Dear Interested Party:

This letter is in reference to Cadillac Renewable Energy's (CRE) Permit to Install application No.373-86D, which proposed to add 6,250 pounds per hour of tire-derived fuel (TDF) as a supplemental fuel at the existing wood-fired power plant located at 1525 Miltner Avenue, Cadillac, Michigan.

After careful consideration of the issues and pursuant to the delegation of authority from the Director of the Department of Environmental Quality, I have denied the permit application.

In the permit application, CRE proposed a fuel change that would increase the emission of several air contaminants, including sulfur dioxide and sulfuric acid mist. My decision to deny the CRE permit application is based largely on the failure of CRE to include a plan to install additional control technology to reduce these additional emissions.

In particular, it is my decision that the permit application does not meet the standard of Best Available Control Technology (BACT) that is required by federal air pollution regulations. The BACT analysis presented as justification for the absence of control failed to address all of the potential impacts and costs associated with the proposed emission increase. Control of sulfur dioxide often provides the benefit of limiting other impacts to the environment. The absence of control in the CRE proposal provided no such corresponding benefit.

In the case of CRE's proposal, I have determined the use of a scrubber is appropriate for the control of emissions generated by the use of 6,250 pounds per hour of TDF as a supplemental fuel. Both wet scrubbers and dry scrubbers are proven technologies for air pollution control and are readily available for use. Based on current practice, the installation and operation of a scrubber to control emissions of sulfur dioxide and sulfuric acid mist would also reduce emissions of particulate matter and hazardous air pollutants known to be present in the exhaust gases from wood-fired boilers using TDF as a supplemental fuel.

In addition to the need for the installation of a scrubber, the permit application has been denied for several technical deficiencies. It is my determination that the permit application is deficient regarding the following information:

1. The applicant has not conducted a proper top-down BACT analysis for control of particulate matter emissions.

2. The top-down BACT analysis for control of sulfur dioxide and sulfuric acid mist emissions lacked sufficient detail to clearly substantiate the elimination of various control alternatives for technical or cost feasibility reasons.

3. The applicant has not performed a complete additional impacts analysis for all regulated pollutants as required under 40 CFR 52.21(o).

4. The applicant has not considered the ability of the control alternatives to control hazardous air pollutants as required in a BACT analysis.

5. Sufficient data concerning potential emissions of polychlorinated dibenzodioxins and furans and the associated health and environmental impacts are not included in the application.

6. Significant concerns were expressed during the comment period about the ability of the CRE facility to demonstrate compliance with Michigan Air Pollution Control Rule 901, which prohibits emissions that cause unreasonable interference with the comfortable enjoyment of life and property. There is insufficient information concerning the quantity and composition of emissions from the CRE facility related to odors and particulate fallout to address the Rule 901 concerns.

During the technical review of the permit application, the Air Quality Division (AQD) also evaluated the available information on the proposed increase in emissions and the impacts on air quality. Protection of public health is the first priority of the AQD. That assessment did not find compelling evidence that the emissions would cause environmental damage or unacceptable public health risks.

Finally, based on a review of past decisions of the Environmental Appeals Board, it is my determination that a decision to issue Permit to Install No. 373-86D would, if appealed, likely result in the permit being remanded to the AQD for correction of these deficiencies. An additional public comment period would then be required for review of changes to the permit. It is in the best interests of all parties that the present permit application be denied, thus avoiding unnecessary appeals and the associated costs and delays inherent in that process.

The decision to deny an application does not prejudice CRE's right to submit a new, complete application when the above information is available.

If you have any questions, please contact Ms. Lynn Fiedler, at 517-373-7087, or Ms.Mary Ann Dolehanty, at 517-373-2098, of our staff, or you may contact me.

Sincerely,
Dennis M. Drake, Chief
Air Quality Division
517-373-7023

cc:
County of Wexford
City of Cadillac
Mr. Robert Miller, EPA, Region V
Ms. Janis Denman, District Supervisor