02-003529EPP In Re: Florida Power Corporation Hines Energy Complex, Power Block 3, Power Plant Siting Supplemental Application No. Pa92-33sa2 vs. * Status: Closed Recommended Order on Tuesday, June 10, 2003.

Summary: Progress Energy Florida provided sufficient evidence for granting certification to construct and operate a new 530 megawatt natural gas-fueled electrical power plant in Polk County.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: FLORIDA POWER )

CORPORATION HINES ENERGY )

COMPLEX, POWER BLOCK 3, POWER )

PLANT SITING SUPPLEMENTAL ) Case No. 02 - 3529EPP

APPLICATION NO. PA92 - 33SA2. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative

Hearings, by its duly - designated Administrative Law Judge,

Charles A. Stampelos, held a certification hearing in the above -

styled case on May 12, 2003, in Bartow, Florida.

APPEARANC ES

For Progress Energy Florida (formerly known as Florida

Power Corporation):

Douglas S. Roberts, Esquire

Hopping Green & Sams, P.A.

123 South Calhoun Street

Post Office Box 6526

Tallahassee, Florida 32314

For the Department of Environmental Prote ction:

Scott A. Goorland, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

For the Southwest Florida Water Management District:

Martha A. Moore, Esquire

Southwest Florida Water

Management District

2379 Broad Street

Brooksville, Florida 34604 - 6899

For Polk County:

Michael Duclos, Esquire

Polk County Attorney's Office

Post Office Box 9005

Bartow, Florida 33831 - 9005

STATEMENT OF THE ISSUE

The issue to be resolved in this proceeding is whether the

Governor and Cabinet, sitting as the Siting Board, should issue

certification to Progress Energy Florida ("PEF"), to construct

and operate a new 530 megawatt ("MW") natural gas - fired

electrical power plant in Polk County, Florida. The proposed

site for the Project is located at Progress Energy Florida's

existing Hines Energy Complex, southwest of Bartow, Florida.

PRELIMINARY STATEMENT

This proceeding was conducted pursuant to the Florida

Electrical Power Plant Siting Act ("PPSA") , Chapter 403, Part

II, Florida Statutes, and Chapter 62 - 17, Florida Administrative

Code, to consider PEF's application for site certification for

the proposed Hines Power Block 3 (also referred to as the

"Project").

On September 4, 2002, Florida Power Co rporation ("FPC" or

"PEF") filed its Supplemental Application for site certification

for the Hines Power Block 3 with the Florida Department of

Environmental Protection ("Department" or "FDEP"). (On

January 1, 2003, Florida Power Corporation changed its c orporate

name to Progress Energy Florida ("PEF")). The application was

found to be complete on September 19, 2002. The application was

found to be sufficient on February 13, 2003.

On February 4, 2003, the Florida Public Service Commission

issued its Fin al Order determining the need for the proposed

electrical power plant.

On April 11, 2003, FDEP issued its written Staff Analysis

Report concerning the Project, as required by Section

403.507(4), Florida Statutes, incorporating the reports from

other state and regional agencies and proposing a comprehensive

set of proposed Conditions of Certification.

On May 7, 2003, a joint prehearing stipulation was

submitted to the undersigned, which indicated that no party to

this proceeding objected to certification o f the Project.

On May 12, 2003, during the certification hearing, FDEP

submitted its revised Staff Analysis Report as FDEP Exhibit 2.

After proper public notice by both PEF and by FDEP, a

certification hearing was held in Bartow, Florida on May 12,

2003, as required by Section 403.508(3), Florida Statutes. The

purpose of the certification hearing was to receive oral,

written, and documentary evidence concerning whether, through

available and reasonable methods, the location and operation of

the proposed Hines Power Block 3 would produce minimal adverse

effects on human health, the environment, the ecology of the

land and its wildlife, and the ecology of State waters and their

aquatic life, in an effort to balance the increase in demand for

an electrical p ower plant location and operation with the broad

interests of the public. See Section 403.502, Florida Statutes.

The hearing would have also considered any petitions challenging

the separate FDEP - issued prevention of significant deterioration

("PSD") per mit for the Project; however, no such petition was

filed.

At the certification hearing, PEF presented the oral

testimony of three witnesses and had PEF exhibits numbered 1

through 9, 11 and 12 admitted into evidence. These exhibits

included the prefiled written testimony of three additional

witnesses. That testimony was filed pursuant to Rule 62 -

17.141(3), Florida Administrative Code. The prefiled written

testimony has been accepted based upon execution of affidavits

attesting to the accuracy of the tes timony and accompanying

exhibits. FDEP presented the testimony of Hamilton S. Oven, of

the FDEP's Siting Coordination Office, and had FDEP Exhibits 1

and 2 admitted into evidence. No member of the public appeared

at the hearing to offer testimony or othe r evidence on the

Project.

Subsequent to the certification hearing, PEF, upon

authorization granted at the hearing, submitted its late - filed

exhibit PEF - 10, representing the Affidavit of Paul V. Crimi,

attesting to his prefiled written testimony and exhib its.

Following the conclusion of the May 12, 2003 hearing, a

transcript of the hearing was filed on May 29, 2003. The Joint

Proposed Recommended Order of PEF, FDEP, Southwest Florida Water

Management District ("SWFWMD"), and Polk County was timely

submit ted and has been considered in the rendition of this

Recommended Order.

FINDINGS OF FACT

BACKGROUND

1. Progress Energy Florida, previously known as Florida

Power Corporation, is an electric utility that provides

electricity in a 32 - county service area in Florida, extending

from the middle of the Panhandle down through the center of the

state, including the west coast of Florida, north of Tampa Bay.

PEF currently serves approximately 1.5 million customers in this

service area. PEF has been providing elec tric service for over

100 years, beginning in 1899 when it began business as the St.

Petersburg Electric Light & Power Company. The Company's

generating capacity has grown from an initial generation of 50

kilowatts up to its total generating capacity toda y of

approximately 8,586 megawatts. PEF has a customer growth rate

of approximately two percent per year. The Company currently

operates 14 different power plant facilities using a mix of

natural gas, oil, coal, and nuclear power.

2. The PEF Hines Ener gy Complex is located in the

southwest portion of Polk County, Florida, approximately 3.5

miles south of the city of Bartow. The unincorporated community

of Homeland lies about one mile to the northeast of the site

boundary. County Road 555 runs through the Project site. The

Hines site contains approximately 8,200 acres of reclaimed

phosphate mine lands. The site is located in a region of the

state dominated by phosphate mining operations, including mines,

settling ponds, sand tailings, gypsum stacks an d chemical

beneficiation plants. The adjacent land uses consist almost

entirely of active phosphate mining or reclaimed mine lands.

3. The Hines Energy Complex was identified and purchased

by then Florida Power Corporation in the mid - 1990s. The site

was selected following a comprehensive process of locating a

suitable site for a large new generating facility. A systematic

site selection approach was undertaken to identify sites

suitable for multiple units which could accommodate potential

clean coal technology, be technology and fuel flexible, be cost

effective, be fully compatible with PEF's commitment to

environmental protection, be in compliance with applicable

government regulations, and be consistent with state and local

land use policies. At th at time, Florida Power Corporation

solicited the help of a team of community, educational and

environmental leaders to evaluate over 50 potential sites in

Florida and south Georgia. That two - year process culminated in

1991 with the selection of the Hines site.

4. In January 1994, the Siting Board certified the Hines

Energy Complex for an ultimate site capacity of 3,000 megawatts

of electrical generating capacity and also granted certification

for the construction and operation of an initial 470 MW combi ned

cycle unit known as Power Block 1. In 2001, the Siting Board

also granted certification for the construction and operation of

Hines Power Block 2, a 530 MW combined cycle unit, which is

currently under construction.

5. The Hines Energy Complex con tains a number of existing

facilities and is divided into several major areas. The plant

island is the location for the existing and future power

generation facilities. It is approximately 704 acres. A 722 -

acre cooling pond has been constructed on the s ite, along with a

311 - acre brine pond. A buffer area has been created along the

eastern portion of the site containing approximately 2,128

acres. These areas serve as a wildlife corridor as well.

Approximately 4,000 acres of the site are designated for water

crop areas to supply captured rainfall for use in the power

plant.

6. The Hines Energy Complex is served by an existing dual

circuit 230 kV transmission line that enters the Hines site from

the northwest. A second dual circuit 230 kV transmissio n line

departs the site heading due south. The existing transmission

lines are adequate to serve the new Power Block 3. Natural gas

is delivered to the Hines Energy Complex by two existing natural

gas pipelines, which will serve Power Blocks 1, 2 and 3. Fuel

oil is also burned in the existing units and is delivered by

truck and stored in an on - site storage tank. That tank is

adequate to serve the requirements of Power Block 3.

PROJECT OVERVIEW

7. The Hines Power Block 3 is a 530 MW combined - cycle

pow er plant to be fueled primarily with natural gas. Fuel oil

will be used as a backup fuel. The proposed Power Block 3 will

be located entirely within the existing Hines Energy Complex

site. The unit will be located west of Power Blocks 1 and 2.

All cons truction activities for Power Block 3 will occur within

an approximately 5 - acre portion of the plant island.

NEED FOR POWER BLOCK 3

8. On February 4, 2003, the Florida Public Service

Commission issued a Final Order determining the need for the

Progress Energy Florida's Hines Power Block 3 Project. The

Public Service Commission determined that the Hines Power

Block 3 will be needed by December 2005, to maintain electric

system reliability and integrity for PEF. This was based upon

an evaluation of PEF's load forecast and maintenance of its

required reserve margin of generating capacity above the firm

demand of PEF's customers. The Public Service Commission also

found that the Hines Power Block 3 will contribute to the

provision of adequate electricity at reasonable cost. The

Project was found to consist of a proven technology at

reasonable estimated cost. Construction at the Hines site also

allows PEF to take advantage of existing infrastructure at the

Hines Energy Complex, thereby saving PEF site devel opment costs.

The Public Service Commission also concluded that PEF, in

proposing the Hines Power Block 3, had identified the least cost

alternative compared to other options, including outside

proposals from third parties. There are no cost effective

co nservation measures available that might mitigate PEF's need

for Hines Power Block 3. In conclusion, the Florida Public

Service Commission determined that PEF met the statutory

requirements under Section 403.519, Florida Statutes, for the

Commission to gr ant the determination of need for Hines Power

Block 3.

PROJECT SCHEDULE AND CONSTRUCTION

9. The proposed Power Block 3 is very similar both to the

existing Hines Power Block 1 and to Power Block 2, which is

currently under construction at the Hines site. The proposed

combustion turbines for the new unit are from the same

manufacturer, Siemens Westinghouse. Due to normal upgrades in

those combustion turbines, they will be able to produce slightly

more electrical energy. Engineering of the units will com mence

in August 2003, and on - site construction will begin no later

than the first quarter of 2004. The new unit is proposed to be

in service by December 1, 2005.

10. Construction activities will be initiated by the

preparation of the five - acre site for construction. This will

include mobilization of contractors and subcontractors along

with plant construction personnel. Existing construction lay

down and parking areas will be utilized for Power Block 3. On -

site construction will begin with the instal lation of the

circulating water piping and pilings for structural foundations.

Power Block 3 will be mechanically complete by August 2005.

11. The construction workforce for Power Block 3 is

expected to average about 145 employees over the two - year

con struction period. Peak construction employment is estimated

at 350 employees. The construction payroll is expected to be

$15 million annually. Based upon prior experience during

construction of Power Blocks 1 and 2, it is expected that most

construction workers will be drawn from the Polk County and the

central Florida area. Construction employees are expected to

commute daily to the job site. Approximately 10 - 15 percent of

total material and equipment purchases are expected to be made

in the central F lorida area, including Polk County.

12. No new roads will be required to support construction

of Power Block 3 as the existing plant access road will be used

during construction. Major Project components will be delivered

to the Hines site by rail or b y truck. No off - site upgrade of

rail or road facilities is expected to be necessary. All

oversized deliveries will receive necessary Florida Department

of Transportation ("DOT") approvals.

13. Most major earthwork activities for construction for

the P ower Block 3 construction area were performed during

initial site development activities that were completed in 1996.

There are no expected impacts to land in the Project area except

for minor grading.

14. Heavily loaded and structural foundation loads such as

the heat recovery steam generators, combustion turbines, steam

turbines, and step up transformers will be supported by deep

foundations. These foundations would include deep foundations

such as pilings similar to that used for Power Blocks 1 and 2.

Lightly loaded foundations will use spread foundations.

Construction dewatering will occur primarily at excavations for

the circulating water intake structure and the discharge

structure in the cooling pond. Other additional limited

dewatering may oc cur depending upon the amount of rainfall and

the depth of other excavations on - site. Dewatering would be

performed using well points or open pit sump pumps, which have a

very localized impact area. Any dewatering would all be within

the existing plant i sland area. Dewatering effluent will be

routed to the existing on - site stormwater collection ditches for

return to the existing cooling pond.

15. The entire Project area is outside the 100 - year flood

zone. There will be no construction impacts to either on - site

or off - site water bodies or wetlands as a result of construction

activities.

16. On - site construction activities will not cause

measurable adverse ecological effects. The five - acre Project

area has already been cleared and graded in anticipati on of

construction of Power Block 3 and other future units.

Vegetation coverage in these areas consists of maintained

grasslands of low ecological functional value. This habitat is

suitable for few animals and exhibits low plant species

diversity. It wi ll not support populations of threatened and

endangered species or species of special concern. There are no

state or federal jurisdictional wetlands that would be impacted

by the development of Power Block 3. Mitigation for wetland

impacts occurred as pa rt of the original permitting process for

the Hines Energy Complex.

17. Construction noise impacts from construction of all

phases up to the 3000 MWs of ultimate site capacity were

analyzed as part of the 1992 certification application. It was

shown at that time that all of the applicable noise criteria

would be complied with during construction. An updated analysis

of construction noise reaffirmed the earlier analysis and

demonstrated no adverse impacts from construction noise. The

nearest residence i s approximately 2.5 miles from the plant

site. The Project construction noise levels will be less than

the existing noise levels measured near these residences.

Construction noise will have an insignificant effect on noise

levels.

18. During construct ion, the most prevalent construction

air emissions will be fugitive dust, generated by site grading,

excavation, vehicular traffic, and other construction

activities. Dust control measures will be used and will

typically require moisture conditioning of c onstruction areas

and roadways. Disturbed areas will also be stabilized by

mulching or seeding as soon as practical. Crushed rock may also

be used in high traffic areas. It is not expected that these

air emissions from construction will present any sign ificant air

quality problems during the construction period.

PROJECT DESCRIPTION

19. Power Block 3 will be similar to the existing Power

Blocks 1 and 2 at the Hines site. Power Block 3 is a new

combined cycle unit of approximately 530 MWs. It will consi st

of two advanced Siemens Westinghouse combustion turbines ("CT")

designed for dual fuel operation. Each CT will connect to an

electrical generator, capable of generating approximately 170

MWs of electricity. Each CT in Power Block 3 will be paired

with a heat recovery steam generator ("HRSG") which will extract

heat energy from the CT's exhaust gas. The HRSG is essentially

a boiler that turns heat in the CT's exhaust, which would be

otherwise wasted, into steam. The steam produced in both HRSGs

is use d to drive a single steam turbine, which will produce an

additional 190 MWs of electricity.

20. The normal operating mode for Power Block 3 will be

for both CTs to be in operation providing steam from their

respective HRSGs to the single steam turbine. However, Power

Block 3 can be operated in other ways, depending on the need for

electricity. One CT can be operated at full load producing

steam from its HRSG that would power the steam turbine at half

load while the other CT and HRSG are idle. The unit will be

operated between 30 percent load and full load in the combined

cycle mode while meeting its air emission permit requirements.

The modern combined cycle power plant is one of the most

efficient power cycles available today.

21. Natural gas will be the primary fuel used in Power

Block 3. Gas will be delivered by the existing gas pipelines

that serve the Hines Energy Complex. Fuel oil will be delivered

by truck to the existing fuel unloading facilities and stored in

the existing on - site fuel sto rage tanks.

22. The existing on - site electrical switchyard will be

expanded to provide electrical transmission interconnection for

Power Block 3. No new off - site transmission lines will be

required for Power Block 3.

23. Pursuant to the authorization under the 1994 site

certification, a 10,000 gallon per day domestic wastewater

treatment plant will treat any additional on - site domestic and

sanitary wastewaters from on - site showers, lavatories, toilets,

and drinking fountains. The treated effluent is directed to the

on - site cooling pond. Potable water is provided from an

existing on - site approved potable water system which is adequate

to support Power Blocks 1, 2 and 3. Potable water is supplied

from well water and is treated and chlorinated for on - s ite uses

such as drinking, washing, showers, and other uses.

24. Solid wastes that may be generated by Power Block 3

include circulating water system screenings, sanitary waste

solids, water treatment filter backwash solids, office solid

wastes, and sol id wastes produced in the course of operating and

maintaining the unit. Office wastes are expected to be the

biggest component of these wastes. These wastes will be

disposed of in differing ways. Circulating water system

screenings will be recycled on - s ite to the extent possible. All

other solid wastes will be disposed of off - site in appropriate

facilities. PEF has a corporate commitment to waste

minimization. This includes extensive recycling of waste

products, reduction at the source, and eliminatio n of most

hazardous waste storage. This corporate commitment will be

implemented on a continuing basis at the Hines Energy Complex.

WATER USE AND SUPPLY

25. The steam in the steam turbine is cooled to the liquid

state in a steam condenser. The rejecte d heat from the steam is

transferred to water pumped from the existing cooling pond into

the circulating water system and then returned to the cooling

pond. The heat rejected from the power plant results in forced

evaporation above and beyond the natural evaporation that occurs

in the cooling pond. The circulating water system equipment for

Power Block 3 will include two new circulating water pumps

capable of pumping 60,000 gallons per minute. An additional

intake structure will be constructed at the coo ling pond to

support these pumps. A new discharge structure will also be

constructed in the cooling pond. There will be no need to

expand the size of the cooling pond to accommodate Power

Block 3.

26. The existing 722 - acre cooling pond will supply cooli ng

water and other water needs for Power Block 3. All process

water needs for Power Block 3 will be supplied from the existing

cooling pond. Water is pumped from the pond to the existing

water treatment area east of Power Block 1. The water is

processed for use either as service water or as demineralized

water. Service water is used for washdown of equipment and

other uses. The higher quality demineralized water is used for

makeup to the steam - condensate - feedwater cycle in the HRSGs to

replace steam cy cle losses. Demineralized water is also used

when firing low sulfur fuel oil in the CTs to control nitrogen

oxide (NO x ) emissions.

27. The reverse osmosis equipment in the demineralized

water system produces a brine reject that will be pumped to the

ex isting on - site brine pond. The other wastewater streams from

Power Block 3 will come from the boiler blowdown and from floor

drains located throughout the facility. Boiler blowdown results

from removal of a portion of the water cycling in the HRSG to

con trol the buildup of solids in that water. Boiler blowdown is

collected and pumped back to the cooling pond without further

treatment. Areas that contain lubricating oil equipment or

where fuel lines run above ground will have containment curbs or

walls. Wastewater streams from these areas that may contain oil

will be routed to the existing oil water separator to remove oil

contamination prior to being pumped to the cooling pond. Any

collected oil will be properly disposed. All wastewaters will

be colle cted and processed as appropriate and pumped back to the

cooling pond. The cooling pond has no discharge to area surface

waters.

28. The cooling pond at the Hines Energy Complex

experiences both natural and forced evaporation. The forced

evaporation is that additional evaporation above and beyond

natural evaporation and is caused by the heat rejected from the

power plant. The total annual average evaporation rate from the

cooling pond from natural evaporation and from heat rejected by

Power Blocks 1, 2 and the proposed Power Block 3 is

approximately 9.3 million gallons per day. This includes an

increase in evaporation of 2.2 million gallons per day for Power

Block 3. This loss of water needs to be replenished to keep the

cooling pond operating and keep the plant continuing in

operation.

29. It has been determined that, over the long term, Power

Block 3 will require an average annual daily water supply of 2.6

million gallons per day, and a peak monthly water supply need of

4.4 million gallons per day. This is needed to replace

evaporation from the pond and to supply the process water needs

for the new unit. The existing Conditions of Certification for

the Hines Energy Complex authorize the use of at least 5 million

gallons per day of groundwater begi nning with the third

generating unit at the Hines Energy Complex. The existing Units

1 and 2 utilize a mix of treated wastewater from on - site and

off - site sources and captured rainfall to supply cooling and

process water needs for Power Blocks 1 and 2. T he water needs

for Power Block 3 will be supplied from these previously

approved quantities of groundwater. The water will be pumped

from the Upper Floridan Aquifer from two new on - site wells

located south of the cooling pond. They will be spaced to

mini mize interference during simultaneous pumping operations.

The wells will have a diameter of 20 inches and the casing will

be set to a depth of 360 feet below land surface. The total

depth of these two production wells will be 880 feet below land

surface.

30. Under the proposed Conditions of Certification, no

groundwater will be withdrawn to supplement the cooling pond

until the operating level in the cooling pond falls to 160 feet

and the water that is stored in the on - site water cropping areas

have be en depleted. The normal pond operating level is proposed

to range between 159 and 163 feet above National Geodetic

Vertical Datum ("NGVD"). The proposed on - site withdrawals were

previously evaluated as part of the initial certification

proceeding in 1994 , and were found to have no adverse impacts.

The proposed on - site withdrawals for Power Block 3 will not have

any adverse impacts on existing legal users of water in the

vicinity of the Project. PEF has investigated other reasonably

obtainable sources of water in the region and found none that

could meet the needs for Power Block 3 beginning in November

2005, when the unit is to begin operation.

31. PEF has undertaken several efforts to minimize the use

of groundwater through the use of water conservat ion practices,

as required by the Conditions of Certification in the 1994 site

certification. These measures include the use of combined cycle

combustion turbine design that uses water conserving electric

generation technologies, retention of any dewateri ng effluents

on - site, on - site rainwater and stormwater capture and reuse in

the cooling pond, return of internal wastewater streams to the

cooling pond for reuse, and reuse of treated wastewater from

sewage treatment facilities.

32. Power Blocks 1 and 2 are supplied water from the on -

site water cropping system, and on - site and off - site treated

wastewaters. The capture and reuse of rainfall is an integrated

part of PEF's efforts to reduce dependence on the Upper Floridan

Aquifer as a source of water. In the water cropping system,

precipitation that falls within the dams in the water cropping

areas of the Hines Energy Complex will be captured, temporarily

stored and routed to the cooling pond as needed. This captured

rainfall is used to make up for evapo rative losses. In

addition, recycled plant wastewaters and treated wastewater from

the City of Bartow are the other primary sources of water for

Hines Power Blocks 1 and 2. The City of Bartow currently

provides approximately 1.7 million gallons per day o f treated

wastewater for use at the Hines Energy Complex.

33. PEF is also pursuing other activities for the

potential development of water resources at the Hines Energy

Complex. This involves preparing an integrated water supply

plan for the site. The plan will be incorporated into the site

certification through separate modification requests. One

component of this plan is an aquifer recharge and recovery

project ("ARRP"). This Project will take stormwater and

reclaimed effluent and provide additiona l on - site treatment to

comply with FDEP's groundwater standards. The treatment will

take place in on - site treatment wetlands and sand filters. Once

treated, the water would be injected into the Floridan Aquifer

through an on - site recharge well for later use at the Hines

Energy Complex and for aquifer enhancement. Under this

proposal, PEF would withdraw 85 percent of the total water

injected into the aquifer; the remaining 15 percent will not be

withdrawn in order to provide water resource enhancement to the

aquifer. PEF will also continue to investigate and report to

the Southwest Florida Water Management District on evaluation of

alternative sources of reclaimed water and of the feasibility of

using brackish groundwater resources to minimize the use of

fresh groundwater resources.

AIR EMISSIONS

34. The primary air pollutants emitted from Hines Power

Block 3 will include nitrogen oxides ("NO x "), carbon monoxide

("CO"), volatile organic compounds ("VOC"), particulate matter

("PM"), and sulfur oxides suc h as sulfur dioxide. The primary

cause of the air emissions from the new unit will be the

combustion of natural gas and distillate or light oil in the

CTs. Emissions of NO x , CO, and VOC will result from the

combustion process. Emissions of PM and sulfur dioxide result

from trace impurities in the fuel itself.

35. Air emissions from Power Block 3 will be minimized

through the inherent efficiency of the combined cycle

technology, as well as the use of natural gas and light oil, use

of combustion control s, and use of post - combustion control

technology for nitrogen oxide emissions. Natural gas is the

cleanest of fossil fuels and contains minimal amounts of

impurities. Light oil is also very low in impurities and its

use will be limited to up to 720 hours per year per combustion

turbine. Natural gas and light oil burn very efficiently, thus

minimizing the formation of air pollutants. Emissions are also

minimized through the use of advanced combustion control

technology in the combustion turbine, specific ally dry, low NO x

combustion controls for firing natural gas, and use of water

injection when firing light oil. A post - combustion control

technology, selective catalytic reduction ("SCR") will be used

to further reduce NO x emissions from Power Block 3.

36. The Hines Power Block 3 is required to meet federal

and state new source performance standards ("NSPS") and best

available control technology ("BACT") requirements, both of

which limit air pollution emission rates. The Project m ust also

comply with ambient air quality standards ("AAQS") and

prevention of significant deterioration ("PSD") increment

standards, which establish levels of air quality which must be

met.

37. Hines Power Block 3 is required to undergo PSD review

because it is a new source of air pollution that will emit some

air pollutants above the threshold amounts established under the

PSD program. PSD review was required for air emissions of PM,

sulfur dioxide, NO x , CO, VOC, and sulfuric acid mist because

these emis sions are greater than the established PSD thresholds.

FDEP has independently prepared a draft PSD review for Power

Block 3 that will be addressed in FDEP's separately - issued PSD

permit for the Project.

38. The BACT analysis for Hines Power Block 3 is part of

the evaluation of air emissions control technology under the PSD

regulations and is applicable to all pollutants for which PSD

review is required. BACT is a pollutant - specific emission

standard that provides the maximum degree of emission reductio n,

after taking into account the energy, environmental, and

economic impacts and other costs. A BACT analysis is performed

first by identifying available and technically feasible emission

control alternatives and then evaluating their degree of

emission r eduction, costs and adverse impacts. The BACT limit

arrived at for each pollutant is the most stringent degree of

emission control that is not rejected on the basis of economic,

energy, environmental or other technical grounds.

39. For NO x , in its sep arate draft PSD analysis, FDEP has

preliminarily determined for this facility a BACT emission limit

of 2.5 parts per million when firing natural gas, and 10 parts

per million when firing low sulfur fuel oil. These emission

levels will be achieved by the u se of dry low NO x combustion

technology when firing natural gas, use of water injection when

firing fuel oil, and use of SCR technology. These limits are

equivalent to emission limits established on other similar units

in Florida.

40. For emissions of carbon monoxide, in its PSD analysis,

FDEP preliminarily has determined for this facility, a BACT

limit of 10 parts per million during natural gas firing and 20

parts per million during oil firing, which will be achieved

using good combustion techniques.

41. In its preliminary PSD analysis, FDEP has determined

for this facility that sulfur dioxide emissions, including

sulfuric acid mist, will be controlled through the use of clean

fuels. In its draft PSD analysis, FDEP has also determined for

this fac ility that BACT limits for particulate matter for Power

Block 3 will be achieved through the use of clean fuels, natural

gas and low sulfur fuel oil.

42. Fuel oil firing will be limited to a maximum of about

720 hours per year. For VOC, emissions will be controlled using

good combustion, and in its PSD analysis, FDEP has determined

preliminarily for this facility that BACT limits will be 2 parts

per million during gas firing and 10 parts per million when

firing low sulfur fuel oil.

43. The air emissi ons from Power Block 3 cannot be

permitted at a level that would cause or contribute to a

violation of federal and state AAQS for the six criteria air

pollutants or PSD increments for sulfur dioxide, NO x and PM. The

PSD increments refer to the amount of i ncremental air quality

deterioration allowed from a new air pollution source. Polk

County is classified as a Class II area for PSD purposes. The

nearest Class I PSD area within which limited increases in air

pollutant concentrations are allowed is the Ch assahowitzka

National Wilderness Area.

44. Air emissions from Power Block 3 were principally

analyzed for emissions from fuel oil firing as representing the

maximum air quality impact. The air quality impact analysis was

performed using approved air qu ality models and indicated that

Power Block 3 will not cause any violations of federal or state

AAQS and will comply with applicable PSD Class II and Class I

increments. The maximum impact of the Project was estimated to

be well below the applicable PSD C lass II increments. Maximum

ambient air impacts were also estimated to be well below the

applicable ambient air quality standards. Using worst case air

emissions during oil firing, it was shown that the Project

impacts would be less than the PSD Class I increments, as well

as less than the Class I significant impact levels, and

therefore were concluded to not be significant in the PSD Class

I area.

45. Air emissions from Power Block 3 are not expected to

have any impact on vegetation or to cause any gr owth - related air

quality impacts. The results of the visibility impact analysis

of the Project's emissions in the nearest Class I area

demonstrated no adverse impact on visibility at that location

due to Power Block 3.

NOISE

46. Noise impacts during c onstruction and operation of

Power Block 3 were shown not to be significant, and the expected

increase in noise will be below levels noticeable by human

hearing. Noise monitoring was originally conducted at various

locations around the Hines Energy Comple x site prior to

construction and operation of Power Block 1. Additional noise

monitoring was conducted at these locations in 2000 during the

permitting of Power Block 2, to determine any changes since the

original permitting. There are only a few isolate d rural

residences in the land area surrounding the site. The nearest

residence is about 2.5 miles from the proposed Power Block.

Mining activities in the surrounding area result in considerable

traffic on nearby roads, causing noise levels to exceed the EPA

guideline of 55 decibels ("dBa"). Without the area traffic,

noise levels meet the EPA guidelines. Using a conservative

approach which tends to overstate the Project impacts, noise

impacts due to Power Block 3 would increase by less than 1 dBa

at the nearest receptor and will not be significant. Similar

noise level increases were predicted for plant construction.

Therefore, the Project will meet applicable noise criteria and

no significant noise impacts will occur as a result of the

Project.

LAND U SE AND SOCIOECONOMIC IMPACTS

47. The Plant Island, where Power Block 1 is in operation

and where Power Block 3 will be constructed, is located near the

southern end of the site.

48. The northern boundary of the Plant Island is about two

miles south of CR 640. The western limit of the City of Fort

Meade is about 3.5 miles east of the Plant Island, and the

unincorporated community of Homeland is more than 2.5 miles

northeast of the Plant Island. The nearest residential use is

three homes located more th an 2.5 miles from the southern

boundary of the Plant Island. Otherwise, the entire area

surrounding the proposed power plant site consists of phosphate

mines.

49. The site is buffered from surrounding populations at

Homeland and Fort Meade by an extens ive buffer area on the

eastern perimeter of the site.

50. There has been almost no change in land use and very

little change in the landscape in the area of the Hines Energy

Complex since the original site certification.

51. There have not been any cha nges in the area

surrounding the Hines Energy Complex that would change the land

use and socioeconomic conclusions reached in the Final Order of

Certification issued for the site by the Siting Board on

January 27, 1994.

52. No land use or socioeconomic impacts will be

associated with construction of Power Block 3 that were not

previously addressed in the Final Order of Certification for the

Hines Energy Complex in 1994.

53. The number of indirect jobs in Polk County resulting

from construction of Power Block 3 will be approximately 113.

These jobs will generate earnings of about $11 million. They

will primarily be in manufacturing of fabricated metal products,

retail trade, real estate, business services, and health

services sectors of the local econom y.

54. The land use impacts from development of Power Block 2

will be quite minimal, and the economic benefits will be

substantial. Current operating employment at the Hines Energy

Complex is 29. The staffing level at the plant is expected to

increase by six employees with the addition of Power Block 3.

Annual payroll was $2.7 million in 2002. The annual payroll

will increase by about $500,000 (2002 dollars) when Power

Block 3 becomes operational in 2005.

55. The estimated number of new indirect job s from the

operation of Power Block 3 is 10, generating earnings of

$458,000 per year. These jobs will primarily be in

construction, retail trade, real estate, business services and

health services sectors of the local economy.

56. The estimated incre ase in property taxes for Power

Block 3 is $3.4 million. Over one - half of this revenue goes to

support the Polk County school system. Since Polk County is

required to provide very few services to the Hines Energy

Complex, the net benefit of these revenue s to the County and the

local school system is substantial.

AGENCY POSITIONS AND STIPULATIONS

57. The FDEP, the Florida Department of Community Affairs

("DCA"), the FDOT, the Florida Fish and Wildlife Conservation

Commission, and the Southwest Florida Water Management District

each prepared written reports on the Project. Each of these

agencies either recommended approval of Hines Power Block 3 or

otherwise did not object to certification of the proposed power

plant. FDEP has proposed a series of Cond itions of

Certification for the Project that incorporate the

recommendations of the various reviewing agencies. PEF states

that it can comply with these Conditions of Certification in the

design, construction, and operation of the Hines Power Block 3.

No state, regional, or local agency has recommended denial of

certification of the Project or has otherwise objected to

certification of the Project.

CONCLUSIONS OF LAW

58. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. Section 403.508(3), Florida Statutes (2002)

59. This proceeding was conducted to implement the purpose

and intent of the Florida Electrical Power Plant Site

Certification process. The purpose s of that process are to

assure the citizens of Florida that the construction and

operation safeguards of the PEF Hines Power Block 3 Project are

technically sufficient to protect their health and welfare and

to effect a reasonable balance between the need for the Project

and the environmental impacts on air and water quality, fish and

wildlife, and the water resources and other resources of the

State resulting from the Project's construction and operation.

Section 403.502(1) - (2), Florida Statutes

60. In accordance with Chapters 120 and 403, Florida

Statutes, and Chapter 62 - 17, Florida Administrative Code, proper

public notice was accorded all persons, entities and parties

entitled thereto. All the necessary and required governmental

agencies were part ies to this proceeding or were otherwise

afforded adequate opportunity to participate in this proceeding.

All required reports by State, regional and local agencies were

completed and presented.

61. The Florida Public Service Commission, in an order

d ated February 4, 2003, has determined a need exists for the 530

MW (nominal) of electrical generating capacity to be supplied by

the Project, pursuant to the requirements of Section 403.519,

Florida Statutes.

62. The Governor and Cabinet of the State of Florida,

sitting as the Siting Board, determined in an order dated

January 26, 1993, that the Hines Energy Complex site is

consistent with the existing land use plans and zoning

ordinances of Polk County, pursuant to the procedures set out in

Section 403.5 08(1) and (2), Florida Statutes. Further

consideration of consistency with local land use plans and

zoning ordinances is not required for this Supplemental Site

Certification Application, pursuant to Section 403.517(3),

Florida Statutes.

63. The Florida Department of Environmental Protection and

the other participating agencies have all recommended

certification of the Hines Power Block 3 for construction and

operation, subject to this Recommended Order and to the

conditions of certification recommended by FDEP. Progress

Energy Florida, the applicant, has indicated its acceptance of

these proposed conditions of certification. As a result, none

of the parties to this proceeding oppose certification of the

Hines Power Block 3.

64. Based upon a preponder ance of the evidence presented

at the certification hearing held on May 12, 2003, Progress

Energy Florida has met its burden of proving that the Hines

Power Block 3 Project should be certified as proposed.

Competent substantial evidence presented at the h earing

demonstrates that the construction and operational safeguards

for the Hines Power Block 3 Project are technically sufficient

to protect the health and welfare of the citizens of Florida and

are reasonable and available methods to achieve that protec tion.

If constructed, maintained, and operated in accordance with this

Recommended Order and the FDEP's proposed Conditions of

Certification, incorporated herein by reference, the proposed

Project will produce minimal adverse effects on human health,

the environment, the ecology of the land and its wildlife, and

ecology of state waters and their aquatic life. Certification

of the Project is consistent with the statutory goal of the

Florida Electrical Power Plant Siting Act of providing abundant,

low cost electrical energy, and certification will effect a

reasonable balance between the environmental and other impacts

which might occur and the need for the Project as separately

determined by the Public Service Commission.

RECOMMENDATION

Based upon the foreg oing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that the Siting Board grant full and final

certification to Progress Energy Florida to construct and

operate a new 530 MW natural gas - fired electrical power plant in

Polk County, Florida, su bject to the conditions of certification

contained in FDEP Exhibit 2 and incorporated herein by

reference.

DONE AND ENTERED this 10th day of June, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

CHARLES A. STAMPELOS

Adminis trative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Admin istrative Hearings

this 10th day of June, 2003.

COPIES FURNISHED :

Ross Stafford Burnaman, Esquire

Florida Fish and Wildlife

Conservation Commission

Bryant Building

620 South Meridian Street

Tallahassee, Florida 32399 - 1600

Michael Duclos, Esquire

Pol k County Attorney's Office

Post Office Box 9005

Bartow, Florida 33831 - 9005

Scott A. Goorland, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

James McGee, Esquire

Florida Power Corporation

Post Office Box 14042

St. Petersburg, Florida 33733

Harold Mclean, General Counsel

Florida Public Service Commission

2540 Shumard Oak Boulevard

Tallahassee, Florida 32399 - 0850

Martha A. Moore, Esquire

Southwest Florida Water Management Dist rict

2379 Broad Street

Brooksville, Florida 34604 - 6899

Douglas S. Roberts, Esquire

Hopping Green & Sams, P.A.

123 South Calhoun Street

Post Office Box 6526

Tallahassee, Florida 32314

Norman White, Esquire

Central Florida Regional Planning Council

555 E ast Church Street

Bartow, Florida 33930

Sheauching Yu, Esquire

Department of Transportation

605 Suwannee Street

Haydon Burns Building, Mail Station 58

Tallahassee, Florida 32399 - 0458

David B. Struhs, Secretary

Department of Environmental Protection

390 0 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

Teri L. Donaldson, General Counsel

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

Kathy C. Carter, Agency Clerk

Department of Environmental Protection

Office of the General Counsel

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the final order in this case.