04-002817EPP In Re: Progress Energy Florida Hines Energy Center Power Block 4 Power Plant Siting Application No. Pa 92- 33sa3 vs. * Status: Closed Recommended Order on Tuesday, April 5, 2005.

Summary: The uncontroverted evidence admitted during the local public certification hearing on Progress Energy of Florida`s project to construct and operate a new 530 MW natural gas-fired electrical power plant in Polk County, FL, supported project approval.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: PROGRESS ENERGY FLORIDA )

HINES ENERGY CENTER POWER )

BLOCK 4 POWER PLANT SITING ) Case No. 04 - 2817EPP

APPLICATION NO. PA 92 - 33SA3. )

)

SITE CERTIFIC ATION RECOMMENDED ORDER

Pursuant to due 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 March 23, 2005, in Bartow, Florida.

A PPEARANCES

For Progress Energy Florida:

Douglas S. Roberts, Esquire

Hopping Green & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314 - 6526

For the Department of Environmental Protection:

Scott A. Goorland, Esquire

Dep artment 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 Distric t

2379 Broad Street

Brooksville, Florida 34604 - 6899

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

a final order granting certification to Prog ress 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 PEF’s

existing Hines Energy Complex, southwest of Bartow, Flo rida.

PRELIMINARY STATEMENT

This proceeding was conducted pursuant to the Florida

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

II, Florida Statutes, and Florida Administrative Code Chapter

62 - 17, to consider PEF’s application for site cer tification for

the proposed Hines Power Block 4 (also referred to as the

“Project”).

On August 5, 2004, Florida Power Corporation, doing

business as PEF filed its Supplemental Application for site

certification for the Hines Power Block 4 with the Florida

Department of Environmental Protection (“Department” or “FDEP”).

The application was found to be complete on August 20, 2004.

The application was found to be sufficient on November 22, 2004.

On November 23, 2004, the Florida Public Service Commission

( FPSC) issued its Final Order determining the need for the

proposed electrical power plant.

On February 16, 2005, FDEP issued its written Staff

Analysis Report concerning the Project, as required by Section

403.507(4), Florida Statutes, incorporating the r eports from

other state and regional agencies and proposing a comprehensive

set of proposed Conditions of Certification.

On February 17, 2005, a joint Prehearing Stipulation was

submitted to the undersigned, which indicated that no party to

this proceedin g objected to certification of the Project.

On March 23, 2005, during the certification hearing, FDEP

submitted its revised Staff Analysis Report as an exhibit.

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

certification hearing was held in B artow, Florida, on March 23,

2005, 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 locat ion and operation of

the proposed Hines Power Block 4 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 fully balance th e increase in

demand for an electrical power plant location and operation with

the broad interests of the public. See § 403.502, Fla. Stat.

The hearing would have also considered any petitions challenging

the separate FDEP - issued prevention of significan t deterioration

(“PSD”) permit 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 (PEF Ex.)

numbered 1 through 10 admitted into evidence. These exh ibits

included the pre - filed written testimony of five witnesses.

That testimony was filed pursuant to Florida Administrative Code

Rule 62 - 17.141(3). The pre - filed written testimony of two

witnesses, Karl Bullock and Richard Zwolak, has been accepted,

ba sed upon their execution of affidavits attesting to the

accuracy of the testimony and accompanying exhibits. The other

three witnesses adopted their pre - filed testimony during the

hearing. FDEP presented the testimony of Steven Palmer, of the

FDEP’s Siti ng Coordination Office, and had FDEP Exhibits 1 and 2

(FDEP Ex.) admitted into evidence. No member of the public

appeared at the hearing to offer testimony or other evidence on

the Project.

Following the conclusion of the March 23, 2005, hearing, a

one - v olume Transcript (Tr.) of the hearing was filed on

March 29, 2005. The Joint Proposed Recommended Order of PEF,

FDEP, and the Southwest Florida Water Management District

(“SWFWMD”) was timely submitted and has been considered in the

rendition of this Reco mmended Order.

FINDINGS OF FACT

Background

1. Progress Energy Florida, previously known as Florida

Power Corporation, is an electric utility that provides

electricity in a 35 - county service area in Florida. This

service area stretches from the Panhandl e through the center of

the state and includes the western coast of Florida north of

Tampa Bay. PEF currently serves approximately 1.5 million

customers in this service area. PEF has been providing electric

service in Florida for over 100 years. PEF’s c urrent generating

capacity is 9,174 megawatts. The Company currently operates 14

different power plant facilities in the state. PEF has a

customer growth rate of 1.7 percent per year. (Hunter, Tr. 14 -

15; PEF Ex. 10, Slide 2).

2. The PEF Hines Energy Complex is located in the

southwest portion of Polk County, Florida, approximately 3.5

miles south of the city of Bartow. The community of Homeland is

located one mile northeast of the Hines site. County Road 555

runs through the Project site. The Hine s site contains

approximately 8,200 acres of reclaimed phosphate mine lands.

The area around the larger Hines site has been dominated by

phosphate mining operations, including mines, settling ponds,

sand tailings, gypsum stacks, and chemical beneficiation plants.

The adjacent land uses consist almost entirely of active

phosphate mining or mined and reclaimed lands. (PEF Ex. 6,

Zwolak at 5 - 6; PEF Ex. RZ - 2; PEF Ex. 1 at 2 - 1).

3. In the late 1980’s, PEF began planning to meet the

needs of future growth in customer demand for electricity and

decided to identify a site that allowed for a wide variety of

possible generation technologies, while at the same time meeting

the ecological and regulatory requirements for building new

generation. PEF solicited th e help of a team of local

community, educational, and environmental leaders to evaluate

over 50 potential sites in Florida and South Georgia. This two -

year process culminated in 1991 with the selection of the Hines

site, then known as the Polk County site . (PEF Ex. 6, Hunter at

4).

4. In January 1994, the Governor and Cabinet, acting as

the Siting Board, certified the Hines Energy Complex for an

ultimate site capacity of 3,000 megawatts (MW) of generating

capacity fueled by either natural gas, coal ga s or fuel oil, and

also granted certification for the construction and operation of

an initial 470 MW combined cycle unit known as Power Block 1.

Power Block 1 began operation in 1999. In 2001, the Siting

Board also granted certification for the construc tion and

operation of Hines Power Block 2, a 530 MW combined cycle unit.

Power Block 2 began operation in 2003. In 2003, certification

was granted by the Siting Board for Power Block 3, which is

currently under construction, and expected to be in service by

late 2005. (PEF Ex. 6, Hunter at 5; PEF Ex. 1, Preface at 1 - 2;

FDEP Ex. 2 at 1).

5. The original certification proceeding that culminated

in the 1994 certification included extensive evaluations of the

worst case capacity constraints and potential environmental

effects of the operation of the expected 3,000 MW of capacity.

Those evaluations included assessments of air quality impacts,

water quality and wildlife impacts, water use, noise impacts,

socioeconomic impacts and benefits, traffic impacts of

construction and operation, and other impacts of the entire

planned capacity of 3,000 MW. This original evaluation

significantly reduces the time and expense for processing the

Supplemental Site Certification Application and allows PEF to

respond more quickly to the growth in demand for electrical

generating facilities. The ultimate site capacity determination

assures PEF that the Hines Energy Complex site has adequate air,

water, and land resources to accommodate additional electrical

generating facil ities. The 1994 certification also established

that the full 3,000 MW of generating capacity and the Hines site

are consistent with the local land use plans and zoning

regulations of Polk County. (PEF Ex. 1, Pre - 1 to Pre - 2 at 2.4

to 2.5).

6. The Hine s Energy Complex contains 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, that is being expanded to approximately 1200

acres, has been constructed on the site, along with a 311 - acre

brine pond. A buffer and mitigation area has been created along

the eastern portion of the Hines site containing approximately

2,498 acres. These areas se rve as a wildlife corridor as well.

Approximately 3500 acres of the site are designated for water

crop areas to supply captured rainfall for use in the power

plant. (PEF Ex. 6, Hunter at 3; PEF Ex. JJH - 4; PEF Ex. 1 at 2 -

1).

7. The Hines Energy Comple x is interconnected to the

electrical grid through multiple existing electrical

transmission lines. A new 20 mile long 230 kV transmission line

to connect the Hines Site to the existing PEF West Lake Wales

Substation is being permitted separately. Natura l gas is

delivered to the Hines Energy Complex by two existing natural

gas pipelines, which will serve Power Blocks 1, 2, 3, and 4.

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

by truck and stored in an onsite storage tank. A new fuel o il

unloading station and a new fuel and storage tank will be added

to serve Power Block 4. (PEF Ex. 6, Hunter at 6, 8; PEF Ex. 1

at 3 - 1; Tr. 17).

Project Overview

8. The Hines Power Block 4 is a 530 MW combined - cycle

power plant to be fueled primarily with natural gas. Fuel oil

will be used as a backup fuel. The proposed Power Block 4 will

be located entirely within the existing Hines Energy Complex

site. The unit will be located west of Power Blocks 1, 2 and 3.

All construction activities for Power Block 4 will occur within

an approximately 5 - acre portion of the plant island. (PEF Ex.

1, at 3 - 2, 4 - 1; PEF Ex. 6, Robinson at 5; Exs. JMR 4 and 5).

Need for Power Block 4

9. On November 23, 2004, the FPSC issued a Final Order

determining the need for the PEF’s Hines Power Block 4 Project.

The FPSC determined that the Hines Power Block 4 will be needed

by 2007 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 20 percent reserve

margin of generating capacity above the firm demand of PEF’s

customers. Power Block 4 adds to the diversity of PEF’s

generating assets in terms of technology, fuel, age, and

functionality. Operational flexibility is provided by Power

Block 4’s dual fuel capability. The FPSC also found that the

Hines Power Block 4 will contribute to the provision of adequate

electricity at reasonable cost. The FPSC concluded that PEF, in

proposing the Hines Power Block 4, had identified the l east cost

alternative compared to other options, including outside

proposals from third parties. There are no cost - effective

conservation measures available that might mitigate PEF’s need

for Hines Power Block 4. In conclusion, the FPSC determined

that P EF met the statutory requirements under Section 403.519,

Florida Statutes, for the Commission to grant the determination

of need for Hines Power Block 4. (PEF Ex. 3).

Project Schedule and Construction

10. The proposed Power Block 4 is similar to the exi sting

Hines Power Blocks 1, 2, and 3, which exist or are currently

under construction at the Hines site. The proposed combustion

turbines for the new unit are two advanced General Electric 7FA

combustion turbines, designed for dual fuel operation.

Engine ering of the units will commence in December 2005 and on -

site construction will begin no later than the first quarter of

2006. The new unit is proposed to be in service by December 1,

2007. (PEF Ex. 6, Robinson at 4, 13 - 14).

11. Construction activitie s 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 project management personnel. Existing

construction laydown and parking areas wi ll be utilized for

Power Block 4. On - site construction will begin with the

installation of the circulating water piping and pilings for

structural foundations. Power Block 4 will be mechanically

complete by June 2007. (PEF Ex. 6, Robinson at 14).

12. The construction workforce for Power Block 4 is

expected to average about 145 employees over the two - year

construction 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, 2, and 3, it is expected that

most construction workers will be drawn from the Polk County and

Central Florida areas. Construction employees are expected to

commute daily to the job site. Traffic improvements have

already been made in the vicinity of the Hines Energy Complex.

Traffic impacts related to construction of Power Block 4 will

not require additional road improvements. (PEF Ex. 1 at 4 - 16 to

4 - 17).

13. No new roads will be req uired to support construction

of Power Block 4 as the existing plant access road will be used

during construction. Major project components will be delivered

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

rail or road facilities is expecte d to be necessary. All

oversized deliveries will receive necessary Florida Department

of Transportation (“DOT”) approvals. (PEF Ex. 1 at 3 - 20, 4 - 3;

PEF Ex. 6, Robinson at 14 - 15).

14. Most major earthwork activities for construction for

the Power Block 4 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, installation of foundation systems and

infrastructure piping, t he new control/administration building,

and the new fuel oil tank. (PEF Ex. 1 at 4 - 1).

15. 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 will include deep foundations

such as pilings similar to those used for Power Blocks 1, 2, and

3. Lightly loaded foundations will use spread foundations.

Construction dewatering will occur primarily at ex cavations for

the circulating water intake structure and the discharge head

wall in the cooling pond. Other additional limited dewatering

may occur, depending upon the amount of rainfall and the depth

of other excavations onsite. Dewatering would be perf ormed

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

localized impact area. Dewatering effluent will be routed to

the existing on - site stormwater collection ditches for return to

the existing cooling pond. (PEF Ex. 6, Robinson at 12 - 13; PEF

E x. 1 at 4 - 7).

16. 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. (PEF Ex. 1 at 2 - 2, 4 - 5).

17. On - site construction activities will not have any

measureable adverse ecological impacts. The five - acre Project

area has already been cleared and graded in anticipation of

construction of Power Block 4 and other future units. The Power

Block 4 area is primarily bare soil, with very sparse weedy

vegetation of low - ecological functional value. This habitat is

suitable for few animals and exhibits low plant species

diversity. It will not support populations of threatened and

endangered species or species of special concern. There are no

jurisdictional or non - jurisdictional wetlands that would be

impacted by the development of Power Block 4 and the on - site

portion of the new transmission line. Mitigation for wetland

impacts on the Hines Energy Complex occurred as p art of the

original permitting process for the Hines Energy Complex. (PEF

Ex. 6, Bullock at 5 - 6; PEF Ex. 1 at 4 - 10 to 4 - 12).

18. Construction noise impacts from construction of all

phases up to the 3,000 MWs of ultimate site capacity were

analyzed as pa rt of the 1992 certification application. It was

shown at that time that the applicable noise criteria would be

complied with during construction of each future phase. An

updated analysis of construction noise from Power Block 4

reaffirmed the earlier an alysis and demonstrated no adverse

impacts from construction noise. The nearest residences are

approximately 2.9 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. (PEF Ex. 6,

Osbourn at 15 - 16; PEF Ex 1 at 4 - 17 to 4 - 19).

19. During construction, the most prevalent construction

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

exc avation, vehicular traffic, and other construction

activities. Dust control measures will be used and will

typically require moisture conditioning of construction 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 significant air

quality problems during the construction period. (PEF Ex. 1 at

4 - 14 to 4 - 16).

Project Des cription

20. Power Block 4 will be similar to the existing Power

Blocks 1, 2, and 3 at the Hines site. Power Block 4 is a new

combined cycle unit of approximately 530 MWs. It will consist

of two advanced GE 7 FA combustion turbines (“CT”) designed for

d ual fuel operation, using primarily natural gas and low sulfur

fuel oil as a backup fuel. Each CT will connect to an

electrical generator, capable of generating approximately 170

MWs of electricity. Each CT in Power Block 4 will be paired

with a heat rec overy 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 used to drive a single steam turbine, which will produce an

additional 190 MWs of electricity. (PEF Ex. 6, Robinson at 4 to

5; PEF Ex. JMR - 2; FDEP Ex. 2 at 1 - 10).

21. The normal operating mode for Power Block 4 will be

for both CTs to be in operation providing steam from their

respective HRSGs to the single steam turbine. However, Power

Block 4 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 a t 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.

(PEF Ex. 6, Robinson at 4 - 5).

22. Natural gas will be the principal fuel used in Power

Block 4. Gas will be delivered by two existing gas pipelines

that serve the Hines Energy Complex. A new on - site gas pipeline

will be constructed to supply natural gas to the new Power Block

4 from the two on - site natural gas meter regulation stations.

Fuel oil will be delivered by truck to a new fuel unloading

facilities and stored in a new on - site fuel storage tank

adjacent to Power Block 4. (PEF Ex. 1 at 3 - 4; Tr. 27).

23. The existing on - site electrical switchyard will be

expanded to provide electrical transmission interconnection for

Power Block 4. The on - site segment of a new 230 kV transmission

line between the Hines Site and the PEF West Lake Wales

electrical substation is included in the project for

certification. (PEF Ex. 6, Robinson at 6; Tr. 17).

24. Pursuant to the authorization under the 1994 site

certification, a 10,000 gallon per day domestic wastewater

treatment plant will treat additional on - site domestic and

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

and drinking fountains for Power Block 4. The treated effluent

is directed to the on - site cooling pond as makeup water.

Potable water is provided from an existing on - site approved

potable water system which is adequate to support Pow er Blocks

1, 2, 3, and 4. Potable water is supplied from well water and

is treated and chlorinated for on - site uses such as drinking,

washing, showers, and other uses. A new on - site water

distribution line will be installed to support Power Block 4 and

t he new control and administration building. (PEF Ex. 6,

Robinson at 12; PEF Ex. 1 at 3 - 11 to 3 - 12).

25. Solid wastes that may be generated by Power Block 4

include circulating water systems screenings, sanitary waste

solids, water treatment filter back wash solids, and solid 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 systems screenings and water filter backwash

will be recycled on - site 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

pr oducts, reduction at the source, and elimination of most

hazardous waste storage. This corporate commitment will be

implemented on a continuing basis at the Hines Energy Complex.

(PEF Ex. 6, Robinson at 12; PEF Ex. 1 at 3 - 18).

Water Use and Supply

26. The existing cooling pond will supply cooling water

and other water needs for Power Block 4. Makeup water to the

cooling pond is obtained from direct precipitation, reclaimed

treated municipal effluent, on - site stormwater runoff, recycled

plant blowdown and wastewaters, water cropping, and groundwater.

(PEF Ex. 1 at 3 - 7 to 3 - 9).

27. The process steam in the steam turbine is cooled to

the liquid state in a steam condenser. The rejected heat from

the steam is transferred to water pumped from the existi ng

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 4 will include two new

circulating water pumps capable of pumping 60,000 gallons per

minute. An additional intake structure will be constructed at

the cooling pond to support these pumps. (PEF Ex. 6, Robinson

at 7 - 8; PEF Ex. 1 at 3 - 9 to 3 - 10).

28. All process water needs for Power Block 4 will be

supplied from the existing cooling pond. Water is pumped from

the pond to the water treatment area located east of the

existing power blocks. The water is processed for use e ither 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 cycle losses .

Demineralized water is also used when firing low sulfur fuel oil

in the CTs to control NO x emissions. (PEF Ex. 6, Robinson at 8 -

9, Osbourn at 7; PEF Ex. 1 at 3 - 12 to 3 - 13).

29. The reverse osmosis equipment in the demineralized

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

existing on - site brine pond for evaporation. The only other

wastewater streams from Power Block 4 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 control 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 colle cted oil is properly

disposed. All wastewaters are collected and processed as

appropriate and pumped back to the cooling pond. The cooling

pond has no discharge to area surface waters. (PEF Ex. 6,

Robinson at 9 - 10; PEF Ex. 1 at 3 - 12 to 3 - 16; FDEP Ex. 2 at 13).

30. 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, 3 and the proposed Power Block 4 is

approximately 10 million gallons per day. This is an increase

in evaporation of 2. 2 million gallons per day for Power Block 4.

This loss of water needs to be replenished to keep the cooling

pond operating and keep the plant continuing in operation. (PEF

Ex. 6, Robinson at 7 - 8; PEF Ex. 1 at 3 - 9).

31. It has been determined that, ove r the long term, Power

Block 4 will require an average annual daily water supply of 2.4

million gallons per day. This is needed to replace evaporation

from the pond and to supply the process water needs for the new

unit. (PEF Ex. 1 at 3 - 8). The existing Conditions of

Certification for the Hines Energy Complex authorize the use of

up to 17.5 million gallons per day of groundwater beginning with

the third generating unit at the Hines Energy Complex. The

water needs for Power Block 4 will be supplied from these

previously approved quantities of groundwater. 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. (PEF Ex. 1 at 3 - 7

to 3 - 9; PEF Ex. 6, Hunter at 7; FDEP Ex. 2, Appendix IV, SWFWMD

Agency Report at 7).

32. Under the Conditions of Certification, no groundwater

will be withdrawn to supplement the cooling pond until the

operating level in the cooling pond falls to 16 0 feet. 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 of

groundwater for Power Block 4 will not have any adve rse impacts

on existing legal users of water in the vicinity of the Project,

on - and off - site wetlands, or to off - site land uses. PEF has

investigated other reasonably obtainable sources of water in the

region and found none that could meet the needs for Power Block

4. (PEF Ex. 1, Vol. 2, Appendix 10.6; FDEP Ex. 2, App. IV,

SWFWMD Agency Report at 8 - 9).

33. PEF has undertaken several efforts to minimize the use

of groundwater through the use of water conservation practices,

as required by the Condition s of Certification in the 1994 site

certification. These measures include the use of water

conserving electric generation technologies, recycling of all

wastewater streams, and the design of the power plant as a “zero

discharge” facility. PEF is also con tinuing to investigate

other sources of water supply for the Hines site. (FDEP Ex. 2,

App. IV, SWFWMD Agency Report at 8).

34. 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 addition, recycled plant

wastewaters, treated wastewater from the City of Bartow, and

nearby industrial a nd power plants are the other primary sources

of water for Hines Power Blocks 1 and 2. The City of Bartow

currently provides approximately 2.0 million gallons per day of

treated wastewater for use at the Hines Energy Complex. (PEF

Ex. 1, Hunter at 7; FDE P Ex. 2, App. IV, SWFWMD Agency Report at

6 - 8).

Air Emissions

35. The primary air pollutants emitted from Hines Power

Block 4 will include nitrogen oxides (“NO x ”), carbon monoxide

(“CO”), particulate matter (“PM”), and sulfur oxides such as

sulfur dioxi de. The primary cause of the air emissions from the

new unit will be the combustion of natural gas and distillate

oil in the CTs. Emissions of NO x and CO will result from the

combustion process. Emissions of PM and sulfur dioxide result

from trace impur ities in the fuel itself. (PEF Ex. 6, Osbourn

at 4 - 5; Tr. 35 - 37).

36. Air emissions from Power Block 4 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 combustio n controls, 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 1,000 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 turbin e, specifically 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 4. (PEF Ex. 6,

Osbourn at 5 - 6; Tr. 35).

37. The Hines Power Block 4 is required to meet best

available control technology (“BACT”) requirements, which limits

air pollution emission rates. The Project must also comply with

a mbient air quality standards (“AAQS”) and prevention of

significant deterioration (“PSD”) increment standards, which

establish levels of air quality which must be met. (PEF Ex. 6,

Osbourn at 6 - 7; PEF Ex. 1 at 3.5 to 3 - 6; FDEP Ex. 2 at 6, 17).

38. Hines Power Block 4 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, and sulfuric acid mist because these

emissions are greater than the established PSD thresholds. (PEF

Ex. 6, Osbourn at 7).

39. The BACT analysis for Hines Power Block 4 is part of

the evaluation of air emissions control technology under the P SD

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 reduction,

after taking into account the energy, environmental, and

economic i mpacts and other costs. (PEF Ex. 6, Osbourn at 6 - 7;

FDEP Ex. 2 at 6).

40. For NO x , 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

su lfur fuel oil. These emission levels will be achieved by the

use of dry low NO x combustion technology when firing natural gas,

use of water injection when firing fuel oil, and use of SCR

technology. (PEF Ex. 6, Osbourn at 8; FDEP Ex. 2 at 9, 21,

Table 4) .

41. Emissions of carbon monoxide will be controlled using

good combustion techniques. Sulfur dioxide emissions, including

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

fuels. Particulate matter emissions will be controlled through

the use of clean fuels, natural gas, and low sulfur fuel oil.

Fuel oil firing will be limited to a maximum of about 1,000

hours per year. (PEF Ex. 6, Osbourn at 7 - 9; PEF Ex. 10, Slide

15; Tr. 36 - 37).

42. The air emissions from Power Block 4 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 incremental air

quality deterior ation 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 Chassahowitzka

National Wildernes s Area. (PEF Ex. 6, Osbourn at 9 - 11; FDEP Ex.

2 at 6 - 8, 16 - 17).

43. Air emissions from Power Block 4 were principally

analyzed for emissions from fuel oil firing as representing the

maximum air quality impact. The air quality impact analysis was

perfo rmed using approved air quality models and five years of

historical hourly meteorological data. This analysis indicated

that Power Block 4 will not cause any violations of federal or

state AAQS and will comply with applicable PSD Class II and

Class I incr ements. The maximum impact of the Project was

estimated to be well below the applicable PSD Class II

increments. Maximum ambient air impacts were also estimated to

be well below the applicable AAQS. Using worst case air

emissions during oil firing, it w as 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 not to be significant in the PSD Class

I area. (PEF Ex. 6, Osbourn at 8 - 14, Exs. SO - 3 and SO - 4; FDEP

Ex. 2 at 7 - 8, 16 - 17).

44. Air emissions from Power Block 4 are not expected to

have any impact on vegetation or to cause any growth - related air

quality impacts. The results of the visibility impact analysis

of the Project’s emissions in t he nearest PSD Class I area

demonstrated no adverse impact on visibility at that location

due to Power Block 4. (PEF Ex. 6, Osbourn at 14 - 15; FDEP Ex. 2

at 6 - 7, 17).

Noise

45. Noise impacts during operation of Power Block 4 were

shown not to be signifi cant. Noise monitoring was originally

conducted at various locations around the Hines Energy Complex

site prior to construction and operation of Power Block 1.

Additional noise monitoring was conducted at these locations in

2000 and 2004 during the permi tting of Power Blocks 2 and 4, to

determine any changes since the original permitting. There are

only a few isolated rural residences in the land area

surrounding the site. The nearest residence is about 2.5 miles

from the proposed Power Block 4. Indust rial activities in the

surrounding area result in considerable traffic on nearby roads,

causing noise levels to exceed the EPA guideline of 55 dBA.

Without the area traffic, ambient noise levels meet the EPA

guidelines. (PEF Ex. 1 at 2 - 65 to 2 - 72). Usin g a conservative

approach which tends to overstate the Project impacts, noise

impacts due to operation of Power Block 4 would increase by less

than 2 dBA at the nearest receptor and will not be significant.

Therefore, the Project will meet applicable nois e criteria and

no significant noise impacts will occur as a result of the

Project. (PEF Ex. 6, Osbourn at 15 - 16; PEF Ex. 10, Slide 23;

PEF Ex. 1 at 5 - 9 to 5 - 12).

Land Use and Socioeconomic Impacts

46. The Plant Island, where Power Block 1 is in operatio n

and where Power Block 4 will be constructed, is located near the

southern end of the site. 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 3.9 miles east of the Plant

Is land, and the unincorporated community of Homeland is more

than 3.5 miles northeast of the Plant Island. The nearest

residential use is three homes located approximately 2.5 miles

from the southern boundary of the Plant Island. Otherwise, the

entire area surrounding the proposed power plant site consists

of existing or former phosphate mines. The site is buffered

from surrounding populations at Homeland and Fort Meade by an

extensive buffer area on the eastern perimeter of the site.

There has been almo st 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. (PEF Ex. 6, Zwolak at 5 -

6).

47. There have not been any changes in the area

surrounding the Hines Energy Com plex that would change the land

use and socio - economic conclusions reached in the Final Order of

Certification issued for the site by the Siting Board on

January 27, 1994. The most significant change has been the

completion of another nearby power plant a pproximately three

miles southeast of the Hines site. (PEF Ex. 6, Zwolak at 6).

48. No land use or socio - economic impacts will be

associated with construction of Power Block 4 that were not

previously addressed in the Final Order of Certification for the

Hines Energy Complex in 1994. (PEF Ex. 6, Zwolak at 6 - 8).

49. The land use impacts from development and construction

of Power Block 4 will be quite minimal, and the economic

benefits will be substantial. Current operating employment at

the Hines Energ y Complex is 29. The staffing level at the plant

is expected to increase by six employees with the addition of

Power Block 4. Annual payroll was $2.7 million in 2002. The

annual payroll will increase by about $493,000 when Power Block

4 becomes operatio nal in 2007. (PEF Ex. 6, Zwolak at 8).

50. The estimated increase in property taxes for Power

Block 4 is $5.0 million. Over one - half of this revenue goes to

support the Polk County school system. (PEF Ex. 6, Zwolak at 8;

PEF Ex. 1 at 7 - 1).

Agency Posi tions and Stipulations

51. The FDEP, the Florida Department of Community Affairs,

the FDOT, and the SWFWMD each prepared written reports on the

Project. (FDEP Ex. 2). Each of these agencies either

recommended approval of Hines Power Block 4 or otherwis e did not

object to certification of the proposed power plant. The FDEP

has proposed a series of Conditions of Certification for the

Project that incorporate the recommendations of the various

reviewing agencies. At hearing, the FDEP added one additional

condition related to air emissions monitoring. (Tr. 54 - 55).

PEF states that it can comply with these Conditions of

Certification in the design, construction, and operation of the

Hines Power Block 4. (Tr. 21, 56). No state, regional, or

local agency h as recommended denial of certification of the

Project or has otherwise objected to certification of the

Project. (PEF Ex. 4).

52. Subject to compliance with the proposed conditions of

certification, the proposed design of Hines Power Block 4 offers

re asonable assurance that the standards of the FDEP and other

affected regulatory agencies will be met and that the operation

safeguards are technically sufficient for the protection of the

citizens of the state. The Hines Power Block 4, as proposed,

minimi zes through reasonable and available methods the 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. (FDEP Ex. 1 at 28; Tr. 57 - 59).

CONCLUSIONS OF LAW

53. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569, and 120.57(1), 403.508(3), Fla. Stat.

54. This proceeding was conducted to implement the

purposes a nd intent of the Florida Electrical Power Plant Site

Certification process. The purposes of that process are to

assure the citizens of Florida that the construction and

operation safeguards of the PEF Hines Power Block 4 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.

§ 403.502(1) - (2), Fla. Stat.

55. In accordance with Chapters 120 and 403, Florida

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

public notice was accorded all persons, entities, and parties

entit led thereto. All the necessary and required governmental

agencies were parties to this proceeding or were otherwise

afforded adequate opportunity to participate in this proceeding.

All required reports by State, regional, and local agencies were

complete d and presented.

56. The FPSC, in an Order dated November 23, 2004, 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 .

57. 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 403.508(1) and (2), Florida Statutes. The addition of

Power Block 4 will not expand the existing boundaries of the

Hines Energy Center or introduce a new fuel not previously

certified for the Hines Energy Comp lex. 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.

58. The FDEP and the other participating ag encies have all

recommended or otherwise do not object to certification of the

Hines Power Block 4 for construction and operation, subject to

this Recommended Order and to the Conditions of Certification

recommended by FDEP. (FDEP Ex. 2). PEF has indicat ed 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 4.

59. Based upon a preponderance of the evidence presented

at the certification hearing h eld on March 23, 2005, PEF has met

its burden of proving that the Hines Power Block 4 Project

should be certified as proposed. Competent, substantial

evidence presented at the hearing demonstrates that the

construction and operational safeguards for the H ines Power

Block 4 Project are technically sufficient to protect the health

and welfare of the citizens of Florida and are reasonable and

available methods to achieve that protection. If constructed,

maintained, and operated in accordance with this Recomm ended

Order and the FDEP’s proposed Conditions of Certification, 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.

Cert ification 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 affect a reasonable balance between the

environmental and other impact s which might occur and the need

for the Project as separately determined by the FPSC.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Governor and Cabinet, sitting as

the Siting Board, enter a Fin al Order granting certification to

PEF to construct and operate a new 530 MW natural gas - fired

electrical power plant (Hines Power Block 4 Project) in Polk

County, Florida, in accordance with the Conditions of

Certification, FDEP Exhibit 2.

DONE AND ENT ERED this 5th day of April, 2005, in

Tallahassee, Leon County, Florida.

S

CHARLES A. STAMPELOS

Administrative 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 Administrative Hearings

this 5th day of April, 2005.

COPIES FURNISHED:

Douglas S. Roberts, Esquire

Hopping Green & Sam s, P.A.

Post Office Box 6526

Tallahassee, Florida 32314 - 6526

Scott A. Goorland, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

Martha A. Moore, Esquire

Southwest Florida Water Management District

2379 Broad Street

Brooksville, Florida 34604 - 6899

Michael Duclos, Esquire

Polk County Attorney’s Office

Post Office Box 9005

Bartow, Florida 33831 - 9005

James V. Antista, Esquire

Fish and Wildlife Conservation Commission

620 South Mer idian Street

Tallahassee, Florida 32399 - 1600

Sheauching Yu, Esquire

Department of Transportation

Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399 - 0450

Craig Varn, Esquire

Department of Community Affairs

2555 Shuma rd Oak Boulevard

Tallahassee, Florida 32399 - 2100

Wm. Cochran Keating IV, Esquire

Florida Public Service Commission

2450 Shumard Oak Boulevard

Tallahassee, Florida 32399 - 0850

Norman White, Esquire

Central Florida Regional Planning Council

555 East Chur ch Street

Bartow, Florida 33830

Steven Palmer

Siting Coordination Office

Department of Environmental Protection

2600 Blair Stone Road

Tallahassee, Florida 32399

Raquel A. Rodriguez, General Counsel

Office of the Governor

The Capitol, Suite 209

Tall ahassee, Florida 32399 - 1001

Kathy C. Carter, Agency Clerk

Department of Environmental Protection

Office of General Counsel

Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties ha ve 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.