001 p-bp15-01-02a 002 003 004 005 MINNESOTA POLLUTION CONTROL AGENCY RMAD and Industrial Divisions Environment & Energy Section; Air Quality Permits Section The University of Minnesota Twin Cities Combined Heat and Power Project (1) Request for Approval of Findings of Fact, Conclusions of Law, and Order and Authorization to Issue a Negative Declaration on the Need for an Environmental Impact Statement; and (2) Request for Approval of Findings of Fact, Conclusion of Law, and Order, and Authorization to Issue Permit No. 05301050 -007. January 27, 2015 ISSUE STATEMENT This Board Item involves two related, but separate, Citizens’ Board (Board) decisions: (1) Whether to approve a Negative Declaration on the need for an Environmental Impact Statement (EIS) for the proposed University of Minnesota Twin Cities Campus Combined Heat and Power Project (Project). (2) If the Board approves a Negative Declaration on the need for an EIS, decide whether to authorize the issuance of an air permit for the Project. The Minnesota Pollution Control Agency (MPCA) staff requests that the Board approve a Negative Declaration on the need for an EIS for the Project and approve the Findings of Fact, Conclusion of Law, and Order supporting the Negative Declaration. MPCA staff also requests that the Board approve the Findings of Fact, Conclusions of Law, and Order authorizing the issuance of Air Emissions Permit No. 05301050-007. Project Description. The University of Minnesota (University) proposes to construct a 22.8 megawatt (MW) combustion turbine generator with a 210 million British thermal units (MMBTU)/hr duct burner to produce steam for the Twin Cities campus. The Project will be located in the Old Main Steam Plant building, 1180 Main Street SE, Minneapolis, Minnesota. The University will retire two coal-fired boilers at the nearby Southeast Plant upon completion of the Project. Environmental Review. Because this Project will generate more than 100,000 tons per year of greenhouse gas (GHG) emissions, an Environmental Assessment Worksheet (EAW) must be prepared. The objective of an EAW is to determine whether the Project has the potential for significant environmental effects. Minnesota rules designate the MPCA as the governmental unit responsible for preparing the EAW. During the EAW comment period, the MPCA received six comments, including three requesting the preparation of an EIS. MPCA staff responded to the comments, and the decision on an EIS is now before this Board. 1 006 Issuance of Air Permit Amendment. The University also submitted a major amendment to its current air permit to the MPCA. The permit, if issued, will authorize construction of the Project. The MPCA received three written comments during the public comment period for the draft permit. Two requested a Public Informational Meeting, which the MPCA held on January 22, 2015. The MPCA staff responded to the comments on the draft permit. The Board will decide whether to authorize the issuance of the air permit amendment if it decides that environmental review is complete. I. BACKGROUND: A. Project Description The University of Minnesota Board of Regents (University) is proposing to construct a 22.8 MW combustion turbine generator in series with a 210 MMBTU/hr duct burner at the Twin Cities Campus (Project). Exhaust gases will be used to produce up to 270,000 pounds of steam per hour for the campus steam distribution system. A 500 kilowatt (kW) diesel emergency generator will also be installed. The Project will be located in the existing Old Main Steam Plant building, 1180 Main Street SE, Minneapolis, Minnesota. B. Procedural History – EAW Because this Project will generate more than 100,000 tons per year of greenhouse gas emissions, an Environmental Assessment Worksheet (EAW) must be prepared. (Minn. R. 4410.4300, subp. 15(B)). That rule designates the MPCA as the governmental unit responsible for preparing the EAW. The objective of an EAW is to determine whether the Project has the potential for significant environmental effects. The responsible governmental unit (RGU) decides whether an Environmental Impact Statement is needed based on the information gathered during the EAW process and the comments received on the EAW. (Minn. R. 4410.1700, subp. 3). MPCA staff prepared the EAW for this Project following procedures described in the EQB rules (Minn. R. 4410.1400), and then began a public comment period on October 27, 2014 (Minn. R. 4410.1500). 2 007 During the public comment period, which ended on November 26, 2014, the MPCA received comment letters from the Minnesota Department of Natural Resources, the Metropolitan Council, and four citizens. Three of the citizen letters raised concerns about impacts related to air quality, stormwater runoff, and public safety (potential for natural gas explosion and site security). Three of the six comment letters requested the preparation of an EIS. The comment letters are in Appendix A to the Findings of Fact, Conclusion of Law, and Order for the EAW (Attachment 1). The MPCA prepared written responses to the comment letters received during the 30-day public comment period. The Responses are in Appendix B to Attachment 1. The MPCA staff found that the Project does not have the potential to significantly impact air quality, and that mitigation measures, including control equipment and permit conditions, will prevent any significant adverse impacts. On the risk of explosion or fire, the MPCA staff found that the risk of explosion or fire is low, with natural gas used throughout the Twin Cities as a fuel, and that safety precautions are designed into the construction and operation of the site. Third, on the potential impact of stormwater runoff, the MPCA staff found that the University’s stormwater pollution prevention and management plan includes best management practices for construction and operation of the Project, and will be required as part of the Project’s Construction Stormwater General Permit and Industrial Stormwater General Permit. C. Procedural History – Air Permit The University submitted an amendment to the existing Federal Part 70 Air Permit for the Twin Cities campus. The MPCA drafted an air emissions permit amendment to cover the Project and issued a public notice of the preliminary decision to issue the permit. (Minn. R. 7007.0850, subp. 2) The public notice established a thirty day public comment period for the permit from October 31, 2014, through 4:30 p.m. on December 1, 2014. The MPCA received three comment letters during the comment period, with two of the three commenters requesting a public informational meeting. One of the commenters stated concerns regarding air quality and emissions in the immediate vicinity of the Riverview Tower Condominiums neighborhood as a result of this Project. Another commenter had 3 008 concerns that under the right wind conditions the emissions from the Project will be sucked into the air intake on top of the building. The commenter also stated concerns about air quality and emissions in the immediate vicinity of his neighborhood as a result of this Project. The third commenter also expressed concern that the neighborhood air quality may be adversely affected by the Project. The comment letters are presented in Appendix A to the Findings of Fact, Conclusion of Law, and Order for the Permit (Attachment 2). MPCA staff prepared Responses to Comments (Appendix B to Attachment 2) and proposed Findings of Fact, Conclusions of Law, and Order for the Permit (Attachment 2). II. DISCUSSION: The MPCA, as the governmental agency responsible for the EAW, must consider four criteria in deciding whether a project has the potential for significant environmental effects. These criteria are: a) The type, extent, and reversibility of environmental effects; b) Cumulative potential effects; 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. (Minn. R. 4410.1700) MPCA staff applied these criteria to the Project, as discussed in the proposed Findings of Fact, Conclusions of Law, and Order for the EAW (Attachment 1) and the MPCA Responses to Comments on the EAW (Appendix B to Attachment 1). The MPCA staff has considered the information gathered during the EAW process and the permit comments received, and requests that the Board decide that the proposed Project does not have the potential for significant environmental effects and approve a Negative Declaration on the need for an EIS. 4 009 In order to issue the air permit amendment, the MPCA must find that certain preconditions specified in Minn. R. 7007.1000, subp. 1 are satisfied: Preconditions for issuance. The agency shall issue a permit or permit amendment, or reissue a permit only if it determines that all of the following conditions have been met: A. The agency has received a complete application for a permit, permit amendment, or permit reissuance, except that a complete application need not be received before issuance of a general permit under part 7007.1100, subpart 4. B. The agency has complied with the public participation procedures for permit issuance, if required by part 7007.0850. C. The agency has complied with the procedures for notifying and responding to affected states, if required by part 7007.0900. D. If the administrator's review is required by part 7007.0950, the administrator has received a copy of the permit and any notices required and has not objected to issuance of the permit within the time period specified, or the administrator has objected but the objection has been resolved to the administrator's satisfaction. E. The conditions of the permit provide for compliance with all applicable requirements and the requirements of parts 7007.0100 to 7007.1850, or include a schedule to achieve such compliance.