods and procedures specified in Special Condition No. 11 to establish compliance with the limitations, in which case the sampled emission rate will be used to determine compliance. RECORDKEEPING REQUIREMENTS 18. The following records shall be kept at the plant for the life of the permit. All records required in this permit shall be made available at the request of personnel from the TCEQ, the EPA, or any air pollution control agency with jurisdiction. A. A copy of this permit. B. Permit application dated May, 12, 2008 and subsequent updates submitted to the TCEQ. C. A complete copy of the testing reports and records of the initial performance testing completed pursuant to Special Condition No. 10 to demonstrate initial compliance. 19. Records shall be kept for a minimum of five years after collection and shall be made immediately available upon request to representatives of the TCEQ, the EPA, or any local air pollution control program having jurisdiction. The most recent two years shall be maintained on-site and shall be available for inspection. The remaining three years of records may be maintained off site. Records shall be legible and maintained in an orderly manner. The following records shall be maintained:

12 SPECIAL CONDITIONS Page 11 A. Continuous monitoring data for CO, Hg and diluent gases, O 2 or CO 2, from CEMS to demonstrate compliance with the emission rates listed in the MAERT and performance standards listed in Special Condition No. 6 for pollutants that are monitored by CMS. Records should identify the times when emissions data have been excluded from the calculation of average emission rates because of planned start-up and shutdown periods along with the justification for excluding data. The CEMS data retention at intervals less than one hour is not required. The permit holder shall retain additional records of planned start-up and shutdown periods in which the emission specifications identified in Special Condition No. 6 are exceeded and shall identify all measures taken to mitigate emissions. All records should also identify factors used in calculations that are used to demonstrate compliance with emissions limits and performance standards. B. Files of all CMS quality assurance measures, calibration checks, adjustments and maintenance performed on these systems. C. Steam turbine generator hourly gross electrical output in MW, including identification of shutdown intervals, for compliance with output based performance specifications of this permit. D. Average coal and petroleum coke feed rate to the PC Boiler in tons per hour and the corresponding average heat input (HHV) in MMBtu/hr, based upon an average over each calendar month. E. Hourly average pressure drop records for the baghouse. F. Tons of coal and petroleum coke fired in the PC Boiler, EPN LMS3, monthly to show compliance with the fuel throughput requirements of this permit. G. Required stack sampling results or other air emissions testing (other than CMS data) that may be conducted on units authorized under this permit after the date of issuance of this permit. REPORTING 20. The holder of this permit shall submit to the TCEQ Waco Regional Office and the Air Enforcement Branch of EPA in Dallas semi-annual reports for each emission unit which is required to be continuously monitored pursuant to this permit.

13 SPECIAL CONDITIONS Page 12 AS-BUILT INFORMATION 21. The holder of this permit shall submit to the TCEQ Waco Regional Office and the TCEQ Air Permits Division change pages to the permit application reflective of the final plans and engineering specifications on the PC Boiler and auxiliary boiler, including their respective control equipment, no later than 30 days before initial start-up of the PC Boiler. This information shall include: A. All TCEQ Tables in the permit application, updated with manufacturer and other specified data. B. Revised plot plans and equipment drawings as required to reflect the constructed facility. C. Identification of any maximum inputs of raw materials for the as-built facility that is lower than the values represented in the permit application and used for calculating or establishing emissions. Accompanying this information shall be a request for permit alteration. The TCEQ shall alter the permit special conditions and MAERT to reflect any such reduction in emissions. Increases in allowable emission rates require a permit amendment before construction begins.

14 EMISSION SOURCES - MAXIMUM ALLOWABLE EMISSION RATES This table lists the maximum allowable emission rates and all sources of air contaminants on the applicant s property covered by this permit. The emission rates shown are those derived from information submitted as part of the application for permit and are the maximum rates allowed for these facilities. Any proposed increase in emission rates may require an application for a modification of the facilities covered by this permit. AIR CONTAMINANTS DATA Emission Point No. (1) Source Name (2) Air Contaminant Emission Rates * Name (3) lb/hr TPY** NORMAL OPERATIONS LMS3 Unit 3 Pulverized Coal Boiler 8,000-MMBtu/hr Nominal 800-MW Gross CO PM (filterable) HF HCl Hg 1,200 (6) 5, (5) 17.5 (5) (5) AUX Auxiliary Boiler 155-MMBtu/hr CO PM (filterable) 2.7 (5) 0.15 (5) PLANNED START-UP AND SHUTDOWN LMS3 Unit 3 Pulverized Coal Boiler 8,000-MMBtu/hr Nominal 800-MW Gross CO 4,480

15 Permit Number HAP14 Page 2 EMISSION SOURCES - MAXIMUM ALLOWABLE EMISSION RATES (1) Emission point identification - either specific equipment designation or emission point number from a plot plan. (2) Specific point source names. For fugitive sources, use an area name or fugitive source name. (3) CO - carbon monoxide PM - particulate matter, suspended in the atmosphere, including PM 10 and PM 2.5 PM 10 - particulate matter equal to or less than 10 microns in diameter HCl - hydrogen chloride HF - hydrogen fluoride Hg - mercury (4) Fugitive emissions are an estimate only and should not be considered as a maximum allowable emission rate. (5) Emission rates reflect the case-by-case MACT determination for the issuance of Permit HAP-14. (6) Compliance with hourly emission limit for CO is based on a rolling 30-day average. * Emission rates are based on and the facilities are limited by the following maximum operating schedule: 24 Hrs/day 7 Days/week 52 Weeks/year or 8,760 Hrs/year ** Compliance with annual emission limits is based on a rolling 12-month period.

16 PRELIMINARY DETERMINATION SUMMARY NRG Texas Power, LLC Permit No. HAP-14 I. APPLICANT NRG Texas Power LLC 1301 McKinney, Suite 2300 Houston, Texas II. III. IV. PROJECT LOCATION The proposed project, new Unit 3 Boiler, at the Limestone Electric Generating Station will be located approximately nine miles north of Jewett on Farm-to Market Road 39 in Limestone County, Texas. PROJECT DESCRIPTION NRG Texas Power LLC (NRG Texas) has requested a Hazardous Air Pollutant (HAP) Major Source [FCAA 112(g)] Permit HAP-14, which would establish Case-By-Case Maximum Achievable Control Technology (MACT) requirements for the Limestone Electric Generating Station - Unit 3 Boiler (LMS3) and auxiliary boiler (AUX) near Jewett in Limestone County, Texas. These new boilers are also subject to State Air Quality and Federal Prevention of Significant Deterioration (PSD) preconstruction permitting requirements. The TCEQ has prepared draft State Air Quality Permit and PSD Air Quality Permit PSD-TX-1072, which establishes additional conditions under which the proposed facility must operate. A pending contested case hearing for permits and PSD-TX-1072 has been abated for this HAP review. The PC Boiler is an 800 MW boiler firing sub-bituminous coal, petroleum coke, or bituminous coal with a maximum heat input rate of 8,000 MMBtu/hr at their Limestone Electric Generating Station (LMS) which has two existing solid fuel fired boilers. LMS3 will fire either 100 percent sub-bituminous coal, or a nominal blend (by weight) of 20% petroleum coke with 80% sub-bituminous, or a 40% bituminous coal with 60% sub-bituminous coal blend EMISSIONS Permit HAP-14 establishes federally enforceable MACT emission limitations for carbon monoxide [(CO) as a surrogate for organic hazardous air pollutants (HAPs)], filterable particulate matter [(PM) as a surrogate for non-mercury HAP metals], hydrogen fluoride (HF), hydrogen chloride (HCl), and mercury (Hg) for LMS3. This permit also establishes federally enforceable MACT emission limitations for CO as a surrogate for organic HAPs and filterable PM as a surrogate for non-mercury HAP metals for AUX. Annual potential emissions of surrogate HAP pollutants, in tons per year (tpy), for CO, and filterable PM for LMS3 are summarized in the following table:

17 Preliminary Determination Summary Page 2 CO Surrogate Pollutants tpy Filterable PM 5, * Annual potential emissions of other HAP pollutants in tpy, for LMS3 are identified in the following table: Fluorides (as HF) Other HAP Pollutants in tpy Mercury (Hg) Hydrogen Chloride (HCl) 17.5* 0.053* 81.7 * - indicates emission rates reduced by case-by-case MACT analysis Annual potential emissions of surrogate HAP pollutants for AUX, for CO is 2.7 tpy, and for filterable PM is 0.15 tpy. V. FEDERAL APPLICABILITY Recent federal court vacatur of both EPA's delisting of electric utility steam generating units (EUSGUs) as sources subject to MACT standards and the Clean Air Mercury Rule (CAMR) require that MACT emission limitations separately be established for coal-fired electric generating units such as the proposed PC Boiler LMS3. LMS3 is now subject to the requirements for case-by-case MACT pursuant to Clean Air Act Section 112(g). Additionally, the U.S. Court of Appeals for the D.C. Circuit vacated the National Emissions Standard for Hazardous Air Pollutants [40 CFR 63 Subpart DDDDD (Boiler MACT)] that applied to the proposed auxiliary boiler. Vacatur of the Boiler MACT may subject the proposed auxiliary boiler to case-by-case MACT requirements under Clean Air Act Section 112(j). NRG Texas elected to submit a case-by-case analysis for both the PC and auxiliary boiler in this application. VI. CONTROL TECHNOLOGY REVIEW The analysis by NRG Texas confirms that the control technologies and emissions limits proposed by NRG Texas in its June 2006 state PSD permit application for the PC Boiler meet case-by-case MACT requirements, with the exception that slightly reduced emissions limits for mercury, HF, and PM (the surrogate for non-mercury HAP metals) are indicated due to recent emissions compliance demonstrations at similar sources. Had a case-by-case

18 Preliminary Determination Summary Page 3 MACT analysis been an applicable requirement when the 2006 state/psd application was submitted, the emission limits proposed as BACT to the TCEQ for mercury and other hazardous air pollutants (emission limits that are now stipulated in the draft State/PSD permit for the PC Boiler) would have satisfied that requirement. Additionally, the analysis confirms that the control technologies and emissions limits proposed by NRG Texas in its June 2006 state/psd permit application for the auxiliary boiler meet case-by-case MACT requirements, with the exception of a more stringent emission limit for CO, the proposed surrogate for organic HAPs. The EPA definition of MACT for a new source in 40 CFR is: Maximum achievable control technology (MACT) emission limitation for new sources means the emission limitation which is not less stringent that the emission limitation achieved in practice by the best controlled similar source, and which reflects the maximum degree of deduction in emissions that the permitting authority, taking into consideration the cost of achieving such emission reduction, and any non-air quality health and environmental impacts and energy requirements, determines is achievable by the constructed or reconstructed major source. The EPA definition of MACT for an existing source in 40 CFR is: Maximum achievable control technology (MACT) emission limitation for existing sources means the emission limitation reflecting the maximum degree of reduction in emissions of hazardous air pollutants (including a prohibition on such emissions, where achievable) that the Administrator, taking into consideration the cost of achieving such emission reductions, and any non-air quality health and environmental impacts and energy requirements, determines is achievable by sources in the category or subcategory to which such emission standard applies. This limitation shall not be less stringent than the MACT floor. The HAPs potentially emitted by LMS3 can be classified in broad categories, based on the effective methods of controlling their emissions: mercury, non-mercury HAP metals, acid gases (hydrogen chloride and hydrogen fluoride), and organic HAPs. The HAPs potentially emitted by AUX can be classified into two broad categories: metal HAPs and organic HAPs NRG Texas performed the case-by-case MACT analyses in two steps. First, they established the "MACT floor" or most stringent emission limitation achieved in practice by the best controlled similar source. Next, NRG Texas performed a "beyond the floor" analysis of the other methods for potentially reducing emissions to a greater degree, considering factors such as the cost of achieving such emissions reductions and any non-air quality health and environmental impacts and energy requirements to establish whether these reductions are achievable.

19 Preliminary Determination Summary Page 4 Of particular relevance to the case-by-case MACT analyses is the requirement of 40 CFR 63.43(d)(4) that case-by-case MACT determinations must take into consideration emissions standards that may have been proposed by EPA pursuant to 112(d) of the Clean Air Act for the pertinent source category. In the case of the PC Boiler, the relevant proposed (and later rescinded) rule is Subpart UUUUU of 40 CFR Part 63. For the auxiliary boiler, the relevant proposed and promulgated (later rescinded) rule is Subpart DDDDD of 40 CFR Part 63. NRG Texas considered the emissions standards under these rules in establishing the case-by-case MACT emissions limitations presented in their application. In addition, NRG Texas considered the following materials in identifying and evaluating available control options, emission limits, and averaging periods: 1) The Clean Air Mercury Rule, 2) BACT determinations made by TCEQ, 3) Entries in the RACT/BACT/LAER Clearinghouse maintained by EPA, and 4) Control technology determinations and emission limits imposed by air quality permitting authorities outside Texas. To be consistent with the draft state/psd permit, proposed Subpart UUUUU, and CAMR, all case-by-case MACT limitations established for the PC Boiler are also expressed as 12-month rolling averages, except for the organic HAP surrogate, CO, which is expressed as a 30-day average. For the auxiliary boiler, the MACT limitations in today's application were established in the averaging period units expressed in the previous Subpart DDDDD Boiler MACT standard. The proposed suite of controls to limit HAP emission from the PC Boiler are a selective catalytic reduction system, a wet flue gas desulfurization system, state-of-the art mercury controls, and a fabric filter. These control technologies will meet the MACT emission limitations established pursuant to 30 TAC and meet the definition of MACT set forth in 30 TAC (7). LMS3 BOILER CASE-BY-CASE MACT Mercury (Hg) - is the HAP of primary concern from coal-fired PC Boilers as demonstrated by EPA in their proposed Subpart UUUUU. NRG Texas first established the MACT floor, or the most stringent mercury emission limit that has been achieved in practice by the best controlled similar source. The LMS3 main boiler will be a PC Boiler with a nominal 800-MW generating capacity, burning subbituminous coal and blends of subbituminous coal with up to 20 percent by weight petroleum coke or up to 40 percent by weight bituminous coal. The universe of similar sources includes all PC Boilers burning subbituminous coal or blends of primarily subbituminous coal and lesser amounts of petroleum coke or bituminous coal.

20 Preliminary Determination Summary Page 5 NRG Texas provided a detailed evaluation of mercury emission controls and recent permit limits for mercury emissions from PC Boilers in a June 2007 technical supplement to the initial state/psd permit application. Based on information then available, NRG Texas determined that a mercury emission limit of pounds per gigawatts-hour (lb/gwh) represented BACT for LMS3 for all fuel types. That emission limit is included in the draft of Permit Nos and PSD-TX-1072 and remains more stringent than nearly all mercury emission limits for PC Boilers that have made initial compliance demonstrations. To date, the most stringent mercury emission limit identified for any facility that burns, primarily, subbituminous coal and has made an initial compliance demonstration is a heat input based limit of 1.7 x 10-6 lb/mmbtu for Unit 4 at the Walter Scott, Jr. Energy Center in Iowa. Based on a maximum heat input rate of 7,675 MMBtu/hr and a gross rating of 870 MW, this unit has a gross heat rate of approximately 8,820 Btu/kWh and its equivalent output-based limit is lb/gwh. Although this unit has been operating for less than one year, NRG Texas conservatively concluded that the mercury emission limit of lb/gwh has been demonstrated in practice and represents the MACT floor for boilers burning only subbituminous coal. NRG Texas's evaluation did not reveal any PC Boiler burning a blend of subbituminous coal and a lesser amount of bituminous coal that achieves a mercury emission limit more stringent than that achieved by Walter Scott Unit 4. However, PC Boilers burning bituminous coal are known to be able to achieve lower mercury emissions rates than boilers burning subbituminous coal, and NRG Texas has taken this into account in establishing the MACT floor for mercury emissions from the PC Boiler. Specifically, NRG Texas has reviewed regulatory agency information to identify the most stringent mercury emission limit for any facility that burns primarily bituminous coal and has made an initial compliance demonstration as of May The results of this review indicate that the most stringent mercury emission limit identified is an output-based limit of lb/gwh pursuant to 7.29(5)(a)3.e of the Massachusetts Air Pollution Control Regulations. This limit took effect in January 2008 and is currently being achieved by the three bituminous PC Boilers at the Brayton Point Station. Although this limit has been in effect for only two months, NRG Texas conservatively concludes that the mercury emission limit of lb/gwh has been demonstrated in practice and would represent the MACT floor for boilers burning only bituminous coal. To reflect the most stringent mercury emission limits demonstrated in practice for both subbituminous coal firing and firing of subbituminous coal blends, this analysis indicates that the MACT floor for mercury emissions from the PC Boiler should be defined as follows:

21 Preliminary Determination Summary Page 6 When firing a blend that includes both subbituminous coal and bituminous coal, a weighted, output-based emission limit, based on a monthly rolling 12-month average, computed as follows: Where: EL b = Total allowable Hg in lb/gwh that can be emitted to the atmosphere during any12-month period when a blend of fuels was burned. EL i = Hg emissions limit for the subcategory i (coal rank), lb/gwh for subbituminous coal and petroleum coke and lb/gwh for bituminous coal; HH i = GWh contributed by the corresponding subcategory i (coal rank) burned during the compliance period; and n = Number of subcategories (coal ranks) being averaged. During 12-month periods when a blend of fuels including bituminous coal is burned, the applicable Hg emission limit will vary with the amount of bituminous coal. For example, if a 60/40 blend of subbituminous and bituminous coals is burned, the Hg emission limit will be lb/gwh; for an 80/20 blend, the limit will be lb/gwh. NRG Texas and the TCEQ also reviewed the available literature to identify whether a "beyond-the-floor" MACT emission limit would be appropriate for mercury emissions from the PC boiler. This review identified no other methods for potentially reducing emissions to a greater degree. Thus, the MACT floor represents the most stringent limit achievable. It should be noted that the mercury emission limits presented above, Unit 4 at the Walter Scott, Jr., Energy Center in Iowa for subbituminous coal firing and the three bituminous coal fired boilers at the Brayton Point Station are based on the use of activated carbon injection in conjunction with state-of-the-art control equipment for reducing emissions of NO X, SO 2, and particulate matter. This is the most effective of all identified mercury emission control strategies, irrespective of cost, and is consistent with the planned air pollution control technologies for the LMS3 PC boiler.

22 Preliminary Determination Summary Page 7 It should be noted that this case-by-case MACT emission limit for mercury emissions from LMS 3 is based on new compliance demonstration data generated after NRG Texas submitted the LMS3 permit application in June The mercury emission limit of 0.02 lb/gwh established as BACT in the draft of Permit Nos and PSD-TX-1072 would have represented case-by-case MACT for Limestone Unit 3 at the time of permit application submittal if a case-by-case MACT determination had been an applicable requirement at that time. Non-Mercury HAP Metals - HAP metals other than mercury are emitted in the form of particulate matter, and particulate matter air pollution control devices are the only identified control technology for non-mercury HAP metals emissions. The design and operation of these devices is not based on the control of emissions of individual metals to meet target levels; rather these devices are designed and operated to meet emission limits for the particulate matter category as a whole. Therefore, NRG Texas proposes the use of filterable particulate matter emissions as a surrogate for non mercury HAP metals emissions. As such, a filterable particulate matter emission limit can be established which represents the case-by-case MACT for all non-mercury HAP metals, as has been EPA's practice when establishing MACT emission standards for source categories emitting HAP metals. NRG Texas provided a detailed evaluation of particulate matter emission controls and recent permit limits for particulate matter emissions from coal-fired PC Boilers in the state/psd permit application technical supplement submitted in June 2007 that established a filterable particulate matter emission limit of lb/mmbtu as BACT for the PC boiler for all fuel types. That emission limit is included in the draft of Permit Nos and PSD-TX-1072 to represent BACT and neither NRG Texas nor the TCEQ found any more stringent emission limit for a pulverized coal-fired PC Boilers that has made its initial compliance demonstration. Accordingly, the MACT floor for emissions of non-mercury HAP metals from the PC boiler is a filterable particulate matter emission limit of lb/mmbtu. As part of this analysis, a review of the available literature was performed to determine whether a "beyond-the-floor" MACT emission limit would be appropriate for emissions of non-mercury HAP metals from the PC boiler. This review shows through advances in fabric filter technology and in the continued commercialization of wet electrostatic precipitator technology, a more stringent filterable particulate matter emission limit of lb/mmbtu is achievable. NRG Texas has determined that the cost of achieving this additional emission reduction through the use of advanced fabric filter baghouse technology at LMS3 is acceptable. Fabric filter baghouses do not cause any appreciable non-air quality health or environmental impacts, nor are they characterized by unacceptable energy requirements. Accordingly, a filterable particulate matter emission limit of lb/mmbtu has been

23 Preliminary Determination Summary Page 8 determined to represent beyond-the-floor MACT for the PC boiler. This emission limit will be achieved using the planned air pollution control technologies represented in the application for Permit Nos and PSD-TX As noted above, wet electrostatic precipitator technology was identified as another add-on control technology that could be used to achieve a beyond-the-floor filterable particulate matter emission limit of lb/mmbtu. The wet electrostatic precipitator is less preferred than the fabric filter baghouse upgrade because of its unacceptable economic costs. The annualized cost of installing, maintaining and operating a wet electrostatic precipitator is estimated to be $22.4 million (a detailed cost estimate is provided in Appendix C of the application). Adding a wet electrostatic precipitator to the planned air pollution control technologies for the PC boiler would not achieve a more stringent limit than the proposed lb/mmbtu. However, the emission reduction achievable with this technology is not material, as the economic costs are unacceptable in any event. Even assuming that the wet electrostatic precipitator in this configuration could achieve a further 50 percent reduction, the cost effectiveness would be more than $100,000 per ton of reduction in filterable particulate matter emissions and approximately $10 million per ton of non-mercury HAP metals emissions. No direct comparison can be made between the case-by-case MACT emission limit for the PC boiler and the new source MACT proposed by EPA under Subpart UUUUU because EPA elected not to propose an emission standard for non-mercury HAP metals from coal-fired EUSGUs. An emission limit of lb/mmbtu for filterable particulate matter should be established as the beyond-the-floor MACT limit for emissions of non-mercury HAP metals from the PC boiler. Acid Gases - Hydrogen chloride (HCl) and hydrogen fluoride (HF) are inorganic, vapor phase HAPs formed from combustion of trace quantities of the halogens chlorine and fluorine in the fuel. NRG Texas provided a detailed evaluation of acid gas emission controls and recent permit limits for HCl and HF emissions from coal-fired PC Boilers in the state/psd application technical supplement submitted in June Based on that evaluation, NRG Texas determined that HCl and HF emission limits of lb/mmbtu and lb/mmbtu, respectively, represent BACT for the PC boiler for all fuel types. Those emission rates were agreed to by the TCEQ and included in the draft of Permit Nos and PSD-TX-1072.

24 Preliminary Determination Summary Page 9 HCl - To date, available information shows that the most stringent HCl emission limit identified for any facility that burns primarily subbituminous coal and has made an initial compliance demonstration is lb/mmbtu for Unit 4 at the Walter Scott, Jr., Energy Center in Iowa. Although this unit has been operating for less than one year, NRG Texas has conservatively concluded that the HCl emission limit of lb/mmbtu has been demonstrated in practice and represents the MACT floor for boilers burning only subbituminous coal. To date, available information shows that the most stringent HCl emission limit identified for any facility that burns primarily bituminous coal and has made an initial compliance demonstration is lb/mmbtu for Unit 3 at the Cross Generating Station in South Carolina." Based on this emission limit, NRG Texas concludes that an HCl emission limit of lb/mmbtu has been demonstrated in practice and represents the MACT floor for boilers burning primarily bituminous coal. Because continuous monitoring for HCl emissions is not feasible, the MACT floor for HCl emissions from the PC boiler should be established based on the use of a worst-case blend containing 60 percent by weight subbituminous coal and 40 percent by weight bituminous coal. The corresponding proposed MACT floor emission limit is lb/mmbtu. HF - To date, available information shows that emissions, based on the use of subbituminous coals primarily from New Mexico with very low fluoride content of 86 parts per million by weight or less. Applying this control efficiency of percent to the HF emission calculations for the PC boiler, and considering the average coal fluoride concentrations of the coals proposed to be burned at this unit, results in an annual average HF emission rate of lb/mmbtu. This value represents the MACT floor for the PC boiler. NRG Texas reviewed available literature to determine whether a beyond-the-floor MACT emission limit would be appropriate for emissions of acid gases from the PC boiler. This review shows that, due to the continued commercialization of wet electrostatic precipitator technology, lower hydrogen chloride and hydrogen fluoride emissions are likely achievable through the addition of a wet electrostatic precipitator to the planned air pollution control technologies for Limestone Unit 3. The hydrogen chloride and hydrogen fluoride emission reductions achievable with this technology addition are unknown, because there are no performance data for any similarly configured existing facility. However, the precise level of emission reduction achievable with this technology is not material to the case-by-case MACT determination, as the economic costs are unacceptable in any event. The required total capital investment for a wet electrostatic precipitator at LMS3 is $128 million and the total annualized cost of installing, maintaining and operating this technology is estimated to be $22.4 million (details are in Appendix C of the application). Even assuming that the wet electrostatic precipitator in this configuration could remove all the remaining HCl and HF,