Notice of Intent To Prepare an Environmental Impact Statement for the Colorado Springs Utilities Next-Generation CFB Coal Generating Unit, Fountain, CO

AGENCY:

Department of Energy.

ACTION:

Notice of intent.

SUMMARY:

The U.S. Department of Energy (DOE) announces its intent to prepare an Environmental Impact Statement (EIS) pursuant to the National Environmental Policy Act (NEPA), the Council on Environmental Quality (CEQ) NEPA regulations (40 Code of Federal Regulations [CFR] parts 1500-1508), and the DOE NEPA regulations (10 CFR part 1021) to assess the potential environmental impacts of a project proposed by Colorado Springs Utilities to design, construct, and operate a Next-Generation Circulating Fluidized Bed (CFB) Coal Generating Unit demonstration plant near Fountain, El Paso County, Colorado. The plant is proposed for a site adjacent to the existing 227 megawatt (MW) Ray D. Nixon Power Plant on the Clear Springs Ranch, a 5,000-acre Colorado Springs Utilities-owned property located approximately 17 miles south of Colorado Springs.

The proposed project, selected under the Clean Coal Power Initiative solicitation, would demonstrate advanced technologies to produce electricity using a variety of fuels, including subbituminous coal from the Powder River Basin (PRB) in Wyoming, which would provide the primary fuel for long-term operation of the plant, bituminous coals from Illinois and Pennsylvania, and blends of PRB coal with waste coal and wood waste. Colorado Springs Utilities would also consider combusting several other fuels, including waste tires and processed municipal solid waste sludge, in blends with the PRB coal. Technologies to be integrated into the proposed plant would include a circulating fluid-bed combustion system to achieve low emissions of sulfur oxides, an advanced staged-combustion process to achieve low nitrogen oxide levels, an advanced selective non-catalytic reduction system to further reduce nitrogen oxide emissions, and a low-cost, integrated trace metal control system having potential to remove virtually all acid gases and up to 90% of mercury from the combustion gas. Upon completing a successful demonstration of the advanced technologies, the new CFB unit would be operated as a commercial power plant to supply approximately 150 MW of electricity to the Colorado Springs Utilities power grid.

The EIS will help DOE decide whether to provide 10% (approximately $30 million in financial assistance) of the total estimated cost of $301 million for the proposed project. The purpose of this Notice of Intent is to inform the public about the proposed project; invite public participation in the EIS process; announce the plans for a public scoping meeting and explain the EIS scoping process; and solicit public comments for consideration in establishing the proposed scope and content of the EIS.

DATES:

To ensure that all of the issues related to this proposal are addressed, DOE invites comments on the proposed scope and content of the EIS from all interested parties. Comments must be received by September 19, 2003, to ensure consideration. Late comments will be considered to the extent practicable. In addition to receiving comments in writing and by telephone, (See ADDRESSES below), DOE will conduct a public scoping meeting in which agencies, organizations, and the general public are invited to present oral comments or suggestions with regard to the range of actions, alternatives, analysis methods, and environmental issues to be considered in the EIS. The scoping meeting will be held at the Fountain Middle School, 515 North Santa Fe Avenue, Fountain, CO, on September 3, 2003, beginning at 7 pm (See “Public Scoping Process”). The public is invited to an informal session at this location beginning at 5 pm to learn more about the proposed action.

Displays and other forms of information about the proposed agency action and the demonstration plant will be available, and DOE personnel will be present at the informal session to discuss the proposed project and the EIS process.

ADDRESSES:

Written comments on the proposed EIS scope and requests to participate in the public scoping meeting should be addressed to the NEPA Document Manager for the CFB Generating Unit project (hereafter termed the “Project”): Mr. Lloyd Lorenzi, National Energy Technology Laboratory, U.S. Department of Energy, P.O. Box 10940, Pittsburgh, PA 15236-0940.

Individuals who would like to otherwise participate in the public scoping process should contact Mr. Lloyd Lorenzi directly by telephone: 412-386-6159; toll free number for recording messages: 1-800-276-9851; fax: 412-386-4604; or electronic mail: lorenzi@netl.doe.gov.

FOR FURTHER INFORMATION CONTACT:

For information regarding the Project or to receive a copy of the draft EIS for review when it is issued, contact Mr. Lloyd Lorenzi as described above. Those seeking general information on the DOE NEPA process, contact: Ms. Carol M. Borgstrom, Director, Office of NEPA Policy and Compliance (EH-42), U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585-0119, Telephone: (202) 586-4600, Facsimile: (202) 586-7031, or leave a toll-free message at 1-800-472-2756.

SUPPLEMENTARY INFORMATION:

Background and Need for Agency Action

Since the early 1970s, DOE and its predecessor agencies have supported research and development programs for a wide variety of innovative coal technologies through the proof-of-concept stage. However, the availability of a technology at the proof-of-concept stage is not sufficient to ensure continued development and subsequent commercialization. Before any technology can be considered seriously for commercialization, it must be demonstrated. The financial risk associated with technology demonstration is, in general, too high for the private sector to assume in the absence of strong incentives. The Clean Coal Power Initiative (CCPI) was established in 2002 as a government/industry partnership to implement the President's National Energy Policy recommendation to increase investment in clean coal technology. That recommendation addresses a national challenge of ensuring the reliability of electric supply while simultaneously protecting the environment.

The goal of the CCPI program is to accelerate commercial deployment of advanced coal technologies that provide the United States with clean, reliable, and affordable energy. Through cooperative agreements established pursuant to the CCPI program, DOE would accelerate deployment of innovative technologies to meet near-term energy and environmental goals; to reduce technological risk to the business community to an acceptable level; and to provide private sector incentives required for continued activity in innovative research and development directed at providing solutions to long-range energy supply problems.

Proposed Action

The proposed action is for DOE to provide, through a cooperative agreement with Colorado Springs Utilities, financial assistance for the proposed Project. The CFB Generating Unit to be constructed under the Project would be designed for long-term commercial operation following completion of an approximately 12-month period of operation to demonstrate performance of advanced technologies under the cooperative agreement with DOE. The cost of the Project is approximately $301 million; DOE's share would be approximately $30 million (10%).

The CFB Generating Unit would produce approximately 150 MW of electricity, at extremely high environmental performance levels, for export to the local grid. The primary fuel for the plant would be subbituminous coal from the Powder River Basin (PRB) in Wyoming. During the demonstration phase of operation for DOE, other fuels would be tested, including bituminous coals from Illinois and Pennsylvania and blends of PRB coal with waste coal and forest biomass (non-commercial timber removed during forest thinning and fire risk reduction activities on National Forest lands). Colorado Springs Utilities would also consider combustion of PRB coal in blends with other fuels, including pelletized or shredded rubber from waste tires and processed sludge from wastewater treatment activities of Colorado Springs Utilities, to demonstrate the range of environmental performance capabilities of the advanced CFB generating unit.

The CFB generating unit would be constructed on an approximately 10-acre site adjacent to the existing 151-acre Ray D. Nixon Power Plant, which has been operating since 1980. The existing power plant features a 227 MW pulverized coal-fired boiler using PRB coal, two 35 MW combustion turbines, a coal storage area, and coal handling facilities. All facilities for the new CFB Unit would be located on the 5,000-acre Clear Springs Ranch property that Colorado Springs Utilities owns and uses for power generation, ash disposal, wastewater treatment, and land application sludge disposal. Site preparation would require grading, clearing of vegetation, and the addition of infrastructure improvements, such as roads, fencing, and drainage. Construction preparations would include installation of foundations for the plant equipment and structures.

The CFB Generating Unit would feature an advanced staged-combustion process that can achieve low nitrogen oxide levels, and an advanced selective non-catalytic reduction system that can further reduce nitrogen oxide emissions. Limestone would be added to the combustion furnace for sulfur removal. The CFB Generating Unit would also include a three-stage system for sulfur oxide control to achieve up to 98 percent sulfur removal. Requirements for limestone, which would be the only reagent added to the combustion furnace for sulfur control, would be reduced to less than half the amount required by conventional CFB systems.

In addition to the advanced sulfur oxide and nitrogen oxide control technologies, the low emission combustion system would feature an integrated trace metal control system with potential to remove virtually all acid gas emissions and up to 90 percent of mercury from the combustion gas. The CFB generating unit would include an advanced system for solids separation, whereby solids separators would be integrated into the traditional furnace structure to reduce cost and improve reliability. This design would allow reduced size of the overall combustion system and eliminate hot expansion joints, thus potentially achieving improved operational performance and reduced maintenance costs.

The primary feed material for the new CFB Unit would be up to approximately 2,200 tons-per-day of subbituminous coal that would be delivered to the site using the existing rail loop and coal handling facilities. Coal would be stored in the same coal storage area that is currently serving the Nixon Power Plant, though a separate conveyor would be constructed to service the CFB Unit.

Construction of the proposed plant would take approximately 36 months. Plant start-up, system and feedstock testing, and long-term performance and reliability demonstration under the cooperative agreement with DOE would require approximately 12 months, after which the plant could continue in commercial operation.

Alternatives

NEPA requires that agencies evaluate the reasonable alternatives to the proposed action in an EIS. The purpose for agency action determines the range of reasonable alternatives.

The Clean Coal Power Initiative (CCPI) was established to help implement the President's National Energy Policy (NEP) recommendation to increase investment in clean coal technology by addressing national challenges of ensuring the reliability of domestic electric and energy supplies while simultaneously protecting the environment. The CCPI program was structured to achieve NEP goals by promoting private sector initiatives to invest in demonstrations of advanced technologies that could be widely deployed commercially to ensure that the United States has clean, reliable, and affordable energy. Private sector investments and deployment of energy systems in the United States places DOE in a more limited role than if the Federal government were the owner and operator of the energy systems. In the latter situation, DOE would be responsible for a comprehensive review of reasonable alternatives for siting the system. However, in dealing with applicants under the CCPI solicitation, the scope of alternatives is necessarily more restrictive, because DOE must give substantial consideration to the applicant's needs, as reflected in its CCPI application, in establishing a project's reasonable alternatives.

The range of reasonable alternatives to be considered in the EIS for the Project is determined in accordance with the overall NEPA strategy. Because of DOE's limited role of providing cost-shared funding for the Project, DOE currently plans to give primary emphasis to the proposed action and the no-action alternative. Under the proposed action, Project activities would include equipment design and fabrication, process engineering, plant permitting and construction, and testing and demonstration of the technology. Under the no-action alternative, DOE would not provide partial funding for the design, construction, and operation of the plant.

In the absence of DOE funding, the new CFB Unit may be constructed, but likely would not include demonstration of operation with the range of fuel sources that has been proposed. In the absence of DOE funding, Colorado Springs Utilities could also consider building a natural gas combustion turbine plant at the Clear Spring Ranch Site. This alternative will be examined in the EIS. DOE will consider other reasonable alternatives that may be suggested during the public scoping period.

DOE plans to complete the EIS within 15 months following publication of this Notice of Intent, and to issue a Record of Decision no sooner than 30 days following completion of the Final EIS. Upon completing the demonstration effort for DOE, Colorado Springs Utilities could continue commercial operation of the new CFB Unit constructed under the Project.

Preliminary Identification of Environmental Issues

The following environmental issues have been tentatively identified for analysis in the EIS. This list is presented to facilitate public comment on the planned scope of the EIS, and is not intended to be a pre-determined set of potential impacts. Additions to or deletions from this list may occur as a result of the public scoping process. The environmental issues include:

(1) Atmospheric resources: Potential air quality effects resulting from emissions during construction and operation of the proposed CFB Unit;

(2) Water resources: Potential effects on surface water and groundwater resources, including effects of water usage, wastewater management, and storm water management;

(3) Aesthetic and scenic resources: Visual effects associated with plant structures and operations;

(4) Ecological resources: Potential on-site and off-site impacts to vegetation, terrestrial wildlife, threatened and endangered species, and ecologically sensitive habitats, including the Fountain Creek riparian corridor and the Clear Springs Ranch Wildlife Management area;

(5) Land use requirements and compatibility for disposal of power plant ash;

(6) Noise: Potential effects resulting from construction and operation of the proposed plant and from transportation of feed materials and plant products;

(7) Health and safety impacts, including construction-related safety and process-related safety associated with handling and management of chemical materials;

(8) Socioeconomic effects resulting from influx of construction laborers and plant operating staff;

(9) Soils and geology compatibility for plant construction and ash disposal;

(10) Utility and transportation infrastructure requirements for delivery of fuels and chemicals to the power plant;

(11) Resource utilization;

(12) Cumulative effects that result from the incremental impacts of the proposed plant when added to the other past, present, and reasonably foreseeable future activities, including the adjacent Nixon Power Plant and the nearby recently-completed Front Range Power Plant;

(13) Connected actions associated with recovery of other fuels, including wood waste, and feed materials for the plant; and

(14) Regulatory compliance and environmental monitoring.

Public Scoping Process

To ensure that all issues related to this proposal are addressed, DOE will conduct an open process to define the scope of the EIS. The public scoping period will end on September 19, 2003. Interested agencies, organizations, and the general public are encouraged to submit comments or suggestions concerning the content of the EIS, issues and potential impacts to be addressed in the EIS, and alternatives that should be considered. Scoping comments should identify specific issues or topics that the EIS should address in order to assist DOE in identifying significant issues for analysis. Written, e-mailed, or faxed comments should be communicated by September 19, 2003 (See ADDRESSES).

DOE will conduct a public scoping meeting at the Fountain Middle School, 515 North Santa Fe Avenue, Fountain, CO, on September 3, 2003, at 7 pm. In addition, the public is invited to an informal session beginning at 5 pm, to learn more about the proposed action. Displays and other information about the proposed agency action and the demonstration plant will be available, and DOE personnel will be present to discuss the proposed action and the NEPA process.

The formal scoping meeting will begin on September 3, 2003, at 7 pm. DOE requests that members of the public who wish to speak at this public scoping meeting contact Mr. Lloyd Lorenzi, either by phone, fax, computer, or in writing (See ADDRESSES in this Notice).

Members of the public who do not arrange in advance to speak may register at the meeting (preferably at the beginning of the meeting) and will be provided opportunities to speak following previously scheduled speakers. Speakers who need more than five minutes should indicate the length of time desired in their request. Depending on the number of speakers, DOE may need to limit speakers to five minutes initially but will provide additional opportunities as time permits. Speakers may also provide written materials to supplement their presentations. Oral and written comments will be given equal consideration.

DOE will begin the meeting with an overview of the proposed Project. The meeting will not be conducted as an evidentiary hearing, and speakers will not be cross-examined. However, speakers may be asked questions to help ensure that DOE fully understands their comments or suggestions. A presiding officer will establish the order of speakers and provide any additional procedures necessary to conduct the meeting.