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Weyerhaeuser and Carolina Power and Light Companies

Letter from Mark Tracy to John Hankinson

Weyerhaeuser CP&L

March 22, 1996

Mr. John H. Hankinson, Jr.
Regional Administrator
United States Environmental Protection Agency
Region 4
345 Courtland Street, N.E.
Atlanta, Georgia 30365

Dear Mr. Hankinson:

Thank you for your letter of March 18 regarding our joint Project XL proposal involving Weyerhaeuser's Moncure facility and CP&L's Cape Fear facility. Your summary of the proposal was essentially correct. We should only point out that the proposal assumed that only one of CP&L's units would be controlled, thereby reducing its actual emissions by fully 700 tpy of NOx versus the potential emissions of 1200 tpy VOC and 160 tpy NOx from Weyerhaeuser's Moncure facility under the emissions reduction exchange. What follows are responses to the concerns raised in your letter as well as those raised in subsequent discussions between your staff, the State of North Carolina and our environmental groups.

Time Frames/Process for Project XL

We would agree that the time required to install the requisite NOx reduction equipment at the Cape Fear Unit leaves little time for the review of the Project XL proposal. We would point out, however, that we have been working with the State of North Carolina on this concept since July of 1995. In addition, we met with your staff on January 24, although the actual proposal was not completed until recently. At the same time, the Project XL procedure is still in its infancy and we would hope that, as in the private sector, when unique opportunities present themselves, allowances could be made to procedural ceremony. We recognize that only limited time remains, but that we are at your disposal and intend to respond to any reasonable inquiry.

To the most technical issues, we understand that you are concerned in three separate areas. These are,

In response to (1), we understand that, while there is no link between Title I and Title IV reductions, the State of North Carolina wants CP&L to achieve reductions above and beyond the Title IV requirements. CP&L is prepared to agree to achieve and demonstrate to the State's satisfaction that its Title IV compliance will not depend on the 700 tpy offered in this proposal. CP&L is currently working with the State to consummate such an agreement. The only caveat

Mr. John H, Hankinson, Jr. March 22, 1996

that CP&L would insist upon is that these NOx reductions be counted in Title IV compliance under extenuating conditions in which two or more of its large baseload units is forced into simultaneous outages.

In response to your second concern, CP&L is prepared to take a facilitywide emission limit (equivalent to 0,47 lb/mmBtu for Unit 5, or 700 tpy of actual emissions) so that the 700 tpy reduction in NOx emissions will be assured at the Cape Fear site. This limitation would be incorporated in the Cape Fear operating permit.

The third concern you raised is in regard to the exchange between NOx and VOCs. We understand that, whether the two emission reductions (i.e., 540 tpy NOx or 1200 tpy VOC) are considered on a mass basis or a molecular basis, neither accurately reflects the stoichiometry of the ozone chemistry making any exchange rate meaningless. Instead, the State of North Carolina has chosen the reactive model embedded in the UAM program along with the best estimate of the background conditions in this part of the country to establish what the exchange rate should be. We support this approach because it is most relevant to the region we are attempting to improve. Regarding the toxics issues this project will reduce emissions from current baseline levels.

Once again, we would like to thank you for the time and effort you and your staff have devoted to this important project and look forward to joining forces with you in pursuing our common goal, the improvement of North Carolina's air quality.


Mark Tracy Richard W. Bagley
Plant Manager Manager-Cape Fear Plant
Weyerhaeuser, Moncure Facility Carolina Power & Light Company

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