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Correspondence



December 5, 1997

Matt Mosier
Air Quality Management Section
Environmental Resources Management Division
City of Indianapolis
2700 South Belmont Avenue
Indianapolis, Indiana 46221

Dear Mr. Mosier:

This letter is in response to the proposed construction permit for Indiana Power and Light Company (IPL), 396 Kentucky Avenue, Indianapolis, to convert boilers 11, 13, and 14 from coal-fired units to coke oven gas (COG) and natural gas-fired units. IPL proposes to use emission limits and netting credits to remain below the major modification threshold for particulate matter, sulfur dioxide, volatile organic compounds (VOC), carbon monoxide, nitrogen oxides (NOx), and sulfuric acid mist.

Although the source is relying on a restriction of VOC and sulfuric acid mist emissions to remain below the major modification threshold, the permit does not contain an emission or production/operational limit for either pollutant. According to the United States Environmental Protection Agency's (USEPA) June 13, 1989, memorandum titled Guidance on Limiting Potential to Emit in New Source Permitting, permits "must contain a production or operational limitation in addition to the emission limitation in cases where the emission limitation does not reflect the maximum emissions of the source operating at full design capacity without pollution control equipment." VOC and sulfuric acid mist emission limits must be added to the permit. In addition, the permit must include a production/operational limit that results in the desired emission limit.

The technical support document of the proposed permit states that the source is not subject to New Source Performance Standards (NSPS), Subpart Db because IPL "changed the post-project potential emissions in July 1997 by revising a fuel contract. Based on this fuel contract NOx emissions would be limited below current baseline potential emissions." Applicability of NSPS standards is based on physical limitations of the unit and cannot be based on limits established in documents such as permits or contracts. Therefore, it is USEPA's position that this source cannot rely on the fuel contract to determine its NSPS status.

Based on the considerations outlined above, it is the position of the USEPA that the permit as currently drafted does not meet the requirements of the Clean Air Act. We will continue to work with you to develop an acceptable permit. If you have any further questions, please contact Sam Portanova, of my staff, at (312) 886-3189.

Sincerely yours,

/s/

Cheryl L. Newton, Chief
Permits and Grants Section



cc: Paul Dubenetzky
Indiana Department of Environmental Management
Office of Air Management