Recommendations for Enhancing Environmental Regulations for the San Juan Generating Station

Bruce C. Buckheit's testimony on managing default risks, improving compliance monitoring, and reducing CO2 emissions at the San Juan Generating Station by implementing changes to regulations in a way that aligns with the Environmental Improvement Act, sets positive examples for similar projects, and eliminates unwarranted loopholes while not overly burdening the facility.

• Environmental regulations
• Compliance monitoring
• CO2 emissions
• San Juan Generating Station
• Bruce C. Buckheit

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1. Testimony of Bruce C. Buckheit October 25, 2022 Introduction Managing the risk of default and form of the limit Compliance assurance monitoring plan The averaging time Use of net generation versus gross energy output Measuring and reporting CO2 emissions Emissions of CO2 separated from the primary exhaust stream at the facility

2. Potential Aggregate Impacts

3. Introduction The changes I recommend to the proposed regulations will More faithfully implement the plain meaning of the Environmental Improvement Act Provide a positive model for CCS coal, gas and hydrogen projects in other jurisdictions Eliminate inappropriate and unjustified loopholes in monitoring and reporting emissions Reduce CO2 emissions by several millions of tons over the life of the proposed San Juan Generating Station project The changes I recommend will not present significant burdens for the proposed San Juan Generating Station project

4. Managing the Risk of Default and Form of the Limit The risk of default The CAM plan is intended to reduce the possibility that an operator will fail to address problems in a timely manner. This is particularly important here, where the technology is relatively new and the agency staff have limited resources to monitor the facility. If the operator is simply suspending use of the carbon capture system because the annual limit allows periods of unabated CO2 emissions, a notice to the agency and certification that the source is on a path to meet the annual limit will suffice. The averaging time I recommend a 365 operating day rolling average. This provides additional flexibility to the operator and a longer averaging period compared to rolling monthly averages. The rule should make it clear that the initial day violation of a 365 day rolling average is 365 days of violation.

5. Use of net generation versus gross energy output Given the context of the legislation and the common understanding of the term megawatt hour this language is best read to permit 1,100 pounds of CO2 for each megawatt hour of electricity provided to the New Mexico electric grid The use of net generation is not unfair to Enchant/Farmington or anyone else There is no competition in New Mexico Enchant/Farmington will use the energy source for the CC island that is the most advantageous for the company From a policy perspective the rules should not favor the use of a more polluting fuel than cleaner fuels or renewables

6. Use of net generation versus gross energy output Carbon capture is extremely energy intensive When the SJGS is operating without carbon capture its heat rate (coal consumption) will be 10,489 Btu/kWh(net). With carbon capture that energy needed to produce one kilowatt hour will increase to 19,873 Btu/kWh. Assuming the use of coal that emits 212 pounds of CO2 for each million Btu of heat provided, this would increase the amount of CO2 generated in the process from 2,290 lb/MWh to 4,198 lb/MWh. If the Enchant/Farmington project captured 85% of the CO2, the emission rate would be 630 lb/MWh well under the statutory limit. The SJGS could operate 28 percent of the year (over 2400 hours) without using any CCS and still comply with a 1,100 lb/MWh (net) limit.

7. Use of net generation versus gross energy output According to the FEED study CCS and other auxiliaries will consume 432 MW of energy Thus, under a gross energy output standard, almost half of the emissions associated with the production of electricity(432/914 MW) will be ignored Per the FEED study, the gross emission rate, when operating with the CCS would then be less than 200 lb/MWh Under such a standard, the proposed SJGS could operate without CCS more than 40 percent of the time (over 3600 hours)

8. Measuring and reporting CO2 emissions Measuring and reporting emission rates generally involve two steps (1) Use laboratory grade measuring techniques to initially measure the emission rates while (2) also gathering data using continuous monitoring systems and calibrating the output of those systems against the reference method results. Determining CO2 mass emission rates from a stack includes a determination concentration and flow. Determining the concentration of CO2 is relatively straightforward, but determining the rate of flow is not. A number of observers have reported that the reference method commonly employed provides numerous alternative options and may permit errors of 20 percent in determining flow.

9. Measuring and reporting CO2 emissions

10. Measuring and reporting CO2 emissions

11. Measuring and reporting CO2 emissions The National Institute of Standards and Technology (NIST)mission is [t]o promote U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. Over the past decade NIST has developed advanced measuring probes and techniques that NIST claims (1) are less expensive than earlier techniques and (2) reduced flow measurement errors to 2 percent or less. We have recommended that the rule provide that an operator consult with NIST on the best practices and methods for measuring flow at the facility and either accept NIST s recommendations or explain why not. The assertion that this recommendation is unduly burdensome is unsupported and, on face value, unsupportable.

12. Measuring and reporting CO2 emissions The second step in the measuring process is to calibrate the continuous monitors against the reference test results. However, the proposed rule provides that the source shall use unadjusted relative accuracy testing results. The proposed regulation would appear to not just allow, but require an operator to use continuous monitor data that the source knows is biased low compared to the reference test results.

13. Measuring and reporting CO2 emissions The Environmental Improvement Act specifies a limit of one thousand one hundred pounds per mega-watt hour. The proposed rule translates this in a way that would effectively increase the limit to 1149.9 lb/MWh. Had the proposed rule be expressed as 1100. lb/MWh several hundred thousand tons of CO2 would not be permitted. Since the intermediate data and calculations are carried out to five significant figures, no additional hardship or data collection efforts are required. No rationale for this outcome has been provided.

14. Measuring and reporting CO2 emissions The proposed rule had not required reporting of emissions data until 15 months of operation had been completed. The Department has since revised its proposal to correct the deficiency. The proposed rule had required recordkeeping for only 24 months. The Department has also revised its proposal to correct that deficiency.

15. Emissions of CO2 Separated from the Primary Exhaust Stream at the Facility The proposed rule appeared to consider only emissions from the stacks serving the boiler island and not the CO2 emissions from the pollution control equipment. I understand that Enchant/Farmington agree that the 1,100 lb limit applies to emissions from the entire facility, including the boiler and carbon capture islands to the point of offsite transfer. While not within the scope of this rulemaking I note that the regulatory scheme for this entire process is not comprehensive as it does not address downstream emissions, leakage and sequestration in perpetuity.