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HomeMy WebLinkAbout9/19/2001 - STAFF REPORTS (23) DATE: September 19, 2001 TO: City Council FROM: Director of Planning and Building A. MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALM SPRINGS AND OCOTILLO ENERGY, LP/INTERGEN NORTH AMERICA REGARDING COMMUNITY BENEFITS. B. CASE5.087413: OCOTILLO ENERGY FACILITY-REVIEW OFA CALIFORNIA ENERGY COMMISSION APPLICATION FOR CERTIFICATION OF A PROPOSED NATURAL GAS FUELED ELECTRICAL GENERATION FACILITY, WITHIN A 75 ACRE SITE LOCATED NORTH OF DILLON ROAD, EAST OF DIABLO ROAD, ZONE: E-1 (ENERGY/ INDUSTRIAL) AND W (WATERCOURSE), SECTION 9, T3S, R4E, SBBM. C. CASE 5.0874A: AN AMENDMENT TO SECTIONS 92.17.2.00 AND 92.17.2.D.7.D OF THE ZONING ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, TO ALLOW NATURAL GAS FUELED ELECTRICAL GENERATION IN THE "Ed" ENERGY INDUSTRIAL ZONE. BACKGROUND: At its September 05, 2001 meeting, the City Council continued discussion and possible action on this project. The CEC Staff Assessment has been completed and is attached to this report. As of Friday, the Memorandum of Understanding has not been completed. This report and its attachments provide a comprehensive update on the project at this time. Staff will prepare resolutions to be distributed prior to the City Council meeting. CALIFORNIA ENERGY COMMISSION (CEC) STAFF ASSESSMENT: The CEC staff has completed its first Staff Assessment for the proposed facility. This document is an independent assessment of the project's potentially significant effects on the environment and on public health and safety; and whether or not it conforms to applicable legal requirements. At this time, CEC staff concludes that there are unresolved issues which include air quality, biological resources, and land use issues. The report also concludes that the project has not demonstrated compliance with all federal, state, and local laws and that there may be the potential to cause significant and unmitigated adverse environmental impacts. CEC staff has recommended that the project be removed from the four-month certification process and placed on a 12-month licensing process. The CEC could either place the project on the 12-month licensing process or suspend processing until all information is submitted and completed. A copy of the CEC staff Summary and Executive Summary is attached to this report. The complete CEC Staff Assessment (SA) is provided under separate cover. City staff is reviewing the SA, InterGen Response (copy attached), and supplemental materials submitted by InterGen in response to the SA. Subsequent to the publishing of the SA, InterGen has provided considerable additional information to the CEC staff. This information is being reviewed by CEC staff, responsible and trustee agencies, and other parties. 1?R Page 2 of 3 September 19, 2001 City Council Supplemental Staff Report Ocotillo Energy Facility AIR QUALITY: Pursuant to City Council direction, the City retained the firms of McDaniels-Lambert and Giroux& Associates/TKCto prepare independent air quality evaluations. These reports were completed and are attached to this report. The SA concluded that there are a number of unresolved issues and, as such, concludes that there may be the potential for unmitigated impacts. InterGen has responsed to these issues in the attached letter. Additionally, the South Coast Air Quality Management District(SCAQMD)has submitted an update letter. SCAQMD continues to conclude that, once all offsets are acquired, the project will not cause significant air quality impacts and that the project will meet all air quality requirements. CEC staff concludes that resolution of its identified issues will take weeks or months to resolve. BIOLOGICAL RESOURCES: The SA concludes that the evaluation of biological resources is not complete at this time. Impacts to the Desert Tortoise have not been fully evaluated or resolved. Consultation with U.S. Fish and Wildlife Service(USFWS)and National Park Services(NPS)is ongoing. Onsite impacts are to be mitigated by acquiring offsite Desert Tortoise habitat at a ratio of 1:1. A key unresolved issue is potential offsite impacts to Desert Tortoise caused by air pollution. A second unresolved issue is the use of evaporation ponds and possible impacts to wildlife. It appears that consultations with USFWS, California Department of Fish & Game (CDFG), NPS, and CEC are ongoing and that resolution will take an undetermined amount of time to resolve. LAND USE: The SA addresses the project's compatibility with existing and planned land uses, and applicable land use plans, ordinances and policies. The SA concludes that the project is consistent with applicable major goals and policies of the City's General Plan but that the project is inconsistent with the City's zoning designation. The report acknowledges that the City is in the process of considering a zoning text amendment. The SA concludes that, if the City Council approves the proposed zoning text amendment, the project would be consistent with the local land use regulations. 9AM)1**4 Page 3 of 3 September 19, 2001 City Council Supplemental Staff Report Ocotillo Energy Facility MEMORANDUM OF UNDERSTANDING (MOU): The proposed MOU has not been completed. Meetings which were scheduled last week were cancelled. It is unlikely that the MOU will be ready for City Council consideration until after the City Council meeting. Director o nning and Building City Manager ATTACHMENTS: 1. Staff Report, dated September 05, 2001 2. CEC Staff Assessment, Summary, and Executive Summary 3. CEC Staff Assessment (provided separately) 4. InterGen Response to the CEC Staff Assessment 5. SCAQMD Letter Dated September 07, 2001 6. McDaniel's-Lambert— Human Health Impact Review 7. Giroux & Associates —Air Quality Analysis Review 8. Resolutions —to be provided 9. Ordinance —to be provided ?Oft: DATE: September 05, 2001 TO: City Council FROM: Director of Planning and Building A. MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALM SPRINGS AND OCOTILLO ENERGY, LP/INTERGEN NORTH AMERICA REGARDING COMMUNITY BENEFITS. B. CASE5.0874B: OCOTILLO ENERGY FACILITY-REVIEW OFA CALIFORNIA ENERGY COMMISSION APPLICATION FOR CERTIFICATION OF A PROPOSED NATURAL GAS FUELED ELECTRICAL GENERATION FACILITY, WITHIN A 75 ACRE SITE LOCATED NORTH OF DILLON ROAD, EAST OF DIABLO ROAD, ZONE: E-1 (ENERGY/ INDUSTRIAL) AND W (WATERCOURSE), SECTION 9, T3S, R4E, SBBM. C. CASE 5.0874A: AN AMENDMENT TO SECTIONS 92.17.2.00 AND 92.17.2.D.7.D OF THE ZONING ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, TO ALLOW NATURAL GAS FUELED ELECTRICAL GENERATION IN THE "E-I" ENERGY INDUSTRIAL ZONE. RECOMMENDATION: A. That the City Council consider adopting the attached Minute Order approving a Memorandum of Understanding (MOU)between the City and Ocotillo Energy, LP/InterGen North America. B. That the City Council consider adopting the attached Resolution which transmits the specific recommendations to be incorporated into the certification and license issued by the California Energy Commission (CEC). C. That the City Council consider the second reading of the attached Ordinance amending the Energy-Industrial Zone (E-I Zone). BACKGROUND: At its August 16, 2001 meeting, the City Council approved the first reading of the amendment to the E-1 Zoning Ordinance text. In its action, the City Council directed staff to provide additional information regarding air quality, community benefits, and the CEC process. The action items described above include approval of a MOU regarding community benefits, recommendations to the CEC, and second reading of the proposed change of zone. Each of these items will be discussed in this report. CALIFORNIA ENERGY COMMISSION LICENSING PROCESS: The California Energy Commission (CEC) four-month licensing process has a number of steps which must be followed. The CEC staff is currently completing its Staff Assessment (SA). If 40411 Page 2 of 5 September 05, 2001 City Council Staff Report Ocotillo Energy Facility available prior to September 05, 2001, a copy will be provided to the City Council. Subsequently, CEC staff will prepare an Addendum Staff Assessment. State guidelines encourage local governments to provide written comments on the proposed power plant within 65 days of the CEC determination that the application is data adequate. CEC determined that the application was data adequate on June 22, 2001. Hence, the desire to provide timely City comments so that CEC staff can incorporate the City's position on land use (zoning consistency) and recommended requirements for construction and operation of the proposed facility. The SA will summarize City actions to date but will, likely, conclude that the proposal is not consistent with local land use plans at this time. The SA Addendum will be prepared on, or about, September 17, 2001. The CEC will schedule evidentiary hearings in mid-September at which time the City and public can address the CEC directly. Upon conclusion of the CEC hearing process, the CEC could make a decision on the subject application. A decision is tentatively scheduled for October. The CEC staff has issued its Ocotillo Energy Project, Phase I-Status Report. This report indicates that the CEC SA will be available August 31, 2001. This report will address potential impacts, information from local, state,federal agencies, and CEC staff's independent research. In its status report, CEC staff expressed some concern about whether or not this project will be ready for approval. Issues addressed in this report include City zoning, air quality, biological resources, and water resources. A copy of the report is attached. AIR QUALITY: The Planning Commission and City Council have asked for additional information regarding air quality impacts. This issue has also been of concern to the public. In response to these concerns, the City has hired two independent consulting firms to review the project's air quality reports, South Coast Air Quality Management District (SCAQMD) reports, and provide a summary of air quality issues in a format which is understandable to the public. The two firms, McDaniel/Lambert, Inc. and The Keith Companies/Giroux and Associates,will provide separate reports regarding air quality impacts caused by the project. The firms retained by the City have extensive experience in meteorology, air quality,airborne toxins,and health and ecological risk assessment. These reports will be provided prior to the City Council meeting. As part of the staff presentation, the City Council will receive testimony from the applicant's air quality consultant, SCAQMD (if available) and the two City consultants. Topics to be addressed will include overall air emissions, toxic material, health risks, PM-10 attainment, visibility, and other issues. MEMORANDUM OF UNDERSTANDING (MOU): A draft MOU is being prepared to reduce potential physical and economic impacts on the community. The community benefits in the proposed agreement include property tax, sales tax, air pollution credits, reclaimed water treatment facility, public arts fee, TUMF fees, job creation, competitive long-term energy contracts (as allowed by state law), monetary compensation to the City and surrounding area,fire protection and use of ammonia training, low income assistance, and cooperation with City regarding favorable legislation. 1?04,WV Page 3 of 5 September 05, 2001 City Council Staff Report Ocotillo Energy Facility The full agreement includes more detail on each benefit. As noted in the Planning Commission recommendation, there was a concern that some of the community benefits should go toward surrounding areas, including Desert Hot Springs. This agreement provides funding to residential areas surrounding the project site with the goal of providing an education-focused youth center and an annual contribution toward operation and maintenance of this facility. A final agreement will be presented at the public hearing. CITY RECOMMENDATIONS TO THE CEC: The attached resolution includes the Planning Commission's recommendations regarding the proposed project. These recommendations should be endorsed by the City Council and provided to the CEC for incorporation into the CEC certification/license for this project. These recommendations include exterior lighting, landscape screening, air quality credits, street improvements, fire protection, erosion control, drainage, on-site sewers, parking improvements, and fees. One issue which the City Council may want to consider is whether or not improvement to Dillon Road to its full General Plan width, including street widening, curbs, gutters, and sidewalks is necessary at this time. Currently, there are no sections of Dillon Road, between Highway 62 and Indian Avenue,with full street improvements. Currently this roadway section consists of a two-lane roadway with an unimproved shoulder. Widening and improving this section of roadway appears out of context and it is unlikely that additional roadway improvements will be completed in the near future. Properties to the south and east have existing WECS permits and property to the west is located in Riverside County. The City Engineer has recommended that Dillon Road be fully improved along the entire property frontage. The City Council could, if so desired, defer these improvements by covenant. (See Engineering Conditions, Dillon Road, Nos.4, 6, and 8.) ENERGY - INDUSTRIAL ZONING TEXT AMENDMENT— SECOND READING: The amendment will allow for the development of the proposed Ocotillo Energy Facility in the E-I Zone, located north of Dillon Road, east of Diablo Road. The City's E-I Zone is located north and south of Interstate 10. The City Council adopted, by first reading, the zoning text amendment to allow natural gas-fueled power plants at its August 16, 2001 meeting. The action before the City Council is adoption of the second reading. If the second reading is approved, the ordinance amendment will go into effect 30 days thereafter. The E-1 Zone currently provides for alternative energy, co-generation, and limited industrial uses. The intent of the ordinance amendment is to expand the type of energy related uses to include natural gas-fueled power generation facilities. The proposed amendment will not substantially change the stated purpose of the zone which is to provide for energy uses. fo46 Page 4 of 5 September 05, 2001 City Council Staff Report Ocotillo Energy Facility PLANNING COMMISSION ACTION: At its August 22, 2001 meeting, by a vote of 3-2-2 (Klatchko and Caffery dissenting; Jurasky and Raya absent), the Planning Commission recommended approval of the proposed Ocotillo Power Plant subject to conditions. In making its recommendation, the Planning Commission recommended that the City Council evaluate the following information: A. Air Quality—that the City Council obtain and review additional information and retain an independent expert to evaluate air quality impacts (Phase 1 and II)— (The City has hired two air quality consultants); B. Emission Offsets/Credits—that the applicant, SCAQMD, and the CEC make every effort to ensure that emission offsets/credits are obtained in the Salton Sea Air Basin — (see Condition of Approval No.14, Planning Division); C. Ground Water Quality — that additional information be reviewed regarding water consumption and impacts to the aquifer — (The applicant will provide information from DWA at the meeting); D. Desert Hot Springs — that a method be considered whereby Desert Hot Springs receives community benefits — (Noted in staff report); E. Street Paving —that paving of local roadways in the immediate project vicinity be considered as part of the air quality mitigation program—(See MOU and"B"above); F. Construction Hours — that hours of construction, operation, and maintenance be limited (including the use of temporary and permanent lighting and generators) to mitigate impacts to nearby residents—(See Condition of Approval No.16, Planning Division); G. Community Benefits — that the City Council enter into a binding agreement regarding community benefits prior to City Council approval of the project. A key provision should be designating the City,its designee,and surrounding communities as"Most Favored Customer"with regards to direct power purchases as allowed by law in the future—(See proposed MOU). �7 Page 5 of 5 September 05, 2001 City Council Staff Report Ocotillo Energy Facility i With these concerns and recommended conditions, the Planning Commission supported the h� project. A copy of the draft Planning Commission minutes is attached. rl Director tanning and Building tl' Ali City Manag i ATTACHMENTS: 1. Draft Planning Commission Minutes, August 22, 2001 2, CEC Ocotillo Energy Project, Phase I: Status Report No.1 3. MOU (to be provided under separate cover) 4. Air Quality Reports (to be provided under separate cover) 5. Minute Order 6. Resolution 7. Ordinance Staff Assessment CALIFORNIA ENERGY COMMISSION OCOTILLO ENERGY PROJECT, PHASE I Application For Certification (0 1 -AFC-8) Riverside County 9L U1 W6 SEPTEMBER 2001 (01-AK-8) Gray Davis, Governor siflF hessmoll CALIFORNIA ENERGY COMMISSION OCOTILLO ENERGY PROJECT,PHASE I Apphmllen For(erlifimlion(81-AFC-8) Riverside(ounlp C O a W ire W F {IY Io4Ar[el Zo CALIFORNIA ENERGY COMMISSION SITING OFFICE Marc Pryor Energy Commission Project Manager Roger E.Johnson Manager SYSTEMS ASSESSMENT & FACILITIES SITING DIVISION Robert L.Therkelsen Deputy Director 44/0 STATE OF CALIFORNIA —THE. RESOURCES AGENCY GRAY DAVIS, Govcrnc CALIFORNIA ENERGY COMMISSION `" y 1513 NIN"41 S'QF'.—f siY I SACRAM_NTO, CA 95Wq 512 The staff of the California Energy Commission hereby submits its Staff Assessment (SA) for the proposed Ocotillo Energy Project, Phase I (OEP-1), a 456-megawatt, natural gas-fired, simple-cycle electric generation facility proposed to be located within the limits of the City of Palm Springs, County of Riverside. This document contains our testimony for the upcoming evidentiary hearings of the Energy Commission that are expected to start in October. It is staff's responsibility to complete an independent assessment of the project's potentially significant effects on the environment, public health and safety, and whether it conforms to applicable legal requirements. This assessment also includes recommended conditions of certification to mitigate potential effects of the project. The analyses were prepared in accordance with the Governor's Executive Order D-26-01, Senate Bill 28X, Public Resource Code Sections 25500 et seq.; the California Code of Regulations (CCR) Title 20, Sections 12001 et seq.; and the California Environmental Quality Act (PRC §§ 21000 et seq.) and its guidelines (CCR title 14 §§ 15000 et seq.). There are many unresolved air quality, biological resources and land use issues facing this project. The project does not comply with all federal, state and local laws and regulations, and has the potential to cause significant, unmitigated adverse environmental impacts. Because of these outstanding issues, staff cannot recommend approval of the project as configured, at this time. In our judgement, we believe that these matters could take many months to resolve, Therefore, we recommend that the project be removed from the 4-month certification process and placed within the traditional 12-month licensing process. Placement in the 12-month process would provide the time to resolve the difficult and time-consuming issues that this project presents. Following are the bases for staff's position: • The applicant has not complied with the Committee's order to file with the Energy Commission: ➢ a complete air emissions offsets package, including mobile offsets if part of the plan; ➢ a publicly-noticed and definitive Preliminary Determination of Compliance (PDOC) from the local air district; ➢ mitigation measures for construction-related NO2 impacts and construction- related, high-wind condition PM10 impacts; ➢ a cumulative modeling analysis that would assess the impacts of the project and other nearby projects on ambient air quality; ➢ a Class I visibility increment analysis and cumulative visibility analysis that addresses the National Park Services (NPS) concerns; and ➢ a complete Desert Tortoise mitigation plan that provides the necessary information to assess mitigation proposals and that addresses NOx deposition issues that have been raised by NPS. 9411 Ocotillo SA Transmittal Letter September 7, 2001 Page 3 • As proposed, the project is likely to have a significant unmitigated air quality impacts for particulate matter (PM10) and ozone (from precursor emissions of oxides of nitrogen [NOx], and volatile organic compounds [VOC]). • As proposed, the project is likely to have a significant unmitigated air quality impacts on cumulative visibilty in federal Class I areas (National Park and Forest Service areas). • The local air district's Best Available Control Technology (BACT) level of 9 parts per million (ppm) for NOx under "special circumstances" will generate considerable comment from interested parties and agencies. PRC 25552 requires projects to meet BACT emissions levels. (Note: BACT does not mean a specific technology. Rather, it is an emissions level to be achieved. Any technology that can achieve the BACT level can be considered by an applicant for use in its power plant.) • The project is a major stationary source of air pollutants and, in accordance with PRC 25552, is not eligible for the four-month licensing process. • As proposed, the project will likely have significant, unmitigated impacts on biological resources including, but not limited to, the Desert Tortoise which is a federally and state listed threatened species . • As proposed, the project will likely have a significant, unmitigated impact on avian species due to to the propsed evaporation ponds that total about 10 acres in size. Staff is recommending that the applicant use a zero liquid discharge system instead of evaporation ponds that total 10 acres in size. This would eliminate significant biological impacts that would be created by the ponds, as well as soils and water resources impacts . • A Section 7 determination for Desert Tortoise habitat is required by the U.S. Fish and Wildlife Service (USFWS). The applicant has not submitted to the US Environmental Protection Agency (USEPA) a Biological Assessment, and USEPA has yet to initiate Section 7 consultation with USFWS. • The project currently does not comply with the City of Palm Springs zoning code because it is not an allowable use in the Energy/Industrial (E-1) zone. The City Council is expected to decide, on September 5, 2001, whether to approve a proposed zoning amendment that would allow this and similar projects in the E-1 zone. Staff believes there are potential options that the applicant should consider that may not achieve the same goals as this project, but may achieve most of the goals and avoid the concerns of the federal agencies and the public. For instance, a small combined-cycle project such as a 300 MW power plant may allow for both maximum use of reclaim water for power plant cooling and use of emissions offsets that are closer to the project site, perhaps no farther than the City of Riverside. Staff has not performed any analyses of these options; it merely presents them as potential options. If the applicant 04/2. Ocotillo SA Transmittal Letter September 7, 2001 Page 4 selects one of these or finds its own, either an amendment to the AFC or a new AFC would be required. Copies of this document are available by contacting Luz Manriquez-Uresti, California Energy Commission, 1516 Ninth Street, MS-15, Sacramento, CA 95814-5512, phone (916) 654-3928. This document is also available on the internet (http://www.energy.ca.gov/sitingcases/ocotillo). Persons wanting information on how to participate in the Energy Commission's hearings should contact Ms. Roberta Mendonca, the Energy Commission's Public Adviser, at (916) 654-4489, or (800) 822-6228. Technical or project schedule questions should be directed to Marc Pryor, Energy Commission Project Manager, at (916) 653-0159. News media inquiries should be directed to Assistant Executive Director, Claudia Chandler, at (916) 654-4989. DATE: ROBERT L. THERKELSEN, Deputy Director for Energy Facilities Siting and Environmental Protection 1?4413 EXECUTIVE SUMMARY INTRODUCTION This Staff Assessment contains the California Energy Commission (Energy Commission) staff's evaluation of the Ocotillo Energy Project, Phase I (OEP-I or "project") Application for Certification (AFC) (01-AFC-8). The proposed electric generating plant project is under the Energy Commission's jurisdiction and cannot be constructed or operated without the Energy Commission's certification. The project was evaluated under the four-month licensing process and the requirements of Public Resources Code section 25552. The Staff Assessment is neither the project Committee's Presiding Member's Proposed Decision (PMPD), nor the Energy Commission's final decision on the proposal. Instead, the Staff Assessment and the expected Staff Assessment Addendum, will serve as staff's written testimony during the Energy Commission's evidentiary hearings on the proposed project. Staff is an independent party in the proceedings, and the Staff Assessment presents staff's independent analysis of the proposed project's ability to comply with both environmental requirements and applicable laws, ordinances, regulations and standards (LORS). It examines engineering and environmental aspects of the project, based on the information available at the time the Staff Assessment is prepared. The Staff Assessment contains analyses similar to those contained in Environmental Impact Reports required by the California Environmental Quality Act (CEQA), and addresses the project's ability to comply with LORS. The Staff Assessment presents recommendations and proposed conditions of certification that would apply to the design, construction, operation, and closure of the proposed facility, if it is certified. STAFFS RECOMMENDATION There are many unresolved air quality, water resources, biological resources and land use issues facing this project and addressed in detail in this report. The project does not comply with all federal, state and local laws and regulations, and has the potential to cause significant, unmitigated adverse environmental impacts. Because of these outstanding issues, staff cannot recommend approval of the project as proposed, at this time. In our judgement, we believe that these matters could take many months to resolve. Therefore, we recommend that the project be removed from the 4-month certification process and placed within the traditional 12-month licensing process. Placement in the 12-month process would provide the time to resolve the difficult and time-consuming issues that this project presents. Following are the bases for staff's position: • The applicant has not complied with the Committee's order to file with the Energy Commission: ➢ a complete air emissions offsets package, including mobile offsets if part of the plan; September 7, 2001 1 - 1 4144111 EXECUTIVE SUMMARY ➢ a publicly-noticed and definitive Preliminary Determination of Compliance (PDOC) from the local air district; ➢ mitigation measures for construction-related NO2 impacts and construction- related, high-wind condition PM10 impacts; ➢ a cumulative modeling analysis that would assess the impacts of the project and other nearby projects on ambient air quality; ➢ a Class I visibility increment analysis and cumulative visibility analysis that addresses the National Park Service's (NPS) concerns; and ➢ a complete Desert Tortoise mitigation plan that provides the necessary information to assess mitigation proposals and that addresses NOx deposition issues that have been raised by NPS. • As proposed, the project is likely to have significant unmitigated air quality impacts for particulate matter (PM10) and ozone (from precursor emissions of oxides of nitrogen [NOx], and volatile organic compounds [VOC]). • As proposed, the project is likely to have a significant unmitigated air quality impact on cumulative visibilty in federal Class I areas (National Park and Forest Service areas). • The local air district's Best Available Control Technology (BACT)/Lowest Achieveable Emission Rate (LAER) level of 9 parts per million (ppm) for NOx under "special circumstances" will generate considerable comment from interested parties and agencies. PRC 25552 requires projects to meet BACT emissions levels. (Note: BACT does not mean a specific technology. Rather, it is an emissions level to be achieved. Any technology that can achieve the BACT level can be considered by an applicant for use in its power plant.) • As proposed, the project will likely have significant, unmitigated impacts on biological resources including, but not limited to, the Desert Tortoise which is a federally and state listed threatened species . • A Section 7 determination for Desert Tortoise habitat is required by the U.S. Fish and Wildlife Service (USFWS). The applicant has not submitted to the US Environmental Protection Agency (USEPA) a Biological Assessment, and USEPA has yet to initiate Section 7 consultation with USFWS. • As proposed, the project will likely have a significant, unmitigated impact on avian species due to to the proposed evaporation ponds that total about 10 acres in size. Staff is recommending that the applicant use a zero liquid discharge system instead of evaporation ponds. This would eliminate significant biological impacts that would be created by the ponds, as well as soils and water resources impacts . • The project currently does not comply with the City of Palm Springs zoning code because it is not an allowable use in the Energy/Industrial (E-1) zone. The City Council is expected to decide, on September 5, 2001, whether to approve a proposed zoning amendment that would allow this and similar projects in the E-1 zone. More detailed information regarding staffs recommendation are presented below under "Issues". EXECUTIVE SUMMARY 1 - 2 f4#14r September 7, 2001 BACKGROUND Ocotillo Energy, LP (Ocotillo or "applicant") filed an Application for Certification (AFC) for the Ocotillo Energy Project, Phase I with the California Energy Commission (Energy Commission) on May 29, 2001. The Energy Commission staff reviewed the AFC for data adequacy and the AFC was determined to be data adequate by the Energy Commission at the June 22, 2001 Business Meeting, thus beginning the Energy Commission's review of this project. In light of California's energy emergency, Senate Bill 28X and Public Resources Code, section 25552, requires the Energy Commission to expedite, to the extent feasible, a 120 day or less time frame for the processing of Applications for Certification for certain simple-cycle projects that could be on line by December 31, 2002. One requirement of the four-month siting process is for either the Committee or the Energy Commission to determine within 25 days of the data adequacy determination whether the proposed project warrants remaining on the four-month schedule. On July 10, staff recommended to the Committee that the project should not remain on the four- month schedule. The bases for this recommendation were staff's belief that the project: 1) could not meet the South Coast Air Quality Management District's (SCAQMD or "District") 5.0 ppmvd Best Available Control Technology (BACT)/Lowest Achievable Emission Rate (LAER) limit; and 2) could not secure the necessary emissions offsets. In addition, staff was unsure whether the District would be able to produce its Preliminary Determination of Compliance (PDOC) within the 35-day timeframe (35 days from June 22, or July 27), and the Final DOC within 65 days (August 27). Based upon the District's assurances that its PDOC would not be more than a few days off schedule, staff changed its position on July 20 and recommended to the Committee that the project be allowed to stay on the four-month schedule. District's assurances were based on its belief that the project could be allowed to operate at a 9.0 ppmvd NOx emissions level for 18 months under an administrative and/or abatement order, and that the applicant could secure offsets for the project in time for the PDOC. On July 25, the Committee issued its ruling that retained the project in the four-month schedule. Following the Committee's Informational Hearing and Site Visit on July 30, it adopted the project's schedule on August 2 and required the applicant to file those items noted in "Staffs' Recommendation" above. PROJECT DESCRIPTION Ocotillo is proposing to construct and operate the project. The Project Area is within the city limits of the City of Palm Springs, Riverside County, and approximately eight miles northwest of City Hall. Access is via east-west Dillon Road on the south side of the property. The Project Area is currently used for wind generation using wind turbines and is approximately 160 acres in area. The Project Site is 54-acres that lies within the southeast quarter of the Project Area and would be the location of the power plant complex'. Nine existing wind turbines would be removed as a direct result of the ' County, Assessor Lot Number 90-110-03 Se tember 7, 2001 1 - 3 / EXECUTIVE SUMMARY P project. About 90 other wind turbines are undergoing testing for use in Alaska and will be removed by that developer, but are not considered a part of this project. The northeast quarter of the Project Area would contain a 10-acre evaporation pond. The proposed project would be a nominal 456 megawatt (MW) simple-cycle power plant, featuring three F-Class combustion turbine generators (CTGs), each with a capacity of 154 MW. Exhaust stacks for the CTGs would be 23 feet in diameter and 80 feet tall. Control of oxides of nitrogen (NOx) would be at the 9 parts per million (ppm) level using dry low NOx (DLN) combustors. Natural gas will be supplied to the CTGs via a Southern California Gas Company (SoCalGas) pipeline. SoCalGas has two 30- inch gas pipelines located 2 miles from the Project Site along the south side of 1-10. Approximately 1.4 miles from OEP-1 a 24-inch branch line under 1-10 has been installed for InterGen's Wildflower 135-MW energy project. Ocatillo intends to install anew 24- inch pipeline from the stub of this line. Water for power plant cooling would be provided by two, new on-site wells, and potable water would be provided by Mission Springs Water District (MSWD) from an existing water line at the south boundary of the project along Dillon Road. Each CTG would be served by its own wet-surface, air-cooled condensor (WSAC) heat exchanger that would provide cooling for the simple-cycle equipment. In addition, the WSAC would collect and concentrate the evaporative cooling system blowdown and other wastewater streams. Each WSAC module would feature two side-by-side stacks, each 100 feet tall and 12 feet in diameter. Wastewater would be evaporated in the evaporation ponds and the residuals will be transported off site. Electricity generated by the project would interconnect with the grid system at the existing SCE Devers Substation, which is located on a separate parcel just north of the project property. A 1-mile long, 230 kilovolt (kV) transmission line would be built between the Project Site and the Devers Substation. In addition to the equipment above, the proposed power plant would feature CTG air inlet filters/ducts, fuel gas scrubber, a 510,000 gallon fire water/raw water storage tank, a 211,000 gallon filtered water storage tank, air compressors and dryers, switchyard, buses and towers, a control building, a switchyard control building, and a gas compressor building. A more complete description of the project is contained in the PROJECT DESCRIPTION section of this Staff Assessment. STAFF'S ASSESSMENT Each technical area section of the Staff Assessment contains a discussion of impacts, and where appropriate, mitigation measures and conditions of certification. The Staff Assessment includes staff's assessments of: • the environmental setting of the proposal; • impacts on public health and safety, and measures proposed to mitigate these impacts; • environmental impacts, and measures proposed to mitigate these impacts; EXECUTIVE SUMMARY 1 - 4 fo 17 September 7, 2001 • the engineering design of the proposed facility, and engineering measures proposed to ensure the project can be constructed and operated safely and reliably; • project closure; • project alternatives; • compliance of the project with all applicable laws, ordinances, regulations and standards (LORS) during construction and operation; and • proposed conditions of certification. Due to the lack of information, staff is unable to complete its Air Quality, Biological Resources, and Land Use analyses. The other sections of the Staff Assessment have been completed. Each section provides recommendations and, where appropriate, recommended Conditions of Certification. The table below is a summary of the technical sections showing the most significant environmental or engineering potential impact level for each section. For details on the impacts, the reader is referred to the technical sections in this Staff Assessment. Except for the Air Quality and Biological Resources sections, staff believes that if the mitigation measures suggested in this document and conditions of certification are implemented, no significant adverse direct, indirect, or cumulative impacts will occur. Environmental and Potentially Less Than Less Than No Engineering Check List Significant Significant Significant Impact Impact Impact w/ Impact Mitigation ENVIRONMENTAL Air Quality X Biological Resources X Noise & Vibration X Cultural Resources X HazMat/Worker Safety & Fire X Protection Land Use X Public Health X Socioeconomics X Soil &Water Resources X Traffic & Transportation X Trans. Line Safety & Nuisance X Visual Resources X Waste Management X ENGINEERING , No Check List Efficiency X Facility Design X Geology & Paleontology X Reliability X Trans. System Engineering X September 7, 2001 1 - 5 4?#4 / 8 EXECUTIVE SUMMARY In addition, staff has determined that the project does not comply with air quality and land use LORS. Details on LORS compliance are contained in the technical sections of this Staff Assessment. ISSUES Significant issues exist within the Air Quality, Biological Resources and Land Use sections. For a more detailed review of potential impacts for all sections see staffs technical section in this Staff Assessment. Air Quality Staff's basic concerns about air quality standards and the air quality-related biological impacts of the project proposal stems from the applicant's desire to run three large Frame 7FA combustion turbine generators (CTG) in the simple-cycle mode for 18 months. According to the applicant, these turbines were originally destined to be used in a project located in another state. Also, the applicant originally intended that its Ocotillo project would be filed under the 12-month AFC process as a combined-cycle power plant. A commitment to using the three particular out-of-state CTGs for the combined-cycle power plant has led to the applicant's effective exclusion from consideration, smaller machines, such as LM6000's, despite its recent experience with these machines. The applicant proposes to operate the three Frame 7FA CTGs without SCR or any other BACT/LAER level-achieving devices. According to the applicant, due to the high temperature of the exhaust, these machines cannot meet South Coast Air Quality Management District's (SCAQMD or "District") normal 5.0 ppmvd NOx Best Available Control Technology (BACT) limit. Instead, the applicant has proposed that the three turbines be allowed to operate at a level of 9.0 ppmvd, and the District has said that this level will comply with the BACT limit with "special" circumstances. Specific Air Quality Concerns Potentially significant unresolved issues include, but are not restricted to, the following: 1. BACT/LAER for NOx: In discussions with U.S. Environmental Protection Agency (USEPA) representatives, staff has become aware of significant concerns the agency has about the level of BACT/LAER for NOx emissions from the project. 2. Project Offsets: The applicant has neither Emission Reduction Credits (ERC)/RECLAIM Trading Credits (RTC) themselves, nor ERC/RTC agreements in place to fully offset air pollutant emissions the project. Additional ERCs/RTCs are necessary to offset NOx and SOx emissions, and additional ERCs are necessary to offset VOC and PM10 emissions. 3. RECLAIM: The applicant has opted into the RECLAIM program to obtain NOx ERCs. These ERCs need to be converted into RTCs by the applicant. Energy Commission staff cannot ensure CEQA compliance for NOx offsets at this time. im /f EXECUTIVE SUMMARY 1 - 6 September 7, 2001 4. Construction Impacts: Significant NO2 and PM10 impacts have been identified by the Applicant; however, it has neither identified mitigation for the NO2 impacts, nor specified PM10 mitigation to be used under high wind conditions. 5. Cumulative Impacts: The applicant has not filed with the Energy Commission a cumulative modeling analysis to assess the cumulative impacts of the project and other nearby projects on ambient air quality. 6. Visibility Modeling: The National Park Service (NPS) Federal Land Manager (FLM) has requested that the applicant provide 1) a revised visual analysis to address concerns with the visibility modeling, 2) a new visual cumulative analysis to address potential cumulative impacts, and 3) a cumulative impact analysis addressing increment consumption at Joshua Tree National Park and other nearby Class I Areas. Protocols for these analyses and the analyses themselves have not been filed with the Energy Commission and, to the best of staffs knowledge, have not been completed. When the analyses are filed with the Energy Commission both NPS and staff will require at least three weeks to assess them. 7. PDOC: The District has not issued a publicly noticed and definitive Preliminary Determination of Compliance for this project. The District has concerns with the above-mentioned items 2 and 6, and is not expected to issue a definitive PDOC until these issues have been resolved satisfactorily. Schedule Preliminary Determination of Compliance The District has not issued, and the applicant has not filed with the Energy Commission, a publicly noticed and definitive Preliminary Determination of Compliance (PDOC) for this project. The District has concerns with items 2 and 6 in the list above, and is not expected to issue a definitive PDOC until these issues have been resolved satisfactorily. The definitive PDOC will be noticed and issued for a 30-day public comment period, after which the District would be expected to issue its Final DOC (FDOC). Staff will need three weeks after the applicant files the FDOC with the Energy Commission to prepare the Air Quality section of the Staff Assessment Addendum. Annual Hours of Operation The applicant has indicated in filings with the Energy Commission that it may modify its requested maximum annual hours limitation from 4,600 to 3,500 hours. However, the applicant has filed either a definitive PDOC nor an amended AFC with the Energy Commission. These actions must be finalized in order for staff to complete its analysis of the project. Biological Resources Air Quality-related Issues The applicant's predicted annual emissions of NOx is 416 tons. Energy Commission staff, and the National Park Service and the U.S. Forest Service (USFS) are concerned September 7, 2001 1 - 7 OPIC 0 EXECUTIVE SUMMARY impacts on the Desert Tortoise due to nitrogen deposition. For instance, Joshua Tree National Park's western border is about seven miles east of the proposed project site. According to NPS, the park is the most heavily air pollutant-impacted National Park in the United States and is Desert Tortoise habitat. The Desert Tortoise is both a federal and state listed species. Nitrogen deposition from project emissions is expected to occur within the Park (and elsewhere) which will favor non-native, invasive vegetation over native. Non-native vegetation does not provide the same nutritional value for Desert Tortoise as the native vegetation, and its seeds can do physical harm to Desert Tortoises when ingested. Fire exacerbates the invasion problem because the non-native vegetation increases the occurrences of fires because it burns more readily than the native vegetation. Also, because the non-native vegetation fares better after fire events, its invasion and destruction of native vegetation is accelerated. Among other concerns, NPS has expressed its strong opposition to the proposed use of Frame 7FA CTGs without benefit of SCR to provide a NOx emssions level of 2.5 ppmvd or less. Its air quality staff believes that there are technologies available that permit use of high-temperature SCR on 7FA machines. This belief has, however, not been backed-up with examples. That being said, the NPS believes that the project should not be allowed to run the simple-cycle configuration at all but, it the applicant is allowed to construct and operate a power plant in the location, the power plant should instead be a combined-cycle configuration with SCR. Water Resources related Issues Zero Liquid Discharge Soil and Water Resources staff, in consultation with Biology staff, has included in its recommended Conditions of Certification, that the project owner shall utilize a zero liquid waste discharge system such as a brine concentrator or crystallizer in lieu of an evaporation pond. This action would eliminate the adverse impacts caused by the evaporation ponds, impacts that are difficult to mitigate. Schedule Issues Zero Liquid Discharge The applicant will need to file with the Energy Commission information on the particular zero liquid waste discharge system it selects. This information will need to be filed with the Energy Commission at least two weeks prior to issuance of the Staff Assessment Addendum. Federal — Section 7 Consultation Biology staff is waiting for information from the applicant regarding the status of the Section 7 consultation with USFWS through USEPA as the responsible agency. Because the proposed project may adversely impact a federally listed species, the desert tortoise and its critical habitat at Joshua Tree National Park by way of contributions to already elevated air pollution, the consultation and resulting biological EXECUTIVE SUMMARY 1 - 8 ���, September 7, 2001 opinion under Section 7 of the Federal Endangered Species Act must be completed prior to any initiation of site mobilization. Biology staff will continue to work closely with the USFWS and the USNPS in order to address all of their biological resource concerns. The information discussed below must be filed with the Energy Commission at least two weeks prior to issuance of the Staff Assessment Addendum. State — Section 2081 Since the project may impact state listed species, in particular desert tortoise, the state Section 2081 Biological Opinion or Letter of Concurrence must be completed prior to project construction. The Section 2081 documentation will be issued within 30 days after the CDFG obtains a copy of the Federal Biological Opinion. CDFG provided Biology staff with a letter dated August 3, 2001 (Nicol 2001 c) and as of August 21, 2001 CDFG had not received an application for this permit from the Applicant. Biology staff will continue to work closely with CDFG staff in order to address all of their biological resource concerns. Other Information Needs Biology staff requires a draft BRMIMP and draft Employee Environmental Awareness Training Program. Biology staff also requires more information on the following: 1. Areas investigated for habitat acquisition as mitigation for desert tortoise and other sensitive species; 2. Management plans for habitat acquired for habitat migitation; and 3. Specific procedures, schedule for restoration mitigation after site excavation and construction. Staff will need at least two weeks from the time the applicant files the information in order to incorporate the information into its Staff Assessment Addendum. Land Use At this time, the proposed project is not in compliance with the City of Palms Springs' zoning ordinance because the property's current zoning, Energy/Industrial (E-1) does not allow for a natural gas fueled electrical generation facility usage. The City is currently considering a zoning amendment that would include this use in the zoning code. Staff expects that the City Council will vote on the matter on September 19, 2001. Staff will need two days from the time the applicant files with the Energy Commission information that the zoning amendment has been approved. If the zoning amendment is not approved by the City Council, and if the applicant continues to pursue the AFC, the Energy Commission would be placed in the position of considering an overide of the City's LORS. ENVIRONMENTAL JUSTICE Staff conducted an environmental justice analysis for the proposed project based on U.S. Environmental Protection Agency Guidance. Using Census 2000 data, staff September 7, 2001 1 - 9 Ofouv4W EXECUTIVE SUMMARY determined that a minority population of greater than 50 percent exists within a six-mile radius of the proposed project. Staff uses a six-mile radius as the potential affected area to be consistent with the area evaluated for cumulative air quality impacts. Several technical areas in this Staff Assessment include an environmental justice evaluation. Since staff has concluded that there will be no significant direct or cumulative public health-related impacts to off-site receptors, there will also be no significant impacts to any minority populations that have been identified. Therefore, there are no environmental justice issues. 4?00)3 EXECUTIVE SUMMARY 1 - 10 September 7, 2001 FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16.50/ST, 16 48/N0, 4861483909 F 3 STATE OF CALIFORNIA ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION In the Matter of- ) Docket No. 01-AFC-08 Application for Certification, ) APPLICANT'S RESPONSE TO STAFF for the OCOTILLO ENERGY PROJECT, ) ASSESSMENT PHASE I ) by Ocotillo Energy LP ) Applicant hereby responds to the Staff Assessment for the Ocotillo Energy Project,Phase I(01-AFC-08)(the"Project")released on September 7,2001. Applicant acknowledges the significant level of effort expended by the California Energy Commission("CEC") staff in preparing the 300-plus pages of detailed analysis contained in the Staff Assessment. Unfortunately,the logistics associated with producing such a massive document apparently prevented the staff from considering critical information that has been provided over the past two weeks by the Applicant and others. Applicant suggests that a more streamlined staff assessment, which provides up to the minute analysis of the issues that all parties acknowledge to be the areas of concern, and less detail regarding other aspects of the project,might be better suited to the four-month certification process. Section 1 of the Staff Assessment provides an Executive Summary of the staffs analysis and conclusions. At page 1-5 of the Staff Assessment, staff sets forth its conclusion that the Project as currently proposed will have no significant impacts in 15 of the 18 areas analyzed. Staff expresses its view that the Project as proposed will have potentially significant impacts in the remaining three areas of air quality,biological resources and land use. Staff further recommends that the Project be removed from the 4-month certification process and placed within the traditional certification process in order to provide the time necessary to resolve what staff perceives to be outstanding issues in these three resource areas. Applicant recognizes that it is not uncommon for outstanding issues to preclude a staff recommendation for approval of a project at this early stage of the process (i.e.,prior to workshops on the Staff Assessment and evidentiary hearings). Furthermore,Applicant does not disagree with certain of the conclusions reached in the Staff Assessment which provide the bases for staffs position. However,the majority of staffs conclusions do not acknowledge or accurately reflect information that has been provided by the Applicant and others. While Applicant will provide more detailed responses to the issues raised by the staff,we provide the following preliminary responses to each of the issues raised. OC_DOCSV4553203 [WM FROM LA7HAM & WATKINS OC #1 (MON) 9. 10' 01 16 51/ST. 16:48/NO. 4861483909 P 4 1. Staff asserts that the Applicant has not complied with the Committee's order to ,file the following information with the CEC: a. A complete air emissions offsets package,including mobile offsets if part of the plan. Applicant provided the CEC with periodic updates on the status of the Project's offset package_ These updates were docketed on August 13, August 22, and August 31,2001, As indicated in the most recent update,provided in connection with Applicant's Status Report#2, Applicant currently has acquired, or has under a binding option contract, 99% of its required NOx offsets, 98%of its required VOC offsets and 34%of its required PM10 offsets. As stated in the PDOC issued by the South Coast Air Quality Management District("SCAQMD"), offsets are not required for CO or(as suggested by staff at page 1-6 of the Staff Assessment) SOx. Given that the NOx and VOC offset packages for the Project are virtually complete,it is unclear why staff is unable to evaluate these aspects of the Project(including compliance with C17QA). The only pollutant for which Applicant does not currently hold virtually all of the required offsets is PM10. This is because the City of Palm Springs has expressed a strong desire to have the PM10 offsets generated from local road paving projects. 1n an effort to address the desires of the City,Applicant has been in the process of working with the City to identify candidate roads,and to obtain regulatory approval from the state and local air agencies to generate offsets through road paving projects. Furthermore,to the extent that PM16 offsets are not obtained through road paving projects, Applicant plans to obtain the additional required offsets from the SCAQMD's Priority Reserve(SCAQMD Rule 1309.1), Offsets are allocated to the Priority Reserve on a quarterly basis, and are available to projects that are permitted during the quarter, Thus,payment of the required fee, and allocation of offsets from the Priority Reserve to the Project,occurs at the time that permits are issued by the SCAQMD for the Project. That is not expected to occur for at least a month, b. A publicly noticed and definitive Preliminary Determination.of Compllance.(PDOC) from the local air district. By letter dated September 7,2001,a copy of which is attached as Exhibit A,the SCAQMD transmitted to the CEC the"definitive"PDOC for the Project. The PDOC reflects the reduction in operating hours from 4,600 to 3,500 hours per year, As pointed out in the SCAQMD's September 7 letter,the SCAQMD previously provided status reports of the PDOC to the CEC on July 20, August 10,August 15 and August 30. The August 15 and August 30 status reports included"drafts"of the PDOC that are not substantially different from the fmal PDOC transmitted on September 7. While Applicant acknowledges that the final PDOC is dated concurrently with the date of the Staff Assessment,the SCAQMD and Applicant took numerous steps prior to that date to inform the staff of the contents and conclusions of the PDOC. oc_pocswsszza.i Iwsrl 2 FROM LAT,HAM & WATKINS OC #1 (MON) 9. 10' 01 16:51i ST, 16:48/NO. 4861483909 P 5 As for public notice,as stated in the SCAQMD's September 7 letter, SCAQMD rules do not require public notice of the PDOC. A public notice will be provided as required by the SCAQMD's Title V program (Regulation XXX). As further indicated by the SCAQMD's September 7 letter, this will be done in parallel with the CEC process. c. Mitigation measures for construction-related NO2 iMM gaots and construction-related high wind condition PM10 impacts, As the CEC Staff knows,the modeling performed for construction-related air impacts is conservative. Actual construction-related air impacts at sensitive receptor locations are likely to be significantly lower than maximum modeling projections,particularly since these impacts decrease significantly with distance beyond the fence line. Moreover,the construction-related air impacts for any project are by nature temporary. These impacts diminish as the project reaches completion, even without mitigation. However, as described in the AFC,efforts will be made to mitigate the construction-related NO2 and high wind condition PM-10 impacts. 'These efforts include the institution of a Construction Fugitive Dust Mitigation Plan,and the tuning of all heavy duty construction vehicle engines to manufacturer's specifications to limit NOx emissions. d. A cumulative modeling analysis that would assess the impacts,of the project and other nearby,projects on ambient air quality. Assuming that this section of the Staff Assessment is referring to items set forth in the August 2,2001 Committee Scheduling Order,the above-referenced item is not listed. Therefore, it is not accurate that Applicant has failed to comply with the Order in this respect, Applicant has completed such an analysis at the request of air quality consultants retained by the City of Palm Springs,and hereby dockets the analysis with the CEC as Exhibit B to this filing. U. A Class I visibility increment analysis and cumulative visibility analysis that addresses the National Park Services(NPS)concerns. This analysis was provide to the NPS on September 5,2001. It was provided to the CEC on September 6,2001. f. A complete Desert Tortoise mitigation plan that provides the necessary information to assess mitigation proposals and that addresses NOx deposition issues that have been raised by NPS. The Applicant's Desert Tortoise mitigation plan was initially provided to staff on July 26, 2001 as part of Applicant's responses to data requests. No additional information was requested by staff regarding the plan. Applicant supplemented the Desert Tortoise mitigation plan with additional information,and docketed the plan with the CEC on September 5,2001. Analysis of NOx deposition issues,beyond that which was provided in the Application for Certification ("AFC"),is included in the report referred to in l.e above. 3 0C_p0CSk55320.1[W97] FROM LATHAM & WATKINS OC #1 (MON) 9, 1011 01 16:52/ST. 16:48/N0. 4861483909 P 6 2. As proposed,the project is likely to have significant unmitigated air quality impacts for particulate matter(PM10)and ozone(from precursor emissions of oxides of nitrogen (NOxl. and volatile organic compounds h'VOCI). It is difficult to understand how the staff reached this conclusion in light of the fact that the Staff Assessment states that a definitive PDOC has not been provided. If staffs position is that it does not have a PDOC, then it has no basis for making the above conclusion. If staff were to review the PDOC that has been provided by the SCAQMD, it would find that its conclusions are contrary to those reached by the SCAQMD,which states as follows: "AQMD modeling staff has reviewed the modeling analysis and determined that the peak impacts from PM10 24-hour&annual concentrations due to normal operation at OBP will not cause a violation or make significantly worse an existing violation according to Appendix A in Rule 1303." (PDOC at page 16.) "Modeling is required for NOx emissions per Rule 2005(c)(1)(B). Modeling analysis substantiates that the project will not cause a violation nor make significantly[sic] an existing violation of the state or national ambient air quality standards at any receptor location in the District." (PDOC at page 22.) Thus,staffs conclusions are in direct conflict with the findings of the SCAQMD. 3. As proposed,the proiect is likely to have a significant unmitigated air quality impact_on cumulative visibility in federal Class I areas(National Park Service and Forest Service areas). Again,the basis for this staff conclusion is unclear in light of the fact that the analysis of this issue is one of the items that staff has identified as not being provided by Applicant. If staff s position is that it does not have the analysis,then it has no basis for reaching this conclusion, If staff were to review the analysis which has been submitted,it would again find that its conclusions are at odds with the conclusions contained therein. 4. The local air district's Best Available Control Technology(BACT)/Lowest Achievable Emission Rate(LAER)level of 9 parts per million(ppm)for NOx under,"special circumstances"will generate considerable comment from interested parties and agencies_ ,PRC 25552 requires projects to meet BACT emission levels. As the CEC staff is well aware,this issue has been the subject of exhaustive discussions with all affected agencies for some months now. It is essentially resolved. The position of the SCAQMD, as set forth in its PDOC, is that the appropriate BACT/LAER NOx level for the combustion turbines in simple cycle configuration is 9 ppm. The U.S,Environmental Protection Agency("USEPA")disagrees that 9 ppm constitutes BACT/LAER for the units,but has indicated a willingness to enter into an administrative order which would allow operation at 9 ppm for the limited life of the simple cycle project. oc nocswss3xo.i lw971 4 4?AO FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16:52/ST. 16:400. 4861483909 P 7 5. As proposed,the project will likely have significant, unmitigated impacts on biological resources including,but not limited to,the Desert Tortoise which is,a federally and state listed endangered species. As staff well knows,Applicant has been discussing the potential biological impacts of the Project with both the U.S. Fish and Wildlife Service("USFWS")and the California Department of Fish and Game("CDFG")for many months now. A review of the Staff Assessment discussion of potentially significant impacts also reveals that CEC staff agrees that all onsite impacts discussed in that section, with the exception of nitrogen deposition impacts to vegetation and potential avian impacts resulting from collisions with nearby wind turbines,are fully mitigated with implementation of mitigation measures proposed by the Applicant. Staff apparently has reached its conclusions based on two issues: (1)whether nitrogen deposition from the project will result in adverse impacts to biological resources,including desert tortoise critical habitat;and(2)whether proposed evaporation ponds will result in avian collisions with wind turbines. With respect to these two issues, CEC staff asserts that it does not have adequate information upon which it can reach a conclusion. If staffs position is that it cannot reach a determination on these issues due to lack of information,then it has no basis for reaching its conclusions. Furthermore,the nitrogen deposition issue currently is the subject of informal consultation between USFWS and EPA under Section 7 of the ESA. Finally,on September 6, 2001, an additional modeling analysis was submitted to CEC staff demonstrating that nitrogen deposition will not have any adverse impact on such offsite resources. Staffs conclusion therefore is in direct conflict with the scientific evidence developed for the OEP. As discussed more fully in Paragraph 7 below,the Staff Assessment fails to provide any scientific analysis to support its conclusion that"[t]he total impacts caused by the OEP-1 evaporation pond facilities may be minimized to'less than significant'levels only by avoiding the indirect impacts of the wind turbines through implementation of alternatives to the evaporation ponds." See.Staff Assessment at pg. 4.2-19. The staff conclusion therefore is based on hypothesis and speculation and is not supportable. 6, A Section 7 determination for Desert Tortoise habitat is required by the U.S.Fish and Wildlife Service(USFWS). The applicant has not submitted to the U.S. Environmental Protection Agency(USEPA) a Biological Assessment,and USEPA has yet to initiate Section 7 consultation with USFWS. Applicant has not received any request from USEPA to prepare a biological assessment. It is Applicant's understanding,based on numerous conversations with both USEPA and USFWS,that an informal consultation is underway between those agencies to determine whether there is any necessity for formal consultation under Section 7 of the federal Endangered Species Act. It is Applicant's understanding that there has been no decision by either USEPA or USFWS that a formal Section 7 consultation will be necessary for the project. CDFG has confirmed that the OEP does not require a California Endangered Species Act Section 2081 incidental take permit,unless the project will result in a take of Desert Tortoise,a State listed species. OC_DOCSW551203 IW'971 5 4#� 8 FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16:53/ST. 16:48/N0, 4861483909 F 8 7. As proposed,theproject will have a significant,unmitigated impact on avian species due to the proposed evaporation ponds that total about 10 acres in size. Staff is recommending that the applicant use a zero liquid discharge system instead of evaporation ponds. The CEC staff relies on supposition instead of scientific fact to reach its conclusion that the proposed evaporation ponds will result in an unmitigated significant impact to avian species as a result of collisions with wind turbines. The Staff Assessment fails to provide any scientific analysis to support its conclusion that "[t]he total impacts caused by the OEP-1 evaporation pond facilities may be minimized to 'less than significant'levels only by avoiding the indirect impacts of the wind turbines through implementation of alternatives to the evaporation ponds." See Staff Assessment at pg. 4.2-1. Furthermore,it is somewhat troubling that the Staff Assessment is the first time that Applicant was made aware of this significant proposed modification to the Project by staff. Had Applicant been made aware of this proposal in advance of the Staff Assessment, analysis of the staffrecommendation could have been well underway by now. 8. The project currently does not comply with the City of Palm Springs zoning code because it is not an allowable use in the Energv/Industrial zone. Applicant agrees that the Project does not explicitly comply with current zoning. In fact, it is Applicant's view that this issue alone is potentially fatal to Phase I of the OEP. The failure of the City of Palm Springs(the"City")to move expeditiously with the proposed zone amendment,coupled with the threat of a referendum or litigation associated with the proposed action,will in all likelihood make it impossible to bring the Phase I project on line by Summer 2002, Applicant first initiated dialogue on the OEP with the City in February 2001, and began formal discussions with the City on a zoning amendment in late May 2001,prior to the submittal of the AFC to CEC. Over the course of the subsequent two months,Applicant and City staff developed the current proposed zone amendment. On July 25,2001,the Palm Springs Planning Commission recommended approval of an amendment to the zoning Ordinance to explicitly allow natural gas fueled electrical generation in the Energy/Industrial zone,which is applicable to the project site. On August 1,2001,the Palm Springs City Council took up the recommendation of the Planning Commission on the proposed zone amendment. At the August 1,2001 meeting,the City Council continued the bearing on the matter to September 5,2001 to allow the Council additional time to consider the matter prior to taking final action on the proposed zone amendment. On August 16,2001,the City Council unanimously approved the introduction and"first reading"of the proposed zone amendment. The matter came back before the Council for the"second reading"and final action on September 5,2001,at which time it was continued for two additional weeks to September 19,2001. The delays associated with action on the zoning amendment,which in and of themselves have critically affected the Project schedule,are compounded by threats of a referendum on the OC_DOCS05320.1 [w971 6 ��� FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16:54/ST. 16:48/NO. 4861483909 P 9 zoning amendment and litigation. Given the delays that have already occurred, there would not be sufficient time to resolve such an action,were it to be pursued, and still meet the Project schedule. Thus,unlike the issues raised above,which Applicant believes either have been addressed, or could easily be addressed during the remainder of the CEC approval process,the zoning issue may in fact prove to be fatal to Phase 1 of the OEP. 9. Staff recommends that the Project be removed from the four month certification process, Whether or not the Project qualifies for the four month certification process is an issue that the CEC staff and the Applicant addressed extensively the last time the staff made this recommendation. As was the case then, Applicant believes that all of the issues raised by the staff,with the exception of the zoning issue, either have been addressed or can be addressed within the four month process. That having been said,if staff is committed to working with Applicant to move the Project forward on an expeditious basis,Applicant is not opposed to being formally mvved off from the four month track at this stage of the process. Setting aside the zoning issue,Applicant believes that the Project can be certified by the CEC within two months. Whether this is done on the four month track or the twelve month track is probably form over substance at this point. Moving the project to the twelve month track at this stage will eliminate the concerns that staff has expressed regarding the qualification criteria. DATED: September 10, 2001 Respectfully submitted, Michael J. Carroll of LATHAM&WATKINS Counsel to Applicant OC_DOC6W55320.1[W47] 7 FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16 .54/ST. 16:48/NO. 4861483909 P 10 EXHIBIT A FROM_I,ATHAM& WATKINS OC #1 (MON) 9. 10' 01 16;55/ST, 16!48/N0. 48611483909 P 11 South Coast ,Air Quality Management District 21865 E. Copley Drive, Diamond Bar, CA 91765-4182 (909) 396-2000 - http://www.agmd,gov September 7, 2001 Mr.Robert L, Therkelsen Deputy Director Systems Amossment&Facilities Siting Califomia Energy Commission 1516 Ninth Street Sacramento,CA 95814 5512 Subject: Ocotillo Energy Project(01-AFC-08) Deer I& Therkelsen: The South Coast Air Quality Management District (AQMD) has provided to the California Energy Commission(CEC) status reports of our Preliminary Determination of Compliance (PDOC) for the proposed Ocotillo Energy Project on July 20, August 10, August 15, and August 30, 2001, This letter is to inform you that we have now completed our analysis(including,but not limited to,the CO BACT determination) of the PDOC for the Ocotillo Energy Project (see attached Engineering Evaluation). Therefore, this letter and the attached Engineering Evaluation constitutes AQMD's official PDOC for the Ocotillo Energy Project. Please be advised that the PDOC or the Final Determination of Compliance (FDOC) do not constitute a Final Title V permit for Prevention of Significant Deterioration (PSD) under federal law (40CFR 52,21) for which the AQMD is the delegated agency. The issuance of Fits! Title V PSD permit is pending a completion of a public notice and comment period required by federal law. The AQMD will be conducting this public notification In parallel to the CEC certification process. Based on our review of the applications for Permits to Construct, we have determined that the project complies with all applicable requirements of AQMD Rules and Regulations with the following remaining issues needed to be resolved before the AQMD can issue final Permit to Construct for the project: 1. Offsets: The project site is located-within aCO attainrueat area,thus, CO offsets are not required. The SOx emissions from this facility arc below 4 tons per year, thus, wording to Rule 1304 (d)(1)(A), the project is exempt from SOX offset requirements. The applicant has been informed that a complete offset package for the other three criteria pollutants (VOC, NOx, and PMro) is necessary before final permits can be issued. Recently, the applicant has informed the AQMD that they intend to join the NOx Regional Clean Air Incentives Market (RECLAIM)program, which will allow them to seek NOx offsets through the RECLAIM program. The 49J*30 FROM LATHAM & WATKINS, OC #1 (MON) 9. 10' 01 16:55/ST. 16:48/NO, 4861483909 P 12 5tr nr na r�o•aani �•-� Mr. Robert Therkelsen 2- September 7, 2001 applicant is actively pursuing to secure all accessary offsets. Although a final offset package has yet to be submitted to the AQMD, the applicant has informed us via a letter dated August 21, 2001, that they have acquired partial offsets for NOx, VOC, and PM10. 2. Modeling: AQMD staff has analyzed the erniesion data and corresponding modeling analysis to verify compliance with AQMD Rule 1303 (New Source Review), 1401 (health risk), and Regulation XVII (PSD). Staff has determined that the modeling analysis for the Ocotillo project meets our rulc mquircmcnts, However, the Federal Land Manager has requestod the applicant to conduct further modeling for PSD Class I increment and cumulative visibility and deposition analyses. Comments from the Federal Lund Managers will be considered prior to issuance of the flnzl Permit to Construct, I would reiterate that AQMD staff will continue to cooperate with the CEC staff to ensure cxpcditious review of the proposed project and any changes made 0 the proposed project as they become available in order to meet the project's deadlines. Staff will also stay in close communication with the National Park Service, United States Forest Service, and the applicant to resolve the remaining issues in a timely manner. If you any questions, please contact me at 909.396,2662, or Ms. Pang Mueller, Senior Manager, at 909.396,2433, Sincerely. Mohsen N ,P.E. Assistant Deputy Executive Officer Engineering.and Compliance MN:CM:TDY:am Attachment cc; Robert Housler,CEC Mike Soblebel,ARB Jack Broadbent,EPA Mayor William Klelndlanet,City of Pe1m Springs David Ready,City of Palm springs Barry wallm"Itt Bubart Btitd Carol Coy Pang Mueller 9.*f FROM LATHAM & WATKINS OC #1 (MON) 9, 10' 01 16:56/ST, 16:4810, 4861483909 F 13 EXHIBIT B #3 FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16.56/ST. 16,48/NO. 4861463909 P 14 1;xhibit B Cumulative Air Quality Modeling Analysis A cumulative modeling analysis was conducted to evaluate the combined air quality impacts of the Ocotillo Energy Project (OBP), other recently permitted sources of air pollutants within six miles of the OEP site, and proposed new sources currently in the permit review process with the South Coast Air Quality Management District. A search for the new projects identified only one such source, (lie Indigo Energy Facility, which was permitted earlier in 2001 and commenced operation this summer. The Indigo plant is about 1.5 miles southeast from the Ocotillo site. Since no other new facilities within six miles were identified, the sources addressed in the cumulative modeling analysis included only the OEP and the Indigo project. The intent of the cumulative analysis was to determine whether the combined effects of the two new power plants would cause or contribute to exceedances of applicable ambient air quality standards. Modeling was conducted using EPA's ISCST3 dispersion model with the five years of onsite meteorological data described in the AFC for the evaluation of OEP impacts alone. The simulations for each averaging time corresponding to an applicable ambient standard used reasonable worst-case emission assumptions for both power plants. For purposes of calculating maximum hourly impacts, emissions for both plants included startups for all turbines, with full- load operation during the remainder of the hour. Emissions for the 3-hour, 8-hour and 24-hour averaging periods were assumed to include one startup hour and 2, 7 or 23 hours of hull load operation,respectively. Annual emissions were estimated based on: Ocotillo 3,500 total hours of operation,including 100 startups for each turbine Indigo 7,884 totals hours of operation,including 365 startups for each turbine The grids of receptors points used in the cumulative modeling were the same as described in the Ocotillo AFC, Table B-1 presents the results of the cumulative modeling. For each pollutant and averaging time,the highest predicted concentration due to the two power plants over a five-year simulation was assumed to coincide with the highest measured (background) concentration measured at the SCAQMD Palm Springs station during the last three years. Despite this extremely conservative approach,the predicted total concentrations in Table B-1 for all pollutants,except PMie, are well below the applicable ambient standards. The existing background level of 104 µglrn3 for PM10 is already above the applicable standard, The predicted contribution of the Ocotillo and Indigo projects to PM10 is only slightly above 2 µ)m3. As demonstrated in the AFC, the OEP's incremental contribution to PM10 does not exceed the SCAQMD significance level of 2.5 µglm3. Thus, the cumulative analysis indicates that the OEP project, in combination with other recently permitted nearby sources, will not cause or significantly contribute to an exceedance of the corresponding standards, 9�� FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16:57/S116:48/N0, 4861483909 P 15 Table 13-1: Ocotillo Energy Project Simple Cycle Phase Combined with Emissions from Indigo Energy Facility - Maximum Concentrations Predicted with ISCST3 I Maximum Cumulative Most Stringent Pollutant Averaging Time Concentration t3ackground Concentration Total Impact Ambient Predicted a (ug/m ) Standard (uglm') (ugim ) NOz 1 hour 202.361 131.000 393.901 470 Annual _ 0.263 34.000 34.263 100 PM19 hour 2.003 104.000 106.003 50 .. 24..-- Annual 0.065 28.900 28.965 30 CO 1 hour 436.633 3450.000 3886.633 23006 8 hour 36.002 2000-000 2036,002 10000 1 hour 26.236 78.600 104.836 655 sot 3 hour 4.508 78.600 83.108 1300 24 hr 0.340 91.700 92.040 105 Annual 0.026 5.300 5.326 80 Tabulated values are maximum concentrations predicted for simulations using five years(1987.1991)of oo-site meteorological data. FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 16:57/ST. 16 :48/NO, 4861483909 F 16 STATE OF CALIFORNIA Energy Resources Conservation and Development Commission Docket No. 01-AFC-08 In the Matter of: ) PROOF OF SERVICE Application for Certification ) for the ) OCOTILLO ENERGY PROJECT,PHASE I ) by Intergen North America LP ) I, Paul Kihm, declare that on September 10, 2001, 1 distributed copies of the attached: APPLICANT'S RESPONSE TO STAFF ASSESSMENT 0 via electronic transfer(e-mail)and by depositing copies with FedEx overnight mail delivery service at Costa Mesa.California with delivery fees thereon fully prepaid and addressed to the following: DOCKET UNIT CALIFORNIA ENERGY COMMISSION DOCKET UNIT,MS-4 Attn: Docket No. 01-AF'C-08 1516 Ninth Street,MS-4 Sacramento, California 95814-5512 Email;dockctQa entrgy.smt0.Ca,us © via electronic transfer(e-mail) and by depositing copies in the United States mail at Costa Mesa,California with fast class postage thereon fully prepaid and addressed to the following: APPLICANT Robert R,Hren Vice President,Development InterGen North America LP Two Houston Center 9009 Fannin,Suite 2222 Houston,Texas 77010 Emu1:thtea(�iatergeacom FROM LATHAM & WATKINS OC #1 (MON) 9. 10' 01 17:01/ST. 16:400, 4861483909 F 17 OCOTILLO ENERGY PROJECT,PHASE I CEC Docket No.01-AFC-08 PROOF OF SERVICE LIST Joan Heredia URS Corporation 130 Robin Hill Road, Suite 100 Santa Barbara, California 93117 Email:joan_horediaQorscotp,com Counsel for Applicant Michael J. Carroll,Esq. Latham&Watkins 650 Town Center Drive, 20th Floor Costa Mesa, California 92626 Email:micbact.cur0ll(a11v.com INTERVENORS Mark R. Wolfe,Esq. California Unions for Reliable Energy Adams Broadwell Joseph&Cardozo 651 Gateway Blvd., Suite 900 South San Francisco, California 94080 Email:mwolf(aladamsbroadweJl.com Harold Stone 2980 Plaimor Avenue Patin Springs, California 92262 E=il:hsWncl3@jmd.com Theresa Covey P. O.BOX 580461 North Palm Springs,California 92258 Email;theresa.eovey(alverizon.nd Joseph Guzzetta, City Manager City of Desert Hot Springs 65-950 Pierson Blvd. Desert Hot Springs,California 92240 Email:dhscnt %vahoo com Daryl Gilbreath *" Service via U.S.Mail only 2040 Calle Lileta Palm Springs, California 92262 2 ��� FROM LATAAM & WATKINS OC #1 (MON) 9. 10' 01 17;0AT. 16;400. 4861483909 F 18 OCOTILLO ENERGY PROJECT,PHASE I CEC Docket No.01-AFC-08 PROOF OF SERVICE LIST INTERESTED AGENCIES Ernest Quintana, Superintendent Joshua Tree National Park 74485 National Park Drive Twentynine Palms,California 92277 Email:chris_holbeck@nps.gov John Notar,Meteorologist Air Resources Division National Park Service 12795 West Alameda Parkway Lakewood,Colorado 80228 Email:iohn notar�s.aov David Ready, City Manager City of Palm Springs 3200 E.Tahquitz Canyon Way Palm Springs,California 92263-2743 Email:DavidR@mpalm-springa.ca.us Hope Sullivan,Principal Planner Planning Division City of Palm Springs 3200 E. TahquW Canyon Way Palm Springs,California 92263-2743 Email:hopes@ei.palm.springs.ca.us I declare undue penalty of perjury that the foregoing is true and correct. Paul Kihm 3 9AX �th Coast r-tir Quality Management District 1 � � ,�„ Z 1865 E. Copley Drive, Diamond Bar, CA 91765-4182 �� (909) 396-2000 • httpi//www.agmd.gov September 7, 2001 Mr. Robert L. Therkelsen Deputy Director Systems Assessment& Facilities Siting California Energy Commission 1516 Ninth Street Sacramento, CA 95814-5512 Subject: Ocotillo Energy Project(01-AFC-08) Dear Mr.Therkelsen: The South Coast Air Quality Management District (AQMD) has provided to the California Energy Commission (CEC) status reports of our Preliminary Determination of Compliance (PDOC) for the proposed Ocotillo Energy Project on July 20, August 10, August 15, and August 30, 2001. This letter is to inform you that we have now completed our analysis(including,but not limited to, the CO BACT determination) of the PDOC for the Ocotillo Energy Project(see attached Engineering Evaluation). Therefore, this letter and the attached Engineering Evaluation constitutes AQMD's official PDOC for the Ocotillo Energy Project. Please be advised that the PDOC or the Final Determination of Compliance (FDOC) do not constitute a Final Title V permit for Prevention of Significant Deterioration (PSb) under federal law (40CFR 52,21) for which the AQMD is the delegated agency, The issuance of Final Title V PSD permit is pending a completion of a public notice and comment period required by federal law. The AQMD will be conducting this public notification in parallel to the CEC certification process, Based on our review of the applications for Permits to Construct, we have determined that the project complies with all applicable requirements of AQMD Rules and Regulations with the following remaining issues needed to be resolved before the ,AQMD can issue final Permit to Construct for the project: 1. Offsets: The project site is located within a CO attainment area, thus, CO offsets are not required. The SOx emissions from this facility are below 4 tons per year, thus, according to Rule 1304 (d)(1)(A), the project is exempt from SOx offset requirements. The applicant has been informed that a complete offset package for the other three criteria pollutants (VOC, NOx, and PM,a) is necessary before final permits can be issued. Recently, the applicant has informed the AQMD that they intend to join the NOx Regional Clean Air Incentives Market (RECLAIM) program, which will allow them to seek NOx offsets through the RECLAIM program. The ;rkelsen -2- September 7,2001 applicant is actively pursuing to secure all necessary offsets. Although a final offset package has yet to be submitted to the AQMD, the applicant has informed us via a letter dated August 21, 2001, that they have acquired partial offsets for NOx, VOC, and PM10. 2. Modeling: AQMD staff has analyzed the emission data and corresponding modeling analysis to verify compliance with AQMD Rule 1303 (New Source Review), 1401 (health risk), and Regulation XVII (PSD). Staff has determined that the modeling analysis for the Ocotillo project meets our rule requirements. However, the Federal Land Manager has requested the applicant to conduct further modeling for PSD Class I increment and cumulative visibility and deposition analyses. Comments from the Federal Land Managers will be considered prior to issuance of the final Permit to Construct. I would reiterate that AQMD staff will continue to cooperate with the CEC staff to ensure expeditious review of the proposed project and any changes made to the proposed project as they become available in order to meet the project's deadlines. Staff will also stay in close communication with the National Park Service, United States Forest Service, and the applicant to resolve the remaining issues in a timely manner. If you any questions, please contact me at 909,396,2662, or Ms. Pang Mueller, Senior Manager, at 909.396.2433. Sincerely, GXf Mohsen Na xni; P.E. Assistant Deputy Executive Officer Engineering and Compliance MN:CM;TDV;am Attachment co: Robert Houslor,CEC Mike Schlebel, ARE Jack Broadbent,EPA Mayor willism Kleindienst,City of Palm Springs David Ready,City of Palm Springs Barry Wallerstoin Barbara Baird Carol Coy Pang Muellor �y Sep 04 01 03: 57p (310) 392 6693 p. 2 HUMAN HEALTH IMPACT REVIEW OF THE PROPOSED OCOTILLO ENERGY PROJECT (OEP) Final September 4, 2001 Charles E. Lambert, Ph-D, DABT Mary F. McDaniel, D.O., M.P.H., J.D. McDaniel Lambert Inc. 1608 Pacific Ave, Suite 201 Venice, CA 90291 310 392 6462 vaww.mclam.com � �� Sep 05 01 09s36a (310) 392 6693 p. 2 HUMAN HEALTH IMPACT REVIEW OF THE PROPOSED OCOTILLO ENERGY PROJECT (OEP) NOISING ONINNVId September 4, 2001 Charles E. Lambert, Ph.D, DABT 100Z 5 - d39 Mary F. McDaniel, D.O., M.P.H., J.D. 03AI3038 EXECUTIVE SUMMARY The proposed Ocotillo Energy Project(OEP) will be located on 54 acres of land approximately 8 miles northwest of the center of Palm Springs,Riverside County, California,and about one mile north of the 1-10 freeway. The facility will be sited one mile due west of an existing peaker plant,the 135 IvM Indigo Energy Facility,and adjacent to a small residential neighborhood along the western facility border(Valley View Ranchos). The nearest home is located approximately 2100 feet from the proposed plant site. Based on a review of the Application for Certification for the project prepared for submission to the California Energy Commission by URS,Consultant to Ocotillo Energy, we conclude that the facility will not represent a significant health risk to the community, As is typical of natural gas burning power plants,the projected emission levels of"toxic air comarninants"are very low and will have a minimal impact on overall local air quality. however,we are concerned about projected levels of nitrogen dioxide(NQ2), one of the"criteria pollutants"for which State and National air quality standards exist. Predicted peak NCz concentrations,while below those known to cause health offects, could nearly double current concentrations at the nearest residence. Due to zoning restrictions,no one currently lives at the fenoeline of the facility or is expected to in the future. It is important that this remain the case as there may be an increased risk of respiratory health affects from NO2 emissions in sensitive individuals at the property boundary. Maximum one-hour NOz concentrations, in combination with existing background concentrations,are very close to levels known to cause health effects in sensitive individuals, including children with asthma,and elderly individuals with respiratory disease. g � ?M13 Sep 04 01 03: 57p 1310) 392 6693 p. 3 Human Health impact Review of OEP WD2r'r;el Lam ert, Ir.r,. HUMAN HEALTH IMPACT REVIEW OF THE PROPOSED OCOTILLO ENERGY PROJECT (OEP) Contents of Review 1.0 Executive Summary t" 2,0 Introduction 3.0 Summary of Health Risk Assessment Completed for OEP 4.0 Criteria Pollutant Health Analysis 4.1 Carbon Monoxide Analysis 4.2 Respirable Particulate Matter(PM10) Analysis 4.3 Nitrogen Oxide Analysis 4.4 Sulfur Dioxide Analysis 5.0 Conclusions 6.0 Recommendations 7.0 Section References 7.1 Section 4.1: Carbon Monoxide Analysis 7.2 Section 4.2: Respirable Particulate Matter (PM10)Analysis 7.3 Section 4.3: Nitrogen Oxide Analysis 7.4 Section 4,4: Sulfur Dioxide Analysis Sep 04 01 03t57p (310) 392 eG93 p. s Hum„n Health !rirt>act Review of OEF MCnanioI t_arnbeN,. Inc. 2.0 Introduction The proposed Ocotillo Energy Project(OEP)will be located on 54 acres of land approximately 8 miles northwest of the center of Palm Springs, Riverside County, California,and about one mile north of the 1-10 freeway. The facility will consist of three natural gas-fired combustion turbine generators that have the capacity to generate a total of 456 megawatts(MW)of electricity. The facility would be sited one mile due west of an existing peaker plant,the 135 MW indigo Energy Facility. A small residential neighborhood is situated adjacent to the western border of the proposed facility(Valley View Rancho-),with the nearest home located approximately 2100 feet from the plant. However,most of the downwind area is zoned exclusively for energy and industrial use. McDaniel Lambert, Inc. was asked by the City of palm Springs planning Department to review the Application for Certification(AFC)for the proposed Ocotillo Energy Project. We were asked to give an independent analysis of potential health effects or air quality impacts on area residents that may be associated with the proposed facility. Under the limitations of a short review cycle,we,were only able to review selected, highly relevant Sections from the AFC prepared for the California Energy Commission (CEC)by URS (consultant to Ocotillo Energy)(6/011). Sections of the AFC reviewed include: ■ S' -tion 1.0 Executive Summary • Section 3.0 Facility Description ■ Section 5.15 HazMat Handling Section 5.2 Air Quality ■ Section 5.16 Public Health In addition to a review of the AFC,we reviewed a report by the Engineering and Compliance Division of the South Coast Air Quality Management District(SCAQMD), entitled EngineeringTvulzwtion(8/21/01). We also spoke with the Vice President for Development at Ocotillo Fnergy,Robert Hren, and with the AFC Project Manager at URS Corporation,loan hleredia. In reviewing documents and interviewing those involved in producing the documents,we concentrated on two major health issues: 1) Acute and chronic health effects related to toxic air contaminants released from -missions at tho Ocotillo facility. These effects are typically evaluated using air modeling results and a human health risk assessment. Results are presented in Sections 5.2 Air Quality and 5,16 Public Health of the AFC. 2) Acute and chronic health effects from criteria air pollutants_ These effects are typically determined by comparison with State and National Ambient Air Quality Standards(NAAQS). The SCAQMD also has Significant Impact bevels for some of the criteria pollutants. The criteria pollutants of concern for facilities of this 4 10A 0� Sep 04 01 03: 57p 1310J 392 6683 p. 6 Human Health Impact RLvievv of OEP McDaniel Lc ini.ierl Inc„ type and for which air quality standards exist are: Carbon Monoxide(CO); PMIO (particulate mater less than 10 um in give);Nitrogen Dioxide(NOZ),- and Sulfur Dioxide(SUZ). In subsequent sections,we review the health risk assessment for toxic air contaminants (Section 3.0)and the potential health impacts from criteria pollutants(Section 4.0). We conclude with an overall assessment of the AFC(Section 5.0)and recommendations for additional infoonation (Section 6.0). 3.0 Health Risk Assessment for Toxic Air Contaminants The human health risk assessment completed for OEP and described in Sections 52 and 5.16 of the AFC follows standard and accepted regulatory protocols. Air concentrations of toxic air contaminants from the combustion of natural gas at the facility were modeled using the approved regulatory model (ISCT3). Chemical concentrations were calculated for both short-term and long-tern exposures at the maximum point of impact at the plant boundary, The modeling was based on both regulatory approved natural gas combustion emission factors provided by the California Ah Resources Board(known as California Air Toxic Emission Factors CATEF)and the projected volume of natural gas throughput predicted for the facility. Three different kinds of potential health effects were calculated from the air modeling data; • Acute health effects--those effects likely to occur within minutes to hours of exposure to the highest possible concentration that could be emitted by the plant (under routine operating conditions). • Chronic health effects—those effects likely to occur after exposure for months to years to low level concentrations of chemicals emitted. • Cancer risk--those effects based on a lifetime of exposure to the chemicals. For cancer risk,a multipathway exposure is assessed- This multipathway analysis assumes that a person is exposed to a chemical,not only from air concentrations through breathing_ but also by swallowing chemicals from facility emissions that are: • deposited on the soil (also a potential source for dermal exposure); • incorporated into home grown produce that is grown in the soil; • found in dairy and beef products from domestic animals(who eat the plants and soil);and • found in mothers milk(infant exposure). Acute and chronic toxicity values and unit cancer risk tpotors for the individual chemicals have been developed by either the California Environmental Protection Agency (CaIEPA)or the U.S. Environmental Protection Agency(USEPA)and can be found at 5 94 y Sep 04 01 03s58p (310) 382 6693 p, 7 HUman Health ml,)act Review of OE.P McDaniel Lamb or1, lqc. the California Air Resources Board website. These toxicity values are used with the exposure data to determine the health risk. It should be noted that current standard risk assessment methodology does not provide toxicity values for the criteria,pollutants(NOx,SOx,and PM10); therefore,certain types of acute and chronic health,effects from this facility as determined by the risk assessment may be underestimated. With these exceptions, the full list of toxic air contaminants assessed are those that would be expected to be present in emissions from the combustion of natural gas, from cooling tower operations,and from the emergency diesel generator. The contribution of possible contaminants in the feed natural gas itself are not typically included in this type of risk assessment as they would be present at very low concentrations(at parts per billion concentration or less)and/or would be destroyed during the combustion process. In either case,they are very unlikely to cause health effects in the community, Risk assessment results derived for emissions from the Ocotillo Plant arc prescntod in Sections 5.2 and 5.16 of the AFC and include emissions from both the turbines and the cooling tower. Risks for the emergency diesel engine-driven fire pump were calculated separately as part of CEC data request. The total maximum cancer risk from all of these sources(0.51 excess cancers per million people exposed) is about half of the USEPA de minitms risk(one in a million), which is generally regarded as a safe level of risk. We would expect that with the inclusion of emissions from start-up activities and the natural gas-fired emergency generator the total risk may be slightly increased. However, the proposed facility will probably not add significant cancer risk (greater than the range of one to ten excess cancers per million people exposed)to any of the surrounding communities. For noncancer healtlh effects,the O1 P has an acute hazard index of 0.24 and a chronic hazard index of 0,06. These hazard indices are lower than the safe level of 1.0 and indicate a low acute and chronic health risk from toxic air contaminants. However, as stated previously,these calculations do not include the contribution of CO,NOx, SOX, and PM10 to both acute and chronic noncancer risk:. These criteria pollutants are addressed separately, 4.0 Criteria Pollutant Health Analysis Summary data for the maximum air concentrations resulting front facility emissions are shown in'rable 1, which is adapted from the information presented in the AFC in Section 5.2 Air Quality, In an assessment of this kind different exposure scenarios are usually assessed. These scenarios include a worst-case exposure,which uses fenceline modeling results, and a more realistic scenario for the closest location of an actual residont. For most of the criteria pollutants comparison to one-hour standards is appropriate based on the types of health effects that could occur. To determine the potential for health effects associated with the criteria pollutants,the projected concentrations are compared with State and Federal air quality criteria. These criteria are set at levels that are believed to 6 I?.IY7 Sep 04 01 03: 58p t310r 382 GGS3 p. 8 I luman Health Imp Xt Review of OEP {V1cDt nt".l Lambert. InG be protective of hurmin health for the most sensitive members of the population. However,there is currently concern,particularly for PM 10,but also for some of the other criteria pollutants as well,that health effects may occur at concentrations lower than the current air quality criteria. 4.1 Carbon Monoxide Analysis The carbon monoxide(CO)emissions from routine operations at the Ocotillo Plant will probably not cause any health effects. This conclusion is based on the CO air modeling that has been completed by the applicant, as well as currently accepted safe exposure levels for CO. The predicted maximum one-hour Co concentration(429 ug/m-see Table 5.2-24)resulting from Ocotillo's gas-fired turbines is around 40%of the SCAQMn allowed increase(1,100 ug/m), and 50 fold lower than the health protective Calilornia one-hour ambient air quality standard(23,000 ug/m'). The ambient air quality standard was developed to be protective of the most sensitive population (people suffering from coronary artery disease). Given the above analysis,the maximum concentration of CO produced from the facility is unlikely to have health impacts. Supporting hvidenee: Carbon Monoxide Health Effects information Carbon monoxide(CO)is a non-irritating,colorless, tasteless, and essentially odorless gas. CO causes harm by depriving the body of oxygen due to its greater affinity for bemoglobin. Carboxyhemoglobin (COlib)is the name of the complex formed by CO and hemoglobin;the:measurement of COlib in the blood is a good indicator of exposure. Symptoms of moderate CO poisoning(>50,000 ug/ms), such as might be experienced by drivers idling in rush hour traffic,include headache.,dizziness, drowsiness,and nausea. Much higher concentrations,such as might result from running;a car in an enclosed garage, or from operating malfunctioning indoor appliances that do not ensure complete combustion,can cause collapse,coma,and even death. The body systems most affected by CO are the ones most dependent on a constant supply of oxygen: the brain,the heart, and in pregnant women,the developing fetus. The most sensitive populations to CO exposure are those with reduced heart and lung function. According to the California Office of Health Hazard Assessment(OE1114A)the elderly population with coronary artery disease is the most sensitive population to the effects of CO overexposure. Other vulnerable populations at risk include fetuses and young infants,who are in critical stages of brain and nervous system development,and individuals with chronic bronchitis or emphysema. The current California one-hour ambient air CO standard of 23,000 ug/m3 is designed to be protective of the most sensitive population,those with coronary artery disease, and is si,rnificantly more stringent than the LISHPA standard of 40,000 ug/ms. ?46 Ye 7 Sep 04 01 03:58p 1310) 392 6693 p. 9 Human Health Impact Review of OEP McDaniel lambert, Inc. 4.2 Respirable Particulate Matter(PM10) Analysis The respirable particulate matter(PMIO)emissions from routine operations at Ocotillo are unlikely to cause any health effects in the surrounding communities. This conclusion is haled on comparisons of the results of PM10 air modeling by the applicant, with safe exposure levels for PIA 10,and levels known to cause toxicity. The predicted maximum 24-hour PM 10 concentration(1.94 ug/m3-see Table 5.2-24) resulting from Ocotillo's gas-fired turbines and cooling tower is less than the SCAQMD allowed increase(2.5 ug/m,),and 26 times lower than the 24-hour ambient,air quality standard(50 ug/m'). There is mounting epidemiological evidence that concentrations less than 50 ug/m' may cause health effects in sensitive populations. however,the maximum concentration produced from routine Ocotillo emissions is still significantly lower(1.94 ug/m')than the lower concentrations(approximately 20 ug/m')of PM 10 thought to potentially cause health effects in sensitive populations. Therel'ore,concentrations of PM10 due to plant emissions are unlikely to impact the health of anyone in the surrounding communities or to add significantly to existing high background concentrations. Supporting l:vidvnce PM10 Health Bffects Inforation Fine particulate matter(PMIO)originates from a number of different sources. However, the two major contributors are combustion operations and the transformation of gaseous pollutants in the atmosphere. Acute health effects from PM10 inhalation include an aggravation of bronchitis in adults and children with preexisting respiratory illness, small but significant changes in lung functioning in children,and immediate additional deaths of the elderly and of people with preexisting heart or lung disease if pollution levels are extremely high(e.g. London hog of 1952). Asthmatics and those with allergies may also react to PM 10 inhalation,particularly to sulfate particulates. Chronic exposure to PMI0 may cause damage to lung tissues, contributing to chronic respiratory disease,cancer, and premature illness and death. Symptoms of chronic obstructive pulmonary disease are correlated with ambient air particulate concentrations. Children in areas ofhigher particulate pollution seem to suffer from increased upper respiratory illnesses(e.g. colds,coughs)than do children in less polluted areas. There is some evidence to suggest that children in general may be more susceptible to the health effects of PMIO because of increased exposure (e.g. time outdoors,higher respiration rates)and other conditions(e.g. higher asthma rates,developing lungs), The present California Ambient Air Quality Standard(CAAQS) for PMl0 is 50 ug/m'for a sample gathered over a 24 hour period. The CAAQS for an annual geometric mean of 24 hour samples is 30 ug/m3. The CAAQ standards are set at these levels to"prevent excess deaths from short-term exposures and exacerbation of symptoms in sensitive patients with respiratory disease."However,there is increasing epideimiological evidence that the threshold for health effects for sensitive populations(elderly with preexisting conditions,children) from PM 10 may be closer to 20 ug/m'for an annual geometric 9 fA l Sep 04 01 03: 59p (3101 352 6693 p. 10 Human Health lrlip�ict Review cif UEF' Mcl)a nioi Lambert, Inc. mean of 24 hour samples. While a number of these epidemiological studies suffer from confounding factors(e.g, multiple pollutant exposure, lack of control for poor indoor air), the welght-of-the-evidence points to a concentration of somewhere between '20 and 50 ug/rn' as being more protective of human health than the current CAAQS,particularly for sensitive receptors, 4.3 Nitrogen Oxide Analysis Nitrogen Oxide(NOx)exposure peaks,measured as maximum one-hour concentrations, are an important factor to consider when evaluating potential NOx health impacts. ) xposurc peaks are important because a growing body of research shows that short-term exprvzores to higher concentrations can be more damaging than long-term exposures to lower levels. Therefore, even in areas where annual average emission levels are low,high one-hour peaks may have significant impacts on health, The one-hour maximum NOx emissions from,the Ocotillo plant occur at the fenceline of the facility where no one currently lives or is likely to live in the future. These concentrations are high and could potentially cause health effects in sensitive individuals only at this point of maximum exposure. This conclusion is based on the NO2 air modeling that has boon completed by the applicant, as well as accepted safe exposure levels for NO2 exposure. NO2 is commonly used as a surrogate for looking at the health effects of all of the possible NOx compounds as it is the most toxic oxide of nitrogen. The predicted maximum one-hour NO2 concentration(262A ug/nr)resulting from 0cotillo's gas-fin+d turbines is 13 fold higher than the SCAQhM allowed increase(20 ug/m)for non-attainment areas,and 50%of the one-hour ambient air quality standard (470 ug/m'), In combination with existing background concentrations(131,6 ug/m'),the une-hour total maximum (394 ug/m) is now close to the one-hour ambient air quality standard (470 ug/m'). Unlike the"safe"regulatory levels for many chemicals, there is not a large margin of safety build into the ambient air quality standard for NO„, In fact, the ambient air quality standard is the same as the air concentration that is thought to cause mild bronchoconstriction in a person who has asthma. Clearly,the ambient air quality standard is set at a level where possible health effects in the most sensitive sub-populations may be observed. The NO2 emissions from the Ocotillo facility could contribute substantially to local air quality right at the fenceline. While the one-hour maximum concentration(262.4 ug/m')produced from Ocotillo emissions is only half of the one-hour ambient air quality standard(470 ug/m'), in combination with background concentrations and NOx and SOx from the nearby I-10 freeway, emissions from the existing 135 MW indigo plant, and the addition ofonsite emergency generator emissions,total concentrations could be high enough to cause respiratory health effects in sensitive individuals living tight at the fenceline. Sensitive individuals are defined in this situation as asthmatic children or adults, or elderly persons with respiratory disew;e(e.g. chronic obstructive pulmonary disease). f#31D 9 Sep 04 01 03: 59p t3101 392 6693 p. 11 Human f ic;alth Impact Review of OEf' McDanuel Lambert, Inc. As shown in Table 1 maximum one-hour NOS concentrations could potentially double for the nearest resident with the facility operating. However, no health effects from NOx would be expected for any of the current nearest residents or anywhere where future residents are likely to be located given current zoning laws. Supporting Lsvidence: NO2 Health Effects Information The odor of NO,is detectable at 1-3 ppm, while mucous membrane irritation does not generally occur at concentrations less than 13 ppm. NO2 is a deep lung irritant that can damage the delicate cells lining the lungs. Controlled studies of normal subjects and mild asthmatics indicate that exposure to as low as 0,30 ppm(500 ughn3)NO2 for 30 minutes can induce bronchoconslrictiuu in the subjects with asthma. Other researchers have seen a decrease in forced vital capacity in asthmatics who were exposed to 0.30 ppm NO2 for 60 minutes during moderate exercise. However, NO2-induced changes in pulmonary function and reactivity in other asthmatic study populations have not presented consistent findings, Acute and subacute exposures to NO2 (at concentrations greater than 5 ppm) increase susecptibility to infection in experimental animals after challenge with respiratory pathogens(e,g. bacteria, viruses). Chronic animal exposures in the low ppm range(e.g. 2.0 ppm) foi durations of several weeks to years have resulted in changes in lung structure and function resembling emphysema and chronic bronchitis. Typical injury seen includes hypertrophy and hyperplasia of bronchial mucosa and thickening of the area through the bronehopulmonary junction to the alveolar duct. There are a number of epidemiology studies, including scvcial conducted in Southern California, which conclude that the current ambient concentrations of NOx in areas with significant air pollution cause statistically significant reductions in lung function growth in children. These studies also show that children who spend more time outside have larger deficits in lung function growth than children who spend more time indoors. The results suggest that exposure to existing levels of NOx, particularly in inland areas of Southern California, may lead to a reduction in maximal attained lung function,which occurs early in life,and ultimately to increased risk of chronic respiratory illness in adulthood- While these studies are compelling, some of them suffer from poor exposure measurement data, as well as the fact that multiple chemicals in addition to NOx arc likely present. 4.4 Sulfur Dioxide Analysis Tlie 802 emissions from the Ocotillo plant will likely not cause any health effects independent of other pollutants. This conclusion is based on the S02 air modeling that has been completed by the applicant as well as national ambient air quality standards set by the USEPA. The predicted maximum one-hour S02 concentration(26.2 µg/m3 or 0.0096 ppm)resulting frorn g+as.fired turbines is more than one order of magnitude less than the USEPA 24-hour national ambient air quality standard(383.67 µg/m; or 0.14 ppm), The national ambient air quality standard is just below the air concentration(548 10 o#r r/ Sep 04 01 03: 59p (310) 392 6693 p. 12 Haman Flealth Inpact Review of 0Ef McD_arriel Larnbeit. Inc. µg/ms)that has been shown to cause a mild bronchoconstriction in a person with asthma. The national ambient air quality standard has been set lower than level at which the most sensitive sub-,population (an asthmatic) would show Symptoms, However, the predicted peak S02 concentrations would contribute to background concentrations (26.2 µg/ml plus 78.6 µglm'), increasing total peak background levels by a very substantial 33%near the fenceline. Given the Similar mechanisms of irritant action, it is conceivable that the SOz Gould also have an additive effect un Qrc high onc- hour maximum concentrations of NO2. Therefore,S02 concentrations below the ambient air quality standard could still result in negative health effects for someone living right at the fenceline. At locations where people are currently living or may live in the future, no health effects would be expected, Supporting Fvidence SQ�Jjealifteffiects Information SO2 has a pungent odor that is detectable at 1370(0.5 ppm), linitation to eyes, mucous membranes,and skin will occur at concentrations of 6 ppm. S02 is generally absorbed in the nasal passages;however,when it does penetrate into the deep lung, it causes bronchoconstriction and a decrease in pulmonary immune response. Controlled studies have shown that in moderate asthmatics an exposure as low as 548 µglml(0.2 ppm) for several minutes during moderate exercise can induce bronchoconstriction. Chronic animal exposure has shown that,with few exceptions, S02 does not produce observable adverse effects at concentrations lower than 20 ppm. Some human epidemiological studies suggest that decreased pulmonary function and increased mortality may be associated with chronic exposure to S02 concentrations in the 274 µg/m3 range(0.1 ppm). 5.0 Conclusions The proposed facility does not represent a significant health risk to residents currently living near the plant, llowever,there may be an increased risk of respiratory health effects from NOx emissions in sensitive individuals(e.g. children with asthma)is the unlikely event that someone was living right at the fenceline of the property. This is a highly unlikely occurrence given that the maximum concentrations modeled are worst- case and that no one currently lives at the fenceline or will in the future given current zoning. Our specific conclusions are the following: 1) "Toxic air contaminants"(non criteria air pollutants)emitted from the facility will probably not have a significant effect on local air quality or the health of nearby residents. "Phis is typical for natural gas burning power plants,which have very low emissions of toxic air contaminants, 11 ftf r� Sep 04 01 03: 59p t3101 392 6693 p. 13 Humes Health Impact Review of Ut=;P M(Daniel h.arnb erl. Ine. 2) Criteria pollutants(CO,PMI0, NOx, $Ox)emitted from the facility are below concentrations thought to cause health effects at any location where local residents currently live or are likely to live in the future. 3) The maximum one-hour NO2 concentrations at the closest actual resident could potentially almost double from current background concentrations when the plant is in operation,but would still be below concentrations,known to cause health effects 4) The maximum one-hour NO2 concentrations at the proposed facility fenceline,in combination with existing background concentrations,are very close to concentrations suspected of causing health effects in sensitive individuals(e-g. asthmatic children or adults,or persons with respiratory disease). 6.0 Recommendations Based on our review of Sections 1.0,3,0,5.15,5,16,and 5.2 of the ACF, we have some suggested recommendations: 1) Use existing cleaner technology to further reduce I-hr maximum NOx concentrations at the fenceline, 2) Monitor air quality in the neighborhoods immediately adjacent to the proposed facility while the plant is in operation. We feel that either addressing recommendation#1 or providing more information(tf2) will help to further address community concerns about the potential health impacts associated with emissions from the proposed Ocotillo Energy Project. r4i 12 Sep 04 01 04: 00p (310) 392 6693 p. 14 Human. rleallh Impact Review Of CIEP McDaniol Lamk;e!'t, Inc. 7.0 Section References 7.1 Section 4.1: Carbon Monoxide Analysis Allred,E., et al. Short-mrm Fffrees ofY'arhon Monoxide on the exercise per/ormance of Subjects with Coronary Artery Disease, New England J. Med, 321:1426- 1432.1989, Costa,U.L. and Amdur, M.O. Air Pollution. In (,assareit and Doulls 7 )xicolo;y. Klassen, ed. McGraw-Hill. p. 878. New York, 1996. Kleinman, M. Carbon Monoxide : Fvalualion of'Current Califi)rnia Air Qualily Standards With Respect. to Protection of!'hildren.Prepared for C:ARB and OBI-111A, September 2000. United States Environmental Protection Agency(USEPA). (.:arbors Monoxide Criteria Document. Washington,DC. 1991, 7.2 Section 4.2: Respirable Particulate Matter(PM10) Analysis Atkinson, R.,ct al. Short-term Associations Between Linergency Hospital Admissions for Respiratory and C.`ardlovascular Disease and Outdoor Air Pollution in London. Arch. Environ. Health. 1999, 54:398411, Norris,Ci. Vivits for Children in Seattle. Environ. Health Perspect. 1999; 107:489-493. Thurston, G, .Particulate Matter and Su jale:1.valualion qJ the current C'ahfornia Air Quality Standards with Respect to Protection(f'Children. Prepared for CARB and 01;HHA. September 2000. United States Environmental Protection Agency(USE-PA). Particulate Matter Criteria D(.xument, Washington,DC. 1995. 7.3 Section 4.3: Nitrogen Oxide Analysis Bates,D.V. Observations on asthma. Environ. Health Perspect. 1995, 1 W: 243-247, Bauer, MA.,et al. Inhalation of 0.30 ppm nitrogen dioxide potentates exercise-induced bronchospasm in asthmatics. Am. Rev, Rcspir. Uis. 1986; 134: 1203-1208. Freeman,G , et al. Pathogenesis of the nitrogen dioxide-induced lesion in the rat lung: a review and presentation gf new observations, Am. Rev. Respir, Dis- 1968; 98: 429-443. 11 ldpow V01 Sep 04 01 04: 00p (310) 382 6693 p. 15 Hainan I{E:alth li;ipact Review of OE_P McDaniel 1 arnbert. Inc Gauderman,W.J.,et al.Association between air pollution and lung,function growth in Soulhern California children. Am, J. of Resp. and Critical Care Med. 2000, 162. 1383-1390. Koenig,J.Q, et al, The pulmonary effects of ozone and nitrogen dioxide alone and combined in healthy and asthmatic adolescent subjects. Toxicol• Ind, Health.1988;4 (4): 521-532. Koren,H•S• Assaeialions between criteria air pollutants and asthma. Environ, Health Yerspect. 1995; 103 (6): 235-242, Linn, W.S.,et al.Air pollution and daily hospital admissions in metropolitan Los Angeles. Environ, Health Yerspect. 2000; 108(5):427-434. McConnell,R•,et al.Air pollution and bronchitic symptoms in Soulhern Galffarnia children with asthma. Environ. Health Yerspect. 1999; 107(9): 757-760. Market, R.F., et al.Short-term expvsure!o nilrogert ioxide enfutnc-es suscept ihil i[y to murine respiratory mycoplasms and decreu.,res intrapulmonary killing of Mycoplasma pulmonis. Am. Rev. Rcsph. Dis, 1989; 140:502-512. 7.4 Section 4.4: Sulfur Dioxide Analysis 13aLncs,J.R.,at al. ,Symptomatic bronchoconstriction gfter short-term inhaG,uon of'.sulfur dioxide. Am. Rev. Respir. Dis. 1987; 136: 1117-1121. Bates, D.V. Observations on asthma. Environ. Health Yerspect. 1995; '103: 243-247. Detels, R., et al. The UCLA population studies of(.'ORI):X. a cohort study q f changes in respiratory function associated with chronic exposure to,50x, NOx, and hydrocarbons. Am. J. of Public Health, 1991; 81 (3): 350-359, Gauderman,W.J.,et al.Association between air pollution and lung,fsnction growth in Souihern California children. Am. J. of Resp. and Critical Care Med. 2000; 162: 1383.1390. Florstman, D.,ct al. Airway sensitivity of asthmatics to sv1jiir dioxide Toxicol. Ind. Health. 1986;2: 289-298, Koren, I I.S. Associations between criteria air pollutants and asthma. linviron. Health Yerspect. 1995; 103 (6):235-242. Linn, W.S.,et al, Respiratory effects gfsulfur dioxide in heavily exercising aslhmalics. Am. Rev. Respir. Dis. 1983; 127: 278-283. 14 Oxor Sep 04 01 04: 60p (310) 392 6693 p. 16 Human Health Impact Review d OEP McD Anlel Lambert, Inc. Linn, W.S.,et at. Replicated dose-response study of sulfur dioxide effects in normal, atopic, and asthmatic volunteers. Am. Rev. Respir. DiS. 1987; 37:118-123. National Institute for Occupational Safety and Health. Criteria for a recommended standard occupational exposure to su fur dioxide. 1974: 16,20-26, Sheppard,D. Mechanisms of airway responses to inhaled sul fur dioxide. In. Palhophysiolo�y and treatment of inhalatlon injuries, Loke,J. ed. New York, NY: Marcel Dekker, 1988: 49-66, wvsep iS Sep 04 01 04: 00p (310) 382 6683 p, 17 Human Health Impact Review of OFF' McDeartiel Lamk)ert, Ina TABLE 1: MODELED MAXIMUM PROJECT IMPACTS PLUS BACKGROUND Max Project Max Background Total State Federal SCAQMD Averaging Impact Residential Concentrations Impact° Standard Standard Significance Pollutant Time M91m3) Impact' 3 Mglm3)- g/m3) „ (Mgl0) (N !9 m3) Level tJ 1m) NO2 1-hour 262.4 103.2 131.6 394.0 470 -- 205 c0 1-hour 429,E 25.1 3,450 3,880 23,000 40,000 -- 502 1-hour 26.2 10.3 78.6 104.8 655 -- 1,100 PMte 24-hour 1.94 0A 104 105.94 50 150 2.5 Proposed facility in normal fill-load operation or during startup;maximum Impact is near the fenceline for Noz and SOz, R Max concentration at Valley View Ranchos, neAmsi resident. 3 Background concentrations are maximum values in the last three years at Palm Springs SCAQMD monitoring station. £02 background data are from the RCAOMD Riverside-Rubidoux station. Max Total Impact is Max Project Impact and background concentration combined. s SCAQMD 1-hour Significant Impact Level rescinded for NO2 attainment areas on April 20,2001 1,4.s' 7 16 Sep 04 01 04: 00p 1310) 392 6693 p. 18 Human Health Impact Review of the Proposed Ocotillo Energy Project (OEP) Mary F. McDaniel, DO, JD, MPH Charles E. Lambert, Ph.D., DABT McDaniel Lambert, Inc. Calculated Cancer Risk from Air Toxics 1.2 4� cn 0.8 OA 0.2 Ace Chronic Safe Lovo Hozard Fencelm, fcnc cline, 0 23000 a, woo Mt 3UQO K 2(100 1000 B,i,.korOLil)d Ncjrezl F,,,Jl,Ty AMb,,nT Air Rosldtpc,� Fencchllc Standard Sep 04 01 04: 01p (310) 39E 6633 p. 20 Respirable Particulate Concentrations (24 hr.) Sulfur Dioxide Concentrations Sep 04 01 04: 01p (310) 392 6993 p. 21 Nitrogen Dioxide Concentrations (1 hr.) 1 d 9-04-201 2: 10PM FROM TKC PLANNING DEPT. 900 653 2214 P. 2 AIR QUALITY .ANALYSIS REVIEW OCOTILLO ENERGY PROJECT (OEP) PALM SPRINGS, CALIFORNIA Prepared for City of Palm Springs Attn: Douglas R. Evans/ Dir. Dept. of Planning & Building 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Prepared by: Hans D. Giroux, Senior Analyst Giroux & ,Associates, Irvine,CA Date: August 31, 2001 494 9-04-201 2: 10PM FROM TKC PLANNING DEPT. 909 653 2214 p_ 3 Introduction The ocotillo Energy Project (OEP) is a proposed electrical generating facility located on 54 acres approximately e miles northwest of the City of Palm Springs, The project will be constructed in phases in order to provide electrical power to the California electricity market as quickly as possible. The ,facility will be constructed in two phases. OEP Phase I will consist of a nominal 456 megawatt (MW) natural gas fired simple cycle generating facility. Phase I entails three natural , gas fired, General Electric F-Class combustion turbine generators operating in simple cycle mode. OEP Phase II will modify the project for a combined cycle operation. In response to the Governor s Executive order D-26-01, the subject project is proposed to be operational in a simple-cycle mode for the summer of 2002 . Combined cycle operation is planned to be initiated by the first quarter of 2004. The OEP will be owned and operated by Ocotillo Energy, LP. Facility Operation The turbines will use dry low nitrogen oxide (Nox) combustion system to minimize air emissions. Evaporative cooling will be used to improve efficiency and output of the facility. A wet-surface air cooled condenser heat exchanger will provide cooling for the simple cycle equipment and a place to collect the evaporative cooling discharge will be provided via a evaporative pond located in the northeast corner of the subject property. The evaporation pond is approximately ten acres in size and will be constructed in accordance with all Regional 'Water Quality Control Board standards_ Natural gas will be the only fuel utilized by the three turbines. Electricity generated by the facility will be delivered to the existing SCE Devers Substation located north of the subject property. Process water will be supplied to the facility from two groundwater wells drilled onsite into the Garnet Hill Sub-basin, Sanitary wastes will be directed to a skid mounted wastewater treatment facility. Solid wastes will be periodically transported off-site. This facility will be constructed and operated without ratepayer support. The project will supply capacity and energy to California' s restructured electric market. The owner anticipates that the electricity generated from this facility will be sold to the California Independent System Operator (ISO) , the California Department of Water Resources (DWR) , or to large wholesale customers. The facility will utilize up-to-date technology that is considered state-of-the-art in California and other locations around the country. The facility will implement Best Available Control Technology (BACT) to minimize gas turbine emissions, Page 1 of 13 �� 9-and-201 2: 11PM FROM TKC PLANNING DEPT. 909 GS3 221A P. d Site Description The site vicinity is extensively developed for wind energy. Access to the site will be available from Z-10 via Highway 62 and Dillon Road Study Objectives The proposed facility has been documented to meet all regulatory requirements for a simple cycle electrical generator as they relate to air quality and public health. However, in the rush to address the electrical energy crisis in California, the proposed facility will initially sacrifice considerable energy and pollution efficiency to make electricity available as soon as possible. This sacrifice will be temporary until the plant is upgraded to a more efficient combined cycle operation. The regulatory analysis is highly technical and can not be well understood without considerable technical background. The questions that the public and elected representatives have raised center around whether the plant can meet complex regulatory requirements, but possibly still adversely impact the health and welfare of the Coachella Valley community. The Palm Springs City Council thus requested that an independent third-party review be conducted of the analysis record with a critical focus on those issues most relevant to local residents and visitors. These issues included - - Possible reversal of the air quality progress made in the last several decades, - Inadequately documented health impacts from pollutants with clean air standards or from airborne toxic$, especially upon an older and more pollution sensitive resident and visitor population, and, - Undocumented visibility degradation that might degrade the highly desirable ambiance of the valley. The documents reviewed in this analysis were primarily the technical back-up for the Application for Certification (AFC) before the California Energy Commission (CEC) , and the SCAQMD Determination of Compliance (DOC) with all its applicable rules and regulations. Page 2 of 13 III�� 9-04-201 2: 11PM FROM TKC PLANNING DEPT. 909 GS3 2214 P. 5 By way of perspective, in 1980-82, the City of Palm Springs experienced almost 50 days per year when the one-hour federal ozone standard was violated in the city. In 1997-99, the number of violation days was down to only four days per year. In 1989, over 25 percent of all days had particulate (PM-10) levels that exceeded the California 24-hour standard. In 1999, the number of violations was down to 5 percent of all days. Although the Palm Springs area is still a "non-attainment" area for ozone and particulates, the frequency and magnitude of violations of clean air standards has dramatically decreased over the last two decades. Any new substantial addition of air pollutants would intuitively be counter-productive to that desirable air quality trend. Air Quality Impact Analysis A wide range of analysis was required to demonstrate the insignificance of air quality impacts due to the proposed project. The site is located in the Salton Sea Air Basin (SSAB) . The SSAB includes the Coachella Valley and all of Imperial County. The Riverside County portion of the SSA$ is under the supervision of the South Coast Air Quality Management Distriot (SCAQMD) . The SCAQMD has jurisdiction over air quality permitting and compliance activities for stationary sources within the vicinity of the project site. In addition, the SCAQMD shares permitting and compliance review with the California Energy Commission since this facility will generate over 50 MW. Each agency has assessed the project's emissions of unhealthful or potentially toxic pollutants from the turbines to nearby residences. Pollutants that will be emitted from the facility turbines include NOx, CO, VOC, S02, and PM10. Air quality in the SSAB meets the federal and state standards for CO, S02, and NO2 . However, this area is considered nonattainment for both federal and state ozone, and the state BM10 standards. In order for the plant to receive an air pollution agency (SCAQMD) permit to operate, there may not be any significant air quality impacts. In order for the CRC to process this project through its "fast-track" process, there may not be any significant environmental impacts within any environmental discipline. If these agencies issue the appropriate permits for the proposed facility, an analysis will have been completed that verifies that there are no significant public health impacts. Page 3 of 13 4?*4&Vr 9-04-201 2: 12PM FROM TKC PLANNING DEPT. 909 653 221d P. 6 Except for a few minor "clean-up" issues, the Ocotillo Energy Project (OEP) has met the regulatory requirements which define 'Inc) significant impact" according to agency standards. This third-party technical review is a critical analysis of the air quality and public health data presented in the 0EP application for certification (AFC) . This review is designed to provide a summary of the findings, and focus on those project air emissions issues of greatest concern to area residents and visitors from hopefully a more understandable and less technical perspective. 1. Are Air Quality Impacts Adequately Mitigated? it is acknowledged that the project will have some air quality impacts. However, if project-related emissions exceed a very small level of emissions for any air contaminant, and if that pollutant is a "non-attainment" pollutant, two analyses are required. Atmospheric dispersion modeling must be performed to verify that air quality levels are not locally worsened by more than an allowable small increment, and secondly, an equivalent or even greater amount of emissions must be reduced upwind of the proposed facility (offsets) . The applicant is still working on completing the offset package, but the plant can not go on line until all offsets have been attained. Most of the offsets are proposed to be obtained from the Los. Angeles Basin because the Coachella Valley has few emissions sources that could provide adequate off-sets. This is especially true for NOx where off-sets are expected to come from the areas around the Los Angeles or Long Beach Harbors. Some of the particulate offsets might be obtained by paving dirt roads. While it might seem counter-productive to offset new emissions in the Coachella Valley with reductions some 100 miles away, those emissions reduced in the Los Angeles Basin would eventually blow into the valley in the form of photochemical smog. Because smog is a regional phenomenon, NOx offsets in the upwind airshed do indeed have a tangible air quality benefit in downwind communities. As noted below, reductions of aged pollutant precursors far upwind may have a greater air quality benefit that impacts from having equivalent amounts of "fresh" NOx released at the project site. Trade-offs (offsets) between combustion particulates versus roadway dust are less desirable because the health effects of the two types of sources are not necessarily identical. Particulates are also gradually removed from the air such that pollution controls for PM-10 outside the Coachella Valley may not have a corresponding benefit near the area of potential power plant PM-10 impact. It would thus be most beneficial to trade off one set of combustion PM-10 particulates for other combustion PM-10 within, or close to the valley. if not enough offsets are available, and unpaved road control is selected as an option, it would be most beneficial to conduct the paving on unpaved roads in the Coachella Valley rather than in other parts of the air basin. Page 4 of 13 9-ad-201 2: 13PM FROM TKC PLANNING DEPT. 909 653 221A P. 7 Dispersion modeling was conducted for plant-related air pollution emissions using universally accepted modeling protocols. This analysis verified the lack of any significant air quality impact directly downwind of any plant emissions. The OEP air quality impact analysis correctly implemented these protocols. That conclusion was confirmed by SCAQMD staff after several weeks of detailed review, and again verified by this independent analysis. The combined mitigation of regional NOx reduction and strongly recommended local PM-10 off-sets, plus the lack of any significant plant plume impact, meet all public health protection standards. 2. Does the project Represent an Adverse Health Risk to Residents of the Coachella Valley? The proposed project will certainly be a significant source of air pollution in the valley. A simple cycle gas turbine (basically a really big jet engine) burns fuel inefficiently, and the extreme exhaust temperature precludes use of efficient pollution control devices. The AFC application shows peak hourly Nox emission levels will be 60 pounds per hour per turbine, or 180 pounds per hour for all three units. This is the same level of Nox air pollution that 10, 000 vehicle trips per hour, each 10 miles long, would create. If the plant (3 units) runs at 100 percent load for 12 hours, it would release around one ton of NOx. According to the California Air Resources Board, the daily valley-wide Nox emissions are 25 tons per day. The existing NOx air pollution burden is therefore equivalent to 25 proposed power plants. The project will add one more to the regional burden. Annual NOx emissions could be as high as 315 tons per year (0.86 ton per day) if all three turbines ran at 100 percent peak output for every allowed hour of annual operation. The probable demand for electricity from this "peaker plant" will be lower than its theoretical maximum output because simple cycle plants are not highly energy efficient, and thus have greater generating costs. Even with somewhat lower emissions than the maximum potential to emit, there are no similar major NOx emitters in the Coachella Valley. Only two facilities in the Salton Sea Air Basin emit more than 100 tons of Nox per year, and they are both in Imperial County (IID Steam Plant, E1 Centro - 415 tons/year and Holly Sugar, Srawley - 210 tons/year) . Until the oEP is converted to a combined cycle plant, it will likely be one of the "high emitting facilities" (>100 tons/year) in the state/basin inventory. Page 5 of 13 3fo; 9-ed-201 2: 13PM FROM TKC PLANNING DEPT_ 909 GS3 2214 P. 8 The proposed project is thus clearly a major source of air pollution. The critical question is whether the addition of this level of pollution would exacerbate the already sometimes degraded air quality of the region, and would there be an increased health risk to Coachella Valley residents. In answering this question, one should note that there are two generic types of air pollutants. Some pollutants are emitted in their already unhealthful form (called "primary pollutants") . Primary Pollutants include carbon monoxide, sulfur oxides, the NO2 component of NOx, and some particulate matter, especially dust. A detailed modeling analysis was performed for all primary pollutants consistent with SCAQMD requirements. No primary pollutant impacts were found that exceeded SCAQMD significance increments. The maximum predicted NOx air quality impacts occur at the OEP eastern property line during high wind events. Nobody lives near this location. The calculation also presumes that all Nox is instantaneously converted from mostly NO (about 90%-) for which there is no clean air standard to NO., which does have a standard. The worst-case prediction does not exceed the State NO, standard even under the instantaneous conversion assumption, and it occurs far from any residence. This modeling analysis was expanded to include more communities within the downwind impact zone. The air pollution increments in various population centers for primary pollutants were almost undetectable. The maximum Nox exposure at the nearest residence west Of OEP was calculated to be less than 50 percent of the plant fenceline maximum which already did not exceed the ambient air quality standards. The NOx impact at any more heavily populated areas of the valley was only a tiny fraction of the plant fenceline maximum. Impacts, from "primary pollutants" will be less than significant with a large margin of safety. If any adverse health impacts were to occur, it would be from "secondaryr' pollutants. These are the pollutants that require additional transformation to reach their most unhealthful state. Photochemical smog (ozone) is the most notorious secondary pollutant in Southern California, The smog formation process involves the conversion of NO emitted from the stack to NO, by absorbing sunlight, and then the combination of NO, and reactive organic gases to create ozone. The plant will emit large amounts of NO (NOx is almost all NO when first released at the stack) , and there is abundant sunlight in the valley. However, the plant will add only very small amounts of ROG to participate in this reaction. Smog formation impacts will thus be mainly controlled by the plant's ROG emission rate which is only 1/3oth of the NOx rate. The plant will generate substantial quantities of one smog precursor, but not the other. Page 6 of 13 '//l�91 9-Od-201 2: 1APM FROM TKC PLANNING DEPT. 909 GE3 221d P_ 9 The ozone formation process also includes a very aggressive competing chemical reaction where NO combines with ozone to produce No. and 02. This process is called "ozone scavenging. " Until is was found the CFCs are the reason for the "ozone hole" in the stratosphere, NO scavenging from high altitude aircraft was believed to be the dominant reaction, and why SSTs should not be developed. Within the dominant zone of power plant plume impact, the plant NOx emissions will paradoxically initially remove smog (ozone) and create clean oxygen. Within the first 5-10 miles downwind of the plant out to perhaps as far as Desert Rot Springs, there is actually a temporary ozone suppression process. The formation of "new" ozone kicks in thereafter and finally becomes dominant, but not until the plant emissions are highly diluted and far downwind. The plant will therefore not exacerbate the ozone non-attainment status because: (1) There is much less ROG (VOC) than Nox emitted to "fuel" the smog formation chemical reaction, and, (2) The large amount of NO will initially suppress ozone levels until the exhaust emissions have traveled far downwind. The airshed also violates standards for particulate matter (PM-10) . Particulate matter emissions have been modeled as primary pollutants, and their incremental contribution to the overall PM-10 exposure is well below significance thresholds and only marginally detectable. The impact analysis does not directly analyze the possible secondary formation of particulate matter from the gradual conversion of NOx to nitrates which are often almost microscopic in size. This conversion is included in the visibility impact analysis under review by the National Parks Service, but the health effects of such conversion are minimal. The most common micro-nitro-particulate that is formed is ammonium nitrate. This is the same material that is applied to golf courses for green lawns. Given that the air coming into the valley already contains a substantial quantity of this material, and that much larger amounts are present on the numerous golf courses in the region, it is not believed that the nitrate formation associated with power plant Nox is significant . The chemical particulate formation process is slow, and with good daytime ventilation when the plant will be running, any substantial conversion of gaseous NOx to particulate nitrate will occur on a much larger regional scale than within the Coachella Valley itself. Because the creation of these tiny particulates degrades visibility, it is more of an aesthetic/visibility issue for residents or visitors or surrounding public lands rather than a public health issue. Page 7 of 13 00(of 9-and-221 2: 1APM FROM TKC PLANNING KEPT. 999 GS2 221A P. 10 3.Has the Impact Analysis Been Conducted Using State-of-the-Art,and Conservative (Overpredictive) Analysis Procedures? Analysis guidelines prepared by EPA, CARS, SCAQNID, etc. leave little leeway for creative data manipulation, and they almost always err on the side of conservatism. There is a recurrent paper trail that verifies that the analysts coordinated input data selection with the 5CAQMD, and that the maximum legally allowable emissions were assigned to project activities. There are well established processes in place to insure that the plant adheres to these limits. The results of the air pollution dispersion modeling showed the following results in comparison to the appropriate annual clean air standard and published sCAQmD significance thresholds: Avg. Ambient Signif. Ocotillo Pollutant Time Standard Increment Impact NOx Annual 100 ig /m3 1 ig /m3 0 , P8 ig /m3 PM- 10 Annual 30 ig /m3 1 ig /m3 0 . 05 lg /m3 S02 0 . 006 i /manual 80 ig /m3 None g Short-term exposures are equally below any significance increment, and far below the applicable clean air standard. Air toxics risk assessment modeling used equally conservative input assumptions (a healthy person living outdoors for the next 70 years at the fenceline of the power plant without ever leaving or even going inside their residence) . Their air toxics exposure risk under such highly implausible assumptions is still a de minimis risk. These calculations are based on guidelines prepared by the California Air Pollution Control Officer's Association (CAPCOA) which are the standard analysis protocols for all California Health Risk Assessments (HRAs) . They include toxics intake routes for inhalation, gastric ingestion, dermal absorption, mother' s milk, and crop uptake, among other human intake pathways- With substantially less-than-significant impacts even as close as the plant property line, the air toxics exposure to any valley residents or visitors where people actually live, recreate, shop, etc. is far below the already acceptable plant fenceline risk level . Page 8 of 13 70 9-04-201 2: 15PM FROM TKC PLANNING DEPT. 909 653 2214 P. 11 4. Is the Project Sited in a Location to Minimize Air Pollution Impacts? The optimum location for siting power plants is in an area where atmospheric mixing is strongest and the downwind population is low. Mixing is best when winds are strong and inversions are deep. Pollution levels vary inversely with wind speed. One unit mass of air pollution mixed into a volume of air moving at 20 mph will be twice as diluted than if the air was moving at 10 mph, and four times as dilute as a 5 mph air mass. Average wind speeds at the proposed project site are 2 .5 times stronger than at the Palm Springs Airport • From a meteorological (and population) perspective, a Coachella Valley power plant is best built near the pass to use the strongest winds for emissions dilution_ Stronger winds can cause power plant exhaust plumes to bend over more quickly, and thus increase the ground level concentration near the source. However, there are few people living downwind near the plant that would be affected by this more rapid bending of the hot exhaust. At farther distances from the plant, any difference in plume height becomes inconsequential. Plant siting is thus optimized meteorologically because the high winds create much better mixing than for a plant location in a more wind-sheltered location. Prevailing wind directions will normally keep the plant exhaust emissions well north of I-10. While the population density north of I-10 is lower, there are obviously pollution-sensitive residential and recreational uses downwind of the plant that merit maximum air quality protection. However, the plume trajectory will be across a relatively low population density within a high wind zone that creates maximum natural dilution. Any possible negative effects of high winds due to reduced plume rise occur within the first mile or less of transport • Any negative plume rise loss effects are eliminated by the absence of residences within this near-field plume impact zone. Because many possible "problem" air pollutants are secondary pollutants that require several (2-3) hours of chemical conversion, the primary zone of potential impact is 20-30 miles away (at 10 mph average daytime wind speeds) . Many diluted fragments of plant emissions will be in the foothills of the valley before substantial chemical conversion is completed. This project would have far more serious possible air quality consequences for valley residents or visitors if it were built in Banning than at its proposed location. Although the east end of the Coachella Valley might be slightly preferred meteorologically, the proposed location is certainly on the plus side of the scale in terms of siting alternatives. Page 9 of 13 �� �/ 9-04-201 2. 16PM FROM TKC PLANNING DEPT- 909 653 2214 P, 12 S. Are there Toxic Air Emissions Risks Associated with this Project to Area Residents? Natural gas combustion releases trace amounts of a variety of complex organic molecules. Natural gas is a "clean" fuel containing few complex hydrocarbons. While perhaps 99. 99 percent of such non-methane material is destroyed during combustion, a small amount escapes complete destruction. Some of these pollutants are carcinogenic or have other adverse health effects. These pollutants include formaldehyde, benzene, toluene, xylene, etc. However, the total hourly emissions of gaseous toxic pollutants for all three units will be 0 .3 pounds per hour. These emissions will be within a very hot (1200 degree) exhaust plume that will be diluted to a tiny fraction of its original concentration by the time it reaches the ground far from the release point , Heaver metals are also contained in the cooling water which may be released into the air from evaporation. A very detailed risk assessment has been performed from air toxics released by plant operations. The risk assessment uses standard analysis procedures recommended/approved by the SCAQMD. An excess individual cancer risk from all air toxics of less than one in one million (0. 000001) is considered a de minimis risk compared to the normal human cancer risk of 300, 000 in a million. The predicted excess cancer risk at the plant fenceline of the project site is 0. 34 in a million. The source of this risk is as follows: Chromium in cooling water - 98. 01 Carcinogenic combustion byproducts - 113% Other metals in cooling water - 0 .7% Since there are no receptors at the fenceline, the risk calculation was performed at the nearest residence, again with SCAQMD approved methods. The worst-case exposure to any person, assuming this person lives outside on their front porch for 70 years, 385 days per year, 24 hours per day, is less than 0 . 01 in a million. Health risk clearly is insignificant from air toxics emissions even if they sound ominous within the project air toxics emissions inventory. Page 10 of 13 9-04-201 2: 16PM FROM TKC PLANNING DEPT. 909 GS3 2214 P. 13 6. What Are the Secondary Atmospheric Environmental Impacts from this Project? Federal agencies require that secondary atmospheric impacts be evaluated under an umbrella designation of "air quality related values, " or AQRVs. 'these include deposition of pollutants on soils or vegetation, airborne pollutant uptake by plants, and visibility and haze impacts due to light scattering effects• Deposition effects are shown to be minimal, and airborne uptake levels are generally below those levels considered as injurious to vegetation. Visibility is a critical issue within the Coachella Valley because bright sunshine and good visibility are important characteristics of the ambiance of the entire region in terms of tourism and resident attractiveness. Visibility is normally measured by how far one can see with the naked eye. However, with mountains surrounding the valley, visibility deterioration may not preclude seeing the mountains, but they may appear to be hazier or murkier. Visibility impact analysis thus uses factors called the "color difference index" and the "contrast factor. " These are then used to compute a light extinction coefficient. Because these calculations are highly complicated, a simpler numerical rating scale has been developed, but that I'decivue" scale has no more meaning to the public than does the term "extinction coefficient. " The OEP visibility analysis uses a sophisticated computer model that takes into account the dispersion of the exhaust plumes from the stacks, the conversion of plant Nox to microscopic light-scattering particulates scattering from non-Nox particulates (soot) , and three-dimensional meteorology over a large analysis domain. The model uses conservative (overpredictive) assumptions, including the assumption that background visibility is completely pristine and limited almost only by the curvature of the earth. The model showed that there were six days per year when winds were light and mixing was vertically limited where the trapped plume could increase natural extinction by more than 5 percent above natural atmospheric background scattering within Joshua Tree National Park mainly due to nitrates formed within the plume. However, that chemical conversion process into nitrates requires many hours, and is not very far advanced within the first 10-20 miles of travel when any visibility effects would most likely be observed by valley residents or visitors. A maximum "excess" extinction of up to 8.08 percent predicted in the park would also be perceived as only a slight haziness and would not be clearly perceptible to the public. Natural visibility varies by much more than an 8 . 08 percent difference in extinction, even during the course of a day. Because NOx emissions will decline four-fold or Page 11 of 13 ft*# �� 9-BA-201 2: 17PM FROM TKC PLANNING DEPT. 909 GS3 221d P_ 14 more when the plant is upgraded to combined cycle (reducing the worst-case "excess" to 2 percent instead of S percent) , and because any short-term visibility effects prior to combined cycle conversion will be imperceptible within the natural range of variation, the visibility impact represents no threat to public perception of any degradation of quality of life within the valley. Within the visibility discussion, the document does not note the possibility of visible steam plumes from the wet-surface air condensers (wSACs) on cold mornings. The white steam plume could be visible for short distances from the plant (500-1000 feet) . It would not affect regional visibility, but there may be a perception of an "industrial" character to the plant. Because of the plant ' s operation as a "pecker" plant, the plant will not likely be operated until mid-day on hot summer days. with the low relative humidity and the massive moisture dispersive capacity, steam plumes will not likely be observed. Slight plume discoloration may also occur because Nox preferentially absorbs only selected wavelengths of light . when these wavelengths are removed, a brown tinge can be seen that is separate of any particulate matter (soot) that might be in a plume_ Because the amount of soot is very small in exhaust from a natural gas-fired plant, and because atmospheric mixing during summer operations of the plant is intense, possible discoloration effects are expected to be minimal. 7, Conclusion% The critical findings of the impact analysis/independent review are as follows: (1) The proposed project will be a major source of air pollution, especially NOx. If the plant operates at near its permitted number of hours, it will be the largest single source of NOx in the Coachella Valley, However, despite this finding, air quality and public health risk impacts from this project will be` well within acceptable levels. (2) "Non-attainment" air pollutants will be offset by concurrent emissions reductions (offsets) of nitrogen oxides (NOx) and 10-micron or less particulates (PM-10) , NOx emissions off- sets procured within the Los Angeles Basin would nevertheless have a tangible benefit for the Coachella valley. PM-10 off- sets would be far less effective, however, if they did not come directly from the local air basin. i Page 12 of 13 a� 9-ad-201 2: 17PM FROM TKC PLANNING DEPT_ 909 653 2214 P. 15 (3) The project will be converted to a combined cycle plant with greater energy efficiency and substantially reduced air emissions in the near future. Given that impacts from the proposed short-term simple cycle operation are acceptable, future impacts would have an even greater margin of safety. (4) State-of-the-art (over-predictive) modeling procedures and standard analysis protocols were utilized, and demonstrated the lack of any significant air quality impacts both in terms of "criteria" air pollutants, as well as from airborne toxics. (5) The project is proposed to be sited at a location where atmospheric mixing is optimized, and the downwind population density is relatively low. Any measurable air quality impacts would occur within the immediate plant vicinity where population density is essentially zero. Highly diluted impacts within areas of more substantial population such as Desert Hot Springs will be almost not measurable. (6) Slight haze formation is possible by the time the exhaust plume reaches Joshua Tree National Park if the background visibility is assumed at over 200 miles. The conditions that might lead to such an impact occur in winter when the proposed project is least likely to be operating. During summer days of possible plant operations, the relative humidity is so low, and the dispersive mixing is so good, such that no steam plume from evaporative emissions would be formed. Any plant-related humidity effects would extend no more than a few hundred feet from the facility. (7) A few technical issues remain unresolved. These include a federal agency "sign-off" on the cumulative project visibility analysis, the allowable Co emission limit, and the completion of the trade-off (off-set) package. As noted above, if non-combustion, "fugitive dust" PM-10 trade-offs are offered, we would highly recommend that they be only obtained from the Coachella Valley. Our independent analysis concurs with regulatory agency findings that the proposed project will not create an adverse airborne impact to human health, nor adversely impact visibility important to valley ambiance. Because combined cycle operations would substantially increase plant efficiency while dramatically decreasing NOx emissions, conversion to a combined cycle system as expeditiously as possible should be a condition of any project support. Page 13 of 13 7JOOO* Copy Attached: Hans Giroux & Associates Resume 9-04-201 2: 18PM FROM TKC PLANNING DEPT_ 909 653 2214 P. 16 H,ANS D. GIROUX SUMMARY OF QUALIFICATIONS AND EXPERIENCE EDUCATION: Bachelor of Arts in German Literature, University of California, 1965 . Bachelor of Science in Meteorology, University of Utah, 1966. Graduate studies in Meteorology, University of Wisconsin, 1967-68. Masters of Science in Meteorology, UCLA, 1972 . candidacy for Doctorate in Meteorology, UCLA, 1974 . PROFESSIONAL EXPERIENCE: Weather Forecaster, U.S. Air Force, Truax AFB, Madison, WI, 1966-67- Staff Weather Officer/Chief Forecaster, McChord AFB, WA, 1968-69 . Teaching Assistant, Basic Meteorology/Advanced Dynamics, UCLA, 1969-71. Research Assistant, California Marine Layer Structure, UCLA, 1971 , Research Assistant, Remote Air Pollution by Satellites, UCLA, 1972 , Research Assistant, Climatic Change - Aircraft Pollution, UCLA, 1973 . Instructor, Basic Meteorology, Cal State Northridge, 1972- 74 . Air Pollution Meteorologist, S-Cubed, LaJolla, CA 1973-75 . Senior Meteorologist, Meteorology Research, Inc. , Altadena, CA 1975-77. Instructor, Weather ,far Flight Aircrews, Orange Coast College, 1976 . Instructor, Basic Meteorology, Golden West Community College, 1976-81. Instructor, Basic Meteorology, Orange Coast College, 1977- ?4 7 9-04-201 2: 18PM FROM TKC PLANNING DEPT. 909 653 221A P. 17 81 . Consultant, Atmospheric impact Processes, Irvine, CA, 1977- present , 9 9 =77 0 9-04-201 2: 'I8PM FROM TKC PLANNING DEPT. 909 GS3 2214 P. 18 BANS D. GIROUX Page 2 PRINCIPAL PROFRPSIONAL R$SPON$IBILITIBS: Military: Performed operational weather forecasting for jet aircrews; trained new personnel; responsible for ground safety, security, records administration, quality control, forecasting methodology research, and liaison with other base units; air defense battle staff weather officer; and deputy detachment commander. University: Conducted laboratory sessions; instructed students in the use of meteorological instrumentation; demonstrated weather analysis techniques; supervised student weather observation programs; gave lectures and tests. Private: Prepared air quality impact assessments for coal- fired, oil-fired, nuclear, �\ir ©uality geothermal and wind energy power generation systems; prepared impact assessments for transportation systems, industrial emissions sources, wastewater treatment plants, landfills, toxic disposal sites, oil processing facilities, mining operations, commercial, residential, institutional and recreational land uses, airports and harbors; conducted atmospheric gas tracer experiments; developed numerical airflow analyses; and conducted numerous meteorological and air quality data acquisition programs with a very strong emphasis in and environments, geothermal development, odors and nuisance and in regional pollution impacts from Southern California urbanization. Noq Developed impact assessments for roadways sources, construction equipment, sand and gravel plants, wineries, industrial equipment, gas recovery plants, railroads, recreational activities and oil refineries; monitored ambient noise levels from above sources, calibrated highway traffic noise model (F14WA-RD-77-108) , and calculated sensitive receptor noise exposures; wrote community noise ordinances, purchased monitoring equipment and trained city staff; performed noise mitigation studies including barrier design, location, equipment noise control, and residential building retrofits. EROFE5SIONAL REYBRENC$S Dr. Don B. Blumenthal, President, Sonoma Technology, Inc. , 707- 527-9372 Mr, Tom J. Lockhart, CCM, Meteor. Standards Institute, 206-549- 2179 Ms. Sylvia Salenius, Director, Env. Studies, P&D Technologies, 714-$35-4447 9-04-201 2: 19PM FROM TKC PLANNING DEPT. 909 653 221A P. 19 Mr. Mike Tolmasoff, Director, No. Sonoma County APCD, 707-433- 5911 Mr. Harry Dillon, Deputy Director, Imperial County APCD, 619-339- 4314 Dr. Alan Eschenroeder, President, Alanova, Inc. , 617-259-0886 Mr. Ken R. Richards, Senior Engineer, Consoer-Townsend Assoc. , 615-244-8864 Mr. John Ledbetter. City of Berkeley Planning Dept . , 510-644-6534 Ms. Barbara Reid, City of Chula vista Planning Dept. , 619 P. OCOTILLO E N E R GY INIERGEN September 19, 2001 Mr. David Ready City Manager City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, California 92262 Mr. David Aleshire City Attorney City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, California 92262 Mr. Douglas Evans Director, Department of Planning and Buildings City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, California 92262 Re: Ocotillo Energy Project Gentlemen: In May of this year, Ocotillo Energy LP submitted to the City of Palm Springs a request for a zoning text amendment related to the Ocotillo Energy Project(OEP) proposed for the extreme north end of the City. That zoning text amendment has received its first reading, and is scheduled for its second reading at the City Council meeting scheduled for 7 pin on September 19, 2001. When we embarked on the expedited schedule to secure permits for Phase I of the OEP, we estimated that all permits would be issued by the end of October, 2001 and construction would commence immediately thereafter. On that schedule,Phase I of the project could be in service by the summer of 2002. Our most recent assessment indicates that this schedule cannot be met. Consequently,we have regrettably made the decision to stop all activity related to Phase I of the OEP, and on September 18, 2001 we formally withdrew our Application for Certification(AFC)to the California Energy Commission (CEC). A copy of that formal withdrawal of the AFC wilt be faxed to you this morning. S � p. 3 2 We do plan to re-assess all of our options for the project,but at this time there is no pending application before the CEC for this project. Therefore, we respectfully request that the zoning text amendment be removed from further consideration at this time. We hope to re-visit this matter with the City at a future date, Sincerely, Robert Hreu Vice President, Development co: Mayor Kleindienst Council Member Oden Council Member Reller-Spurgin Council Member Hodges Council Member Jones Soore L 9A Coachella Valley Economic Partnership Helping Innovative Companies Expand/Relocate to The Coachella Valley. Palm Springs Small Business Energy Audit Program Final Report September 19, 2001 73-710 Fred Waring Dr.,Ste. 205* Palm Desert, CA 92260 (760) 340-1575 or(800)596-1007 PALM SPRINGS ENERGY AUDIT PROGRAM REPORT OVERVIEW Following the success of the pilot program in Pahn Desert, This program was a cooperative effort of The City of Palm Springs, The Coachella Valley Economic Partnership and the Palm Springs Economic Development Corporation. The objective of the program was to provide complimentary energy audits to 200 Palm Springs based small businesses. The audits are designed to determine ways for businesses to reduce load (and therefore costs) through retrofitting and behavioral changes. In addition, participating businesses were offered assistance in applying for appropriate rebates. IMPLEMENTATION The Coachella Valley Economic Partnership contracted with the Palm Springs Economic Development Corporation for implementation based on their experience in working with the small business community. Southern California Edison, which provided training for the auditors and information packets for businesses. RESULTS (Contacts) 567 Businesses were selected 173 audits were completed (31%) 110 businesses declined to be audited(19%) 10 businesses ineligible (home-based or corp.) (1.6%) 22 businesses were closed(some for summer) (3.8%) 24 mail returned (4.1%) 26 wrong number(4.5%) 202 couldn't reach (36%) TARGETED RECOMMENDATIONS There were 14 items targeted for evaluation by the auditors. Of the 173 businesses audited, the percentage of businesses that were recommended to address the specific targeted items are as follows: 87% Clean Cooling Coils 87% Maintain AC Filters 78% Turn off Unused Lights 70% Set Thermostat to 78 Degrees 55% Install Window Film 52% Clean Lamps &Fixtures 47% Reduce Wattage 41% Replace Fluorescents 29% Install Motion Sensitive Switches 11% Install Higher Rated AC 8% Install Time clocks 8% Install Pre-Coolers OTHER RECOMMENDATIONS The other top recommendations to the 173 businesses audited include: Remove lamps and ballasts Install Awnings Pre-Cool the building Install Fans Use Task Lighting Use Reflective Roof Coating Install/Replace Weatherstrip Install Motion Sensitive Switches Install Programmable Thermostat Replace gaskets on re&igerators REBATES * Of the 173 businesses audited, 45 rebate reservations been submitted to SCE. ESTIMATED LOAD REDUCTION According to SCE,those businesses audited used approximately 14,000,000 kwh during the last 12 months. SCE estimates that if the businesses follow through with the recommendations of the auditors, a minimum 15% reduction in energy consumption will be realized. This calculates to a total reduction of 2,100,000 kwh for the 173 audited businesses. ESTIMATED COST REDUCTION Based on the current blended rate of$0.15 kwh,the recommendations will result in the following dollar savings (annually): 100% Follow through=$315,000 90% Follow through=$283,500 75% Follow through= $236,250 50% Follow through= $157,500 25% Follow through= $ 78,750 All participating businesses will be contacted by phone within 30-45 days in order to ascertain the recommendation follow-through rate and to provide additional assistance and/or referrals as necessary.