May 31, 2008

Board sets high bar for particulate emissions for coal-fired Highwood Station

By KARL PUCKETT
Tribune Staff Writer and the Associated Press

HELENA — Backers of a coal-fired power plant proposed east of Great Falls intend to begin construction by the end of November, even though the state Board of Environmental Review on Friday finalized an order requiring developer Southern Montana Electric Generation and Transmission to meet the toughest particulate pollution emissions standards in Montana — and perhaps the country.

"We're going to try," said Jeff Chaffee, an engineer with Bison Engineering and consultant for SME, a coalition of rural co-ops developing the Highwood Generating Station.

The order requires SME, which already has an air quality permit, to do additional work studying whether the technology is available to control PM2.5, which stands for particulate matter 2.5 microns or smaller, before the project can proceed.

A revised permit would be approved only following that additional review.

SME officials said they weren't sure how long the "best available control technology" analysis it would take. The existing permit expires in November.

Highwood Generating Station would burn coal to produce 250 megawatts of electricity, but SME's permit to run it is being appealed by Citizens for Clean Energy and the Montana Environmental Information Center on the grounds the plant should have more stringent particulate controls.

In April, the board unanimously voted to require the tougher particulate standard. But the final written order was not finalized until Friday. The vote was again unanimous.

"You have to take the best technology available today and apply it," said Joe Russell, the chairman of the board.

Tim Gregori, the CEO and general manager of SME, said he had hoped that SME would be granted additional time to complete the work.

But the decision calling for the added study will not kill the project, he added. SME will look into whether the emissions controls already planned at the plant are sufficient or if different technology is necessary.

"We've already been working on it," he said.

Russell said the order just affects the control technology, not the circulating fluidized bed boiler that's planned at Highwood.

Particle pollution is a mixture of microscopic solids and liquid droplets suspended in air, according to the EPA. It is made up of acids, organic chemicals, metals, soil or dust particles and allergens such as fragments of pollen or mold spores. PM2.5 is 1/30th the diameter of a human hair.

Currently, the EPA requires states to monitor for PM2.5 levels, but it hasn't come up with specific emissions control guidelines for industrial facilities, allowing states to use the study of PM10 as a "surrogate" analysis.

No other permitted facilities have been required to use controls for PM2.5, said Katherine Orr, the review board's attorney.

"It's important to compare to the technology of other permitted sources," she said. "You can't do that here."

In Friday's ruling the state decided to push ahead and require the PM2.5 standard anyway, with BER members saying the technology is available even if it isn't in use.

"I believe SME can do the job," said board member Bill Rossbach of Missoula.

Russell, of Kalispell, said the testimony of a witness called by Citizens and MEIC at a previous hearing left little doubt the technology is out there.

"The fact is that testimony was provided that there are control strategies that can be employed that don't change the boiler," he said.

Abigail Dillon, the attorney for the groups appealing the permit, said she was satisfied with Friday's order.

SME officials have argued that Highwood's emissions controls would be among the best in the country. DEQ officials have said a thorough "best available control technology" analysis was done for PM10, of which PM2.5 is a subset, in accordance with EPA guidelines.

Under its existing permit, Highwood could emit up to 419 tons of PM10 a year but actual emissions of pollutants typically are lower because facilities rarely run at 100 percent capacity all the time.

"We do think, unfortunately, a number of the findings are not consistent with the evidence," SME attorney Ken Reich said of the board's order.

The $790 million plant would serve customers of four rural utilities in central and southeastern Montana and possibility Electric City Power, the utility arm of the city of Great Falls. The groups challenging the air permit also are suing Cascade County for rezoning the land where Highwood Station would be constructed.

As with coal plants across the country, Highwood faces challenges far broader than the air pollution dispute that led to Friday's order.

SME originally planned to finance the project through the federal Rural Utilities Service. Butit's now seeking alternative financing after the agency announced earlier this year that it no longer would be financing new generation coal-fired facilities because of rising construction costs and an uncertain regulatory climate that could see the implementation by Congress of taxes on the emissions of carbon dioxide, a suspect greenhouse gas. And last month, one of Highwood's largest backers, the Yellowstone Valley Electric Cooperative, said it wanted to pull out of the construction project.

The Board of Environmental Review previously rejected a request by Citizens and MEIC asking that SME be required to controlHighwood's carbon emissions.