July
16,
2003
Ms.
Jean
Vernet
Office
of
Electrical
Transmission
and
Generation
Department
of
Energy
Forrestal
Building
1000
Independence
Avenue,
SW
Washington,
DC
20585
Re:
EPA
Docket
No.
OAR­
2002­
0058
Potential
Impact
of
EPA
Proposed
MACT
Rule
on
the
City
of
Escanaba,
MI
Dear
Ms.
Vernet:

As
described
in
my
previous
letter
of
May
16,
2003
to
you,
the
City
of
Escanaba
has
a
25­
megawatt
coal­
fired
power
plant
and
a
16­
megawatt
oil­
fired
combustion
turbine
that
provides
all
the
power,
except
for
occasional
off­
peak
economic
energy
purchases,
used
by
the
City.
We
have
obtained
estimates
of
the
cost
to
add
equipment
to
the
coal­
fired
power
plant
to
meet
the
requirements
of
the
proposed
EPA
MACT
Rule.
The
cost
estimate
is
in
the
range
of
$
11,000,000
to
$
14,500,00
for
initial
capital
improvements.
An
additional
$
450,000/
year
operating
costs,
not
including
the
energy
required
to
operate
the
equipment,
would
be
added
to
that.
The
3­
megawatt
station
power
requirement
to
operate
the
equipment
would
create
additional
costs
and
a
greater
capacity
shortage
than
Escanaba
currently
has.
The
result
would
be
a
rate
increase
to
the
City's
electric
customers
of
approximately
25%
­
30%.

Due
to
the
age
and
capacity
of
the
City's
power
plant,
the
cost
of
the
modifications
would
justify
closing
the
plant
in
our
opinion.
However,
because
of
the
transmission
constraints
described
in
my
earlier
letter
and
Mr.
William
Pyle's
letter
of
May
12,
2003
to
you,
we
do
not
have
the
option
of
closing
the
plant
unless
it
is
replaced
by
a
new
power
plant.
Obviously,
it
would
take
a
significant
amount
of
time
to
build
a
new
power
plant.

An
example
of
the
critical
nature
of
the
power
supply
situation
in
the
Upper
Peninsular
(
U.
P.)
was
seen
recently
when
the
Silver
Lake
Dam
was
breached.
The
flood
from
the
Silver
Lake
Dam
failure
damaged
the
Presque
Isle
Power
Plant,
the
U.
P.'
s
largest
power
plant.
Escanaba's
16­
megawatt
combustion
turbine,
an
older
unit
meant
for
short­
term
emergencies
and
peaking
requirements,
which
had
just
been
installed
and
had
not
completed
the
final
checkout
phase,
was
pressed
into
service
to
provide
power
for
other
U.
P.
utilities.
The
total
output
of
our
combustion
turbine
and
all
the
power
from
our
coalfired
plant
in
excess
of
the
City's
needs
was
provided
to
other
utilities
for
at
least
two
weeks
while
repairs
were
being
made
to
the
Presque
Isle
Power
Plant.
We
have
since
learned
that
the
transmission
system
operator,
American
Transmission
Company
(
ATC),
had
declared
a
TLR5,
which
they
say
was
the
longest
one
in
history.
Without
extraordinary
cooperation
and
coordination
with
all
U.
P.
utilities
and
ATC,
a
blackout
would
have
occurred
in
the
U.
P.

The
example
I
just
sited
also
makes
it
clear
that
the
U.
P.
is
vulnerable
to
terrorist's
activities
because
of
transmission
constraints
and
a
weak
power
supply
system.
One
event,
the
Silver
Lake
Dam
failure,
caused
a
major
disruption
to
the
U.
P.
economy.
Ore
mines,
a
significant
part
of
the
U.
P.
economy,
had
to
suspend
operations
and
the
power
that
kept
businesses
and
homes
with
lights
was
costly.

I
believe
it
is
obvious
that
a
25%­
30%
increase
in
electric
rates
could
have
a
devastating
economic
impact
on
Escanaba.
We
can
only
speculate
what
local
industries
and
businesses
might
do
in
response
to
such
an
increase.

Escanaba
supports
the
efforts
of
the
Michigan
Municipal
Electric
Association
and
AMPOhio
lead
group
of
utilities
with
power
plants
affected
by
the
EPA
proposed
MACT
Rule.
We
believe
that
the
proposals
this
group
has
made
are
a
reasonable
alternative
to
the
EPA
proposal.
In
addition,
Escanaba
and
Marquette
are
in
a
unique
position
due
to
transmission
constraints
that
we
believe
would
afford
us
an
exemption
from
the
final
rule
adopted
by
EPA.

Thank
you
in
advance
for
your
efforts
on
behalf
of
the
citizens
of
Escanaba.

Sincerely,

__________________________
Mrs.
Judith
Schwalbach
Mayor,
City
of
Escanaba
__________________________
Mr.
Doug
Terry
City
Manager,
City
of
Escanaba
__________________________
Mr.
Robert
Headden
Superintendent,
Escanaba
Electric
