DRAFT/PROPOSED. AIR EMISSION PERMIT NO Total Facility Operating Permit Reissuance IS ISSUED TO. ALLETE Inc dba Minnesota Power Inc

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1 DRAFT/PROPOSED AIR EMISSION PERMIT NO Total Facility Operating Permit Reissuance IS ISSUED TO ALLETE Inc dba Minnesota Power Inc Minnesota Power Laskin Energy Center 5699 Colby Lake Road Hoyt Lakes, St. Louis County, Minnesota The emission units, control equipment and emission stacks at the stationary source authorized in this permit reissuance are as described in the Permit Applications Table. The conditions included in Stage 1 of this permit action are effective on the Stage 1 Issuance Date shown below. Stage 1 condition authorize construction of the facility and operation of EU 001 and EU 002 emission units at the address listed above until final action is take on Stage 2. Air Emission Permit No remains effective until the Stage 2 Issue Date shown below. Beginning on the Stage 2 Issue Date shown below, Air Emission Permit No supersedes Air Emission Permit No and authorizes the Permittee to operate 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. Unless otherwise indicated, all the Minnesota rules cited as the origin of the permit terms are incorporated into the SIP under 40 CFR and as such as are enforceable by U.S. Environmental Protection Agency (EPA) Administrator or citizens under the Clean Air Act. Permit Type: Federal; Pt 70/Major for NSR Operating Permit Issue Date: <issue date> Stage 1 Issue Date Authorization to Construct and Operate: Stage 2 Issue Date Part 70 Reissuance: Expiration Date: <expiration date or Non Expiring> All Title I Conditions do not expire. Stage 1 Issuance Stage 2 Issuance Don Smith, P.E., Manager Don Smith, P.E., Manager Air Quality Permits Section Industrial Division Air Quality Permits Section Industrial Division for John Linc Stine for John Linc Stine Commissioner Minnesota Pollution Control Agency Commissioner Minnesota Pollution Control Agency Permit Applications Table TDD (for hearing and speech impaired only): (651) Printed on recycled paper containing at least 10% fibers from paper recycled by consumers

2 Permit Type Application Date Permit Action Total Facility Operating Permit Reissuance May 29, 2013 Reopening August 5, 2009 Administrative Amendment February 28, Major Amendment October 10, 2013 TABLE OF CONTENTS Notice to the Permittee Permit Shield Facility Description Table A: Limits and Other Requirements Table B: Submittals Appendices Appendix A [Reserved] Appendix B Acid Rain Permit Application Appendix C Insignificant Activities Required to be Listed Appendix D [Reserved] Appendix E Sulfur Dioxide (SO 2 ) Modeling Parameters Appendix F Nitrogen Oxides (NO X ) and Particulate matter smaller than 10 microns (PM 10 ) Modeling Parameters

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 Outside Metro Area TTY 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 Laskin Energy Center (LEC) is an electric generating facility located near Aurora, Minnesota. The net generating capacity is 110 megawatts. Prior to the implementation of the physical changes authorized by this permit action, this electric power facility contained two identical steam generating boilers, coal receiving, handling, and storage facilities, and ash handling and storage capabilities. Each boiler had twelve 4 million British thermal units (mmbtu/hr) natural gas/oil fired ignitors and dry low NO X combustors. Each boiler vented emissions to a high efficiency wet scrubber that discharged to the atmosphere through a common stack. The scrubbers controlled Particulate Matter (PM), PM 10, SO 2, and lead. The permit action authorizes the conversion of two existing boilers at LEC from predominantly coal combustion to exclusively natural gas combustion. This project will require that the burners in the two existing boilers be replaced in order to accommodate the fuel switch from coal to natural gas. The two boilers will continue to discharge to a common stack. As part of the conversion project, the coal crusher and ash handling equipment will be idled or removed. The coal piles will also be removed, eliminating the need for coal pile maintenance) and fugitive emissions from wind erosion. The existing scrubbers and low NO X coal burners will be retired. New low NO X natural gas burners will also be installed.

4 Facility Name: Minnesota Power - Laskin Energy Center Permit Number: A-1 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 MODELING REQUIREMENTS What to do Why to do it THE FOLLOWING MODELING REQUIREMENT DOES NOT APPLY FOLLOWING THE CONVERSION OF BOILER #1 AND BOILER #2 TO NATURAL GAS. Parameters Used in Modeling: The parameters used in the modeling performed for determining emission and/or operational limits for this facility are listed in Appendix E of this permit. If the Permittee intends to change any of these parameters, the Permittee must submit the revised parameters to the Commissioner and receive written approval before making any changes. The revised parameter information submittal must include, but is not limited to: the locations, heights and diameters of the stacks; locations and dimensions of nearby buildings; velocity and temperatures of the gases emitted; and the emission rates. The plume dispersion characteristics due to the parameter revisions must equal or exceed the dispersion characteristics modeled for this permit, and the Permittee shall demonstrate this in the proposal. If the information does not demonstrate equivalent or better dispersion characteristics, or if a conclusion cannot readily be made about the dispersion, the Permittee must remodel. Parameters Used in Modeling (continued): For changes that do not involve an increase in an emission rate and that do not require a permit amendment, the proposal must be submitted as soon as practicable, but no less than 60 days before making the change to any parameter. For changes involving increases in emission rates and that require a minor permit amendment, the proposal must be submitted as soon as practicable, but no less than 60 days before making the change to any parameter. For changes involving increases in emission rates and that require a permit amendment other than a minor amendment, the proposal must be submitted prior to or with the permit amendment application. Minn. Stat. Section , subds. 4a & 9; Minn. R , subps 7A, 7L & 7M; Minn. R , subps. 1, 2 & 4; Minn. R CONTINUED CONTINUED This is a state only requirement and is not enforceable by the EPA Administrator and citizens under the Clean Air Act. DETERMINING IF A PROJECT/MODIFICATION IS SUBJECT TO NSR These requirements apply if a reasonable possibility (RP) as defined in 40 CFR Section 52.21(r)(6)(vi) exists that a proposed project, analyzed using the actual-to-projected-actual (ATPA) test (either by itself or as part of the hybrid test at Section 52.21(a)(2)(iv)(f)) and found to not be part of a major modification, may result in a significant emissions increase (SEI). If the ATPA test is not used for the project, or if there is no RP that the proposed project could result in a SEI, these requirements do not apply to that project. The Permittee is only subject to the Preconstruction Documentation requirement for a project where a RP occurs only within the meaning of Section 52.21(r)(6)(vi)(b). Title I Condition: 40 CFR Section 52.21(r)(6); Minn. R ; Minn. R , subp. 2 Even though a particular modification is not subject to New Source Review (NSR), or where there isn't a RP that a proposed project could result in a SEI, a permit amendment, recordkeeping, or notification may still be required by Minn. R

5 Facility Name: Minnesota Power - Laskin Energy Center Permit Number: A-2 Preconstruction Documentation -- Before beginning actual construction on a project, the Permittee shall document the following: 1. Project description 2. Identification of any emission unit (EU) whose emissions of an NSR pollutant could be affected 3. Pre-change potential emissions of any affected existing EU, and the projected post-change potential emissions of any affected existing or new EU. 4. A description of the applicability test used to determine that the project is not a major modification for any regulated NSR pollutant, including the baseline actual emissions, the projected actual emissions, the amount of emissions excluded due to increases not associated with the modification and that the EU could have accommodated during the baseline period, an explanation of why the amounts were excluded, and any creditable contemporaneous increases and decreases that were considered in the determination. Title I Condition: 40 CFR Section 52.21(r)(6); Minn. R ; Minn. R , subp. 4; Minn. R , subps. 4 & 5 The Permittee shall maintain records of this documentation. The Permittee shall monitor the actual emissions of any regulated NSR pollutant that could increase as a result of the project and that were analyzed using the ATPA test, and the potential emissions of any regulated NSR pollutant that could increase as a result of the project and that were analyzed using potential emissions in the hybrid test. The Permittee shall calculate and maintain a record of the sum of the actual and potential (if the hybrid test was used in the analysis) emissions of the regulated pollutant, in tons per year on a calendar year basis, for a period of 5 years following resumption of regular operations after the change, or for a period of 10 years following resumption of regular operations after the change if the project increases the design capacity of or potential to emit of any unit associated with the project. The Permittee must submit a report to the Agency if the annual summed (actual, plus potential if used in hybrid test) emissions differ from the preconstruction projection and exceed the baseline actual emissions by a significant amount as listed at 40 CFR Section 52.21(b)(23). Such report shall be submitted to the Agency within 60 days after the end of the year in which the exceedances occur. The report shall contain: a. The name and ID number of the facility, and the name and telephone number of the facility contact person b. The annual emissions (actual, plus potential if any part of the project was analyzed using the hybrid test) for each pollutant for which the preconstruction projection and significant emissions increase are exceeded. c. Any other information, such as an explanation as to why the summed emissions differ from the preconstruction projection. Before beginning actual construction of any project which includes any electric utility steam generating unit (EUSGU), the Permittee shall submit a copy of the preconstruction documentation (items 1-4 under Preconstruction Documentation, above) to the Agency. This condition shall not be construed to require the Permittee to obtain any determination from the Administrator before beginning construction. Title I Condition: 40 CFR Section 52.21(r)(6); Minn. R ; Minn. R , subps. 4 & 5 Title I Condition: 40 CFR Section 52.21(r)(6); Minn. R ; Minn. R , subps. 4 & 5 Title I Condition: 40 CFR Section 52.21(r)(6)(ii); Minn. R ; Minn. R ; Minn. R , subps. 4 & 5 The Permittee shall comply with state and federal permitting rules and obtain the required permits prior to beginning construction. For any project which includes any EUSGU, the Permittee must submit an annual report to the Agency, within 60 days after the end of the calendar year. The report shall contain: Title I Condition: 40 CFR Section 52.21(r)(6); Minn. R ; Minn. R , subps. 4 & 5 a. The name and ID number of the facility, and the name and telephone number of the facility contact person b. The quantified annual emissions analyzed using the ATPA test, plus the potential emissions associated with the same project analyzed as part of a hybrid test. c. Any other information, such as an explanation as to why the summed emissions differ from the preconstruction projection, if that is the case.

6 Facility Name: Minnesota Power - Laskin Energy Center Permit Number: A-3 For any project which does not include any EUSGU, the Permittee must submit a report to the Agency if the annual summed (actual, plus potential used in hybrid test) emissions differ from the preconstruction projection and exceed the baseline actual emissions by a significant amount as listed at 40 CFR Section 52.21(b)(23). Such report shall be submitted to the Agency within 60 days after the end of the year in which the exceedances occur. The report shall contain: Title I Condition: 40 CFR Section 52.21(r)(6); Minn. R ; Minn. R , subps. 4 & 5 a. The name and ID number of the facility, and the name and telephone number of the facility contact person b. The annual emissions (actual, plus potential if any part of the project was analyzed using the hybrid test) for each pollutant for which the preconstruction projection and significant emissions rate is exceeded. c. Any other information, such as an explanation as to why the summed emissions differ from the preconstruction projection. OPERATIONAL REQUIREMENTS The Permittee shall comply with National Primary and Secondary Ambient Air Quality Standards, 40 CFR pt. 50, and the Minnesota Ambient Air Quality Standards, Minn. R to Compliance shall be demonstrated upon written request by the MPCA. 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. Air Pollution Control Equipment: Operate all pollution control equipment whenever the corresponding process equipment and emission units are operated. Operation and Maintenance Plan: Retain at the stationary source an operation and maintenance plan for all air pollution control equipment. At a minimum, the O & M plan shall identify all air pollution control equipment and control practices and shall include a preventative maintenance program for the equipment and practices, a description of (the minimum but not necessarily the only) corrective actions to be taken to restore the equipment and practices to proper operation to meet applicable permit conditions, a description of the employee training program for proper operation and maintenance of the control equipment and practices, and the records kept to demonstrate plan implementation. 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. Fugitive Emissions: Do not cause or permit the handling, use, transporting, or storage of any material in a manner which may allow avoidable amounts of particulate matter to become airborne. Comply with all other requirements listed in Minn. R 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. PERFORMANCE TESTING Performance Testing: Conduct all performance tests in accordance with Minn. R. ch unless otherwise noted in Tables A, B, and/or C. Performance Test Notifications and Submittals: Performance Tests are due as outlined in Table A of the permit. See Table B for additional testing requirements. Performance Test Notification (written): due 30 days before each Performance Test Performance Test Plan: due 30 days before each Performance Test Performance Test Pre-test Meeting: due 7 days before each Performance Test Performance Test Report: due 45 days after each Performance Test Performance Test Report - Microfiche Copy: due 105 days after each Performance Test The Notification, Test Plan, and Test Report may be submitted in an alternative format as allowed by Minn. R Minn. Stat. Section , subds. 4a & 9; Minn. R , subp. 7(A), 7(L), & 7(M); Minn. R , subps. 1, 2 & 4; Minn. R Minn. R Minn. R , subp. 2; Minn. R , subp. 16(J) Minn. R , subps. 14 and 16(J) Minn. R , subp. 4 Minn. R Minn. R Minn. R , subp. 9(A) Minn. R , subp. 16 Minn. R. ch Minn. R ; Minn. R , subps. 1-4, Minn. R , subps. 1-2

7 Facility Name: Minnesota Power - Laskin Energy Center Permit Number: A-4 Limits set as a result of a performance test (conducted before or after permit issuance) apply until superseded as stated in the MPCA's Notice of Compliance letter granting preliminary approval. Preliminary approval is based on formal review of a subsequent performance test on the same unit as specified by Minn. R , subp. 3. The limit is final upon issuance of a permit amendment incorporating the change. MONITORING REQUIREMENTS Monitoring Equipment Calibration - The Permittee shall either: Minn. R , subp. 3 Minn. R , subp. 4(D) 1. Calibrate or replace required monitoring equipment every 12 months; or 2. Calibrate at the frequency stated in the manufacturer's specifications. For each monitor, the Permittee shall maintain a record of all calibrations, including the date conducted, and any corrective action that resulted. The Permittee shall include the calibration frequencies, procedures, and manufacturer's specifications (if applicable) in the Operations and Maintenance Plan. Any requirements applying to continuous emission monitors are listed separately in this permit. Operation of Monitoring Equipment: Unless otherwise noted in Tables A, B, and/or C, monitoring a process or control equipment connected to that process is not necessary during periods when the process is shutdown, or during checks of the monitoring systems, such as calibration checks and zero and span adjustments. If monitoring records are required, they should reflect any such periods of process shutdown or checks of the monitoring system. RECORDKEEPING Recordkeeping: Retain all records at the stationary source, unless otherwise specified within this permit, 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). Recordkeeping: maintain records of the occurrence and duration of any startup, shutdown, or malfunction in the operation of the facility including malfunction of the air pollution control equipment or any periods during which a continuous monitoring system or monitoring device is inoperative. 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. If the Permittee determines that no permit amendment or notification is required prior to making a change, the Permittee must retain records of all calculations required under Minn. R For expiring permits, these records shall be kept for a period of five years from the date the change was made or until permit reissuance, whichever is longer. The records shall be kept at the stationary source for the current calendar year of operation and may be kept at the stationary source or office of the stationary source for all other years. The records may be maintained in either electronic or paper format. REPORTING/SUBMITTALS 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. Minn. R , subp. 4(D) Minn. R , subp. 5(C) Minn. R , subp. 2 Minn. R , subp. 5(B) Minn. R , subp. 4 Minn. R , subp. 3

8 Facility Name: Minnesota Power - Laskin Energy Center Permit Number: A-5 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. 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. Shutdown and Breakdown Reporting Requirement for the Dust Collector Systems for Material Handling Equipment: Minn. R , subp. 2 Minn. R , subp. 2 Shutdowns and breakdowns shall be reported on a quarterly basis to the Agency. The quarterly report shall include an identification of any dust collector that experienced a breakdown and/or shutdown, the time and reason for the breakdown or shutdown, a description of any repairs made, and the date and time the dust collector was placed back in service. 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 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 to Minn. R , subp. 1(H) 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). Performance testing deadlines from the General Provisions of 40 CFR pt. 60 and pt. 63 are examples of deadlines for which the MPCA does not have authority to grant extensions and therefore do not meet the requirements of Minn. R , subp. 1(H). Emission Inventory Report: due on or before April 1 of each calendar year following Minn. R permit issuance, to be submitted on a form approved by the Commissioner. Emission Fees: due 30 days after receipt of an MPCA bill. Minn. R ACID RAIN PROGRAM REQUIREMENTS Comply with all acid rain requirements. These are included in Tables A and B and also in the acid rain permit attached as Appendix B. Emissions from the stationary source cannot exceed any allowances that the source lawfully holds under federal acid rain regulations, except as allowed by Minn. R , subp. 7. If the unit has excess emissions, the designated representative shall submit a proposed offset plan in accordance with 40 CFR Section 72.9(e). Keep the certificate of representation, all emissions monitoring information, copies of all reports, compliance certifications and related submissions and all records made or required under the Acid Rain Program on site for a period of 5 years from the date the document was created. Recordkeeping: Keep on site at the source each of the following documents for a period of 5 years from the date the document is created: The certificate of representation, all emissions monitoring information, copies of all reports, compliance certifications, and other submissions or records made under the Acid Rain Program, copies of all documents used to complete an acid rain permit application. 40 CFR pts. 72, 73, 75 and 76; Minn. R Minn. R , subp CFR Section 72.9(e); Minn. R CFR Section 72.9(f); Minn. R CFR Section 72.9(f)(l); Minn. R

9 Facility Name: Minnesota Power - Laskin Energy Center Permit Number: A-6 Apply for Acid Rain Program Permit reissuance: The designated representative shall submit a complete Acid Rain permit application for each source with an affected unit at least 6 months prior to the expiration of an existing Acid Rain Permit in accordance with 40 CFR Section 72.30(c). CONSTRUCTION AUTHORIZATION Under Air Emission Permit No , the Permittee is authorized to modify EU 001 and EU 002 to burn only natural gas. The modified units shall meet all applicable requirements of this permit. Within 18 months of the issuance of Air Emission Permit No , the authorization to initiate construction expires. The authorization to construct also expires if there is an interruption in construction of 18 months or more. The Permittee must keep a record of the dates of installation and start-up on site. The Permittee may apply for an extension of the construction authorization deadline by following the Administrative Amendment provisions in Minn. R CFR Section 72.30(c); Minn. R [Stage 1] Title I Condition: To avoid classification of changes as major modifications under 40 CFR Section & Minn. R

10 Facility Name: Permit Number: Minnesota Power - Laskin Energy Center Subject Item: GP 001 Boilers A-7 Associated Items: CE 001 Wet Scrubber - High Efficiency CE 002 Wet Scrubber - High Efficiency CE 006 Overfire Air CE 007 Overfire Air CE 008 Low NOx Burners CE 009 Low NOx Burners EU 001 Boiler - Unit #1; CE 001, CE 006, CE 008 EU 002 Boiler - Unit #2; CE 002, CE 007, CE 009 SV 001 Common Boiler Stack FIRST OPERATING SCENARIO What to do Why to do it THE FOLLOWING CONDITIONS APPLY TO TO GP 001 PRIOR TO THE CONVERSION OF BOILER - UNIT #1 AND BOILER - UNIT #2 TO NATURAL GAS Carbon Monoxide: less than or equal to tons/year on a calendar year basis for both boilers combined. This limit and associated recordkeeping is suspended if CO emission factor testing of EU 001 and EU 002 demonstrates a CO emission factor less than or equal to lb/mmbtu for each emission unit. This limit is re-instated if a subsequent EU 001 or EU 002 CO emission factor test measures CO in excess of lb/mmbtu. GP 001 CO Emissions Monitoring and Recordkeeping: The Permittee shall calculate and record the GP 001 calendar year CO emissions by January 30 of each year, for the previous calendar year. SECOND OPERATING SCENARIO Minn. R , subp. 2 to avoid 100 tpy environmental review potential emission increase threshold Minn. R , subp. 4 and 5 to avoid 100 tpy environmental review potential emission increase threshold THE FOLLOWING CONDITIONS APPLY TO GP 001 AFTER THE CONVERSION OF BOILER - UNIT #1 AND BOILER - UNIT #2 TO NATURAL GAS Permit conditions in GP 001 expire upon the conversion of Boiler - Unit #1 and Boiler - Unit #2 to natural gas. [STAGE 1] Minn. R , subp. 2

11 Facility Name: Permit Number: Minnesota Power - Laskin Energy Center Subject Item: GP 002 Scrubbers A-8 Associated Items: CE 001 Wet Scrubber - High Efficiency CE 002 Wet Scrubber - High Efficiency FIRST OPERATING SCENARIO What to do Why to do it THE FOLLOWING REQUIREMENTS APPLY TO EACH SCRUBBER IN GP 002 INDIVIDUALLY PRIOR TO THE CONVERSION OF BOILER - UNIT #1 AND BOILER - UNIT #2 TO NATURAL GAS The Permittee shall operate and maintain the scrubbers (CE 001 and CE 002) at all times that any emission unit controlled by the scrubbers (EU 001 and EU 002) is in operation. The Permittee shall document periods of non-operation of the control equipment. The Permittee shall operate and maintain control equipment such that it achieves an overall control efficiency for Total Particulate Matter: greater than or equal to 90 percent The Permittee shall operate and maintain the scrubbers in accordance with the Operation and Maintenance (O & M) Plan. The Permittee shall keep copies of the O & M Plan available onsite for use by staff and MPCA staff. Temperature: less than or equal to 175 degrees F using 3-hour Average at the common stack, unless a new limit is set pursuant to Minn. R , subp. 3 based on the values recorded during the most recent MPCA-approved performance test where compliance was demonstrated. The new limit shall be implemented upon receipt of the Notice of Compliance letter granting preliminary approval. The limit is final upon issuance of a permit amendment incorporating the change. If the 3-hour rolling average temperature is above the maximum temperature limit, the PM emitted during that time shall be considered uncontrolled until the average temperature is below the maximum temperature limit. This shall be reported as a deviation. Temperature Monitoring: The Permittee shall maintain and operate a thermocouple monitoring device that continuously indicates and records the stack temperature. The monitoring equipment must be in use and properly maintained whenever operation of the monitored control equipment is required. The monitoring device shall have a margin of error less than +/- 2.0 percent of the temperature being measured. The recording device shall also calculate the three-hour rolling average temperature. Recorded values outside the range specified in this permit are considered Deviations as defined by Minn. R , subp. 8a. Opacity: less than or equal to 20 percent using 3-hour average, unless a new limit is set pursuant to Minn. R , subp. 3 based on the values recorded during the most recent MPCA-approved performance test where compliance was demonstrated. The new limit shall be implemented upon receipt of the Notice of Compliance letter granting preliminary approval. The limit is final upon issuance of a permit amendment incorporating the change. If the 3-hour rolling average opacity is above the maximum opacity limit, the PM emitted during that time shall be considered uncontrolled until the average opacity is below the maximum opacity limit. This shall be reported as a deviation. Opacity Monitoring: The Permittee shall maintain and operate an opacity monitoring device that continuously indicates and records the opacity of the stack. The monitoring equipment must be in use and properly maintained whenever operation of the monitored control equipment is required. The monitoring device shall have a margin of error less than +/- 2.0 percent. The recording device shall also calculate the three-hour rolling average. Recorded values outside the range specified in this permit are considered Deviations as defined by Minn. R , subp. 8a. Daily Monitoring: The Permittee shall physically verify the operation of the temperature recording device at least once each operating day to verify that it is working and recording properly. The Permittee shall maintain a written or electronic record of the daily verifications. The Permittee shall maintain a high temperature alarm for the boiler operator. The Permittee shall maintain a continuous hard copy readout or computer disk file of the temperature and opacity readings and calculated three hour rolling average temperatures and opacity at the common stack. Annual Calibration: The Permittee shall calibrate the temperature monitor at least annually and shall maintain a written record of the calibration and any action resulting from the calibration. Minn. R , subps. 2 and 14 Minn. R , subps. 2 and CFR Section 64.7(b); Minn. R Minn. R , subps. 2 and 14 Minn. R , subps. 2 and 14; 40 CFR Section 64.3(b)(4)(ii); Minn. R ; 40 CFR Section 64.7(b); Minn. R Minn. R , subps. 2 and 14; 40 CFR Section 64.3(b)(4)(ii); Minn. R Minn. R , subps. 2 and 14; 40 CFR Section 64.3(b)(4)(ii); Minn. R ; 40 CFR Section 64.7(b); Minn. R Minn. R , subps. 2 and 14; 40 CFR Section 64.3(b); Minn. R Minn. R , subps. 2 and 14; 40 CFR Section 64.9(b); Minn. R CFR Section 64.3; Minn. R

12 Facility Name: Permit Number: Minnesota Power - Laskin Energy Center Quarterly Inspections: At least once per calendar quarter, the Permittee shall inspect the control equipment internal and external system components. The Permittee shall maintain a written record of the inspection and any corrective actions taken resulting from the inspection. Annual Inspection: At least once per calendar year, the Permittee shall conduct an internal inspection of the control device that includes all operating systems of the control device. The Permittee shall maintain a written record of the inspection and any action resulting from the inspection. For periods when the scrubber exhaust is below the maximum temperature and opacity, the Permittee shall use either one of the following when completing calculations as required elsewhere in this permit: a. The overall control efficiency limit specified in this permit for this equipment (90%); or b. The overall control efficiency determined during the most recent MPCA approved performance test. If the tested efficiency is less than the efficiency limit in this permit, the Permittee must use the tested value in all calculations until the efficiency is demonstrated to be above the permit limit through a new test. Corrective Actions: If the temperature and/or opacity is above the maximum specified by this permit or if the scrubber or any of its components are found during the inspections to need repair, the Permittee shall take corrective action as soon as possible. Corrective actions shall return the temperature and/or opacity to at least the permitted maximum and/or include completion of necessary repairs identified during the inspection, as applicable. Corrective actions include, but are not limited to, those outlined in the O & M Plan for the scrubbers. The Permittee shall keep a record of the type and date of any corrective action taken. Documentation of Need for Improved Monitoring: If the Permittee fails to achieve compliance with an emission limitation or standard for which the monitoring did not provide an indication of an excursion or exceedance while providing valid data, or the results of compliance or performance testing document a need to modify the existing maximum exhaust temperature, the Permittee shall promptly notify the MPCA and, if necessary, submit a permit amendment application to address the necessary monitoring changes. As required by 40 CFR Section 64.9(a)(2), for the Semi-Annual Deviations Report listed in Table B of this permit and/or the Notification of Deviations Endangering Human Health and the Environment listed earlier in Table A of this permit, as applicable, the Permittee shall include the following related to the monitoring identified as required by 40 CFR pt. 64: 1) Summary information on the number, duration, and cause of excursions or exceedances, as applicable, and the corrective action taken; and 2) Summary information on the number, duration, and cause for monitor downtime incidents. The Permittee shall maintain records of monitoring data, monitor performance data, corrective actions taken, and other supporting information required to be maintained. The Permittee may maintain records on alternative media, such as microfilm, computer files, magnetic tape disks, or microfiche, provided that the use of such alternative media allows for expeditious inspection and review, and does not conflict with other applicable recordkeeping requirements. SECOND OPERATING SCENARIO THE FOLLOWING CONDITIONS APPLY TO GP 002 AFTER THE CONVERSION OF BOILER - UNIT #1 AND BOILER - UNIT #2 TO NATURAL GAS Permit conditions in GP 002 expire upon the conversion of Boiler - Unit #1 and Boiler - Unit #2 to natural gas. A-9 40 CFR Section 64.3; Minn. R CFR Section 64.3; Minn. R Minn. R , subp. 4 and 5 40 CFR Section 64.7(d); Minn. R CFR Section 64.7(e); Minn. R CFR Section 64.9(a)(2); Minn. R CFR Section 64.9(b); Minn. R [STAGE 1] Minn. R , subp. 2

13 Facility Name: Permit Number: Minnesota Power - Laskin Energy Center Subject Item: GP 003 COMS/CEMS Requirements A-10 Associated Items: MR 007 Opacity MR 008 SO2 MR 009 NOx MR 010 CO2 What to do THE FOLLOWING CONDITIONS APPLY TO THE GP 003 MONITORS BOTH PRIOR TO AND FOLLOWING THE CONVERSION OF BOILER - UNIT #1 AND BOILER - UNIT #2 TO NATURAL GAS COMS REQUIREMENTS (PART 75) Additional monitoring requirements are located at the individual MR level. Monitoring Data: All COMS data must be reduced to six-minute averages. A six minute average is valid only if it contains data from at least five minutes within the averaging period. COMS data shall be reduced and calculated as outlined in Minn. R , subp. 3. COMS Certification: The owner or operator shall ensure that each COMS required by this part meets the initial certification requirements of this section and shall ensure that all applicable initial certification tests under paragraph (c) of this section are completed by the deadlines specified in 40 CFR Section 75.4 and prior to use in the Acid Rain Program. In addition, whenever the owner or operator installs a continuous emission or opacity monitoring system in order to meet the requirements of Sections through 75.18, where no continuous emission or opacity monitoring system was previously installed, initial certification is required. (Section 75.20(c)(8) outlines the COMS certification requirements.) COMS Certification Test Plan: due 30 days before COMS Certification Test COMS Certification Test Pretest Meeting: due 7 days before COMS Certification Test COMS Certification Test Report: due 45 days after COMS Certification Test COMS Certification Test Report - Microfiche Copy: due 105 days after COMS Certification Test The Notification, Test Plan, and Test Report may be submitted in alternate format as allowed by Minn. R , subp. 2 Certification Application: The owner or operator shall apply for certification of each continuous emission or opacity monitoring system used under the Acid Rain Program. The owner or operator shall submit the certification application in accordance with 40 CFR Section and each complete certification application shall include the information specified in Section Continuous Operation: COMS must be operated and data recorded during all periods of emission unit operation including periods of emission unit start-up, shutdown, or malfunction except for periods of acceptable monitor downtime. This requirement applies whether or not a numerical emission limit applies during these periods. A COMS must not be bypassed except in emergencies where failure to bypass would endanger human health, safety, or plant equipment. Why to do it 40 CFR Section 75.10(d)(2); Minn. R , subp. 1, 2, & 3 40 CFR Section CFR Section 75.61; Minn. R , subp. 1-3; Minn. R , subp CFR Sections 75.20(a)(2), 75.60(b)(1), & Minn. R QA Plan: Develop and implement a written plan that describes in detail (or that refers to separate documents containing) complete, step-by-step procedures and operations of the activities outlined in 40 CFR pt. 75 Appendix B, Section 1.1. Upon request from regulatory authorities, the source shall make all procedures, maintenance records, and ancillary supporting documentation from the manufacturer (e.g., software coefficients and troubleshooting diagrams) available for review during an audit. Electronic storage of the information in the QA/QC plan is permissible, provided that the information can be made available in hardcopy upon request during an audit. COMS Daily Calibration Drift Test: The Calibration Drift shall be quantified and recorded at zero (low-level) and upscale (high-level) calibration drift at least once daily according to the procedures listed in 40 CFR Section 60.13(d)(2) and pt. 60, Appendix B, Performance Specification 1. The zero and upscale calibration levels must be determined using the span value specified in the applicable requirement. If the applicable requirement does not specify a span value, a span value of 60, 70, or 80 percent opacity must be used unless an alternative span value is approved by the commissioner. 40 CFR pt. 60, Appendix F, shall be used to determine out-of-control periods for COMS. 40 CFR pt. 75, Appendix B, Section 1; Minn. R , subp CFR Section 75.14; Minn. R , subp. 2

14 Facility Name: Permit Number: Minnesota Power - Laskin Energy Center COMS Calibration Error Audit: due before the end of each calendar half-year following Permit Issuance. Audits are to be at least three months apart but no more than eight months apart except that a calibration error audit need not be conducted during any semiannual period in which the emission unit operated less than 24 hours. The calibration error audit shall be conducted according to the procedures in 40 CFR pt. 60, Appendix B, Performance Specification No. 1. COMS Attenuator Calibration: The Permittee shall have an independent testing company conduct calibrations of each of the neutral density filters used in the calibration error audit according to the procedure in 40 CFR pt. 60, Appendix B. These calibrations shall be conducted within the time frame of opacity stability guaranteed by the attenuator manufacturer but not less frequently than annually. Recordkeeping: The owner or operator must retain records of all COMS monitoring data and support information for a period of five years from the date of the monitoring sample, measurement or report. Records shall be kept at the source. A-11 Minn. R , subp. 3 Minn. R , subp CFR Section 75.57(a); Minn. R This requirement is more stringent than the 40 CFR pt. 75 requirement to retain records for three years. CEMS REQUIREMENTS The CEMS requirements listed below outline the typical standards of 40 CFR Pt. 75 when combined with Minn. R. Additional monitoring requirements may also apply to the Facility based on the standard and it is the responsibility of the Facility to meet all applicable requirements. Installation Notification: due 60 days before installing the continuous emissions monitoring system. The notification shall include plans and drawings of the system. CEMS Certification: The owner or operator shall ensure that each CEMS required by this part meets the initial certification requirements of this section and shall ensure that all applicable initial certification tests under paragraph (c) of this section are completed by the deadlines specified in 40 CFR Section 75.4 and prior to use in the Acid Rain Program. Certify all CEMS required by the Acid Rain Program in accordance with 40 CFR pt. 75, Appendix A, Section 6. CEMS Certification Test Plan: due 30 days before CEMS Certification Test CEMS Certification Test Pretest Meeting: due 7 days before CEMS Certification Test CEMS Certification Test Report: due 45 days after CEMS Certification Test CEMS Certification Test Report Microfiche Copy: due 105 days after CEMS Certification Test The Notification, Test Plan, and Test Report may be submitted in alternate format as allowed by Minn. R , subp. 2. Certification Application: The owner or operator shall apply for certification of each continuous emission or opacity monitoring system used under the Acid Rain Program. The owner or operator shall submit the certification application in accordance with 40 CFR Section and each complete certification application shall include the information specified in Section Continuous Operation: CEMS must be operated and data recorded during all periods of emission unit operation including periods of emission unit start-up, shutdown, or malfunction except for periods of acceptable monitor downtime. This requirement applies whether or not a numerical emission limit applies during these periods. A CEMS must not be bypassed except in emergencies where failure to bypass would endanger human health, safety, or plant equipment. Monitoring Data: Hourly averages shall be computed using at least one data point in each fifteen minute quadrant of an hour, where the unit combusted fuel during that quadrant of an hour. Not withstanding this requirement, an hourly average may be computed from at least two data points separated by a minimum of 15 minutes (where the unit operates for more than one quadrant of an hour) if data is unavailable as a result of the performance of calibration, quality assurance, or preventive maintenance activities pursuant to 40 CFR Section and appendix B of pt. 75, or backups of data from the data acquisition and handling system, or recertification, pursuant to Section The owner or operator shall use all valid measurements or data points collected during an hour to calculate the hourly averages. All data points collected during an hour shall be, to the extent practicable, evenly spaced over the hour. CEMS QA/QC: The owner or operator of an affected facility shall operate, calibrate, and maintain each CEMS according to the QA/QC procedures in 40 CFR pt. 75, Appendix B as amended. Minn. R , subp CFR Section 75.20; 40 CFR pt. 75, Appendix A, Section 6 40 CFR Section 75.61; Minn. R , subp. 1-3; Minn. R , subp CFR Sections 75.20(a)(2), 75.60(b)(1), & Minn. R CFR Section 75.10(d)(1); Minn. R , subp. 1 and 2 40 CFR Section 75.21

15 Facility Name: Minnesota Power - Laskin Energy Center Permit Number: A-12 QA Plan: Develop and implement a written plan that describes in detail (or that refers to separate documents containing) complete, step-by-step procedures and operations of the activities outlined in 40 CFR pt. 75, Appendix B, Section 1.1. Upon request from regulatory authorities, the source shall make all procedures, maintenance records, and ancillary supporting documentation from the manufacturer (e.g., software coefficients and troubleshooting diagrams) available for review during an audit. Electronic storage of the information in the QA/QC plan is permissible, provided that the information can be made available in hardcopy upon request during an audit. Daily Calibration Error (CE) Test: Conduct daily CE testing of each gas monitoring system according to the procedures in Section of 40 CFR pt. 75, Appendix A and of each flow monitoring system according to the procedures in Section of 40 CFR pt. 75, Appendix A. Linearity and Leak Check Test (Acid Rain Program): due before end of each calendar quarter following CEM Certification Test Linearity and Leak Check Test (Acid Rain Program): due before the end of each QA operating quarter (calendar quarter in which there are at least 168 unit operating hours) following Permit Issuance in accordance with procedures in 40 CFR pt. 75, Appendix B, Sections and 2.2.2, and Appendix A, Section 6.2. Perform a leak check at least once during each QA operating quarter and no less than 30 days apart only if a differential pressure flow monitor has been installed. CEMS Relative Accuracy Test Audit (RATA): Due semianually following Permit Issuance, i.e., once every two successive QA operating quarters (calendar quarter in which there are at least 168 unit operating hours). Conduct a RATA on all CEMS required by the Acid Rain Program, in accordance with 40 CFR pt. 75, Appendix B. Relative accuracy test audits may be performed annually (i.e., once every four successive QA operating quarters, rather than once every two successive QA operating quarters) if any of the conditions listed in 40 CFR pt. 75, Appendix B, Sections (a) through (i) are met. Recordkeeping: The owner or operator must retain records of all CEMS monitoring data and support information for a period of five years from the date of the monitoring sample, measurement or report. Records shall be kept at the source. Quarterly Reports: Electronically report the data and information in 40 CFR Section (a), (b), and (c) to the Administrator quarterly. 40 CFR pt. 75, Appendix B, Section 1; Minn. R , subp CFR pt. 75, Appendix B, Section CFR pt. 75, Appendix B, Sections & 2.2.2; Minn. R CFR pt. 75, Appendix B, Section 2.3.1; Minn. R Minn. R ; 40 CFR Section CFR Section 75.64; Minn. R , subp. 1 & 2