STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY

IN THE MATTER OF THE DECISION ON THE NEED FOR AN ENVIRONMENTAL IMPACT STATEMENT FOR THE PROPOSED RAHR MALTING COMPANY AND KODA ENERGY, LLC COMBINED WASTEWATER TREATMENTSYSTEM EXPANSION AND HEAT AND POWER PLANT FINDINGS OF FACT SCOTT COUNTY CONCLUSIONS OF LAW SHAKOPEE, MINNESOTA AND ORDER

FINDINGS OF FACT

Pursuant to Minn. R. 4410.1000 - 4410.1600 (2006), the Minnesota Pollution Control Agency (MPCA) staff has prepared an Environmental Assessment Worksheet (EAW) for the proposed Rahr Malting Company and Koda Energy, LLC, Combined Wastewater Treatment System Expansion and Heat and Power Plant project (Project). Based on the MPCA staff environmental review, comments, and information received during the comment period, and other information in the record of the MPCA, the MPCA hereby makes the following Findings of Fact, Conclusions of Law, and Order.

FACILITY HISTORY

Overview Rahr Malting is a manufacturer of barley malt. The barley malt product is sold to various beverage and malting food industries. Rahr Malting is a privately held company and the third largest commercial malting company in the United States. Rahr Malting is located on an 18-acre parcel in Shakopee, Scott County. The site is located on the northwest side of Shakopee, adjacent to and south of U.S. Highway 69.

The Rahr Malting wastewater treatment system currently has a National Pollutant Discharge Elimination System (NPDES)/State Disposal System (SDS) Permit for the discharge of non-contact cooling water and wastewater. Rahr Malting treats 66 percent to 75 percent of its process wastewater in the existing wastewater treatment system and discharges to the Minnesota River under the conditions included in the permit. Non-contact cooling water is discharged via the same outfall to the Minnesota River. The remaining 25 percent to 33 percent of Rahr Malting’s process wastewater is discharged to the city of Shakopee wastewater collection system for treatment at the Metropolitan Council Environmental Services Blue Lake Wastewater Treatment Facility (MCES Blue Lake Facility).

As of January 1, 2008, the MCES Blue Lake Facility will no longer accept process wastewater from Rahr Malting. Because the MCES Blue Lake Facility will no longer be available to accept the process wastewater, Rahr Malting is proposing to expand its existing wastewater treatment system to treat all process wastewater on site. The MCES Blue Lake Facility will continue to treat sanitary wastewater from Rahr Malting and Koda Energy after completion of the proposed wastewater system expansion.

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Rahr Malting currently purchases electricity from Xcel Energy. Koda Energy is proposing to build a combined heat and power biomass plant that will provide, on average, 120,000 pounds (lbs)/hour of steam to Rahr Malting and 17.8 megawatts (MW) of electricity that may either be sold to Rahr Malting or will be sold wholesale to an electric utility. A natural gas pipeline, owned by Rahr Malting delivers natural gas to the facility.

Koda Energy is a limited liability corporation whose owners include Rahr Malting and the Shakopee Mdewakanton Sioux Community, a federally recognized Indian Tribe. Koda Energy will purchase dry biomass malt byproducts from Rahr Malting to meet a portion of Koda Energy’s biomass fuel requirements. The fuel handling system is designed for a fuel mix of 35 percent oat hulls, 35 percent wood shavings and 30 percent byproducts from Rahr Malting.

Koda Energy will obtain well water (up to 146,000 gallons per day) from wells owned by Rahr Malting under an existing Minnesota Department of Natural Resources (DNR) Water Appropriation Permit. Koda Energy will discharge up to 72,000 gallons per day of boiler blowdown, cooling tower blowdown, and reverse osmosis reject water to the Rahr Malting wastewater treatment system. The proposed wastewater treatment system expansion and the proposed heat and power plant will be built next to each other on property owned by Rahr Malting and will impact the same geographic area.

A covered conveyor will transfer malt byproducts from Rahr Malting to the truck loading station at Koda Energy. A pipe from wells owned by Rahr Malting will deliver well water to Koda Energy. A discharge pipe from Koda Energy will deliver boiler blowdown, cooling tower blowdown, and reverse osmosis reject water to the Rahr Malting wastewater treatment system. Trucks delivering fuels to the Koda Energy truck unloading station will enter and exit on haul roads owned and maintained by Rahr Malting.

Permitting History In 1997, an NPDES/SDS Permit authorized Rahr Malting to construct a wastewater treatment system to treat process wastewater from the company’s barley malting operation. The wastewater treatment train includes fine screens, an equalization tank, a sequencing batch reactor (SBR), a solids holding tank, an effluent equalization tank, effluent filter, and re-aeration basin. Sanitary wastewater from Rahr Malting discharges to the municipal sanitary sewer and does not mix with the process wastewater. Previously, waste activated sludge was discharged to the MCES Blue Lake Facility, but is currently dewatered and subsequently land applied.

PROPOSED PROJECT DESCRIPTION

Wastewater Treatment System Rahr Malting is proposing to expand the wastewater treatment system. The proposed expansion will include the installation of a membrane bioreactor (MBR) to run in parallel with the existing SBR system. The annual average wet weather (AWW) design flow will increase from 1.5 million gallons per day (MGD) to 2.092 MGD with an AWW/peak hourly wet weather (PHWW) rate of 2.41 MGD.

The proposed MBR system is being designed to treat an average daily flow of 1.5 MGD and a peak instantaneous flow of 2.25 MGD. The flow rates for the proposed wastewater treatment system expansion were determined from review of the malting process, available flow equalization, and planned flows from the proposed heat and power plant. The proposed wastewater treatment system expansion will be located adjacent to the existing wastewater treatment system on undeveloped land.

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The proposed wastewater treatment system expansion consists of a biological treatment system (activated sludge process) in addition to the MBR filtration system.

Activated Sludge Process The activated sludge process is an aerobic, biological process that uses the metabolic reactions of micro- organisms to remove substances exerting an oxygen demand. By definition, activated sludge is the suspension of concentrated micro-organisms in wastewater.

Wastewater enters a reactor basin where micro-organisms are brought into contact with organics in the influent. The organic matter serves as a carbon and energy source for microbial growth and is converted into microbial cell tissue and oxidized end product (like carbon dioxide and water). Contents of the reactor basin are referred to as mixed liquor suspended solids (MLSS).

When the MLSS is discharged from the reactor basin, a means to separate the micro-organisms from the treated wastewater is provided. Usually gravity settling is used. Filtration, as proposed in the MBR, can also be used. The concentrated microbial solids are then recycled back to the reactor basin to maintain the concentrated microbial population for degradation of the incoming organic materials. Because the micro-organisms are continually synthesized in this process, a means must be provided for wasting some of the generated microbial solids. This wasting can occur either from settling basin(s) and/or the activated sludge reactor basin itself.

The process wastewater from Rahr Malting will be pumped from the existing screening process wet well and will be split between the two activated sludge systems (MBR and SBR). The new MBR treatment system will consist of three concrete reactor tanks and three membrane tanks. Each reactor tank has interior dimensions of 44 feet by 67.5 feet by 23 feet. Three positive displacement blowers, with a capacity to supply 3,060 standard cubic feet per minute at 11-pound force per square inch gauge, will provide aeration to the tanks. Two blowers will operate and one will be on standby. Each tank will contain fine bubble diffusers for the transfer of oxygen to the wastewater. The MLSS will flow by gravity to the membrane tanks.

Membrane Filtration Membranes are materials that can separate particles and molecules from liquids. The membranes are hollow strands of porous polymer fibers that prevent the passage of certain contaminants while allowing water molecules to flow to the inside of each strand.

This selective filtration is possible because the surface of each membrane fiber consists of billions of microscopic pores that block the passage of all particles larger than the size of the pores, creating a physical barrier to contaminants. Water is drawn through the pores with the use of a slight suction, much like that required when sipping liquid through a straw.

The proposed membrane system is composed of hollow-fiber membrane modules submerged on racks in three concrete tanks. Each membrane tank has inner dimensions of 14 feet in length by 13 feet in width by 8 feet, 3 inches in height. The membrane system contains 160 membrane modules; the modules are housed on 10 racks (16 modules per rack).

Water is drawn through the membranes by a suction developing filtrate pump. There are three filtrate suction pumps each with a capacity to pump 568.5 gallons per minute (gpm) at 25 feet total dynamic head. Particles greater than 0.1 microns are filtered out of the water. Mixed liquor is returned back to the activated sludge tanks continuously using three pumps through a common manifold. Changes in effluent flow rates are provided using a variable frequency drive on the filtrate pumps and mixed liquor return pumps.

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Discharge The treated water from the MBR process will mix with the treated water from the SBR process prior to sampling. Some of the water is used for non-contact cooling before discharge to the common discharge outlet. The Rahr Malting wastewater treatment system will continue to discharge to the Minnesota River at river mile 25.3 after the proposed expansion. This section of the Minnesota River is considered impaired by Section 303(d) of the federal Clean Water Act. A water body is impaired if it does not meet one or more of the federal Clean Water Act’s water quality standards.

This reach of the Minnesota River is considered impaired for low dissolved oxygen levels, caused by high phosphorous levels in the river. The primary tool for addressing impaired waters is a pollution reduction plan called a Total Maximum Daily Load, or TMDL. A TMDL is the maximum amount of a pollutant a water body can receive without violating water quality standards. The TMDL process identifies all sources of the pollutant and allocates necessary reductions among the various sources. These reduction strategies form the basis of an implementation plan. In 1985/1987, a low dissolved oxygen TMDL study for the reach of the Minnesota River from Jordan to its confluence with the Mississippi River was developed.

The proposed expansion increases the capacity of the existing wastewater treatment system and increases the volume of discharge. No flow limitations will be included in the proposed draft NPDES/SDS Permit. The calendar month average 5-Day Carbonaceous Biochemical Oxygen Demand (CBOD5) concentrations will increase from 68 kilograms per day (kg/day) to 96.5 kg/day. The increase in CBOD5 load from the wastewater treatment system is offset by the nonpoint sources reduction projects previously achieved by Rahr Malting.

The mass ammonia limits will remain the same after the proposed expansion. The total suspended solids mass limitations will remain the same after the proposed expansion. The monthly average phosphorus limit (2 mg/l) will be changed to a more stringent monthly average limit (1 mg/l) and the mass concentrations of phosphorus discharged to the Minnesota River will remain the same. Limits for pH and dissolved oxygen will also remain the same after the proposed expansion. With the nonpoint source load reduction units previously obtained by Rahr Malting, the proposed effluent limits in the current draft NPDES/SDS Permit will not impact the requirements included in the current TMDL.

Trading Agreement In 1995, Rahr Malting proposed to build its own wastewater treatment system. The Rahr Malting process water was being discharged to the MCES Blue Lake Facility. Because the reach of the Minnesota River from Jordan to its confluence with the Mississippi River is classified as impaired for low dissolved oxygen levels, any new discharge was required to comply with the requirements of the 1985 (amended 1987) Waste Load Allocation for the lower Minnesota River included in the TMDL.

Rahr Malting agreed to install and maintain nonpoint source best management practices (BMPs) and received credit for the pollution reductions. Rahr Malting agreed to come up with 150 nonpoint source load reduction units upstream of its facility (one unit of trading credit was defined as the equivalent of one pound per day of CBOD5). Rahr Malting agreed to spend $250,000 on projects that were approved by MPCA staff. The conditions of the agreement were specified in the NPDES/SDS Permit that was issued on January 8, 1997.

The 1997 NPDES/SDS Permit limited the phosphorus discharge and required Rahr Malting to reduce CBOD5 from nonpoint sources of pollution in the upper portions of the Minnesota River within five years. These nonpoint source load reduction units offset the additional loads from the Rahr Malting wastewater treatment system. By the fall of 1999, four nonpoint source sites and five projects with associated BMPs had been found, evaluated, approved, and constructed. The five projects exceeded the required 150 nonpoint source load reduction units and resulted in a total of 212.8 nonpoint source load reduction units (an additional 62.8 lbs/day).

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In the proposed draft NPDES/SDS Permit for the proposed wastewater treatment system expansion, Rahr Malting will be given credit for the 212.8 nonpoint source load reduction units that were achieved as a result of the five projects. The nonpoint source load reduction units will offset the proposed increase in CBOD5 of 28.5 kg/day for the proposed expansion and will not impact the requirements of the 1985 (amended 1987) Waste Load Allocation for the lower Minnesota River.

The proposed draft NPDES/SDS Permit will not authorize Rahr Malting to obtain additional nonpoint source load reduction units above 212.8 lbs CBOD5 per day. No additional nonpoint load reduction units will be credited to Rahr Malting should future trades, required for replacement purposes, exceed the current 212.8 nonpoint source load reduction units.

Combined Heat and Power Plant The proposed heat and power plant will include a fuel receiving building, fuel storage bins, fuel processing (grinders), fuel combustion, air pollution control equipment, and ash handling and disposal. Fuel receiving, handling, storage, and processing will generate truck traffic and airborne particulate matter (PM).

The proposed heat and power plant operations will include the following four basic processes:

• Fuel handling and processing – fuel is delivered to Koda Energy, stored in one of ten fuel storage bins, conveyed to a set of four grinders, ground, and delivered to the fuel metering bin, which meters fuel to the boiler; • Fuel combustion – the boiler burns fuel to produce steam; • Power generation – a portion of the steam heats glycol in heat exchangers to provide process heat for Rahr Malting and another portion of the steam powers a condensing steam turbine for electrical power generation; and • Ash storage and removal – ash from the combustion process is stored and then removed off site for disposal.

Fuel Handling and Processing Trucks will deliver 70 percent of the fuels to a receiving building. Trucks will either be walking bottom beds, hopper trucks, or straight trucks. All unloading will occur indoors. Rahr Malting will pneumatically convey the other 30 percent of the fuels (malt byproducts) to the fuel delivery building. A baghouse will control particulate emissions from unloading operations and will maintain negative pressure during unloading to prevent dust from exiting the building.

While the fuel delivery station can receive up to four trucks (100 tons) of fuel per hour, the fuel storage feed conveyor (30 tons per hour) and the proposed boiler firing capacity (21 tons per hour) ultimately limit fuel deliveries and processing to an average eight trucks per day. The facility can store four days worth of fuel in the on-site fuel storage bins and can store up to two hours of fuel in the ground fuel metering bin.

The fuel handling system is designed for a fuel mix of 35 percent oat hulls, 35 percent wood shavings, 30 percent byproducts from Rahr Malting natural gas, and liquid propane gas (LPG) will serve as backup fuels. (Additional biomass, such as energy crops, have been proposed to be blended into the proposed fuel mix, at a later time. Additional fuel requirements are discussed in Section 23 of the EAW.)

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Natural gas is the primary backup fuel fired with LPG used as a standby pilot fuel source. Northern Natural Gas will supply natural gas to Koda Energy through a service line owned and operated by Rahr Malting. Service connections to Minnegasco are also available.

An enclosed conveyor system will deliver fuel to the proposed boiler. Fabric filters will control dust at all transfer points. A 30-ton per hour conveyor will deliver the fuel from the truck receiving building to one of ten fuel storage bins. Another set of conveyors will then deliver fuel from the storage bins to a set of four grinders in the grinder building. The grinders will reduce the fuel to a fine powder. A pneumatic system will convey the fuel from the grinders to the day metering bin. The day metering bin will feed the fuel to the boiler at the boiler firing rate.

The Boiler (Fuel Combustion/Power Generation) A suspension boiler with a design heat input of 308.2 million British thermal units per hour (MMBtu/hr) will burn the biomass fuel. The boiler will produce, on average, 120,000 lbs/hour of process steam for Rahr Malting and 17.8 MW of electricity. An outdoor two-cell evaporative cooling tower will provide cooling as required. The boiler is designed to burn up to 42,000 lbs/hour of biofuels. As a back-up fuel, the boiler can also burn up to 240 MMBtu/hr of natural gas. The boiler will control nitrogen oxides with burner air staging, burner staging, separated over-fire air, and a selective non-catalytic reduction system. An electrostatic precipitator (ESP) will control PM.

Ash Handling and Removal Based on the design fuel mix, at maximum capacity the boiler will generate 8,970 tons per year of ash. The ash is composed of 95 percent fly ash and 5 percent bottom ash. A pneumatic dense phase conveying system will transport 2,100 lbs/hr of ash from the boiler bottom ash hopper, the dust collector (multi-cyclone) ash hoppers, and the ESP ash hoppers to an ash storage bin. A dustless ash unloader will use a fine water mist to condition the ash and prevent particulate emissions. Koda Energy is exploring beneficial uses for the fly ash produced by the biomass boiler. Until a beneficial use is found, one truck per day of ash will be sent to a landfill for disposal.

Construction will require the delivery and storage of structural steel and prefabricated large equipment and machinery. Construction will involve the use of heavy equipment to excavate up to 10,000 cubic yards of soil, remove inappropriate fill, and move and erect large machinery and equipment. Construction will also involve welding, grinding, cutting, drilling, hammering, and other activities that generate noise.

The Koda Energy construction schedule anticipates 365 days for construction, which will begin as soon as the proper permits are issued. Construction activities will have the potential to increase emissions of fugitive dust, contaminate stormwater runoff with PM, and increase noise. Koda Energy will comply with the Stormwater Pollution Prevention Plan (SWPPP) and will mitigate stormwater runoff.

Environmental Concerns Typical environmental concerns for construction and operation of combined heat and power plants include the potential for air emissions, odors, noise, and surface water runoff. Typical concerns for a wastewater treatment system expansion include surface water runoff and wastewater discharge.

Additional Concerns Described in Comment Letters No additional Environmental concerns were presented in the comment letters.

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Community Involvement in Process Community involvement by the MPCA regarding the EAW included the standard activities required by the Environmental Quality Board (EQB).

PROCEDURAL HISTORY

1. Pursuant to Minn. R. 4410.4300, subps.18.C and 15, an EAW was prepared by MPCA staff on the proposed Project. Pursuant to Minn. R. 4410.1500 (2006), the EAW was distributed to the EQB mailing list and other interested parties on July 2, 2007.

2. The MPCA notified the public of the availability of the EAW for public comment. A news release was provided to interested parties, on July 2, 2007. In addition, the EAW was published in the EQB Monitor on July 2, 2007, and available for review on the MPCA Web site at http://www.pca.state.mn.us/news/eaw/index.html on July 2, 2007.

3. The public comment period for the EAW began on July 2, 2007, and ended on August 1, 2007. During the 30-day comment period, the MPCA received two comment letters from government agencies and received one comment letter from a citizen.

4. The MPCA prepared responses to all comments received during the 30-day public comment period. Comment letters received have been hereby incorporated by reference as Appendix A to these findings. The MPCA responses to comments received are hereby incorporated by reference as Appendix B to these findings.

CRITERIA FOR DETERMINING THE POTENTIAL FOR SIGNIFICANT ENVIRONMENTAL EFFECTS

5. Under Minn. R. 4410.1700 (2006), the MPCA must order an Environmental Impact Statement (EIS) for projects that have the potential for significant environmental effects that are reasonably expected to occur. In deciding whether a project has the potential for significant environmental effects, the MPCA must compare the impacts that may be reasonably expected to occur from the project with the criteria set forth in Minn. R. 4410.1700, subp. 7 (2006). These criteria are:

A. the type, extent, and reversibility of environmental effects;

B. potential cumulative effects of related or anticipated future projects;

C. the extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority; and

D. the extent to which environmental effects can be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the project proposer, including other EISs.

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THE MPCA FINDINGS WITH RESPECT TO EACH OF THESE CRITERIA ARE SET FORTH BELOW

Type, Extent, and Reversibility of Environmental Effects

6. The first criterion that the MPCA must consider when determining if a project has the potential for significant environmental effects that are reasonably expected to occur, is the "type, extent, and reversibility of environmental effects" Minn. R. 4410.1700, subp. 7.A (2006). The MPCA findings with respect to each of these factors are set forth below.

7. Reasonably expected environmental effects of this Project to air quality:

• Air Emissions o Rahr Malting Industrial Process o Rahr Malting Wastewater Treatment System. o Koda Energy • Odors • Construction Noise • Operations Noise

8. The extent of any potential air quality effects that are reasonably expected to occur:

Rahr Malting Industrial Process Rahr Malting generates air pollution from receiving, handling, storing, and processing barley. Various combustion sources throughout the facility heat glycol or provide direct heat for drying grain. Production at Rahr Malting will not change as a result of either the proposed wastewater treatment system expansion or the proposed combined heat and power plant. Material receiving, handling, processing, and shipping produce most of the PM and particulate matter under 10 microns (PM10) emissions at Rahr Malting, and these emissions will not change as a result of either project. The sulfur dioxide emissions at Rahr Malting will not change as a result of the proposed Project. Combustion emissions account for most of the nitrogen oxides, volatile organic compounds, and carbon monoxide emitted by Rahr Malting.

Rahr Malting Wastewater Treatment System. The Rahr Malting wastewater treatment system is an insignificant air emissions source. The proposed expansion is also an insignificant air emissions source. Because these kinds of facilities typically are insignificant emissions sources, the U.S. Environmental Protection Agency (EPA) has not developed emissions factors for small industrial wastewater treatment facilities. The MCES has evaluated potential human health risks from air emissions from its much larger treatment facilities. MCES calculations can help evaluate the potential for air emissions from the proposed Rahr Malting wastewater treatment system expansion.

Using the MCES information as a guide, the potential air quality impacts from the wastewater treatment system at Rahr Malting were evaluated. Rahr Malting processes about 1.5 million gallons/day with a BOD of 600-800. Assuming hazardous air pollutants (HAPs) composition is similar to that of MCES, this would translate to approximately 300 lbs/year of HAPs from Rahr Malting (one percent of MCES volumetric flow and twice the strength as indicated with BOD), or approximately two percent of MCES

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emissions, which would result in no more than an acute hazard index of 0.08. Chronic hazard indices and cancer risks from MCES were less than thresholds; Rahr Malting wastewater treatment system ‘risks’ would be proportionately lower than thresholds.

Koda Energy Potential emissions of carbon monoxide and nitrogen oxides from fuel combustion will exceed 250 tons per year, designating the proposed facility a major source under EPA New Source Review Rules. Koda Energy will emit more than new source review significance levels for PM10. Koda Energy will emit less than new source review significance levels of sulfur dioxide, volatile organic compounds, and HAPs.

The proposed boiler will control nitrogen oxides by firing finely ground fuel in suspension burners, air- staging with separated over-fire air, and a selective non-catalytic reduction system. A multicyclone and an ESP will control particulate emissions and good combustion practices will control carbon monixide emissions. Ash handling and disposal will generate truck traffic and airborne particulates. Koda Energy will control particulate emissions from fuel delivery, handling and processing by enclosing emissions sources and providing fabric filter dust collection at transfer points. Dustless unloading and fabric filter dust collection will control particulate emissions from ash handling and unloading. Paving and street sweeping will control fugitive dust emissions from truck traffic.

Koda Energy will be subject to a Best Available Control Technology (BACT) determination for PM, PM10, nitrogen oxides, and carbon monoxide. Nitrogen oxides emissions will be subject to a BACT- determined control technology and emission limit. Review indicates that the boiler will be required to use low nitrogen oxides burner, over-fire air boiler design, and selective non-catalytic reduction system as a BACT condition. Selective non-catalytic reduction system entails the injection of ammonia, urea, and/or other nitrogen-bearing reagent with nitrogen oxides present in the flue gas.

PM and PM10 emissions will be subject to a BACT-determined control technology and emission limit. Preliminary review indicates that the boiler will be required to use mutlicyclones and an ESP. Biomass handling stack vents as well as ash loadout stack vents will be required to use fabric filters. Carbon monoxide emissions will be subject to a BACT-determined control technology and emission limit. Preliminary review indicates that the boiler will be required to apply good combustion practices as a BACT condition.

Prevention of significant deterioration (PSD) analysis included an air quality analysis of PM10, nitrogen oxides, and carbon monoxide emissions. An air dispersion modeling assessment was completed to determine compliance with the PM10, nitrogen oxides, and carbon monoxide National Ambient Air Quality Standard (NAAQS), Minnesota Ambient Air Quality Standard (MAAQS), and applicable PSD increments. The air dispersion model used comprehensive facility information, coupled with representative meteorological data (such as temperature, wind direction, and wind speed), to predict ambient air concentrations at and beyond the facility boundary.

The air modeling demonstrated that the proposed heat and power plant emissions will not exceed the PM10, nitrogen oxides, and carbon monoxide NAAQS, MAAQS, and applicable PSD increments. The results of the federal PSD modeling were used to evaluate if the proposed BACT limits meet ambient standards and applicable PSD increments with some room for future growth.

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The model considered stack emission rates, location, temperature, velocity, and other dispersion-related items, such as enhanced turbulence due to nearby buildings. The modeling also considered fugitive road dust and the future paving of existing unpaved roads at Rahr Malting and Koda Energy (i.e., approximately 25-50 trucks per day) and idling diesel truck emissions – nominally the equivalent of two idling diesel trucks for one-hour averages (i.e., diesel nitrogen dioxide exhaust for acute) and the equivalent of one idling diesel truck for annual averages (i.e., diesel PM exhaust for chronic). The number of idling trucks may be a somewhat conservative – erring on the side of protecting public health and the environment for cumulative effects.

Modeling for toxic air pollutants demonstrated acceptable inhalation risks for the sum of Koda Energy and Rahr Malting without idling diesel truck emissions. Modeling for toxic air pollutants demonstrated elevated inhalation risks for the sum of all sources. The above elevated risks are primarily due to regional/background conditions typical of suburban areas. Recent (2003-2006) Twin Cities monitored background risk data indicates suburban risks including metals of 0.7 (acute), 1.0 (chronic non-cancer), and 4.0 (cancer). These were updated from the earlier “Minnesota Statewide Air Toxics Monitoring Study (1996 2001)” report, which is available at http://www.pca.state.mn.us/air/toxics/at-monitoringstudy- 9601.html. Sulfur dioxide emissions will not exceed the PSD significant threshold.

A visibility analysis was performed for the nearest Class I Area (Rainbow Lake Wilderness Area). The screening procedure consisted of the methodology outlined in the EPA document Workbook for Estimating Visibility Impairment. The calculations were performed for various distances (starting at 250 kilometers - distance to Rainbow Lake) using the EPA VISCREEN model. The results indicate that there should be no visible plume impacts at the Rainbow Lake Wilderness Area resulting from the Project.

The proposed heat and power plant boiler is subject to the New Source Performance Standards (NSPS) Subpart Db provisions (Standards of Performance for Industrial-Commercial-Institutional Steam Generating Units). This subpart begins at 40 CFR § 60.40b. For the proposed heat and power plant boiler, Subpart Db provides emission concentration limits for PM and opacity.

In addition to the emission limits established by the NAAQS and MAAQS, Subpart Db has requirements that necessitate demonstration that the facility is meeting its emission limits for its regulated pollutants. However, these limits are technology-based limits rather than health-based limits. The permit restricts the usage of natural gas to less than 10 percent of the annual combustion capacity. Due to this restriction, the boiler nitrogen oxides emissions are not subject to Subpart Db. The boiler nitrogen oxides emissions, however, remain subject to PSD review, as described above. Initial performance tests are required for PM and opacity.

To ensure compliance with the requirements of the NSPS Subpart Db and permit emission limits, Koda Energy is installing multicyclones and ESP to control PM. This permit also restricts the facility from being designated as a major National Emission Standards for Hazardous Air Pollutants (NESHAP) source. The permit has limits for HAPs not to exceed 9.0 tons per year per any single pollutant and 22.5 tons per year for all HAPs combined.

Koda Energy followed MPCA emission estimating guidance using existing wood combustion emissions factors. Koda Energy used either AP-42 factors or the 95 percent upper confidence limit calculated from the individual data points that make up the AP-42 factors for many pollutants. The 95 percent upper

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confidence level means emission factors were calculated for dioxins/furans and acrolein using emission factors from AP-42 and California’s Air Toxics Emission Factors database.

The emission factor data were based on wood combustion sources. Mercury was evaluated in two ways: (1) using AP-42 emission factors (1.79 lbs/year); and (2) using Maximum Achievable Control Technology NESHAP limit (approximately 8 lbs/year). The MPCA staff believes these emission factors are reliable because the databases use data from actual testing of similar materials and similar types of equipment. The EPA and California emission factor databases have been routinely used by the MPCA staff on similar evaluations.

Dispersion factors used conservative Risk Assessment Screening Spreadsheet (RASS) values for lesser sources (e.g., fugitive dust sources) and refined AERMOD values for key sources (boilers, heaters, kilns), and supplemental Q/Chi approach (also referred to as Equivalent Risk Emission Rate, or ERER) for acute risks. The AERMOD modeling used meteorological data from the Minneapolis/St. Paul airport (surface data) and St. Cloud (upper air data). Risks were initially calculated used “unpaired” RASS values. The company has since updated acute risks using “paired” Q/Chi values and to estimate all risks assuming a taller boiler stack (220 feet).

Nearby residents were evaluated for potential risks from inhalation and vegetable consumption. Residential exposure was assumed to occur at the location of maximum annual concentrations related to the Koda boiler. This location is just northwest of the proposed boiler location near the highway. The location of maximum hourly concentrations is expected to be near the location of the maximum annual concentration.

The area where the maximum concentration occurs is not zoned residential, but air concentrations in residentially zoned areas may not be significantly different since people live very near the facility. Acute and chronic non-cancer hazard indices associated with air emissions from the Rahr Malting and Koda Energy facilities were estimated to be less than the threshold considered “acceptable.” The threshold hazard index for non-carcinogens is one.

Cancer risks were estimated for a hypothetical farmer at the location where maximum air concentrations in an area where farming could feasibly occur. This location is at a point bordering the north side of the 100-year floodplain, about a mile from the proposed Project; the farmer cancer risk for this scenario is estimated to be 2 in 100,000 (2E-05), which is above the “acceptable” cancer risk threshold of 1 in 100,000 (1E-05). The estimated cancer risk represents the probability of an individual getting cancer due to exposure to the pollutants being assessed.

However, “sustenance” farming is not expected to occur in this area. The “sustenance” farmer is assumed to have a regular diet of farm-generated meats, eggs, produce, and dairy products. A land use evaluation suggests that “sustenance” farming does not occur at the location assessed, and development plans suggest it will not occur in the reasonably foreseeable future. Further, a risk isopleth corresponding to a cancer risk of 1E-05 was placed around the facility for the purpose of scanning for potential farming in the zone that could potentially exceed the “acceptable” cancer risk threshold.

This area ranges from about one-half-mile west and east of the facility to about 1 to 1.5 miles north and south of the facility. Only small portions of the area appear to be open fields used for crop growth. Livestock growth is not evident. Inspection of aerial photographs and interviews with county and extension representatives suggest that little to no livestock production is undertaken in that area.

11 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

A second region was considered for potential “sustenance” farming. This area is bounded by a risk isopleth corresponding to a cancer risk of 0.4 in 100,000 (4E-06 - approximately 40 percent of the “acceptable” risk threshold). This is a very large area and would take a significant amount of time to visually survey; however, the area lies within the city limits of Chaska and Chanhassen, and there are no plans for agricultural activities in the 2020 comprehensive plans for those cities.

City ordinances in effect in some of these areas indicate that the area bounded by a 4E-06 farmer cancer risk lays either on the 100-year floodplain or in the city limits of Chanhassen, Chaska, Eden Prairie, or Shakopee. The city planning department in Chaska was contacted and they have a city ordinance that bans cattle or livestock within the city limits unless it is zoned agriculture. Looking at the current zoning map for Chaska, there is no land zoned agriculture within the city limits. Similar information has not yet been reviewed for the other cities in the vicinity.

Risks related to air emissions from the Rahr Malting wastewater treatment system were not quantitatively evaluated. A qualitative analysis based on a process volume comparison with MCES, for which a full risk assessment from air emissions was conducted. The analysis included a comparison of source unit types, liquid volumes and liquid strengths processed, dispersion characteristics, and receptor locations relative to sources.

The Air Emission Risk Analysis (AERA) assumed that the Koda Energy boiler will be operating at 8,600 hours per year. The proposed heat and power plant boiler will operate, at a minimum, of 51 weeks per year, at 60 percent of its design availability. Depending on electricity prices, the boiler may operate up to 100 percent of its design availability. It was assumed that the boiler will be operating 24 hours per day. Emissions from the proposed heat and power plant boiler are based on 100 percent capacity. While the proposed heat and power plant boiler is under normal operation, the Rahr Malting glycol heaters (natural gas) will not be in operation.

When the Koda Energy proposed heat and power plant boiler is either in shutdown or startup mode, the Rahr Malting glycol heaters will be staging up or down in operation. Because Rahr Malting can only use a fixed amount of steam, the proposed heat and power plant boiler and Rahr Malting glycol heaters operation will be staged so as to not produce excess steam. It is anticipated that Koda Energy shutdown and startup will be on natural gas. Hence, the assumption of basing the emissions from 100 percent proposed heat and power plant boiler capacity is representative for the overlap of startup and shutdowns.

It is estimated that the emissions used are generally conservative. Many of the emission factors were based on AP-42 wood factors. California and EPA Boiler NESHAP suggest AP-42 values should be conservative for biomass fuels other than wood. In addition, the proposed heat and power plant boiler is being specifically designed for biomass combustion. The proposed heat and power plant boiler should have lower actual emissions than some of the older boilers in the AP-42 database.

In addition, 95 percent Upper Confidence Level emissions were used for a number of emission estimates. Wood emission factors from AP-42 and California’s Air Toxics Emissions Factors database were used to estimate dioxin/furan emissions, and AP-42 wood emission factors were used to estimate mercury emissions. Some factors could result in an over-prediction of risk and others could result in under- prediction. Mercury speciation assumes 30 percent of mercury emissions are divalent, which would, in large part, deposit near the facility. This may be conservative, but data are not yet available to substantiate that claim.

12 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

On-site idling vehicle analysis was performed for the cumulative effects analysis. The quantitative risk analysis only evaluated acute nitrogen oxides and non-cancer chronic effects from diesel exhaust. It is commonly understood that diesel exhaust is carcinogenic; however, there is not yet consensus on which unit risk value to use for risk assessment from the range of values available.

Idling vehicle emissions have not historically been included in AERAs. Adding the vehicle-related hazard quotients to the acute and chronic hazard indices would increase the site-related hazard indexes from 0.3 (both acute and chronic) to 0.4.

The maximum annual concentrations are predicted to fall just north of the facility near the south side of the highway. The location of the maximum acute modeled concentrations is not reported; however, it is anticipated that it will fall inside the property boundaries and near the location of the maximum predicted annual concentrations.

The emergency generator emissions are not included in the quantitative analysis. Since the company only operates the engine four times a year for testing purposes, this will not impact the chronic results. Given that the nearest residence is only about 150 meters and the stack height is about 47 feet, under calm atmospheric conditions, hourly nitrogen oxides emissions are not well-dispersed. This could result in acute hazard indices higher than those in the analysis.

Dioxins/furans are known to have non-cancer effects, yet health benchmarks are not yet available with which to assess these endpoints. This will result in an under-prediction of non-cancer risks. However, because there does not appear to be significant opportunity for dioxin/furan accumulation in all the foods assumed in the farmer ingestion scenario (beef, pigs, chickens, eggs, milk) it is unlikely that dioxins/furans related to the proposed Project will accumulate enough to result in a significant incremental increase to background levels already in food products obtained from various sources.

The MPCA staff finds that the potential increase in air emissions from the proposed Project and Rahr Malting are unlikely to exceed ambient air quality standards for criteria pollutants, including emissions from existing projects. For air toxics, the risk analysis indicates that the cumulative impacts from the proposed Project and Rahr Malting with emissions from other existing projects would not have the potential to be significant.

Odors While people often associate odors with the burning of biomass – wood, grass, leaves, etc. – a modern industrial boiler is a controlled combustion unit designed for efficient combustion. Temperatures achieved in industrial boilers generally destroy the organic compounds that typically cause the odors associated with uncontrolled biomass burning.

Storage of moist biomass can cause odors as a result of fermentation and decomposition. The proposed heat and power plant fuels will typically have less than ten percent moisture and a high turnover (less than fours days of storage are available), which will mitigate the potential for odor from stored fuels.

Odor potential from the operation of the wastewater treatment system is reduced by enclosing treatment facilities.

13 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

Construction Noise During construction, there will be noise from the trucks and earthmoving equipment. In addition, the Occupational Safety and Health Administration requires vehicle backup alarms on vehicles that have an obstructed rear view. An estimated sound level for the backup alarm is approximately 97 decibels, as a time weighted average (dBA).

Construction will also involve welding, grinding, cutting, drilling, hammering, heavy equipment operation, and other activities that generate noise. The city of Shakopee has zoned the area immediately adjacent to the project as either heavy or light industrial. Residential areas to the south of the proposed Project site may observe elevated noise levels during construction. With the exception of a handful of residential properties, large buildings and trees buffer most residential properties potentially impacted by noise from the proposed Project. To minimize impacts on nearby residences, construction will take place during daylight hours and should not have impacts on human health or the quality of life.

Construction noise is unavoidable, but the effects of excessive sound levels can be minimized by acting to limit noise intensity. The specific actions include the following:

o Require contractors to comply with Minnesota Noise Rules for vehicles. Minn. Stat. § 7030.1040 states limits for motor vehicles with a manufacturer’s gross vehicle weight rating of more than 10,000 pounds. o Require contractors to have truck mufflers working properly. o Limit construction activities to hours allowed by city ordinances.

Operations Noise The proposed heat and power plant will be located on property leased from Rahr Malting. Per Minn. R. 7030.0040, subp. 2, the sound levels in the residential areas produced by the proposed project must not exceed an L50 of 50 dBA and an L10 of 55 dBA during the hours of 10:00 p.m. to 7:00 a.m.

The proposed heat and power plant includes indoor and outdoor equipment that have sound levels. The indoor equipment will have attenuation provided by the building, but the attenuation will be reduced in the summer time when louvers, doors, or windows are opened for ventilation. The three significant noise sources that are not housed in buildings include the ID fan, glycol fans, and the ash handling blowers. Each of these outdoor sources must not exceed a sound pressure level of 95 dBA at a distance of 3 feet for the L50 sound levels to be at 50 dBA or less at the residential area 582 feet from the proposed heat and power plant. Based on data provided by the design engineers or measurements from the sound monitoring analysis, this equipment will meet this requirement.

An extensive sound monitoring analysis determined L50 sound levels from the Rahr Malting facility to be approximately 54 dBA at a residential area 582 feet from the stack of the proposed Project, and 56 dBA at a residential area 756 feet away from the stack of the proposed Project. These L50 sound levels exceed the state standard of 50 dBA. The sound monitoring analysis concluded there are multiple noise sources at the existing facility. There has not been any success in identifying a major source (or sources) that can be modified to reduce the overall impact on the neighbors. Rahr Malting will continue to explore ways to decrease noise from their facility. If the proposed Project produces an L50 sound level of 50 dBA at these two residential areas, the sound levels should increase to 55 dBA and 57 dBA, respectively.

14 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

9. The reversibility of any potential air quality effects that are reasonably expected to occur:

The MPCA finds that any potential effect that is reasonably likely to occur from this proposed Project would be reversible. Once emissions are released to the air, they cannot be recovered, but the release can be stopped. If air quality were to be impacted, there are measures that can be implemented to minimize impacts. For example, the MPCA could initiate a complaint investigation and require the Project proposer to make operational and maintenance changes. As discussed above, the expected effects on air quality are minimal. There is no reason to believe that this Project is reasonably expected to cause a significant negative effect on air quality.

10. Comments received that expressed concerns regarding potential effects to air quality:

No comment letters expressed a general concern for air quality. As discussed above in Findings 7 and 8, the analysis indicates that the effects on air quality that are reasonably expected to occur are not significant.

11. The MPCA finds that the environmental review is adequate to address the concerns because:

All potential impacts to air quality that are reasonably expected to occur from the proposed Project have been considered during the review process and methods to prevent these impacts have been developed.

12. The MPCA finds that the Project, as it is proposed, does not have the potential for significant environmental effects based on the type, extent, and reversibility of environmental effects reasonably expected to occur as a result of its air emissions.

13. Reasonably expected environmental effects of this Project to water quality:

o Surface Water Runoff o Wastewater Discharge

14. The extent of any potential water quality effects that are reasonably expected to occur:

Surface Water Runoff The Rahr Malting SWPPP covers the proposed wastewater treatment system expansion and proposed heat and power plant locations. The Rahr Malting SWPPP focuses on control of stormwater pollution as a result of grain loading and unloading operations. High pollution potential areas identified in the Rahr Malting SWPPP include receiving areas, loadout areas, transfer points and air emissions points. Identified sources of pollution include spillage from trucks, rail cars, and loading equipment.

Activities at the proposed wastewater treatment system expansion and the proposed heat and power plant that may contaminate stormwater are consistent with those described in the Rahr Malting SWPPP, and the measures in the Rahr Malting SWPPP are appropriate measures for controlling these potential stormwater contaminant sources. Measures identified include weekly sweeping (now twice weekly), more frequent sweeping of high exposure areas, inspection and maintenance of air pollution control equipment, covered loading and unloading areas, indoor storage of chemicals, secondary containment for all gasoline and fuel oil tanks, and a detention pond.

An existing detention pond treats stormwater from the Rahr Malting site prior to discharge to the Minnesota River. This pond treats stormwater from the wastewater treatment system and will treat

15 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

stormwater runoff from the proposed wastewater treatment system expansion. This detention pond will also treat stormwater from the north and west of the proposed heat and power plant location. A second detention pond is planned for the proposed heat and power plant. The second stormwater basin will treat stormwater from the majority of the proposed heat and power plant location prior to discharge to a city of Shakopee storm sewer.

Wastewater Discharge Wastewater Treatment System Expansion The proposed daily ammonia limits are the same as the limit included in the 1997 NPDES/SDS Permit. The proposed plant expansion will increase the annual average capacity to 2.092 MGD and the AWW/peak daily/PHWW flow rates will increase to 2.41 MGD. The flow rates for the plant expansion were determined from review of the malting process, available raw waste flow equalization, and planned flows from the proposed heat and power plant.

Rahr Malting processes barley in five malt houses. Processing involves steeping the barley in either a high volume steep (submerged in water) or a low volume steep (sprayed with water). After accounting for evaporative losses, the two processes generate a low flow of 1.18 MGD (all five malt houses at the low volume steep rate) and a high flow of 2.34 MGD (four malt houses (80 percent) at high volume and one malt house (20 percent) at low volume steep rate). Process wastewater from the malt houses discharge to a central location and equalized in a 328,000-gallon tank to eliminate hydraulic surges.

The process wastewater from the malting complex is pumped to the existing process wastewater treatment facility’s screenings/lift station. The overflow from this equalization basin currently discharges to the city of Shakopee sanitary sewer system. The expanded wastewater treatment system will eliminate this overflow. A second influent equalization basin, with a 362,000-gallon volume, feeds the SBR four times per day and will also feed the expanded portion of the wastewater treatment system on a continuous basis.

Heat and Power Plant Koda Energy will discharge 72,000 gallons per day to the Rahr Malting wastewater treatment facility. This is 3.6 percent of the wastewater treatment facility’s daily permitted discharge of 2.091 MGD. Koda Energy will use up to 150 gpm of well water and will discharge 50 gpm of boiler blowdown, cooling tower blowdown, and reverse osmosis reject water. Most of the losses result from evaporation in the cooling tower and the release of steam.

15. The reversibility of any potential water quality effects that are reasonably expected to occur:

The MPCA finds that any potential effect that is reasonably likely to occur from this Project would be reversible. As discussed above, the expected effects on water quality are minimal. Proposed permit limits are expected to prevent degradation of the water quality. Potential environmental effects are expected to be minimal based on current conditions. Though not expected to occur, impacts from a release of effluent not meeting the limits stipulated in the NPDES/SDS Permit for the proposed Project would be of finite duration and the environment would be expected to ultimately return to current conditions. There is no reason to believe that this Project is reasonably expected to cause a significant negative effect on water quality.

16. Comments received that expressed concerns regarding potential effects to water quality:

16 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

No comment letters expressed concern with the surface water runoff or wastewater discharge. As discussed above in Findings 14 and 15, the analysis indicates that the effects on water quality that are reasonably expected to occur are not significant.

17. The MPCA finds that the environmental review is adequate to address the concerns because:

All potential impacts to water quality that are reasonably expected to occur from the proposed expansion of this facility have been considered during the review process and a method to prevent these impacts has been developed.

18 The MPCA finds that the Project, as it is proposed, does have the potential for significant environmental effects on water quality based on the type, extent, and reversibility of environmental effects reasonably expected to occur.

Potential Cumulative Effects of Related or Anticipated Future Projects

19. The second criterion that the MPCA must consider, when determining if a project has the potential for significant environmental effects that are reasonably expected to occur, is the "potential cumulative effects of related or anticipated future projects," Minn. R. 4410.1700, subp. 7.B (2006). The MPCA findings with respect to this criterion are set forth below.

20. The EAW, public comments, and MPCA follow-up evaluation did not disclose any related or anticipated future projects that may interact with this Project in such a way as to identify any potential cumulative environmental effects that are reasonably expected to occur.

21. Public comments concerning cumulative effects:

The EAW and MPCA follow-up evaluation did not disclose any related or anticipated future projects that may interact with this Project in such a way as to identify any potential cumulative environmental effects that are reasonably expected to occur.

22. In considering the potential cumulative effects of related or anticipated future projects, the MPCA finds that the reasonably expected effects from this Project will not be significant.

The Extent to Which the Environmental Effects Are Subject to Mitigation by Ongoing Public Regulatory Authority

23. The third criterion that the MPCA must consider, when determining if a project has the potential for significant environmental effects that are reasonably expected to occur, is "the extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority," Minn. R. 4410.1700, subp. 7.C (2006). The MPCA findings with respect to this criterion are set forth below.

24. The following permits or approvals will be required for the Project:

Proposed Wastewater Treatment System

17 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

Unit of Government Type of Application Status MPCA NPDES/SDS Permit Modification Submitted MPCA Plans and Specifications Review To be submitted MPCA NPDES General Stormwater Permit To be submitted (Construction Activities) MPCA NPDES General Stormwater Permit To be submitted (Industrial) City of Shakopee Building Permit To be submitted City of Shakopee Plat Amendment Approved Watershed District Review and Comment To be requested Approval

Proposed Heat and Power Plant Unit of Government Type of Application Status MPCA Non-Contact Cooling Water To be submitted MPCA Air Permit/PSD Pending MPCA NPDES General Stormwater Permit To be submitted (Construction Activities) MPCA NPDES General Stormwater Permit To be submitted (Industrial) DNR Water Appropriation Permit amendment To be submitted City of Shakopee Building Permit To be submitted City of Shakopee Plat Amendment Approved Watershed District Approval Review and Comment To be requested

Combined Project Unit of Government Type of Application Status DNR Natural Heritage and Nongame Database Submitted, under review Review Minnesota Historical Society Concurrence on Findings of Cultural Completed State Historic Preservation Resource Impacts Office Watershed District Approval Review and Comment To be requested

25. The above-listed permits include general and specific requirements for mitigation of environmental effects of the Project. The MPCA finds that ongoing public regulatory authority will address any significant potential environmental effects that were identified as reasonably expected to occur.

18 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Shakopee, Minnesota And Order

The Extent to Which Environmental Effects can be Anticipated and Controlled as a Result of Other Available Environmental Studies Undertaken by Public Agencies or the Project Proposer, Including Other EISs

26. The fourth criterion that the MPCA must consider is “the extent to which environmental effects can be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the project proposer, including other EISs.” Minn. R. 4410.1700, subp. 7.D (2006). The MPCA findings with respect to this criterion are set forth below.

27. The following documents were reviewed by MPCA staff as part of the potential environmental impact analysis for the proposed expansion of the facility. This list is not intended to be exhaustive. The MPCA also relies on information provided by the Project proposer, commentors, staff experience, and other available information.

• EAW • Air Emission Permit Application and Draft Permit, Technical Support Document for the Air Emission Permit • AERA and dispersion modeling submittal • NPDES/SDS Permit Application and Draft Permit • Effluent Limits Summary

28. There are no elements of the Project that pose the potential for significant environmental effects that cannot be addressed in the Project design and permit development processes, or by regional and local plans.

29. Based on the environmental review, previous environmental studies, and MPCA staff expertise on similar projects, the MPCA finds that the environmental effects of the Project that are reasonably expected to occur can be anticipated and controlled.

CONCLUSIONS OF LAW

30. The MPCA has jurisdiction in determining the need for an EIS for this Project. The EAW, the permit development process, the facility planning process, responses prepared by MPCA staff in response to comments on the Rahr Malting Company and Koda Energy, LLC, Combined Wastewater Treatment System Expansion and Heat and Power Plant project EAW, and the evidence in the record are adequate to support a reasoned decision regarding the potential significant environmental effects that are reasonably expected to occur from this Project.

31. Areas where the potential for significant environmental effects may have existed have been identified and appropriate mitigation measures have been incorporated into the Project design and permits. The Project is expected to comply with all MPCA standards.

32. Based on the criteria established in Minn. R. 4410.1700 (2006), there are no potential significant environmental effects reasonably expected to occur from the Project.

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APPENDIX A

Minnesota Pollution Control Agency

Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Environmental Assessment Worksheet

LIST OF COMMENT LETTERS RECEIVED

1. Larry Rademacher. Comment received, via e-mail, July 9, 2007. 2. Phyllis Hanson, Manager, Local Planning Assistance, Metropolitan Council. Letter received July 31, 2007. 3. Ronald Wieland, Senior Planner, Environmental Review Unit, Minnesota Department of Natural Resources. Letter received August 1, 2007.

APPENDIX B

Minnesota Pollution Control Agency (MPCA)

Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant

RESPONSES TO COMMENTS ON THE EAW

1. Comments by Larry Rademacher. Comment received via e-mail July 9, 2007.

Comment 1-1: Rahr Malting draws its water from deep wells that penetrate the Superior Aquifer. Using Fifty-two degree water from deep within the earth for cooling industrial equipment and then discharging that water into the river at eighty plus degrees is not an acceptable use of our Natural Recourses.

Response: The Minnesota Department of Natural Resources Water Appropriation Permit Program allows water resources to be used as boiler blowdown, cooling tower blowdown, and reverse osmosis reject water. The purpose of the permit program is to ensure that water resources are managed so that adequate supply is provided to long-range seasonal requirements for domestic, agricultural, fish and wildlife, recreational, power, navigational, and quality control. The program exists to balance competing management objectives, including both the development and protection of the water resources.

Koda Energy will obtain well water from wells owned by Rahr Malting, under an existing Water Appropriation Permit. The discharged water from Koda Energy will be sent to the Rahr Malting wastewater treatment system. The effluent from the Rahr Malting wastewater treatment system will be required to comply with an effluent temperature of 30° Celsius.

The 30° Celsius effluent discharge temperature is in compliance with Minn. R. ch. 7050. This rule requires that the identified receiving waters (see Section 18b of the EAW) are maintained to permit the propagation and maintenance of a healthy community of cool or warm water sport or commercial fish and associated aquatic life.

Comment 1-2: If the water originated from the same river that it is going to be discharged into then the ground water table would not be affected. The use of well water needs more review.

Response: The MPCA staff determined that any potential water quality impacts have been identified and evaluated and the analysis does not indicate the potential for significant environmental effects to water quality. The commenter did not provide any additional information for analysis.

Sources, composition and quantities of all sanitary, municipal, and industrial wastewater produced or treated at the site, for Koda Energy and Rahr Malting, as well as waste treatment methods and estimates of composition after treatment, were evaluated in Section 18 of the EAW. In addition receiving waters were identified, including major downstream water bodies, and estimates of the discharge impact on the quality of receiving waters were identified and evaluated.

Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Responses to Comments on the Shakopee, Minnesota Environmental Assessment Worksheet

2. Comments by Phyllis Hanson, Manager, Local Planning Assistance, Metropolitan Council. Letter Received July 31, 2007.

Comment 2-1: The Metropolitan Council staff review finds that the EAW is complete and accurate with respect to regional concerns and raises no major issues of consistency with Council policies.

Response: The comment is noted.

Comment 2-2: An EIS is not necessary for regional purposes.

Response: The comment is noted.

Comment 2-3: The commenter notes that when an application is submitted to the MPCA for connection to the City’s sanitary sewer, a copy of the plans, design data, and a location of the map of the project will also need to be submitted to the Metropolitan Council.

Response: A copy of the comment letter will be sent to Koda Energy to notify them of this requirement.

Comment 2-4: The Council’s Environmental Service Municipal Services staff will need to review, comment and recommend issuance of the construction permit by the MPCA before connection can be made to the City’s wastewater disposal system.

Response: This request will be forwarded to the MPCA permit staff.

Comment 2-5: The commenter notes that the Minnesota Valley State Trail is located within 1/4 mile of the site and that the proposed expansion does not appear to have a substantial impact on the Minnesota Valley Trail or Recreation Area.

Response: The comment is noted.

3. Comments by Ronald Wieland, Senior Planner, Environmental Review Unit, Minnesota Department of Natural Resources. Letter Received August 1, 2007.

Comment 3-1: The commenter provided the following points for accuracy and clarification: • “7 mussel species” should be replaced with “4 mussel species” • only dead specimens of state-listed endangered and threatened mussels have been documented in the area

Response: The comment is noted.

Comment 3-2: The commenter noted that the Bald Eagle nest listed in the database printout was active in 2006 and 2007.

Response: The comment is noted.

2 Rahr Malting Company and Koda Energy, LLC Combined Wastewater Treatment System Expansion and Heat and Power Plant Responses to Comments on the Shakopee, Minnesota Environmental Assessment Worksheet

Comment 3-3: The commenter noted that there is a low probability of encountering a live population of gopher snakes on the site.

Response: The comment is noted.

Comment 4-1: The commenter notes that the water that is used at the Koda Energy must come from the Prairie du Chien-Jordan well and not from the Mt. Simon-Hinckley wells.

Response: A copy of the comment letter will be forwarded to Koda Energy to inform them of this requirement.

Comment 4-2: The commenter encourages Koda Energy to investigate the feasibility of procuring a back-up source of water in the event that the Jordan well goes out of service.

Response: A copy of the comment letter will be forwarded to Koda Energy to inform them of this request.

Comment 4-3: The commenter notes that 1.5 inch spaced trash rack rods are recommended to prevent discharge of floatable trash and litter to public waters.

Response: A copy of the comment letter will be forwarded to Koda Energy to notify them of this requirement.

Comment 4-4: The commenter notes that they accept the conclusion presented in the EAW, which demonstrates that the proposed modifications of the facility will have insignificant aquatic impacts.

Response: The comment is noted.

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