AQ_F_1000067_20160624_ENF_SOC

Special Order by Consent
CPI USA North Carolina LLC
BEFORE THE NORTH CAROLINA
ENVIRONMENTAL MANAGEMENT COMMISSION
STATE OF NORTH CAROLINA )
COUNTY OF BRUNSWICK ) SPECIAL ORDER BY CONSENT
IN THE MATTER OF: ) SOC 2016- Ocn,
CPI USA NORTH CAROLINA LLC )
This SPECIAL ORDER BY CONSENT ("ORDER") is made and entered into pursuant
to North Carolina General Statute 143-215.110 by and between CPI USA NORTH CAROLINA
LLC (the "COMPANY") and the ENVIRONMENTAL MANAGEMENT COMMISSION, an
agency of the State of North Carolina(the "COMMISSION").
WITNESSETH:
I. The COMPANY and the COMMISSION do hereby stipulate and agree to the following:
A. The COMPANY operates an electric power generating facility (the "Facility")
(SIC code 4911) at 1281 Powerhouse Drive SE, Southport, Brunswick County,
North Carolina. The Facility operates under Air Quality Permit No. 05884T20
(the "Permit") which was issued by the North Carolina Division of Air Quality
("DAQ") on April 18, 2016. The Permit supersedes Permit No. 05884T19 and all
previously-issued permits issued by the DAQ to the Facility.
B. The U.S. EPA modified the National Ambient Air Quality Standard ("NAAQS")
for sulfur dioxide ("S02") to a 1-hour standard in 2010. The standard is 75 parts
per billion ("ppb") and compliance is determined by measuring the 991h percentile
of 1-hour daily maximum concentrations each year and averaging those values
over three years. The DAQ has conducted modeling of the Facility's emissions to
determine the ambient impact relative to the 1-hour S02 NAAQS. Based on the
modeling of emissions at the allowable S02 limits in Permit No. 05884T19, the
ambient impact would exceed the 1-hour S02 NAAQS.

Special Order by Consent
CPI USA North Carolina LLC
C. At the Facility, the COMPANY has been authorized by the Permit to operate six
steam electric generating boilers. Emissions from three of the boilers (ES-1-1A,
ES-1-1B, and ES-1-1C) are emitted through a common stack and the boilers and
stack are collectively referred to as Unit 1 or ES-1. Emissions from the other
three boilers (ES-2-1A, ES-2-1B, and ES-2-IQ are emitted through a different
common stack. Those boilers and stack are collectively referred to as Unit 2 or
ES-2.
D. The Permit contains certain provisions related to emissions of SO2 from the
Facility. In particular, Section 2.1A.3.b.ii of the Permit establishes an emission
limit of 453.6 pounds SO2 per hour for each of Units 1 and 2, on a 1-hour average
(the "Emission Limit"). The effective date of the Emission Limit is June 24,
2016. Section 2.1A.3.b.iii of the Permit requires the COMPANY to provide no
later than July 17, 2016 an ambient SO2 monitor (the "Ambient Monitor") for
installation and operation near the Facility by the DAQ. Section 2.1A.3.dd.ii of
the Permit requires the COMPANY to report emissions of SO2 that exceed the
Emission Limit by notifying the DAQ Regional Supervisor or Director of any
such occurrence by 9:00 a.m. Eastern time on the next business day after the
Company becomes aware of the occurrence (the "Notification Requirement").
E. The provisions of the Permit related to the Emission Limit, the Ambient Monitor,
and the Notification Requirement, which were not included in any previous
version of the Permit, are based on modeling of SO2 levels in ambient air
conducted by the DAQ. In its modeling analysis, the DAQ determined that the
Facility's compliance with the Emission Limit in the Permit would result in
modeled compliance with the 1-hour NAAQS for SO2.
F. In order to achieve the Emission Limit, the COMPANY would need to make
substantial changes at the Facility, such as operational changes, installation of
emission controls, or equipment modifications.
G. After the installation of the Ambient Monitor near the Facility, the
COMMISSION and the COMPANY will determine: (i) if actual measured SO2
levels near the Facility are below the NAAQS under the current operating
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Special Order by Consent
CPI USA North Carolina LLC
conditions at the Facility and (ii) if modification to the Facility to achieve the
Emission Limit is ultimately necessary.
H. The COMMISSION and the COMPANY agree that, for purposes of this ORDER,
achieving compliance with the SO2 NAAQS may be determined either by
ambient monitoring or modeling.
I. The COMMISSION and the COMPANY agree to enter this ORDER for the
purpose of allowing the COMPANY to evaluate changes to achieve the Emission
Limit or otherwise provide for compliance with the NAAQS, subject to the
DAQ's concurrent review of SO2 data from the Ambient Monitor.
THEREFORE, the COMMISSION and the COMPANY, desiring to resolve and settle the
compliance issues between them, have agreed to enter into this ORDER with the following terms
and conditions:
II. The COMPANY, desiring to operate in a safe and environmentally sound manner in
accordance with the rules and regulations of the COMMISSION, does hereby agree to perform
the following activities:
A. The DAQ shall provide the COMPANY with the specifications (including
manufacturer and model number) for the Ambient Monitor. The COMPANY
shall provide the Ambient Monitor to the DAQ by July 17, 2016.
B. The COMPANY shall conduct an evaluation (the "Evaluation") of potential
compliance alternatives to determine if any of them can be implemented at the
Facility to achieve the Emission Limit or otherwise provide for compliance with
the NAAQS. At a minimum, the COMPANY shall evaluate the following
alternatives:
• Demonstrate compliance with the SO2 NAAQS through data from the
Ambient Monitor
• Adjust fuel blend
• Modify SO2 emission controls
• Adjust stack height
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Special Order by Consent
CPI USA North Carolina LLC
• Any economically viable alternative that the COMPANY identifies during
the Evaluation.
The COMPANY may include in the Evaluation any data or other information
collected from the Ambient Monitor. The COMPANY shall evaluate the
feasibility, cost and required time period for implementing each alternative,
identify any required regulatory approvals for each alternative, and determine
whether each alternative will achieve the Emission Limit or otherwise provide for
compliance with the NAAQS. The COMPANY shall summarize the Evaluation
in a written report ("Feasibility Report"). The Feasibility Report shall identify the
option selected by the COMPANY and a proposed schedule for implementation.
C. If, based on data from the Ambient Monitor that have been validated by the DAQ,
the DAQ finds that four or more daily maximum 1-hour SO2 values exceed 75
ppb within the first four months of operation of the Ambient Monitor, the
COMPANY shall submit the Feasibility Report to the DAQ within 120 days after
the DAQ notifies the COMPANY of the fourth daily maximum 1-hour value in
exceedance of 75 ppb. If the fourth daily maximum 1-hour exceedance occurs
during the fifth through twelfth months of operation of the Ambient Monitor, the
COMPANY shall submit the Feasibility Report to the DAQ within 90 days after
the DAQ notifies the COMPANY of the fourth daily maximum 1-hour value in
exceedance of 75 ppb.
D. If the COMPANY is not required to submit the Feasibility Report to the DAQ
under paragraph ILC, the COMPANY shall submit the Feasibility Report to the
DAQ within 60 days after the DAQ has provided the COMPANY with the
DAQ's assessment of validated data collected during the first twelve months of
operation of the Ambient Monitor.
E. If, based on data from the COMPANY's SO2 continuous emissions monitoring
("CEM") system at the Facility, the COMPANY determines that its SO2
emissions have exceeded the Emission Limit in Section 2.1A.3.b.ii of the Permit
on or after its effective date of June 24, 2016, the COMPANY shall notify the
DAQ's Regional Supervisor by 9:00 a.m. Eastern time on the next business day.
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Special Order by Consent
CPI USA North Carolina LLC
Excess SO2 emissions, as reported by the COMPANY pursuant to this ORDER,
shall be considered a violation of the Emission Limit in the Permit. The
COMPANY shall not be required to notify the DAQ after the first occurrence of
SO2 emissions above the Emission Limit and the COMPANY shall not be
required to comply with the Notification Requirement. The facility shall continue
to submit quarterly reports detailing excess emissions as required under the CEM
monitoring and reporting requirements in Section 2.1A.3.dd.i of the Permit.
111. If, due to ambient SO2 concentrations in excess of 75 ppb at the Ambient Monitor, the
COMPANY must implement the chosen option described in the Feasibility Report to comply
with the NAAQS, its implementation will be subject to a schedule to be prescribed in a new and
separate Special Order by Consent (the "SOC") between the COMPANY and DAQ. The
separate SOC shall be signed by the COMPANY within 90 days of the submittal of the
Feasibility Report required under paragraph II.0 of this ORDER. Alternately, the new and
separate SOC shall be signed by the COMPANY within 90 days of (i) notification by the DAQ
of the fourth validated daily maximum 1-hour value from the Ambient Monitor exceeding 75
ppb within a 12-month period or (ii) the submittal of the Feasibility Report under paragraph II.D
of this ORDER, whichever occurs later.
IV. The COMMISSION agrees that, except as provided in the terms and requirements of this
ORDER, it shall not issue a separate Notice of Violation or pursue any additional enforcement
action against the COMPANY related to the 1-hour SO2 NAAQS, Emission Limit, Ambient
Monitor, or Notification Requirement during the term of this ORDER. In the event that the
COMPANY fails to comply with any deadline as set out in this ORDER or fails to achieve final
compliance with any applicable requirement in this ORDER, the COMPANY agrees that, unless
excused under Paragraph V, the COMPANY will pay the COMMISSION stipulated penalties
according to the following schedule:
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Special Order by Consent
CPI USA North Carolina LLC
Deadlines and Requirements Stipulated Penalties
First exceedance of the 453.6 lb/hr S02 $1000 for the first exceedance
Emission Limit in Section 2.1A.3.b.ii of the
Permit.
Fourth daily maximum 1-hour S02 $1000 for the fourth exceedance
measurement exceeding 75 ppb at the Ambient
Monitor within a 12-month period due to the
emissions from the Facility.
Failure to meet any deadline established in $500 per day for the first 5 days and $1000
Paragraph II or III. per day thereafter.
Stipulated Penalty:
Failure within thirty (30) days of receipt of the DAQ Director's written demand to pay the
penalties will be grounds for a collection action, which the Attorney General is hereby
authorized to initiate. The only issue in such an action will be whether thirty (30) days has
elapsed.
V. The COMPANY'S obligation to comply with the requirements set forth in this ORDER
for which a stipulated penalty may be assessed may be delayed or excused only to the extent that
noncompliance is caused by circumstances beyond control of the COMPANY, as determined by
the DAQ Director. Contractor delays or failure to obtain funding will not be considered events
beyond the COMPANY'S control. If any such delaying event occurs, the COMPANY shall
notify the DAQ in writing within ten (10) days of encountering or discovering the delaying
event, describing in detail the event or delay, the precise cause(s) of the event or delay, the
measure(s) taken and to be taken by the COMPANY to prevent or minimize the event or delay,
and the schedule by which those measures will be implemented. If the COMPANY establishes
good cause for its failure to comply with any part of this ORDER, (i.e., noncompliance was
caused by circumstances beyond the control of the COMPANY), the DAQ and the COMPANY
jointly may stipulate and agree to a written modification of this ORDER. Extension of any
compliance date pursuant to this Paragraph shall not extend any subsequent deadlines established
in the ORDER unless the subsequent deadline necessarily is dependent upon completion of the
earlier deadline.
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Special Order by Consent
CPI USA North Carolina LLC
VI. This ORDER shall pertain only to the equipment, sources, and operations described in
Paragraph I of this ORDER. Any violation of Air Quality Standards resulting from other sources
or equipment for which the COMPANY is responsible shall subject the COMPANY to
appropriate enforcement action pursuant to North Carolina General Statute 143-215.114.
VII. The COMPANY agrees to waive any rights it may have to seek judicial review to
challenge this ORDER or to seek a stay of enforcement of this ORDER in connection with any
judicial review of the State Implementation Plan. The COMMISSION acknowledges that this
waiver does not prohibit the COMPANY from seeking modification of this ORDER if any
regulatory standards upon which this ORDER is based are changed subsequent to its execution.
In such cases, the COMPANY may petition that the ORDER be modified to reflect those
regulatory changes.
VIII. On or before the tenth day of each month following installation of the Ambient Monitor,
the DAQ shall provide the COMPANY with raw S02 data collected from the Ambient Monitor
during the previous month. Within 10 days after the DAQ validates any S02 data from the
Ambient Monitor, the DAQ shall provide such validated data to the COMPANY. The DAQ
shall notify the COMPANY on the following business day after determining that raw data from
the Ambient Monitor indicates an exceedance of 75 ppb S02 has occurred. The DAQ shall
notify the COMPANY within 10 business days after determining that validated data from the
Ambient Monitor indicates an exceedance of 75 ppb S02 has occurred.
IX. The COMPANY shall agree to allow DAQ staff access through the Facility property to
access the Ambient Monitor on adjacent property pursuant to a license agreement to be executed
by the DAQ and the COMPANY. The COMPANY shall agree to allow the DAQ to store
equipment, such as an ATV, at the Facility to improve access to the monitoring site.
X. The DAQ shall conduct a review of ambient monitoring data collected after the first 12
months following the beginning of operation of the Ambient Monitor, and at the end of each
calendar year thereafter.
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Special Order by Consent
CPI USA North Carolina LLC
XI. If the data from the Ambient Monitor or from a modeling analysis indicate that the area
near the Facility is in compliance with the NAAQS prior to the termination of this ORDER, the
COMPANY may submit to the DAQ a permit modification request to modify the Emission Limit
in the Permit.
XII. The order shall terminate at the earliest of the following:
i. The date in paragraph XX.
ii. Upon approval of such modification by DAQ and issuance of a permit with a
revised emission limit requested by the COMPANY as outlined in paragraph XI.
iii. The effective date of a new and separate SOC required under paragraph III.
XIII. In the event the COMMISSION or the DAQ find that reports, plans, specifications, or
permit applications required by Paragraph II are in any respect deficient or if additional
information is necessary to comply with the requirements of North Carolina General Statutes
143-215.107 et seq., any regulations promulgated thereunder, or any other applicable laws or
regulations, the COMPANY shall be notified by the DAQ as soon as possible. The COMPANY
shall be afforded an opportunity to modify, amend, or supplement its submissions to make such
submissions complete and appropriate, and request any necessary amendments to this ORDER to
effectuate its compliance.
XIV. All notices and reports required from the COMPANY by this ORDER shall be delivered
to:
Brad Newland, P.E., Regional Air Quality Supervisor
N.C. Dept. of Environmental Quality
127 Cardinal Drive Extension
Wilmington, NC 28405
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Special Order by Consent
CPI USA North Carolina LLC
All payments required from the COMPANY by this ORDER shall be mailed, first class
postage prepaid, to the following address:
Enforcement Group - Payments
NCDEQ—DAQ
Mail Service Center 1641
Raleigh,North Carolina 27699-1641
XV. This ORDER constitutes full and final settlement and satisfaction of all matters addressed
herein and any and all claims or prospective claims that the COMMISSION has or may have for
violations of regulations described in Paragraph I hereof, as of the date this ORDER is approved
by the COMMISSION. This ORDER shall not affect the COMPANY'S obligation to comply
with any Federal, State, or local laws or regulations.
XVI. Final approval and entry into this ORDER are subject to the requirements that the
COMMISSION give notice of proposed consent order to the public, and that the public have at
least thirty (30) days within which to comment on the ORDER.
XVII. Should any provision of this ORDER be declared by a court of competent jurisdiction to
be inconsistent with Federal or State law and therefore unenforceable, the remaining provisions
hereof shall remain in full force and effect.
XVIII. Any modifications of this ORDER must be agreed to in writing signed by both parties.
XIX. Except as otherwise set forth herein, this ORDER is not and shall not be interpreted to be
a permit or modification of an existing permit under Federal, State or local law, and shall not be
construed to waive or relieve the COMPANY of its obligations to comply in the future with any
permit.
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Special Order by Consent
CPI USA North Carolina LLC
XX. This Special Order by Consent is effective upon execution by the COMMISSION and
shall expire on December 31, 2020, or as provided in paragraph XII.
ATTESTED: CPI USA NORTH CAROLINA LLC
BY: tZ�ves
(Dqavi
Southport Plant Manager
DATE:
APPROVED AND ACCEPTED:
BY: Rfxj-.e,
Environmental Management Commission
DATE: a"f'I ao
I
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