MARCH 19, 2007

Mr. Richard Fristik

USDA Rural Development Program, Utilities Programs

1400 Independence Avenue, SW

Mail Stop 1571, Room 2237

Washington, D.C. 20250-1571

richard.fristik@wdc.usda.gov

Kathleen Johnson

Montana Department of Environmental Quality

& the Air Resources Management Bureau

Department of Environment Quality Director's Office

P.O. Box 200901 Helena, MT 59620-0901

RE: MY COMMENTS

Final Environmental Impact Statement (FEIS)

Highwood Generating Station (HGS)

Air quality permit HGS (#3423-00

AFS#: 030-013-0038)

Great Falls, Montana

Dear DEQ-ARMB,

I'm AGAIN writing to express my concerns about the above.

I have lived in Great Falls since 1972 at 615 Third Avenue North and have enjoyed the benefits of the relatively clean environment here.

SUMMARY OF MY POSITION:

1. I oppose the DEQ issuing the above air quality Permit.

2. The HGS FEIS is flawed,

3. There should be no ROD issued until the HGS FEIS has been amended by a Supplemental EIS which covers the many germane and important omissions and errors in the FEIS as discussed below.

4. I oppose the REA, of the US Dept of Agriculture providing guarantees, loans, and moneys for the development of the HGS because it is a merchant plant, for the reasons listed below.

5. The scope of RUS EIS process and the MDEQ air quality permit process is too limited to adequately assess the true needs of this community or to meet the requirements of MEPA, NEPA and the Montana Constitutional Requirements to provide its citizens with a clean and healthful environment.

COMMENTS:

My reasons are as follows:

1. NEPA requires the providing of a range of alternatives and analysis of each in the EIS sufficient for the deciders to make a substantive determination of whether the project should go forward as proposed. The range of alternatives considered in the FEIS as currently drafted is inadequate for the federal deciders to issue a ROD, which would not be "arbitrary and capricious." In fact it is my understanding that the only alternative to the Salem site considered in the DEIS was North of town and that this site is off the table since it has been sold (optioned?) to a private developer for an IGCC type plant. An FEIS with only one alternative other than the NO action alternative does not meet NEPA requirements for consideration of a range of alternatives. The Response on page L-156 to 303-19 that there are two is not correct.

2. The city of Great Falls has applied to MT DNRC for moving of its reserved water rights to above Morony Dam. PP&L has objected given that the current river flows are inadequate to meet its impoundment rights. The city of Great Falls reserved rights are based on industrial/municipal use. These uses are typically not consumptive. 95% of the HGS use of the Great Falls reserved water right is a consumptive use and almost 85% of the Great Falls reserved rights are leased to the HGS. Our city commissioners agreed to this lease of Great Falls reserved water rights as a consent agenda item without debate and no vote of the taxpayers. The city has been selling below cost power to its customers by giving SME credits for the water once the plant is built and now PP&L wants to be paid for the water. This means that PP&L will be cutting back on its electric production so that Great Falls and SME can produce a dirtier more expensive product while depleting the Missouri at low flow times by as much as .3%. The FEIS says that this depletion is not significant. But there is nothing in the EIS to back up this assertion. In fact the Great Falls Tribune of last week ran an article that there was not enough flow in the Missouri to allow for two pulses in the spring to aid survival of the pallid sturgeon. The FEIS has said that there will be state action unless there is proper MEPA/NEPA documentation. The City and County commissioners say that they are relying on this HGS FEIS for this purpose. Where is the loss to GF Reserved Rights and Missouri River flow being considered?

3. The following sub items should be considered under a Supplemental FEIS before an informed decision may be made by the RUS:

a. Item 1 above by providing a range of alternatives to provide power to the City of Great Falls’ and SME’s current customer base. Although claims have been made to the contrary, Great Falls’ current customer base is 25 mgw and SME’s is 60 to 65 mgw. 90 mgw is clearly less than 250 mgw as proposed. There are no alternatives considered in the FEIS in detail for supplying this 90 mgw of Power. The FEIS lists other alternatives and then does not consider them. I believe that the following alternatives would have much more merit than the one alternative the FEIS has considered. These alternatives need to be fully considered in a supplemental FEIS:

(1) Split SME and the city of Great Falls and consider each of their needs separately. As an alternative for Great Falls consider solar and wind backed up by firming power contracts with PPL and/or with investing in some of the new power storage ideas from hydrogen cells to bio-diesel produced locally,

(2) For SME an IGCC plant in eastern Montana near the coal and their customer base supplemented by wind and solar.

b. The effect of the reduction in Missouri River flow and the loss of 85% of the City of Great Falls’ reserved water rights. (See Item 2. above)

c. The financial viability of the project has not been established nor has it been discussed in the FEIS. In response the public has been told that much of the information is private but that it has been made available to the RUS for its decision-making. Is this true? What are your procedures to have this independently evaluated? Are the assumptions underlying the plans warranted? How can the DOA decide on a plan to guarantee a project without allowing the public to review the business plan for the various alternatives? Questions such as cost of coal, its cost of transport, costs associated with a carbon emission tax, all need to be set out and compared with other alternatives. Global warming is real and plant developers still have not considered the costs associated with a carbon tax. A recent study by Beck engineering for the City of Great Falls has raised the estimated cost of building the plant to over $720,000. 00; the cost of coal, coal transport up 40% and still no factoring in of a potential liability for a carbon tax. It is my understanding that other new coal plants being proposed around the country have considered such costs. SME’s argument that a carbon tax will effect the costs of production the same for all energy producers is ludicrous since other energy production options do not burn coal (see response page L-243& L-244) It is irresponsible to approve building the plant before potential CO2 discharge costs are considered.

d. The FEIS does not provide a monitoring plan to validate and address the effects of airborne pollutants on local surface waters and aquatic organisms. To begin with, background monitoring would be needed to establish baseline levels of mercury and other pollutants in strategic sampling locations (streams or ponds) within the primary fall-out zone of the plant's emissions. Limiting this fall out area to 10 miles conveniently excludes Benton Lake Wildlife area preserve. In this circumstance is a 10-mile limit warranted. What will be the impact on Benton Lake of plant fallout? Fish from resident (non-migratory) populations should also be sampled to determine potential bio-concentration of mercury as it moves up trophic levels. Control sites could be selected to help differentiate between the proposed generating station's effects and other major pollution sources. Without an aquatic monitoring plan, it will be impossible to know the ultimate fate of released toxins and the associated human health risk to downwind Montana communities from surface water contamination.

e. Studies from Steubenville, PA by the Federal Environmental Protection Agency show that 70% of Mercury depositions occur close to the plant. Mercury is a known health risk not only to developing fetuses and babies, but to middle-aged men as well, increasing their risk of heart attacks. I had a heart attack about five years ago and do not need to have the additional risk caused by this plant. I do not see where in the FEIS the mercury depositions from the plant are being measured as effects the human population centers and compared with other alternatives such as wind, hydro, conservation, solar. Wind normally blows west to east in Great Falls, but it can blow from any direction. As part of the air quality permit and the alternatives under the FEIS, potential deposition of mercury in Great Falls City proper when the wind blows from the North and/or East needs to be studied and then addressed. Response in FEIS page L-225 demonstrates that there are no controls or monitoring plans proposed which will guarantee a clean and healthful environment. It is not adequate to set standards which don’t demonstrate protection of the human health and environment simply because industry can meet them so that “economic development” will not be curtailed and then say that the environment is protected because standards have been set and are being met. There were asbestos standards in Libby – now what? The DEQ must have stronger standards and measurements on the ground to demonstrate what are the results from those standards. See also response on page L-222 that also points to the fact that standards for emissions are not adequate for the purpose of providing a clean and healthful environment.

f. The cumulative effects of the Great Falls' refinery's air discharges, the new malting plant, 10th Avenue South vehicular traffic, the west bank linseed oil plant, and Malmstrom coal plant (formerly they were burning oil); and the newly proposed IGCC plant north of Great Falls need to be considered in this air permit application and in the FEIS in a comprehensive way with appropriate studies and actual test measurements so that we will know what is actually happening here. The comment is made that HGS lies outside of the 10^th avenue South problem area so that monitoring is not necessary is not backed by agreement by the DEQ. Does the DEQ agree or does the RUS agree with the comments of the EPA in this regard?

g. The effects of particulate matter, acid rain, mercury deposition under a range of alternatives as it affects area farmland needs to be considered and compared under the various alternatives. This area is known as the Golden Triangle. The standard for measuring the effect of soil contamination in the FEIS is not sufficient to measure the effects on area farmland. The FEIS seems to only refer to the acreage upon which the plant sits. Saying that the area farmland is not prime farmland is clearly wrong. There are no tests showing baseline levels on area farmland currently present for pollution from the plant. It is not sufficient to say that airborne contaminants will not have a significant impact on area farmland without having a standard, a baseline study and a method of monitoring. In answering this concern on page L-286 the FEIS simply references a standard that does not evaluate the issue and then say that it meets that standard. Admitting that the standard applied does not measure the problem admits that the FEIS is deficient in its analysis and to say that the DEQ will give out an air quality permit without making such measurements means that the states process for granting an air quality permit is flawed. Furthermore, the response on L-231 saying that NAAQS and MAAQS standards are met as being proof that there is no adverse impact to the surrounding land water and human populations because those standards are met is a not adequate proof of anything relevant. The result could mean that acid rain from the plant will reduce yields on some of the most productive wheat country in the world and poison fisheries and people over time in this reach of the great Missouri river.

h. The effect of acid rain on area forests (the Highwoods, the Little Belts, the Rocky Mountain Front) under the alternatives has not been analyzed. Furthermore, if the forests are diminished due to acid rain, what will be the effect on the Madison aquifer, which rises in the Little Belts?

i. Areas in the little Belts (particularly Pilgrim Creek, middle fork of the Judith), which may be considered for wilderness designation, are not considered in the FEIS. Comment answer on page L-253 in calling this a class II area means that congress and the people will be denied the option of making this a class I area without any consideration of whether it should be or not.

j. The impact on the visual air as seen from the Rocky Mountain Front (when viewed from the Bob Marshall Wilderness or the Scapegoat Wilderness), Gates of the Mountains, wilderness study areas in the Missouri River Monument at the top of the mountains looking towards Great Falls which are more that 33 miles may still show the pollution of the plant visually. The EPA’s comment (604-2 pg L-253) points out that there is an impact and suggests that a fuller range of alternatives (more wind etc) need to be analyzed in the FEIS to see whether visual impairment from these wilderness areas can be mitigated or eliminated thereby.

k. The USDA in making its decision cannot rely on decisions made by the MT DEQ as being correct under Montana law for the reasons set forth in 4 below.

4. Even though the DEQ may be meeting its MEPA requirements by this FEIS when applying national air quality standards and then using MEPA to determine mitigation measures, this does not mean that the state is meeting its requirement under MT state constitution to provide its citizens with a clean and healthful environment. In fact the opposite is true for the following reasons:

a. Granting an air quality permit before an EIS has been completed and the public given the opportunity to comment thereon makes a mockery of the EIS process and points up that recent changes in regulatory authority and MEPA will not insure a "clean and healthful" environment as required by the Montana Constitution. The DEQ cannot make substantive determinations and the procedural ones being made are not adequate to the task of protecting our "clean and healthful" environment here in Great Falls. As I provided in my comments to the DEIS a recent letter from the Governor's office to me to which a comment from the DEQ was attached and a recent article in the Great Falls Tribune make it clear that as far as the DEQ is concerned the matter has been decided and the only purpose of the EIS is only to determine what mitigation measures are required.

b. The state has said that it will only consider the alternatives that the proponents of the plant propose as being economically viable, that they will not question the proponents determination of economic viability of their proposal and that they have no authority to use the MEPA process to prevent the plant being built. Given that as a backdrop and the fact that the state is applying federal standards, how could the DEQ possibly be doing an adequate job to protecting Montana's pristine environment? The people in the Midwest are a- coughing and a-wheezing from coal plant emissions; why should we allow the same for the citizens of Great Falls?

c. The air quality permit should only allow the best available technology to be permitted. It does not do so. The permit also allows the plant to operate for months before they use the mercury-reducing technology they say they will install. Ostensibly this is to allow them to run their plant and see whether they need it or not! This is unacceptable. Mercury reduction by using best available technology must be required from beginning of plant operations.

d. The coal plant is not needed. Wind power firmed up by other means such as: conservation, contracts with PP&L are much better solutions for Great Falls. Wind becomes more viable if regulations related to the flow of electricity on the grid should not favor industry but should allow for real pooling of wind power. If, in spite of better choices, a coal plant will be built, it should use the state-of-the-art IGCC technology. Circulating Fluidized Bed technology is not new or best available technology; it has been around for twenty years.

e. There is more energy produced here in Great Falls by PPL hydro than we need. Coal development here makes no sense. By granting this permit in this form, the DEQ becomes an agent (and responsible) for bad economic development and environmental degradation this type of coal plant would have on this region.

f. The developers of the coal plant have not been honest and forthcoming with their presentation to our city officials. Mr. Gregori of SME told city commissioners that the plant would only produce 21 pounds of mercury a year while at the same time the proposed permit allows 45 lbs per year. Now the projection in the response is 34.5 to 36.4 pounds per year (see L-228) yet it is my understanding that the draft air quality permit remains at 45 lbs per year.

g. Applicant has referenced a plant with similar technology in Indiana or Kentucky. In talking with engineers who have studied this sister plant in operation, I have learned that it has been very difficult for the plant to maintain permitted levels of the various discharges because chemical additives need constant adjustments for factors which change constantly. It would seem that this type of plant would be impossible to monitor adequately to insure that standards you set are being achieved. Has DEQ talked with regulators and plant officials for this sister plant to determine problems they have had in meeting their permit in actual operation?

h. I am concerned that if standards DEQ sets in its air quality permit are not met, the company, once the plant is built, will request modifications to the permit to allow even greater pollution. Bison Engineering, the firm designing this plant, have just undergone the same process for a new plant in Western Montana. Even though this other plant was a small plant, it is illustrative of a problem, which has surfaced with applications submitted by Bison Engineering. The DEQ must look carefully at the application to see whether claims are supportable. The plant should not be built and then the DEQ forced to consider closure or lowering standards. In my opinion, at the very outset applicants should not be allowed to submit proposals, which they know, are risky or even impractical with the idea that they will get modifications in the permit later. Granting an air quality permit to such folks with such foreseeable problems will only allow capital to be wasted if the plant can not be operated adequately.

i. The permit should expire after eighteen months if construction has not commenced. This was a condition in the Roundup permit and should be here also, especially since technology is advancing so rapidly in this field. We don't want Great Falls to be stuck with an old technology plant just because time passes (three years) etc for whatever reason, as allowed in this FEIS (see response page L-205to 600-13).

j. The DEQ's responsibility to the citizens of this state makes up our first line of defense. You are entrusted by the citizens of this state to make wise decisions on our behalf. It is a difficult job, because politics usually come into play. We in Great Falls are relying on you so that our local city officials (who have political interest in the coal plant project) will at least have clear standards before them. Your Department sees to it that those standards are in accord with our right to a clean and healthful environment, as guaranteed in our Constitution. In the long term, an ill-conceived project can have disastrous effects on the economic and environmental future of the people who live here and those who live downstream and downwind from here. FEIS response on page L-300 demonstrates that there has been no meaningful economic analysis of the effect the reduced “livability” the plant will cause will have on the economic growth of this community. Speculations about the fact that you have not heard that large numbers of folks plan to leave if the plant is built is not only insulting but shows you have no intention of providing economic studies which will address the question.

3. Finally, the City of Great Falls, Montana, has never permitted its Citizens to vote on whether they want a coal plant business venture in Great Falls, even though it is the taxpayers who may be forced to cover losses in the development and possible operation of the plant. The Cascade County Commissioners have never approved the plant, nor consider its economic and environmental consequences to this region even though it agreed to a zoning change of the Urquhart property. Others living down wind from this plant have never been involved in the decision-making. Questions put to the city concerning proof of those willing to buy the power and the nature of the contract and the list of public meetings they have submitted to you have never been provided me, although I have requested them. How can citizens be permitted to meaningfully participate in a process which has been determined without such participation and then when participation is only granted if it supports the city manager's view.

Sincerely yours,

Stuart Lewin