BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO DOCKET NO. 13A − ______E
______________________________________________________________________________ IN THE MATTER OF THE APPLICATION OF BLACK HILLS/COLORADO
ELECTRIC UTILITY COMPANY, LP, FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO CONSTRUCT A POWER PLANT CONSISTING OF A 40 MW SIMPLE CYCLE COMBUSTION TURBINE AND
ASSOCIATED BALANCE OF PLANT PURSUANT TO COMMISSION DECISION NO. C12-1434.
______________________________________________________________________________
DIRECT TESTIMONY AND EXHIBITS OF FRED CARL
ON BEHALF OF
BLACK HILLS/COLORADO ELECTRIC UTILITY COMPANY, LP
April 30, 2013
Table of Contents
SECTION PAGE
I. INTRODUCTION AND QUALIFICATIONS ... 1
II. PURPOSE OF TESTIMONY ... 1
III. AIR PERMIT ... 3
IV. IMPACT TO REGIONAL HAZE ... 4
V. IMPACT TO OZONE... 6
VI. IMPACT TO GREENHOUSE GAS EMISSIONS ... 6
VII. CACJA COMPLIANCE, LM6000 VS. LMS100 ... 7
VIII. CONCLUSION ... 7
List of Exhibits
Exhibit FC-1: Letter from CDPHE dated February 12, 2013
Exhibit FC-2: Air Permit for the PAGS Complex in Pueblo, Colorado
Exhibit FC-3: Comparison of Emissions (Permit Levels), Black Hills’ Electric Generating Units
DIRECT TESTIMONY OF FRED CARL 1
I. INTRODUCTION AND QUALIFICATIONS 2
Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. 3
A. My name is Fred Carl. My business address is 625 Ninth Street, P.O. Box 1400, 4
Rapid City, South Dakota 57701. 5
Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY? 6
A. I am employed by Black Hills Service Company, a wholly-owned subsidiary of 7
Black Hills Corporation. I am Director of Environmental Services. 8
Q. ON WHOSE BEHALF ARE YOU TESTIFYING? 9
A. I am testifying on behalf of Black Hills/Colorado Electric Utility Company, LP 10
(the Company or Black Hills). 11
Q. WHAT ARE YOUR DUTIES AND RESPONSIBILITIES AS DIRECTOR 12
OF ENVIRONMENTAL SERVICES? 13
A. I am responsible for the environmental permitting and compliance support efforts 14
for all of Black Hills Corporation, including its regulated utilities subsidiaries. 15
Black Hills/Colorado Electric Utility Company, LP is a regulated utility 16
subsidiary of Black Hills Corporation. My employment history and expertise is 17
provided in Appendix A. 18
Q. HAVE YOU PREVIOUSLY TESTIFIED BEFORE THIS COMMISSION? 19
A. Yes. 20
II. PURPOSE OF TESTIMONY 21
Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY? 22
A. The purpose of my testimony is to discuss the environmental impact of 1
substituting an LM60001 gas-fired turbine for an LMS100 gas-fired turbine at the 2
Company’s existing Pueblo Airport Generating Station (PAGS) complex, in terms 3
of air emissions and issues relating to the state air permit for the generating 4
facilities at the PAGS complex. 5
Q. WHAT IS YOUR RECOMMENDATION? 6
A. I support the Company’s application to build an LM6000 gas-fired turbine at 7
PAGS. It complies with Commission Decision No. C12-1434 because it replaces 8
42 MW2 of generating capacity retired at the Clark Station with a utility-owned 9
resource of similar size. It is compliant with the technology presented in the 10
Company’s Colorado House Bill 10-1365, Clean Air-Clean Jobs Act (CACJA) 11
Plan in Docket No. 10M-254E, as that Plan addressed natural-gas-fired 12
replacement capacity that does not exceed the emissions associated with the 13
available PAGS expansion slot. The Emission Reduction Plan (see Exhibit TMO-14
1 in Docket No. 10M-254E) approved by the Commission (see Decision C10-15
1330) explains on pg. 19 that replacement capacity needed due to retirement of 16
the Clark Station “… will be a natural gas-fired peaking unit” (as Option Two). It 17
goes on to describe that new generation using the current expansion slot at PAGS 18
will result in “… no new emissions in the air shed because the emissions 19
associated with the expansion slot are already being counted.” As substituting an 20
1 All references herein to “LM6000” or “General Electric LM6000” or “GE LM6000” do not
represent a commitment to purchase; but instead, represent a proposal for a 40 MW simple-cycle, aeroderivative gas-fired turbine that will be defined by the Company’s vendor selection process.
2 The replacement capacity of Clark Station is 42 MW as referenced in Black Hills’ Clean
Air-Clean Jobs Act Plan (Docket No. 10M-254E). The actual capacity is now 40 MW because one set of cables was removed from each phase of Clark Station Unit 1 in 2011, reducing the unit’s capability from 18 MW to 16 MW.
LM6000 for the third LMS100 permitted at PAGS will result in reduced 1
emissions, this proposal meets all requirements of the CACJA. 2
III. AIR PERMIT 3
Q. WILL THE ADDITION OF AN LM6000 TURBINE IN 2017, RATHER 4
THAN AN LMS100 TURBINE, AFFECT THE COMPANY’S EXISTING 5
AIR PERMIT? 6
A. Yes. The state air permit for the generating facilities at the PAGS complex was 7
issued on July 22, 2010 and is specific to the units addressed in the application for 8
that permit and stipulated in the final permit. To date, all units described in that 9
application have been constructed and are in operation, with the exception of one 10
of the LMS100 turbines, designated as emission point 003 in the air permit. The 11
“commence construction deadline” on that unit is currently April 13, 2015 (see 12
Exhibit FC-1, the February 12, 2013 letter from Colorado Department of Public 13
Health and Environment (CDPHE)). As the permit is unit-specific, the Company 14
will apply to modify the permit, substituting an LM6000 turbine for the currently 15
permitted LMS100. A new commence construction deadline will be established, 16
which will be either within 18 months after issuance of the permit modification or 17
within 18 months of the date on which the construction was scheduled to 18
commence as set forth in the modified permit, whichever is later. The current air 19
permit is provided in Exhibit FC-2. 20
Q. WHAT IS REQUIRED TO RECEIVE APPROVAL TO MODIFY THE AIR 21
PERMIT? 22
A. A pre-application development meeting will be conducted with CDPHE to review 1
the proposal and obtain guidance on the process. In general, the Company will be 2
required to conduct a Best Available Control Technology (BACT) review to 3
determine recommended emission control technology and emission rates. Based 4
upon CDPHE-approved protocols, the Company will conduct emission modeling 5
to assess compliance with ambient air quality standards. Once the CDPHE has 6
approved the application materials and has recommended the permit terms, it will 7
provide the public a 30-day period to provide comments. Following review of 8
any comments received, the CDPHE will render its final decisions. The review 9
and decision process normally takes about a year. 10
IV. IMPACT TO REGIONAL HAZE 11
Q. WILL THE ADDITION OF AN LM6000 TURBINE IN 2017, RATHER 12
THAN AN LMS100 TURBINE, IMPACT THE COMPANY’S EMISSIONS 13
REDUCTION PLAN FOR THE CACJA, REGIONAL HAZE OR 14
COLORADO’S STATE IMPLEMENTATION PLAN (SIP)? 15
A. No. In accordance with the December 1, 2010 order of the Commission 16
(Decision No. C10-1330) regarding the Company’s plan to comply with the 17
CACJA (C.R.S. §§ 40-3.2-201 – 40-3.2.210), the Company will retire Clark 18
Station by the end of 2013. This retirement complies with the Company’s 19
emissions reduction plan filed under the CACJA in Docket No. 10M-254E. The 20
requirement to retire the Clark Station was incorporated into the Colorado 21
Revised Regional Haze Plan (also known as the State Implementation Plan or 22
SIP), approved by the Air Quality Commission on January 7, 2011, and 23
subsequently approved by the state General Assembly as HB 11-1291. It was 1
signed into law by Governor Hickenlooper on May 4, 2011, and formal approval 2
was granted by EPA on December 31, 2012. As described throughout the 3
testimony of CDPHE (see Direct Testimony of Paul R. Tourangeau, filed Sept. 4
29, 2010 in Docket No 10M-254E) and noted in the Commission’s December 1, 5
2010 final order (see Decision No C10-1330, Docket No 10M-254E, pgs. 13, 15, 6
23, 24, 25), the approved plan complies with all provisions of the CACJA and 7
Regional Haze. The Commission found that, “[d]ue to the circumstances 8
surrounding the already-permitted expansion slot at PAGS for an additional LMS 9
100, the emissions at Clark Station will be considered reduced to zero and thus 10
will not be subject to reasonably foreseeable emission regulation.” Decision No. 11
C10-1330 at ¶ 76. As overall emissions from an LM6000 are approximately one-12
half those from an LMS100, this plan will not exceed current permitted site 13
emissions; instead, it would result in an overall net decrease at PAGS. Thus, the 14
CACJA emission reduction requirements would still continue to be met. Also, 15
there would be no need to modify the State’s Regional Haze SIP as the 16
requirements for Black Hills in that plan only address the closure of the Clark 17
Station. As found by the Administrative Law Judge in Decision No. R11-0889-I 18
in Docket No. 11A-226E, “neither House Bill No. 11-1291 nor the SIP references 19
the replacement capacity for the retired Clark Station units.” Decision No. R11-20
0889-I, at ¶ 116, Docket No. 11A-226E. 21
Q. WILL THE ADDITION OF AN LM6000 TURBINE, RATHER THAN AN 1
LMS100 TURBINE, INCREASE REGIONAL HAZE IN THE LOCAL 2
REGION? 3
A. No. In the electric utility sector, the Colorado Regional Haze SIP is directed at 4
coal-fired generating units. Regardless, both the LM6000 and LMS100 gas-fired 5
turbines are equipped with state-of-the-art emissions control technology for NOx 6
and CO. Both units employ low NOx burners and Selective Catalytic Reduction 7
(SCR) for control of NOx emissions and oxidation catalysts for control of CO 8
emissions. Moreover, due to the LM6000 having a smaller generating capacity 9
(MW), emissions of the Regional Haze pollutants of concern (NOx, PM and SO2) 10
will be approximately one-half those of an LMS100 (see Exhibit FC-3). 11
V. IMPACT TO OZONE 12
Q. WILL THE ADDITION OF AN LM6000 TURBINE, RATHER THAN AN 13
LMS100 TURBINE, CHANGE THE COMPANY’S REQUIREMENTS FOR 14
OZONE? 15
A. No. The PAGS site is located in an attainment area for ozone and therefore 16
normal permitting procedures would apply. 17
VI. IMPACT TO GREENHOUSE GAS EMISSIONS 18
Q. WILL THE ADDITION OF AN LM6000 TURBINE, RATHER THAN AN 19
LMS100 TURBINE, AFFECT THE COMPANY’S REQUIREMENTS 20
UNDER THE EPA’S GREENHOUSE GAS (GHG) TAILORING RULE? 21
A. Yes. EPA’s 2010 GHG Tailoring Rule will require implementation of GHG 22
limits on a unit that is being modified in a current air permit, if that modification 23
triggers certain emission thresholds. This rule was not in place during the original 1
air permitting of PAGS; thus, GHG was not addressed during that permitting 2
process. Replacing an LMS100 turbine with an LM6000 unit, however, would 3
qualify the new LM6000 unit for such review. Included in the permitting process 4
would be a BACT review to determine a GHG emissions limit. Several factors 5
are considered, including the vendor’s combustion turbine estimated performance 6
efficiencies. In September 2012, Black Hills successfully permitted LM6000 7
turbines at its new Cheyenne Prairie Generating Station in Cheyenne, Wyoming, 8
under the EPA’s Greenhouse Gas Tailoring Rule, to include restrictions on GHG. 9
Therefore, we do not expect difficulties in obtaining a GHG permit at the PAGS 10
complex for the same turbine technology, the LM6000. 11
VII. CACJA COMPLIANCE, LM6000 VS. LMS100 12
Q. DO THE NINE EVALUATION FACTORS CONSIDERED BY THE 13
COMMISSION IN THE COMPANY’S PLAN FOR COMPLIANCE WITH 14
THE CACJA CHANGE AS A RESULT OF SUBSTITUTING AN LM6000 15
TURBINE FOR A THIRD LMS100? 16
A. No. As presented in the direct testimony of Mr. Fredric Stoffel, Black Hills’ 17
proposal to construct, own and operate an LM6000 does not change any of the 18
Commission’s findings with respect to the nine evaluation factors discussed in 19
Decision No. C10-1330 (Docket 10M-254E, the Company’s CACJA compliance 20
plan). 21
VIII. CONCLUSION 22
A. I support the Company’s application to build an LM6000 gas-fired turbine at 1
PAGS. It complies with Commission Decision No. C12-1434 because it replaces 2
42 MW of generating capacity retired at the Clark Station with a utility-owned 3
resource of similar size. It is compliant with the technology presented in the 4
Company’s CACJA Plan in Docket No. 10M-254E, as that Plan addressed 5
natural-gas fired replacement capacity that does not exceed the emissions 6
associated with the available PAGS expansion slot. Substituting an LM6000 in 7
place of an LMS100 not only complies with the requirement that replacement 8
capacity not exceed the emissions associated with the available PAGS expansion 9
slot, it results in an approximate 50% reduction in emissions. Thus, substituting 10
an LM6000 for the third LMS100 permitted at PAGS complies with the 11
Company’s approved CACJA compliance plan and meets all requirements of the 12
CACJA. Finally, I believe the Company will be able to obtain all necessary 13
modifications to the state air permit at the PAGS complex. 14
Q. DOES THIS CONCLUDE YOUR TESTIMONY? 15
A. Yes. 16
Appendix A
Statement of Qualifications Fred Carl
Mr. Carl graduated from South Dakota State University with a Bachelor of Science degree in Zoology in 1975 and a Master of Science degree in Biology in 1978.
Mr. Carl has 35 years of experience managing environmental programs in the energy industry, cement industry and state air quality regulatory programs, including 20 years with Black Hills Corporation.
His specific experience history includes six years of air quality permitting and enforcement with a state regulatory agency, nine years of environmental program management in the cement industry and 20 years with Black Hills Corporation, establishing and directing the corporate environmental compliance and management program.
Major projects at Black Hills include securing seven PSD Air Permits for new coal and gas fired power generation projects in three western states and a power generation expansion project in a Carbon Monoxide and Particulate Matter nonattainment area. Environmental compliance management of Black Hills power generation projects have entailed working with seven western state agencies and three EPA Regional Offices.
