AIR EMISSION PERMIT NO IS ISSUED TO. Rochester Public Utilities for Two Standby/Peaking Diesel-Fired Generator Sets

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1 AIR EMISSION PERMIT NO IS ISSUED TO Rochester Public Utilities for Two Standby/Peaking Diesel-Fired Generator Sets Rochester Public Utilities 3605 Highway 52 North Rochester, Olmsted County, MN The emission units, control equipment and emission stacks at the stationary source authorized in this permit are as described in the following permit application(s): Permit Type Application Date Total Facility Operating Permit January 15, 2004 This permit authorizes the permittee to the stationary source at the address listed above unless otherwise noted in Table A. The permittee must comply with all the conditions of the permit. Any changes or modifications to the stationary source must be performed in compliance with Minn. R to Terms used in the permit are as defined in the state air pollution control rules unless the term is explicitly defined in the permit. Permit Type: State; Limits to Avoid Part 70/Limits to Avoid New Source Review Issue Date: May 21, 2004 Expiration: Permit does not expire All Title I Conditions do not expire. Ann M. Foss Major Facilities Section Manager Majors and Remediation Division for Sheryl A. Corrigan Commissioner Minnesota Pollution Control Agency CDT:lh TDD (for hearing and speech impaired only): (651) Printed on recycled paper containing at least 10% fibers from paper recycled by consumers

2 TABLE OF CONTENTS Notice to the Permittee Permit Shield Facility Description Table A: Limits and Other Requirements Table B: Submittals Appendices: None

3 NOTICE TO THE PERMITTEE: Your stationary source may be subject to the requirements of the Minnesota Pollution Control Agency s (MPCA) solid waste, hazardous waste, and water quality programs. If you wish to obtain information on these programs, including information on obtaining any required permits, please contact the MPCA general information number at: Metro Area (651) Outside Metro Area TTY (651) The rules governing these programs are contained in Minn. R. chs Written questions may be sent to: Minnesota Pollution Control Agency, 520 Lafayette Road North, St. Paul, Minnesota Questions about this air emission permit or about air quality requirements can also be directed to the telephone numbers and address listed above. PERMIT SHIELD: Subject to the limitations in Minn. R , compliance with the conditions of this permit shall be deemed compliance with the specific provision of the applicable requirement identified in the permit as the basis of each condition. Subject to the limitations of Minn. R and , subp. 2, notwithstanding the conditions of this permit specifying compliance practices for applicable requirements, any person (including the Permittee) may also use other credible evidence to establish compliance or noncompliance with applicable requirements. FACILITY DESCRIPTION: The facility consists of two standby/peaking diesel-fired generator sets with a nominal rated capacity of 2.0 megawatts each. The permit includes limits to avoid classification of the facility as a major source under 40 CFR Section and 40 CFR Part 70.

4 TABLE A: LIMITS AND OTHER REQUIREMENTS 05/21/04 Facility Name: RPU - IBM Peaking Diesel Generators Permit Number: Table A contains limits and other requirements with which your facility must comply. The limits are located in the first column of the table (What To do). The limits can be emission limits or operational limits. This column also contains the actions that you must take and the records you must keep to show that you are complying with the limits. The second column of Table A (Why to do it) lists the regulatory basis for these limits. Appendices included as conditions of your permit are listed in Table A under total facility requirements. Subject Item: Total Facility What to do If EPA-approved air dispersion modeling predicts a violation of a National Ambient Air Quality Standard (NAAQS) in the impact area of the RPU generators and emissions from the RPU generators have a significant impact on the violation, then the Permittee shall obtain federally-enforceable offsets sufficient to either: a) reduce the predicted ambient air concentrations to a level below the applicable NAAQS; or b) compensate for the entire impact of the emissions from the RPU generators. The federally-enforceable offsets must be obtained prior to operation of the generators. Circumvention: Do not install or use a device or means that conceals or dilutes emissions, which would otherwise violate a federal or state air pollution control rule, without reducing the total amount of pollutant emitted. Operation Changes: In any shutdown, breakdown, or deviation the Permittee shall immediately take all practical steps to modify operations to reduce the emission of any regulated air pollutant. The Commissioner may require feasible and practical modifications in the operation to reduce emissions of air pollutants. No emissions units that have an unreasonable shutdown or breakdown frequency of process or control equipment shall be permitted to operate. Noise: The Permittee shall comply with the noise standards set forth in Minn. R to at all times during the operation of any emission units. This is a state only requirement and is not enforceable by the EPA Administrator or citizens under the Clean Air Act. Inspections: The Permittee shall comply with the inspection procedures and requirements as found in Minn. R , subp. 9(A). The Permittee shall comply with the General Conditions listed in Minn. R , subp. 16. Record keeping: Retain all records at the stationary source for a period of five (5) years from the date of monitoring, sample, measurement, or report. Records which must be retained at this location include all calibration and maintenance records, all original recordings for continuous monitoring instrumentation, and copies of all reports required by the permit. Records must conform to the requirements listed in Minn. R , subp. 5(A). Records required by this permit shall be retained at the RPU facility located at 4000 East River Road NE, Rochester, Minnesota. Recordkeeping: Maintain records describing any insignificant modifications (as required by Minn. R , subp. 3) or changes contravening permit terms (as required by Minn. R subp. 2), including records of the emissions resulting from those changes. Shutdown Notifications: Notify the Commissioner at least 24 hours in advance of a planned shutdown of any control equipment or process equipment if the shutdown would cause any increase in the emissions of any regulated air pollutant. If the owner or operator does not have advance knowledge of the shutdown, notification shall be made to the Commissioner as soon as possible after the shutdown. However, notification is not required in the circumstances outlined in Items A, B and C of Minn. R , subp. 3. At the time of notification, the owner or operator shall inform the Commissioner of the cause of the shutdown and the estimated duration. The owner or operator shall notify the Commissioner when the shutdown is over. Breakdown Notifications: Notify the Commissioner within 24 hours of a breakdown of more than one hour duration of any control equipment or process equipment if the breakdown causes any increase in the emissions of any regulated air pollutant. The 24-hour time period starts when the breakdown was discovered or reasonably should have been discovered by the owner or operator. However, notification is not required in the circumstances outlined in Items A, B and C of Minn. R , subp. 2. Why to do it 40 CFR Minn. R Minn. R , subp. 4 Minn. R Minn. R , subp. 9(A) Minn. R , subp. 16 Minn. R , subp. 5(C) Minn. R , subp. 5(B) Minn. R , subp. 3 Minn. R , subp. 2 At the time of notification or as soon as possible thereafter, the owner or operator shall inform the Commissioner of the cause of the breakdown and the estimated duration. The owner or operator shall notify the Commissioner when the breakdown is over. A-1

5 TABLE A: LIMITS AND OTHER REQUIREMENTS 05/21/04 Facility Name: RPU - IBM Peaking Diesel Generators Permit Number: Notification of Deviations Endangering Human Health or the Environment: As soon Minn. R , subp. 1 as possible after discovery, notify the Commissioner or the state duty officer, either orally or by facsimile, of any deviation from permit conditions which could endanger human health or the environment. Notification of Deviations Endangering Human Health or the Environment Report: Minn. R , subp. 1 Within 2 working days of discovery, notify the Commissioner in writing of any deviation from permit conditions which could endanger human health or the environment. Include the following information in this written description: 1. the cause of the deviation; 2. the exact dates of the period of the deviation, if the deviation has been corrected; 3. whether or not the deviation has been corrected; 4. the anticipated time by which the deviation is expected to be corrected, if not yet corrected; and 5. steps taken or planned to reduce, eliminate, and prevent reoccurrence of the deviation. Application for Permit Amendment: If a permit amendment is needed, submit an Minn. R through Minn. R application in accordance with the requirements of Minn. R through Minn. R Submittal dates vary, depending on the type of amendment needed. Extension Requests: The Permittee may apply for an Administrative Amendment Minn. R , subp. 1(H) to extend a deadline in a permit by no more than 120 days, provided the proposed deadline extension meets the requirements of Minn. R , subp. 1(H). Emission Inventory Report: due 91 days after end of each calendar year following Minn. R through Minn. R permit issuance (April 1). To be submitted on a form approved by the Commissioner. Emission Fees: due 60 days after receipt of an MPCA bill. Minn. R through Minn. R A-2

6 TABLE A: LIMITS AND OTHER REQUIREMENTS 05/21/04 Facility Name: RPU - IBM Peaking Diesel Generators Permit Number: Subject Item: Associated Items: GP 001 Generators EU 001 Eastern Standby/Peaking Generator EU 002 Western Standby/Peaking Generator What to do Opacity: less than or equal to 20 percent opacity once operating temperatures have been attained. Sulfur Dioxide: less than or equal to 0.5 lbs/million Btu heat input. This requirement is less stringent than the fuel restriction for diesel fuel sulfur content. Compliance with the diesel fuel sulfur content limit constitutes compliance with this limit. Sulfur Content of Fuel: less than or equal to 0.05 percent by weight. This limit applies to diesel fuel burned in the generators. Fuel Usage: less than or equal to gallons/year of diesel fuel burned in each generator. Stack Heights: The minimum exhaust stack height for EU 001 shall be 18.0 meters above grade. The minimum exhaust stack height for EU 002 shall be meters above grade. Diesel Fuel Certification: The owner or operator shall retain written documentation of each shipment of diesel fuel oil received for the diesel engines. The written documentation shall include the following information: the sulfur content of the diesel fuel and the method used to determine the sulfur content. Recordkeeping of Fuel Usage: By the 15th day of each month, the Permittee shall record the amount of diesel fuel burned in each generator during the previous month and during the previous 12 months (12-month rolling sum). Why to do it Minn. R , subp. 1 Minn. R , subp. 2 Title I Condition: To avoid classification as a major source under 40 CFR and 40 CFR 70.2; To not cause or contribute to a violation of the ambient air increments for SO2 established in 40 CFR 52.21(c) Title I Condition: To avoid classification as a major source under 40 CFR and 40 CFR 70.2; To not cause or contribute to a violation of the annual ambient air increments established in 40 CFR 52.21(c) Title I Condition: To demonstrate compliance with the ambient air increments established in 40 CFR 52.21(c) Minn. R , subp. 5 Minn. R , subp. 5 A-3

7 TABLE B: SUBMITTALS Facility Name: RPU - IBM Peaking Diesel Generators Permit Number: /21/04 Table B lists most of the submittals required by this permit. Please note that some submittal requirements may appear in Table A or, if applicable, within a compliance schedule located in Table C. Table B is divided into two sections in order to separately list one-time only and recurrent submittal requirements. Each submittal must be postmarked or received by the date specified in the applicable Table. Those submittals required by parts to must be certified by a responsible official, defined in Minn. R , subp. 21. Other submittals shall be certified as appropriate if certification is required by an applicable rule or permit condition. Send any application for a permit or permit amendment to: Permit Technical Advisor Permit Section Air Quality Division Minnesota Pollution Control Agency 520 Lafayette Road North St. Paul, Minnesota Also, where required by an applicable rule or permit condition, send to the Permit Technical Advisor notices of: - accumulated insignificant activities, - installation of control equipment, - replacement of an emissions unit, and - changes that contravene a permit term. Unless another person is identified in the applicable Table, send all other submittals to: Supervisor Compliance Determination Unit Air Quality Division Minnesota Pollution Control Agency 520 Lafayette Road North St. Paul, Minnesota Send submittals that are required to be submitted to the U.S. EPA regional office to: Mr. George Czerniak Air and Radiation Branch EPA Region V 77 West Jackson Boulevard Chicago, Illinois Send submittals that are required by the Acid Rain Program to: U.S. Environmental Protection Agency Clean Air Markets Division 1200 Pennsylvania Avenue NW (6204N) Washington, D.C B-1

8 TABLE B: RECURRENT SUBMITTALS Facility Name: RPU - IBM Peaking Diesel Generators 05/21/04 Permit Number: What to send When to send Portion of Facility Affected Semiannual Deviations Report due 30 days after end of each calendar Total Facility half-year following Permit Issuance. The first semiannual report submitted by the Permittee shall cover the calendar half-year in which the permit is issued. The first report of each calendar year covers January 1 - June 30. The second report of each calendar year covers July 1 - December 31. If no deviations have occured, the Permittee shall submit the report stating no deviations. Compliance Certification due 30 days after end of each calendar year following Permit Issuance (for the previous calendar year). To be submitted to the Commissioner on a form approved by the Commissioner. This report covers all deviations experienced during the calendar year. Total Facility B-2

9 TECHNICAL SUPPORT DOCUMENT For AIR EMISSION PERMIT NO This technical support document is intended for all parties interested in the permit and to meet the requirements that have been set forth by the federal and state regulations (40 CFR 70.7(a)(5) and Minn. R , subp.1). The purpose of this document is to provide the legal and factual justification for each applicable requirement or policy decision considered in the preliminary determination to issue the permit. 1. General Information 1.1. Applicant and Stationary Source Location: Applicant/Address Rochester Public Utilities 4000 East River Road NE Rochester, MN Contact: Joe Hensel Phone: (507) Stationary Source/Address (SIC Code: 4911) 3605 Highway 52 N Rochester Olmsted County 1.2. Description of the Permit Action The permit is for construction/operation of two standby/peaking diesel-fired generator sets with a nominal rated capacity of 2.0 megawatts each. The generators are located on the property of the IBM-Rochester facility. The Eastern Standby/Peaking Generator and Western Standby/Peaking Generator are identified as EU 001 and EU 002, respectively. Emissions from EU 001 and EU 002 are emitted through stack/vents SV 001 and SV 002, respectively. The generators are grouped under group GP 001 in the permit Facility Emissions: Table 1. Total Facility Potential to Emit Summary Total Facility Limited Potential Emissions PM PM 10 SO 2 NO x CO VOC All HAPs <0.1 Technical Support Document, Permit Action Number: Page 1 of 4 Date: 7/18/2005

10 Classification Major/Affected Source PSD Part 70 Permit Program Part 63 NESHAP 2. Regulatory and/or Statutory Basis New Source Review Table 2. Facility Classification X X Synthetic Minor X Minor Emissions are limited to avoid classification as a major source under NSR. The amount of diesel burned in each unit is limited to 109,620 gallons per year. Part 70 Permit Program Emissions are limited to avoid classification as a major source under Part 70. The amount of diesel burned in each unit is limited to 109,620 gallons per year. New Source Performance Standards (NSPS) There are no New Source Performance Standards applicable to the operations at this facility. National Emission Standards for Hazardous Air Pollutants for Source Categories (NESHAP for Source Categories) Potential HAP emissions are below the major source levels of 10 tons/year of any single HAP and 25 tons/year of any combination of HAPs, so the facility is not a major source under 40 CFR Part 63. Minnesota State Rules The generators are subject to Minn. R , Standards of Performance for Stationary Internal Combustion Engines. Table 3. Regulatory Overview of Facility EU, GP, Applicable Regulations Comments: or SV GP 001 Minn. R Standards of Performance for Stationary Internal Combustion Engines GP CFR 52.21; 40 CFR 70 Limits opacity to 20% opacity once operating temperatures have been attained and sulfur dioxide emissions to 0.5 lb/million Btu heat input. Prevention of Significant Deterioration of Air Quality; State Operating Permit Programs A limit on sulfur content and the amount of fuel burned annually is taken to avoid classification as a major source under 40 CFR and 40 CFR 70. Technical Support Document, Permit Action Number: Page 2 of 4 Date: 7/18/2005

11 3. Technical Information 3.1 Calculations of Potential to Emit Calculations are attached as Attachment A. Emissions are calculated by taking into account the limit on the amount of fuel burned of 109,620 gallons of diesel fuel per year and the fuel restriction that only diesel fuel with a sulfur content of 0.05% or less can be burned in the units Major Source Status under 40 CFR and 40 CFR 70 The permit restricts the amount of fuel which can be burned in each unit as well as the sulfur content of the fuel. The pollutant emitted in the largest amount is nitrogen oxides (NOx) and the permit restrictions limit annual NOx emissions to 54.9 tons/year, which is below the major source levels of 250 tons/year under 40 CFR and 100 tons/year under 40 CFR Compliance with Ambient Air Quality Standards and PSD Increments Modeling conducted for an unrelated project has shown modeled exceedances of short-term sulfur dioxide (SO2) national ambient air quality standards (NAAQS), short-term PSD increments for SO2 and the annual PSD increment for NO2 near the IBM-Rochester facility (the generators will be located on IBM property, but are considered a separate source; see Section 3.4). The modeling also showed exceedances of short-term PM-10 standards near the Crenlo manufacturing plant in Rochester. Recent modeling conducted by RPU (see Attachment D) has shown that compliance with the PSD increments can be attained by the restrictions proposed in the permit and by not installing Boiler No. 5 at the IBM facility. IBM will be required to demonstrate compliance with the PSD increments prior to installation of Boiler No. 5 at the facility, so installation and operation of the RPU generators is not expected to result in an exceedance of the PSD increments. To mitigate the modeled exceedances of the NAAQS, the following language has been added to the permit: If EPA-approved air dispersion modeling predicts a violation of a National Ambient Air Quality Standard (NAAQS) in the impact area of the RPU generators and emissions from the RPU generators have a significant impact on the violation, then the Permittee shall obtain federallyenforceable offsets sufficient to either: a) reduce the predicted ambient air concentrations to a level below the applicable NAAQS; or b) compensate for the entire impact of the emissions from the RPU generators. The federally-enforceable offsets must be obtained prior to operation of the generators. The NAAQS exceedances are being resolved in accordance with the procedures outlined in a July 5, 1988 EPA memorandum (Attachment B to this document). 3.4 Single Source Determination In a November 21, 2003 letter, the MPCA determined that the IBM facility and the proposed RPU generators are separate stationary sources for permitting purposes. A copy of the November 21, 2003 letter is included as Attachment C to this document. Technical Support Document, Permit Action Number: Page 3 of 4 Date: 7/18/2005

12 3.5 Environmental Review Minn. R , subp. 15(A) establishes a 100 ton/year threshold for an Environmental Assessment Worksheet (EAW). Since the permit limits total emissions from the facility to less than 100 tons/year of any pollutant, an EAW is not required. 4. Conclusion Based on the information provided by RPU, the MPCA has reasonable assurance that the proposed operation of the emission facility, as described in the Air Emission Permit No and this technical support document, will not cause or contribute to a violation of applicable federal regulations and Minnesota Rules. Staff Members on Permit Team: Craig Thorstenson (engineer / permit writer) Greg Berger (enforcement) John Chikkala (peer reviewer) Attachments: A Calculations B July 5, 1988 EPA Memorandum C November 21, 2003 MPCA Letter D Dispersion Modeling Results Technical Support Document, Permit Action Number: Page 4 of 4 Date: 7/18/2005