La Paloma urges decision by Jan. 31 on appeal of its air permit

Citing a need for speed to get into financing and construction right away, La Paloma Energy Center LLC (LPEC) on Jan. 7 asked the U.S. Environmental Appeals Board (EAB) for a decision by Jan. 31 on an appeal by the Sierra Club of an air permit for its Texas power project.

The club in December appealed a greenhouse gas (GHG) air permit for the project that was issued in November by the U.S. Environmental Protection Agency’s Region 6 office. LPEC wants to construct a new natural gas-fired combined cycle plant, called the La Paloma Energy Center, to be located in Harlingen in Cameron County, Texas. Its capacity would be as high as 735 MW, depending on certain equipment decisions.

Time is of the essence for LPEC, and both the Clean Air Act and EAB regulations mandate rapid resolution of this prevention of significant deterioration (PSD) permitting process, the company noted.

“Obtaining a final PSD permit is a key milestone for LPEC because having all of the necessary permits is a pre-requisite to obtaining financing for this project,” the company told the board in the Jan. 7 filing. “LPEC has obtained all of the other necessary approvals and agreements – aside from this permit – to commence construction. This permit is the last criteria that LPEC needs to fulfill before it can secure its financing and start construction. Financing of large industrial projects such as La Paloma cannot begin until all permits – including the PSD permit – are obtained. LPEC suffers other financial consequences for each day that goes by without a final PSD permit. If this project continues to be delayed, LPEC may have to renegotiate the terms of its contracts and there is no assurance that LPEC will be able to renegotiate those same favorable terms. Furthermore, LPEC will bring nearly 100 permanent new jobs to Harlingen and over 3,000 construction jobs during the construction period. And it will serve a market in critical need of affordable, clean electricity. Delays in the issuance of this permit jeopardize the project and could lead to the loss of these jobs and this energy source.”

Rapid resolution is also mandated by the EPA’s own regulations, said LPEC. The board is an adjunct of EPA. In January 2013, EPA revised its regulations to establish specific deadlines for petitions, responses, replies, and motions in PSD permit appeals, the company pointed out.

La Paloma said its appeal does not involve multiple petitioners or dozens of amici who would like to weigh in on a highly technical or controversial issue of high policy import, which should allow a faster board decision.

The LPEC project would have a capacity of 637 MW, 681 MW, or 735 MW, with the final capacity to be determined by the developer’s election to install two identical turbines from any of three permitted turbine models. This combined-cycle plant will consist of two natural gas-fired combustion turbines, each exhausting to a fired heat recovery steam generator to produce steam to drive a shared steam turbine. The three models of combustion turbines being considered are: the General Electric 7FA, the Siemens SGT6-5000F(4), and the Siemens SGT6-5000F(5). The plant is being developed by Coronado Power Ventures LLC and Bechtel.

The Sierra Club raised two narrow issues in its challenge to Region 6’s GHG PSD permitting decision. Board review is not warranted on either of these grounds, EPA argued in its Dec. 26, 2013, response brief. “As an initial matter, while Petitioner has cited select pages of its comment letter, the petition fails to adequately cite the relevant analysis and reasoning provided by the Region in response to those comments,” the agency said. “As a result, Petitioner fails to explain why the Region’s responses to the comments were clearly erroneous. Accordingly, the Board should make use of summary disposition to resolve this case based on Petitioner’s failure to adequately meet this threshold requirement.”

La Paloma argued in its own Dec. 27, 2013, initial brief that EPA followed all of the required steps in this permitting process.

The Sierra Club is asking the board to review:

  • Whether the EPA region clearly erred by setting three different greenhouse gas limits, each purporting to represent best available control technology (BACT) for the proposed plant’s generating units, but ranging from 909.2 pounds of carbon dioxide per megawatt hour gross (lb CO2/MWh) to 934.5 lb CO2/MWh gross. These BACT limits differ due to the difference in heat rate between the three alternative turbine technologies. Rather than selecting BACT based on the most efficient turbine that meets the applicant’s project purpose, the region set three different limits and allowed the applicant to choose which would apply depending on which turbine design was ultimately installed. “This does not comply with the top-down BACT process, nor the policy underlying BACT to establish the most stringent limit achievable with the lowest emitting control option that meets the project purpose,” said the appeal.
  • Whether the region clearly erred by refusing to consider a solar thermal hybrid addition to the proposed combined cycle power plant, despite being a demonstrated method to reduce greenhouse gas emissions without changing the fundamental business purpose of producing electricity through a combined cycle plant. “The Region incorrectly determined that including solar thermal supplemental heat to a combined cycle plant would be ‘redefining the source,’” said the appeal.
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.