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Weyerhaeuser and Carolina Power and Light Companies

Letter from EPA to Mark Tracy


MAR 18 1996

Mr. Mark Tracey
Facility Manager, Weyerhaueser
985 Corinth Road
Moncure, North Carolina 27559

SUBJ: Project XL Proposal for the Weyerhaueser Moncure Facility

Dear Mr. Tracey:

The purpose of this letter is to outline EPA Region 4's concerns with the status as well as the content of the Project XL proposal involving the Weyerhaueser Moncure facility.

Very briefly, it is our understanding that the proposal will involve the installation of low NOx burners on two units at Carolina Power and Light company's Cape Fear plant in lieu of Weyerhaeuser installing BACT for VOC and NOx in accordance with the PSD regulatory program. Based upon UAM modelling, the State of North Carolina believes that there is more benefit in controlling NOx emissions at CP&L for ozone reductions in the area than in controlling VOC and NOx emissions at the Weyerhaeuser facility. Based on the current version of the Project XL proposal, there will be approximately 1,200 tons of VOC per year and 160 tons of NOx per year that will not be controlled under the PSD/BACT mechanism versus an estimated 500-700 tons NOx per year which will be controlled at CP&L.

Timeframes/Process for Project XL

Based upon our current experience and expectations, the initial process steps of a Project XL proposal takes about four months prior to the negotiation stage. Negotiating a Final Project Agreement (FPA), including stakeholder participation, could take up to 6 months and there is no guarantee that agreement will be reached to implement a particular project. Under that timeline, a project proposed today which made it past the initial process steps would be ten months away from final resolution. The region has serious concern as to whether a viable XL project could be proposed for this facility. If a project were proposed at this late date, it is probable that a final decision on a FPA would be made very near to the beginning of the 1997 ozone season. If during the negotiations agreement could not be reached on the project, the facility would not be able to install appropriate controls prior to the 1997 ozone season. This raises the issues not only of compliance with the State-issued permit, but also of compliance with Federal statutes and State PSD regulations concerning the expansion at the facility.

In addition to the concerns with timing, we have several technical concerns on the information received to date which I wish to touch on.

1. The demonstration of an environmental benefit

a. Toxic analysis: There has been no risk assessment completed or proposed which would compare the toxic implications of the two alternatives in the localized area near the Moncure plant.

b. Ozone formation: There has been no demonstration that the use of BACT controls at the Moncure plant would result in significant adverse impacts on ozone levels - in fact, with reductions of both VOC and NOx at the plant, localized ozone concentrations would be reduced.

2. Reductions at the CP&L Cape Fear Plant

CP&L has indicated that the Cape Fear Plant would not have been controlled in their Phase II Acid Rain NOx control strategy for their system. Low NOx burners at Cape Fear would be in addition to those necessary to meet an NOx averaging plan system-wide. However, upon installation, CP&L desires to use the Cape Fear Plant to demonstrate compliance with a system-wide averaging plan for additional flexibility should other units need to be shut down for maintenance, etc. If CP&L utilizes the reductions in NOx to demonstrate compliance with the system-wide averaging plan, then those reductions would fall into the category of being "otherwise required."

In summary, we have numerous concerns about the viability of an XL project for this plant expansion. If you have any questions, please contact me.


James H. Hankinson, Jr.
Regional Administrator

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