Gordon Chirdon Testimony

Q:  Please state your name and business.

A:  Gordon Chirdon, Director, Sempra Generation (formerly, Sempra Energy Resources), 101 Ash Street, San Diego, CA 92101.

Q:  What is your role with respect to the Project?

A:  I am responsible for the project’s overall development activities.

Q:  Have you previously filed testimony in this proceeding?

A:  Yes.

Q:  What is the purpose of your rebuttal testimony?

A:  To provide an overall view regarding Catoctin Power, LLC’s (“Catoctin Power”) position on conditions that have been proposed and to clarify certain issues with respect to the project.

Q:  With respect to such proposed conditions, could you provide an update informing the Hearing Examiner and the Commission about those conditions that Catoctin Power has agreed to have incorporated into the CPCN without change, and those conditions to which Catoctin Power objects or for which Catoctin Power is seeking clarification or amendment?

A:  Attached as Exhibit A is a compilation of each of the conditions that intervening parties have proposed.  The chart provides Catoctin Power’s position with respect to each proposed condition and, where appropriate, provides proposed amendments to clarify or otherwise address problematic language.  The chart also includes two additional conditions that Catoctin Power proposes for inclusion in the CPCN. 

PPRP's Proposed Conditions and Related Issues

Q:  Are you familiar with the CPCN conditions proposed by the PPRP on behalf of the State?

A: Yes, I have been involved throughout the project development and have participated in details related to the project and proposed conditions with PPRP and associated agencies.

Q: Could you summarize the status of your discussions with the PPRP regarding its proposed conditions?

A: We have been working with the State Agencies and believe we have reached agreement on the wording of all but a few conditions, and these only require clarification or refinement in our opinion. Exhibit A summarizes the conditions in the record to date, and the wording that we believe we have reached agreement on with the State Agencies. Exhibit A also contains a column denoting those conditions we appear to be in agreement on, and those which we are continuing to discuss with the State Agencies. Catoctin Power’s concerns regarding those few conditions for which we are not in agreement are contained in Exhibit A, as is our proposed amended language.

Q: PPRP has a condition No. 87 that will require Catoctin Power to develop a forest planting plan to mitigate nitrification effects on the Chesapeake Bay. What is Catoctin Power’s position on this issue?

A: As noted in Mr. McCann’s testimony, Catoctin Power believes that the requirement to provide NOx offsets at a ratio of 1.3 to 1.0 will provide a net reduction of nitrogen deposition for the region, effectively negating the need for additional mitigation. However, Catoctin Power recognizes that the protection of the Chesapeake Bay is important to the Commonwealth and agrees to the condition provided that the State will provide the land for the trees.

Q: Dr. Hall's first set of pre-filed testimony states, at page 6, that "Catoctin Power would increase Frederick County's wealth by $16 million in the first year of operation, which, all other things being equal, would lower the county's educational funding by about $131,000 and total state funding by $148,000." Has Catoctin Power evaluated the educational funding issue and, if so, what did Catoctin Power conclude?

A: Catoctin Power had an independent third party assess this impact and concluded that the facility should not have a negative impact on state educational funding. Our consultant reviewed historical information which demonstrated that Frederick County’s educational funding continued to increase over time while the County’s wealth had also increased. Furthermore, applying these historical factors to the future scenarios, our consultant concluded that a decrease in educational funding was not likely or probable.

There are two basic components of educational funding. First is the base or Total Program that Frederick County is eligible to receive, and the second is the percentage of that base that Frederick County receives. While the State determines the base amount, the County’s wealth and student enrollment affect the rate. Historically, Frederick County’s percentage has remained steady even during times of wealth growth. This is because student enrollment has increased along with this wealth growth.

A decrease in educational funding in the amount cited by Dr. Hall will occur when the State educational model is run with the assumption that wealth contributed by the Catoctin Power facility is added to Frederick County, with no increase in wealth in any of the other 23 Maryland counties, and no increase in enrollment. If in his calculation Dr. Hall assumed an increase in school enrollment of 25, educational funding would increase by about $132,000, or about the same amount as the $131,000 negative impact (and $148,000 when accounting for other non-Foundation sources).

In 2005, the State funding will again increase and the County percentage has remained stable (increased wealth and increased enrollment) but the State’s base amount of funding has increased. It is our understanding that, under the State’s Bridge to Excellence program, total State funding for education will continue to increase through 2008.

Finally, we generally concur with Dr. Hall’s projections, including that the Catoctin Power project returns a net economic benefit to Frederick County even if one uses the assumption of “only growth in Frederick County” within the model.

Q: Are there any additional conditions that Catoctin Power would like the PSC to include in the CPCN?

A: Yes. While reviewing the PPRP’s proposed conditions, it occurred to us that it would be appropriate for the PSC to add two conditions of general applicability. These conditions are set forth in Exhibit A as Catoctin-1 and Catoctin-2. They are similar to conditions that PPRP proposed, but have three important differences. First, unlike the PPRP’s proposed conditions, which would only apply to PPRP’s proposed air quality requirements, Catoctin Power’s proposed conditions would apply to all CPCN conditions.

Second, whereas PPRP’s proposed condition does not define the “subsequent amendments” with which Catoctin Power must comply, Catoctin Power’s proposed condition defines this term because Catoctin Power believes it is in all parties’ best interests to specifically identify up front those documents with which Catoctin Power must comply. Third, Catoctin Power’s proposed conditions clarify that if there are any inconsistencies between the conditions in the CPCN and applicable federal or state statutes or regulations, the applicable federal or state statutes or regulations shall take precedence. This is important because PPRP’s proposed conditions incorporate several State and federal laws in paraphrased form. Because paraphrased language is necessarily incomplete, Catoctin Power believes it is important to clarify, in a section entitled “General Conditions,” that if there are any inconsistencies between the conditions specified in the CPCN and applicable federal or state statues or regulations, the applicable federal or state statutes or regulations shall take precedence.

Frederick County's Proposed Conditions and Related Issues

Q: Are you familiar with the CPCN conditions proposed by the Frederick County Board of County Commissioners ("BOCC" or "County") as reflected in Gary Hessong’s and Mike Marschner’s testimony?

A: Yes. For ease of reference, Exhibit A reflects Catoctin Power’s position on each such proposed condition. I have also provided some clarifying comments in my rebuttal testimony below.

Q. Gary Hessong’s testimony reflects a number of conditions proposed by the BOCC. I would appreciate understanding Catoctin Power’s position on each. Let’s start at the top. Mr. Hessong proposes that the Site Plan attached to his testimony be made a condition to the CPCN. What is Catoctin Power’s position on that proposal?

A: By way of background, Catoctin Power voluntarily submitted a site plan to the Frederick County Division of Permitting and Development for review. Meetings were held with the Frederick County Division of Permitting and Development Review, including a meeting with the Technical Advisory Committee, prior to a public meeting before the Frederick County Planning Commission held on August 18, 2004. As noted in Gary Hessong’s testimony, Catoctin Power addressed each concern raised during the Frederick County Site Plan review process, including concerns raised by the public. Catoctin Power agrees to a condition requiring Catoctin Power to design and construct the facility in accordance with the Site Plan reviewed by the Frederick County Planning Commission on August 18, 2004. The following is the proposed condition related to the Site Plan:

The Site Plan drawings (Cover Sheet 1, Revision 0 dated 6/24/04; Site Plan Sheet 2, Revision 2 dated 8/9/04; Preliminary Stormwater Management Site Plan Sheet 3, Revision 0 dated 6/16/04; Sediment and Erosion Control site Plan Sheet 4, Revision 0 dated 6/16/04) are deemed to meet Frederick County zoning requirements and the Project shall be designed and constructed in substantial conformity with these documents, provided that Frederick County Division of Permitting and Development Review (“DPDR”) shall have authority to approve any substantive changes that Catoctin Power may request to the design shown on the Site Plan drawings if DPDR verifies that such substantive changes comply with Frederick County zoning requirements and, provided further, that the PSC retains final override authority to approve Catoctin Power’s request for substantive changes if DPDR unreasonably conditions or delays its approval.

Q: Mr. Hessong proposes that the CPCN include a condition mandating compliance with site improvement suggestions set forth in Bruce Dell's September 16, 2004 memo under the “Site Plan” and “Site Improvement Plans” sections. What is Catoctin Power’s position on that proposal?

A: Catoctin Power agrees to conditions presented in the September 16, 2004 Memo. Specifically, Catoctin Power agrees to the replacement of dead trees along Manor Woods Road and selection of colors for structures. The additional requirement to work with MDE on mitigation of wetland disturbances is covered in several other CPCN conditions, and therefore is redundant, but acceptable to Catoctin Power. We propose that the following language be incorporated into the CPCN to satisfy this condition:

Dead trees or trees which have been cut down, along the frontage of the Eastalco facility on Manor Woods Road, shall be replaced by Catoctin Power when Catoctin Power does its tree planting.

The color of major structures and buildings shall be earth tones.

Catoctin Power shall work with MDE to mitigate wetland disturbances as required under applicable federal, state and local laws.

Catoctin Power also agrees to addition of a condition related to storm water management. Specific storm water management requirements will be developed after completion of additional site studies and further development of site plan drawings. Catoctin Power will coordinate these activities with Frederick County DPDR and will submit a stormwater management plan to DPDR prior to the start of rough grading. We propose that the following language be incorporated into the CPCN to satisfy this condition related to stormwater management:

Catoctin Power shall prepare and implement stormwater management plans (including grading, sediment and erosion control plans) in accordance with applicable federal, state and local laws. Catoctin Power shall submit the stormwater management plan to DPDR prior to the start of rough grading.

Q: Mr. Hessong proposes that the CPCN include a condition requiring Catoctin Power to obtain general building, electrical, plumbing and fire protection permits from the County. What is Catoctin Power’s position on that proposal?

A: It is my understanding that, as a matter of Maryland law, the CPCN process preempts local requirements that may otherwise apply to the construction of the facility. With this understanding, Catoctin Power agrees to a condition that would provide the Frederick County DPDR with the right to review applicable portions of the design and construction of the facility for verification of compliance with local building codes. We propose that the following language be incorporated into the CPCN to satisfy this condition related to verification of compliance with local building codes:

The Project shall comply with applicable local building code requirements for structures, electrical systems, plumbing, and fire protection systems. For purposes of this condition, DPDR shall have responsibility for verifying that the Project complies with the above applicable local building code requirements and shall accommodate incremental execution of design and construction activities, provided however, that the PSC retains final override authority to verify compliance if DPDR unreasonably conditions or delays its verification. To support DPDR compliance verification activities, Catoctin Power shall (a) develop a schedule for document submittals and provide this schedule to DPDR, including regular schedule updates; (b) submit design drawings to DPDR for compliance verification at least 30 days (or lesser number of days mutually agreed to by Catoctin Power and DPDR) prior to the start of incremental construction covered by such design drawings; and (c) pay fees to DPDR equivalent to fees normally assessed by DPDR for analogous building permit verification activities.

Q: Mr. Hessong proposes that the CPCN include a condition requiring that NOx and VOC offsets be purchased from Frederick County or, if not available, then from a geographically close source. What is Catoctin Power’s position on that proposal?

A: Catoctin Power agrees to pursue purchasing offsets from Frederick County or, if not reasonably commercially available, from geographically close sources. We propose that the following language be incorporated into the CPCN to satisfy this condition related to purchasing offsets:

Catoctin Power shall endeavor to obtain all required NOx and/or VOC offsets from sources in or near Frederick County, if reasonably commercially available.

Q: Mr. Hessong proposes that the CPCN include a condition requiring that Catoctin Power comply with all applicable PM 2.5 ambient air quality standards now or in the future if Frederick County is designated as a non-attainment area for PM 2.5. What is Catoctin Power’s position on that proposal?

A: Maryland does not currently have requirements addressing PM2.5 ambient air quality standards. However, Catoctin Power agrees to comply with future PM 2.5 regulations as they become applicable to the project. We propose that the following language be incorporated into the CPCN to satisfy this proposed condition relating to PM 2.5:
Catoctin Power shall comply with any future Maryland Department of the Environment regulations that are related to emission of PM 2.5 (i.e., fine particulate matter with a diameter smaller than 2-1/2 microns) and that are applicable to the Project.

Q: Mr. Marschner’s testimony also reflects a number of conditions that the County has proposed be included in the CPCN. I would appreciate understanding Catoctin Power’s position on each. Let’s begin with the County request for a significant amount of land to be put into agricultural preservation. In particular, as set forth on pages 11-13 of Mr. Marschner’s testimony, the County also has requested that Catoctin Power be ordered to put property into agricultural preservation for buffer purposes. What is Catoctin Power's position on that proposal?

A: Catoctin Power objects to this proposed condition for a number of reasons.

At the outset, Mr. Marschner’s testimony indicates that the purpose of this proposed condition is to provide buffer between the Catoctin Power project and the local community, including Saint Matthew’s Church. However, we are unaware of any basis in the record supporting the County’s suggestion that a 250 acre (or more) buffer of property is necessary or appropriate. During cross-examination on December 9, 2004, Mr. Marschner was unable to provide any additional insight into the County’s rationale for this proposed condition. Moreover, he was unable to provide any information regarding the condition itself beyond what is reflected in his pre-filed testimony.

We believe that the County’s request has no relationship to the Catoctin Power project. The starting point in evaluating the County’s request, I believe, is the siting of the Catoctin Power facility. The Catoctin Power project was purposefully sited near the center of an industrially zoned parcel with significant amounts of adjacent industrial property to provide physical buffer to the community. Catoctin Power also proactively solicited local citizens’ concerns and took these into account by lowering the profile of the plant and positioning the facilities to minimize visual, noise, traffic, and lighting effects from the project. As noted above, Catoctin Power voluntarily participated in the County’s public Site Plan review process, culminating in Catoctin Power’s incorporation of the additional buffering and screening recommendations of the Frederick County DPDR and the public. The Site Plan, in turn, expressly includes conditions mandating buffer to minimize potential visual and other impacts associated with the proposed Catoctin Power project. During cross-examination on December 9, 2004, Ms. Elizabeth Smith (on behalf of the County) confirmed this point.

The only stated rationale given for the County’s request for Catoctin Power to place 250 acres of land into agricultural preservation is to provide a buffer between Catoctin Power and both Saint Matthews Church and the community. The County identifies only two specific parcels, both owned by Eastalco and not Catoctin Power, for purposes of this agricultural “buffer” (Parcels 3 and 76 on Tax Map 94). Both identified parcels, however, are already zoned for agricultural use, effectively providing additional buffer the County is seeking. It appears to us that the County’s stated objective has been met since development on such parcels is currently restricted to agricultural use and it is my understanding that any change in such zoning designation could only occur under the Frederick County Comprehensive Planning Program. Additionally, the County has not provided any evidence that Catoctin Power’s proposed buffering and screening, which the County accepted during the Site Plan review, is inadequate, nor has the County provided any evidence that the parcels identified by the County have any buffering value related to the Catoctin Power facility. In fact, the majority of land comprising the two parcels that the County has identified (i.e., Parcels 3 and 76) is not even located between St. Matthews Church and the facility.

The County’s alternative suggestions are similarly objectionable. To the extent that Eastalco does not agree to place Parcels 3 and 76 into agricultural preservation, the County’s proposed condition would mandate that Catoctin Power seek to place other Eastalco property into agricultural preservation. It is unclear what “other” Eastalco property the County may have in mind, but for the reasons stated above, we see no basis for such request given that buffering concerns have been addressed by virtue of the Site Plan and the fact that the Catoctin Power project is being developed on industrial-zoned property at a location that is consistent with the County’s Comprehensive Plan.

To the extent that Eastalco does not agree to place any of its property into agricultural preservation, the County’s proposed condition would mandate that Catoctin Power work with the Carroll Manor Land Trust to identify other properties for placement into agricultural preservation by Catoctin Power. Again, we see no basis in the record for this condition given that buffering concerns related to the Catoctin Power facility have been addressed. In addition, with respect to this element of the proposed condition, we cannot evaluate the buffering value of any non-Eastalco land identified by the Carroll Manor Land Trust, particularly given that by definition it would occur at a location that is unrelated to the project site.

An unstated predicate to the County’s request could be that land should be set aside as an offset for impacts associated with the development of the project. At the risk of being redundant, however, it is important to emphasize that the project is being developed on property that is zoned for industrial use. In other words, the project is being developed in areas that the County has previously determined to be appropriate for development of new facilities, including power projects. This is not a situation, for example, where a project is being developed on a pristine, greenfield location where an argument could be made that some form of land “offset” might be appropriate. Here, however, we have addressed buffering concerns by virtue of (i) project siting on industrial-zoned property, and (ii) the Site Plan which includes extensive buffer-related conditions that were developed with input from the County and the public.

We feel that the CPCN process should not be used as a surrogate for the County’s land use planning regulations or to obtain a land use concession from Catoctin Power, particularly where Catoctin Power is not in a position to provide the concession and where such a concession has no demonstrable nexus to the facility. The placement of Eastalco-owned property into agricultural preservation is a matter between the County and Eastalco, and the County should work with Eastalco through the local land use process to accomplish its objectives rather than through this CPCN proceeding.

Q: Mr. Marschner states in his testimony at page 9, lines 14-18, that, as another condition, the CPCN should reflect that its issuance “does not require Frederick County to provide or sell effluent or potable water to Sempra and that if Frederick County is willing to do so, Sempra will be required to comply and fulfill such requirements that the County might have regarding the use of the effluent and those other terms and conditions that the BOCC might believe appropriate." What is Catoctin Power’s position on that proposal?

A: Mr. Marschner’s proposed condition has two parts. First, it appears that Mr. Marschner desires to have included in the CPCN a statement to the effect that Frederick County is not required to sell Catoctin Power the effluent. We do not believe that Frederick County would have any such obligation whether or not this condition is included in the CPCN. Catoctin Power has no specific objection, however, to language clarifying that Frederick County is not required to sell Catoctin Power the effluent, and that any such arrangement is subject to contract negotiations between the County and Catoctin Power. Just to be clear on this point, Catoctin Power is not requesting a CPCN condition mandating Frederick County to sell effluent to the Catoctin Power facility, but seeks only to have the PSC approve Catoctin Power’s use of the county’s effluent, while not imposing commercial terms on either Frederick County or Catoctin Power. The details of the effluent supply agreement should be left to the parties to negotiate outside of this CPCN proceeding.

Second, Mr. Marschner’s proposed condition would impose on Catoctin Power an obligation to “comply and fulfill such requirements that the County might have regarding the use of the effluent and those other terms and conditions that the BOCC might believe appropriate.” Catoctin Power objects to this proposed condition. The proposed language would, if included as an enforceable condition of the CPCN, eliminate Catoctin Power’s bargaining position with the County precisely because Catoctin Power would be limited to accepting an agreement “on terms and conditions that the BOCC might believe appropriate” rather than on mutually agreeable terms and conditions. We trust that this is not Mr. Marschner’s intent, and his oral testimony on December 9, 2004, before the Hearing Examiner suggests that it is not. That being said, Mr. Marschner’s proposed language is tantamount to having the Commission order Catoctin Power to accept an effluent supply agreement on whatever terms the County wishes to impose. Because any effluent supply arrangement between the County and Catoctin Power should be the result of commercial negotiations between two parties, Mr. Marschner’s proposed condition is not appropriate and should not be included in the CPCN. Catoctin Power will not be inclined to pursue the effluent supply option should the Commission include this proposed condition in a CPCN issued in this proceeding.

Q: On page 10 of his testimony, at lines 2 through 5, Mr. Marschner states that even if the CPCN is issued, Frederick County will have no obligation to provide potable water to the Catoctin Power facility or to anyone else. What is Catoctin Power’s position regarding this statement?

A: Catoctin Power has assumed for purposes of its CPCN application that Frederick County will provide potable water that the Catoctin Power facility will require. This assumption is based on our understanding of the County’s regulations and the fact that the County currently provides a substantial amount of potable water to Eastalco and to other users in the Adamstown area. Mr. Marschner has not provided any technical or regulatory reason why the County would not or could not provide potable water to the Catoctin Power facility, in accordance with terms and conditions to which other potable water users are bound. Furthermore, Catoctin Power is not aware of any limits to the County system that would prohibit the County from furnishing the Catoctin Power facility with potable water. However, in the event that Catoctin Power is unable to obtain potable water from the County, Catoctin Power will need to find another source for this water, such as the Potomac River.

Q: In his testimony at pages 10-11, lines 15-2, Mr. Marschner proposes as a condition the following, which is excerpted from his testimony: "any special effluent water quality requirements that may be placed on the use of the effluent water be based on sound technologically feasible methods of determining the 'real time' quality of the effluent water and that these methods be first validated based on the actual water quality leaving the County's wastewater treatment facilities. Any such limits . . . should be placed on Sempra's use of the water and not apply to the County or the County's NPDES permit, since the water quality requirements of the reuse of the water may in fact be more significant than those associated with the normal disposal of wastewater into the water of the state." What is Catoctin Power’s position on that proposal?

A: We object to this proposed condition. Like other proposed conditions discussed herein, this proposed condition is an example of the County asking the Commission to impose “commercial” conditions through the CPCN. As I have stated, Catoctin Power and the County should negotiate in good faith an effluent supply agreement. The CPCN is not the place to impose terms and conditions of an effluent supply arrangement between the County and Catoctin Power. We strongly object to any CPCN condition that would result in providing the County with bargaining leverage for a contract negotiation that has yet to occur.
Regarding the County’s NPDES permit, Catoctin Power is not requesting, nor has MDE required, any changes to the County’s NPDES permit as a condition for providing effluent to the Catoctin Power facility. On this basis, an additional condition, beyond those proposed by PPRP, to address Mr. Marschner’s concerns is not necessary. If the County wishes to impose on Catoctin Power “any special effluent water quality requirements” per the language in Mr. Marschner’s proposed condition, the County should raise this issue in the context of an effluent supply contract negotiation between the County and Catoctin Power.

Q: In his testimony at page 11, lines 3-13, Mr. Marschner proposes as a condition the following requirement, which is set forth in the following discussion excerpted from his testimony: "In establishing the proposed McKinney outfall the County is effectively developing a non-potable water supply along the New Design Road corridor. It will be in the County's best interest to make sure that the effluent quality in this outfall line is preserved throughout the entire outfall length to allow access to the non-potable effluent supply by other potential water reuse customers. . .. The CPCN should make it clear that if the County's effluent is used by Sempra's Catoctin Power project, concentration based limits may need to be imposed on Sempra's return flow to the Potomac River through the County's system to preserve the quality of the effluent for use by others." What is Catoctin Power’s position on that proposal?

A: We object to this proposed condition. Catoctin Power has already submitted an application with MDE for an NPDES permit. MDE is expected to approve this permit based on public health and safety issues, whereas the issue raised by the County is another commercial matter relating to the use of effluent by Catoctin Power. If the County wishes to impose limits, beyond those in Catoctin Power’s NPDES permit, the County would be free to raise this issue as part of a contractual negotiation between the County and Catoctin Power. We see no basis for inclusion of this proposed condition in the CPCN. From our perspective, imposition of this condition may render our preferred water supply option – namely, County effluent – infeasible.

Q: Mr. Marschner proposes in his testimony that the CPCN include a condition requiring Catoctin Power to obtain a separate NPDES permit with respect to return flows through the County's effluent outfall system. What is Catoctin Power’s position on that proposal?

A: My understanding is that it is standard practice for each wastewater point source to have a separate NPDES permit for its own waste stream even if combined waste streams from multiple sources discharge to the same outfall. This in fact is the current situation where Frederick County and Eastalco have separate NPDES permits for the same outfall. Therefore, Catoctin Power agrees with Mr. Marschner’s proposal that Catoctin Power obtain a separate NPDES permit.

Q: Mr. Marschner's testimony also raises a number of other issues that seem to go to CPCN-related matters. I would appreciate having Catoctin Power’s views on such issues. For instance, Mr. Marschner states that "the County may also by permit or contract require such discharges to meet certain water quality requirements to allow for the reuse of the water by other properties along the alignment of the effluent conveyance system." What is Catoctin Power’s position on that statement?

A: It is not clear whether the County is requesting the Commission to impose a CPCN condition along the lines reflected in Mr. Marschner’s statement; to the extent it is, we object. As previously discussed, MDE is responsible for issuing Catoctin Power’s NPDES permit. The issues raised by Mr. Marschner in the quote above, and elsewhere in his testimony, are commercial in nature and are not relevant to this proceeding. If Frederick County intends to restrict Catoctin Power’s use of effluent by contractual provisions or terms, that is a matter left to the private negotiations of the parties (i.e., outside of the CPCN process). Catoctin Power has previously indicated its willingness to work with the County and is prepared to negotiate these issues with the County as part of a commercial arrangement involving County infrastructure and effluent supply.

Q: Mr. Marschner’s testimony states that changes to the County's water appropriation permit "may be needed to clearly address the County's responsibilities in the event a low flow water restriction is declared for the Potomac River." (p. 9, lines 1-9) What is Catoctin Power’s position on that issue?

A: Catoctin Power has provided for 100% augmentation of its consumptive use of water during low flow conditions, whether utilizing County effluent, or utilizing direct withdrawal of Potomac River water. Catoctin Power does not have any specific opinion on changes to the County’s water appropriation permit, except to say that we have accepted full responsibility for meeting consumptive use requirements under Maryland law associated with the project’s use of County effluent or Potomac River water.

Q: Mr. Marschner has testified that he is preparing a concept study regarding the proposed effluent arrangement, and that the concept study is a prerequisite to the BOCC’s consideration of entering into an effluent supply contract. He has also testified that he anticipates completing that study during the first quarter of 2005. How does his anticipated timing impact Catoctin Power’s consideration of the effluent supply arrangement?

A: Catoctin Power believes that effluent from Frederick County waste water treatment plants is the best source of makeup water for the Catoctin Power facility, which is the reason use of effluent is the primary alternative for water supply in Catoctin Power’s CPCN application. Catoctin Power remains committed to use of county effluent, provided that Catoctin Power and the County can reach agreement on commercial terms in a timely manner to support construction of the facility. From this standpoint, the timely completion of this study is necessary to facilitate any negotiation of a commercial agreement for use of the effluent. In the alternative, we are prepared to move forward with our secondary water alternative as outlined in our pre-filed testimony and related reports filed in this proceeding.

Staff’s Proposed Conditions

Q:  Are you familiar with the CPCN conditions proposed by PSC Staff, as set forth on page 2 of Mr. Taborsky’s testimony?

A:  Yes.

Q:  What is Catoctin Power’s position with respect to such proposed conditions? 

A:  As provided for in the PJM Tariff, the Transmission Owner may undertake most, if not all, of the system upgrades and the direct interconnection facilities construction.  In this event, Catoctin Power will not be able to directly provide the Staff’s requested 'certification' with respect to facilities that Catoctin Power is not responsible for constructing, even though such construction is funded by the project.  Additionally, although the PJM Tariff currently provides that 'authorization' be granted by PJM prior to synchronizing the plant with the transmission grid, the Tariff does not explicitly require any 'certification' be provided by PJM or the Transmission Owner to Catoctin Power for work conducted by the Transmission Owner.  The form of 'authorization' is not specifically defined by the PJM Tariff, although Catoctin Power has raised the issue with PJM and will work toward some type of written record in this regard.  Catoctin Power’s ‘certification’ will therefore necessarily have to rely, at least in part, on PJM and/or the Transmission Owner for facilities that Catoctin Power is not responsible for constructing. 

Q:  What form of certification does Catoctin Power believe is reasonable, achievable, and meets Staff’s objectives?

A:  To the extent that Catoctin Power is responsible for the construction of the interconnection or transmission improvements, we can directly certify.  Catoctin Power would propose to furnish a 'Notice of Completion' as required by the PJM Tariff for this certification.  If Catoctin Power is not responsible for the actual physical work, we will rely on PJM or the Transmission Owners for this certification.  In this case, we would furnish the above-referenced authorization to begin initial operation PJM provides to Catoctin Power pursuant to the PJM Tariff.

Don James’ Proposed Conditions and Related Matters

Q:  Are you familiar with the CPCN conditions proposed by Don James?

A:  Yes, and we recognize that he represented in his testimony that he is not testifying as an expert on any matter.

Q:  Mr. James proposes that the CPCN restrict Catoctin Power’s water supply to the County’s effluent.  What is Catoctin Power’s position on that proposal?

A:  We object to this proposed condition.  On December 9, 2004, Mr. James confirmed that he does not have any particular concern with the secondary water alternative (direct withdrawal from the Potomac River) and proposed this condition only because of a preference for the primary water alternative (County effluent).  While we also prefer to use the County’s effluent, our and the PPRP’s analyses demonstrate that the secondary water alternative is feasible.  At this point, Frederick County has not committed to negotiate for the use of county effluent by the Catoctin Power project.  Furthermore, while the County infrastructure will be available and may be the best use of resources for both the County and Catoctin Power, Catoctin Power has no assurance that it can reach a commercially acceptable arrangement for use of the effluent or the County system.  We therefore believe we must be allowed to implement our secondary water supply alternative.  Without the secondary alternative, our Project may not be feasible.

Q:  Mr. James proposes that the CPCN include a condition requiring quarterly air testing at a minimum of three locations surrounding the plant.  What is Catoctin Power’s position on that proposal?

A:  We object to the proposed condition.  Mr. Bill Paul, on behalf of the MDE, testified at length regarding this issue during the December 9, 2004 hearing.  We concur with Mr. Paul’s testimony that local monitoring is not necessary in this case, and that ambient air quality is a regional issue that is adequately addressed by existing air monitoring data in the area.  If the MDE determines that additional air monitoring is necessary in the Adamstown area, it should be the entity charged with the implementation of such monitoring. 

Q:  Mr. James has expressed concern regarding the safety of the project.  Could you respond to Mr. James’ concern?

A:  Mr. James has raised issues related to plant operative safety, due primarily to use of natural gas as a fuel, both at community meetings and in these hearings.

Catoctin Power understands the concerns of local residents regarding safety issues, and specifically addressed the issue of safety as a topic of discussion at a community meeting held on June 24, 2004 at the Carroll Manor Elementary School in Adamstown. At this meeting, Catoctin Power reiterated to the community that safety is the highest priority at all facilities affiliated with Sempra and Catoctin Power is no exception.  It was further explained that incidents at new, state-of-the-art, combined-cycle power plants have been rare and limited to equipment damage or loss.  Our research of the industry indicates that there has not been an injury to the public or damages to non-plant property from an incident at natural gas-fired, combined-cycle power plant in the US.

Q:  Mr. James also has expressed concern about potential impacts associated with ammonia shipments to the project site.  Could you respond to Mr. James’ concern?

A:  As an initial matter, it is important to point out that aqueous ammonia is inherently safer than the more toxic anhydrous type, and, although some power generating facilities may use aqueous ammonia in a concentration of 29%, Catoctin Power has elected to use aqueous ammonia with a concentration of only 19% or less, specifically due to its greater safety characteristics.  Mr. James’ specific concern is with regard to the impacts of a major ammonia spill near a local school.  In order to address Mr. James’ concern, Catoctin Power will include in its contract with aqueous ammonia suppliers a requirement that trucks supplying aqueous ammonia to the facility take a route along US Route 15, Mountville Road, Ballenger Creek Pike, and Manor Woods Road in order to avoid travel by local schools.  Furthermore, Catoctin Power will require that all ammonia truck drivers delivering aqueous ammonia to the facility are certified to handle this type of material.  Catoctin Power will also coordinate site emergency response procedures with local emergency response agencies prior to delivery of aqueous ammonia to the facility.  Catoctin Power personnel will also be trained to properly handle and respond to any onsite emergencies involving aqueous ammonia.

Finally, Catoctin Power responded to an earlier data request from Mr. Rolan Clark (Data Request 3-3) related to ammonia hazards.  As noted in Catoctin Power’s response to Mr. Clark’s data request, Catoctin Power’s analyses concluded that any impact from a catastrophic ammonia spill on the Catoctin Power site would occur on Eastalco property, and not impact local schools or the Adamstown community.

Q:  In his testimony, Mr. James expressed a concern about the water quality from the augmentation facility.  Could you respond to Mr. James’ concern?

A:  The source and supply of augmentation water that Catoctin Power currently plans to use already discharges water to the Potomac River via the sources adjacent to the Shenandoah River; Catoctin Power is only managing the timing and quantity of releases to match its augmentation obligations.  Since the purpose of augmentation is to mitigate conditions during low flow events, Catoctin Power believes the management of this flow is a direct benefit to the Potomac River.  Moreover, we signed an agreement with the Washington Area Water Suppliers that provides additional evidence that these water suppliers recognize operational benefits to this ‘new’ source of water during low flow events.

Any augmentation water storage facility that Catoctin Power uses will be required to comply with state and federal water discharge requirements.  The operator of such storage facilities will comply with the requirements of a National Pollution Discharge Elimination System (NPDES) permit, which limits pollutants discharged into the receiving water.  Failure to comply with NPDES permit requirements could result in fines, civil or criminal penalties, and non-renewal of the NPDES permit.  In addition, Catoctin Power will monitor the storage facility operator’s performance and compliance with regulatory requirements.

Q:  Mr. James has expressed a concern that the proposed project may not be beneficial to the State of Maryland, the County of Frederick, or Adamstown.  Could you respond to Mr. James’ concern?

A:  The project returns a significant net benefit to the revenues of Maryland and Frederick County in the form of taxes, employment and services.  Catoctin Power also provides a new source of environmentally acceptable energy at a point in the PJM Transmission System that is critical for support of the electrical power grid for the Maryland and Washington, D.C. area.  The project’s economic benefits are contained in various testimonies by both Catoctin Power and MDE.  We believe that Catoctin Power additionally will provide supplemental benefits as a good corporate neighbor and local business and community member.

Brent Waters Rebuttal Testimony

Q: Please state your name and business.

A: My name is Brent Waters. I am employed by Golder Associates Inc. (Golder). My business address is 3719 Saunders Avenue, Richmond, Virginia 23227.

Q: What is your role with respect to the Project?

A: I assisted in the evaluation of the Project’s general water requirements; analysis of the preferred, secondary and backup water supply alternatives; analysis of the potential impacts of the proposed withdrawal and wastewater discharge on the Potomac River; and the feasibility of utilizing water storage from existing quarries to meet Maryland’s Consumptive Use regulations.

Q: Have you previously filed testimony in this proceeding?

A: Yes, I filed direct testimony on various water-related issues.

Q: What is the purpose of your rebuttal testimony?

A: The purpose of my rebuttal testimony is to clarify several water-related issues raised during the direct testimony of certain interveners in this case.

Q: On page 5 of John W. Grace’s direct testimony, Mr. Grace says that any water that Catoctin Power, LLC (Catoctin Power) obtains from the Potomac River would be solely used for cooling tower makeup. (p. 5, lines 17-18; p. 6, lines 10-11; p. 6 lines 22-23). The PPRP Draft Report also makes this statement. Is this accurate?

A: No. Water drawn from the Potomac River would be primarily used for cooling tower makeup. However, Catoctin Power may also use Potomac River water for fire suppression. A letter to John Grace is provided as an attachment to my testimony clarifying the potential use of the non-potable water supply for fire suppression. I also should note that Catoctin Power has filed (or will be filing) supplemental testimony on my behalf clarifying that the company’s CPCN application specifically encompasses the Project’s requested use of Potomac River water for fire suppression purposes.

Q: The PPRP Draft Report states that “establishing the chlorine residual when the reclaimed water enters the on-site water storage tank does not ensure adequate contact time unless a minimum on-site storage time of six hours prior to use in the cooling system can be assured.” (PPRP Draft Report, p. 6-37). What is Catoctin Power’s position regarding this statement?

A: It is our understanding that a chlorine residual will be established at the McKinney WWTP and maintained within the effluent conveyance system. Catoctin Power will monitor chlorine concentrations and will maintain or, if necessary, establish a chlorine residual prior to the effluent entering the water storage tank located at the Catoctin Power project site.

Q: On behalf of the County, Mr. Marschner proposes in his testimony that the CPCN include a condition requiring Catoctin Power to obtain a separate NPDES permit with respect to return flows through the County's effluent outfall system. Do you have any comments on that proposal?

A: It is standard practice for each wastewater point source to have a separate NPDES permit for its own waste stream even if combined waste streams from multiple sources discharge to the same outfall. For example, both EastAlco and Frederick County have separate NPDES permits for discharges to the existing single Potomac River outfall. Similarly, Catoctin Power will also have a separate NPDES permit for its discharge to the Potomac River outfall with its own specific effluent limits. Catoctin Power has applied for this NPDES as part of the permitting process for the facility.

Q: Mr. Marschner proposes in his testimony the following condition, which is excerpted from Page 10 of his testimony: "any special effluent water quality requirements that may be placed on the use of the effluent water be based on sound technologically feasible methods of determining the 'real time' quality of the effluent water and that these methods be first validated based on the actual water quality leaving the County's wastewater treatment facilities. Any such limits . . . should be place on Sempra's use of the water and not apply to the County or the County's NPDES permit, since the water quality requirements of the reuse of the water may in fact be more significant than those associated with the normal disposal of wastewater into the waters of the state." Do you have any comments on that proposal?

A: I agree with Mr. Marschner’s testimony regarding the need to monitor effluent quality prior to use at the Catoctin Power facility. I have reviewed the permit conditions proposed by PPRP to address this issue, and I believe these proposed conditions adequately address Mr. Marschner’s concerns. For example, proposed PPRP Condition 57 requires Catoctin Power to monitor effluent turbidity at the facility with a threshold of 5 NTU as a basis for rejection. Recent testing by Frederick County appears to indicate that turbidity monitoring is one reliable method for assessing whether an upset condition has occurred. Further, it is my understanding that the conditions proposed by PPRP do not apply to Frederick County or its NPDES permit. Finally, I would refer you to Mr. Chirdon’s rebuttal testimony on this point for additional details regarding Catoctin Power’s position on Mr. Marschner’s proposed condition.

Q: Mr. Marschner proposes as a condition to the CPCN the following requirement, which is set forth in the following discussion excerpted from his testimony: "In establishing the proposed McKinney outfall the County is effectively developing a non-potable water supply along the New Design Road corridor. It will be in the County's best interest to make sure that the effluent quality in this outfall line is preserved throughout the entire outfall length to allow access to the non-potable effluent supply by other potential water reuse customers. . . . The CPCN should make it clear that if the County's effluent is used by Sempra's Catoctin Power project, concentration based limits may need to be imposed on Sempra's return flow to the Potomac River through the County's system to preserve the quality of the effluent for use by others." Do you have any comments on Mr. Marschner’s proposal?

A: Catoctin Power’s application for an Industrial Wastewater NPDES permit is based on concentration-based discharge limits and includes analysis that is specific to the characteristics of the proposed wastewater stream, the existing Potomac River outfall, and the receiving stream (the Potomac River). Catoctin Power’s NPDES permit application shows that the concentration-based limits established by the MDE, to meet established water quality standards that are protective of aquatic and human life, will be met by the Catoctin Power facility. It is my understanding that neither the CPCN nor the NPDES permit are required to establish effluent limits for potential private users of the effluent. As Mr. Chirdon’s rebuttal testimony makes clear, Catoctin Power objects to Mr. Marschner’s proposed condition, and believes that such issues are more appropriately the subject of commercial negotiations between Catoctin Power and Frederick County.

Q: Mr. Marschner also states in his testimony that "limitations [may be] placed on the reuse of this water by the MDE since the use of this water at intermediate points along the conveyance system may represent multiple outfall locations in the County's [NPDES] permit for Potomac River discharge" (p. 7, lines 2-6). Do you have any comments to Mr. Marschner’s statement?

A: Frederick County’s NPDES permit will require compliance prior to the point that the treated wastewater discharges into the wastewater conveyance pipeline. MDE will regulate the use of the effluent by others separately.

Q: Mr. Marschner’s testimony also states that “[s]ince the effluent conveyance system could serve multiple properties which may also need access to the conveyance system to discharge individual wastewater discharges, the County may need to establish minimum water quality requirements to ensure the reuse of the supply as it flows along the pipeline corridor to the Potomac River." (p. 7, lines 9-13). Do you have any comments to Mr. Marschner’s statement?

A: MDE will regulate each waste stream that is discharged to the Potomac River through the County’s conveyance system and outfall. Any NPDES permit issued by MDE to a wastewater source will require monitoring and compliance with water quality standards that will take into consideration the potential cumulative effects of all waste streams discharging to the Potomac River through the existing outfall. Any quality requirements by Frederick County beyond those established in the Project’s NPDES permit would not be due to a regulatory issue of concern to MDE, but would be the subject of commercial issues with Frederick County. Mr. Chirdon’s rebuttal testimony provides additional information regarding Catoctin Power’s position on this issue.

Q: Mr. Marschner’s testimony further states that "[t]he County will need to establish an appropriate capacity fee and commodity fee for the use of the non-potable water supply. Specific, possible uniform contractual provisions will need to be developed to make sure allocations provided to multiple user of the non-potable water supply are not compromised by any single user’s withdrawal from the conveyance system and, to the extent necessary, that withdrawals do not jeopardize the County’s ability to maintain water supply for fire protection along the conveyance systems alignment.” (p. 7, lines 13-20). Do you have any comments to Mr. Marschner’s statement?

A: The issues raised above by Mr. Marschner are issues of concern to Frederick County, and relate to issues that would be addressed during future contract negotiations between Frederick County and Catoctin Power.

Brent Waters Rebuttal Testimony

Q: Please state your name, occupation, and business address.

A: My name is Brent Waters. I am employed by Golder Associates Inc. (Golder). My business address is 3719 Saunders Avenue, Richmond, Virginia 23227.

Q: On whose behalf are you testifying?

A: Catoctin Power, LLC (Catoctin Power).

Q: Have you previously filed testimony in this proceeding?

A: Yes, I have. I have submitted testimony on the Project’s general water requirements, the preferred, secondary and backup water supply alternatives for the Project, and the potential impacts of the proposed withdrawal and discharge from the Project on the Potomac River and its tributaries as described in portions of Chapters 2, 3, and 5 of the Certificate of Public Convenience and Necessity Application.

Q: Why are you now submitting supplemental testimony in this proceeding?

A: The Project’s application for a water appropriation identifies the intended use of such water to be for cooling water purposes. Catoctin Power also intends to use such water for fire suppression purposes, however. Therefore, the purpose of this supplemental testimony is to clarify that Catoctin Power intends to use non-potable water supplies under the preferred or secondary water supply alternatives for fire suppression purposes.

Q: Will this modification of water use require any modification to existing permits?

A: Yes. Non-potable water supplies, either treated effluent from the Ballenger Creek and the proposed McKinney WWTPs (preferred water supply) or surface water from the Potomac River (secondary water supply), will primarily supply makeup water for the cooling tower. In addition, non-potable water supplies may also be used to provide fire suppression water. The “Application to Appropriate and Use Waters of the State” has been modified to include the use of water for fire suppression, as well as cooling tower make-up and is included as an attachment to this rebuttal testimony.

Q: Will this modification change the amount of water appropriation being requested?

A: No. This will not change the amount of water use requested in the application, and therefore will have no affect on any party’s analysis of the Project’s consumptive use of water from the Potomac River Basin. Fire suppression water would be provided from water already planned to be stored onsite for use under emergency conditions, and will not alter the amount of water requested in the permit application (nor will it reflect any change in the volume of water that the Project stores onsite).

Gregory Powell Testimony

Q: Please state your name and business.

A: My name is Gregory M. Powell. I am a Senior Engineer with Golder Associates, Inc.

Q: What is your role with respect to the Project?

A: I am providing expert consulting support to Catoctin Power, LLC (Catoctin Power) regarding water supply and consumptive use issues associated with the proposed Catoctin Power Project.

Q: Have you previously filed testimony in this proceeding?

A: Yes, I have filed two sets of pre-filed testimony in this matter.

Q: What is the purpose of your rebuttal testimony?

A: The purpose of my rebuttal testimony is to address issues raised by the County with respect to consumptive use requirements, and also to address an issue concerning a condition proposed by the PPRP regarding one of the proposed augmentation facilities.

Q: On behalf of the County, Mr. Marschner stated in his testimony that changes to the County's water appropriation permit "may be needed to clearly address the County's responsibilities in the event a low flow water restriction is declared for the Potomac River." (p. 9, lines 1-9) Do you have any comments to Mr. Marschner’s statement?

A: I believe Mr. Marschner’s concern stems from MDE’s right to require Frederick County to reduce withdrawals from the Potomac River when a restriction stage is declared in the Washington Metropolitan Area under the provisions of the Potomac River Low Flow Allocation Agreement. Mr. Marschner appears to be concerned that Frederick County will be required to reduce its water allocation due to potential consumptive use of County effluent by Catoctin Power. Catoctin Power has taken responsibility for its consumptive water use by providing 100 percent augmentation during periods of low flow in the Potomac River. To this end, PPRP has imposed draft conditions on Catoctin Power, not Frederick County, to fully augment for Catoctin Power’s consumptive use during low flow conditions. Therefore, the CPCN addresses Catoctin Power’s responsibility and obligations to augment regardless of whether Catoctin Power directly draws water from the Potomac River or uses Frederick County waste effluent. Catoctin Power has also executed a Settlement Agreement with the Washington Metropolitan Area water suppliers. The Settlement Agreement recognizes Catoctin Power’s commitment to implement augmentation for its consumptive water use. Under both the proposed CPCN conditions and the Settlement Agreement, Catoctin Power will need to restrict water usage if it cannot fully augment 100 percent of its consumptive water use. Therefore, Frederick County should not bear any responsibility to augment or curtail water withdrawals from the Potomac River due to operation of the Catoctin Power facility. I believe the proposed CPCN conditions and the Settlement Agreement adequately address Catoctin Power’s augmentation obligations for its consumptive water use.

Q: Do you have any comments regarding PPRP’s Draft Condition 63?

A: Yes. PPRP’s Draft Condition 63 would require implementation of a baseline study to demonstrate Catoctin Power’s ability to accurately measure drawdown in the Millville Quarry and to test the augmentation standard operating procedures. While this condition is reasonable, the condition as proposed in PPRP’s November 24, 2004 submission to the Commission appears to require the study to occur during a specific 7-month calendar period (June through December), which is significantly longer than necessary to make a reasonable demonstration of daily drawdown. In my opinion, Catoctin Power should be able to demonstrate its ability to accurately measure drawdown in the Millville Quarry based on a two month test period, provided that the test includes at least 10 days of augmentation water releases, 7 of which must be consecutive. Augmentation releases will reduce the water level in the quarry by 3 inches each day, and seven consecutive days of augmentation will reduce the water level in the quarry by more than 1.5 ft. Since the condition also states that the water level recorder must be accurate to 0.01 ft, this test will demonstrate the ability to measure drawdown and test the augmentation procedures.

Furthermore, PPRP’s Draft Condition 63 would require Catoctin Power to complete its baseline study within six months prior to initiating withdrawal from the Potomac River or using reclaimed water from Frederick County. Because PPRP’s Draft Conditions give Catoctin Power the option to either augment or curtail during low flow conditions, and for the other reasons that Mr. Chirdon discusses in his rebuttal testimony, it would be more appropriate to link the study’s completion date to Catoctin Power’s use of water from the Millville Quarry for low flow augmentation purposes.

Q: Do you have any comments regarding PPRP’s Draft Condition 64?

A: Yes. Draft Condition 64 would give MDE the right to conduct a study (possibly including a dye tracer test) at the Millville Quarry to quantify the potential loss of water to the surrounding geologic formation. My understanding is that MDE proposed this condition out of a concern that the Millville Quarry may experience naturally occurring losses of water into the geologic formation that would compromise Catoctin Power’s ability to accurately measure augmentation releases from the quarry. As I understand it, MDE is concerned about a situation in which the Millville Quarry water level would temporarily rise due to a volume surge (which could occur, for example, during extreme rain events), resulting in a subsequent excessive level drop (as the surge volume enters the local groundwater system) which could impact the accuracy of using quarry water level as a means to measure the amount of augmentation water released by Catoctin Power. While it may be possible for a volume surge to occur, the conditions of its occurrence would be extremely rare, and such an occurrence is only of interest during the release of augmentation water. During a normal rain event, when water is being released for augmentation, Catoctin Power would be required to increase pumping rates to remove rainwater inflow and potentially higher groundwater inflow in order to lower the quarry water level by the required amount. Consequently, the contemplated volume surge would not occur. Moreover, the occurrence of a severe rain event, when the operation of extensive pumping capacity during augmentation could not keep up with the large inflow of water into the quarry, is already contemplated under PPRP Draft Condition 67, which prescribes specific measures Catoctin Power must take to account for rainfall entering the quarry.

I believe that PPRP’s concern about volume surge is for all practical purposes moot, because the Millville Quarry must continuously maintain its water level to avoid flooding. This means that, if a volume surge were to occur, the Millville Quarry would be pumping a large amount of water into the River – many times more than Catoctin Power’s augmentation obligation. Additionally, during such an event, runoff to the Potomac River basin would be in such tremendous quantities that Catoctin Power’s contribution during augmentation would be of no consequence. Furthermore, it is reasonable to assume that any such volume surge could occur for at most a few days; during this same time period, the Shenandoah and Potomac Rivers would likely be flowing very heavily – and either Catoctin Power would not be required to augment, or such augmentation would be done at very high rates to account for the inflow to the quarry, again rendering this issue moot.

I believe that Catoctin Power will be able to demonstrate all of this in the study it conducts pursuant to Condition 63. Therefore, at a minimum, it would be reasonable to limit PPRP’s right to require a study pursuant to PPRP Draft Condition 64 to a circumstance in which the Millville Quarry water level fluctuations conducted to comply with PPRP Draft Condition 63 indicate the potential for naturally occurring loss of water into the geologic formation.

Robert McCann Rebuttal Testimony

Q: Please state your name and business.

A: My name is Robert C. McCann, Jr. and I am Manager of the Air Resources Group at Golder Associates Inc., 6241 NW 23rd Street, Gainesville, Florida, 32653.

Q: What is your role with respect to the Catoctin Power, LLC (“Catoctin Power”) Project?

A: My role is to manage and perform the air quality permitting and impact studies associated with the Project.

Q: Have you previously filed testimony in this proceeding?

A: Yes.

Q: What is the purpose of your rebuttal testimony?

A: The purpose of my rebuttal testimony is to address PPRP’s nitrogen deposition proposal, Mr. James’ concerns regarding air monitoring in Frederick County, and PPRP’s estimated greenhouse gas emissions as reported by the PPRP in the Interim Draft Environmental Review of the Proposed Catoctin Power Project, dated November 24, 2004 (“Draft Report”).

Q: PPRP’s Draft Report discusses nitrogen deposition associated with the proposed Catoctin Power facility, and proposes that Catoctin Power mitigate nitrogen loading by planting trees. (PPRP Draft Report pp. 4-82 to 4-83). Do you have any comments regarding PPRP’s nitrogen deposition modeling? and mitigation proposal?

A: The nitrogen deposition modeling performed by PPRP does not account for the NOx emission offsets that Catoctin Power will obtain. These offsets will completely offset Catoctin Power’s NOx emissions, and will offset an additional 57 tons of NOx emissions from other sources in the airshed. Thus, the Catoctin Power project could likely result in a net reduction in total nitrogen delivered to the Chesapeake Bay watershed area.

In addition, t The air modeling performed by PPRP assumed that the Project’s combustion turbines will operate with the duct burners, with a NOx emission rate of 2.5 ppm, for the entire year. In fact, the operation of the combustion turbines and duct burners will be limited to 4,000 hours/year. Without the duct burner firing, the combustion turbines’ NOx emission rate will be limited to 2.0 ppm. Therefore, the maximum annual NOx emission rate, accounting for limited hours of duct firing, would be about 20 percent lower than that modeled, thereby decreasing nitrogen deposition predicted for the Project accordingly.

For these reasons, I do not believe that the Catoctin Power project will significantly contribute to nitrogen deposition in the Chesapeake Bay. Nevertheless, as Mr. Gordon Chirdon has testified, Catoctin Power understands that Maryland is very concerned regarding nitrogen deposition in the Chesapeake Bay. Therefore, Catoctin Power has agreed to PPRP’s proposed condition provided that the State will provide the land for the trees.

Q: Mr. Don James has proposed in his pre-filed testimony that the CPCN include a condition requiring quarterly air testing at a minimum of three locations surrounding the plant. Do you have any comments to Mr. James’ proposal, and could you explain why this Project does not raise safety concerns regarding the quality of air in Adamstown?

A: In my opinion, Mr. James’ proposed condition does not have a technical basis and would provide no additional value from an air quality perspective. As I stated in my previous testimony, a source impact analysis was conducted to determine if the Project’s predicted impacts would exceed federal or state emission threshold levels above which air monitoring must be conducted. This analysis demonstrated that the Project’s projected impacts are well below federal and state thresholds for air monitoring and will not result in significant ambient air impacts beyond the boundary of the Project site.

Second, I do not believe that Mr. James’ proposed condition would provide any additional value from an air quality perspective. As Mr. William Paul, Division Chief of the Combustion and Metallurgical Division of the Air Quality Permits, Maryland Department of the Environment (MDE), testified at the December 9, 2004 hearing, the MDE is mandated to protect public health and the environment and takes seriously its obligation to monitor air quality throughout the State. To that end, the MDE has established a network of monitors throughout the State to measure air quality and determine whether areas are in compliance with Ambient Air Quality Standards. Mr. Paul testified that this network of monitors complies with federal guidelines and, based on federal criteria and the fact that there is nothing unusual about the area surrounding the Catoctin Power site (e.g., hilly terrain which could concentrate emissions), the MDE has determined that existing air monitoring stations in the State are adequate to assess air quality levels in the Adamstown area. For this reason, and the reasons stated above, MDE has determined that air monitoring in Adamstown would not provide any additional information about air quality in the plant vicinity. Indeed, Mr. Paul testified to that effect during the December 9, 2004 hearing, and I agree with this analysis.

With regard to your question about air quality safety, the monitors described above and various other analyses all demonstrate that the proposed Project will not create air quality safety concerns for Adamstown. Frederick County complies with all Ambient Air Quality Standards, except for ozone. With regard to ozone, the County’s local ozone monitor shows that Ambient Air Quality Standards have been met for the last 5 years. Moreover, the Project’s maximum impacts, which would occur close to the plant site, are predicted to be 3% or less of the Ambient Air Quality Standards and, therefore, are not only considered to be insignificant, but are also well below levels that the federal government has found to be protective of human health and welfare. At Adamstown, the project’s air quality impacts would be even less – we estimate that the impacts would be less than 1% of the Ambient Air Quality Standards.

Finally, it is important to keep in mind that the Project will obtain emission offsets for both NOx and VOCs at the required 1.3 to 1 emission offset ratio. This means that the Project will permanently retire the equivalent of 1.3 tons of NOx and VOCs from other facilities for every ton of NOx and VOC that the Project emits. As a result, the Project will actually result in a net decrease in NOx and VOC emissions in the region and will have a net benefit on regional air quality for ozone.

Q: On behalf of the County, Mr. Hessong proposes in his pre-filed testimony that the CPCN include a condition requiring that NOx and VOC offsets be purchased from Frederick County or, if not available, then from the geographically closest sources. Do you have any comments to Mr. Hessong’s proposal?

A: As Mr. Chirdon states in his rebuttal testimony, Catoctin Power will endeavor to obtain all required NOx and/or VOC offsets from sources in or near Frederick County, if commercially available. That being said, it is important to understand that ozone is a regional pollutant. Because ozone is a regional pollutant that is formed over hundreds of miles, Maryland and federal regulations recognize that air quality objectives are served so long as new sources located in Frederick County purchase emission offsets from sources located in areas that contribute to Frederick County’s ozone nonattainment, regardless of whether such sources are within Frederick County itself. Indeed, at the December 9, 2004 hearing, Mr. Paul discussed the potential benefits to Frederick County’s air quality for offsets to come from upwind locations, rather than from Frederick County.
However, both MDE and Catoctin Power recognize that Frederick County could benefit economically if Catoctin Power purchases offsets from Frederick County sources. It is for this reason that Catoctin Power agrees with Frederick County’s request to pursue purchasing offsets from sources in or near Frederick County, as previously noted.

Q: Do you have any clarifications or corrections that you would like to offer with respect to the pre-filed or oral testimony of other parties to this proceeding?

A: Yes. I would like to correct PPRP’s maximum greenhouse gas (GHG) emission predications from the Catoctin Power combustion turbines (CTs) and duct burners as presented in Table 4-7 of the PPRP Draft Report. PPRP’s predications are based on generic emissions factors for NOx, CO, and NMVOCs. These generic factors are much higher than the emissions that PPRP has proposed in Table 4-3 for the CTs and duct burner. For example, for purposes of Table 4-7, the PPRP assumed NOx, CO and NMVOC emissions of 7,880; 1,908; and 208 tons/year, respectively. However, as shown in Table 4-3, the total NOx, CO, and NMVOC emissions that PPRP has actually proposed for the CTs and duct burners are 188.4, 129.8, and 29.8 tons/year, respectively. The CTs’ NOx, CO, and NMVOC emissions are 155.2, 99.0, and 20.4 tons/year, respectively. The duct burners’ NOx, CO, and NMVOC emissions are 33.2, 30.8, and 9.4 tons/year, respectively. As a result, PPRP’s analysis overestimates the Project’s total GHG emissions in Table 4-7. Therefore, the Project’s actual GHG emissions for NOx, CO and NMVOC, based on PPRP’s proposals, should be 188.4, 129.8, and 29.8 tons/year, respectively.

Robert McCann Supplemental Testimony

Q: Please state your name, occupation, and business address.

A: My name is Robert C. McCann, Jr. and I am Manager of the Air Resources Group at Golder Associates Inc., 6241 NW 23rd Street, Gainesville, Florida, 32653.

Q: On whose behalf are you testifying?

A: Catoctin Power, LLC (Catoctin Power).

Q: Have you previously filed testimony in this proceeding?

A: Yes, I have. I have submitted testimony on the Project’s air quality requirements, as described in the Certificate of Public Convenience and Necessity Application.

Q: Why are you now submitting supplemental testimony in this proceeding?

A: The Project’s application for non-potable water supplies has been modified to give Catoctin Power the option to withdraw surface water directly from the Potomac River as a secondary water supply primarily to provide makeup water for the cooling tower. Should Catoctin Power elect to pursue the secondary water supply alternative, Catoctin Power will use water pumps at the Water Supply Pump House to withdraw water from the River. These water pumps will be electrically powered, but will have a diesel fuel-fired emergency generator as a backup power source. The purpose of this supplemental direct testimony is to submit the air permit application for the emergency generator. The generator will be fired by diesel fuel with a maximum sulfur content of 0.05%. The generator is expected to operate 200 hours or less per year and emit less than 1 ton/year of any regulated pollutant.

Q: Will this air permit application change the air permit review requirements of the Project?

A: No. The potential increase in regulated pollutant emissions associated with the emergency generator does not trigger any additional review requirements.

Richard Zwolak Testimony

Q: Please state your name, occupation and business address.

A: My name is Richard A. Zwolak. I am an environmental planning consultant with Golder Associates, Inc. (“Golder”). My business address is 5100 W. Lemon Street, Suite 114, Tampa, FL 33609.

Q: What is your role with respect to the Project?

A: I am Golder’s Project Manager and responsible for the overall conduct of the environmental studies and permitting efforts for the proposed Catoctin Power, LLC (“Catoctin Power”) project. I also performed Catoctin Power’s land use planning and socioeconomic assessments which have been provided in the CPCN documents.

Q: Have you previously filed testimony in this proceeding?

A: Yes, I filed both direct testimony and supplemental testimony.

Q: What is the purpose of your rebuttal testimony?

A: I would like to address a number of issues raised in the pre-filed testimony and during the December 9, 2004 hearing in this matter. Such issues include, among others: (i) the buffering requirements and commitments that Catoctin Power has proposed and agreed to; (ii) the County’s request for a condition mandating that Catoctin Power set aside 250 acres of land in the vicinity of St. Matthews Church for buffer purposes; (iii) the transport of aqueous ammonia to the site; and (iv) the secondary water alternative.

Q: Are you familiar with the proposed Site Plan?

A: Yes, I was responsible for site plan development during preparation of the CPCN application. At that time, the Site Plan was modified to accommodate comments received from the local community. Subsequently, Catoctin Power voluntarily submitted the Site Plan to the Frederick County Division of Permitting and Development Review (“DPDR”), and I was responsible for coordinating with the DPDR staff regarding the staff’s recommended additions and changes to the Site Plan.

Q: Could you explain to what extent the Site Plan addresses buffer-related issues?

A: Yes. First it should be pointed out that the location of the Catoctin Power facility was selected in coordination with the local community. The final location places the facility within the Eastalco fenceline in close proximity to the existing Eastalco structures. This location takes advantage of existing buffers and screening. Catoctin Power’s proposed facility structures are consistent in height with the existing Eastalco structures so that the Catoctin Power facility will blend in with the Eastalco facility.

Following the recommendations of the DPDR, several changes were made to the Site Plan to improve buffering and screening of the facility from viewsheds north of the facility site, such as from Manor Woods Road and Saint Matthews Church. These changes included 1) the addition of a 5 foot wide vegetative screen along the north boundary of the project site, and 2) the addition of a mixture of approximately 150 trees along both sides of the access drive from the project site to Manor Woods Road, tying this new vegetation in to the existing buffer between Manor Woods Road and Eastalco. Additional visual impact mitigation will be accomplished through the implementation of a lighting plan which will mitigate offsite spillage of light, as well as selection of earthtone colors for major plant structures as requested by DPDR during its Site Plan review.

The proposed buffering and screening far exceeds the Frederick County Zoning Code requirements. In combination with existing buffers, the installation of the proposed buffering and screening will result in an effective visual buffer between the Catoctin Power facility and nearby areas of public access or assembly.

Finally, PPRP has proposed several conditions related to site buffering, screening and lighting. These conditions will assure the Catoctin Power facility complies with proposed requirements for buffering, screening and mitigation of offsite light spillage.

Q: Are you familiar with the County’s proposed condition, as expressed in Mr. Marschner’s testimony, that Catoctin Power be ordered to put property into agricultural preservation for buffer purposes.

A: Yes.

Q: Mr. Marschner’s testimony states that the County seeks, as a condition to the CPCN, to have parcels 3 and 76 to be placed into permanent agricultural preservation in order to act as a buffer between the Project and the community, including St. Mathew’s church. Are you familiar with these parcels?

A: Yes. I have reviewed both parcels from various land use and zoning perspectives.

Q: How are parcels 3 and 76 designated?

A: Both parcels possess current future land use and zoning designations of A- Agricultural.

Q: Can parcels 3 and 76 be developed?

A: Based on each parcel’s current future land use and zoning designation, development on each parcel would be limited. In particular, development is currently restricted to agricultural or forestry use, limited residential use, governmental, recreation or education uses and several other types of uses that require site plan approval.

Q: What is your understanding of the process by which these parcels could be developed?

A: The ongoing agricultural use would be allowed to continue under the parcels’ current zoning designation. If Eastalco or another third party wished to pursue one of the other currently-authorized uses that I mentioned before, they would need to comply with applicable Frederick County development standards. For example, the Frederick County Planning Commission would likely have to approve a Site Plan and issue permits before Eastalco or a third party could develop the parcels for non-agricultural use. Development of a residential subdivision, commercial or industrial use would not be allowed without a zoning change. Frederick County has rules and regulations that set forth the process pursuant to which Frederick County must accomplish zoning changes. Any zoning change would have to comply with these requirements, and obtain the Frederick County Board of County Commissioners’ approval.

Q: Is it fair to say that the ability of Eastalco or another party to change the present agricultural land use and zoning designation on these parcels is within the control of the County?

A: Yes.

Q: How do these parcels provide “buffer” beyond their present designation?

A: Given their present zoning designation, they provide essentially the kind of buffer that the County apparently desires (namely, limited development). With respect to the County’s desire to provide buffer between the Catoctin Power project and Saint Matthews Church, it is worth noting that Parcel 76 provides essentially no buffer to either Eastalco or the proposed Catoctin Power project because the parcel is not located between Saint Matthews Church and the proposed Catoctin Power facility. Similarly, only about 8 acres of the 169 acre Parcel 3 are located between the Church and cemetery and the proposed Catoctin Power facility. Therefore, the majority of this parcel’s present agricultural and forested use provides no buffer to either Eastalco or the proposed Catoctin Power facility. Parcel 3 does contain mature trees along portions of the perimeter of the parcel that significantly screen the view of Eastalco and the proposed Catoctin Power facility from the Church, and a hill within the terrain on Parcel 3 also helps screen the proposed Catoctin Power facility.

Q: In the event that parcels 3 and 76 are not placed into agricultural preservation, the County proposes that the CPCN order Catoctin Power to work with Eastalco to find other property on Eastalco’s property to achieve the same “buffer” objective. Could you comment on that alternative?

A: There is only one other parcel located between the Church and the proposed Catoctin Power facilities. The parcel is located south of Parcel 3, extending to Manor Woods Road. Only about 10 acres of the parcel are located between the Church and cemetery and the proposed Catoctin Power facility. Therefore, the parcel has limited buffering value for the Catoctin Power facility. Moreover, existing vegetation along the north and south perimeter of the parcel presently serves as a visual buffer to the Church. Eastalco owns the parcel and it is designated GI- General Industrial.

Q: Finally, if Eastalco and Catoctin Power do not place the prescribed amount of Eastalco land into agricultural preservation, the County proposes that the CPCN order Catoctin Power to work with the Carrollton Manor Trust to find 250 acres, at Catoctin Power’s expense, to be placed into agricultural preservation for “buffer” purposes. Could you comment on that alternative, including the extent to which the alternative achieves the County’s stated objective to create “buffer” between the Project and the community?

A: As I have discussed, Catoctin Power and the County have already agreed to buffer the Catoctin Power Project from the community pursuant to the Site Plan that Catoctin Power developed based on County and community input. Additional buffering is unnecessary and unwarranted.

The County has not provided any evidence that the Catoctin Power project will cause significant visual impacts to neighboring communities. The only community proximate to the proposed project is Adamstown. Visual impact assessments concluded that only a very small portion of the proposed project would be visible from Adamstown due to the low profile of the Catoctin Power facility and the fact that the 400 acre Eastalco facility is situated directly between Adamstown and the 17 acre Catoctin Power project site. The Catoctin Power facility is not in the viewshed of any other communities in south central Frederick County. The closest development west of the Catoctin Power project site is Agro Park, a commercial and industrial complex which is located on land zoned general industrial and is already buffered by forested wetlands on the Eastalco site. The closest development east of the Catoctin Power project site is St. Joseph’s Church. Similar to Adamstown, Eastalco is situated between St. Joseph’s Church and the Catoctin Power site, and additional buffering is not warranted.

Q: Are you aware of any basis in the record supporting the County’s proposal regarding the set aside of Eastalco or other property for agricultural preservation?

A: No I am not. The County has not provided any evidence to suggest that Catoctin Power’s proposed buffering is insufficient. In fact, the County, through the Site Plan review process, has recommended a very specific buffering and screening plan, including the location, type and size of vegetation to be provided by Catoctin Power. Catoctin Power has committed to the installation of all buffering and screening as recommended by the County during the Site Plan review process and as depicted on the Site Plan. Catoctin Power has also supported the County’s request to include the Site Plan as a condition in Catoctin Power’s CPCN.

Q: Per your earlier direct and rebuttal testimony, is it not true that buffer-related issues have already been addressed in the context of the Site Plan and the PPRP’s proposed conditions?

A: Yes. Buffer-related issues have already been addressed.

Q: Mr. James has expressed concern about potential impacts associated with ammonia shipments to the Project site. Could you respond to Mr. James’ concern?

A: Yes. First, it should be recognized that aqueous ammonia transport is thoroughly regulated and the transport industry has a commendable safety record. With respect to the Project, the number of deliveries is anticipated to be equivalent to two trucks per week. Catoctin Power has made the commitment to restrict aqueous ammonia deliveries to a US 15/Ballenger Creek Pike/Manor Woods Road route in order to keep aqueous ammonia delivery trucks from passing through Adamstown or passing by the schools along Ballenger Creek Pike west of Wellington Trace.

Q: Dr. Hall’s second set of pre-filed testimony, at page 4, states that all secondary water supply and discharge alternative options go through the C&O Canal National Historic Park and require a permit from the National Park Service. (Page 4, lines 25-30). Does Catoctin Power agree with this statement?

A: Yes, with the exception that there has been no documentation provided to date that confirms the National Park Service owns the land where the US 15 bridge crosses the Potomac River. The NPS as well as Catoctin Power representatives continue to research ownership of this parcel of land.

Q: Dr. Hall’s second set of pre-filed testimony, at page 5, states that “Catoctin Power could avoid several environmental issues by locating the pump house outside the park.” (Page 5, lines 12-13). What is Catoctin Power’s position regarding this issue?

A: The issues identified by Dr. Hall are fuel storage, construction staging and interference with a public boat ramp. Fuel storage will not be an environmental issue because the storage tank will be placed inside of the pump house structure. Construction staging impacts would be minimized by use of a staging area outside of Park boundaries to the greatest extent practicable. Construction staging would be more problematic at Route A when compared with Route B which is located in an area that is already disturbed and has staging areas and paved vehicle access. Interference with the public boat ramp can be avoided by placement of the intake structure and potentially the pump house as far upstream as possible. The existing structural supports for the US 15 bridge and the USGS gauging station are located between the boat ramp and the intake/pumphouse location proposed for Route B. Catoctin Power representatives and the NPS met on December 16, 2004 to review the Route B proposal and dialogue is continuing to resolve issues to the satisfaction of the affected parties.

Q: PPRP’s draft Environmental Review of the Proposed Catoctin Power Project (“PPRP Draft Report”) raises concerns regarding proposed water line Routes A and B to the Potomac River. (PPRP Draft Report, pp. 3-20; 5-21; 5-22). PPRP’s Draft Report (p. 3-20) and Dr. Hall’s second set of pre-filed testimony (p. 5, lines 27-29) state that Catoctin Power should increase the number of pipeline routes under consideration.” What is Catoctin Power’s position regarding this issue?

A: I believe that the request was to reevaluate the 13 routes that were subjected to the initial evaluation. Dr. Hall’s testimony makes specific reference to Route F of the Secondary Water Supply and Wastewater Discharge Program Environmental Report. Catoctin Power has communicated repeatedly with the landowner of the parcel that would be traversed by the pipeline to gain access to Routes F, G and H and the landowner is unwilling to grant an easement for the pipelines. Routes F, G and H would therefore be feasible only by traversing NPS land for a considerable distance, and therefore, the resulting NPS impacts would be greater than Routes A and B.

Q: The PPRP Draft Report indicates that the secondary water alternative would require Catoctin Power to obtain pipeline crossing permits from Frederick County to cross water lines under County-owned roads. (PPRP Draft Report p. 6-18). Is this accurate?

A: It is our understanding that the CPCN process preempts such requirements. To the extent that the CPCN process does not preempt local permitting, however, Catoctin Power would need to obtain a Utility permit to cross County road right-of-way.

Q: The PPRP has proposed, at PPRP Condition 91, that Catoctin Power shall designate a truck route connecting US 15 to the site access driveway via Mountville Road, Ballenger Creek Pike (MD351) and Manor Woods Road, and that all combination units trucks, all single unit trucks with a GCW of 26,000 lbs or more, and all trucks transporting aqueous ammonia shall use this designated route. Do you have any comments to this proposed condition?

A: As noted in Mr. Chirdon’s testimony, Catoctin Power supports the use of the proposed truck route for delivery of aqueous ammonia because the route will ensure that trucks delivering aqueous ammonia to the Catoctin Power facility do not travel by local schools, which is a concern to the community. There is no basis, however, to limit all truck traffic to this one route. Both Ballenger Creek Pike north of Manor Woods Road and New Design Road are currently used by Eastalco for large truck traffic. These roads are designed to accommodate large truck traffic and have been shown to have adequate capacity. Ballenger Creek Pike and New Design Road, north of Manor Woods Road are both acceptable truck routes for general deliveries to the Catoctin Power facility.