1. GHG PSD Applicability Exercise

2. GHG PSD Applicability Exercise - Part 1 Hard Rock, LLC is a manufacturing facility with the following sources of GHGs: boilers, emergency generators, space heaters, process heaters and thermal oxidizers. Assume the permitting of the proposed modification will be completed after July 1, 2011 and commencement of construction for the proposed modification is August 1, 2012. Further, the facilitys current GHG emissions are in excess of 100,000 tpy CO 2 e. Also assume there are no debottlenecking issues associated with the pending modification. Because the dominant component of the GHGs is CO 2, it is reasonable to assume that CO 2 e limits rather than mass-based limits will be controlling. Therefore, this example only deals with CO 2 e emissions. DRAFT2

3. GHG PSD Applicability Exercise - Part 1 (contd) Hard Rocks modification includes the addition of a new gas-fired boiler with distillate oil back up. Hard Rock proposes to limit backup fuel use to 500 hr/yr or less. Hard Rock is also adding two new diesel- fired emergency generators with their use limited to 500 hours per year. Hard Rock is removing from service a coal-fired stoker boiler. The CO 2 e emissions at the new units are as follows: DRAFT3 UnitHourly Emissions Yearly Emissions @8,760 hrs/yr Yearly Emissions @ 8,260 hrs/yr Yearly Emissions @ 500 hr/yr Boiler on nat. gas 24 TPH210,240 TPY198,240 TPY12,000 TPY Boiler on distillate 33.5 TPH293,460 TPY276,710 TPY16,750 TPY EmGen 116 TPH140,160 TPY132,160 TPY8,000 TPY EmGen 28 TPH70,080 TPY66,080 TPY4,000 TPY

4. GHG PSD Applicability Exercise - Part 1 (contd) As part of this project, Hard Rock will shut down a stoker boiler, with a maximum capacity of 300 MMBtu/hr and a maximum operating schedule of 24 hr/day, 365 days/yr. In looking back over the last ten years, this boiler operated, on average, 320 days over the two years with the highest usage, at an average rate of 195 MMBtu/hr. The boiler has the following emission rate: DRAFT4 UnitHourly Emissions @ 300 MMBtu/hr Yearly Emissions @ 8,760 hrs/yr Hourly Emissions @ 195 MMBtu/hr Yearly Emissions @ 7,680 hr/yr Stoker Boiler30.8 TPH269,800 TPY20.03 TPH153,830 TPY

5. GHG PSD Applicability Exercise - Part 1 (contd) Hard Rock believes that PSD review for GHGs is not required for this project since the emissions reductions caused by the shutdown of the stoker boiler will mean that the project has an increase in CO 2 e that is below the significance level. What is your assessment? What other information may be needed? DRAFT5

6. Math for Part 1 of the Hard Rock Example Unit GHG Emissions (TPY of CO2e) New Boiler – gas use198,240 New Boiler – distillate use16,750 EmGen 18,000 EmGen 24,000 Project Total Prior to Netting226,990 DRAFT6

7. Key Points of Part 1 of the Hard Rock Example Choose the worst-case scenario. In this case, firing distillate for up to 500 hours per year increases emissions over the level when firing gas only, so the assessment must include 500 hours of distillate use and 8260 hours of gas use. Sum the emissions of units with increases only in the first step. Do not count decreases from emission units until the contemporaneous netting is done. If not provided by the applicant, request information on ALL the emission increases and decreases during the contemporaneous period before you start the netting calculation for those pollutants exceeding the significant emissions thresholds. DRAFT7

8. GHG PSD Applicability Exercise - Part 2 In response to your request for additional information, Hard Rock submits the following information on previous changes to the facility. Assume beginning of the contemporaneous period is 5 years before construction commences. Also, assume the previous changes have not been relied upon in the past for PSD permitting. DRAFT8 Recent Actual GHG Emissions (CO 2 e basis) Potential GHG Emissions (CO 2 e basis) Process Heater (shutdown July 2007) 17,500 TPY20,000 TPY RTO (shutdown September 2007) 2,550 TPY4,500 TPY Space Heaters in a New Building (added October 2007) 2,000 TPY5,000 TPY

9. GHG PSD Applicability Exercise - Part 2 (contd) Is Hard Rock subject to PSD for GHGs? DRAFT9

10. Math for the Hard Rock Example DRAFT10 Netting Analysis GHG Emissions (TPY of CO 2 e) Project Increase226,990 Stoker Boiler SD (Actual)-153,830 New Space Heaters (PTE)5,000 RTO SD (Actual)-2,550 Net Emissions Increase75,610

11. Changing the Outcome of the Applicability Determination If you determine that PSD applies for GHGs, what are the kinds of changes to the project that Hard Rock could propose that would eliminate PSD applicability to GHG? DRAFT11

12. Options to Eliminate PSD Applicability Eliminate or greatly reduce the use of distillate for back up with an enforceable limit Enforceable limits on the operating hours or fuel use and emissions of the new boiler Start construction earlier (to bring an earlier reduction into the contemporaneous period) DRAFT12

13. Key Points of Part 2 of the Hard Rock Example Use the actual emissions from the units being shutdown (as opposed to the potential emissions) when doing the netting calculation. Double-check the dates of all increases and decreases to ensure they are really contemporaneous (i.e., the shutdown of the process heaters in July of 2007 was not in the contemporaneous period and therefore could not be used in the netting calculation). Also confirm whether contemporaneous increases and decreases have been relied upon in a previous PSD permitting action DRAFT13

14. Key Points of Part 2 of the Hard Rock Example (contd) The permit applicant can take enforceable limit on the emissions of the new or modified units to drop below the significance level. In this case, the applicant could limit the hours of operation of the new boiler, its fuel-firing rate, the hours of distillate used, or a combination of all these actions to reduce the project emissions and successfully net out. DRAFT14