Bull Run Fossil Plant Estimation of NC Lawsuit NOx Rate Limit

1. Bull Run Fossil PlantEstimation of NC Lawsuit NOx Rate Limit May 14, 2009

2. BRF NC Lawsuit - NOx Emission Compliance :CYTD (Jan 23 – Current) Performance and Future Projections • Currently, Bull Run’s average NOx Emission rate for the NC CY to date is 0.099 lb/MMBTU against a NC CY target of 0.08 lb/MMBTU. In order to recover on emission rate, Bull Run must average an aggressive NOx emission rate of at least 0.072 lb/MMBTU for the remainder of the CY in order to achieve compliance with the court ruling. • Based on the latest May 2009 Generation Plan, Bull Run must average the following NOx rates to achieve compliance if generation is curtailed. • In order to average the above NOx Rates, Bull Run must operate at rates slightly lower than those above to account for unit startup and shutdown conditions where the Selective Catalytic Reduction (SCR) System which reduces NOx cannot be in service due to technology limitations which prohibits equipment operation at reduced flue gas temperatures (~ < 600-degres F). • Several equipment and operating risks pose threats to achieving the NOx emission rate requirements, including: • SCR System Trips (never before operated year-round - previously only 5 months per year) • High Boiler Exhaust NOx due to equipment issues (Aux Air Dampers), which causes SCR to operate outside of design limits • Potential FD Fan Issues, Boiler Tube Leaks, Boiler Feed Pump Issues, etc. which threaten generation • Air Preheater Pluggage from High Ammonia Slip due to pushing limits of equipment design to recover NOx rate • Each above issue, and others not listed, threaten generation which in turn threatens NOx compliance with the NC Lawsuit

3. BRF NC Lawsuit - NOx Emission Compliance :Historical Performance and Recommendation • Historically, Bull Run’s SCR (in Ozone Season Operation Only) has averaged cumulative NOx Emission Rates as Follow. Bull Run’s historical availability is also presented. • Based on known risks and equipment liabilities, and performance in recent history (last year), Bull Run should conservatively be assumed to be 50% - 70% availability for the remainder of CY 2009. Based on this, Bull must average 0.062 – 0.068 lb/MMBTU NOx rate. Bull Run must operate between 0.058 – 0.064 lb/MMBTU to achieve this goal, accounting for the additional tons from unit startups and shutdowns. • Note that even if Bull Run achieved 90% availability, the operating NOx rate would need to be ~0.067 lb/MMBTU, which has been very seldom achieved in the current CY to date due to conditions mentioned previously. • Operation at this NOx rate, given the higher than historical SCR inlet NOx will be challenging given the stated circumstances. Note that each upset to generation (unit trip or derate) reduces the amount of remaining operating hours in which to recover NOx rate (unit must be online to catch up on rate). Therefore, each day the unit remains offline, the rate which must be averaged to meet NC Lawsuit limits is then reduced. • In order to have a chance at meeting the NC lawsuit NOx emission rate limit, it is recommended that Bull Run be kept in service at full load until the average cumulative NOx rate of 0.08 is achieved (currently estimated in October 2009).