Citizens for Clean Energy, Inc.

www.cce.org

615 Third Avenue North

Great Falls, MT 59401

March 15, 2007

Richard Fristik

USDA Rural Development, Utilities Program

1400 Independence Avenue, SW

Mail Stop 1571, Room 2237

Washington, DC 20250-1571

re: Final Environmental Impact Statement (FEIS), Highwood Generating Station

Dear Mr. Fristik:

I have read both the DEIS and the FEIS and I am sending in these comments because of lingering questions and concerns. In the FEIS I am identified as Commentator #C20.

At the outset, I do want to let you know how much I appreciate your professionalism and the extensive time and effort that you personally have given this project. You have always answered my questions promptly and courteously, and I have been pleased to have met you in person. Please know that my criticisms of the FEIS are not in any way intended to reflect negatively upon you.

Having read Southern Montana Electric’s (SME), Bison Engineering, and Stanley Engineering literature for the past several years, it is apparent to me that much of this document was written by SME and its consultants and apparently assembled by contractors at Mangi Environmental. Since this document purports to assess the significance of multiple adverse health impacts, I was quite surprised to discover that the EPA did not appear to be directly involved in arriving at these conclusions. (Mr. John Wardell from the Region 8 office of the EPA did send in several cautionary comments on the DEIS, coded as individual #C36).

In addition to responses to my specifically coded comments, there are important new developments, important cultural issues regarding Native Americans that weren’t considered in the FEIS, and apparent oversights in the FEIS.

Important new developments

A. On February 2, 2007, the Intergovernmental Panel on Climate Change erased the question mark from whether human activity is impacting the climate. With 90% certainty climate scientists from 113 countries from around the world developed this consensus. According to Dr. Paul Epstein, Associate Director of the Center for Health and the Global Environment at Harvard University, “no one is saying global warming is the whole picture here, but it is playing a role, and as climate changes, it’s projected to play an even greater role”. At the National Press Club on February 26, 2007, NASA climatologist James Hansen told journalists there should be no more coal-fired power plants. “There should be a moratorium on building any more coal-fired power plants until the technology to capture and sequester carbon dioxide emissions is available” (see also 603-1 and 603-2 below).

Even this year’s Academy Awards on February 25 addressed this topic with former Vice President Al Gore’ s film “An Inconvenient Truth” winning the award for best documentary. “It’s not a political issue; it’s a moral issue,” he said in accepting the award. Citizens for Clean Energy Inc. has been showing this film at our local library to standing room crowds. Our earth is reaching a “tipping point”, and citizens around the country are demanding that our elected leaders and government officials to respond appropriately.

How can the Rural Utility Service deny the reality of a future carbon tax? SME will ignore this at its own peril. Even leaders in the coal-fired utilities recognize its inevitability:

“You would be crazy not to consider CO2 costs. These are 40-year to 50-year assets.” David Eves, Xcel Energy, March 2005

“As a major coal burning utility some might expect us to duck the issue. But avoiding the debate over global climate change and failing to understand the consequences are not an option for us.”

James Rogers, Cinergy Chair, March/April 2005

B. Several new and “greener” power utilities in the Great Falls area have been proposed and are likely to come on line well before the Highwood Generating Station could be built. These include 300 MW of wind power to complement a fully subscribed Montana-Alberta Transmission line, a 260 MW natural gas-fired turbine to supply firming power for wind power (to be constructed at the Industrial site north of town), along with a proposed 275 MW IGCC electric utility to be built at this same site. It is my understanding that the purchase of this site by Montgomery Energy Partners (see Great Falls Tribune, March 3, 2007) essentially forecloses the option of this “Alternative site” for SME. These facilities, along with others such as the 500 MW proposed windfarm in eastern Montana make it unlikely that the lights in Montana will go out anytime soon (Montana is already a net exporter of energy). I am also aware of plans by PPL Montana to upgrade some of its water turbines at our dams, resulting in approximately 10 MW increased capacity.

New issue

Purity of environment is essential to the harvest of sweetgrass used in spiritual ceremonies for Native Americans. During a Feb. 22, 2007 meeting with Senator Max Baucus, the statement was conveyed from Tribal Elders on the Rocky Boy’s Indian Reservation that land contamination by the coal plant would prevent their local harvest of sweetgrass. In addition, the possibility of significant ancient Native American trails and campsites at the Salem site has been raised. Such history that predates the Lewis and Clark Expedition would further enrich the value of the existing National Landmark and nurture the growing interest in Indian history in the West. (It is known that Lewis & Clark’s Indian guides often followed ancient tribal pathways).

Oversights

A. During the Draft environmental Impact Statement formal comment period, residents of the Rocky Boy’s Indian Reservation voiced their strong and unanimous opposition to the Highwood coal plant, evidenced by oral testimony in Havre and Great Falls, by the submission of numerous letters from students at Stone Child College, and by signatures on a petition opposing the coal plant. Unfortunately, this petition with hundreds of signatures of Native Americans was not recorded and oral testimony from former Tribal Chair Alvin Windy Boy, Native Studies Director Vernon Standing Rock and other members of the Chippewa Cree Tribe who each spoke at the Havre did not appear in the formal record as published in the FEIS. Furthermore, the FEIS failed to weigh the significance of comments from the tribal governments on the Rocky Boy, Fort Belknap and Fort Peck Indian Reservations (refer to comments C277 & C320); these were treated with the same emphasis as those coming from single individuals.

B. There was a selection bias on which names to print in the FEIS. Proponents of the proposal had each of their names listed when they signed postcards that were delivered en masse during the Great Falls hearing on the DEIS. However, more than a thousand opponents who signed a petition by Citizens for Clean Energy were not individually recorded.

C. Some individuals who submitted SME postcards stating they did NOT support the proposed action nonetheless were erroneously listed in the FEIS as proponents instead of opponents.

D. There is a major missing section in the FEIS I in Appendix E of Volume 2, section 3.0 The pages go right from 2-3 to 4-1. (This section 3 is also missing in the download version).

Specific responses

Objections to numbered responses provided for Citizens for Clean Energy code C20 appear below.

100-15 Our Montana Constitution not only guarantees its citizens a right to a “clean and healthful environment” (Art. II, Section 3) but also creates an obligation to “maintain and improve a clean and healthful environment ...for present and future generations”(Art. IX, Section 1). The proposed coal plant violates these tenets. As a physician, I ascribe to the philosophy of “first do no harm”. It is immoral to use a more polluting technology when a clearly superior alternative exists. Even though the initial costs may be higher, in the end doing the right thing will also prove the most economical.

100-17 A RUS application for a guarantee of taxpayer dollars includes financial details. These are not present, either in the FEIS or in the system load forecasts. Furthermore, a formal Freedom of Information Act requesting this information and submitted by our attorneys in October, 2006, has gone unanswered. The public has a right to have this information in a timely manner, and it certainly should have been provided before the final public comment period expired.

100-23 There is no question that SME has considerable experience in managing electrical contracts. However, as pointed out to us by Montana Public Service Commissioner Bob Raney (email: braney@mt.gov; website www.psc.state.mt.us/Commissioners/District3) and also by Mr. Thomas R. Huntley, General Manager of Central Montana Electric Cooperative (501 Bay Drive, Great Falls, MT 59404; phone 406-268-1205; email tom@cmepc.org), this is very different from actively managing the grid on a 0.4 second basis and completely different from being responsible for operating a generating facility. Such experience is lacking by the proponents of the present proposal. Their inexperience in running an electric generation plant also calls into question their claims about “reliability” of baseload power from a single facility that could be subject to emergency shutdowns, dramatic fluctuations in the cost of coal or its transportation, train derailments, etc.

100-24 SME continues to inflate its membership claims. In the March 11, 2007, Great Falls Tribune , SME reported 24,785 participants, not the 120,000 people claimed in its advertising. SME and ECP has tried repeatedly and unsuccessfully to capture the Great Falls residential market through legislative action in 2005 and in 2007. The rural cooperatives in central Montana and Park Electric Cooperative in eastern Montana have specifically refused to participate in SME’s costly and financially risky endeavor.

100-25 The mission of the RUS is not outside the scope of the EIS. Indeed it is absolutely central to the guaranteed loan of federal taxpayer dollars. RUS has a mandate to assist RURAL areas and to prioritize renewable energy projects that help RURAL America, not to fund a merchant plant. The RUS should not guarantee a loan to construct a coal plant that supplies urban areas like the municipality of Great Falls (and other municipal needs in cities such as Kalispell or Hamilton that are currently being courted by Electric City Power). The RUS should not guarantee loans to provide electricity to large businesses in the Great Falls area, to residents in the suburban area of Billings, or to commercial ventures in coal bed methane development in Wyoming. Furthermore, a recent financial feasibility study on the city’s 25% interest of the plant revealed plans for a transmission reservation of 65 MW of SME power to Idaho (see p.12 R. W. Beck study, submitted to the City of Great Falls on Feb. 28, 2007). According to the Office of Management & Budget, beginning in 2008 it is recommended that RUS no longer support such electric generation projects, because of rapid advances in technology and because such ventures are best left to the commercial sector. It is not too soon to begin to do the right thing by denying this loan guarantee of taxpayer dollars.

200-4 & 200-13 It is equally if not more risky to have a CFB coal plant that cannot be throttled back during the night and during off-peak periods when power must be sent onto the grid. According to Public Service Commissioner Greg Jergesen, SME may not only fail to recover its production costs during these off-peak intervals, but also may have to pay other generators, such as PPL Montana, to turn off their hydropower so as not to exceed grid capacity. According to the Commissioner, there is a precedent for this type of problem.

200-10 & 200-11 These responses fail to address the central question of where are the signed contracts for 65 MW of longterm power for Electric City Power’s share. Letters of intent are insufficient to hold current customers if the price of power is noncompetitive with the marketplace. The City’s 25% share of the plant cannot be divorced from the whole. SME cannot built with 75% funding, nor is it possible to run 75% of a coal plant. SME’s attitude that the City (ECP) is completely on its own for its 25% share of the cost and the power consumption fails to recognize this reality. In 2006 City Manager John Lawton informed representatives of CCE that the City’s interests and SME’s interests are the same because they are business partners. We have been unable to find any documents defining the rights of the City and SME as partners. This is one of the reasons why so many local citizens oppose this “shotgun wedding” of City of Great Falls to the Highwood Plant.

200-12 Why does SME publicly state this power is “by Montanans for Montanans” if their largest potential commercial load growth is in Wyoming. Why are they trying to secure a reservation for transmission of 65 MW into Idaho?

200-14 Since RUS will likely no longer fund loan guarantees for generation capacity after 2008 (when the plant is under construction), where will the funding for the inevitable cost overruns come from (see also 100-25)? Will the RUS be guaranteeing the loan funds for 75% of the $515 million price tag or 75% of the more recent $720 million price estimate in the R. W. Beck study?

200-15 Since many of SME’s past forecasts have been inaccurate, what assurance is there of the accuracy of future forecasts?

200-16 The availability of competitive contractual power agreements from other sources to meet SME’s current and future needs is not outside the scope of this EIS. It should be part of the documentation for the “No Action” alternative. Most rural Americans do not want to get into the costly and financially risky power generation business, and for good reason. Agricultural pursuits are challenging enough without putting the financial well being of cooperative members at risk of having to purchase electricity at fluctuating cost-based rates that are likely to be noncompetitive.

305-2, 305-3, 305-4 SME continues to dismiss IGCC technology at its own peril. Perhaps IGCC was eliminated based upon outdated assessments of “reliability” and “fundability in the marketplace”. The FEIS cites erroneous capital cost and efficiency information in Table 2-6 on page 2-26 and non-comparable information about mercury and other pollutants listed on Table 2-7 on page 2-27. These shortcoming are echoed by nationally recognized IGCC engineers. The Governors of 5 Western states recently signed a pact to limit greenhouse gases, and power from a coal plant like the Highwood Generating Station could not be sold to California. The February 2007 edition of Popular Science indicates that 28 of 154 proposed coal plants will be IGCC. The numerator keeps growing while the denominator of old technology plants is rapidly shrinking. In February, 2007, 8 of 11 pulverized coal plants on the drawing board in Texas were nixed. Within the past two weeks the announcement of a proposed IGCC facility north of Great Falls (at the Industrial Site) has made front page headline news, and with it foreclosed possible use of this Alternative Site for SME. Furthermore, within the past several months the transformation of one of the planned pulverized coal plants in Roundup, Montana, to a synfuels and IGCC electric utility has been announced. Why would the RUS want to guarantee the loan for the last old style coal plant in America? It takes a wise surgeon to know when not to operate. The Highwood coal plant is technologically dated and should never be built.

308-5 The answer to this question about combusting more highly polluting lignite has changed with time. At one point CEO Tim Gregori of SME indicated that the proposed plant would be incapable of burning lignite. When it was pointed out that the Alstom literature (Alstom being the company that is supplying the boiler) touts CFB technology as being fuel flexible and capable of burning “brown coal”, the answer changed, indicating that a new air quality permit would have to be sought. This is less than comforting, since once a plant is built it cannot afford to be idled. (Current rules in Montana permit even higher levels of “acceptable” mercury emissions from a coal plant that combusts lignite).

309-1 Public comments favoring IGCC technology are prescient, given the recent announcement of Montgomery Energy Partners to build an IGCC facility at the Industrial site north of Great Falls. Furthermore, had SME selected that Industrial site they would not be facing pending litigation regarding a Cascade county zone change from “Agricultural” to “Heavy Industrial” at the Salem site.

500-3 With increasing recognition of global climate change and persistent drought conditions, the RUS should be even more worried about operating a coal plant where peak electrical demand occurs during minimum water flows and with a water reservation that is junior to many downstream interests that could turn the coal plant off. Furthermore, because PPL has filed an objection due to loss of water to generate electricity in its dams, it would be extremely risky to release funds to begin construction of this coal plant until this essential water issue is resolved. To the best of my knowledge, SME has not looked into the feasibility of using Billings wastewater as a water source when they indicated that water for the project isn’t available in their own service area.

601-2 I am informed by independent meterologists that the air quality modeling performed by SME is incomplete and does not take into consideration inversions at the Salem site nor does it factor in recent data regarding distribution of ionized mercury from coal plants or the hazards of breathing PM 2.5 (please refer to separate CCE testimony on air quality issues and on health).

602-3 See separate report on mercury by CCE healthcare team.

602-4 To me as a Ph.D biochemist, the Montana DEQ is overlooking an important responsibility by not obtaining baseline samples of soil and water for subsequent comparisons of cumulative effects of heavy metals, acid rain, radionuclides, and other pollutants. This would not have to be an expensive proposition, since these samples could be stored for later comparison and analysis. In addition, monitoring only once annually for PM 10 (with timing left to the discretion of the plant operators and undoubtedly coinciding with filter changes), the use of surrogate rather than specific markers for toxic heavy metals other than mercury, and the failure to evaluate the coal or the land for radioactive contamination seems to give little more than lip service to several important public health considerations.

603-1 & 603-2 In February, 2007, SME offered to capture greenhouse gases from the proposed coal plant in a news release from the Governor’s office, timed to coincide with the release of the Intergovernmental Panel on Climate Change report that indicates with 90% certainty that humans are impacting the planet’s climate. While SME CEO Tim Gregori’s intentions to capture and sequester greenhouse gases are admirable, his sincerity is questioned when his lobbyist simultaneously testified against a requirement for carbon sequestration. Furthermore, the technology to recover greenhouse gases from a CFB plant has yet to be invented. (This is in contrast to IGCC technology, where sequestration is much more readily accomplished and has already been proven in a synfuels IGCC plant in North Dakota, where the excess CO2 is sold for enhanced oil recovery). Several CCE members currently serve on the Governor’s Technical Working Groups for Climate Change, and we are very concerned that a future carbon tax will make the Highwood plant noncompetitive with renewable sources of energy and with IGCC plants that sequester CO2. Furthermore, the FEIS does not adequately address the increased nitrous oxide (with a 300 fold global warming potential relative to CO2) produced in excess by this particular CFB technology.

The topic of CO2 capture is conspicuous by its absence from the FEIS. Even Alstom (SME’s own boiler manufacturer) acknowledges its importance. At the fifth MEHC-Pacificorp IGCC Working Group meeting in October, 2006, Nancy Mohn of Alstom admitted that “studies performed to date that compare the cost of electricity from an IGCC plant with CO2 capture to the cost of electricity from a pulverized coal plant with CO2 capture show that the IGCC configuration is typically lower”.

604-1 What shortsightedness to degrade our beautiful blue clean skies with visual haze and smog for a project with such questionable longterm benefits.

1200-1 How will the new 150 railroad car train length that will soon become standard for BNSF affect the cost of this project?

1400-1 Who is responsible for the maintaining the integrity of the buried toxic waste after the coal plant is no longer operational?

1600-1 See statement of CCE health team.

1700-1 & 1700-2 Executive Order 12898 issued by the President of the United States requires all federal agencies to examine possible disproportionate impacts of the Highwood coal plant on minority and low income populations. The Final Environmental Impact Statement (FEIS) is remiss in failing to adequately examine these effects on residents of the Rocky Boy’s Indian Reservation. The Rocky Boy’s Indian Reservation with a population of several thousand Native Americans is directly downwind from the proposed coal plant. It was recently shown in the Steubenville, Ohio, study that ionized mercury disproportionately settles within the local region. Mercury enters the food chain through consumption of fish. The amount of mercury in a single teaspoon can make the fish in a 1000 foot-acre lake unfit for consumption. Native Americans heavily rely upon locally harvested fish, wild game, and the land for sustenance.

It is not too late to do the right thing. The RUS should call for a Supplemental EIS so that both proponents and opponents can consider all of the current facts and harms before an irrevocable decision is made.

Sincerely yours,

Cheryl M. Reichert, M.D. , Ph.D.

co-vice Chair, Citizens for Clean Energy, Inc.

Pathology and Biological Chemistry

51 Prospect Drive

Great Falls, MT 59405

home phone: 406-727-1964