STATEMENT OF BASIS

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Jon S. Corzine Governor DEPARTMENT of ENVIRONMENTAL PROTECTION Division of Air Quality Bureau of Operating Permits 401 E. State Street, 2nd floor, P.O. Box 27 Trenton, NJ 08625-0027 Mark N. Mauriello Acting Commissioner STATEMENT OF BASIS May 21, 2009 PSEG Fossil LLC Hudson Generating Station is located at Duffield and Van Keuren Avenues, Jersey City, NJ 07306, and consists of an electric power generating plant, owned and operated by PSEG Fossil LLC. The NJDEP has assigned facility identification number 12202 to PSEG Fossil LLC Hudson Generating Station. This statement of basis is for permit activity number BOP090001. The facility is classified as a major facility based on its potential to emit 11861.4 tons per year of Nitrogen Oxides (NOx); 4,461 tons per year of Carbon Monoxide (CO); 1,565 tons per year of Volatile Organic Compounds (VOC); 4,512.2 tons per year of Total Suspended Particulates (TSP); and 11,659.1 tons per year of Sulfur Dioxide (SO2) to the atmosphere. The annual emissions of Particulate Matter less than 10 microns (PM10) will be established through stack testing. It is also classified as a major hazardous air pollutant (HAP) facility. A major HAP emitting facility is designated as major when the allowed emissions exceed 10 tons per year of any individual hazardous air pollutant or 25 tons per year of any combination of individual hazardous air pollutants that may be emitted simultaneously. The draft permit allows any individual hazardous air pollutant to be emitted at a rate to not exceed: 600 pounds per year of acrolein, 280 pounds per year of allyl chloride, 1,280 pounds per year of arsenic, 2,400 pounds per year of benzene, 1,400 pounds per year of benzyl chloride, 100 pounds per year of beryllium, 340 pounds per year of cadmium, 240 pounds per year of carbon disulfide, 41.4 tons per year of chlorine, 20 pounds per year of 2-chloroacetophenone, 200 pounds per year of chloroform, 580 pounds per year of hexavalent chromium, 2.71 tons per year of cobalt, 2.35 tons per year of cyanide compounds, 60 pounds per year of dibenz(a,h)anthracene, 260 pounds per year of 7,2-dimethylbenz(a)anthracene, 100 pounds per year of dimethyl sulfate, 100 pounds per year of 1,2-diphenyl hydrazine, 9.61 tons per year of formaldehyde, 43.4 tons per year of n-hexane, 4 pounds per year of hexachlorobenzene, 200 pounds per year of hexachlorocyclopentadiene, 2,841 tons per year of hydrogen chloride, 146 tons per year of hydrogen fluoride, 1,400 pounds per year of lead, 1,940 pounds per year of manganese, 240 pound per year of mercury, 400 pounds per year of methylhydrazine, 36.8 tons per year of nickel, 40 pounds per year of phenol, 2.60 tons per year of phosphorus, 1.1 tons per year of polycyclic organic matter (POM), 4 pounds per year of quinoline, 1.0 tons per year of toluene, 2.7 tons per year of selenium, 0.004 pounds per year of 2,3,7,8-TCDD and 1.59 tons per year of antimony. The equipment that emits air contaminants from this facility include two (2) steam electric generating units (i.e. boilers serving electric generating units), Hudson Unit No. 1, with a maximum heat input of 4558 MMBtu/hr (HHV), that burns natural gas or # 6 fuel oil and is equipped with water injection for NOx control; Hudson Unit No. 2, with a maximum heat input of 6,600 MMBtu/hr (HHV), that burns coal, natural gas, or #6 fuel oil and is currently equipped with Selective Non-Catalytic Reduction (SNCR) for NOx control and an Electrostatic Precipitator (ESP) to control TSP and PM10 emissions, and currently uses Ultra-Low Sulfur Coal for control of SO2 emissions; three (3) natural gas-fired Auxiliary Boilers each with a maximum heat input of 101 MMBtu/hr (HHV) and each equipped with COEN delta Low NOx burner for NOx control; a 2.9 MMBtu/hr (HHV) distillate oil-fired emergency generator; a 1.875 MMBtu/hr (HHV) natural gas-fired emergency fire pump and coal and ash handling equipment and other ancillary equipment. The Responsible Official at the facility has certified that the facility currently meets all applicable requirements of the Federal Clean Air Act and the New Jersey Air Pollution Control Act. Based on this certification, and the Department’s evaluation of the information included in the facility’s application, the Department has concluded that this air pollution control operating permit should be approved to allow operation of the existing facility for five years. Prior to the expiration of the Operating Permit’s five-year term, the facility will be required to apply for a renewal, at which time the Department will evaluate the facility and issue a public notice with its findings. The operating permit includes monitoring, recordkeeping and reporting requirements that are sufficient to demonstrate the facility’s compliance with the applicable requirements consistent with the following: 1. Provisions to implement the testing and monitoring requirements of N.J.A.C. 7:27-22.18, the recordkeeping and reporting requirements of N.J.A.C. 7:27-22.19, and all emissions monitoring and analysis procedures or compliance assurance methods required under the applicable requirements, including any procedures and methods promulgated pursuant to 40 CFR 64; and Where the applicable requirement does not require direct periodic monitoring of emissions, the Department requires periodic monitoring of surrogate parameters sufficient to yield reliable data from the relevant time period that are representative of the facility's compliance with the permit. Such monitoring requirements include fuel sampling and analysis, monitoring of fuel consumption and monitoring. 2. The conditions of approval for this operating permit are based on conditions of approval in all preconstruction permits for equipment at this facility, and on applicable requirements in state and federal air pollution control rules. Pursuant to N.J.A.C. 7:27-22.33, all preconstruction permits issued to this facility have been incorporated in this operating permit. Each condition in the permit includes the citation of the applicable requirement on which the condition is based. Please refer to the attached explanation sheet for the structure and configuration of conditions of approval, included in the Facility Specific Requirements section of this permit. FACILITY NAME (FACILITY ID NUMBER) BOP050001 Activity Number (assigned by the Department) Emission unit number (assigned by the facility) New Jersey Department of Environmental Protection Facility Specific Requirements Brief description of emission unit Emission Unit: Operating Scenario: U1 25 MM BTU/hour Boiler burning Fuel Oil and Natural Gas OS Summary OR OSXX Boiler burning Fuel Oil OSXX denotes the operating scenario number and lists the rules and requirements that apply to a particular scenario. An operating scenario represents various ways (or scenarios) a piece of equipment can operate. OS Summary lists all rules and requirements that apply to an emission unit, regardless of operating scenarios. Emission unit may contain one or more pieces of equipment and the corresponding operating scenarios Records to be kept Submittal requirement Item Number Description of applicable requirement Monitoring method to ensure compliance Air contaminants Actions to be taken by the facility Ref.# 1 Applicable Requirement Conduct a comprehensive stack test at emission point PTXX at least 18 months prior to the expiration of the approved operating permit to demonstrate compliance with the CO, NOx, TSP and VOC emission limits.[N.J.A.C. 7:27-22.16(e)] Monitoring Requirement Recordkeeping Requirement Submittal/Action Requirement Stack Test - Submit a protocol, conduct stack tests, submit results: As per the approved schedule. Submit a stack test protocol to the Bureau of Technical Services (BTS) at PO Box 437, Trenton, NJ 08625 at least 30 months prior to the expiration of the approved operating permit. [N.J.A.C. 7:27-22.18(e)] and [N.J.A.C. 7:2722.18(h)] Other: Stack emission testing. Stack Other: Stack test results. [N.J.A.C. test shall be conducted for CO, NOx, 7:27-22.16(e)] TSP, and VOC emissions (add language as needed). Based on any 60 minute period. [N.J.A.C. 7:2722.16(e)] Rule citation (subchapter, section, and paragraph) for the applicable requirement Rule citation for the monitoring requirement Rule citation for the recordkeeping requirement Rule citations for the submittal/action requirement Explanation Sheet for Facility Specific Requirements

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