NOTICE
APPEARANCE
35 (2002).
High combustion efficiency
Elimination of slagging
High turndown
The limestone reacts with the sulfur released from the fuel in the following
a. Calcination of limestone
b. Reaction with sulfur (sulfation)
CaO+l/202+S02=CaSO4+heat

SOUTHERN ILLINOIS POWER COOPERATIVE

Low Sulfur Dioxide Emission Coal Fueled Device

TO:

Dorothy Gunn, Clerk

Illinois

Pollution Control Board

State ofIllinois Center

100

W. Randolph Street, Suite 11-500

Chicago, illinois 60601

Steve Santarelli

Illinois Department ofRevenue

101

West Jefferson

P.O. Box

19033

Springfield, Illinois 62794

)

PCB~~

)

(Tax Certification)

Richard C.

Myott

Southern illinois Power Coop

11543

Lake ofEgypt Road

Marion, Illinois 62959-8500

)

PLEASE TAKE NOTICE that I have today filed with the Office ofthe Pollution

Control Board the APPEARANCE and RECOMMENDATION ofthe Illinois

Environmental ?rotection Agency, a copy ofwhich

is herewith seived upon the applicant

and a representative ofthe Illinois Department ofRevenue.

Date:

December 29, 2004

Respectfully submitted by,

Robb H. Layman

Special Assistant Attorney General

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

1021

North Grand Avenue East

P.O.

Box

19276

Springfield,

IL 62794-9276

Telephone: 217/782-5544

Facsimile:

217/782-9807

REC~1VED

CLERK’S OFACE

BEFORE

THE ILLINOIS POLLUTION CONTROL

BOARD

JAN

2005

OF THE

STATE OF ILLINOIS

STATE

OF ILLINOIS

Pollution

Control

Board

PROPERTY IDENTiFICATION NUMBER

10-26-200-002

NOTICE

REGEIV~•.

CLERK’S OFFICE

BEFORE

THE ILLINOIS POLLUTION CONTROL

BOARD

JAN

2O~5

OF THE

STATE OF ILLINOIS

STATE OF ILLN 015

PoIIut~onControl 6oard

SOUTHERN ILLINOIS POWER COOPERATIVE

)

Low Sulfur Dioxide Emission Coal Fueled Device

)

0~c’iI?

)

PCB~’

)

(Tax Certification)

PROPERTY IDENTIFICATION NUMBER

)

10-26-200-002

)

APPEARANCE

hereby

file

Appearance

this

proceeding

behalf

the

Illinois

Environmental Protection Agency.

Respectfully submitted by,

~67V4_

Robb

Layman

Special Assistant Attorney General

Date:

December 29, 2004

ILLINOIS ENV~.ONMENTAL

PROTECTION AGENCY

1021

North Grand Avenue East

P.O. Box

19276

Springfield, Illinois 62794-9276

Telephone: 217/782-5544

Facsimile:

217/782-9807

CLERK’S OFFir~

BEFORE THE ILLINOIS POLLUTION CONTROL

BOARD

JAN

2005

OF THE STATE OF ILLINOIS

STATE OF ILLINOIS

PoIIut~onControl Board

SOUTHERN ILLINOIS POWER COOPERATIVE

)

Low Sulfur Dioxide Emission Coal

Fueled Device

)

PCB~W

)

(Tax Certification)

PROPERTY IDENTIFICATION NUMBER

)

10-26-200-002

)

RECOMMENDATION

NOW COMES the ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

(“Illinois EPA”), through its attorneys, and pursuant to 35

III. Adm.

Code 125.204 ofthe

ILLINOIS POLUTION CONTROL BOARD’S (“Board”) procedural regulations, files

the Illinois EPA’s Recommendation in the above-referenced request for tax certification

of pollution control facilities.

In support thereof, the illinois EPA states as follows:

On September 30, 2004, the Illinois EPA received a request and

supporting information from SOUTHERN ILLINOIS POWER COOPERATIVE

(“SIPC”) concerning-the proposed tax certification ofcertain air emission sources andlor

equipment located at its power plant in Williamson County, Illinois.

A copy ofthe

relevant portions ofthe application is attached hereto. Exhibit

Al.

The Illinois EPA also

received a letter on October 25, 2004, from SIPC containing supplemental information

for the application.

Exhibit

BJ.

The applicant’s address is

as follows:

Southern illinois Power Cooperative

11543 LakeofEgyptRoad

Marion, Illinois

62959-8500

—

The subject matter of this request consists ofthe recognition of a new

circulating fluidized bed (“CFB”) boiler as a “low sulfur dioxide emission coal fueled

device” as defined by statute.

The CFB boiler does not require downstream

flue gas

desulfurization because the sulfur dioxide is captured by limestone that is utilized as part

of the fluidized bed.

The equipment may therefore be considered a low sulfur dioxide

emission device as the CFB boiler will be used to convert locally available coal ma

manner that eliminates the need for any additional sulfur abatement measures otherwise

required under state or federal

laws and regulations.

Section

11-40 ofthe Property Tax Code, 35 ILCS 200/11-40

(2002),

defines “low sulfur dioxide emission coal fueled devices” as:

“any device used or intended

for the purpose ofburning, combusting or

converting locally available coal

in a manner which eliminates or

significantly reduces the need for additional sulfur abatement

that would

otherwise be required under State or Federal air emission standards.”

The word “device” is also defined in the same provision to include:

“all machinery, equipment, structures and all related apparatus, including

coal feeding equipment, ofa coal gasification facility designed to convert

locally available coal into a low sulfur gaseous fuel and to manage all

waste and b.y-product streams.”

As with pollution control facilities, low sulfur dioxide emission coal

fueled devices are entitled to preferential tax treatment, as provided by 35 ILCS 200/11-

(2002).

Based on information in the application,

it is the Illinois

EPA’s

engineeringjudgment that the described project andlor equipment may be considered

“low sulfur dioxide emission coal fueled device” in accordance with the statutory

definition and consistent with the Board’s regulations at 35

Ill

Adm

Code

125

200

Because the CFB boiler identiflea in SIPC’s application satisfies the

aforementioned criteria, the Illinois EPA recommends that the Board issue the applicant’s

requested tax certification.

Respectfully submitted by,

ILLINOIS ENVIRONMENTAL PROTECTION

AGENCY

Robb

H. Layman

Special Assistant Attorney General

DATED:

December 29, 2004

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

1021 North Grand Avenue East

P.O. Box

19276

Springfield,

Illinois 62794-9276

Telephone: 217/782-5544

Facsimile:

217/782-9807

THIS FILNG

SUBMIUED

ON RECYCLED PAPER

—_

CERTIFICATE

OFSERVI

I hereby certify that on the

29th

day ofDecember, 2004,I&

j~yFirstClass

Mail, with postage thereon fullypaid and deposited into the possession ofthe United

States Postal Service, one (1) original and nine

(9)

copies ofthe following instruments

entitled

NOTICE,

APPEARANCE and RECOMMENDATION to:

Dorothy Gunn, Clerk

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago, Illinois

60601

and a true and

correct copy ofthe same foregoing instruments, by First Class Mail.with

postage thereon fullypaid and deposited into the possession ofthe United States Postal

Service, to:

Steve Santarelli

Richard C. Myott

Illinois Department ofRevenue

Southern Illinois Power Coop

101

West Jefferson

11543

Lake ofEgypt Road

P.O. Box

19033

Marion, Illinois

62959-8500

Springfield, Illinois 62794

By: Robb H. Layman

Special Assistant Attorney General

This filing is submitted on recycled paper.

MAYER

BROWN

ROWE

September 29, 2004

VIA

UPS

Mr. Donald B. Sutton, P.E.

Permit Manager/Permit

Section

Division ofAir Pollution Control

Illinois Environmental Protection Agency

1021 North Grand

Avenue East

Springfield, IL 62702

Re:

Southern illinois Power Cooperative

Application for Certification ofCirculating

Fluidized Bed Boiler

Dear Mr. Sutton:

Mayer, Brown,

Rowe & Maw LLP

190 South La Salle Street

Chicago, Illinois 60603-3441

Main Tel (312) 782-0600

Main Fax (312) 701-7711

w~w.mayerbrownro~.com

Patrick J.

McNemey

Direct Tel (312)

701-7609

Direct Fax (312)

706-8747

Enclosed please find

Southern

Illinois Power Cooperative’s Application for certification

of its newly installed Circulating Fluidized Bed Boiler.

Please cause your staff to review the

enclosedApplication and

call me if you need

any additional documentation.

Thank you.

cc:

Ms.

Angela L. Desmond

Verytruly yours,

RECEIVED

SEP

2flP4

IEPA

DAPC

SPFLD’

—

Brussels

Charlotte

Chicago

Cologne

Frankfurt

Houston

London

Los Angeles

Manchester

New York

Palo Alto

Paris Washington, D.C.

Independent Mexico City Couespondent

Jauregul, Navarrete, Nader y

Rojas,

S.C.

PJM:mg

Enclosures

Mayer, Brown, Rowe & Maw LLP operates in combination with our assoctated English limited liability partnership in the offices listed above.

T~u

~ert~ñcanon Jo,- Po1hitio~,

Conin,!

Facilities

Page

of2

glon

This

Agency

authorized

request

this

infbrm~ion

tmder Illinois Revised Statues,

1979,

Chapter,

120,

Section 502a.5.

Disciosece

oIthis

infoemation is voluntary.

Howcvet~~ilure

comply

could

~eveat your

application

from

being processed

could result in dcnial

of your

applicatiat

for atti&atim.

APPUCATION FOR CER11FICA11ON (PROPERTY

TAX TREATMENT)

POLLUflO~

CONTROL FACILI1Y

AIR

2’

WATER

IWNOIS

ENViRONMENTAL

PROTECflON AGENCY

P.O. Box

19276, Sprfr~gfl.Id,

62794-9276

FOR

AGENCY USa

File No.

Date Recthed

Certification

No.

Date

Sec. A

~

•

Company Name

Southern Illinois Power Cooperative

PersonAuthorized toReceiveCertification

Person

toContact for Additional Details

Mr. Richard

 C. Myott

 Ms. Angela Desmond

SlreetAddress

11~43Lak8~EgyptRoad,

S~reet.~1dm~S~

 ~ i~ewa~erhouseCoopers

LI

Munictpahty,

State& ZipCode

Munictpality,State & Zip

Cede

Marion,

 IL 62959—8500

 Chicago,

 IL 60606

Telephone

Number

 Telephone Number

(618)

964-~1448

(312)

298—4116

Location

of Facility

Municipality

Township

Quarter

Section

Township

Range

26

105

Marion

Street Address

County

Book

Number

11543

 Lake of Egypt

Rd.

 Williamson

Property

Identification

Number

Parcel

Number

10—26—200—002

Sec. B

~ei

.c~

~

•

Nature of

 Operations

Conducted atthe Above Location

Southern Illinois Power Cooperative

 (“SIPC”) generates electricity through

 the process of carbon combustion.

Waler Pollution Control

Construction

Permit No.

Date Issued

NPDESPERMIT

No.

1RL106090

(See

 Exhibit A attached)

Date

Issued

Expiation Date

~March12,

2001

 July

25,

2003

Air Pollution

 Control Construction

Permit

No.

Date Issued

*.~olIution

Control Operating

Permit

No~

00070028,

00070029,

00070030

Date Issued

May

16,

2001

and June

15,

2001

Sec.C

~

~

~

~

~°

~

DescribeUnitProcessSlpC

was formerly comprised of four-solid fuel coal fired

generating units.

 It has replaced coal fired Units

 1—3 with

 .a new

circulating fluidized bed boiler

 (“CFB”).

The

CPu

 is designed

 to use coal

refuse, which is low Btu, high ash fuel,

 as its main fuel.

 It produces

enough steam to serve three existing steam turbines with a total nominal

generating capacity of

 120 MW

 (gross).

 (See CFB Schematic. attached- as Exhib

Materials Used

Process

Coal, coal refuse, petroleum coke, wood chips,

 tire derived fuel,

Limestone and ammonia.

Sec.0

~

~

zu,

Describe

Pollution

Abatement

Control Facility

See narrative description of

 CFB attached as Exhibit C and copy of

~ay 16,

 2001 IEPA Construction Permit attac-hed as Exhibit D.

t

B)

IL 532-0222

APC 151

(Rev.

8/00)

l1~~~I

V ~

SEP

?fl04

~EPA

DAPC

SPFLD

Sec. E

(1) Nature of Contaminants or Pollutants

‘C

I-

Tax

Cart

j/kalionfor Poilugie,n C~~ur,’I

Facilities

Page

2 of

5/Of)

Material

Retained,

 Captured

Recovered

Contaminant or Pollutant

DESCRIPTION

 DISPOSAlOR USE

See copy of May

16,

 2001IEPA

construction permit for

CFB

attached hereto as Exhibit D

(2) Point(s)

of

Waste Water

Discharge

Plans and

Specifications Attached

Yes

~

No

.@i..

Are

contaminants

(or residues)

collected

by

the control facility?

Yes

No

(4)

(5)

Date installation completed 12/200’3

status of installation on date of application Complet.g,4_.._

FAIR CASH VALUE IF CONSIDERED REAL PROPERTY:

110,000

ooo.L’

NET SALVAGE VALUE IF CONSIDERED REAL PROPERTY:

PRODUCTIVE GROSS ANNUAL INCOME OF CONTROL FACILITY:

PRODUCTIVE NETANNUAL INCOME OF CONTROL FACILITY:

e.

 PERCENTAGE CONTROL

FACILITY BEARS

 TOWHOLEFACILITY VALUE:

Sec. F

‘T~following

information is submitted in accordancewith the

 Illinois Property Tax

Code, as

amended, and to the best of my

knowledge, is true and

 correct.

The facilities claimed herein are

~polIution

control fadhties

as defined in Section 11.10 of the

Illinois Property Tax

Signature

Title

INSTRUCTIONS

FOR COMPIUNG AND FlUNG APPLICATION

Sec.

G

General:

Separate applications must be completed

for each control

facilIty claimed. Do not mix types (water and air).

Where both air

and

water operations are related. file twoapp~cations.If attachments

are needed, record

them consecutively on an

index sheet

Sec. A

Information refers to applicant as listed in the tax records

and the person to be contacted for further details or for rnspection of

facilities.

Define facility location by

street address or legal desaiption~A plat map location

reqi*ed for facilities located

outside of municipal boundaries._The property ideritifoation number is requ Wed.

Sec. B

Seif-explanatoty.

Sttnit copies ofal pemiitsIssued by local polulion

control agencies.

(e.g.MSD Constniction

Pemilt)

Sec. C

Refers to manufacturing processes or

materials onwlich pollution control fadlityis used.

sec.

0

Nanatlve description ofthe pollution control

facility, indicating that

its primary purpose is to eliminate,

preventor reduce pollution.

Slate the type of control facility.

State permitnumber,

date, and agency issuing permit

A narrative description and a process

flow diagram describing the oolution control fadllltv. ki~jde

a listing of each major piece ofequipotent included

the claimed

fa~

cash value for realproperty.

Include an averace analysisofthe influent and eftkient of the control facilitystating the

collection efficiency.

Sec.

E

 List air

contaminants, orwater pollution substancesreleased as effluents to the manufactising processes.

List also the

final

dIsposal

of any contaminants removed from the manufacturing processes.

Item (1)- Refers to polkitants and conbminants

removed

from the process by the pollution control facility.

Item (2)

Refers

to water pollution but can

apply towater’camed wastes from air pollutioncontrol facilities.

Submit drawings,

wtiithclearly show (a) Point(s) of discharge to receiving

stream,

and(b)

Sewers

and process piping to and

from the control

—

Sec. F

facility.

Item(3)—Itthe collected contaminantsare disposedof

other than as wastes,

state

the dispositionofthe materials, and the value

in dollars reclaimed by sale or reuse of

the colleratd substances. State the cost ofreclamationand related

expense.

Item

(4)-

State the date which the pollution control facety

was

first placed in service and operated.

If not, explain.

Item

(5)- This information is essential to the certification and assessment actions.

This accotxilrng datamust be completed

activate project review

prior to certification

 bythis Agency.

Self-explanatory.

Signature

must bea corporate authorized signature.

Submit to:

Attention:

Attentiort

Ikds

EPA

Thomas McSwiggin

Donald E. Sutton

P.O. Box

19276

Permit

Section

Permit Section

Springfield.

62794-9276

Division of Water Pollution Conrot

Division of

Air

Pollution Control

1/ Completion of this section

 is not an acknowledgement that this property

constitutes real property for ad valorem property

tax

 purposes.

Exhibit

Section D

Describe Pollution Abatement Control Facility

The principle ofthe circulating fluidized bed system

can

be explained by examining the

relationship between differential pressure

and

superficial gas

velocity for a bed ofparticles. For a

fixed bed, the log of differential pressure is

approximately proportional to the log of

gas

velocity.

As the

gas

velocity increases beyond the minimum fluidization velocity, the particles begin to

expand

and

become fluidized, and a distinct bed level is visible in the fluid bed. The differential

pressure remains

almost constant until the bed material

begins

elutriate (lift and

separate) at

the entrainment velocity ofa bubbling bed. The degree of turbulent mixing continues to increase

between the

minimum and

the entrainment velocity. Beyond the entrainment velocity, the

particles are carried

out ofthe combustor, and a continuous process is maintained by circulating

the

same amount

ofparticles to the bottom ofthe reactor. The entrainment velocity marks the

transition

from a bubbling bed to a circulating bed. Beyond

this

velocity, the differential pressure

becomes a function ofvelocity

and

solid recirculating rate.

The CFB system operates in the

region between that ofa bubbling fluidized bed

and

that of a circulating fluidized bed until

normal bed temperatures

are obtained,

air

flow is above minimum, and the entrainment velocity

is reached. From that point the

unit

operates as a circulating fluidized bed.

This

fluidization

pattern is characterized by high turbulence, solids.back-mixing,

and

the absence of a defined bed

level. The entrained bed material, with an average size in the

range of 100 to 300 microns,

(talcum powder) is

separatedby a cyclone and

returned

to thebed via a non-mechanical loop

seal. Fuel is

fed into the lower combustion chamber, and

primary air

is introduced

through a

lower

grid.

Because ofthe

turbulence in the circulating bed, the fuel mixes quickly and

uniformly with the bed material. Although there is no definite fixed bed depth, the density ofthe

bed

varies throughout

the system, with the highest density at the level where the fuel is

introduced.

Secondary air is introduced to:

•

Ensure solids circulation;

•

Provide staged combustion for NOx reduction.

•

Supply air for continuous fines combustion in the upper part

the combustion chamber.

The major advantages ofthe CFB combustion system can be summarized as follows:

Fuel flexibility

The CFB can be designed to fire a wide range offuels including high ash

and moisture

coals, biomass,

and low volatile petroleum cokes.

Low sulfur emissions

Downstream

flue

gas

desulfurization is not requiredto meet environmental regulations. Sulfur is

capturedby limestone in the combustion chamber.

High combustion efficiency

Excellent vertical and

lateral mixing and a long solids residence time resulting from high gas

solids slip velocity ensures optimum carbon

burnout.

Low NOx emissions

Low combustion temperature and staged combustion result in

low NOx emissions which meet

most regulatory standards

without downstream treating.

Elimination of slagging

Low combustion temperature eliminates slag

formation

and reduces the volatilization of alkali

salts. This reduces boiler corrosion

and convective surface fouling.

High turndown

The high velocities in the combustion chamber permit large load reductions without bed

slumping.

The major components of the

CFB

boiler system

are

th~

combustion chamber, hot cyclone

separator, the non-mechanical loop seal,

INTREX

and the convection

superheater surface. In the

combustion chamber the

bed

material, with the fuel, is fluidized with

primary

air which

turbulently

transports the solids up the full height ofthe combustion chamber. Combustion of the

fuel takes

place as it

rises and

heat is

transferred

to the membrane water-wall tubing that

forms

the walls of the combustion chamber.

The hot combustion

gases with the entrained solids exit at

the top of the combustion

chamber into the cyclone separator. The cyclone separator separates

the solids

from the combustion gases

and returns the solids, including any unburned solid fuel,

through the non-mechanical loop seal to the INTREX

where solids heat is transferred to

superheaters and combustion chamber where they

mix

with incoming fresh fuel. The long solids

residence time

at combustion temperature and the retention and conti-nuous--reçirculation-of the

solids ensure high combustion efficiencies for a wide range of fuels and result

an ideal system

for the mixture offine limestone with the fuel for efficient S02 retention in

solid ash form.

The limestone reacts with the sulfur released from the fuel in the following

Calcination of limestone

CaCO3+heat=CaO+C02

Note: The released C02 does

have

a minor affect on the quantity of flue gas.

13204921.1

04271347

Reaction with sulfur (sulfation)

CaO+l/202+S02=CaSO4+heat

The product, CaSO4 is an inert substance known

as gypsum.

The limestone is continuously reacted and, therefore, it is

necessary

to continuously feed

limestone with the fuel. The sulfation

reaction requires that there is always an

excess amount of

limestone present. The amount of excess limestone that is required is dependent on a number of

factors such as the amount of sulfur in the fuel, the temperature of the bed, and the physical

and

chemical characteristics of the limestone. The ideal reaction temperature range is

845

900°C.

The lower section of the combustion chamber includes

a water cooled air distribution

grid

and

windbox

as well as a bottom ash removal system.

Provisions

are

made for primary and

secondary air

supply to the combustion chamber. The

primary

air is supplied through the water

cooled windbox

to the fluidizing grid and provides the initial fluidization

air

flow. The secondary

air

provides

a staged combustion effect to ensure high combustion efficiencies and to minimize

NOx production.

Flue

gas and some fine size particulate-matter leave the hot cyclone separator

and pass through the convection section which contains superheat, reheat and economizer banks,

plus an

air

preheater. The flue gas then enters

particle

collector where particulate m’atter is

removed in.compliance with environmental regulations. Clean flue gas is discharged to the stack

via the induced draft fan.

Feedwater enters the economizer and counterfiows against the flue gas, picking

up heat before

entering the drum.

Water flows from the

drum

to the lower combustion chamber headers via

downcomers and supply pipes. The combustion chamber is arranged for natural circulation. As

the steamlwater mixture in the waterwalls absorbs heat from the combustion flue gases it rises up

the water wall tubes, is collected in

the upper combustor headers and is transferred to the drum

via rise tubes. The

density difference between the water and the steam/water mixture creates a

natural pumping

action. The steam/water mixture is separated in the drum.

Dry, saturated steam

leaves the top of the

drum

and is delivered to the superheat

surfaces. The superheater bundles

are

arranged

in multiple stages, SH

I, SH II (in

INTREX

)and SH ifi (in INTREX),with

attemperation between each stage. The superheated steam exits the outlet header of the final

superheater and enters the main steam line.

13204921.1

04271347

Exhibit D

ILLINOIS

ENVIRONMENTAL

PROTECTION

AGENCY

___--

—

‘i..

I~1

‘Oh,

Sl’~N

uii,

Iii

 ir.ac

n’s

(,27’l4—~)5O(,

7/782—2113

Tiit~.t,~~

V.

5kINNI1~.

DIRt.

Ifl.

 COt~.ISTRUCTION

PERMIT

—

PSD

 NSPS

PERMITTEE

Southern

 Illinois Power Cooperative

Attn:

Mr.

 Richard G. Myott

11543 Lake of Egypt Road

Marion,

 Illinois

 62959—8500

~p1ication

 No.:

00070030

 t.D.

 No.:

 199856P2AC

~2plicant’s

 Designation: CFB BOILER

 Date Received:

 July 12,

2000

Subject: Circulating Fluidized Bed Boiler

 (Power Production)

Date Issued: May 16,

2001

Location:

 11543 Lake of

Egypt

Road,

Marion

Permit

 is hereby granted to the above-designated Permittee to CONSTRUCT

emission units and air pollution control equipment in conjunction with a

repowering project described

in

 the above referenced permit application,

 including one circulating fluidized bed

 (CFB)

 boiler capable of burning coal

refuse,

 coal,

 petroleum coke,

 tire derived fuel, wood chips,

 and fuel oil;

solid fuel storage piles and si-los and reclaiming and conveying equipment;

limestone storage pile and silo and reclaiming and conveying equipment; ash

storage silos;

 and associated air pollution control equipment and other

support equipment.

 This Permit

 is granted based upon and subject to the

findings and conditions that follow:

In conjunction with this permit,

 approval is given with respect to the

Prevention of Significant Deterioration

 (?SD)

Air

 Quality Regulations

to

construct

 the above referenced project,

 in that the Illinois Environmental

Protection Agency (Illinois EPA)

 finds that the application fulfills all

applicable

 requirements of 40 CFR 52.21.

 This approval is issued pursuant to

the Clean

Air

 Act,

 as amended,

42

U.S.C.

7401

et.

 seq.,

 the Federal

~egn.latiorispromulgated thereunder at 40 CFR 52.21,

 and a Delegation of

Authority agreement between the United States Environmental Protection Agency

(USEPA)

 and the Illinois EPA for the administration of the PSD Program.

 This

approval becomes effective in accordance with the provisions of 40 CFR 124.15

and may be appealed in accordance with the provisions of 40 CFR 124.19.

 This

approval

 is also based upon and subject to the following findings and

conditions.

FINDINGS

la.

 Southern Illinois

 Power Cooperative

 (SIPC)

 is presently comprised of

four solid fuel fired coal fired gerterating units and has requested

a

permit ~

 construct

 a new solid fuel fired boiler to replace existing

coal fired Units 1—3. Units 1—3 are each rated at

 33 MW. The boiler

would be designed to use coal refuse,

 which-is

 a low Btu, high ash fuel,

as

 its main fuel. The new boiler will produce enough steam to serve the

tl~ree~exiStingsteam turbines with

 a total nominal generating capacity

of 120 MW (gross).

b.

 The proposed new boiler will be a circulating fluidized bed

 (CTh)

 boiler

with limestone injection in the combustor, ammonia injection

as

necessary in the cyclone section of the boiler, and a baghouse for

particulate emission control.

 Associated emission units

 include fuel

handling systems for coal refuse,

 coal,

 petroleum, coke,

 wood chips and

tire derived

 fuel; new limestone storage silo and conveying equipment;

two ash storage silos and other ancillary equipment.

GEORGE

H.’ RYAN,

GOVERNOR

Pag~ 2

c.

i.

 Concurrent with the boiler project,

 SIPC

 is proposing to construct two

simple cycle combustion turbines

 (CTs)

 SIPC is

 also proposing

to

install a selective catalytic reduction system on Unit

4,

 an existing

coal-fired boiler at

 the Marion Generating Station rated at

173

MW.

ii.

 Separate permit applications have been submitted for the simple

cycle combustion turbines and the selective catalytic reduction

system for Unit

4.

 However,

 for air quality purposes they can be

considered a single project.

2.

 The CFB boiler project will be located at SIPC’s existing Marion Generating

Station located in Williamson County.

 The area is designated attainment

for all criteria air pollutants.

 The county has a Class

 II designation for

Prevention of Significant Deterioration

 (PSD)

 permit

 review.

3a.

 The existing plant

 is a major source under PSD rules.

 The proposed

CFB

boiler will have potential annual emissions of 3690 tons/year of sulfur

dioxide

 (SOz),

 841 tons/yr of nitrogen oxides

 (NOn),

 67.5 tons/yr of

particulate matter

 (PM),

92.

 tons/yr of carbon monoxide

 (CO),

 and 44.2

tons/yr of volatile organic materials

 (VOM).

b.

 SIPC has submitted a PSD netting’demonstration that addresses the

decrease in emissions from shutdown of existing boilers that occurs with

this repowering project. The netting demonstration,

 summarized in

Attachment

B,

 shows that the proposed repoweririg project will result

in

a significant net increase

 in emissions

 for one regulated PSD pollutant,

carbon monoxide

 (CO).

 ?J.l other regulated PSD pollutants.will

experience either a net decrease or

art

 insignificant net increase in

annual emissions.

 Therefore,

the

CFB

 boiler is subject to PSD review

for CO and only provisions of this permit that relate to emissions of CO

 are considered part of the PSD approval.

S

4..

 The air quality analysis submitted by SIPC and reviewed by the Illinois

EPA shows that .the proposed repowering project will not cause

a

violation of the ambient air quality standard for CO.

 The air quality

analysis demonstrated compliance with the allowable increment levels

for

CO established under the ?SD regulations.

‘

5.’

 After reviewing the materials submitted by SIPC, the

 Illinois EPA has

determined that the proposed CFB boiler will

 Ci) comply with applicable

state air emu.issiori standards,

 (ii)

 comply with applicable federal New Source

Performance Standards,

 40 CFR

60,

 Subpart Da

 (iii)

 comply with all

applicable Illinois

Air

 Pollution Board Regulations and

 (iv)

 utilize Best

Available Control Technology

 (BACT)

 ...on emissions of CO as required by

regulat-~.orts, 40 CFR 52.21(Conditions

 3 and

 7 as applied to emissions of CO

represent the application

 of BACT for CO,

as

 required by Section

 165 of the

Clean Air Act.),

and

(v)

 utilize BACT on emission associated with burning of

tires as required by section 55(h)

 of the Environmental

 Protection Acz.

 (Conditions

 2,3 and

 7 represent the application of BACT)

 The CFB boiler

 is an affected unit under

the

Acid

Rain

Deposition

Control Program pursuant

 to Title IV of the Clean Air Act and is

 subject

to certain control requirements an~emission monitoring requirements

pursuant

to

 40 CFR Parts 72,

73,

 and 75.

 As an affected unit under

the

Acid Rai&?rograxn,

art

 Acid Rain Permit application must be submitted in

accordance with the applicable requirements of

 40 CFR 72.30 before

commencing

 operation and must hold calendar year allowances for each

 tort

of SO2 emitted.

Page

3

7a.

 This permit is

 issued based on the proposed CFB boiler not being a major

new source of hazardous air pollutants

 for purposes of Section 112(g)

of

the Clean Air Act.

 This reflects

 a finding that the CFB boiler should

reduce emissiori~of hazardous air pollutant-s

front

 the Marion Generating

Station,

as

 it generally

reduces

emissions

air

pollutants

(refer

Attachment

B,

 Table

1).

In

 addition,

 the application indicates that the

emission

hazardous

air

 pollutants

 from the boiler itself would be

below

the

criteria

for

major

source

hazardous

air

pollutants.

b.

 The, new fuel handling systems

 to be installed

 for the CFB boiler do not

involve breaking,

 crushing,

 screening,

 cleaning, or thermal drying of

coal.

 To the extent that any such

operations

are

required,

they

will

accomplished by existing equipment.

 Therefore,

 the new fuel handling

systems are not

 subject

to

 the New Source Performance Standards for Coal

Preparation

 Plants,

 40 CFR 60,

 Subpart

Ba.

copy

the

air

permit

application,

the

project

summary

and a draft of

this permit were placed in a location in the vicinity of the proposed

project

 site.

 The public has been given notice and an opportunity to

 examine this material and to submit comments.

 A public hearing was’held

in the vicinity of Marion Generating Station to allow public comment

ott

this matter.

b.

 This permit is issued following consideration by the Illinois EPA of all

public comments submitted by April 28,

 2001.

 This is the date for close

of the comment period established by order of the Hearing Officer,

following consideration of an oral request by the Permittee

 at the

public hearing, which was unopposed to shorten the period following the

hearing

 for submittal of written comments.

 As such,

 this

 permit

authorizes the Permittee

 to undertake construction of the proposed

facility.

 However,

 the Illinois EPA is retaining jurisdiction over the

application and will take further action on the application after

conside.rat~.onof public comments, if any, submitted within the public

comment period originally established for the project,

 i.e., May 18,

2001.

 As necessary to allow the Illinois EPA to consider and take

action upon -any such further public comments,

 the issuance of this

permi.t shall not be ‘considered a final action by the

 Illinois EPA.

The Illinois

EPA

 is issuing approval to construct the proposed repowering

project subject to the following Special Conditions and consistent with the

materials included in the air permit application.

Any

 departure from the

conditions of this permit approval or intent of the terms expressed in the air

permit application would need to receive prior written authorization by the

Illinois EPA.

SPECIAL CONDITIONS

1.

 Standard Conditions for issuance of construction permits, attached

hereto and incorporated herein by reference,

 shall apply

 to this

project,

 unless superseded by the following Special Conditions.

2a.

i.

 The CFB boiler

 is subject to a New Source Performance Standard

(NSPS)

 for Electric Utility Steam Generating Units,

40

 CFR ?0,

Subparts

A,

 and Da.

 The Illinois EPA is administering NS?S

in

Illinois

 ott behalf of the USEPA under

 a delegation agreement.

ii.

 The emissions

 front

 CEB boiler shall not exceed the applicable

limits pursuant

to

 the NSPS,

 as follows:

Page

A.

 The NO~emissions from the CFB boiler system shall not

exceed

 1.6 lb/MW—hr gross energy output,

 based on a 30-day

rolling average,

 pursuant

to

 40 CFR 60.44a(d).

The

 S’JCR

system shall be operated and maintained to the extent

 necessary to ensure compliance with the applicable

 NS?-S ‘and

achieve the emission limitations contained

itt

Attachment

A.

B.

 The SO2 emissions from the CFB boiler system shall comply with

the requirements of 40 CER 60.43a(a).

 Compliance with the SO2

emission limitation and percent reduction requirement shall be

determined

 art a 30—day rolling average basis.

C.

 The PM emissions

 from the CFB boiler system shall not

 exceed

0.03 lbfrnm3tu heat input and

 1 percent of potential

combustion concentration when cornbusting solid fuel,

and

30

percent of the potential combustion concentration when

combusting liquid fuel pursuant to 40 CFR 60.42a(a).

Compliance with the

 PM emission limitation constitutes

compliance with the percent reduction requirements.

D.

 Pursuant

 to 40 CFR 60.46a(c),

 the emission limitations

established above shall apply at all times,

 except during

periods of startup, shutdown or malfunction as defined by

40

CFR 60.2.

b.

i.

 The limestone handling and storage processes are subject to the

NSPS

 for Nonmetallic Mineral Processing Plants,

 40 CFR 60,

Subparts A and 000.

ii

A.

 Stack Emissions of

 particulate matter from affected

limestone handling and storage processes shall not exceed

0.022 gr/dscf and shall not exhibit greater than 7 percent

opacity

 (unless controlled by a wet scrubber)

40

CFR

60.272(a).

B..

 Fugitive emissions of particulate matter from limestone

.grirtding mills,

 screens

 (except truck dumping),

 storage

bins,

 enclosed truck or railcar loading operations and

crushers

 at which a capture system is used shall not exceed

10

 opacity.

 (40 CFR 60.672(b). ‘and

 Cd))

C.

 Fugitive emissions of particulate matter from the crushers,

at which

 a capture system is

 not used, shall not exceed 15

opacity.

 (40 CFR 60.672(.c))

Truck dumping of limestone into any

screening

operation,

S

feed hopper,

 or crusher is exempt from the requirements

40 CFR,

 Subpart 000.

 (40 CFR 60.672(d))

c.

 At all times,

 the Permittee shall maintain and operate emission

 urtits

that are subject

to

 the NS?S,

 including associated air pollution control

equipment,

in

 a manner consistent with good air pollution control,

practice

for

minimizing

emissions,

required

 per NSPS,

 40 CFR

 60.11(d).

3a.

The

 Permittee shall use good combustion practices

 to minimize CO

emissions from the CFB boiler.

Page

b.

j.

 The CO emissions from the CFB boiler shall not exceed the

following limit except

during

startup,

malfunction

 breakdown

and shutdown as addressed by Condition

7.

0.15

lb/million

Btu,

based

 on a 3—hour block average

ii.

The

Pertnittee

shall

evaluate

emissions

from

the

CFB

boiler

‘to

determine whether a lower CO emission limit

 (as low as

 0.10)

may

reliably

achieved

while

complying

with

other

emission

limits

without

significant

 riskto equipment or personnel and

unreasonable increase in maintenance and repair needed for the

boiler.

4a.

 The ‘fuel storage silos,

 limestone storage silo and ash storage silos

shall

each

equipped

with

baghouse

(fabric

filter)

control

emissions.

 The baghouses shall be operated and maintained so

 as to

ensure

compliance

with

the

emission

limitations

indicated

the

 application.

b.

 The Permittee shall

employ

good operating practices for the operation of

the active fuel and limestone storage piles as

 to minimize the emission

of PM from the storage piles.

5.

The

 Permittee shall comply with the following requirements with respect,

to opacity and visible emissions,.

a.

 The emission

 of smoke or other particulate matter from the CFB

boiler shall not have

art

 opacity greater than 20 percent,

 pursuant

to

35

 IAC 212.122(a),

 exceDt as allowed by 35

 IAC 201.149,

212.122(b)

212.124.

Opacity

measurements

taken

 demonstrate

compliance with these provisions shall be based on a

 6—minute

average.

b.

 The emissiOn of smoke or other particulate matter from ba.ghouses

associated with the fuel storage,

 limestone storage and ash

storage silos

 shall- not have

art

 opacity greater than

 30 percent,

pursuant to 35

 EAC 212.123(a),

 except as allowed by 35

IAC

201.149,

 212.123(b)

 or 212.124.

 Opacity measurements taken to

demonstrate compliance with these provisions shall be based on

a

6—minute average.

S

c.

Visible

emission

of particulate

 matter

associated with fuel

storage

pile,

the

limestone

storage

pile,

 and the associated

material handling operations shall comply with the provisions of

35 IAC 212.301.

6a.

i.

 Emissions from the CFB boiler shall not exceed the limits

itt

Attachment

A,

 Table

2,

 except during startup, malfunction or

shutdown

 as addressed by Condition 7.

 Compliance with the limits

ensures that emissions

 from the CFB boiler

project

are

 within the

overall project totals

shown

in Attachment B.

The

 total increase

in emissions

 in Attachment

 B will ensure that the

CF3

boiler

and

 associated projects do not constitute a major modification

pursuant to

 PSD for any pollutant except CO. Compliance with these

hourly

Limits

shall

determined

3—hour

block

average

for

all pollutants consistent with testing and monitoring.as requ~.red

by Conditions

 12 and

14.

Page

ii.

Annual

emissions

from

the

CFB

boiler

shall

not

exceed

the

limits

attachment

Table

Compliance

with

 the annual limits shall

be determined from a

 running total of 12 months of emission and

fuel consumption data.

b.

 PM emissions

 from the operation of the fuel silos,

 limestone silo and

ash silos shall not exceed the limits of 0.137

 lb/hour-each for silos

Si

through S5,

 and 0.645 lb/hour each for silos S6 and S7,

 as indicated in

the application.

7.

 The CFB boiler and air pollution control equipment shall be operated

to

minimize emissions during startup, malfunction and shutdown including:

a.

i.

 Operation in accordance with the manufacturer’s written

 instructions,

 or other written instructions developed and

maintained

the

Permittee;

and

ii.

Review

operating

parameters

the

units

 during startup,

malfunction,

breakdown

shutdown

necessary

 make

adjustments to reduce or eliminate excess emissions.

b.

 The Perm.ittee shall maintain the CF3

boiler’

and

air

pollution

control equipment

 itt accordance with written procedures developed

 and maintained by the Permittee.

 These procedures shall be

reviewed

 at least annually and enhanced consistent with good air

pollution

control

practice

based

on.

actual

operating

experience

 and performance.

S

c.

 Upon malfunction

 of the CFB boiler or any air pollution control

equipment

that

will

result

emissions

excess

the

applicable

limits

Condition

the

Permittee

shall,

soon

practicable,

repair

the

affected

system

remove

the

system

 from

service

that

excess

emissions

 cease.

Consistent

 with the above,

if

the

 Permittee has maintained and

operated

the

CFB

boiler

and

air

pollution-

control

equipment

that

atalfunctions

are

infrequent,

sudden,

not

caused

poor

main.tertance

careless

operation,

and

general

,are

not

reasonably

preventable,

the

Permittee

shall

begin

shutdown

the

system

within

minutes,

unless

the’malfunction

expected

repaired

within

120

minutes

such

shutdown

could

threaten

the

stability

the

regional

electrical

 power system.

such

case,

shutdown of the system shall be undertaken when it is apparent

that repair will not be accomplished within 120 minutes or

shutdown will not endanger theregiortal power system.

 In no case

shall shutdown of the CFB boiler be delayed solely for the

economic

benefit

the

Perinittee.

Notwithstanding

the

above,

the

Per~ittee

determines

that

the

continuous

emission

monitoring

system

(CEMS)

inaccurately

reporting

excess

emissions,

the

Permittee

may

continue

operation

provided

the

Perinittee

records

the

information

it

relying

 upon

 conclude that the CFB boiler and emission control systems-are

functioning

properly

and

the

 CEMS

reporting

inaccurate

data

and

the Permittee takes prompt action to resolve the accuracy of the

CEMS.

Pagel

Ba.

 The fuel feed stream combusted into the CFB boiler shall contain no more

than 20 percent by -weight,

 on a calendar quarter basis,

 of tires,

 tire

derived

 fuel,

 and other materials which constitute municipal solid waste

as defined

itt

40 CFR 60.Sla.

b.

 The Perinittee shall keep records on a calendar quarter basis of the

weight of tires,

 tire derived fuel and other material which constitute

municipal

 solid waste

 coznbusted

itt

 each, CFB boiler and the weight of all

other materials,

by

type,

 burned in each

 CE’B boiler.

c.

As

 a consequence of the above conditions,

 this permit

 is issued based on

the CFB boiler constituting a co—fired boiler pursuant

to

 40 CFR

60.50b(g

 provided the

 Pertnittee notifies the tJSEPA of this status

accompanied by a copy of this permit,

 with a copy of such notification

also sent to the Illinois EPA.

9a.

 This permit allows use of tires and tire derived fuel,

 as defined in

Section

 54 of the Act,

 and clean wood,

 as defined in 40 CFR 60.5lb,

as

supplemental fuels in

 the CF8 boilers.

b.

 Supplemental fuels shall be burned in a blend with commercial fuels

 (coal refuse,

 coal, petroleum coke,

 etc.)

 so as to not exceed 20 percent

by weight in the total fuel supply to the CFB boiler, determined

ott

a

-daily basis.

c.

 The Permittee shall handle supplemental fuels

 for the CFB boiler in

accordance with a written fuel management plan designed to assure that

acceptable fuel is received and fuel is

 safely stored and handled.

 This

plan shall include the specifications for acceptable fuel,

 anticipated

sources of fuel,

 procedures for qualifying fuel suppliers, procedures

for

inspection of fuel shipments,

 procedures for rejection of unacceptable

shipments,

 and procedures for on—site handling and storage of

 fuel..

The Permittee shall burn supplemental fuels in the CFB boiler in accordance

with written operating procedures designed to assure

 a uniform and

consistent b,~lendof

 fuel. to

 the boilers and operation of the boiler-s

itt

compliance with applicable requirements of this permit.

 This plan shall

include the design and maximum amount of the “fuel in the total blend,

procedures for blending fuels,

 changes to normal operating procedures

for

the

boiler,

any,

and

acceptable

ranges

for

boiler

and

air

pollution

control

equipment

operating

parameters,

 if diUerertt

than

normal.

e.

 The Permittee shall keep appropriate records to demonstrate that

 it is

complying with the above requirement~.

f.

i.

 The Permittee shall promptly submit monthly progress reports

to

the Illinois EPA while

 it is initially introducing a supplemental

fuel into a CFB boiler.

 This report shall include the firing

rate(s)

 being evaluated,

 a description of the events and findings

during the month,

and

 a summary of CEM’s emission data.

ii.

At

 the conclusion of

 the introduction of a supplemental

 fuel,

the

Permittee shall promptly submit a final report to the Illinois EPA

stating the maximum rate

 at- which the fuel will be burned ~nd

providing

 a- summary of the written fuel management plan and

operating

procedures

prepared

for

use

 the fuel and the range of

emission

rates

expected

from

operation

with

such

fuel.

Page

8

g.

 Nothing in this condition shall excuse

 the Permittee from compliance

with applicable statutes and rules governing supplemental fuels,

including

rules

governing

 storage of tires.

l0a.

The

Permittee

shall

not

burn

wastes

that

are

generated

another

person’s activities,

 other than tires and tire derived fuel

itt

the

boiler,

 without first having obtained local approval pursuant

to

Section

 39.2 of the Act,

 if required,

 and appropriate permits

 from the

Illinois

EPA.

b.

 For purposes of this condition,

 a clean wood material-

may

considered

a waste if it

 is a

 di-scarded material.

This condition is

 imposed to address compliance with State requirements

under Section 39.2 of the Act.

ila.

 Under this permit,

 the CFB boiler and associated equipment may be

operated

for

 a period that ends

 180 days after the CFB boiler first

generates electricity to allow for equipment shakedown and emissions

testing

 as required.

 This period may be extended by Illinois EPA upon

request of the

 Perrnittee if additional time is needed to complete

shakedown

perform

emission

testing

the

CFB

bailer.

b.

 Upon successful completion of emission testing of the CFB boiler

demonstrating compliance with applicable limitations,

the

 Permittee may

continue to operate the facility as allowed by Section 39.5(5)

 of the

Environmental Protection Act.

c.

 This condition supersedes Standard Condition

6.

12a

i.

 Within 60 days after operating the CF8 boiler at the greatest load

which

will

normally

operated,

but

not

later

than

180

days

after its initial startup,

 the Permittee shall have emissions

tests for the CFB boiler system performed as follows:

A.

 Emissions shall be measured by an approved testing service.

B.

 Emissions shall be measured for

 t4O~, CO,

PM,

 ‘VOM,

 SO2 and

opacity.

Emissions

testing

shall

cándücted

under

conditiofls

that

are

representative

maximum

emissions.

0.

 These tests shall be used-as the initial compliance tests to

demonstrate compliance with the

 limits and conditions set

itt

this

 permit.

S

ii.

Emission

testing

for

and

opacity

shall

also

conducted

in

a

timely manner in accordance with 40 dR

 60.8 for other emission

units

that

are

subject

NSPS.

iii.

 Itt addition to the initial emission testing required above,

the

Permittee

shall

have

emission

tests

performed

within

days

written request by the Illinois

 EPA.

 The Illinois EPA may request

these

tests

if,

based

ott

observations

 by field personnel or other

information and affected emission unit or air pollution control

systems are poorly maintained or operated so as

 to make compliance

with permit limitations uncertain.

Page

9

Unless

otherwise

specified

 or approved by the Illinois EPA or the

 (JSEPA,

 the- following USEPA methods and procedures

 shall be used

-‘

 for testing of emissions of the CFB boiler:

Location of Sample Points

 CJSEPA Method

1

Gas Flow and Velocity

 USEPA Method 2

Flue Gas Weight

 (JSEPA Method

3,

 or 3A

Moisture

 USEPA Method

4

Particulate Matter

 USEPA Method 5,or Method

20l,or 201A

 (40 C,FR l,Appendix

M), or Method

 19’ as specified

itt

CPR

60.48a(b)

Nitrogen Oxides

 USEPA Method

7,

 7E or

 19 as

specified in 40 CFR 60.48a(d)

Sulfur Dioxides

 (JSEPA Method

 6 or

 19 as

specified in 40 CFR 60.48a(c)

Opacity

 (JSEPA Method 9

Carbon Monoxide

 tJSEPA Method 10

Volatile Organic Material

 USEPA Method ‘18,

25,

 or 25A

A.

The

 Perxnittee may report all

 PM emissions measured by USEPA

Method

5

as

 PMto,

 including back half condensable

particulate.

 If the Permittee reports USEPA Method 5 PM

emissions

as

 PM10,

 testing using USEPA

method

201

or201A

need

not

performed.

B.

 Perinittee may

exclude

methane,

ethane

and

other

exempt

compounds

 from the results of any VOM test

provided

that

the

test protocol to quantify and correct for any such compounds

is included in the test plan approved by the

 Illinois EPA.

ii.

 The following methods and procedures shall be used for particulate

matter a~ndopacity measurements for the limestone handling and

 storage operations (outlet from limestone silo),

as

specified

in

 CFR 60.675:

‘

Method

Opacity

Method

c.

 At least

 60 days prior

 to the actual date of testing,

 a written test

plan shall be submitted

 to the Illinois EPA for review.

 This plan shall

describe

the

specific

procedures

for

testing

and

shall

include

minimum:

i.

 The person(s)

 who will be perf~rmingsampling and analysis

and

th~irexperience with similar tests.

ii.

 The specific conditions under which testing shall be performed

including a discussion of why these conditions will be

representative of maximum emissions and the means by which the

operating parameters

 for the CFR boiler system -will be tracked and

recorded.

iii.

 The specific determinations of emissions that

 are intended to be

made,

 including sampling and monitoring locations.

 As part of

this plan,

 the Permittee may set

 forth a strategy for performing

emission testing

 in the normal load range of the CFB boiler.

Page

iv.

 The test method(s)

 which will be used, with the specific analysis

method if the method can be used with different analysis methods.

d.

The

 Illinois EPA shall be notified prior

 to these tests to enable

 it to

observe these tests.

 Notification

 for the expected date of testing

shall be submitted

 a minimum of 30 days prior to the expected date.

Notification of the actual date and expected time of testing shall be

submitted

 a minimum of

 5 working days prior to

 the actual date of the

test.

The

 Illinois EPA may at

 its discretion accept notifications with

shorter advance notice provided that the Illinois

 EPA will not accept

such notifications

if

 it interferes with the Illinois EPA’s ability to

observe testing.

e.

 Three copies of the Final Reports

 for these tests shall be submitted to

the Illinois EPA within

 30 days after the test results are compiled and

finalized.

 The Final Report from testing shall contain

 a minimum:

i.

 A sununary of results;

ii.

General

information;

iii.

 Description of test method(s),

including

descriptionof

-sampling

points,

 sampling train,

 analysis equipment, and test schedule;

and

iv.

 Detailed description of test conditions,

 including:

A.

 Fuel consumption

 (in tons)

 of the unit being .tested;

B.

 Firing rate (million Btu/hr)

 of the unit being tested;

C.

 Turbine/Generator output rate

 (MWe); and

D.

 Data and calculations,

 including copies of all raw data’

sheets and records of laboratory analysis,

 sample

calculations,

 and data on equipment calibration.

13.

 The Permittee shall install, operate and maintain systems

 to measure the

consumption

-of

different

fuels

the

boiler.

14a.

 The Permittee shall install,

 operate,

 and maintain a Continuous

Emissions Monitoring

 (CEM)

 system

 ott the CFB boiler

itt

accordance with

the provisions of the Acid Rain Program

 (40 CFR Part

75)

 and the NSPS

(40 CER 60.47a)

 to measure CO2 or 02 and emissions of SO2,

 NOR,

and

opacity from the CFB boiler system.

 The procedures under 40 CFR 60.13,

40 -CFR 60.47a(c)

 and the applicable .~roceduresunder 40 CFR 75 Subpart B

shall

 be. followed for the installation, evaluation and operation of

these CEM systems.

b.

 At least

 30 days prior to,initial startup of the CFB boiler system,

the

Fermittee shall submit to the Illinois EPA for review and comment

a

detailed monitoring plan.

 This plan shall describe the configuration

and operation of the

 NOR,

 SO2,

 and opacity’CEM systems.

c.

 These CEM monitoring systems shall be operated and collect data in

accordance with the applicable provisions of the Acid Rain Program.

Page

l5a.

The

 Permittee shall maintain

 a file of the following items:

i.

 Written procedures used by the Permittee as good combustion

practices and good air pollution control practice

 for the boiler

to minimize emission in accordance with Condition

7;

and

ii.

 The heat and sulfur content of the each of solid fuels fired in

 the boiler in Btu/th and lb/mmBtu,

 respectively.

b.

The

 Permittee shall keep inspection,

 maintenance,

 and repair logs with

dates and nature of such activities for the CFB boiler,

 the SNCR system

and the CFB baghouse.

i.

 The Permittee shall keep inspection, maintenance,

 and repair logs

for the fabric filters associated with handling and storage of

solid fuel,

 limestone,

 and ash.

c.

 The Perinittee shall maintain the following operation records:

i.

 The quantity of each fuel consumed by the CTh boiler

 (tons/day);

ii.

 The quantity of electricity generated by the CFB

boiler

(MW/day)

iii.

 The amount of limestone consumed

 (tons/month); and

iv.

The

amount

SNCR

reagent

consumed

(lb

ton/month).

d.

 The Permittee shall maintain the following records related to startup,

malfunction,

 breakdown and shutdown of the CTh boiler and SNCR system:

i.

 The time and date of startup,

 malfunction, breakdown or shutdown

and

confirmation

 that

standard

practices

were

followed;

and

ii.

For

each

incident

when

operation

continued

during

malfunction

breakdown

with

excess

emissions,

the

following

information

shall

be

 included:

A.

nate

 and duration of malfunction or breakdown;

B.

‘

 A description of the malfunction or breakdown;

The

reason

continued

operation

was

necessary,

including

supporting documentation; and

D.

 The corrective actions used

 to reduce the quantity of

emissions and the durati~,nof the incident.

e.

The

 Fermittee shall keep the following records with regards to

emissions:

i.

 02 or CO2 concentration

itt

 the exhaust from the CFB boiler system

recorded hourly.

ii.

 SO2 emission rates

 (lb/million Btu)

from

 the CFB boiler system

recorded hourly by combining the SO2 concentration

 (ppm)

and

diluent concentration measurements according to the proced~iresin

CFR.

Appendix

Page

12

iii.

 NO~emission rates

 (lb/million Btu)

 from the CFB boiler system

recorded

hourly

combining

the

NOR,

concentration

(ppm)

and

diluent concentration measurements according to the procedures

itt

40 CFR 75 Appendix

F.

iv.

 Opacity readings from the opacity monitoring system.

 Monthly and annual emissions of

 NOR,

CO,

 SO,,

 V0f4 and PM

 from the

CFB boiler system (tons/month and ‘tons/year),

 complied at least

ott

a quarterly basis.

 SO2 and NO~emissions may be based on data from

the CEM. All other emissions shall be calculated’based on

 fuel

consumption and relevant factors developed from emission test data

and fuel composition,

 with supporting calculations.

vi.

 Emissions

of

 Pt~! from handling and storage of solid fuel,

 limestone

and ash

 (tons/month and tons/year).

f.

 The Permittee shall maintain records that’ identify:

i.

 Any periods during which a required continuous monitoring system

was not operational,

 with explanation; and

ii.

Any

day

which

emissions

 exceeded an applicable standard or

limit.

g.

 All records required by this permit shall be retained

 for a

period

 o~at

least

 5 years.

 The most recent

 3 years of data must be kept on site and

made available to the Illinois EPA for inspection and copying upon

Illinois EPA request during normal business hours.

 Records may be’

maintained in electronic format.

.16.

 Pursuant to the NSPS

itt

 40 CFR 60.7,

 the Ferm.ittee shall furnish the

Illinois EPA’with

written

 notification

regarding

emission

units

 that are

subject

the

NSPS

follows:

a.

 The date construction commenced, postmarked no later than 30 days

after such date;

b.

 The actual date of initial startup postmarked within

 15 days after

such date; and

c.

 The date upon which demonstration of the continuous monitoring

system

performance

commences

i~accordance

with

60.13(c),

po.~tmarkednot

 less than 30

days

prior

such

date.

l7a.

 The Perutittee shall comply with the applicable NSPS

 recordkeeping and

reporting requirements

 in 40 CFR 60.7 and 60.49a,

 including the

requirement

 to submit Compliance Reports to the Illinois EPA for

 the CF3

boiler

 oct a

quarterly

basis.

b.

 If there

any

other

exceedartce

the

requirements

Conditions

through.6 of this permit not

addressed

the

NSPS

quarterly

report,

the

Permittee

shall

submit

report

the

Illinois

EPA

within

days

after

the

exceedance.

The

report

shall

include

description

the

exceedance,

copy

relevant

records,

and

description

the

exceedance

violation

and

efforts

reduce

emissions

and

future.

occurrences.

Page

13

c.

 The Permittee shall comply

with

the applicable annual emission reporting

requirements

itt

 lAd Part

 254.

d.

 The Permittee shall comply with applicable reporting requirements under

the Acid Rain Program

 (40 CFR Part 75

 Subpart G).

 In addition to

reporting to

 (JSEPA,

 copies

 of such reports shall also be provided to

the

Illinois

 EPA, upon request.

18a.

 Two copies

 of any required reports and notifications concerning

equipment operation,

 emission testing,

or

 a monitoring system,

 except

the Annual Emission Report required by 35

 Ill.

 Adxn.

 Code 254,

 shall be

sent to the Illinois EPA at

 the following address unless otherwise

indicated:

Illinois

Environmental

Protection

Agency

Division of Air. Pollution Control

Compliance Section

 (*40)

P.

0.

 Box 19276

Springfield,

Illinois

62794—9276

Telephone:

217/782—5811

Facsimile:

 217/782—4710

One

copy

required

reports

and

notifications,

 other than the Annual

Emission

report

shall

 be sent

 to the Illinois EPA at the following

address:

Illinois

Environmental

Protection

Agency

Division

Air

Pollution

Control

—

Regional

Office

2009

Mall

Street

Collinsville,

Illinois

62234

Telephone:

618/346—5120

Facsimile:

618/346—5155

1.~a.

The-Permittee

shall

permanently

shut

down

three

existing

coal

fired

boilers

identified

 Marion Units

1,

 2 and

Shutdown

Units

and

 3 shall occur within 180 days after the

 CFB. boiler system becomes

operational.~ For the purpose of this permit, the CFB

 boiler

system

shall be considered operational when it begins to generate electricity

for

sale

customers

 under contract.

 Prior to the operational

 date,

the

unit

will

through

sequence

shakedown

modes

including

testing

for

the

proper

operation

the

boiler.

This

period

may

 be extended as

reasonably

necessary

the

Illinois

EPA

the

written

request

the

Permittee

the

orderly

shakedown

the

new

boiler

irtterrupted

and

operation

the

existing

boilers

must

 resumed for the Permittee to

provide

ctric

power.

b.

 The Pertaittee shall notify the Illinois EPA within 30 days of shutdown

of each of the existing coal-fired boilers on a permanent basis.

ZOa.

The

Permittee

shall

perform

the

evaluation

emissions

from

the

CFB

boilers

required

Condition

3(b)ii

itt

accordance with a plan submitted

the

Illinois

EPA

for

review

and

comment.

The

initial

plan

shall

submitted

the

Illinois

EPA

for

review

and

comment

later

than.60

days after completion of

 the emission tests required by Condition

 12(a)

(i)

The

plan

shall

provide

for

systematic

 evaluation of changes, within the

normal or feasible

range

operation,

itt

the’

following

elements

related to the monitored CO emissions:

Page

Boiler

Operating

Load

and’ Operating

Settings

 Flue

Gas

 Temperature at Selected Points

 in the Boiler

Composition

Fuel

Supply

Bed

and

Combustion

Settings,

Including

Excess

Oxygen

Amount

 arid Type

Limestone

Added

the

Bed

Fabric

Filter

Pressure

Drop,

Cleaning

Cycle

and

Operation

Opacity

and

Particulate

Matter

Emissions

SO2

Emission

Rate

NO~Emission Rate and Ammonia Slip

c.

The

 Ferrnittee shall promptly begin this evaluation after the CFB

 boiler demonstrates compliance with the applicable emission limits

shown

emission

testing

and

monitoring,

and

after

Illinois

EPA approves the evaluation plan required by Condition

20

 (a).

If

necessary,

the

Perinittee

shall

submit

update

the

plan

that

describes

its

 findings with respect to control of CO

emissions during

 the shakedown of the boiler, which highlights

possible areas of concern for the evaluation.

d.

i.

 This evaluation shall be completed and a detailed written report

submitted to the Illinois EPA within two

years

after

completion

the emission tests required by Condition 12(a) (i)

ii.

 This deadline may be extended for

art

additional year if the

Permittee

submits

interim

report

demonstrating-the

need

for

additional

time

effectively

evaluate

 emissions and propose

alternative

limit

limits

for

emissions.

stringent

emission

limits

for

emissions

shall

set

result of this evaluation if the Illinois EPA finds that a CFB

boiler

can

consistently

comply

with

such

limits.

Additional

parameters

factors,

e.g.,

the

composition

the

fuel

supply,

may

included

such

limits

address

particular

modes

operation during which such limits

may

not

achievable.

ii.

 If- the Permittee fails to complete the evaluation or submit the

requited

report

itt

timely

manner,

the

emission

limit

shall

automatically

revert

the

lower

limit

identified

Condition

3(b) (ii),

i.e.,

0.10

 CO/nunBtu.

21.

The

approval

for

the

above

referenced

project

does

not

relieve

the

Perrnittee

 of the responsibility to

comply

with

all

local,

state

and

federal regulations which are part of

the

applicable

Illinois

Sate

Implementation Plan,

 as well as

 all ether applicable

federal,

state

and

local

r~quirernetLts.

Please note that additional rules addressing NO~emissions from this boiler

has been adopted by the Illinois Pollution Control Board in response to

USEPA’s ~

 SIP call”

 and the development

 of Illinois’

 plans

 for. attainment

of

the

ozone

air

quality

standard

the

Chicago

arid

Metro—East

ozone

rionattairiment

 areas.

 Refer

to

35

 IAC Part

 217, Subpart W, NO~Trading Program

for Electrical Generating Units.

Page

If you have any questions concerning this permit, please contact Shashi Shah

at 2l7/78221l3.

Donald

E.

 Sutton,

 ?.E.

Manager,

Permit

Section

Division

Air

Pollution

Control

DES:SRS:jar

cc:

 Region 3

Attachment A

Table

Emission

Units

Unit

 I.D.

 Description

 Number

 Control

CEB Boiler

 Circulating Fluidized Bed

1

 Selective Non—Catalytic

 Solid-fuel Fired Boiler

 Reduction

Rated heat input- 1402 million

 System,

 Limestone

Btu HHV/hr

Injection_arid_Baghouse

Sl,

52,

 Fuel Storage Silo

4

 Baghouse

S3,__54

Limestone

Storage

Silo

Baghouse

 CFB Bottom Ash Storage

1

 Baghouse

Silo

CFB

Fly

Ash

Storage

Silo

 Baghouse

MH1

Coal

Refuse/CoaL

Material

Characteristic

—

Material_Handling

MH2

 Petroleum Coke Material

1

 Material Characteristic

—

Handling

MH3

 Tire

 Fuel. Material

Material

Characteristic

—

 Handling

MH4

 Wood Chips Material

1

 Material Characteristic

Handling

MH5

 Limestone Material

Material

Characteristic

Handling

-__-

*

Nominal

capacity

rating

Table

CFB Boiler Emission Limitations

eollutant

 Emission Rate

 Emissions

 (Lb/Hr)

 Emissions

 (tpy)

z~Io~

 1.6 lb/MW—hr

192

841

CO

 0.150

 lb/mmBtu

210

92.

VOM

,

 0.01

 lb/rnxnBtu

 10.1

 44.2

so2

 0.6 lb/mmBtu

841

 3,690

TSP/?M~0

 0.011

 lb/mmBtu*

 15.4

 67.5

Notes:

 The hourly emission limits and lb/mznBtu emission limits shall not

apply during start-up,

 shutdown,

 or malfunction. Compliance shall

be based on

3

 hour block average.

 Tons per year

 (tpy)

 limits are based on continuous operation at

the hourly emission limit and 400

 annual capacity factor.

NO~and

 SO2 emission limits are based on the applicable limit in

the

 t4SPS

 40 CER Part 60 Subpart Da. CO emission limit

 is based on

BACT evaluation.

S

The hourly emission Limits reflect compliance with the following

emission rates:

NO~

—

 1.6 lb/MW—hr; CO

—

 0.150 lb/mrnBtu; VOM

0.01

 lb/mxnBtu; SO~

0.6

 lb/rnmBtu;.artd TSP/PM

—

 0.011 lb/mmBtu

(front—half particulates

 only)..

TSP and PM~oemission Limits only include front—half (filterable)

particulates.

Attachment

B

Table

1

Annual

Net

Emissions

Change

for

Marion

Generating

Station

Pollutant

New

Unit

Emissions

CFB

Boiler

and

Turbine

Emission

Decreases

—

Shutdown

Three

Boilers

Net

Change

Major

Modification

Threshold

(Torts/Year)

 (Tons/Year)

 (Torts/Year)

 (Tons/Year)

NO,~

 833.7

‘

2,329

—

 1,495.3

40

502

 3,142.8

 12,227

—

 9,084.2

40

888.9

55.4

833.5

100

VOM

 41.5

9.5

32.1

TSP

78.1

83.0

—

5.0

?Mt0~

70.3

56.4

13.9

Lead

0.09

0.60

H2S04

 49.1

278.2

—

229.0

Notes:

The New Unit Emissions represent the operation of the

new

CFB

boiler,

including

the

associated

material

handling

operations,

projected

maximum

annual capacity factor

85,

and

the

operation

two

new

turbines

projected maximum-annual capacity factor of 22.

 Construction of the CIB

 boiler system is addressed in this permit, while construction of the turbines

addressed

 in a separate permit.

The

tmission

Decrease

represents

the

actual

reduction

emissions

fi~om.

retirement of three existing boilers

 (Units

 1 through 3),

 as addressed by this

permit.

It

 does not include the decrease

itt

emissions ,front

installation

selective

catalytic

reduction

(5CR)

ona

 fourth

existing

boiler

(Unit

4),

addressed

separate

permit.

The

anticipated

reduction

actual

NO~

emission from the 5CR system

 oct Unit

4

is

estimated.

2361

tons/year.

The Net Change in emissions

 is the sum of the New Unit Emissions and the

Emissiott Decreases.

As

 shown,

 there will not be a net increase above the Major

Modification

Threshold

for

any pollutant

except

carbon

monoxide.

*

 Net change evaluated in terms of filterable PM1O- (front half ~f Method

S

Sampling Train).

(..

SRS:jar

L)r

ILL.II~Li~

ENVIRONMENTAL PROTECTION AGENCY

DIVISION OF AIR POLLUTION CONTROL

P. 0.

BOX

19506

SPRINGFIELD, ILLINOIS 62794-9506

STANDARD CONDITIONS FOR CONSTRIJCTIONIDEVELOPMENT PERMITS

ISSUED BY

TEE

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY

July

1985

The Illinois

Environmental

Protection Act (Illinois Revised

Statutes,

Chapter

111.1/2, Section

1039) authorizes

the

Environmental Protection Agency to

impose conditions on

permits

which it issues.

The

following conditions

are applicable

unless susperseded by special condition(s).

Unless

this

permit has been extended or it has been voided by

a newly issued

permit, this permit will expire one

year

from

the

date of issuance, unless a continuous program of construction or development on

this project has

started

by such time.

The

construction

or development covered by this

 permit

shall be done in compliance with applicable provisions of

the

Illinois Environmental

Protection

Act and

Regulations

adopted by

the

Uhinois

Pollution Control

Board.

There

shall

be no deviations

from

the approved plans,and specifications unless awrittearequest

formodification,

along with

plans

and

specifications

required,

shall

have been

submitted to

the

Agency

and

a supplemental

written

permit

issued.

~

The

 permittee

shall

allow

any

duly

authorized

agent

of the

Agency

upon

the

presentation

of credentials, at

easonable

times:

to enter

the permittee’s

property

where actual or

 potential

effluent, emission or noise sources are located or

where

any

activity

to

be conducted

pursuant to

this

permit,

~th‘nave access

to a~dto copy

any

records required to be kept under the terms

and

conditions

of this

permit,

 inspect,

including

during any

hours of operation of equipment

constructed

or operated under

 this permit,

such equipment

and

any

equipment required to be kept,

used,

operated, calibrated

andmaintained

under

 this

permit,

d.

to

obtain and

remove

samples

of any discharge or emissions of pollutants,

and

‘

to enter

and

utilize

any photographic, recording, testing,

monitoring

or other equipment for the

purpose

preserving,

testing, monitoring, or recording

any

acti~jty,discharge, or

emission authorized

this

permit.

The

issuance

of this parmit:

shall

not

considered as

any

manner

affecting

the title

the

premises

upon

which

the

permitted~

facilities

are

located,

does not release the

perrnittee

from any liability for damage to person or

 property

caused

by or resulting

 from

the

construction.

maintenance,

or operation of the proposed facilities,

does not release the

permittee from compliance with other applicable statutes and regulations of the Uaited

States, of the

 State

of Illinois, or

with applicable

local laws, ordinances and regulations,

does

not

take

into consideration or attest to

the structural stability of any units or

 parts

of the project~and

IL 532-0226

0.005

APC iqe

R.v.

5/99

PTintedoii

RecycIe~

P2pef

c.nvtronmental

Protection

Agency

Bureau

of Air

~iember1.

1992

For assistance

in preparing a

permit application.

contact

the Permit Section:

lflinois

Environmental Protection Agency

Division of

Air Pollution

Control

Permit

Section

2200

Churchill Road

Springfield.

 Illinois 62706

217/782.2113

contact

a

regional

office of the Field

Opera-

tions

Seciton. The regional

offices

and

their

areas

of responsibility

are shown an

the

map.

The addresses

and telephone numbers of the

reg~onaI

offices

are as follows:

ILLINOIS

EPA

REGION

1

BUREAU

AIR,

FOS

9511

WEST

HARRISON

1ES PLAINES,

IL

60016

-~47—294—400O

nl;nois

EPA

54~5

NotTh

University

Peoria.

Illinois

61614

309”G93-5461

lltin~i~

EPA

Region3

2009

MaIl Street

Coilinsville.

Illinois

-62234

618/346.5120

C*A.0~._

OC~

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 4#G~C

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 ~‘(•“(Ii

4’

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S

(

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Ca~.Z

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4.AØ~

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J._._.~

 j~?,a..

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1!’

Piin~or~

~

Papqe

October 21, 2004

VIA

UPS

Mr.

 Donald E.

Sutton~

Permit

Manager/Permit Section,

DivisionofAirPollution Control

Illinois

EnvironmentalProtection

Agency

1021 North Grand Avenue East

Springfield. IL

62702

Re:

Southern I hinois Power Cooperative (“SIPC”)

Application

forcertification ofCirculating

FluidizedBed

Boiler (“CFB”) as a Low Sulfur

Dioxide Emission Coal Fueled Device

Dear

Mr. Sutton:

OCT

2004

IEPA-DAPC-SPFLD

A Y

L R

R

0

May&,

Bro~m,

Rowe

Maw LIP

1uthLaSa1e$~

C~,Ilmc~6060~344i

M~i

 Tel (312) 782.0600

Man

Fax

(312)701.7711

M~nW

Diact Tel (312)

701-7609

Died

 Fax (312)

706-1747

This letterwill supplement our

 Application

for Certification of SIPC’s CFB asa low

sulfur

dioxide

 emission coal

fueled device which was filed with the IEPA on

September 29, 2004.

Our Application, although submitted on an IEPAPollution Control

Certification

Application, wasand

still is a

 request

for certification ofthe CFB asa low sulfUr

dioxide emissioncoal

 fueled

device as defined in Title

35,

Subtitle A, Chapter-I,

Section 125.200(bXl) ofthe

Illinois

Administrative Code and in Section 11-40 ofthe

Illinois

 Property

TaxCode

(35

ILCS 200/11-40 West 2004).

Consistent with the dCscription ofthe CFB contained in

 section

(d)ofour

Application,

this

 letterconfirms

that the CFB is fueled exclusivelyby locally availab1e~

Illinois coal and

burns

the fuel by an

 advancedprocesswhich eliminates

the

need

for any

 additional sulfur abatement

measures.

Based upon the foregoingthe entire CFB, includingall related machineryand

equipment,

qualifies

~sa low sulfurdioxide emission coal fueled

 device

and we

 respectfully

request

that SIPC’s A~pplicatlon

for Certification be

 granted.

éiussals

chatos.

csicaui

Colo~*

~ra**~at

HQI~n

LolKion Lo.~g~se

M~i.nthu~.r

New

 Ycit PeloNbPa~

WL.I~II,

 D.C.

~epend.1

Ms~co

City ConaeponC~itJan~

Navan*,

Nidet yR*

&C.

Mayer,Elcwn~

Roew& MewLLP ~e~a*.sIi ~cIi1~1llI0n

with cii

saö~dEl

nhidlatEly patnaruh~

Wi Sis dices la~atove.

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Rowe &MawLLP

Mr. Donald E. Sutton

October 21,2004-

Page2

Thai~k

you for yourprofessional

review of the

matter.

Please contact me if you need

any

additional

infomiation.

 Very

truly

yours,

Pa~e~1~

cc:

Ms. Angela L

 Desinond

9015611 04271347

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