Violation Letter #VLRAG08-18**

Dear Mr. Gregori:

The Montana Department of Environmental Quality (Department) is issuing Violation Letter #VLRAG08-18 ** to Southern Montana Electric Generation and Transmission

Cooperative – Highwood Generating Station (SME) for the following violation of the Clean Air Act of Montana by SME related to the electrical generating facility near Great Falls, Montana:

Construction without approval~~air quality permit~~. On May 30, 2007, the Department issued Montana Air Quality Permit (MAQP) #3423-00 to SME for the construction and operation of an electrical generating facility. SME is subject to the Administrative Rules of Montana (ARM) 17.8.342 and 40 Code of Federal Regulations (CFR) 63, Subpart B ~~Under~~ because the potential emissions of Hazardous Air Pollutants (HAP) from the facility, considering the applicable federally enforceable conditions (MAQP #3423-00), are greater than 25 tons per year.

Under ARM 17.8.342(2), any owner or operator who constructs a major source of HAPs is required to obtain from the Department a notice of MACT approval or a 112(g) exemption pursuant to this rule, prior to beginning actual construction, unless: (a) the major source has been specifically regulated or exempted from regulation under a standard issued pursuant to 42 USC 7412(d), (h), or (j) and incorporated into 40 CFR Part 63; (b) the owner or operator of the major stationary source has already received all necessary air quality permits for such construction, as of July 23, 1999; or (c) the major source has been excluded from the requirements of 42 USC 7412(g) under 40 CFR 63.40(c), (e), or (f).

Under 40 CFR 63.42(c), ~~Administrative Rules of Montana (ARM) 17.8.743(1), a~~no person may begin actual construction or reconstruction of a major source of HAPs unless: (1) The major source in question has been specifically regulated or exempted from regulation under a standard issued pursuant to section 112(d), section 112(h), or section 112(j) in part 63, and the owner or operator has fully complied with all procedures and requirements for preconstruction review established by that standard, including any applicable requirements set forth in subpart A of this part 63; or (2) The permitting authority has made a final and effective case-by-case determination pursuant to the provisions of §63.43 such that emissions from the constructed or reconstructed major source will be controlled to a level no less stringent than the maximum achievable control technology emission limitation for new sources.

SME has not been specifically regulated or exempted from regulation under section 112(d), section 112(h), or section 112(j) in part 63. In addition, SME has not received a final effective case-by-case Maximum Achievable Control Technology (MACT) determination or a final effective permit to bring their potential emissions below major source HAP levels. MAQP #3423-01 will not be final and effective until at least November 26, 2008. Therefore, construction activities at the SME facility are prohibited until at least November 26, 2008. ~~not construct, install, alter, or use any air contaminant source or stack associated with any source without first obtaining a permit from the Department.~~ ~~Beginning on or about November 10, 2008, SME constructed cement pads for the water cooling tower cells without first obtaining a permit from the Department.~~ Under the Administrative Rules of Montana (ARM) 17.8.749(1), an air quality permit may be issued with such conditions as are necessary to assure compliance with applicable air quality requirements. On May 30, 2007, the Department issued Montana Air Quality Permit (MAQP) #3423-00 to SME for the operation of an electrical generating facility.

During ~~The~~the Department’s November 12, 2008, ~~recent~~ inspection of the SME site, staff documented ~~has shown~~ that SME had started construction at the site. C Therefore, the Department finds that the construction activities that have taken place at the SME site location without a case-by-case MACT approval and prior to MAQP #3423-01 becoming final are a violation of 40 CFR 63 and ARM 17.8.342. ~~Because SME is currently subject to the requirements of MAQP #3423-00 and 40~~ ~~Code of Federal Regulations (CFR~~) ~~Part 63, SME needed a “Notice of~~ ~~Maximum Achievable Control Technology~~ ~~Approval” prior to the beginning of construction. As of the date of the~~ ~~recent~~ ~~inspection, SME did not have the required approvals for beginning construction in compliance with 40 CFR Part 63.~~

Sections 75-2-401, 412 and 413, Montana Code Annotated (MCA), describe the formal enforcement actions that may be taken when the Department believes there has been a violation of the Clean Air Act of Montana, a rule adopted under the act, or an order or permit issued under the act. This violation letter is being issued based upon the Department’s initial determination that a violation has occurred. If you would like to submit a written response, please do so within 15 days after receipt of this letter.

The Department may initiate a formal enforcement action, and the violation documented in this letter may be used to establish a history or pattern of violations. The Department will notify you before proceeding with a formal enforcement action.

If you have any questions, please contact me at (406) 444-4114.

Sincerely,

Robert Gallagher

Environmental Engineer Specialist

Air Resources Management Bureau

E-mail: rgallagher@mt.gov

cc: Betsy Burns, U.S. EPA, Montana Office