Federal appeals board sends part of Pio Pico air permit back to EPA

The U.S. Environmental Appeals Board on Aug. 2 remanded part of an air permit for the gas-fired, 300-MW Pio Pico project in California back to the U.S. Environmental Protection Agency for further work.

Helping Hand Tools, the Sierra Club and an individual, Rob Simpson, had petitioned the board to review a prevention of significant deterioration (PSD) permit that EPA Region 9 issued to Pio Pico Energy Center LLC. The permit authorizes Pio Pico to construct and operate a 300-MW natural gas-fired peaking and/or intermediate load-shaping power plant in Otay Mesa, Calif.

The petitions challenged the region’s issuance of, as well as several conditions in, the permit. Collectively, the petitioners raised eleven issues for board resolution. These include:

  • challenges to the Region’s acceptance of late comments;
  • the adequacy of the Region’s responses to comments;
  • the Region’s decision to eliminate combined-cycle gas turbines as a control technology in its best available control technology (BACT) analysis for greenhouse gases;
  • the adequacy of the BACT emission limits the Region selected for greenhouse gases and for particulate matter (PM);
  • the Region’s conclusion that carbon monoxide emissions from the facility are not subject to the PSD program;
  • the location of air quality monitors; and
  • the Region’s decisions not to use emission reduction credits to mitigate air pollutants.

In addition, two of the petitioners ask the board to remand the permit to the Region for a reassessment of the “need” for the facility following a recent California Public Utilities Commission (CPUC) decision denying the local utility the authority to enter into a long-term power purchase agreement with Pio Pico.

The board in its Aug. 2 decision remanded the permit in part and directed the Region to prepare a revised PM BACT analysis and reopen the public comment period to provide the public with an opportunity to comment on it. The board denied review of all other challenges.

For example, on the “need” issue, the board wrote that the petitioners had not demonstrated that the Region abused its discretion in electing not to perform an independent analysis of the “need” for the facility. “The Region had the discretion, but was not required, to conduct an independent analysis of the ‘need’ for the Facility, and the Region also had the discretion, but was not required, to rely on the State of California agency’s assessment of need. In this case, because the Region exercised its discretion not to conduct a needs assessment and not to rely on any State of California agency’s determination of need, the recent CPUC decision does not affect the Region’s conclusion.”

Company worked out new power sales deal with San Diego Gas & Electric

Pio Pico Energy Center had during the court of this case told the board that it had worked out a sixth amended Purchase Power Tolling Agreement (PPTA) with San Diego Gas & Electric for this project. Pio Pico filed a copy of the agreement on June 11.

“San Diego Gas & Electric Company and Pio Pico have executed an amendment to the Purchase Power Tolling Agreement (‘PPTA’) which contemplates the project starting construction in early 2014 and requires a commercial operations date no later than September 1, 2015,” said the company in the June 11 filing.

The Sierra Club, in a June 18 response, said the PPTA document is not relevant to the issues in this proceeding because the PPTA does not become effective unless and until the CPUC approves an application from San Diego Gas & Electric (SDG&E), which has not happened. The CPUC had already rejected a previously proposed PPTA between Pio Pico and SDG&E on the grounds that there was no need for the facility until 2018 at the earliest, the club noted.

Said Pio Pico in a Feb. 6 brief about the air permit appeal: “The proposed plant will consist of three 100 megawatt General Electric LMS100 simple cycle natural gas-fired turbines. Pio Pico will be constructed to satisfy a request by [SDG&E] for new peaking generation. The plant will support SDG&E’s wind and solar power generation assets. This requires Pio Pico to use quick-starting, simple cycle turbines that can rapidly scale through loads to produce power that will supplement intermittent generation gaps from wind and solar units.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.