Thanks Mary.  This info is very helpful as usual.  We're working through the issues with Scott and hope to come to a conclusion on the best course of action in the next few weeks.  As a side note, the NOx credits last traded over $30,000.  In your opinion is there a price level where the state may come in and suspend the need for ERCs?  Or are they used as a disincentive to folks trying to build merchant plants?
Thanks again,
Trevor

 -----Original Message-----
From: 	Schoen, Mary  
Sent:	Wednesday, September 19, 2001 9:52 AM
To:	Taylor, Michael E; Woods, Trevor
Cc:	Jacobson, Lisa; Keeler, Jeff; Phillips, Marc
Subject:	GA ENA Emissions Management Issues

Michael/Trevor - sorry to be responding so late ...my e-mail sending capabilities were out until late yesterday.

If EMA is to manage the emissions issues for a new Enron plant in Georgia starting in 2004, it will not only have to procure offsets. but also insure that the plant has adequate NOx allowances to cover its summer ozone emissions.  

1.  Emission Reduction Credit Issues:

Atlanta and surrounding areas are designated as serious nonattainment.  Clark County (which is several counties east of Atlanta) is designated as an attainment area.  However, Clark County has been found to contribute to nonattainment in other areas (it is an upwind contributor) and as a result there are special permitting requirements in this area.  100 tons per year qualifies a source as "major" which means BACT is required and an offset ratio of 1.1:1 is enforced.  Another requirement is an Alternative Siting Analysis.  This condition puts a burden on the applicant of demonstrating that the benefits of the project will greatly outweigh any costs imposed by the project (including environmental costs).  We've heard from a locat permitter that obtaining offsets would be difficult and that a recent exchange of offsets took place at $10,000 per ton.  A 500 MW combined cycle would probably require around 185 tons of offsets or more depending on the specifics.

2.  NOx SIP Call Allowances:

Only the fine grid portion of GA is included in the SIP Call.  This does include Clark County.  Barring in changes or new challenges to the SIP Call, GA will have to have a program in place starting May 31, 2004.  Because GA's budget was changed with the Court ruling on the fine/course grid modeling back in January 2001, GA has yet to submit a SIP to the USEPA.  We are poking around to see if we can find a draft, so we have a better understanding of GA's new source provisions.

3.  Permitting Uncertainties:

One thing you should be aware of before procuring offsets for this project, is that GA like some other states recently, has placed a moritorium on issuing new permits for merchant plants.  I know Scott Churbock has been very involved in the state and has been negotiating with local permitters for some time.  You may just want to clarify who takes the risk of the cost of these offsets if the project is not ultimately approved.

Please let me know if you have any questions, and I will pass along new info. as we receive it.

Mary Schoen
415.782.7803