Attachment_K_-_Statement_of_Basis.pdf

STATEMENT OF BASIS

Minor Air Quality Operating Permit

EROS Data Center Sioux Falls, South Dakota

South Dakota Department of Environment and Natural Resources

Table of Contents Page i

1.0 Operational Equipment 1

1.1 Proposed Equipment 1

2.0 New Source Performance Standards 1

2.1 Standards Applicable to Engines 1

2.2 Other NSPS Standards 2

3.0 New Source Review 2

4.0 Prevention of Significant Deterioration 2

4.1 Potential Emissions 3

4.2 Generator – Criteria Air Pollutants 3

4.3 PSD Summary 5

5.0 National Emission Standards for Hazardous Air Pollutants 5

6.0 Maximum Achievable Control Technology Standards 5

6.1 Potential HAP Emissions 6

6.2 Potential HAP Emissions – Generators 6

6.3 Standards Applicable to Engines 6

6.4 Other MACT Standards 6

7.0 State Requirements 7

7.1 Permit Type 7

7.2 State Particulate Emission Limits 7

7.3 Sulfur Dioxide Emissions 7

7.4 State Restrictions on Visible Emissions 8

8.0 Recommendation 9

1.0 Operational Equipment

On March 05, 2019, EROS Data Center in Sioux Falls, South Dakota submitted a Air Quality Construction permit application for the construction and operation of four non-emergency generators which are used for peak shaving and emergency backup.

1.1 Proposed Equipment

Table 1-1 provides a description of the non-emergency generators at EROS Data Center’s facility in Sioux Falls, SD as listed in the March 05, 2019, minor air quality application.

Table 1-1 – Equipment Information Maximum Control

Unit Description Operating Rate Device

#1 Non-emergency Generator –2005, Cummins, model #DFGE, compression ignition, fired with distillate oil.

846 kilowatts (1135 horsepower)

Oxidation Catalyst

#2 Non-emergency Generator –2005, Cummins, model #DFGE, compression ignition, fired with distillate oil.

846 kilowatts (1135 horsepower) Oxidation

Catalyst

#3 Non-emergency Generator –2005, Cummins, model #DFGE, compression ignition, fired with distillate oil.

846 kilowatts (1135 horsepower) Oxidation

Catalyst

#4 Non-emergency Generator –2017, Cummins model #DQFAH ,compression ignition, fired with distillate oil.

1111 kilowatts (1490 horsepower)

Oxidation Catalyst

2.0 New Source Performance Standards

DENR reviewed the following new source performance standards (NSPS) to determine if EROS Data Center’s generators are applicable to the following NSPS at this time.

2.1 Standards Applicable to Engines

There are two new source performance standards for stationary reciprocating compression ignition (CI) internal combustion engines (ICE). The two standards are applicable to the following engines:

1. 40 CFR Part 60, Subpart IIII is applicable to compression ignition engines that commence construction after July 11, 2005 where the stationary CI ICE are manufactured after April 1, 2006 and are not fire pump engines, or manufactured as a certified National Fire Protection Association (NFPA) fire pump engine after July 1, 2006 or are modified or reconstructed after July 11, 2005; and

2. 40 CFR Part 60, Subpart JJJJ is applicable to spark ignition engines that commence construction after June 12, 2006, where the stationary SI ICE are manufactured:

a. On or after July 1, 2007, for engines with a maximum engine power greater than or equal to 500 horsepower (except lean burn engines with a maximum engine power greater than or equal to 500 horsepower and less than 1,350 horsepower);

b. On or after January 1, 2008, for lean burn engines with a maximum engine power greater than or equal to 500 horsepower and less than 1,350 horsepower;

c. On or after July 1, 2008, for engines with a maximum engine power less than 500 horsepower;

d. On or after January 1, 2009, for emergency engines with a maximum engine power greater than 19 kilowatts (25 horsepower); or

e. Owners and operators of stationary SI ICE that commence modification or reconstruction after June 12, 2006.

In accordance with 40 CFR § 60.4219, a compression ignition means a type of stationary internal combustion engine that is not spark ignition engine. Spark ignition means relating to a gasoline, natural gas, or liquefied petroleum gas fueled engine or any other type of engine with a spark plug (or other sparking device) and with operating characteristics significantly similar to the theoretical Otto combustion cycle.

The non-emergency generator units #1,#2, and #3 were all constructed and manufactured prior to 2006 and are not subject to either of these two subparts.

Unit #4 was constructed after 2006 and as such is applicapble to Subpart IIII.

2.2 Other NSPS Standards

DENR reviewed the New Source Performance Standards and determined there are no other applicable standards.

3.0 New Source Review

ARSD 74:36:10:01 states that New Source Review (NSR) regulations apply to areas of the state which are designated as nonattainment pursuant to the Clean Air Act for any pollutant regulated under the Clean Air Act. EROS Data Center is located in Sioux Falls, South Dakota, which is in attainment or unclassifiable for all the pollutants regulated under the Clean Air Act. Therefore, EROS Data Center is not subject to NSR review.

4.0 Prevention of Significant Deterioration

A prevention of significant deterioration (PSD) review applies to new major stationary sources and major modifications to existing major stationary sources in areas designated as attainment under Section 107 of the Clean Air Act for any regulated air pollutant. The following is a list of regulated air pollutants under the PSD program:

1. Total suspended particulate (PM);

2. Particulate with a diameter less than or equal to 10 microns (PM10);

3. Particulate with a diameter less than or equal to 2.5 microns (PM2.5);

4. Sulfur dioxide (SO2);

5. Nitrogen oxides (NOx);

6. Carbon monoxide (CO);

7. Ozone – measured as volatile organic compounds (VOC);

8. Lead;

9. Fluorides

10. Sulfuric acid mist;

11. Hydrogen sulfide;

12. Reduced sulfur compounds;

13. Total reduced sulfur; and

14. Greenhouse gases (carbon dioxide, methane, nitrous oxide, etc.).

If the source is considered one of the 28 named Prevention of Significant Deterioration source categories listed in Section 169 of the federal Clean Air Act, the major source threshold is 100 tons per year of any regulated air pollutant, except for greenhouse gases. The major source threshold for all other sources is 250 tons per year of any regulated air pollutant, except for greenhouse gases.

EROS Data Center is not one of the 28 named Prevention of Significant Deterioration source categories; therefore, its Prevention of Significant Deterioration threshold for pollutants is 250 tons per year, except for greenhouse gas emissions.

On June 23, 2014, the Supreme Court of the United States issued a ruling that the EPA could not require facilities to obtain a Prevention of Significant Deterioration permit based solely on greenhouse gas emissions. The Supreme Court of the United Sates’ ruling states that in order for a Prevention of Significant Deterioration program evaluation for greenhouse gas to occur, a facility must trigger one of the major source thresholds for another regulated pollutant before greenhouse gas emissions can be considered under the Prevention of Significant Deterioration permitting program. This ruling applies to both new Prevention of Significant Deterioration sources as well as major source modifications.

4.1 Potential Emissions

The Department uses stack test results to determine air emissions whenever stack test data is available from the source or a similar source. When stack test results are not available, the Department relies on manufacturing data, material balance, EPA’s Compilation of Air Pollutant Emission Factors (AP-42, Fifth Edition, Volume 1) document, the applicant’s application, or other methods to determine potential air emissions.

Potential emissions for each applicable pollutant are calculated from the maximum design capacity listed in the application and assuming the unit operates every hour of every day of the year, while using the fuel that will emit the greatest emissions. Potential emissions are not realistic of the actual emissions and are used only to identify which air quality permit and requirements are applicable.

4.2 Generators – Criteria Air Pollutants

The emission factors for each applicable pollutant are derived from the Compilation of Air Pollutant Emission Factors (AP-42, Fifth Edition, Volume 1). The non-emergency generators are considered large stationary diesel engines as the rated power for this engine is greater than 600 horsepower. Table 4-1 shows the specific pollutant emission factors associated with the engine classification while burning distillate oil. The emission factors are from Table 3.4-1 October 1996 for large stationary generators.

The emission factor chosen for nitrogen oxide is1.9 pounds per million Btus, this is the controlled emission factor as specified by AP-42, Vol. 1 section 3.4. This emission factor was chosen due to the belief that it more closely represents the nitrogen oxide emissions produced by the EROS Data Center Generators. All of the generators at the facility are equipped with advanced ignition timing systems which alters the chamber pressure of the engines to achieve more ideal nitrogen oxide emissions. AP-42, Vol. 1 section 3.4, Table 3.4-1 lists the nitrogen oxide emission factor for units equipped with injection timing retard (ITR) systems at is1.9 pounds per million Btus.

In addition to ITR control technology, each of the units is equipped with Selective Catalytic Reduction (SCR) systems. The SCR system uses a chemical reductant which when combined with nitrogen oxide over a catalyst greatly reduces NOx emissions.

As detailed in 40 CFR Part 63 Subpart ZZZZ Units #1-3 must be equipped with a catalytic reduction system to meet compliance with this subpart, unit #4 is a certified Tier4F engine and as such, comes equipped from the factor with a SCR system installed. Operation without the SCR system in place on Unit #4 would be in violation of the manufactures operational guidelines and as such would be in violation of 40 CFR 60 Subpart IIII.

Table 4-1 – Emission Factors for Large Stationary Combustion Engines

Unit Pounds per million Btu

TSP PM10 SO2 NOx VOCs CO Non-emergency generator 0.1 0.1 0.0015 1.9 0.85 0.85

1 – Sulfur oxide emissions are a function of the sulfur content in the fuel. During the combustion process, essentially all the sulfur in the fuel is oxidized to sulfur dioxide. The sulfur emission rate is based up a sulfur content of 0.0015%. This is the fuel requirement in 40 CFR 80.510(c).

The application notifies that the generators will be used for non-emergency use. Therefore, the non-emergency generators' potential emissions will be based on the unit operating 8,760 hours per year. Equation 4-2 calculates the generators potential emissions of each pollutant based on the heat input found using equation 4-1, the emission factor in Table 4-1, and 8,760 operating hours per year.

The emission factors are based on the heat input of the unit in million Btus per hour. Equation 4-1 calculates the heat input for the generators.

Equation 4-1 – Heat Input Calculations

%35*610

5.2543*

MMBtu Btu hphr BtuhpateOperatingR hr MMBtuHeatIput

Each non-emergencygenerator (Units #1-3) have a heat input of 8.24 MMBtu/hr.

Unit #4 has a heat input of 10.83 MMBtu/hr.

Equation 4-2 – Generator potential emissions ton lb yr hr

MMBtu lbsfactoremissionx hr MMBtucapacityinput yr tonsPotential 20008760

Table 4-2 summarizes the potential uncontrolled emissions from the non-emergency generators located at the facility.

Table 4-2 - Potential Uncontrolled Emissions from Non-emergency Generators (tons/year) Unit TSP PM10 SO2 NOx VOCs CO

#1 3.61 3.61 0.55 68.64 3.25 30.71 #2 3.61 3.61 0.55 68.64 3.25 30.71 #3 3.61 3.61 0.55 68.64 3.25 30.71 #4 4.74 4.74 0.72 90.14 4.27 40.32

Total 15.6 15.6 2.4 296 14 132.4

EROS Data Center agreed to accept a enforceable limit to restrict the operation of the generators to no more than 1,480 hours during any 12-month period to maintain nitrogen oxide and carbon monoxide emissions below the major source threshold for both the PSD and Title V air quality permit program. Equation 4-3 calculates the potential nitrogen oxide emissions based on the federally enforceable operational limit and emission factor for nitrogen oxide from Table 4-1 for Units #1-#4.

Equation 4-3 - Nitrogen Oxide Emissions Based on Operational Limit ton lbs hr lbsRateEx yr hrsTimeOperatingMaxLimitE NOxNOx 000,2/ yr tonsLimitENOx 50

The operational limit of 1,480 hours per calendar year is sufficient to maintain potential nitrogen oxide emissions equal to or less than 50 tons per 12-month rolling period. A potential emission limit at this level will allow the EROS Data Center to forgo an hourly emission limit for nitrogen oxide and stack testing requirements because the potential emissions are maintained below 50% of the major source threshold for the Title V air quality permit program.

Emisions for the generators with this limit in place are shown in Table 4-3 below.

Table 4-3 - Potential Uncontrolled Emissions from Non-emergency Generator With Limitations Unit TSP PM10 SO2 NOx VOCs CO

#1 0.61 0.61 0.09 11.60 0.55 5.19 #2 0.61 0.61 0.09 11.60 0.55 5.19 #3 0.61 0.61 0.09 11.60 0.55 5.19 #4 0.80 0.80 0.12 15.23 0.72 6.81

Total 2.6 2.6 0.4 50 2.4 22.4

4.3 PSD Summary

EROS Data Center ‘s potential criteria pollutant emissions are less than 250 tons per year. Therefore, EROS Data Center is considered a minor source and is not applicable to the PSD program.

5.0 National Emission Standards for Hazardous Air Pollutants

The Department reviewed the national emission standards for hazardous standards and determined EROS Data Center is not applicable to any standards under 40 CFR Part 61.

6.0 Maximum Achievable Control Technology Standards

The federal Maximum Achievable Control Technology Standards are applicable to both major and area sources of hazardous air pollutants. A major source of hazardous air pollutants is defined as having the potential to emit 10 tons or more per year of a single hazardous air pollutant or 25 tons per year or more of a combination of hazardous air pollutants. An area source is a source that is not a major source of hazardous air pollutants.

6.1 Potential HAP Emissions

The Department uses stack test results to determine air emissions whenever stack test data is available from the source or a similar source. When stack test results are not available, DENR relies on manufacturing data, material balance, EPA’s Compilation of Air Pollutant Emission Factors (AP-42, Fifth Edition, Volume 1) document, the applicant’s application, or other methods to determine potential air emissions.

6.2 Potential HAP Emissions – Generators

AP-42, Table 3.4-3, October 1996, lists the hazardous air pollutants emission factor as 0.00149 pounds per million Btus for large stationary generators.

Using Equation 4-2, the hazardous air pollutant emission factor, the heat input, and assuming 1,480 hours of operation per year per, the potential hazardous air pollutant emissions for the non-emergency generator are calculated and summarized Table 6-1.

Table 6-1 – Potential HAP Emissions for All Units (Ton/Year) Unit HAPs

Units #1- 4 0.01

The potential to emit is less than 10 tons of a single hazardous air pollutant, and has the potential to emit less than 25 tons of any combination of a hazardous air pollutants Therefore, EROS Data Center is considered an area source for hazardous air pollutants.

DENR reviewed the Maximum Achievable Control Technology Standards under 40 CFR Part 63 and determined the following may be applicable to EROS Data Center.

6.3 Standards Applicable to Engines

Subpart ZZZZ is applicable to any existing, new, or reconstructed stationary reciprocating internal combustion engines located at a major or area source of hazardous air pollutant emissions, excluding stationary reciprocating internal combustion engines being tested at a stationary reciprocating internal combustion engines test cell/stand.

Generators constructed prior to June 12, 2006 are considered existing generators. Units #1-3 were constructed before 2006 and are located at an area source. Therefore, the generators are subject to this subpart and are required to comply with the applicable provisions of this subpart.

Unit #4 is subject to the requirements set by 40 CFR Part 63 Subpart ZZZZ. However because this generator is applicable to Subpart IIII there are no additional requirements

6.4 Other MACT Standards

DENR reviewed the Maximum Achievable Control Technology (MACT) and determined there are no other applicable standards.

7.0 State Requirements

7.1 Permit Type

According to ARSD 74:36:05:03, a facility is required to obtain a Title V air quality permit if the source has the potential to emit more than 100 tons of a criteria pollutant (nitrogen oxide, volatile organic compounds, PM10, carbon monoxide, lead and ozone), has the potential to emit more than 10 tons of a single hazardous air pollutant, and has the potential to emit more than 25 tons of any combination of a hazardous air pollutants, or is applicable to a New Source Performance Standard or a MACT standard. EROS Data Center’s potential emissions are less than the major source threshold for the Title V air quality operating permit program and the PSD preconstruction permit program when considering operational limits.

The New Source Performance Standard and MACT Standard applicable to the facility were promulgated under sections 111 and 112 of the Clean Air Act. However, ARSD 74:36:07:88 and

40 CFR § 63.6585 (d), an area source (minor) is not required to obtain a Title V permit if the only reason for the Title V permit is the requirement of 40 CFR Part 63 Subpart ZZZZ. Therefore, A Title V air quality permit is not required due to a federal standard.

Any source operating in South Dakota that meets the definition of a minor source under the ARSD 74:36:04:02 are required to obtain a minor air quality permit. In accordance with ARSD 74:36:04:02.01, a minor source is exempt from obtaining a minor source operating permit if the source has the potential to emit 25 tons per year or less of any criteria pollutant, except lead, before the application of control equipment. The EROS Data Center, nitrogen oxide emissions are greater than 25 tons per year. Therefore, EROS Data Center is required to have a minor air quality permit for the operations at this facility.

7.2 State Emission Limits

Total suspended particulate limits are applicable to fuel burning units EROS Data Center’s generator is a fuel burning unit. The total suspended particulates for fuel burning units are derived from ARSD 74:36:06:02.

The state limits are based on the heat input of the unit in million Btus per hour. Equation 4-1 found the heat input of the generator Units #1-#3 to be 8.24 MMBtu/hr. In accordance with ARSD 74:36:06:02(1)(b), a fuel burning unit with heat input value less than 10 million Btus per hour may not exceed 0.6 pounds of particulate emissions per million Btu of heat input. This limit applies to the non-emergency generator Units #1-#3. Based on Table 4-1, the total suspended particulate matter emission rate for the non-emergency generator is 0.1 pounds per million Btus which indicates compliance with the state’s total suspended particulate matter emission limit.

In accordance with ARSD 74:36:06:02(2), South Dakota’s sulfur dioxide emission limit for a fuel burning unit is 3.0 pounds per million Btus heat input. The sulfur dioxide emission factor for Units #1-#3 is 0.0015 pounds per million Btus which demonstrates compliance with the state’s sulfur dioxide emission limit.

In accordance with ARSD 74:36:06:01, the particulate matter and sulfur dioxide emission limits in ARSD 74:36:06 are not applicable if a particulate matter and sulfur dioxide emission limit specified in ARSD 74:36:07 (NSPS) is applicable. Unit #4 is applicable to New Source Performance Standard Subpart IIII which requires limits on both particulate matter and sulfur dioxide; therefore, the state’s particulate and sulfur dioxide emission limits are not applicable to Unit #4.

7.3 State Restrictions on Visible Emissions

Visible emissions are applicable to any unit that discharges to the ambient air. In accordance with ARSD 74:36:12, a facility may not discharge into the ambient air more than 20 percent opacity for all units. EROS Data Center must control the opacity at less than 20 percent for the non-emergency generator.

8.0 Recommendation

EROS Data Center will be required to operate the generator within the requirements stipulated in the following regulations:

ARSD 74:36:04 - Minor Operating Permits;

ARSD 74:36:06 - Regulated Air Pollutant Emissions;

ARSD 74:36:07 - New Source Performance Standard;

ARSD 74:36:08 – National Emission Standards for Hazardous Air Pollutants; and ARSD 74:36:12 - Control of Visible Emissions.

Based on the above findings, EROS Data Center is not required to obtain a Title V air quality operating permit. EROS Data Center is required to obtain a minor air quality permit as well as a construction permit. These permits will be issued at the same time under the term administrative efficiency. Using this statement of basis as well as a single public notice two permits will be issued, the construction permit as well as a minor operating permit for the facilty. This is being done to minimize cost as well as time associated with the permiting process. Questions regarding this permit review should be directed to Levi Jackson, Engineer I.