Great, Jerry. I take it then that simultaneous operation of the new and old 
is a physical impossibility. Can we take this to the next step then, to 
carefully walk through the netting calculations (Shudeish & Prabhat are doing 
this) to minimize the total emissions that can occur ("potential to emit") at 
any one time. The way I read the existing permits, however, is that allowable 
(and unenforceable bec of grandfathering?) emissions are NOx is 1428 tpy and 
CO is 429 tpy at each station, which may mean that we can not characterize 
these as "minor" sources. If the netting calculation is such that we can 
avoid New Source Review (I believe this to be the case bec there is planned 
to be a new reduction), we can do the 401.01(5) construction activities and 
try to get a fast-track permit approval.
I still do not whether, as a technical matter, the applications could qualify 
as "minor" revisions under R18-2-319.A, which mean,
1. Do not violate any applicable requirement
2. Do not involve substantive changes to existing monitoring, reporting, or 
record-keeping requirements in the permit
3. Do not require or change a case-by-case determination of an emission 
limitation or other standard, or a source-specific determination of ambient 
impacts, or a visibility or increment analysis
4. Do not seek to establish or change a permit condition for which there is 
no corresponding underlying applicable requirement and that the source has 
assumed in order to avoid an applicable requirement to which the source would 
otherwise be subject. The terms and conditions include:
     a. A federally enforceable emissions cap that the source would assume to 
avoid classification as a modification under any provision of Title I of the 
Clean Air Act; and
     b. An alternative emisssions limit approved under regulations 
promulgated under CAA sec 112(i)(5)
5. Are not modifications under and provision of Title I of the CAA
6. Are not changes in fuels not represented in the permit application or 
provided for in the permit
7. The increase in the source's potential to emit is not significant (40 tpy 
NOx, etc) [not applicable to TWP bec net reduction]
8. Are not required to processed as a significant revision under R18-2-320 
(refers to signif change in existing monitoring terms or relaxation of 
reporting/recordkeeping or "does not qualify as a minor permit revision....")
If someone could make a hard analysis of the foregoing, that might provide us 
additional strength.
Van Wolf

>>> <Jerry.D.Martin@enron.com> 9/26/2001 1:24:56 PM >>>
Van, the 3 old units and 1 new unit at each station cannot run
simultaneously.  There is only so much gas in the line leading to each
station, and there is a limit to the discharge pressure.  If we tried to
start the new unit with the old units running, the suction pressure would
decrease significantly, and the discharge pressure would increase,
automatically shutting down all units rather quickly.  Even if it was
physically possible, we would be literally "spinning our wheels" with no
benefit - burning fuel with no increase in throughput.

I'll be happy to explain this to Ms. Wrona tomorrow.

Thanks,
Jerry

    -----Original Message-----
   From:   "Van Wolf" <vwolf@swlaw.com>@ENRON
             
[mailto:IMCEANOTES-+22Van+20Wolf+22+20+3Cvwolf+40swlaw+2Ecom+3E+40ENRON@ENRON.
com]


   Sent:   Wednesday, September 26, 2001 2:07 PM
   To:     Eisenstein, Arnold L.; Pribble, Dan; Martin, Jerry D.; Shafer,
             John; Campbell, Larry; Soldano, Louis; Melton, Richard ;
             Jensen, Ruth; Kendrick, William; shead@ensr.com
   Subject:  Red Rock/ADEQ: Nancy Wrona meeting

   I just met with Steve Burr, ADEQ Special Counsel, to discuss options and
   develop a strategy to rush the permit issuance schedule and/or allow
   significant construction to begin before actual issuance of the permit.
   He will attend the meeting tomorrow by teleconf because he thinks it
   would help if both of us attended as there are legal issues.

   He spoke with Prabhat yesterday, and both he and Prabhat believe this is
   a good project that should go forward expeditiously, but ADEQ must stick
   with its rules and policy interpretations. Nonetheless, there appears to
   be a way to re-interpret the application possibly to be a "minor"
   revision. The key will be assure that, during the construction period
   and the transition period, as well as operating procedures, all of the
   equipment that could operate at the same time does not have the
   "potential to emit" contaminants in excess of 250 tons per year (tpy).
   For the meeting with Nancy, someone, I assume it will be Larry, will
   need to be acutely familiar with the details of the permits revisions
   applications to be able to walk this through with Prabhat & Shudeish. I
   can review this as well, in order to discuss it with Steve, but we will
   need to make sure we have our technical ducks all lined up. In that
   sense, the appropriate person should please review the Ariz air rules at
   R18-2-319.A (minor revision to Class I source permit) and R18-2-401,
   definition of "major source" esp subsec c (to avoid "new source
   review"). Let me know if I need to fax these to anyone, but they may
   also be on the ADEQ website (www.adeq.state.az.us).

   For policy reasons, ADEQ needs to limit pre-permit construction because
   otherwise it would be subject to political pressure from sources with
   sunk capital costs. For TWP's purposes, the key is to keep the total
   "potential to emit" at each station below 250 tpy to avoid New Source
   Review. [I am out of my legal "depth" here and need technical
   assistance; the permit applications seem to indicate an increase in NOx
   and CO as well as a decrease in the same section (see sec 2.2 on
   Netting)as well as being subject to New Source Review (sec 3.2); there
   may some language in the applications that is somewhat misleading; the
   netting calculation is going to be important). The concern will be
   whether the old reciprocating compressors and the new turbine can all
   operate at the same time so as to result in significantly excess
   emissions. Are there operating (end enforceable) restrictions that would
   prohinbit operation of equipment that would cause emissions in excess of
   what currently allowed?

   If the permit revisions can be recharacterized as "minor," either there
   are no restrictions on immediate commencement of all contruction (only
   seven days notice required) or the allowable construction is that set
   forth in Ariz law at ARS 49-401.01(5), which would allow "installation
   of building supports and foundations, laying of underground pipework and
   construction of permanent storage structures." It appears that
   site-deliveries could occur, but I am not sure about tie-ins.

   I am somewhat skeptical that we can get a complete "minor" revision
   approach because I think this is a "major" source and the emissions
   limitations are significant. We may, with the netting, be able to avoid
   NSR and get 401.01(5) construction, but we will need technical analysis
   to be creative as to how the revisions set up the equipment changes and,
   in particular, whether we can screw down the operating procedures and
   transition to limit the "potential to emit."

   Thus, it will also be important to try to get a faster permit
   review/approval schedule. We agreed that TWP's "negotiating period" will
   be quick. EPA needs a 45-day review, but can we get submittals to EPA
   now (these revisions are essentially the same as for Stations #3 & #$,
   which EPA is about to approve) and get a faster indication of "no
   objections" from EPA?

   I sense Burr wants to help us come up with creative solutions, and I
   believe this will be Nancy's intent as well. Please let me know what
   further I can do from this end to prepare for tomorrow's meeting. I will
   have the conference room ready for a pre-meeting strategy session.
   Van Wolf

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   G. Van Velsor Wolf Jr.
   Snell & Wilmer L.L.P.
   One Arizona Center
   Phoenix , Arizona 85004-2202
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