AQ_F_1000067_20191220_ENF_Enf-FND

STATE OF NORTH CAROLINA NORTH CAROLINA
DEPARTMENT OF ENVIRONMENTAL
QUALITY
COUNTY OF BRUNSWICK FILE NO. DAQ 2017-011
IN THE MATTER OF: )
CPI USA NORTH CAROLINA, LLC - )
SOUTHPORT PLANT )
FOR VIOLATION OF: ) CIVIL PENALTY ASSESSMENT
40 CFR 51.166 AND NCAC 2D. 0530 )
PREVENTION OF SIGNIFICANT )
DETERIORATION )
Acting pursuant to North Carolina General Statutes (G.S.) 143-215.114A, I, Michael A. Abraczinskas,
Director of the Division of Air Quality(DAQ),make the following:
I. FINDINGS OF FACT:
A. CPI USA North Carolina, LLC - Southport Plant(CPI—Southport) operates a biomass
cogeneration facility located in Southport, Brunswick County,North Carolina. The DAQ
Facility ID Number is 1000067.
B. CPI - Southport was issued Air Permit No. 05884T08 on March 31, 2009, for a 2008
project titled, "Retrofit of Six Boilers with S02 and NOx Controls and Increased
Wood/Biomass Firing at the Southport Plant" (2008 Boiler Retrofit Project)that allowed
the facility to increase the firing rate of the Tire Derived Fuel (TDF) component of its fuel
from 35%up to and including 50% on a BTU basis. This application and the associated
permit also allowed modifications to the wood fuel feed system, which increased the
maximum potential wood fuel feed rate to Units 1 and 2 (each"Unit"is comprised of 3
boilers).
C. CPI- Southport began construction on the 2008 Boiler Retrofit Project in April 2009 and
concluded construction on March 15, 2011. Post-construction operations also began on
March 15, 2011.
D. Pursuant to 15A NCAC 2D.0530(u), CPI- Southport relied on projected actual emissions
for the purposes of demonstrating that this 2008 Boiler Retrofit Project would not result in
an emissions increase that would trigger the requirement for submittal of a Prevention of
Significant Deterioration(PSD) application.
E. On February 26, 2016, CPI- Southport submitted their annual Projected vs. Actual report as
required by Permit 05884T19. This reporting event was triggered by an increase in the TDF
boiler fuel component from<35%to nearly 50% on a BTU heat input basis. This report

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DAQ 2017-011
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indicated that actual emissions of carbon monoxide(CO), sulfur dioxide(SO2), and particulate
matter(PM)were significantly higher than projected emissions contained in the original
permit application, #1000067.08B, for the 2008 Boiler Retrofit Project.
F. In an April 15,2016 letter from William Willets to David Groves, DAQ Central Office staff
reported that they had completed a review of the 2015 Projected vs. Actual report and
informed CPI - Southport of their potential concerns regarding reported actual emissions
excesses for CO, S02, and PM10 over the projected actuals contained in the 2008
application. DAQ requested further information be provided to facilitate a review and to
determine whether or not the allowable PSD avoidance emissions increases for those
pollutants (also known as Significant Emissions Rate or SER)were calculated correctly.
G. CPI- Southport responded to the April 15, 2016 communication and information request on
June 14,2016 in a letter to William Willets from David Groves. In that communication,
CPI- Southport stated that the 2008 netting calculation contained in its original application
should have taken credit for some underutilized capacity not related to the 2008 Boiler
Retrofit Project. The company also claimed that they did not correctly account for CO
emissions and PMIo emissions that could be excluded from 2015 Actual Emissions if the
plant had fired wood at the maximum allowable percentage on a BTU heat input basis
under a previous permit(See Stipulation 2.1 —AA.h. in permit 05884T06,where a
50%/50%wood/coal mixture is specified). As a result, CPI- Southport contended that the
revised calculations demonstrate that none of the permitted criteria pollutant emissions
exceed the PSD SER for individual pollutants.
H. DAQ considered the information contained in this June 14, 2016 response and subsequently
determined that neither the adjustment for underutilized capacity,nor the emissions
increment associated with maximizing the percentage of wood utilized as a component in
the fuel are valid"net reductions"under PSD rules. As a result, the final adjusted value for
the actual emissions change in CO attributable to the 2008 Boiler Retrofit Project was
calculated to be 1,241 tons/yr(based on Continuous Emissions Monitoring and netting
calculations), which exceeds the 100 ton/yr SER for CO under PSD rules. The facility was
informed of this decision in a July 21, 2016 email (Thaker to Groves, et al). In that same
communication, CPI- Southport was informed that DAQ agreed with their conclusion that
a PSD review for SO2 was not triggered and that the DAQ was unable to make a
determination for PM and PMIo without some further information, which was requested of
the facility as part of the same email.
I. CPI- Southport submitted a letter response to DAQ via email(Grace to Thaker) on July 27,
2016 providing the information requested by Rahul Thaker in the July 21, 2016 email
(Thaker to Groves, et al).
J. DAQ determined that the correct value for the change in projected PM emissions
attributable to the 2008 Boiler Retrofit Project to be 33 tons/yr, which is in excess of the 25
ton/yr PSD SER for PM. This was communicated back to the facility in an email (Thaker
to Groves, et al) sent on August 1, 2016.
K. On January 24, 2017, DAQ issued a Notice of Violation/Notice of Recommendation for
Enforcement(NOV/NRE)to CPI - Southport for failure to obtain a PSD permit prior to

CPI USA North Carolina,LLC—Southport Plant
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commencing construction on the 2008 Boiler Retrofit Project pursuant to 40 CFR 51.166
and NCAC 2D .0530. The determination was based on CO and PM emissions exceeding
allowable SER's. This letter requested CPI- Southport to submit a full PSD permit
application within 30 days of receipt.
L. CPI- Southport submitted a response to the NOV/NRE on February 8, 2017.
M. DAQ received CPI—Southport's PSD application for the 2008 Boiler Retrofit Project on
March 2, 2017.
N. On July 12, 2018, DAQ issued an Addendum to the January 24, 2017 NOV/NRE for failure to
obtain a PSD permit prior to commencing construction on the 2008 Boiler Retrofit Project
pursuant to 40 CFR 51.166 and NCAC 2D .0530. Based on a review of additional
information, DAQ concluded that the emissions increase from the 2008 Boiler Retrofit Project
exceeded the PSD threshold level of 40 tons per year for S02. This letter requested CPI -
Southport to submit a PSD permit application for S02 within 45 days of receipt of the letter.
O. CPI—Southport's Plant Manager Frank Hayward sent an email to Brad Newland on July 31,
2018 acknowledging receipt of the Addendum to the January 24, 2017 NOV/NRE. Mr.
Hayward stated they would send the PSD application by August 30, 2018.
P. DAQ - Central Office Permits received a S02 PSD application for CPI—Southport on August
30, 2018.
Q. On October 16, 2018, DAQ—Air Quality Analysis Branch requested more information about
the air dispersion modeling associated with the August 30,2018 PSD application. CPI—
Southport submitted a revised Section 6 & 7 to the PSD application on December 14, 2018.
R. On October 22, 2019, DAQ issued CPI USA North Carolina, LLC - Southport Plant a Second
Addendum to the January 24, 2017 NOV/NRE for violation of 15A NCAC 2D .0530 and 40
CFR 50.166. This Addendum was for failure to operate the appropriate S02 BACT controls
since the completion of actual construction and boiler operation commencement associated
with the 2008 PSD Project. This letter also requested that CPI USA North Carolina, LLC -
Southport Plant submit economic benefit information in six categories specific to the 2008
NOx/SO2 Boiler Control Retrofit and Increased Wood/Biomass Firing PSD Project. The six
categories were violation dates, capital costs, operation and maintenance costs,permit
application and report costs, engineering costs, and other miscellaneous costs. The requested
information would be used in determining DAQ's civil penalty assessment for the facility's
PSD violations.
S. On November 15, 2019, CPI- Southport submitted a response to the October 2019 Addendum
and the response included economic benefit information for the requested six categories. With
this response, the company indicated that the required BACT controls for S02 emissions
became operational in November 2017.

CPI USA North Carolina,LLC—Southport Plant
DAQ 2017-011
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T. Air Quality Compliance History:
CPI—Southport and the NC DAQ entered into a Special Order by Consent on June 24,
2016 to address issues with the National Ambient Air Quality Standard for SO2.
A Notice of Deficiency(NOD) was issued to CPI—Southport on April 28,2016, for its
emergency fire pump (I-EFP) exceeding the 50 hours of non-emergency use limit specified
in 40 CFR 63.6640.f.3.
U. The cost of investigation or inspection in this matter totaled$667.00.
Based upon the above Findings of Fact, I make the following:
II. CONCLUSIONS OF LAW:
A. CPI USA North Carolina, LLC - Southport Plant was in violation of 40 CFR 51.166 and
15A NCAC 2D.0530 for failure to obtain a PSD permit prior to commencing
construction on the 2008 Boiler Retrofit Project.
B. CPI USA North Carolina, LLC - Southport Plant was in violation of 40 CFR 51.166 and
15A NCAC 2D .0530 for failure to operate the appropriate SO2 BACT controls since the
completion of actual construction associated with the 2008 Boiler Retrofit Project until the
appropriate SO2 BACT controls became operational.
C. G.S. 143-215.114A provides that a civil penalty of not more than twenty-five thousand
dollars per violation may be assessed against a person who violates or fails to act in
accordance with the terms, conditions, or requirements of a permit required by G.S.
143-215.108 or who violates any regulation adopted by the Environmental Management
Commission.
D. G.S. 143-215.3(a)(9)provides that the costs of any investigation or inspection may be
assessed against a person who violates or fails to act in accordance with the terms,
conditions, or requirements of a permit required by G.S. 143-215.108 or who violates
any regulation adopted by the Environmental Management Commission.

CPI USA North Carolina,LLC—Southport Plant
DAQ 2017-011
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Based upon the above Findings of Fact and Conclusions of Law, I make the following:
III. DECISION:
CPI USA North Carolina, LLC - Southport Plant is hereby assessed a civil penalty of:
$ dOv .c)O For one violation of 40 CFR 51.166 and 15A NCAC 02D .0530
for failure to obtain a PSD permit prior to commencing
construction on the 2008 Boiler Retrofit Project.
$ 3 O - 06 For violation of 40 CFR 51.166 and 15A NCAC 02D .0530 for
failure to operate the appropriate S02 BACT controls,
commencing on March 15, 2011, and continuing until April 2016.
For violation of 40 CFR 51.166 and 15A NCAC 02D .0530 for
$ failure to operate the appropriate S02 BACT controls from May
2016 to November 2017.
$ H 7 3,3 20 . 06 TOTAL CIVIL PENALTY,which is 0.77 percent of the
maximum penalty authorized by G.S. 143-215.114A.
$ $667.00 Investigation costs.
$ q 7 3, q%7 • 00 TOTAL AMOUNT DUE
Pursuant to G.S. 143-215.114A in determining the amount of the penalty, I considered the factors
listed in G.S. 143B-282.I(b) and 15A NCAC 2J .0106, which are the following:
1) The degree and extent of harm to the natural resources of the State, to the public health, or to
private property resulting from the violation(s);
2) The duration and gravity of the violation;
3) The effect on ground or surface water quantity or quality or on air quality;
4) The cost of rectifying the damage;
5) The amount of money saved by noncompliance;
6) Whether the violation was committed willfully or intentionally;
7) The prior record of the violator in complying or failing to comply with programs over which
the Environmental Management Commission has regulatory authority; and
8) The cost to the State of the enforcement procedures.
lZ Zo 4X-111L J 4 ,
Date Michael A. Abraczinskas, Director
Division of Air Quality