March 19, 2007

Richard Fristik

USDA Rural Development Utilities Programs

1400 Independence Ave SW

Mail Stop 1571, Room 2237

Washington, D. C. 20250-1571

RE: Southern Montana Electric Highwood Generating Station

Dear Mr. Fristik:

My daughter (Karen J. Gessaman) and I (Ronald L. Gessaman) chose to prepare a joint commentary on the Southern Montana Electric Highwood Generating Station Final Environmental Impact Statement (FEIS). We did not have an opportunity to comment upon the Draft Environmental Impact Statement (EIS) for this facility. Our family has resided in the central Montana area for almost a hundred years and hence has extensive ties to the area. Karen is a recent magna cum laude graduate of the University of Montana in Missoula with an economics degree and a minor in history; she is currently taking accounting courses with the objective of becoming a CPA. I received a chemical engineering degree from Montana State University in Bozeman almost forty years ago and primarily worked as a technical service consultant. During my engineering career, I spent a number of years working worldwide on construction, commissioning, and troubleshooting the operation of various large industrial facilities including the Sasol II and III coal gasification plant startups in South Africa. I am currently retired and living in Great Falls, Montana, which is directly adjacent to the proposed Highwood Generating Station (HGS) at Salem, Montana.

After reviewing the recently issued Final Environmental Impact Statement for the proposed HGS, we were very disappointed. We think this FEIS was poorly prepared; much of the content is incomplete, inconsistent, arbitrary, or capricious within given sections and from section to section. Frequently the data used to draw conclusions is several years out of date and does not reflect the rapidly changing nature of generation technology, the electrical market, or environmental attitudes (i.e., acceptable emission levels, CO2, etc.) in Montana and the nation. Qualifiers, like might, maybe, possible, probably, unlikely, most likely, generally, could, etc., of all types are liberally scattered throughout the document. There is also virtually no financial detail provided.

In addition to the more than one hundred comments that follow these first few general paragraphs of this letter, there are two specific problems with this FEIS that deserve special recognition. One is the problem of missing or garbled information in various sections of the FEIS. If you check Appendix E of Volume Two closely, you will quickly note that the Table of Contents for Appendix E lists a 12 plus page section 3.0 (Results and Discussion) [of basically the Bison Report]. If you page through Appendix E in the paper volume, the pages go directly from 2-3 to 4-1. The elusive section 3 of Appendix E is also missing from the download version of the FEIS.

Some typical examples of the types of garbled information included in this FEIS can be found in the main Table of Contents and in Appendix C of Volume 2. On page vi of the main Table of Contents, section 4.8.2 is shown as starting on page 4-82 (it actually starts on page 4-78) and the next section 4.8.3 starts on page 4-79. On pages 8 -10 of Appendix C in Volume Two, there are serious problems with formatting, rendering the data virtually unintelligible. It is impossible to tell which "government law" corresponds to the correct "summary." Note especially the bottom of page 10. Possibly the correspondence problem between the two columns continues to the bottom of C-13. For example, does the Nongame and Endangered Species Conservation Act attach to "Regulation of Groundwater and Surface, water and appropriation of water [sic]" on page C-12? Some other garbled areas of this FEIS are noted in the comments section of this letter.

A second entirely separate issue deserving of special attention is thermal efficiency. Normally, one of most important considerations when discussing power plants is thermal efficiency, as much of the financial justification for a plant is related to the efficiency of operation. If efficiency is low, fuel costs in relation to the quantity of electricity generated are high and vice versa. Generally, the higher a plant’s thermal operating efficiency, the newer the technology the plant employs. We would expect to see design thermal efficiency for the specific technology to be used at this particular plant, the Highwood Generating Station, to be prominently displayed in at least the Abstract, the Executive Summary, and somewhere in the first few pages of the main text. In this FEIS, there is no mention of thermal efficiency that we could find in either the Abstract or the Executive Summary, and only a limited, general efficiency discussion for the various types of available combustion technologies in section 2 of the text. We had difficulty calculating a thermal efficiency for the plant because we could not establish from this FEIS what the actual coal feed rate to the plant is projected to be.

Please consider issuing a revised FEIS or a supplemental EIS to correct the discrepancies noted above and address the questions, concerns, and comments we have listed below. The comments presented below are not meant to be an exhaustive list but are only intended to be illustrative of the comment earlier that this FEIS was poorly prepared. We also would like to emphasize that contrary to what may be inferred from some of the comments below, we are not promoting the construction of a power production facility using any particular technology. We are simply trying to demonstrate that the construction of the HGS using the technology proposed is not the latest, greatest, state-of-the-art panacea.

Comments:

Our comments below are arranged roughly in the order that we came upon the information in the FEIS. Where possible, we cross-referenced the comments with other sections of the FEIS dealing with the same topic.

1. In the cover letter provided with the mailing of the FEIS, the parties involved in Southern Montana Electric (SME) include “one municipal utility, the City of Great Falls.” This information is not in the abstract and further, in both the executive summary (p. ES-1 paragraphs 3 and 5) and the main document (p. 1-1), the one municipal utility is listed as “Electric City Power, Great Falls, Montana.” We do not see how the City of Great Falls can be a municipal utility; the City of Great Falls is a municipality. The cover letter and the abstract both should present summaries of the same information contained in the main document, especially when it is so very important who the legal parties are that are participating in the ownership of the proposed plant.

2. The first paragraph of the abstract describes the proposed plant as “250 MW (net).” The use of the word “net” in describing the power output of the plant is rarely used in the remainder of the entire document, including the executive summary. See ES-1, paragraph 1.

3. The fourth paragraph of the abstract states that “the proximity of the alternative site to greater numbers of residents intensifies some of these impacts such as traffic, noise, and air quality; nevertheless, impacts would not likely be significant.” This statement makes no sense. The rest of the paragraph implies that there are no air quality issues, so how can non-issues be intensified by siting the plant at the alternate location?

4. In the same paragraph of the abstract mentioned in comment three above, it is stated that “repositioning the HGS and wind turbines reduces but does not eliminate significant impacts on the [National Historic Landmark] NHL.” The movement of the physical presence of the proposed HGS plant a few hundred yards so most of the plant facilities are not actually within the boundaries of the NHL cannot possibly reduce the visual pollution created by the plant.

5. In the fourth paragraph of the executive summary (p. ES-1), the statement is made “under its charter, SME is required to meet the electrical power needs of the cooperative members it serves.” This is not possible because one of the member systems is not a cooperative; Electric City Power is by definition in paragraph 2 a municipal utility.

6. In the same paragraph referenced in item five above, the proposed power from the facility is presented as being created “to meet the electrical energy and related service needs of approximately 120,000 Montanans.” A similar claim is made on page 1-2 where SME claims to provide for the needs of “up to approximately 120,000 Montanans.” By SME’s own admissions on its website, the five co-ops being served by SME have approximately only 23,000 members (serving possibly 68,000 individuals). The only way 120,000 Montanans can be served is if all the about 60,000 residents of the City of Great Falls were to be considered potential SME customers; current state law prevents SME from serving any of those residential customers. According to the statement “the EIS does not consider possible changes to law,” on page 1-30, none of the residents of Great Falls should be considered potential SME customers.

7. On page ES-2, paragraph 5, the comment that “SME thus faces an imminent wholesale power supply shortfall of major proportions” is made. In the previous two paragraphs, both the cooperative portion of SME and ECP are reported to have contracts providing for their power needs through 2011. 2011 is hardly an imminent crisis.

8. Under nonrenewable combustible energy sources (p. ES-4), the descriptions of pulverized coal and IGCC facilities are both inaccurate or incomplete. For the pulverized coal plant to have capital costs higher than CFB, it would likely need to be equipped with significant emissions control systems. In this case, the plant probably would not “have somewhat higher emissions of air pollutants” than CFB.

For IGCC, a large number of units are currently proposed, in permitting, or under construction and, in one well-publicized instance, a second generation IGCC unit is being built by the same utility that operates a decade-old IGCC unit in Florida. The second unit will use IGCC technology that is significantly better than the original IGCC unit. According to engineering data from some of the future IGCC units, the emissions from these plants will be much lower than the proposed HGS, making the comment “does not enjoy significant emissions advantages over CFB” incorrect. Most of these IGCC units are scheduled for startup in the same time frame as the proposed HGS.

9. Further down on page ES-4 under Other Coal-fired Power Plant Sites, the representation is made that three alternate sites were dismissed from consideration for having “a higher degree of risk associated with environmental permitting.” If there are no significant emissions from HGS, then why was there any risk concerning environmental permitting at any site?

10. On page ES-7, paragraph 2, the statement “however, under the proposed action, SME and its member cooperatives would continue to purchase power from WAPA . . .” is made. If the proposed HGS is built, the cooperatives’ share of the power would be 185 MW, which is significantly more than the projected load for a number of years. Why would SME be purchasing power from WAPA unless, with the proposed HGS being their only generating facility, they are unable to balance load changes or are considering selling substantial amounts of power on long-term contract to other utilities?

11. Paragraph 5, page ES-7, details the makeup and location of rail, pipeline, transmission, and other facilities required for the Alternative Site. No similar details are provided for the preferred site description on page ES-6.

12. Paragraph 6 on page ES-7 refers to Alternate Site construction taking “the same length of time as the Salem site, approximately three and a half years,” but paragraph two on page ES-6 for the Salem site states “construction is estimated to take approximately four years and three months (51 months).”

13. On the second line of page ES-8, “reuse as an industrial byproduct” of the ash is referenced for the Alternate Site. No similar statement is made on page ES-6 for the Salem site. This is inconsistent with the comment about ash disposal in paragraph four on ES-5, and paragraph five of page ES-14. ES-14 clearly states that such ash “would be disposed of at the High Plains Sanitary Landfill ...”

14. In the first paragraph of ES-9, when discussing the no action alternative, the statement “due to the higher electrical rates it would likely lead to for SME’s members and consumers, the socioeconomic impacts from the no action alternative would be potentially significant and adverse.” Since we cannot quantify or specify the impact of SME continuing to purchase electricity from others (paragraph 5, ES-8), how do we know that purchased electricity rates will be higher than the proposed HGS electricity rates?

15. The impacts to soil, water resources, air quality, biological resources, noise, recreation, cultural resources, etc. described on pages ES-9, ES-10, and ES-11 are disingenuous at best. First, SME represents that there is an insignificant amount of emissions from the proposed HGS and then SME state that for each of the various impacts, the effect would be “adverse and most likely non-significant.” If there is nothing being released by the proposed HGS, how can there be any adverse impact, significant or most likely non-significant? We also noted that, in the last paragraph on ES-9, trace element deposition is mentioned as having a “long-term minor impact on sensitive species.” Are humans a species sensitive enough to be affected?

16. In the second paragraph of page ES-10, which refers to the noise impact of the proposed HGS plant, the phrase “the dominant” is repeated twice. The predicted impact of noise is severely underestimated from my personal experience. We currently live approximately one mile from an oil refinery. At night, even small sounds like the release of steam from steam traps are audible. In this paragraph, the noise levels are predicted to equal ambient noise during quiet periods five km from the Salem site. Does the “quiet periods” refer to when the plant is shut down?

17. In the discussion of the impact of the proposed HGS on the NHL on pages ES-10 and ES-11, we fail to see how a few landscaping bushes along the building walls will hide the structures, especially the four hundred foot tall primary stack, the 225 foot tall boiler building, and the 220 foot tall secondary stack. Additionally, the last paragraph of page ES-13 states “the upper portions of the proposed generating station would be visible to park users and recreationalists along the Missouri River in Great Falls.” What exactly will be hidden by the planned landscaping when the landscaping is new and when that landscaping has matured?

18. In paragraph 3 of page ES-11, the statement “operation of the power plant at the Salem site would cause no additional direct impacts to land use or farmland” is made. A similar statement appears for the Alternate Site on page ES-14. Previously, on page ES-9, “trace element deposition” having an effect on sensitive species was mentioned. Will not these trace elements have an effect on organic farmers in the area?

19. In the same paragraph mentioned in comment 18 above, the potential effect of the Salem construction on nearby rural land market values is discussed. Stated is that “market values may be reduced . . . [but] property values are less likely to be affected.” A similar statement appears on page ES-14 for the Alternate Site. By Montana law, land assessments are either based on market value or productivity. Logically, this means that the market values and property values must trend in the same direction.

20. The last paragraph of page ES-11 refers to the overall health and safety impacts of the plant and states these impacts “would be adverse but non-significant” for the Salem location, but in the last paragraph on page ES-14, these impacts are described as “adverse most likely [emphasis added] non-significant” for the Alternate Site. This is the exact same plant, so the health and safety impacts should be the same.

21. In the first paragraph on page ES-12 and the first paragraph of page ES-15, it states that the proposed HGS will provide electricity “at reduced rates for SME’s customer base.” Since no one can predict what the market rates will be in 2011 and thereafter, this statement is pure speculation.

22. In the second paragraph on page ES-12, in the overall impacts of the Alternate Site, “the close proximity ... to residential areas ... is a disadvantage.” If all impacts from the HGS are non-significant, why would closeness to a residential area be a disadvantage?

23. In the third paragraph on page ES-13, the noise level predictions are quoted as being ambient at 1.9 km from the Alternate Site. In comment 16 above, a similar noise level was quoted at five km for the Salem site. Does the plant make a significantly different amount of noise at the Alternate Site verses the Salem site or do the existing ambient noise levels differ so much? Please clarify exactly what is meant here.

24. In paragraph 5 on page ES-14, in discussing the overall impacts on waste management at the Alternate Site, the statement “there is some potential for impacts to become significant” is made. Since the same paragraph states that “all ... wastes ... would be disposed of at the High Plains Sanitary Landfill ....” why is there potential for impacts to become significant when impacts at the Salem site (see paragraph four, page ES-11), where waste will be disposed of onsite, lack that potential?

25. On page 1-1, section 1.1, paragraph 2, SME is noted as providing wholesale electricity to one municipal utility. This municipal utility is presumably Electric City Power. In paragraph four, ES-2, it states “the wholesale power requirements of Electric City Power are met by purchases from PPL Montana that will end in 2011.” This seems inconsistent. The issue of where ECP actually currently gets its power is further muddied by the statement at the top of page 2-5.

26. In paragraph three of page 1-2, the availability of loans and guarantees from RD electrical programs for construction of transmission facilities is mentioned. SME has publicly stated that they would be unable to utilize energy purchases from utilities located east of their service area because transmission facilities for such power do not exist and cannot be financed. Could such transmission facilities be built with a RUS loan if SME should decide to form a partnership with utilities east of the SME service area?

27. In the last paragraph on page 1-6, the fact that an independent contractor was hired to prepare this EIS is mentioned. We do not understand why it is necessary for the reader to search through the entire EIS to discover who that independent contractor was.

28. Table 1-1 on page 1-8 is severely in need of updating. This table shows estimated peak power demand from 2004-2018. Since three of the estimated years have elapsed, we need to know how the actual system usage compared with the estimates to get some idea of the accuracy of the model used.

29. On page 1-9, paragraph 2, SME states that they will make up any power supply shortfalls over the next few years by “purchasing power from other sources.” Over the almost sixty year life of all of the co-ops involved in SME, power has always been purchased from others; neither SME nor its members have ever been involved in the generation end of electrical supply. This is a significant shift in the prevailing historic activity of the co-ops involved, and they may not have the resources to satisfactorily accomplish generation operation.

30. In paragraph 3 on page 1-10, projections are made for the increase in SME’s residential customer base over the next 20 years. Stated is “The main factor behind this increase will be the continued expansion of the City of Billings into the area served by Yellowstone Valley Electric Cooperative.” These suburban residents are not the rural customers that RUS is chartered to assist. The following paragraph refers to residential energy usage being influenced by a list of bulleted factors, the final one of which is “Increased electricity use by ‘farm customers,’ resulting from an increase in farm size and enhanced mechanization.” It makes very little sense for this to be one of the primary reasons that the average amount of electricity per residential customer remains relatively constant over the next 20 years. Among the other reasons listed, there is no mentions of distributed alternate energy generation devices such as small wind mills, solar panels, Stirling engines, etc.

31. The last paragraph of page 1-10 states “SME anticipates ... a reduction in the number of homes selecting natural gas as a home heating fuel,” but in the second paragraph on page 1-15, the phrase, “Not only has gas continued its traditional role as the fuel of choice for residential and commercial heating” appears. These statements are direct opposites.

32. The second paragraph of page 1-11, when discussing a decline in the percentage of load due to residential customers, states “the bulk of that shift is expected in the period 2003-2008.” Most of that 5 year period has elapsed. Has the projected shift actually occurred? Two paragraphs further down the page, the statement, “In order for a load to be considered in the context of this analysis, there must be considerable assurance that the load is likely to develop” is made. Checking to see whether changes predicted by 2007 actually happened is one way to verify short term forecasts and gain some degree of confidence in longer term forecasts. Similar forecasts are made on page 1-12; portions of these forecasts could also be verified by using current data.

33. In the discussion on base load generation on the bottom of page 1-13 and the top of page 1-14 is the comment “ Base load units are generally the newest, largest, and most efficient of the three types of generation.” The technology (CFB) chosen is neither the newest nor the most efficient and faces the strong possibility of being outdated before construction is even finished.

34. The final two sentences of the paragraph beginning with “As earlier indicated...” on page 1-14 are totally confusing because SME refers to a six member co-op but sometimes included only its five actual rural coops in its load descriptions and other times uses all six members’ load. Incidentally, no annual projected loads for ECP are provided during the 2004 thru 2018 period used for projections; the statement, “projected requirements of about 65 MW after 2011” is the only comment on this matter. The comments on page 2-4 do not provide any additional enlightenment. ECP projections should also be compared to actuals through the current date.

35. In the second to last paragraph on page 1-14, the statement “the unwillingness of current owners of existing generation to sell the electrical output of their facilities at prices less than ‘what the market will bear’” is made. Does SME really expect to buy electricity for less than market price? Were SME to be in the same position, SME would be unlikely to sell electricity at less than market price, as that would be a poor business practice.

36. Near the top of page 1-15, the statement “The WSCC of which SME is a member, has relied completely (emphasis added) on very expensive natural gas-fired generation to meet future regional supply requirements” appears. On page 2-5, it states “the WECC has relied almost (emphasis added) exclusively on natural gas fired generation to meet future regional supply requirements.” A Rand report, ISBN: 0-8330-3217-8, states that as of 2005, only 83 GW of the 91 GW of proposed capacity in the WSCC region will be produced by gas-fired power stations. 90% is not completely. This is an illustration of qualifiers being misused in an attempt to change the overall meaning. Further, is it really necessary to use both WSCC and WECC, since the WECC is the successor to WSCC and we are talking about future generation?

37. The first full paragraph of page 1-16 provides price data for natural gas. Despite the high prices shown there for January 2006, a quite different situation exists in March of 2007. On March 1, 2007, the natural gas price on the commodities market was $7.30/mcf; that same day, light sweet crude was $61.79. In the whole discussion about natural gas price volatility on pages 1-14 through 1-16 there is no mention of the similar price volatility occurring with coal over the same period. There is a good description of this occurrence in Dr. Thomas Power’s March 5 MTPR commentary entitled “Coal Industry Layoffs.” To quote, “In 2004 Montana and Wyoming coal was available at $5 a ton. At the beginning of 2006, it was selling at a price four times that, $20 per ton. ...[Recently] In Montana and Wyoming coal prices fell to half their peak value, to $10 a ton.”

38. The last paragraph of page 1-16 refers to the member systems of SME having met their total wholesale power supply requirements through the use of traditional power purchase agreements “over the course of the past 60 years.” This means that none of the member systems of SME have any experience with electricity generation. There is no corporate culture concerning the operation of a large industrial facility. SME essentially is in the same experience position as a grassroots facility in a Third World country.

39. Perhaps SME can explain why, in the first paragraph of page 1-17, they seem to believe that their customers should not be subject to market based energy prices. Why should SME’s customers be privileged to purchase power cheaper than the “market-based price” paid by all other Montanans? In the end, SME’s power will end up being market-based just like all of the other power in Montana because a different price would be a poor business practice, especially if SME’s costs end up being similar to other electricity producers’ costs.

40. Near the middle of page 1-17, the statement, “the most recent effort to secure a power purchase agreement was through . . . RFP issued in November 2003” is found. On the top of page 2-5, it states, “in early December 2006, SME engaged in discussions with a regional provider of wholesale energy . . . for the purpose of securing . . . a portion of the post-July 2008 supply needs of the cooperative member systems.” Obviously, these two statements are contradictory.

41. Table 1-2 on page 1-18 should be updated to reflect recent data for comparison with projections.

42. In the discussion on page 1-20, where SME finds that there is a lack of wholesale power purchase options, the problem is not a lack of power purchase options, but an unwillingness of SME to recognize that the electrical market is in transition. SME can no longer expect to purchase electricity for less than the cost of production.

43. There is insufficient detail in the last paragraph of page 1-20 and at the top of page 1-21 about how operating interruptions on the proposed HGS will be handled. There are no mentions of the average number of scheduled outage days per year expected and how those scheduled outages and any unscheduled outages would affect the reliability of user power supply and rate stability.

44. In the discussion of water resources on page 1-26, there is no consideration of how air emissions will affect water quality, only discharges into the river. Since the proposed HGS will discharge its waste waters to the City of Great Falls’ wastewater treatment system, who will be liable if the metals in that wastewater cause the wastewater treatment plant outflow to fail discharge standards? If that occurs, will the taxpayers of Great Falls be the ones responsible for any fines, remediation, and necessary treatment plant modifications?

45. The comment on page 1-26 under Air Quality that this proposed HGS would “be considered a state-of-the-art ‘clean coal’ facility” is inaccurate. The power generation field is changing quickly. Other newer technologies have been commercialized; these technologies provide lower emissions, better thermal efficiency, and greater potential for easy CO2 capture. A number of facilities utilizing IGCC technology have been announced. An abbreviated comparison of projected emissions for the proposed HGS and two of these facilities is shown in the table below; all emission levels are in #/MMBtu.

Pollutant	For proposed CFBHGS	For PMEC IGCC(w/ Selexol)	For Polk IGCC #2 (w/ SCR)
SO2	0.038	0.0053	0.006
NOx	0.07	0.012	0.015
CO	0.10	0.036
PM10	0.026	0.009	0.005
PM	0.012	0.001
VOC	0.003	0.003

46. On page 1-28 under Farmland and Land Use, the construction of the power plant on an undeveloped site in the Great Falls area would entail the permanent conversion of farmland to industrial land use. The “could entail” used in the FEIS in the description of this conversion is another perfect example of the use of inappropriate language, especially since the FEIS does not address plant decommissioning at some future date.

47. Near the bottom of page 1-29, the statement “given the projected 30-50 year life of a coal-fired generating station” appears. Previously, we have been told the lifespan of the proposed HGS is 30-35 years. Exactly which is it? We understand that the plant is to be landscaped with Rocky Mountain junipers to mitigate the visual effect of its equipment on the viewscape. We recently learned from a local gardener that these shrubs take at least thirty years to reach maturity and that they likely will not even reach a small fraction of the height of the 400 ft stack. By the time the shrubs reach maturity, the generating plant may be nearing the end of its design life. Even if the full-sized shrubs could be considered effective camouflage for the generating plant, this can hardly be effective visual impact mitigation when, for virtually all of lifespan of the generating facility, they are just small shrubs. Does this choice of shrubbery indicate SME expects a longer generating lifespan than 35 years, or is this just another oversight?

48. The first paragraph on page 2-2, specifically the phrase “SME also conducted an evaluation of sites in the Great Falls area as described in this chapter,” implies that the Great Falls area sites were evaluated in addition to sites at four other general areas of the state. Information later in the chapter (see comment 72) seems to indicate that the Great Falls area was one of the four general areas.

49. On page 2-2, where alternates to the proposed power plant were discussed, the explanation for Alternate 2 implies that energy conservation and efficiency were considered only to “offset the projected increases in energy demand.” Energy conservation and efficiency should be considered not only in context of future energy demand but also to mitigate the impacts of current energy demand. As noted later in comments 53 and 56, the SME member co-ops do not seem to be effectively promoting current reductions in energy demand through energy conservation programs.

50. In the first paragraph of page 2-4, it states that “ECP . . . will have a load requirement of approximately 65 MW . . . in 2011.” The use of “will” here is inappropriate as this is a sales forecast based on projections that no one has been able to extract from ECP. The recently released R. W. Beck study report indicates that the current ECP load is only 20-25 MW, which is considerably lower than required to meet their long-term sales forecasts. In the same report R. W. Beck also expressed concern that ECP is behind their sales targets.

51. In the second paragraph of page 2-5, the results of a RFP in December 2006 are discussed; stated is that the costs received were in “excess of $56/MWh less the cost of transmission [emphasis added].” The next sentence refers to prices in the $64-66 range. Should the “less” actually be a plus?

52. In the fourth paragraph of page 2-5, reference is made to the “price volatility of natural gas.” As previously mentioned in comment 37, no mention of the price volatility/escalation for coal is made. In addition, there is no discussion concerning the effect of future liquid natural gas (LNG) deliveries via the numerous coastal super ports currently under construction and how those deliveries might affect natural gas prices.

53. In the first paragraph of the Energy Conservation section on page 2-5, the statement is made that “promotion and use of energy efficiency programs generally have neutral or beneficial effects on the environment . . .” This statement implies that the “promotional” campaigns for efficiency programs result in negative impacts on the environment. Because increases in energy conservation or efficiency generally have beneficial impacts, the promotional aspect must have a negative effect to achieve an overall neutral effect. If this is, in fact, what is occurring, then perhaps SME needs to rework their promotional campaigns so their expenditures in the interest of energy conservation are effective. Improvements in energy utilization means lower future load requirements.

54. In the first full paragraph on page 2-6, the legal requirement for electrical utilities and co-ops to invest “a minimum of 2.4 percent of their annual retail sales in universal systems benefits programs” is mentioned. Does this requirement also apply to ECP? Can the costs of this requirement be shared among members or allotted across the membership of SME or does each SME member utility need to meet this legal requirement on their own? If the requirement is on an individual utility basis, all available information indicates that ECP is not fulfilling this legal requirement.

55. On page 2-6 and 2-7, conservation is discussed and the statement is made that “it is reasonable to assume potential reductions in electricity use from conservation and electricity improvements are in the 10 percent range . . .” Similar comments are made on page 2-40. Sheryl Carter, senior policy analyst for the NRDC, believes that “this country could cut in half the amount of electricity we’re expected to use over the next decade if all states had plans similar to California’s and Minnesota’s” for encouraging consumers to purchase energy efficient appliances. If the federal government would implement the congressionally mandated appliance energy efficiency programs already on the books, savings might even be higher. A conservation improvement in the range suggested by Ms. Carter would have a drastic effect on the two “combinations of energy sources” discussions on pages 2-40 through 2-48.

56. On page 4-55, SME states “that it has and would continue to promote energy efficiency for residential, industrial, and agricultural energy consumers. SME states that it would further develop and implement energy conservation ideas and projects as they are identified and shown to be economically feasible.” The facts do not support this assertion by SME and further illustrates SME’s tendency to promise more than they are currently or have previously delivered. In Table 2-1 on page 2-7, the energy conservation expenditures by SME member system co-ops is documented for 2004. With the exception of the repayments for legacy programs undertaken–in the 1980s and early 1990s–by MPC, the BPA, and others, no expenditures are listed for the Beartooth and Fergus Co-ops and only $26 was expended by the Tongue River Co-op in 2004. Overall, 88% of the 2004 SME investments for “energy conservation” are for legacy program repayments. Despite the rhetoric in the text surrounding this table, it is readily apparent from the expenditure data that several of SME coop members do not have any substantial, active, ongoing energy conservation programs and that SME as an organization is not stressing energy conservation.

57. In the footnote to Table 2-1 on page 2-7, data is presented that permits estimation of SME’s total annual 2004 expenditures for wholesale power; that expenditure appears to be approximately $20.3 million (i.e., $915,391/ 0.045 = $20,342,022). SME’s portion of the capital cost (using the latest cost estimates) for the construction of the proposed HGS is about $540 million dollars. On a very simplified basis (which excludes interest, fuel, maintenance, daily operating costs, etc.) 25 years of wholesale power purchases at the 2004 level would be required to expend the same amount of money as SME’s raw capital expenditures for the proposed HGS. All the financial details involved in the proposed financing, construction, and operation of the HGS plant needs to be exposed for public scrutiny.

58. The busbar costs for wind energy in Table 2-2 (page 2-8) is shown as $50.60/MWh. Reportedly, the average sale price to NorthWestern Energy for Judith Gap wind farm energy in 2006 was less than $40/MWh, which is considerably lower than the table number. The table numbers are apparently from nationwide projections. Local, current data should always be used when available.

59. The first paragraph of page 2-11 states that a wind turbine at three hundred meters away is “no noisier than the reading room of a library.” This is a very tangible indication to the average citizen of how noisy the turbine will be. Is it possible to make a similar analogy for the noise levels predicted for the proposed HGS at the same distance? If the proposed HGS plant is significantly noisier at this distance, how far away must one be to experience a level of noise similar to that “reading room of a library?”

60. In the paragraph on page 2-12 (that was added to the DEIS for the FEIS) concerning integration issues experienced by NorthWestern Energy, there is no reference listed for the testimony cited for the NorthWestern Energy representative. In a November 19, 2006 Great Falls Tribune article entitled “Harvesting the wind: A year into project, Judith Gap turbines a huge success” by Tribune Staff Writer Karl Puckett, John Hines, “NorthWestern's director of energy supply planning,” stated “‘We're quite pleased with this project . . . We believe this is a very good one in terms of both price and production.’” While the Tribune article clearly indicates how NorthWestern feels about Judith Gap just four months ago, there is no date to indicate how “recently” the testimony critical of Judith Gap was made. Possibly, NorthWestern has become much more adept at managing the Judith Gap power since the testimony?

61. The discussion of the wind power capabilities and price on page 2-13 for the SME service area is simplistic. Paragraph two does not provide any detail on the percentages of the overall SME service areas that are located within the various wind classes. Obviously, the wider the area that wind generation resources are located over, the more likely it is that some of the wind generation resources will be producing a substantial amount of power at any given point in time. The presumption that SME would be constantly buying power to firm up the wind-supplied power is unrealistic. Presumably, SME would quickly establish some idea of the amount of electricity at any particular given time of year that would be produced by the wind and acquire a small, long-term baseload contract to provided needed firming. SME’s explanation of how they derived their cost of wind power estimate shows a clear lack of planning capabilities.

62. On page 2-16, the third paragraph has typographical errors where “mWh” (milliwatt hour?) is used in place of MWh at least based on numbers presented in Table 2-9 (page 2-60). In the very next paragraph, discussing solar power productivity, a reference is missing for the statement “Estimates of capacity factors range from 20 to 35 percent.”

63. In the discussion on page 2-18 regarding the likelihood that additional power could be generated by the five hydroelectric dams on the Missouri River near Great Falls, what is the basis/source for the statement that “further expansion of . . . generation at these facilities . . . is probably not realistic?” While we agree that it is probably unlikely that the dams would be enlarged, the evolving nature of technology and the unspecified “upgraded” age of the current generation equipment means that great potential might exist for more power output. Please provide the necessary documentation to demonstrate that no additional power is obtainable.

64. The dismissal of the potential for at least partial capture of the 502 “adjusted, undeveloped MW” of hydropower cited in Table 2-3 (page 2-18) is curious considering that “adjusted” means, according to the Table 2-3 footnote, that projects likely to experience severe “environmental, legal, or institutional constraints” have already been removed from the pool of potential power projects. In the paragraph above Table 2-3, institutional and legal constraints are cited for the dismissal of hydropower as viable power source. Also mentioned is constructing multiple facilities would render this action infeasible because of the time involved. The load projections for SME show gradual growth, and a number of small projects coming online over a period of years might perfectly match demand growth if properly scheduled.

65. On page 2-26, cost projections for various nonrenewable power generation facilities are presented in Table 2-6. The data presented in the columns for the CFB plant and the IGCC plant is very curious, as discrepancies exist between the data and the description of benefits and deficiencies for these two types of plants in later sections of this chapter. Similar data in a somewhat expanded form is presented in Table 2-9 (page 2-60). For example, a negative comment is made about the reliability being low on an IGCC plant (note average capacity factor < 80% listed in Table 2-9), yet the fixed O&M costs are lower than for the CFB unit. In another example, in the middle of page 2-32, there is a discussion of efficiency in which gasification-based systems are quoted as being 5-12% more efficient than conventional boiler plants but the variable/fuel costs for the CFB plant are shown in Table 2-6 as 35% lower than the IGCC costs–the most efficient plant should have lower fuel costs. Exactly how did SME select the data presented Table 2-6, since the source of most of the table data throughout the entire FEIS is SME documents?

66. Table 2-7 (page 2-27) presents a number of challenges.

(a) The table title states that the numbers are for a gross 250 MW generating plant. Footnote 10 for the HGS CFB refers to a 270 gross MW unit. Are all the emissions data shown in this table for technologies other than the proposed HGS unit for 250 MW (gross) units?

(b) The data presented for the IGCC coal unit is testing data from an operational run with high sulfur content coal dissimilar to Montana coal. This is an unfair comparison of IGCC with the proposed HGS because a coal of low sulfur content would likely be utilized in either style plant if the plant were to be constructed in Montana.

(c) The footnotes indicate that the reported IGCC emissions are based on the TECO Polk Power Station IGCC plant; this is a ten year old plant that is no longer representative of the technological developments taking place in the IGCC field. Despite its age, TECO is pleased with the operation of this plant according to a telecon discussion with the plant operations manager on 3/9/07 and issued a press release on 2/16/07 announcing the construction of a new 630 MW IGCC coal-fueled power facility at the same site. The new plant will incorporate the lessons learned from ten years of operating the Polk Power Station, have significantly lower emissions than the existing Polk Station, and may possibly even capture and sequester CO2. The EIS for this new plant will be issued late this summer or in early fall.

(d) The estimated annual emissions numbers for most pollutants in Table 2-7 for the proposed HGS plant are different than those shown in Table 2-12 (page 2-75), also for the proposed HGS plant. The numbers in Table 2-12 are clearly stated to be from all operations combined of the proposed HGS. Some of the numbers in Table 2-7 appear to be from just the combustion section of the proposed HGS. Further, the listing for GHGs of 2,100,000 tons/year is significantly different than the 2,800,000 tons/year of total GHG emissions reported on page 4-53. The number reported for GHGs in Table 2-7 is actually for facility-wide CO2 emissions and does not include CO2 equivalents of 0.67 million tons per year.

(e) In footnote one, the coal consumption of the CFB unit is quoted as 1,108,700 tons/year. This is different than the 1,135,800 tons/year shown in Table 2-8 on page 2-51 and on page 4-144 or the 1,314,000 tons/year (based on SME’s air permit application) quoted on the bottom of page 2-71. Page 2-83 also notes that projected coal consumption is 1,314,000 tons/year. There is almost a 20 percent difference between the highest and lowest reported coal consumption figures. Without knowing the quantity of coal to be consumed, evaluating the thermal efficiency of the plant is impossible.

67. Near the bottom of page 2-28, mention is made of the potent greenhouse effect of methane losses during natural gas production. This is listed as an environmental concern for a NGCC unit. No mention is made of the fact that similar methane emissions can occur during the strip mining of coal.

68. A number of suspicious representations are made in the discussion of PC plants on page 2-31. Examples are:

(a) The stable cost of coal. This issue was already discussed in our comment 37.

(b) Only new conventional pulverized coal plants utilizing the latest technology are capable of approaching forty percent efficiency. We are suspicious of the 45 percent efficiency quoted for such advanced modern plants and wonder about the source data as other sources, including the website of large contractors like Foster-Wheeler, quote a maximum 40 percent number. Even the FEIS on page 2-32 cites the Department of Energy as noting conventional coal boiler plants as being limited to “33-40 percent efficiencies.”

(c) The reasoning for eliminating a PC plant in favor of a CFB plant is very poorly explained and documented. Given the questions previously raised about the data presented in Table 2-6, there is sufficient question about the basis for the PC elimination decision to require a complete reexamination of this decision.

69. In the discussion on pages 2-31 through 2-34, a number of questionable points are raised about IGCC. Some of these are:

(a) On page 2-32, the first full paragraph refers to fly ash being “blown out” of the gasifier. This implies that the fly ash is leaving in an uncontrolled, explosive manner. The word “leaves,” with appropriate grammatical corrections, would be much more appropriate.

(b) The next paragraph states that, “currently, gasification-based systems can operate at around 45 percent efficiencies.” IGCC technology has advanced significantly in the last few years and efficiencies are near 50 percent. For substantiation of this contention we quote from the EFSEC filing (page 2.6.1) for the Pacific Mountain Energy Center (PMEC) IGCC plant current undergoing scoping in Kalama, Washington, “the thermal efficiency of the combined cycle plant is over 50%. More than 50% of the energy in the fuel is converted to useful electricity.”

(c) The last paragraph on page 2-32 truly misrepresents the state of IGCC technology currently. The term “with great promise” does not seem to fit well with the reality of the number of IGCC plants currently proposed to come online in the next half decade and plants such as the new Polk facility (see comment 66(c)) and the PMEC facility discussed in part (b) above. The representation that the emissions from a recently-designed IGCC plant are “similar” to a CFB plant (in particular, the proposed HGS plant) are true misrepresentations. Greenhouse gas, an especially relevant emission, will always be lower for an IGCC unit, even without any CO2 capture considerations, because the thermal efficiency of the IGCC process is higher than for CFB.

(d) Regarding the lack of existing, operating IGCC facilities capturing CO2, as referenced near the top of page 2-33, we are unaware of any operating CFB plants currently utilizing carbon capture equipment. In addition, the likelihood that an economical method for capturing CO2 will be implemented is much less likely for a CFB plant than for an IGCC plant. This is because the gas stream to be treated for CO2 removal is much (as much as 160 times) larger on a CFB unit than on an IGCC unit. The smaller the stream to be treated, the easier the job! There is proven, commercially available technology for capturing CO2 on an IGCC plant in an economically viable manner, but a similar situation does not exist for a CFB plant. The PMEC facility mentioned above will start up with about 14 percent CO2 recovery (this is the maximum amount that is currently marketable) and with the necessary engineering tie-ins to upgrade to 90 plus percent CO2 capture.

(e) In regard to the statement near the bottom of page 2-33 that “the industry lacks experience at integrating” gasification and combined cycle processes, the word “industry” clearly should be prefaced with the word “utility,” and even then the statement may not be true. Many people would concur that ten years of Polk plant operating experience (see discussion about this plant earlier in comment 66 (c)) and similar experience at the Wabash River facility in Indiana for even a longer period is at least a substantial introduction of IGCC technology to the utility industry. There are also captive IGCC units operating in a number of refineries, including at least two in the USA (Premcor in Delaware and El Dorado in Kansas) and a growing number in southern Europe.

(f) The IGCC information contained in the paragraph at the top of page 2-34 is severely out of date. As previously indicated in the comments above, both the Polk and Wabash plants have been operating for in excess of ten years which is quite a bit longer than the listed “several years.” The list of announced IGCC units now includes plants in at least Montana, West Virginia, Washington, Wyoming, and California in addition to the five states listed in the FEIS.

(g) The discussion of IGCC plant reliability and costs and the “conclusion” on page 2-34, also do not reflect the significant advances that have taken place in IGCC technology in the past several years. The capital premium associated with an IGCC plant has shrunk to less than 20% with the simplifications being made in the latest designs, and operation at thermal efficiencies over 50% brings the costs almost in line. This is without even considering the implications of what effect initiation of CO2 capture regulations or a carbon tax would have on cost differentials. PMEC’s IGCC project manager, Tom Krueger, was quoted in the December 2005 issue of CEP as stating, “IGCC is not only the lowest cost energy option, but the realistic, environmentally responsible option for producing large quantities of base load power at affordable rates.” Energy Northwest, owner of the PMEC IGCC plant, expects their new plant to operate with greater than 90% reliability according to a telecon with Laura Schinnell on 3/12/07.

70. In the discourse on utilizing combinations of energy resources to satisfy SME’s energy needs, serious consideration has not been given to the benefit of energy conservation. As we stated earlier in comment 55, some experts believe conservation could reduce energy consumption by up to 50 percent. This is substantially more than the paltry 10 percent that SME has used in the discussions on pages 2-40 through 2-48. Many of the comments made in this section make little or no sense or are contradictory; examples are:

(a) The size of project components is independent of the size of the CFB plant (stated on page 2-41). This would imply that you could build a plant of any size for the same price.

(b) On 2-41, if the size of the plant is reduced, the number of coal cars in the trains will probably be reduced. The number of cars in coal trains will likely be fixed at 150 (up from the cited 110 and the current 135), as that is the number that Burlington Northern has chosen as their new standard. The increased number of cars in a standard coal train will occasion a larger delivery of coal with each train and hence require greater unloading and storage activity and storage capacity.

(c) Wind development would preferably be located at or near the Salem site (page 2-42, 2-44). A distributed allocation of wind generation resources throughout SME’s service territory would better balance load and result in better potential wind resource efficiency and utilization. This comment also applies to the contention that any solar resources would also have to be in the Salem area; again, distribution at several locations in the SME service territory makes more sense than concentration in one location, especially a location beset by environmentally sensitive visibility issues (page 2-44).

Apparently, a different writer wrote the comments on wind energy on page 2-46, where it states “Wind development could potentially be located at a number of locations within SME’s service area.” Later, on the same page, we also found “Because there would be no requirement to locate the wind requirement at or near the Salem site, there would be no impact to the Great Falls Portage NHL.”

(d) New hydroelectric generation would need to provide power that SME needs starting in 2008 (page 2-43). There is no possibility the proposed HGS will be operating by 2008. Why would hydroelectric generation be held to a different timetable for comparison purposes?

71. Several of the site screening study factors mentioned on page 2-48 appear to have little or no relevance to the siting process. What relevance do “high level of reliability,” “fuel cost stability,” and “operational available by 2009” have on the site selection process, as these are issues dealing with the selection of the technology to be used and, in the case of the 2009 date, an impossibility unless a NGCC unit were under consideration?

72. The description of the site selection process beginning on page 2-49 is very unenlightening.

Discussion points of interest:

(a) The comment that “risk factors with the potential to impede, delay, or prevent development of the plant at a given site were identified” seems to imply that the most important criterion was speed and not necessarily the selection of the most physically appropriate location. The fact that Native American lands and class one airsheds were to be avoided further implies that SME’s intentions were to rush plant siting.

(b) In the second paragraph, the FEIS refers to seven sites when it appears there are eight if you include the Section 36 site; talks about the Salem industrial or industrial park sites (are these the same?); references Figure 2-19 as showing the sites but that figure only shows the four main areas considered for site selection; and finally, states that Figure 2-20 shows artist’s representations of the power plant at each site location but that figure only shows four sites.

(c) SME mentioned that they examined in detail site proximity to state or national parks, etc., but they obviously failed to identify the proximity of the Salem site to the NHL.

(d) The last paragraph refers to the sectional findings of the Decker, Hysham, and Nelson Creek sites being identified as unacceptable and refers to three sites but should refer to four, since there are two sites at the Decker location.

(e) On page 2-52, which of the two (see page 2-49) Decker sites is being discussed is unclear. Further, the exact reasoning for considering whichever Decker site this is as having “a higher degree of risk associated with environmental permitting and approvals” is not discussed on page 2-53.

(f) The Hysham site description on page 2-53 and 2-54 also has a few problems. Figure 2-22 on page 2-64 supposedly shows this site but is instead a picture of the Salem site looking towards the Highwood Mountains. The limestone consumption is listed as 58,000 tons/year without explanation as to why it is more than twice as high as other locations. Similar comments to those for the Decker site are made about environmental permitting risks without explanation.

(g) In the discussion of the Great Falls area sitings that took place before the Salem site was selected (see discussion on page 2-49) mention is made of the site north of Malmstrom Airforce Base being eliminated for a number of reasons including the fact that Malmstrom is fourth in line as an emergency location to land the space shuttle and that location at this site would require transport of coal through Great Falls. The latter reason should be equally a disqualifier for the Salem site, as the coal comes from the same spur location.

(h) A second Great Falls site in Section 36 was disqualified because repeated efforts to contact the property owner failed. This explanation sounds convenient but, if SME were serious about this site, unrealistic.

73. On page 2-52, during the discussion of the Decker site, mention is made of the delivery of No. 2 fuel oil by truck for startup. This is the first mention of any fuel oil delivery requirements in the FEIS. No. 2 fuel oil deliveries are also mentioned for the Nelson Creek site on page 2-54. We assume similar fuel oil delivery would be required for all the other proposed sites, including the Salem site that was ultimately chosen as the primary site. Why is there no discussion of fuel oil delivery, annual projected usage levels, source, spill precautions, safe handling, fire and explosion prevention systems for storage facilities, etc. for this commodity in general, at the other sites (as appropriate), and specifically for the primary Salem site?

74. The Nelson Creek site discussed on page 2-54 mentions upgrading rail service to allow delivery of major plant equipment. Does this mean that major plant equipment will be delivered by rail to the Salem site? What about the other sites considered? If so for the Salem site, what implications does this have for other traffic, rail right-a-ways, etc. We noticed no discussion of this possibility in any of the Salem site coverage.

75. According to page 2-69, the discussion of alternate railroad spur alignments on page 2-58 is not correct. The term “alignments” should be replaced with corridors, as the page 2-69 explanation seems to indicate that there are multiple alignments within at least one of the three railroad corridors.

76. In section 2.1.9.5 on page 2-59, Figure 2-25 (page 2-66) supposedly has something to do with the High Plains Landfill. In fact, Figure 2-25 shows the interaction between the proposed HGS and the NHL.

77. There are several issues associated with the site selection conclusions on page 2-59.

(a) Table 2-9 (page 2-60) shows some of the same data that was previously questioned for Table 2-6 (page 2-26) in our comment 65.

(b) The conclusion that NGCC is unattractive because of the volatility of natural gas prices ignores similar volatility associated with the price of coal. See our comment 37. If the volatility and rising price of coal were seriously considered, substantial revision of the criteria documented in Table 2-10 (page 2-61) would be required.

(c) The summary analysis of sites does not mention multiple sites at the Decker location (only one site implied) or anything about consideration of more than two sites in the Great Falls area. Any summary should at least mention that other sites were considered and rejected.

78. Table 2-10 (page 2-61) perpetuates the misconceptions of the cost of the IGCC option with respect to cost effectiveness and reliability that may have been true a few years ago. As discussed in the previous comment 69, technological developments in IGCC have resulted in substantially better cost effectiveness and projected reliabilities of greater than 90%. Much of this improvement is associated with better overall plant design and proper sparing of critical equipment.

79. In the discussion of the alternatives and location to be assessed in detail on pages 2-62 through 2-71, a number of areas deserve comment.

(a) The use of the word “several” in the second paragraph on page 2-62 implies that only a handful of sites were evaluated as possible power plant locations. As we understand the information presented on page 2-49, at least eight sites were studied. Possibly, the actual number should be substituted for the word “several.”

(b) The criteria listed for evaluation of the sites in the second paragraph on page 2-62, specifically “the load centers for the member cooperatives” and “proximity to nearby fuel sources,” are not at all similar to the major factors listed for the site screening study on page 2-48. If the above mentioned two criterion were seriously considered in the site selection process, the chances of any Great Falls site being seriously considered, i.e., most of the SME load is near Billings and the coal mines are in southeastern Montana not central Montana, would approach zero.

(c) In the second paragraph of the No Action discussion on page 2-62, the final sentence, that in the case of the No Action alternative being chosen, “SME would not investigate other cost effective and potentially reliable energy sources, nor would efforts be made to extend the current power purchase agreements,” sounds more like a statement from a couple of little kids about to take their ball and go home than a business entity concerned with serving their customers. They are obviously not taking this alternative seriously.

(d) The arguments that purchasing power from existing sources of wholesale supply would promote the continued use of inefficient and dirty currently operating coal-fired generation is speculation at best. Initially, some of the power might be from such plants, but some of the possible sources are nearing the end of their lifespan and might be replaced by even newer and cleaner technologies than SME is proposing to use. If nationwide conservation efforts on the level proposed by Sheryl Carter, in comment 55, were achieved, there likely would be substantial availability of excess generation capacity.

(e) In the discussion (center of page 2-63) of the plant features that will be visible as depicted on Figure 2-27 (page 2-68), there is no mention of the 220 foot auxiliary stack and it is not shown on the figure. Elsewhere in the FEIS, mention is made of a 210 foot tall temporary stack for use in the initial dryout of the boiler refractory and subsequent maintenance activities; this stack is also not discussed or shown. If this “temporary stack” is to be used for subsequent maintenance activities, it is clearly not temporary and needs to be shown. Finally, it would be most helpful if Figure 2-27 clearly showed the height of the various structures and not just elevations.

(f) In the last part of the first paragraph on page 2-69, Figure 2-24 on page 2-65 is reported as showing three possible alignments of rail lines within the preferred rail corridor. This figure is not clear and could benefit from some annotation identifying each possible alignment.

(g) On page 2-70, Figure 2-29 (page 2-72) supposedly shows Morony Reservoir. Figure 2-29 is of a generalized CFB process.

(h) The third paragraph of page 2-70 discusses the two pumps to be located near Morony Dam. It is not clear if these two pumps are to be operated separately or in parallel or even how they will be driven.

(i) In the last full paragraph of page 2-70, No figures/maps showing the location of the wastewater line or the power export lines are provided. This criticism continues onto the further discussion of transmission structures on page 2-71. Seeing these maps is necessary for a proper understanding of where the various lines are routed.

80. In addition to the discrepancy of the quantity of coal consumption previously mentioned in comment 66, our review of the 2.2.2.2 Operation section on pages 2-71 through 2-76 raised the following additional questions/comments:

(a) Is the eight month plant startup activities interval listed in paragraph one on page 2-71 included in the four year, three month construction estimate or in addition to the construction period? Do the time limit requirements listed in the DEQ air quality permit application and, for example, mentioned for mercury specifically on the bottom of page 4-52, include this eight month startup period or begin at the end of the eight month period (i.e., does this mean that SME-HGS has 26 months from the time that they start trying to start the facility until they must meet mercury emission standards)?

(b) According to our understanding of what Burlington Northern is currently telling customers, 110 car trains (as described on the top of page 2-73) will not be used for delivery of coal in the future. Even the currently used 135 car trains will be replaced by 150 car trains. Use of larger trains could require a substantial redesign of tracking within the plant site boundaries, unloading facilities, storage facilities, etc.

(c) The description of this facility as being “state-of-the-art” in paragraph three of page 2-73 does not correspond to what is being labeled as “state-of-the-art” for other new power generation facilities worldwide. The same comment applies to the use of the phrase “‘clean coal’ technology” to describe the CFB boiler itself in the following paragraph. The projected emission figures for this CFB boiler are substantially higher than those of the PMEC IGCC unit; the estimated PMEC IGCC emission levels are readily available for comparison at the Washington State EFSEC site: http://www.efsec.wa.gov/

(d) Figure 2-30 in the second to last paragraph on page 2-73 supposedly references emissions from the CFB boiler. Figure 2-30 on page 2-77 is a picture of a Judith Gap wind turbine.

(e) Near the bottom of page 2-75, the onsite ash disposal facilities at the Salem site are described as a rectangular grid of nine cells in a two parcel wide by five parcel long arrangement with each cell having a projected life of approximately three years and the overall facility providing storage capacity for in excess of 35 years. Nine cells times three years each does not equal a lifespan in excess of 35 years. Moreover, this description is not the same as mentioned on page 4-116 where the monofill is described as being “constructed as twelve cells in a 3 by 4 grid” extending over approximately, “100 acres.”

81. In section 2.2.2.3 the wind turbines to be installed at the Salem site are discussed. Issues raised by this discussion are:

(a) In the middle paragraph on page 2-77, the statement is made that the, “ Wind towers would be upwind from the HGS coal-fired plant facilities.” According to Figure 2-31 on page 2-78, this is not true. Since the prevailing winds are from the southwest and the turbines are orientated in a single line from northwest to southeast and generally north-northwest of the plant, the turbines could best be described as located in a straight line perpendicular to the prevailing wind direction and the generally southwest-northeast orientation of the overall proposed HGS facility. Suggested additions to Figure 2-31 are a large arrow showing the prevailing wind direction (SW), a symbol showing that north is at the top of the map as is customary, and possibly some legend information detailing historical wind history with respect to direction and speed.

(b) The representations made in Table 2-13 on page 2-81 are very simplistic and presented without any support documentation. A comparison with the actual experience of NorthWestern’s use of Judith Gap Wind Farm power would be of great interest and such a comparison would provide “real world” cost data.

(c) In the middle paragraph of page 2-81, comments are made about the proposed HGS being the only SME generation source and about the limited load-following ability of the plant. The presented comparison of “ramp up” capabilities demonstrates one of the disadvantages of a CFB plant, but implies that the increased flexibility of a gas-fired facility comes at “a much higher cost.” This may currently be true for specifically a NGCC facility but may not be true in the future because of the variability of fuel cost of all types (gas, coal, etc.), potential future CO2 capture requirements and a Carbon Tax, the technological developments in IGCC (which is after all really a gas-fired combined cycle operation), etc.

(d) SME’s contention near the middle of page 2-82 that their contemplated supply portfolio of a single coal-fired power plant will result in less negative impact to customers in the SME service area than other options is pure speculation.

(e) No basis or justification other than control system response is given for SME’s belief that wind power should be limited to a range of 2-3 percent of system load near the bottom of page 2-82. Does SME have company operating experience demonstrating this is a practical limit? What limits have other utilities established for wind power usage? Reportedly, NorthWestern’s portfolio includes about 7-8 percent wind power (see our previous comment 60 for the article citation).

(f) Near the top of page 2-83, the comment “a wind resource-based power purchase agreement would enable SME to structure the integration of wind resources into the supply mix as a ‘firm resource’” is made. This is a very interesting representation. SME cannot develop its own wind power resources because they are not “firm,” but, if they buy wind power, it is suddenly a “firm resource.” Could this be expanded upon and explained?

82. In the discussion of the alternative site on page 2-84 and page 2-85, mention is made that construction of the plant at this site would take three and a half years, the same length of time as at the Salem site. However, on page 2-63, Salem site construction time is estimated as four years and three months. Reference is also made to the possibility of reuse of fly and bed ash as an industrial byproduct, but other discussions of ash disposal in this FEIS have mostly indicated the ash would be disposed of at the High Plains Landfill. Clarification?

83. In the comparison of the environmental impacts of the three main alternatives (no action, HGS, and IPS) shown in Table 2-14 on pages 2-88 through 2-99, there are numerous instances where the impact for one alternative was simply copied to another alternative. A good example is for water resources on page 2-88 and 2-89, where the Industrial Park Site description still includes at least two “HGS” mentions in the impact statement. A similar situation exists on page 2-90 under air quality. There were also other problems, like on page 2-88 under Alternate 3, where the disposal of ash is described as “unknown” when we, in fact, know from previous FEIS discussion that this ash likely would go to the High Plains Landfill. The notation that the impact on visual resources of the HGS will only be of “small extent,” i.e., less than the “medium extent” experienced for the Industrial Park Site is most curious, as that seems to imply that less than 100 people would note the visual effect of the proposed HGS facility on the NHL.

NOTE: Not much time was spent reviewing Sections 3 or 4 of the FEIS as these sections basically discuss environmental aspects of the proposed facilities and this is in general outside of our area of expertise.

84. On pages 3-2 and 3-3, there is a discussion of the Pendroy Clay soils at the Salem site. On page 3-2, it states the soil is well-drained, but on the top of page 3-3, the soil is characterized as exhibiting “very slow permeability” and the next paragraph points out the “high runoff potential.” Well-drained and a high runoff potential do not seem to be terms descriptive of the same conditions. A further mention later on of the “high plasticity” of the soils would seem to fit with “slow permeability.”

85. At three locations in the FEIS, pages 3-11, 4-123, and 5-8, representations are made that water resources like the Missouri River and Belt Creek “do not support the beneficial uses of aquatic life, coldwater fishery, warm water fishery, and drinking water.” This is the same Missouri River that is considered a blue-ribbon trout stream, listed under recreation in Figure 3-35 on page 3-68 as a fishing site for outdoor activities, and the source of both Great Falls (see page 3-17) and Fort Benton municipal water. We presume that this is an attempt to show that the water is already dirty, so SME does not need to worry about how much more water pollution occurs!

86. No details are provided for the raw water tank mentioned on page 4-22. If the plant uses 3,200 gpm, the size of this tank could be substantial if any significant plant run time is contemplated during a disruption in makeup water pumping.

87. The operation of the City of Great Falls wastewater treatment facility is discussed just above the middle of page 4-23. The paragraph quotes the facility as being licensed and permitted to treat/discharge up to 21,000,000 gpd and indicates the facility is currently discharging between 9 and 10.5 million gpd. The actual current operating capacity of the facility is not listed. Can the facility currently accommodate 21,000,000 gpd and, if so, why does it have so much reserve capacity?

88. Near the bottom of page 4-23, there is a discussion of a 5.8 million gallon surge basin for wastewater at the Salem site. Numerous other ponds and containment areas are mentioned on pages 4-24 and 4-25 as planned on the site. There is no discussion in this section about how birds and other wildlife will respond to these water resources. In addition, mosquito control, smells, and other obnoxious aspects of small bodies of stagnant water are not addressed. Contrary to the statement at the bottom of page 4-24, there is no “labeled Loop Pond” shown on Figure 4-3 on page 4-19.

89. On page 4-34, the comment “the use of the fabric filter baghouse for particulate control represents BACT for radionuclides, as it would reduce radionuclide emissions from the CFB boiler by more than 90 percent” is made. This means that the fly ash contains 90 percent of the radioactive materials contained in the coal feed or formed during the combustion process. While usage of the fly ash as a byproduct is currently not covered by this FEIS, according to a statement on page 4-115, and disposal of the fly ash at an onsite monofill is proposed, the potential for significant radioactive contamination would exist if such byproduct use is initiated and also at the monofill site. If the byproduct usage should happen to include a wallboard manufacturing facility as mentioned by one of the local county commissioners, wallboard contaminated with substantial levels of radioactivity (and other heavy metals in the fly ash) would be distributed to housing units throughout the wallboard marketing area. It is our understanding that radioactive emissions are not monitored at combustion-type power generation facilities. If this is correct, a substantial radioactive source could be created at the monofill without recognition of the potential danger. Will any resources be allocated to ensure that a radioactive dump/storage site is not created only eight miles from Great Falls?

90. On page 4-35, mention is made of the fact that operation of the auxiliary boiler will be allowed for a maximum of 850 hours of operation per year. This is more than 35 days per year and, if all this time is utilized, would indicate that expected reliability of the proposed HGS is just slightly over 90 percent. The PMEC information filed at the previously mentioned website (see comment 80) cites a 100 hour per year limit.

91. In the discussion of mercury emissions in section 4, the February 2005 test burn of 80 tons of Powder River Basin (PRB) coal is described (p. 4-51) and the statement “However, the test burn alone does not provide sufficient data to allow boiler manufacturers to confidently extrapolate the data and guarantee mercury emissions control in a full-scale CFB unit with IECS” is made. This statement raises a number of questions. First, did problems during the test burn prevent the necessary data collection for extrapolation/guarantees to be made? Second, does this imply that there is no established operating history on the use of PRB sub-bituminous coal in a CFB facility? Third, are there no other existing, operating CFB facilities using this type of coal that can provide the necessary data and what is the operating history of those facilities? Fourth, what guarantees are the manufacturers prepared to make specifically with respect to mercury and in general for a proposed HGS CFB unit using this coal?

92. In the discussion on cultural resources at the Salem site on page 4-82, the insertions added between the DEIS and the FEIS seem to indicate that SME is arguing that construction of the HGS will have an effect on the visual landscape qualities of the area similar to tillage of the land, construction of a few gravel roads, some fencing, a couple isolated farmsteads, etc. Through careful selection of words, SME makes it sound like the dams, the City of Great Falls, MAFB, transmission lines across the Missouri River, etc. have a similar effect on the NHL’s visual purity to the proposed HGS. This is not true because these development activities/entities are not physically on the NHL and, in general, are located some distance from the NHL and were existing before the NHL status was granted to the area. Is it SME’s intention to contend that NHL status was granted to this area incorrectly? Similar arguments are advanced in the Cumulative Impacts section, on page 5-19 and 5-20. Particularly aggravating on page 5-19 is the addition (from the DEIS to the FEIS) of the word “predominantly” in front of “rural landscape” to describe the Salem area; few areas today are more typically rural than this area.

93. Further to the discussion on the NHL in comment 92 above, SME makes the strange argument on page 4-89 under visual resources that the location of the HGS will have little effect on the NHL because the site is actually commemorating portage from the river. This is irrational because the commemoration is for the “portage” which does not just include the expedition’s climb up the riverbank but includes the entire trek around the falls.

94. In the discussion of human health and safety, representations are made on page 4-123 that there is a “lack of potential human health risk for virtually all coal combustion waste constituents” except for arsenic and that there is no link between EMF and cancer. While we are unprepared to offer documentation (since this is not our field of expertise) that this is untrue, the citation on which these conclusions are made is almost ten years old and there have been numerous reports in the popular press in recent years describing the hazards of air emissions from industrial plants (arsenic, lead, mercury, other heavy metals, particulate matter, CO, etc.) and of electromagnetic radiation based on more recent medical studies or re-evaluations of the data from older studies An evaluation of more recent research information is needed badly to update this section!

95. Of great significance is the comment on page 4-129, that the jobs created by the operation of a power plant in the Great Falls area, “would represent a modest beneficial effect on the local economy, but would not be significantly beneficial.” Only 25% of these new jobs would go to existing residents of the area and the remaining jobs would go to people moving from other locals. The newcomers, because of SME’s lack of experience operating any type of generation facility, would need to possess substantial CFB power plant operating experience. Unless SME plans on offering exceptionally high wages and a very good benefit package, SME likely will have trouble attracting the quality of personnel required. This will be especially true if the financial stability of the proposed HGS is at all questionable or the HGS is viewed as causing a deterioration in the quality of life in the Great Falls area. Experienced workers with established community ties and pension benefits will not leave an existing job for a position that is not perceived as having long term stability or is unpopular among the local populace. SME’s plan to use the power of eminent domain (pg. 4-130) to acquire property from uncooperative local land owners will not enhance SME’s standing in the local community. Usage of eminent domain is not a popular option in Montana society.

96. SME’s conclusion on page 4-132, that construction of the HGS at the Salem site “would also provide reliable electricity at reduced rates” is insupportable. Similar conclusions could be drawn for SME’s discussion of the No Action Alternative in section 4.16.1 where SME represents “that it is not unreasonable to suppose that rates could be 20 percent to 100 percent higher.” There are no guarantees that this plant will be able to provide electricity at rates that are less than the market rate or that market rates will not be lower under the No Action Alternative. There are a number of indications that the electricity market is in a state of transition. With the continued development of newer technologies for dispersed small-scale renewable and non renewable generation capacity and the possibility of a carbon tax, the distinct possibility exists that market imbalances will cause drastic fluctuations in the spot electricity market. Current indications are that this could start to occur within three to five years.

97. The possibility, mentioned on page 4-134, that construction of the proposed HGS at the Salem site could “potentially influence land uses in the greater vicinity of the site to become more industrialized” is not popular among many local Great Falls residents. The Great Falls area already has a municipal industrial park located north of the City along Highway 87. Now various county officials are “licking their chops” at the possibility that the county could create their own county industrial park surrounding the Salem location. Businesses that have already been mentioned for such a park are a wallboard plant, and a concrete plant making formed concrete shapes for local and regional sale. Both of these proposed businesses would use the ash which, as has been discussed in previous comments, is contaminated with all sorts of heavy metals, radiation, etc. Presumably, any such commercialization would contribute to the visual degradation of the NHL site and add to noise in the area. The cumulative impact statement on page 5-19 for the HGS concludes that “there are no other planned, proposed, or likely facilities in the vicinity of the Salem site that would add to noise from the proposed action.” Which of these descriptions - “planned, proposed, or likely” - applies to the wallboard and/or concrete plants?

98. At the end of the first paragraph on page 4-130, representations are made that construction of the proposed HGS is unlikely to affect property values, assessments, and property taxes of surrounding rural, agricultural properties but, under the discussion of Farmland and Land Use on page 4-141, the statement “the development of the Salem site in of itself may reduce market values of nearby rural, agricultural land . . . [sic]” is made. Further on, page 4-141 discusses how the impacts of the plant will cause a cycle that will convert farmland to primarily industrial land because the adverse effects of the proposed HGS will cause local residents to relocate. This topic is discussed again on page 5-20 under Cumulative Impacts where the likelihood of such development “is not considered great given the availability of other sites closer to town.” More likely is that polluting industries will attempt to hide in the shelter of the proposed HGS, realizing that it is less likely their emissions will be traced because of the power plant emissions. SME’s arguments on this topic are contradictory and appear to be an attempt to include any possible argument in the hopes that one of them might be applicable and persuasive. How can these contradictory representations being made by SME be reconciled?

99. Regarding the mitigation measures being discussed in Table 4-18 (page 4-138), both the stack and the coal silo are proposed to be painted a sky blue. Neither the boiler building (225’ tall) or the auxiliary stack (220’ tall) are discussed; what color will they be? Several individuals with more artistic skills than us have pointed out that consideration should be given to shadings in any color scheme because the horizon is different than the over head sky color and the blues perceived are affected by sunlight intensity. Any camouflaging attempt may not be of much benefit, however, as some of the water tower facilities in the Great Falls area are painted a bluish color and they still “stick out like a sore thumb!”

100. The definition of “irretrievable resource commitment” on page 4-142 includes the phrase “disturbance of a cultural site.” By this definition, the effect of the proposed HGS on the NHL should be labeled irretrievable. The discussion under topography, soils, and land use (page 4-142) and cultural and visual resources (page 4-143) clearly point out that removal of the construction activities associated with the plant and return of the area to the natural landscaping is “unlikely in the foreseeable future.” Even if this were to occur, the historical integrity of the site would not be restored.

101. Section 4.20 on page 4-144 and 4-145 does not mention the ash disposal site with its permanent mound extending about 25 feet above the surrounding ground level; shows in paragraph three that 545 acres of land will be developed, but 550 acres are used according to page 4-142 and only 320 acres are affected according to Appendix E (page 1-1); represents that the viewshed associated with the NHL could be restored at some future date but that is not really true because the integrity of the site will have been destroyed as stated above; and suggests that the proposed HGS “would result in beneficial long-term socioeconomic productivity in the vicinity of the project site.” Since the last point cannot be referring to farmland or the growth of a residential suburb, is this a reference to a future industrial park that might develop around the proposed HGS?

102. As we understand the federal regulations for analyzing cumulative impacts (see bottom of page 5-1), all future nonfederal and private actions must be included in the cumulative impacts analysis and not only those actions currently under consideration by an agency in permitting procedures or other environmental reviews. We interpret this to mean that the full impact of the Electric City Energy Center, including future phases expanding the facility to 550 MW from its currently permitted 260 MW, must be included in the cumulative analysis portion of the FEIS. Is this interpretation correct, and, if so, what steps are planned to permit public review of the cumulative impacts analysis of the addition of the Electric City Energy Center impacts/emissions to the Great Falls regional area and specifically on the viability of the proposed HGS?

103. For the adverse impacts of air quality described on page 5-4, the No Action alternative is characterized as involving coal-fired power plants releasing emissions to the atmosphere. This cannot be demonstrated as, under the No Action alternative, all power could come from NGCC plants, hydropower facilities, conservation, various green energy sources, nuclear, etc. or some combination of all of these sources. The same is true for the bulleted “long-term local air quality impact,” the bulleted “short-term impact on regional haze,” the bulleted “emissions of mercury,” and the bulleted “emissions of greenhouse gases;” none of these actions will necessarily occur for the No Action alternative.

104. On page 5-5, the noise resource statement added from the DEIS to the FEIS has no alternatives attached to it. We suggest #2.

105. Under Visual Resources on page 5-6, the scenic impact on the NHL is considered “small” extent (limited to less than 100 people) while the scenic impact at the alternate site is considered “medium” extent (100 to 1000 people). Both of these numbers for affected people seem low. No time frame is stated in these impact terms’ descriptions on page J-20. Lots of tourists visit the NHL interpretive display in the summer, and there are local landowners and traffic on local roads that will be affected by the HGS site. Both US 87 and the Bootlegger Trail are heavily traveled and those travelers plus most of the Riverview Terrace and all the Eagles’ Crossing areas of Great Falls might be exposed to anything located at the alternate site. These adverse impact descriptions also appear in the various chapter 5 sections discussing each of the individual resource topics for the various sites.

106. In the farmland and land use impact on page 5-6, the impact on land use from the Salem site is reported to be medium to large extent and possible likelihood. This does not correspond to what was stated in the middle paragraph of ES-11, which stated “no additional direct impacts to land use or farmland.”

107. On page 5-11, the increased number of fish consumption advisories nationwide and global climatic warming are both mentioned. The first point raises the question of how the number of fish consumption advisories in Montana has changed in recent years. The information contained in the paragraph on global warming needs to be updated to reflect the recent international consensus that was reached in Paris in February of 2007.

108. Under Section 5.2.2, the future operation of the Electric City Energy Center at operating levels up to 550 MW and operation of a coal gasification facility to supply half or more of the center’s feedstock needs to be added as a consideration.

109. Why is there no impact from the proposed HGS site for Environmental Justice and Protection of Children on page 5-8 or page 5-21? The Industrial Park Site carries a medium extent impact on page 5-8 and page 5-24.

110. We did not provide citations in/for our comments because we assumed that our responsibility in reviewing the FEIS was only to point out inconsistencies, errors, and omissions in the information presented in the FEIS and, if possible, provide a helping hand for the FEIS compilers to use in correcting the identified flaws. The citations presented in Section 6.0 to document the FEIS use no recognizable (i.e., APA, MLA, or Chicago) or even consistent standard. In particular, some Internet citations contain the date of access - always important when checking up on citations - and some lack this valuable information.

111. Some of the definitions in the glossary of Appendix B of Volume II leave a lot to be desired and some important terms are missing completely. Examples are:

(a) On page B-4, CCP is defined as “Large-volume, non-hazardous waste products . . .” This should read “Large-volume, classified as non-hazardous waste products . . .” because the waste products are not really safe, but are considered as such for environmental classification purposes if disposed of as a byproduct.

(b) On page B-7, gasification is defined as “a method for exploiting poor quality coal and thin coal seams by burning the coal in place . . .” This is not a definition that fits well with standard usage of the term throughout this FEIS, where mostly the coal feed to an IGCC plant is referenced.

(c) Circulating Fluidized Bed (CFB) is not defined.

(d) Integrated Gasification Combined Cycle (IGCC) is not defined.

(e) Limestone is not described.

112. According to the R. W. Beck report (page 3), which was issued in late February of 2007, SME personnel are to be trained at the East Kentucky Power Gilbert Unit #3. This unit started up in Spring 2005 and thus has a relatively short operating history. During this time, East Kentucky Power has trial-burned tires and contracted to burn paper mill waste in their CFB plant in addition to the designed coal fuel. Despite an ongoing major public relations campaign to burnish the company image, as of 2005, East Kentucky Power was the only coal-burning utility to be cited since 2000 by the current administration under New Source Review rules. This information about the training of personnel is not mentioned in the FEIS. Why does SME consider East Kentucky Power to be an appropriate company to train their workers? Does SME have any plans to burn fuels other than coal in the proposed HGS (we noted that SME mentioned a permit would be required but that does not tell us if SME is seeking such a permit) or have they even considered the possibility of burning alternative fuels?

113. There is virtually no discussion about maintenance requirements for the generation facility in the FEIS. With SME having no experience with the operation of any generation facilities, we’re curious as to whether SME realizes the full impact of the maintenance requirement involved in operating a major generating facility. Does SME realize the maintenance requirements, and, if so, why is there not more detail included in the FEIS? Information about the frequency of routine maintenance, turnarounds, inspections, etc. would give some indication of what reliability SME expects and how well SME plans to care for any generating plant.

114. On page 9 of Appendix I, item L is the Fuel Storage Tank. This 275,000 gallon (5700 barrel) capacity diesel fuel storage tank is barely discussed in the main text of the FEIS. While not an exceptionally large tank, this is a good-sized, aboveground tank with significant potential for safety and environmental hazards. Why is there not more discussion of this tank? What specific containment features are being provided in case of leakage, tank rupture, fire, etc.?

115. While we did not study the Preliminary Air Quality permit in Appendix I in any detail because of time constraints and because the permit is preliminary, we did note that testing for many pollutants is on an infrequent basis. A good example of this is the statements on page 11 of the air quality permit section where the requirements for H2SO4 and HF are both “after the initial source test, additional testing shall continue on an every five year basis.” Is this testing interval normal for other major industrial facilities? A table showing the various pollutants and the frequency of testing for emissions levels of these pollutants would be helpful.

116. Despite an extensive search, we were unable to discover any information about the size of the coal pile in the main text of the FEIS. The only indication of how big the coal pile will be is in the Appendix I permit analysis section page 3, item 4, which indicates that the pile will store enough coal to supply the CFB boiler for approximately 1 month. Why is there no discussion of the coal pile size in the main FEIS? Early on, representations were made that any coal storage facilities at the plant would be totally enclosed so that the frequently gusty winds in the Great Falls area would not spread coal dust. Bits of information from various sections of the FEIS refer to pile spraying, coal pile packing equipment, etc., seem to indicate that the pile is not enclosed. This needs to be clarified; perhaps a whole new little section discussing the coal pile issue is needed.

117. Some of the appendices are difficult to cite when describing where comments are located because the various documents contained in the appendices are not sequentially numbered. Appendix I is the worst (see comments 115, 116, and 118 for examples of the complex citation required). Appendix I has no index and contains two separate documents, both individually numbered. Have you considered separating these documents into different appendices or renumbering them?

118. In the discussion of the BACT determination for air quality on pages 12 and 13 of Appendix I permit analysis, it is important to note that the use of BACT does not mean the absolute best available emissions control technology for coal combustion but only that technology judged to be the best available for this particular style of coal plant. The DEQ’s analysis on page 13 that relatively little or no additional environmental protection could be achieved using IGCC BACT reflects the careful use of the words “currently operational” and does not reflect the latest technology for proposed IGCC plants like the PMEC in Washington. In our opinion, this shows a backward-thinking philosophy for air emissions control!

119. We were confused by the discussion on page 2 of Appendix L describing which comments were and were not included in Appendix L. Paragraph 3 refers to “locat[ing] your id number to see which of your comments was included” but paragraphs 1 and 4 seem to imply all substantive comments received on the DEIS should be attached to the FEIS, even if those comments do not merit individual discussion. Can you confirm or clarify which DEIS comments were included in the FEIS?

120. We strongly object to the listing in Appendix L of 44 pages of the names of submitters of the postcards created and distributed by SME member Yellowstone Valley Electric since a similar listing was not provided for the signatories to the Citizens for Clean Energy petition (page L-52). Also while the specific number of Yellowstone Valley Electric postcards submitted is listed on page L-3, a similar accounting is not provided for the Montana Environmental Information Center postcards received (see page L-48). This represents unequal treatment with respect to proponents of the HGS; government agencies are supposed to be neutral.

121. Obviously, one of primary reasons SME chose the Salem site in the Great Falls area was the availability of “abundant” and cheap water from the Missouri River. Was any serious consideration given to locating the plant in southeastern Montana at one of the alternative sites or another completely different site and using water from coal bed methane development (CBMD) to provide the necessary water resources? Such a siting would have the advantage of being close to the coal mine for fuel shipment and of solving a controversial environmental problem, disposal of coal bed methane development water. The proponents of coal bed methane development say the water is not a pollution problem, so a minor cleanup of that water should make it suitable for plant usage, and the opponents of CBMD would be gratified to have a potential pollution problem solved.

Conclusion:

We understand that one of the major reasons for this FEIS is to allow RUS to consider partial (75 percent) funding of the plant through a loan to SME. We have heard that RUS has a policy of funding small utility projects that contribute to rural development and generally does not fund major generation facilities. In fact, rumors are circulating that RUS has not funded a major generation facility in the past decade and that Congress has directed the RUS to concentrate on funding conservation and alternate energy resource projects in the rural sector rather than coal-fired generation facilities. Clarification of exactly what RUS’ current mandate entails would be helpful.

According to press reports, the entire federal government, and by association, the RUS, is attempting to minimize future governmental expenditures because of military expenditures associated with the war on terror. This was recently personally brought home to our extended family by a recent reduced government subsidy advance payment received from the 2007 farm program. More than half the funds expected were impounded to fund military expenditures. Similar impoundments or cuts could be forthcoming for other government programs, including the RUS. The amount of money being requested by SME is a substantial portion of the annual, slightly over $4 billion RUS budget. Serious consideration should be given by RUS to whether this project, the proposed HGS, is deserving of such a large percentage of the RUS funding, in a period of limited and potentially declining available funding, and whether such HGS funding will result in a number of smaller, more deserving, higher rural beneficial impact projects being denied funding.

The publicly-disclosed costs of the proposed HGS have recently grown from the $515 million figure prominently displayed for months by SME to a reported $720 million in the R. W. Beck report. Construction costs are continuing to rise. At currently projected costs, a loan for this project would cost RUS $540 million; this amount could ultimately be much larger if SME honors its pledge to install carbon capture facilities at the plant. The estimated cost of such carbon capture facilities could be as much as $500 million, of which RUS’ loan share would be $375 million, if the attempt to find/develop some new, innovative technology for carbon capture fails and SME must fall back on a capital-intensive and operationally-expensive amine-based carbon capture technology.

As the proposed HGS is currently described in the FEIS, we are adamantly opposed to the proposed Highwood Generating Station (HGS). We do not believe that the emissions from the proposed plant are at the lowest possible level that could be achieved from coal-based electricity generation. Further, funding this project would result in new governmental expenditures diminishing the effects of previous federal government funding for the National Historic Landmark and the entire commemoration of the Lewis and Clark Expedition in the Great Falls area. We feel that a RUS loan of this size is not an efficient use of limited federal resources. If the project is truly worthy, funding will be available in the private capital market.

Sincerely,

Ronald L. Gessaman Karen J. Gessaman