&EPA
  United States
  Environmental Protection
  Agency

  EPA-430-R-04-002
LANDFILL METHANE
OUTREACH PROGRAM
  Tennesseeo
  State Primer


                     A Primer on
                     Developing
                     Tennessee's

                     Landfill Gas Energy
                     Potential

                         Printed on paper that contains at least
                         30 percent postconsumer fiber.

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Introduction
   1.  The Goals of This Primer	1
   2.  About the Landfill Methane Outreach Program	2
   3.  Tennessee      LMOP Task Force	3
   4.  Landfill Gas Energy Projects in Tennessee	3
   5.  Where to Go for More Information	4
      1:
   1.  Overview of Federal Regulations and Permits	6
       1.1   Clean Air Act (CAA)	6
       1.2   Resource Conservation and Recovery Act Subtitle D 	10
       1.3   National Pollutant Discharge Elimination  System (NPDES) Permit	11
       1.4   Clean Water Act, Section 401	12
       1.5   Other Federal Permit Programs and Regulatory Requirements	12
   2.  Overview of State Regulations and Permits 	13
       2.1   Summary of Permits	13
       2.2   Permitting Assistance	20
       2.3   Tennessee Regulatory Authority (TRA) Jurisdiction	20
       2.4   Tennessee Department of Transportation (TDOT)	21
   3.  Overview of Local Regulations and Permits 	22
      2:
   1.  Overview of Federal Incentive Programs	23
       1.1   Renewable Energy Production Incentive  (REPl) 	23
       1.2   Qualifying Facilities Certification	23
       1.3   Section 29 Tax Credit	24
   2.  State Incentive Programs	24
       2.1   Green Power Switch®	24
       2.2   Renewable Portfolio Standard 	25
   3.  Electricity Restructuring and Landfill Gas Energy	25
   4.  Voluntary Reporting of Greenhouse Gases Program 	26
                               A Primer on Developing Tennessee's Landfill Gas Utilization Potential

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Tables
  Table A      Tennessee State LMOP Task Force Members	3
  Table B      Landfill Gas Energy Projects in Tennessee 	4
  Table C      Candidate Landfills in Tennessee	5
  Table 2.1     Summary Table of State Regulations/Permits 	13
  Table 2.2     Air Quality Construction Permit and Title V Operating Permits 	14
  Table 2.3     Solid Waste Management Permit	17
  Table 2.4     NPDES Permit/Tennessee State Operating Permit	19
  Landfill Gas Projects in Tennessee

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   Introduction
                             of


Throughout the country, the number of landfill gas energy projects is growing. Recovering methane gas
at solid waste landfills provides significant environmental and economic benefits by eliminating methane
emissions while capturing the gas's energy value. The methane captured from landfills can be transformed
into a cost-effective fuel source for generating electricity and heat, firing boilers, or even powering vehicles.

Permits, incentive programs, and policies for landfill gas energy project development vary greatly from
state to state. To guide landfill gas  energy project developers through the state permitting process and  to
help them to take advantage of state incentive programs, the U.S. Environmental  Protection Agency's
(EPA's) Landfill Methane Outreach  Program (LMOP) has worked with      agencies to develop  individual
primers for states participating in the State Partner Program. By presenting the  latest information on federal
and state regulations and incentives affecting landfill gas energy projects in this primer, LMOP and
Tennessee      officials hope to facilitate development of many of the landfills listed in Table C on      5.

To develop this primer, the     of Tennessee identified all the permits and funding programs that could
apply to landfill gas energy projects developed in Tennessee. It should be noted, however, that the regula-
tions, agencies, and policies described are subject to change. Changes are likely  to occur whenever a
state legislature meets or when the federal government imposes new directions on      and local  govern-
ments. Landfill gas energy project developers should verify and continuously monitor the status of laws and
rules that might affect their plans or the operations of their projects.



This primer is designed to help realize the potential of landfill gas recovery in the state of Tennessee. It
provides information for developers of landfill gas energy projects, as well as all other  participants in such
projects:
       •  Landfill owners/operators            • Community officials

       •  Utility companies                   • State regulators

       «  Independent power producers        « Engineers

       «  Utility regulators                    « Equipment vendors



If you are interested in taking advantage of the economic and environmental opportunities in landfill
gas energy recovery in Tennessee, you will need to know the regulatory requirements  that apply.
You will also need to  know what economic incentives are available to help make these projects more
economically viable.
                                    A Primer on Developing Tennessee's Landfill Gas Utilization Potential

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To address these needs, this primer covers the following topics:
        *   Federal Regulations and Permits. This section provides information on federal regulations that
           may pertain to landfill  gas energy projects, including solid waste, air quality, and water quality
           regulations.

        •   State Regulations and Permits. This section provides information on state permits that apply to
           landfill gas recovery projects in Tennessee.

        *   Local Regulations and Permits.  Local permit approval will often be needed for landfill gas
           energy projects.

        •   Federal Incentive Programs. This section  presents information on federal incentives that may
           apply to landfill gas energy  projects.

        •   State Incentive Programs. This section presents information about environmental infrastructure
           financing opportunities in the      of Tennessee.

        *   Electricity Restructuring. This section discusses how renewable  energy provisions in
           electricity restructuring regulations might apply to  landfill gas energy projects.

        •   Voluntary Reporting of Greenhouse Gases. This section discusses a program allowing
           organizations to gain recognition for environmental achievements related to greenhouse
           gas emissions.





In order to promote the use of landfill gas as an energy source, EPA has established the Landfill Methane
Outreach Program (LMOP). The goals  of LMOP are to reduce methane emissions from landfills by:
        •   Encouraging environmentally and economically beneficial landfill gas energy development

        •   Removing barriers to developing landfill gas energy projects

To achieve these goals, EPA establishes alliances with four key constituencies:
        •   State environmental and energy agencies

        •   Energy users/providers (including investor-owned, municipal, and other public  power utilities;
           cooperatives; direct end users; and power marketers)

        •   Industry (including developers, engineers, and equipment vendors)

        •   Community partners (municipal  and small private  landfill owners and operators; cities, counties,
           and other local governments; and community groups)

EPA establishes these alliances through a Memorandum of Understanding (MOD). By signing the MOU,
each Partner acknowledges a shared commitment to  promoting landfill gas  energy recovery at solid waste
landfills, recognizes that the widespread use of landfill gas  as an energy resource will reduce methane and
other air emissions, and commits  to certain activities that enhance the development of this resource.

As of May 2003, more than 340 landfill methane recovery projects were operating in the United States.
EPA estimates that up to 500 landfills across the United States could install  economically viable landfill gas
energy projects.
       Landfill Gas Projects in Tennessee

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The Tennessee State LMOP task force has been formed to review state regulations and policies to explore
opportunities for overcoming barriers to landfill gas energy projects. The overall purpose of the state task
force is to encourage information sharing and increased coordination among interested parties on landfill
gas energy project development in Tennessee.

The Tennessee State LMOP task force is comprised of the following members:
 Table A
                    LMOP
Name
W. Alan Ball
Jeff Norman
John Trimmer
Chris Garkovich
Organization
Tennessee Department of Environment and
Conservation (TDEC), Division of Community Assistance
TDEC, Division of Solid Waste Management
TDEC, Division of Air Pollution Control
University of Tennessee County
Technical Assistance Service (UT-CTAS)
Phone Number
(615)532-0090
(615)532-0876
(615)532-0552
(931)528-5518
Brian Hensley
Energy Division, Tennessee Department of
Economic and Community Development
(615)741-2994
Mike Allen        Tennessee Chapter, Solid Waste Association of
                 North America
                                                             922-2845
Libby Hill Smith    Southern Alliance for Clean Energy
                                                             637-6055
Daryl Williams
TVA Public Power Institute, Biomass & Renewable Energy,
Tennessee Valley Authority
(256) 386-2973
John Boynton     Tennessee Department of Transportation, Right-of-Way Office   (615) 741-3196
Mike Gaines
Tennessee Regulatory Authority (TRA)
(615)741-2904,ext.220
                                                              in
The Tennessee Department of Environment and Conservation (TDEC) is a      Partner to EPA for man-
aging LMOP, which encourages cooperation between EPA and state energy and environmental agencies to
promote the development of landfill gas energy resources. This partnership focuses on developing consen-
sus among landfill owners/operators, utility companies,  independent power producers, project developers,
utility regulators, and the state regulators so they can work together to promote new energy and environ-
mental opportunities from which all Tennessee residents will benefit.
                                   A Primer on Developing Tennessee's Landfill Gas Utilization Potential

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The state of Tennessee currently has four landfill gas energy projects. Table B (below) lists these projects.
According to TDEC and EPA, numerous candidate landfills have the potential to support economically
viable gas energy projects. Table C (on page 5) identifies some of Tennessee's candidate landfills.
                     to Go for

        W. Alan Ball
        TDEC, Division of Community Assistance
        401 Church Street, 8th Floor
        Nashville, TN 37243-1533
        Phone: (615)532-0090
        Fax: (615)532-0199
        e-mail: alan.ball@state.tn.us
        www.tdec.net/dca
        Chris Voell
        U.S. Environmental Protection Agency
        Landfill Methane Outreach Program (6202J)
        1200 Pennsylvania Avenue, N.W.
        Washington, DC 20460
        Phone: (202)
        Fax: (202) 565-2079
        e-mail: voell.christopher@epa.gov
        www.epa.gov/lmop
 Table B
Landfill Name
                                  in
Landfill Owner
County
Landfill Gas to
Energy Project
Chestnut Ridge    Waste Management  Anderson
                                 Powering generator
                                 since 1/1/92
CFM     Tons/Day
Bordeaux
Metro Nashville
Davidson
Powering generator
since 4/1/00
1,500
Closed
1994
                                     1,150   1,675
Middlepoint
BFI
Rutherford
Powering generator
since 5/1/02
960
3,251
Quail Hollow
Waste Management   Bedford
             Leachate evaporation
             since 1/1/96 and
             generating on-site power
                        860
        Closed
       Landfill Gas Projects in Tennessee

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 Table C
in
(Criteria: At least 1 million tons of landfill waste in place, or design capacity greater than 2.75 million tons,
and not closed for more than 5 years)

                                                                               Waste in
Landfill Name
Alcoa-Maryville-
Blount County
Bi-County
Bradley County
Carter Valley
Cedar Ridge
Iris Glen
Environmental Center
Jackson-Madison
County
Jefferson County
North Shelby
Northwest Tennessee
Disposal Corp.
Roane County
Shelby County
Penal Farm
South Shelby
Summit
Twin Oaks
West Camden
Landfill Owner
Alcoa-Maryville-
Blount County
Bi-County Solid
Waste Management
System
Bradley County
BFI
Waste Management
Waste Management
Jackson-Madison
County
Jefferson County
BFI
Northwest Tennessee
Disposal Corp.
Roane County
Shelby County
BFI
Chattanooga
BFI
Waste Management
County
Blount
Montgomery
Bradley
Hawkins
Marshall
Washington
Madison
Jefferson
Shelby
Obion
Roane
Shelby
Shelby
Hamilton
Knox
Benton
Tons/Day
320
456
360
2,000
1,150
1,500
450
85
1,625
1,175
Closed 1998
Closed 1989
3,625
Closed 1999
Closed 1993
1,800
Place (Tons)
2,000,000
1,000,000
1,600,000
3,400,000
2,500,000
2,000,000
1,700,000
1,000,000
5,500,000
2,000,000
1,600,000
2,300,000
13,300,000
7,300,000
1,670,000
1,200,000
CFM
NA
NA
NA
450
400
500
NA
NA
1,500
NA
NA
500
1,800
1,100
1,039
400
                                      A Primer on Developing Tennessee's Landfill Gas Utilization Potential

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 Part 1:  Regulations and Permits
                           of
The following section discusses federal regulations that may pertain to landfill gas energy projects,
Landfill gas energy projects can be subject to solid waste, air quality, and water quality regulations. The
federal regulations are presented in general terms because individual state/local governments generally
develop their own regulations for carrying out the federal mandates. Specific requirements may therefore
differ among states. Project developers should contact relevant federal agencies and, in some cases,
state agencies for more detailed information and applications. The discussion of each key federal
regulation/permit contains three components:
        •  Importance of the regulation/permit to landfill gas energy  project developers

        •  Applicability to landfill  gas energy projects

        •  Description of each regulation/permit

1.1            Air Act

The Clean Air Act regulates emissions of pollutants to ensure that air quality meets specified health and
welfare standards. The CAA contains three provisions that may affect landfill gas energy projects: (1) New
Source Performance Standards (NSPS) and Emission Guidelines; (2) National  Emission Standards for
Hazardous Air Pollutants (NESHAP); and (3) New Source Review (NSR). Project developers who are  plan-
ning to construct a new landfill  gas energy system or who plan to modify a landfill operation to incorporate
a landfill gas energy system must obtain a Permit to Construct (PTC) permit from the responsible regulato-
ry agency if emissions from the project       the major facility emission thresholds. The PTC permit
specifies the NSPS and NSR requirements that the project must meet (Chapter 1200-3-9). Landfill energy
plants that are part of major sources must also obtain Title V Operating Permits that consolidate the vari-
ous air regulatory and reporting requirements into a single operating  permit. The general requirements of
NSPS, NESHAP, NSR, and Title V for landfill gas energy projects are discussed below.


               for

Importance    Landfill gas energy projects can be part of a compliance strategy to meet EPA's new
               emissions  standards for landfill  gas.

Applicability   Landfills meeting certain design capacity, age, and emissions criteria are required to col-
               lect landfill gas and to either flare it or use  it for energy.

Description    EPA final regulations under the  CAA amendments require large landfills to collect and con-
               trol landfill  gas. Specifically, landfills that are designed to be at least 2.5 million
               megagrams (Mg) and 2.5 million cubic meters in size and have estimated emissions of
               non-methane organic compounds (NMOC) of at least 50 Mg/year must reduce their emis-
               sions of landfill gas. The regulations identify NMOC as a surrogate for landfill gas.
               Therefore,  the emission reductions required in the rules are specified as reductions of
       Landfill Gas Projects in Tennessee

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               NMOC. Landfills can use flares or energy recovery projects to meet the emission reduc-
               tion requirements,

               Landfill gas emissions were targeted in these rules because of the potential negative
               impact on human health and the environment from the volatile organic compounds
               contained in the gas.  In addition, the contribution of landfill gas to local smog formation,
               local odors, and the potential for explosions or landfill fires were included in the
               decision-making process.

               For landfills that commenced construction before May 30, 1991, and received waste after
               November 8, 1987  ("existing landfills"), the Emission Guidelines  (40 CFR Part 60 Subpart
               Cc) apply. For landfills that commenced construction, reconstruction, or modification on or
               after May 30, 1991  ("new landfills"), the       (40 CFR Part 60  Subpart WWW) apply.
               The collection and control requirements of each of these standards are the same; only the
               start of the compliance clock differs.

               The final regulations were published in the Federal Register on March 12, 1996, but clari-
               fying amendments have been made since. The regulations (as revised) can be found  in
               the Code of Federal Regulations at 40 CFR Part 60, Subparts Cc and WWW. Additional
               amendments were  proposed on May 23, 2002 (67 FR 36476), but were not final as of
               December 2002.

               Landfill gas collection systems and either gas treatment or control  achieving 98 percent
               NMOC destruction  or 20 ppmv outlet NMOC concentration are required for existing and
               new landfills that meet both of the following criteria:
                 (1) Capacity - maximum design capacity greater than or equal to 2.5 million Mg (about
                     2.75 million tons) and 2.5 million cubic meters.

                 (2) Emissions - annual NMOC emission rate is greater than 50 Mg (about 55 tons).
                     Landfills below the capacity and emissions thresholds have reporting requirements
                     to demonstrate their capacity and/or emission levels,  but are not required to apply
                     controls.

                                        for

Importance    Landfill gas energy projects can be part of a compliance strategy to meet EPA's new
               emissions standards for landfill gas.

Applicability   Landfills meeting certain design capacity,  age, and emissions criteria are  required to
               collect landfill gas and to either flare it or use it for energy.

Description    The final municipal  solid waste landfills NESHAP was published in the Federal Register
               on January 16, 2003 (68 FR 2227). It affects the same landfills and has the same control
               requirements as the NSPS and Emission  Guidelines. As with the NSPS, the emission
               reduction requirements of the rule are  specified as NMOC. Landfills with design  capacities
               of at least 2.5 million Mg and 2.5 million cubic meters and that have estimated annual
               NMOC emission rates of at least 50 Mg/year are required to collect and treat or control
               landfill gas emissions. These control requirements are the same as the NSPS and
               Emission Guidelines with one exception: large landfills (i.e., those that exceed the
               2.5 million Mg and cubic meters threshold) that operate part or all of the landfill as a
               bioreactor must install collection and control systems for the bioreactor earlier than would
               be required by the NSPS, even if total estimated emissions do not yet exceed 50 Mg/year.
                                    A Primer on Developing Tennessee's Landfill Gas Utilization Potential

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               The control systems may also be removed earlier from bioreactors, Bioreactors generate
               landfill gas more quickly than conventional landfills, but also generate the gas for a shorter
               period of time.

               The NESHAP also contains additional record keeping and reporting requirements com-
               pared to the NSPS. Landfills that are required to collect and control landfill gas must
               develop a start-up, shutdown,  and malfunction (SSM) plan and report SSM events. The
               NESHAP also requires semiannual compliance reporting, instead of the annual reporting
               required by the  NSPS. The NESHAP defines types of deviations from the standards that
               must be reported in the semiannual reports, for example, periods when monitored control
               device operating parameters are outside of specified ranges.



Importance    New landfill gas projects may be required to obtain construction permits under New
               Source Review (NSR). Depending on the     in which the project is located, obtaining
               these permits may be the most critical aspect of project approval.

Applicability   The combustion of landfill gas results in emissions of carbon monoxide, oxides of nitro-
               gen, and PM-10. Requirements vary for control of these emissions depending on local air
               quality. The relevant standards for a particular area will be discussed in Section 2 of Part
               1, Overview of State Regulations and Permits. Applicability of these standards to landfill
               gas projects will depend on the level of emissions resulting from the technology used in
               the project and  the project's location (i.e., attainment or nonattainment area).

Description    CAA regulations require  new stationary sources and modifications to existing sources of
               certain air emissions to undergo NSR before they begin construction. The purpose of
               these regulations is to ensure  that sources meet the applicable air quality standards for
               the area in which they are located. Because these regulations are complex,  a landfill
               owner or operator may want to consult  an attorney or expert familiar with NSR for more
               information about permit requirements.

               The existing CAA regulations for attainment and maintenance of ambient air quality
               standards regulate six criteria  pollutants: ozone,  nitrogen dioxide (NO2), carbon monoxide
               (CO), particulate matter (PM-10), sulfur dioxide (SO2), and lead. The CAA authorizes the
               EPA to set both health and public welfare-based national ambient air quality standards
               (NAAQS) for each criteria pollutant. Areas that meet the NAAQS for a particular air
               pollutant are classified as being in "attainment" for that pollutant and those that do not are
               in "nonattainment." Because each     is required to develop an air quality implementa-
               tion plan (called a       Implementation Plan or SIP) to attain and maintain compliance
               with the NAAQS in each Air Quality Control Region within the state, specific permit
               requirements will vary by state. (See 40 CFR 51.160-51.166 for more information.)

               The location and     of the landfill gas energy project will dictate what kind  of construc-
               tion and operating permits are required. If the landfill is located in an     that is in
               attainment for a particular pollutant, the landfill gas energy project may have to undergo
               Prevention of Significant Deterioration permitting. Nonattainment Area permitting is
               required for those landfills that are located in       that do  not meet the NAAQS for a
               particular air pollutant. Furthermore, the level of emissions from the project determines
               whether the  project must undergo major NSR or minor NSR. The requirements of major
       Landfill Gas Projects in Tennessee

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               NSR permitting are greater than those for minor NSR. The following provides more detail
               on new source permits:

               of

Prevention of Significant Deterioration (PSD) review is used in attainment areas to determine whether a
new or modified emissions source will cause significant deterioration of local air quality. Tennessee
Department of Air Pollution Control (APC) can assist landfill gas energy project developers in determining
whether a proposed project requires PSD approval. Applicants must determine PSD applicability for each
individual pollutant.

For each pollutant for which the new or modified source is considered major (i.e., exceeds specified
emission thresholds), the PSD major NSR permitting process requires that the applicants determine the
maximum degree of reduction achievable through the application of available control technologies.
Specifically, major sources may have to undergo any or all of the following four PSD steps:
        *  Best Available Control Technology (BACT) analysis

        *  Monitoring of local air quality

        *  Source impact analysis/modeling

        *  Additional impact  analysis/modeling (i.e., impact on vegetation, visibility, and Class I areas)

(See 40 CFR Part 52.21 for more information on PSD.)

Minor sources and minor modifications are exempt from this process, but these sources must still obtain
construction  and operating air permits. See Chapter 1200-3-9 for more information.



A source located in an area that has been designated nonattainment for one or more of the six criteria pol-
lutants may be subject to the  nonattainment for such pollutant. Ozone is the most pervasive nonattainment
pollutant and the one most likely to affect landfill gas energy projects. Because NOx and VOC emissions
contribute to ozone formation, the emission thresholds that trigger major NSR and the control requirements
are more stringent in ozone nonattainment      than in attainment areas. Therefore,  NOx permitting has
been an issue for some landfill energy projects.

A proposed new emissions source or modification of an existing source located in a nonattainment
must undergo nonattainment  major NSR if the new source or the modification is classified as major (i.e., if
the new or modified source exceeds specified emissions thresholds). To obtain a nonattainment NSR per-
mit for criteria pollutants, a project must meet two requirements:
        •  It must use technology that achieves the Lowest Achievable Emissions Rate (LAER) for the
          nonattainment pollutant.

        *  It must arrange for an emissions reduction at an existing combustion source that offsets the
          emissions from the new project at specific ratios.

Potential Exemptions

EPA furnished a guidance document to      and regional  permitting authorities that provides an exemption
from major NSR permitting requirements for landfill projects that qualify as "pollution control projects." An
existing landfill that plans to install a landfill gas energy recovery project may qualify as a pollution control
project as long as it reduces non-methane organic compounds (NMOC) at the site. Under the guidance,
                                    A Primer on Developing Tennessee's Landfill Gas Utilization Potential

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the permitting authority may exempt the project from major NSR, provided it meets all other requirements
under the CAA and the state, including minor source requirements. In nonattainment areas, offsets will still
be required, but need not exceed a 1:1 ratio. States have discretion to exercise the increased flexibility
allowed by the guidance on a case-by-case basis.

        If

Importance    Many landfill gas energy projects must obtain operating permits that satisfy Title V of the
               1990 CAA Amendments.

Applicability   Any landfill or landfill gas energy plant that is a major source,  as defined by the Title V
               regulation (40 CFR Part 70), must obtain an operating permit.

Description    Title V of the CAA requires that all major sources obtain new federally enforceable operat-
               ing permits. The purpose of the permit is to consolidate all air emission limits, monitoring,
               record keeping, and reporting requirements that apply to the source in a single permit.
               Each major source must submit an application for an operating permit that meets guide-
               lines spelled out in individual      Title V programs. The operating permit describes the
               emission limits and operating  conditions that a facility must satisfy and specifies the
               reporting requirements that a  facility must meet to show compliance with the applicable air
               pollution regulations (e.g., NSPS, NESHAP, NSR). A Title V operating permit must be
               renewed every five years.

1.2                                                                               D

Importance    Before a landfill gas energy project can be developed, all Resource Conservation and
               Recovery Act (RCRA) Subtitle D requirements (i.e., requirements for non-hazardous
               waste management)  must be  satisfied.

Applicability   Methane is explosive in certain concentrations and poses a hazard if it migrates beyond
               the landfill facility boundary. Landfill gas collection systems must meet RCRA Subtitle D
               standards for gas control.

Description    Since October 1979,  federal regulations promulgated under Subtitle D of RCRA have
               required controls on the migration of landfill gas.  In 1991, EPA promulgated landfill design
               and performance standards. The newer standards apply to municipal solid waste landfills
               that were active  on or after October 9, 1993. Specifically, the standards  require monitoring
               of landfill gas and establish performance standards for combustible gas migration control.
               Monitoring requirements must be met at landfills  not only during their operation, but also
               for a period of 30 years after closure.

               Landfills affected by RCRA Subtitle D are required to control gas by establishing  a pro-
               gram to periodically check for methane emissions and prevent offsite migration. Landfill
               owners and operators must ensure that the concentration of methane gas does not
               exceed:
                     Twenty-five percent of the lower explosive  limit for methane  in facilities' structures

                     The lower explosive limit for methane at the facility boundary

               Permitted limits on methane levels reflect the fact that methane is  explosive within the
               range of 5 to  15  percent concentration in air. If methane emissions exceed permitted
               limits, corrective action (i.e., installation of a landfill gas collection system) must be taken.
10
Landfill Gas Projects in Tennessee

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1.3
               Subtitle D may provide an impetus for some landfills to install energy recovery projects in
                     where a gas collection system is required for compliance. (See 40 CFR Part 258
               for more information.)
Importance    Landfill gas energy projects may need to obtain NPDES permits for discharging waste-
               water that is generated during the energy recovery process.

Applicability   Landfill gas condensate forms when water and other vapors condense due to temperature
               and pressure changes within the collection system. This wastewater must be removed
               from the collection system. In addition, landfill gas energy projects may generate waste-
               water from system maintenance and cooling tower blow down.

Description    NPDES permits regulate discharges of pollutants to surface waters. The authority to issue
               these permits is delegated to      governments by EPA. The permits, which typically last
               five years, limit the quantity and concentration of pollutants that may be discharged. To
               ensure compliance with the limits, permits require  wastewater treatment or impose other
               operation conditions. The state water offices or EPA regional office can provide further
               information on these permits.

               The permits are required for three categories of sources and can be issued as individual
               or general permits. A landfill gas energy project would be included in the "wastewater
               discharges to surface water from industrial facilities" category and would require an
               individual permit. An individual permit application for wastewater discharges typically
               requires information on:
                     Water supply volumes

                     Storm water treatment

                     Water utilization

                     Plant operation

                     Wastewater flow

                     Materials and chemicals used

                     Characteristics and disposal methods

                     Production

                     Planned improvements

                     Other relevant information
                                    A Primer on Developing Tennessee's Landfill Gas Utilization Potential
11

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1.4

Importance     Landfill gas energy projects may need Clean Water Act (CWA) Section 401  certification for
                constructing pipelines that cross streams or wetlands.

Applicability    Landfill gas recovery collection pipes or distribution pipes from the landfill to a nearby
                gas user may cross streams or wetlands. When construction or operation of such pipes
                causes any discharge of dredge into streams or wetlands, the project may require
                Section 401 certification.

Description     If the construction or operation of facilities results in any discharge into streams or wet-
                lands, such construction is regulated under Section 401. This requirement may affect the
                construction of landfill gas energy project facilities or pipelines to transport landfill gas.

                The applicant must obtain a water quality certification from the state in which the dis-
                charge will originate. The certification should then be sent to the U.S. Army  Corps of
                Engineers. The certification indicates that such discharge will comply with the applicable
                provisions of Sections 301, 302, 303, 306,  and 307 of the  CWA.

1.5

The  following are brief descriptions of how other federal permits could apply to landfill gas energy
project development:
        •   IRCRA Subtitle C could apply to a landfill gas  energy project if it produces hazardous waste.
           While some landfill gas energy projects can return condensate to the landfill, many dispose
           of it through the public sewage system after some form of onsite treatment. In a few cases, the
           condensate may contain high enough concentrations of heavy metals and organic chemicals
           for it to be  classified as a hazardous waste, thus triggering federal Subtitle C regulation.

        *   The Historic Preservation Act of 1966 or the Endangered Species Act could apply if power lines
           or gas pipelines associated with a project infringe upon a historic site or an area that provides
           habitat for  endangered species.

        •   Requirements of the Uniform Relocation Assistance and Real Property Acquisitions Act of 1970,
           as  amended (Uniform Act), will apply to landfill gas energy projects, if federal funds are used for
           any part of project design, right of way acquisition, or construction. The Federal Highway
           Administration is the lead agency for issues concerning the Uniform Act.
1 2     Landfill Gas Projects in Tennessee

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                           of
This section provides information on permits required by the      of Tennessee for the development of a
landfill gas energy project. For an overview of required permits, contact information, and length of the
review period, see Table 2.1. Tables 2.2 through 2.4 present more detailed information about the required
permits. Information provided on  each permit includes:
        •  How the permit is applicable to landfill gas projects
        •  The appropriate agency contact
        •  A description of the permit
        *  The regulation
        *  Information required and suggestions for a successful application
        *  The application and review process
        •  The review/approval period
        •  Any fees required

2.1                 Of
The principal permits for landfill gas energy projects in Tennessee are related to solid waste, air, and water
quality. These are regulated by the Tennessee Department of Environment and Conservation (TDEC).
 Table  2.1
of
Type of Standard
 Permit Agency/Contact
Re view/Appro val
Air Construction Permit Operation
 John Trimmer/TDEC
2-12 months (minor)
5-12 months (major)
State Operating Permit
 John Trimmer/TDEC
2-4 months
Title V Operating Permit
 John Trimmer/TDEC
18 months
Solid Waste Landfills Solid
Waste Management Permit
 Jeff Norman/TDEC
270 days
Water NPDES
 Saya Qualls/TDEC
180 days (minor)
1 year (major)
Certificate of Convenience
And Necessity
 Mike Gaines/TRA
no set time
                                   A Primer on Developing Tennessee's Landfill Gas Utilization Potential
                                                         13

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 Table 2.2
         Air                                          Title ¥
Agency Contact
Regulation
              John Trimmer
              TDEC, Division of Air Pollution Control
              401 Church Street, 9th Floor,  L&C Annex
              Nashville, TN 37243-1531
              Phone: (615)532-0552
              Fax: (615)532-0614
              E-mail: John.Trimmer@state.tn.us
Description          Any person wishing to construct an air contaminant source or to modify an existing
                     air contaminant source is required to obtain a construction permit from the
                     Tennessee Division of Air Pollution Control (TDAPC), A Title V Operating Permit is
                     required of companies that have operations involving a major air contaminant
                     source. A state operating permit is required for new construction permit applicants
                     who are non-Title V sources.
              Chapter 1200-3-9
              Construction and Operating Permits
                     Chapter 1200-3-3
                     Hazardous Air Pollutant Control Requirements\
                     Chapter 1200-3-16
                     New Source Performance Standards (NSPS)
Information
Required!
Suggestions
              For all air contaminant sources located in Davidson, Hamilton, Knox, or
              Shelby counties, the applicant must contact and obtain a permit from the
              applicable county air permit agency. For all other counties, applications and
              assistance can be obtained by contacting the TN Environmental Assistance Center
              at (888) 891-8332.

              Air Quality Construction Permit
              • Permit Application Form (Form # CN-0730 - APC -20) requires the address of the
               facility, principal contact, brief description of emission source, and the estimated
               construction start and completion dates.
              « Process or Fuel Burning Source  Description Form (Form # CN-0741 -APC 21/24)
               requires more detailed information about process and equipment specifications
               and fuel type and  usage.
              « The emission point description form (Form # CN-0742 -APC -22) requires
               information regarding the quantification of the pollutants emitted.
              • See www.state.tn.us/environment/permits/airconst.htm.

                             Permit
              • Persons planning to operate an air contaminant source require a  State Operating
              « Permit from the TDAPC. Facilities that emit more than  100 tons per year (tpy) of
               an air pollutant, 10 tpy of a hazardous air pollutant, and /or 25 tpy of a
               combination of hazardous air pollutants are not eligible for a State Operating
               Permit but must obtain a Title V Operating  Permit (see  below).
14
Landfill Gas Projects in Tennessee

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                     • Permit Application Form (Form # CN-0730 -ARC 20) requires the address of the
                       facility,  principal contact, and a brief description of emission source,
                     • Construction Permit applicants who are non-Title V sources are required to apply
                       for a State Operating Permit within 30 days of startup.

                     Title V Operating Permit
                     • Forms APCV. Index -V.31 series (Forms V, Index, V.1, V.2, V.3, V.4/V.5, V.10,
                       V.11, V.19, V.20 - V.27, V.28, V.29, V.30, and V.31)
                     • Facility identification  information.
                     • Stack identification information.* Description of equipment and processes and products.
                     • Emissions of regulated air pollutants and emissions related information.
                     « Fuels, fuel use, raw materials, production rates, and operating schedules.
                     « Information  on air pollution control systems.
                     * Statement of Completeness and Certification of Compliance with all applicable
                       regulations.
                     • Compliance methods for assurance of compliance with applicable requirements.
                     « See www.state.tn.us/environment/permits/title5.htm.

Application Review  When construction permit or Title V permit applications are submitted, TDAPC
Process             reviews them for completeness. TDAPC makes a completeness determination
                     within 60 days of the receipt of a Title V permit application and within 30 days  of the
                     receipt of a construction permit application. The applicant is notified in writing of
                     adequacy or any deficiencies.

                     Air Quality Construction Permit
                     • Upon receipt of a construction permit application, a public notice is published in a
                       newspaper  of local circulation in the proximity of the applicant. A construction
                       permit for a minor source  must be issued within 115 days after receipt of a
                       complete application.
                     • Major source (PSD) draft construction permits go through a public review process
                       where the public, affected states, and EPA's comments are solicited. A public
                       hearing is held if significant interest is displayed. After considering public
                       comments and a final supervisory review, a final decision is made, and the permit
                       is issued or denied. For PSD major sources, the permit is to be issued within six
                       months after receipt  of a complete application.
                     « Construction permits are issued for the  period of time required to complete
                       construction and to meet any startup conditions identified in the permit, which is
                       approximately one year.

                           Operating Permit
                     • When the applications are  submitted, TDAPC reviews them to determine adequacy.

                     Title V Operating Permit
                     • Upon receipt of a complete application, TDAPC prepares a draft permit. The  draft
                       permit is then subject to review by the public,  affected states, and EPA. A notice
                       giving general information about the permit will be published in a local newspaper.
                       This notice will afford the public an opportunity to: (a) comment on the proposed
                       permit;  and  (b) request a public hearing on the permit. The normal duration of a
                       Title V operating permit is three to five years.

                                    A Primer on  Developing Tennessee's Landfill Gas Utilization Potential     15

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Review/Approval     Air Quality Construction Permit
Period               • Generally, the entire permit process may     two to four months for minor
                      sources and five to more than 12 months for major sources.

                          Operating Permit
                     • Generally, an operating permit is issued within two to four months. The normal
                      duration of a      operating permit is nine to 10 years.

                     Title V          Permit
                     • The entire permit process may take from six months to more than twelve
                      months. The normal duration of a Title V operating permit is three to five years.

Fees                 Air Quality Construction Permit
                     Application      for the Air Quality Construction Permit are       upon the emission
                     rate per year:
                     Anticipated Maximum                                     (Filing/Processing)
                     Emission Rate                                            Permit Fee
                     Less than 10 Tons/Year                                   $100.00
                     10 to < 100 Tons/Year                                     $500.00
                     100 to < 250 Tons/Year                                   $1,000.00
                     250 to < 500 Tons/Year                                   $2,000.00
                     500 to < 1,000 Tons/Year                                  $3,000.00
                     1,000 to < 5,000 Tons/Year                                $4,000.00
                     5,000 to Greater Tons/Year                                $5,000.00

                          Operating Permit
                     Application Fees: There are no application      at this time.
                     Annual Emission Fees (2002):
                     • Minor Sources (under 100 tons):
                      The rate is $12.50 per ton of allowable emissions. A source of less than 10 tpy
                      is exempt from minor source fees,  provided that such  source has not taken a
                      limitation on its permit that would render it a conditional major or synthetic minor
                      source. Minor source fees are based on  the sum of the allowable and/or actual
                      emissions of all regulated pollutants at the  source. An annual emission fee is
                      not charged for carbon monoxide. All annual emission fees are due by the first
                      day of the month in which the fee is due (based upon  the county in which the
                      source is located).

                     Title V          Permit
                     Application Fees: There are no application fees for the Title V  permit.
                     Annual Emission Fees (2001-2002):
                     • Major Sources (Title V):
                      The     is $21.70 per ton for actual emissions or $13.00 per ton for allowable
                      emissions. Title V fees were due by July 1, 2002, following the end of the annual
                      accounting period (June 30, 2002).
1 6     Landfill Gas Projects in Tennessee

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 Table 2.3

Agency Contact
Information
Required/
Suggestions
Jeff Norman
TDEC, Division of Solid Waste Management
401 Church Street, 5th floor
Nashville, TN 37243-1533
Phone: (615)532-0876
Fax: (615)532-0886
e-mail: jeff.norman@state.tn.us
Regulation           1200-01-07
                     Solid Waste Management Permit and Terms of the Permit
                     Persons who wish to construct or operate a solid waste disposal facility must obtain
                     a landfill permit from the Tennessee Division of Solid and Hazardous Waste
                     Management. The following types of disposal facilities require permits:
                     • Class I disposal facility: Takes non-hazardous municipal solid wastes
                      (e.g., household  wastes), approved special wastes, and commercial wastes.
                     • Class II disposal facility: Takes non-hazardous  industrial wastes, commercial
                      wastes, and fill.
                     « Class III disposal facility: Takes Class IV wastes, plus landscaping, land clearing,
                      and farming wastes.
                     • Class IV disposal facility: Takes construction/demolition wastes, shredded tires,
                      and waste with similar characteristics.
                     Facilities  covered by Permit-by-Rule, junkyards,  and other exempted solid waste
                     disposal facilities or practices are not required to obtain a landfill permit.
The applicant must submit the following items to the Division of Solid and
Hazardous Waste Management staff at the appropriate Environmental
Assistance Center.
Part /:
•Acompleted application (Form CN-1036) that includes: the name, address, and
  phone numbers of the owner(s); proposed activities to be conducted at the
  facility; and a statement regarding whether the facility is subject to local
  approval (TCA§ 68-211-701) and  county approval, if necessary.
«A topographic map showing: the facility; property boundaries to 1/2 mile past the
  boundaries; each waste processing or disposal unit; and wells, springs, and other
  surface water bodies within 1/4 mile of the property boundaries.
«A disclosure statement containing  information concerning past performance in
  waste management fields of the applicant, as well as officers, directors, and/or
  partners of the  applicant's business.
                                    A Primer on Developing Tennessee's Landfill Gas Utilization Potential
                                                                          17

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                     Part II:
                     • A hydrogeologic assessment of the potential site.
                     • Facility design plans and operations manual.
                     • Financial assurance demonstrating the financial responsibility for closure and
                       post-closure care.
                     « Other specific requirements for Class I, II, III, and IV disposal facilities.
                     A new facility cannot begin construction without submitting Parts I and II and
                     receiving an effective permit.

Application          Permit applications are evaluated by inspecting the facility and checking its
Process             consistency with Parts I  and II to determine whether performance and design
                     standards have been met.
Review Process
Review!
Approval
Period
After the Part I application is received and reviewed for completeness, a preliminary
public notice is issued. The state archeologist reviews the site for the existence of
burial grounds. The Part II items then are submitted to the Division and are
reviewed by a committee. When all documents and approvals have been met, a
second  public notice of intent to issue a permit is issued. Public response to this
second  notice may generate another public notice to hold a public hearing.  If
requested, the Division may give notice of a public hearing concurrently with the
second  public notice of intent to issue a permit. After review of the public comments,
a final public notice with the permit decision is issued.

The application normally is processed in at least 270 days. The entire permit
process may take from 16 to 32 months, depending on the type of facility, public
interest, public hearings, revisions, appeals, and site preparation. Landfill permits
are valid for the life of the facility, as permitted, as long as it complies with
regulations and annual maintenance fees are paid.
Class I and Class II (Hydrogeologic plan)
Class I and Class II (Design and construction plans)
Class 111 and Class IV
Major Modifications
Annual maintenance
Class 1 (tons/year)




Class II (tons/year)

Class III and IV


fees;
Greater than 100,000
50,000 to 100,000
25,000 to 50,000
10,000 to 25,000
Less than 10,000
Greater than 1 ,000
Less than 1,000

$4,000
$6,000
$3,000
$2,000

$15,000
$10,000
$6,000
$2,000
$1,000
$5,000
$2,000
$2,000
       Landfill Gas Projects in Tennessee

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 Table 2.4

Agency Contact
                     Saya Quails
                     TDEC, Division of Water Pollution Control
                     401 Church Street
                     6th Floor, L&C Annex
                     Nashville, TN  37243-1534
                     Phone: (615)532-0652
                     Fax: (615)532-0503
                     e-mail: saya,qualls@state,tn.us
Information          • General Information: EPA Application Form 1
Required/            • Wastewater Discharge Information: EPA Application Form 2C
Suggestions         • New Sources and New Dischargers: Application for Permit to Discharge Process
                      Wastewater: EPA Application Form 2D
                     * Facilities Which Do Not Discharge Process Wastewater: EPA Application Form 2E
                     • Application for Permit to Discharge Storm Water Associated With Industrial Activity:
                      EPA Application Form 2F
                     « Form CN-1090 is required to identify the parties responsible for different aspects
                      of the permit.
                     In most cases, topographic maps, process flow line diagrams, and extensive
                     sampling     are required with the applications. A preliminary engineering
                     report and treatability analysis also may be required where unusual or complex
                     wastewater treatment systems may be needed.

Application Process  Applications and assistance can be obtained from the Division of Water
                     Pollution Control.

Review Process      A public hearing is held if significant interest is displayed. After considering public
                     comments, the appropriate revisions are made, and the final permit is issued.
                     A permit may be         to  the Water Quality Control Board up to 30 days after
                     the final permit is received.

                     The Division must make permit decisions within one year of receipt of a complete
                     application for major facilities  and within 180 days of receipt of a complete
                     application for minor facilities. The permit process can take from six to 12 months.
                     Normally, the permit is issued for a term of five years.  Under the current
                     development phase of the WPC Watershed Initiative, however, permits may be
                     issued for less than five years to synchronize the permit. If approved, a draft permit
                     is prepared,  and a public notice is issued. The applicant is  given 25 days and EPA
                     is given 60 days to review and comment on the draft permit.  EPA does not review
                     all draft permits.

                     Plan  review fees vary from $250 to $1,500, depending on the design flow capacity
                     of the facility and the size of a mining site in acres. These      are due with the
                     application.
                     Annual maintenance     vary from $500 to $7,500, depending on the volume of
                     discharge or the size of disturbance in      on a mining site and the Standard
                     Industrial Classification (SIC)  code  of the facility.
Review/Approval
Period
                                    A Primer on Developing Tennessee's Landfill Gas Utilization Potential
                                                                                              19

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The staff of TDEC is available to provide assistance during the permitting process. The Environmental
Assistance Center (EAC) can be reached at (888) 891-8332.

                                                       (TRA)

The mission of the TRA is to promote the public interest by balancing the interests of utility consumers and
providers while facilitating the transition to a more competitive environment.

Established in 1996, TRA was created to  meet the challenge of the changing telecommunications and
utility environment. TRA is charged with the responsibility of setting the      and service standards of
privately owned telephone, natural gas, electric, and water utilities.



Depending on the use of the final product, it may be necessary for the project developer to obtain
a Certificate of Convenience and Necessity (CCN) from the TRA. Certain other gas pipeline safety
regulations may also apply. Therefore, it is recommended that the project developer contact the TRA
before a methane gas operation is instituted to determine if a CCN  is necessary. If necessary, a CCN
application is made by filing a Petition with the TRA and paying a $25 fee.



The TRA will make a review of the CCN  Petition and may require additional information from the project
developer as well as a public hearing. A formal decision on the CCN application will  be reached in a public
meeting of the TRA Directors.



There is no set rule,  regulation,  or statute concerning the length of the review period for an energy-related
CCN. However, the TRA strives to process such applications in an expeditious manner.

Fees

Annual inspection and supervision fees are required from all  utilities under the jurisdiction  of the TRA. The
minimum fee is $100.


         Mike Gaines, Chief of Energy and Water Division
         Phone: (615) 741-2904, ext. 220
         e-mail: Mike.Gaines@state.tn.us

         Glynn Blanton, Chief of Gas Pipeline Safety Division
         Phone: (615) 741-2904, ext. 185
         e-mail: Glynn.Blanton@state.tn.us

         Richard Collier, General Counsel
         Phone: (615) 741-2904, ext. 170
         e-mail: Richar.Collier@state.tn.us
20     Landfill Gas Projects in Tennessee

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        Tennessee Regulatory Authority (TRA)
        460 James Robertson Parkway
        Nashville, TN 37243-0505
        Fax: (615)741-2336

                                         of                       (TOOT)

If landfill gas energy projects are to impinge upon the      of Tennessee right of way, a permit from TDOT
must be obtained. There are some restrictions as to where utilities can be located.

        Central Right-of-Way Office
        600 James K. Polk Building
        505 Deaderick Street
        Nashville, TN 37243-0337
        Phone: (615)741-3196
        Fax: (615)532-1548
        Contacts: Jeff Hoge, Assistant  Director
        Joe Shaw, State Utilities Coordinator (e-mail: Joe.Shaw@state.tn.us )

                1
        7345 Region Lane
        Knoxville, TN 37914
        Phone:      594-2496
        Fax:      594-2495
        Contact: Jim Watson, Regional Utilities Coordinator (e-mail: Jim.Watson@state.tn.us )

        Region 2 Right-of-Way Office
        P.O.  Box
        4005 Cromwell Road
        Chattanooga, TN 37422-2368
        Phone: (423)510-1100
        Fax: (423)510-1131
        Contact: Steve Langford, Regional Utilities Coordinator (e-mail: Steve.Langford©state.tn.us )

                3
        6601 Centennial Blvd.
        Nashville, TN 37243-0360
        Phone: (615)350-4200
        Fax: (615)350-4410
        Contact: Jim Nikahd,  Regional  Utilities Coordinator (e-mail: Jim.Nikahd@state.tn.us )

        Region 4 Right-of-Way Office
        300 Benchmark Place
        Jackson, TN 38301
        Phone: (731)935-0134
        Fax: (731)935-0208
        Contact: Charles Green, Regional Utilities Coordinator (e-mail: Charles.Green@state.tn.us )
                                   A Primer on Developing Tennessee's Landfill Gas Utilization Potential     21

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                            of


Within the framework of federal and state regulation, local governments may have some jurisdiction over
landfill gas energy development in certain cases. Typically, local permits address issues that affect the
surrounding  community. These permits generally fall under the categories of construction, environment
and health, land use, and water quality/use. It should be noted, however, that some local standards and
regulations are stricter than state or federal regulations.

          to                                 of

The following six steps  will assist landfill gas energy project developers to achieve successful local permits
approval:

   Step 1.    Determine which local authorities have jurisdiction over the project on the project site(s).

   Step 2.    Contact the  local, city, and/or county planning and public works departments to obtain
              information about applicable permits and to discuss your plans. Meeting with agency staff
              to  discuss the landfill gas energy project and required permits often helps to expedite the
              permitting process.

   Step 3.    Obtain essential information regarding each  permit,  including:
                      •  What information is required

                      •  The permitting process that should be followed

                      •  Timeframes (including submittal, hearing, and decision dates)

   Step 4.    Obtain copies of the regulations to compare and verify what is required in the permit
              applications. If they differ, contact the appropriate permitting agency.

   Step 5.    Submit a complete application. Incomplete applications typically result in processing delays.

   Step 6.    Attend meetings or hearing(s) where the application will be discussed to respond to any
              questions that are raised. Failure to do so could result in delays.
22     Landfill Gas Projects in Tennessee

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 Part 2:  Incentive  Programs
                           of
There are three federal incentive programs that may apply to landfill gas energy projects: the Renewable
Energy Production Incentive (REPI), Qualifying Facilities (QF) certification, and Section 29 Tax Credit. Each
program is described below.

1.1

The Renewable Energy Production Incentive (REPI), mandated under the Energy Policy Act of 1992, may
provide a cash subsidy of up to  1.5 cents per kilowatt-hour to owners  and operators of qualified renewable
energy sources, such as landfills, that began operation between October 1993 and  September 2003.
Public sector entities may qualify to earn a cash subsidy based on a tier system. Tier 1 facilities (solar,
wind, geothermal, or closed-loop biomass) receive full payments or pro-rata payments if funds are too
minimal to match  all requests. Any remaining funds fall to Tier 2, which includes landfill gas facilities.
If there are insufficient funds to cover Tier 2 applicants, a pro-rata system is implemented. The U.S.
Department of Energy (DOE) will make incentive payments for 10 fiscal years, beginning with the fiscal
year in which application for payment for electricity generated by the facility is first made and the facility
is determined by DOE to  be eligible for receipt of an incentive payment. The period for payment under
this program ends in fiscal year  2013. REPI payments are subject to adjustment because Congress
appropriates REPI payments each year.
For further information, contact:
         U.S. Department of Energy
         National Renewable Energy Laboratory
         Golden Field Office
         Golden, CO 80403
         Phone: (303) 275-4795
         www.eren.doe.gov/power/repi.html
U.S. Department of Energy
Efficiency and Renewable Energy
Forrestal Building, Mail Station EE-10
1000 Independence Avenue, S.W.
Washington, DC 20585
Phone: (202)
1.2

Landfill gas energy projects that generate electricity will benefit from the Qualifying Facilities (QF)
certification, which is granted through the Federal Energy Regulatory Commission (FERC). The following
information describes the benefits of QF status and the steps for applying for such status.

The Public Utility Regulatory Policies Act (PURPA), one of five parts of the National Energy Act of 1978,
was designed to promote conservation of energy and energy security by removing barriers to the develop-
ment of cogeneration facilities and facilities that employ waste or renewable fuels. Such facilities are called
Qualifying Facilities or QFs. Under PURPA, utilities are required to purchase electricity from QFs at each
utility's avoided cost of generating power. PURPA provides that a small power production facility, such as a
landfill gas energy project that       FERC standards, can become a QF.

In order to apply for QF status, applicants must prepare either: (1) a Notice of Self-Certification, which
asserts compliance with the FERC's technical and ownership criteria;  or (2) an Application for Commission
Certification of Qualifying Status, which requires a  draft Federal Register notice and provides actual FERC
approval of QF status. In either case, the applicant must also file Form 565, which is a list of questions
                                   A Primer on Developing Tennessee's Landfill Gas Utilization Potential
                                             23

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about the project, and must pay any filing fees associated with certifications, exemptions, and other activi-
ties. FERC will provide the QF "Info Packet," which describes the necessary steps, requirements, and
background information. After submittal of the initial application, further justifications and submittal of infor-
mation may be required.

For the QF Info Packet and applications, contact:
         Federal Energy Regulatory Commission
         Qualifying Facilities Division
         825 North Capitol Street, N.E.
         Washington, DC 20426
         Phone: (202) 208-0577
         www.ferc.fed.us

1.3               29

Developers of landfill gas energy projects who sell landfill gas to an unrelated third party may qualify for a
tax credit under Section 29 of the  Internal Revenue Service (IRS) tax code. In order to take advantage of
the credits, project developers may bring in an outside party when developing power projects. The Section
29 tax credit was established in 1979 to encourage development of unconventional gas resources, such
as landfill gas. Section 29  tax credits are available through 2007 to landfill gas projects that had binding
contracts in place by December 31, 1996 and were placed in service by June 30, 1998. The credit has
been extended several times by the U.S. Congress. Currently, it is discontinued.
2.1

Tennessee Valley Authority (TVA) and local public power companies, working with input from the
environmental community, have created a program called Green Power Switch® to  produce electricity
from cleaner, greener sources and incorporate the electricity into the Tennessee Valley's power mix. The
program was started for two main reasons:

       1.  TVA's mission to improve quality of life while minimizing the negative environmental impact
          of business.

       2.  The customer wanted an environmental energy alternative.

Green Power Switch® began on Earth Day 2000 and is expanding to consumers throughout the Tennessee
Valley as more resources for generating renewable power become available.

In the start-up       of Green Power Switch®, methane gas from landfills will provide the largest source
of cleaner energy. At present, TVA has two sources of methane gas:  the Middle Point Landfill near
Murfreesboro, Tennessee, and the City of Memphis Wastewater Treatment Plant, which produces a
methane by-product that is co-fired at TVA's Allen Fossil Plant.

Contact Information:
         Gary Harris
         Manager of Green Power Switch®
         Phone:  (615)232-6124
         e-mail: ghharris@tva.gov
24     Landfill Gas Projects in Tennessee

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The Renewable Portfolio Standard (RPS) is a plan to generate more clean power from sustainable and
secure energy sources. The      of Tennessee does not presently have a state-implemented Renewable
Portfolio Standard (RPS). The      has closely followed a national RPS that will require utility companies
to use alternative energy sources to  generate electricity by setting a goal of at least 20 percent of the
overall power mix to come from clean and sustainable sources by 2020.

Contact Information:
         Thomas W. Swanson
         Manager Power Resources & Operations Planning
         Phone: (423) 751-6741
         e-mail: twswanson@tva.gov







         Is

Electricity restructuring refers to the introduction of competition into both the wholesale and retail electricity
markets. Until now, electric utilities operated as monopolies authorized by federal and      regulatory
authorities as the sole provider of electric service to consumers within a specific service territory. Under
restructuring, utilities will lose these monopolies, enabling other energy providers to compete for their
customers. With retail  choice, independent power producers are allowed to sell energy directly to retail
customers utilizing  both the transmission grid in the region and the distribution system of the local electric
utility. The desired result is more energy options for consumers, lower energy prices, and greater use of
renewable energy sources.

Efforts to restructure the electric utility industry began in 1978 with passage of the Public Utilities
Regulatory Policies Act (PURPA), which required utilities to buy a portion of their power from
unregulated power generators in an effort to encourage the development of smaller generating
facilities, new technologies, and renewable energy sources. The National Energy Policy Act of 1992
(EPACT) expanded on PURPA, allowing  more types of unregulated companies to generate and  sell
electricity, effectively creating a competitive wholesale market for electric power.

Restructuring at the retail level has been a hot issue in many states since the passage of EPACT, which
delegated to states the authority to introduce competition among electric utilities within  their borders. As of
January 2002, 18       and the District of Columbia have either enacted enabling legislation or issued a
regulatory order to implement retail access. Retail        in these jurisdictions is either currently available
to all or some customers or will soon be available. Six states have either passed legislation or issued
regulatory orders to delay implementing retail access. Twenty-six states, including Tennessee, have not
enacted enabling legislation to restructure the electric power industry or implement retail access. After
being first to enact  retail choice, California has suspended direct retail access.

Gef the Latest Information on Electricity Restructuring in Your

For up-to-date information on electricity restructuring in Tennessee, visit the U.S. DOE Web site at
www.eia.doe.gov/cneaf/electricity/page/restructure.html and the National Conference of State Legislatures
Web site atwww.ncsl.org/programs/esnr/restru.htm.
                                    A Primer on Developing Tennessee's Landfill Gas Utilization Potential     25

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The Voluntary Reporting of Greenhouse Gases Program, created by Congress under Section 1605(b) of
the Energy Policy Act of 1992, provides an opportunity for any company, organization, or individual to
establish a public record of their greenhouse gas emissions, reductions, or sequestration achievements in
a national database. The data submitted to the program is made publicly available via CD-ROM and the
Internet, Those who report to 1605(b) can gain recognition for environmental stewardship, demonstrate
support for voluntary approach toward achieving environmental policy goals, support information exchange,
and inform the public debate about greenhouse gas emissions.

Additional information about the program,  as well as reporting forms and technical assistance, are available
through Energy Information Administration's (ElA's) Communications Center by calling (202) 586-0688 or
toll free at (800) 803-5182, via e-mail at infoghg@eia.doe.gov, and on the  program's Web site at
www.eia.doe.gov/oiaf/1605/frntvrgg.html.
26     Landfill Gas Projects in Tennessee

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