# REGIONAL HAZE STATE IMPLEMENTATION PLAN FOR THE STATE OF ARIZONA

APPENDICES - VOLUME III

Appendix A-12 through Appendix A-18

Air Quality Division Arizona Department of Environmental Quality

### List of Appendices Arizona Regional Haze SIP 

## LIST OF APPENDICES

APPENDIX VOLUME I

APPENDIX A-1. BACKGROUND Appendix A-1a. Definitions Appendix A-1b. Arizona Department of Environmental Quality – Air Quality Division Organization Charts

APPENDIX A-2. DESCRIPTIONS OF ARIZONA Appendix A-2a. Bibliography for Chapter 2

APPENDIX A-5. ATTRIBUTABLE IMPAIRMENT Appendix A-5a. Arizona’s RAVI rule Appendix A-5b. Notification letters to FLMS on contact person, and Public Comment Period Appendix A-5c. Supporting Documents Related To The Promulgation Of Arizona’s RAVI Rule Appendix A-5d. New sour ce review rule-R18-2-410

APPENDIX A-6. CLEAN AIR CORRIDOR Appendix A-6a. WRAP Policy on Clean Air Corridors Appendix A-6b. WRAP Emission Tracking System and Assessment Process for the Clean Air Corridor

APPENDIX A-7. STATIONARY SOURCES Appendix A-7a. Arizona Draft Western Backstop SO2 Trading Program Rule Appendix A-7b. Proposed WRAP 309 Coordinating Committee Charter Appendix A-7c. WRAP Report on A ssessment of NOx/PM Strategies

APPENDIX A-8. SO2 MILESTONES/BACKSTOP Appendix A-8a. WRAP Market Trading Forum Non-Utility Sector Allocation Final Report from the Allocations Working Group (November 2002) Appendix A-8b. Western Emissions B ackstop (WEB) Emissions & Allowance Tracking Systerm (EATS) Analysis Appendix A-8c. Recommendations for Ma king Additional Determinations in the Context of Reasonably Attributable BART

APPENDIX A-9. MOBILE SOURCES Appendix A-9a. Arizona Mobile Source Work Group Findings and Recommendations Related to Mobile Source Emissions

### List of Appendices Arizona Regional Haze SIP 

## LIST OF APPENDICES (Cont.)

APPENDIX VOLUME II

APPENDIX A-10. FIRE PROGRAMS Appendix A-10a. WRAP report “Assessing St atus of Incorporating Smoke Effects into Fire Planning and Operation” Appendix A-10b. EPA’s “Interim Air Qual ity Policy on Wildland and Prescribed Fires” Appendix A-10c. Revised Arizona R18- 2-602, “Unlawful Open Burning” and Article 15, “Forest and Range Management Burns” Appendix A-10d. Supporting Documents Relate d to the Promulgation of Revised Arizona R18-2-602, “Unlawful Op en Burning” and Article 15, “Forest and Range Management Burns” Appendix A-10e. WRAP “Policy on Fire Tracking Systems” Appendix A-10f. WRAP report “Nonburni ng Alternatives for Vegetation and Fuel Management” Appendix A-10g. WRAP report “Burning Management Alternatives on Agricultural Lands in th e Western United States” Appendix A-10h. WRAP report “Enhanced Smoke Management Programs for Visibility” Appendix A-10i. Arizona Revised Statute 49-501 Appendix A-10j. WRAP report “Annual Emission Goals for Fire”

### List of Appendices Arizona Regional Haze SIP 

## LIST OF APPENDICES (Cont.)

APPENDIX VOLUME III

APPENDIX A-12. POLLUTION PREVENTION Appendix A-12a. Arizona Pollution Prev ention Work Group Review of WRAP Policy on Renewable Energy and Energy Conservation Appendix A-12b. Details of Renewabl e Energy Generation and Capacity Appendix A-12c. ICF Assessment of Renewable Energy and Energy Conservation Programs

APPENDIX A-13. OTHER GCVTC OPTIONS Appendix A-13a. Arizona’s Assessment of Other Recommendations Of The Grand Canyon Visibility Transport Commission Appendix A-13b. Summary of Discussi ons with Federal Land Managers on Emissions In-and-Near the F our Arizona GCVTC Class I Areas

APPENDIX A-14. PROJECTION OF VISIBILITY Appendix A-14a. Arizona Technical Re view Memoranda of WRAP Emission Inventories and Technical Support Document Appendix A-14b. Summary of Emission I nventories used in WRAP Modeling

APPENDIX A-18. PUBLIC PARTICIPATION Appendix A-18a. Notices of Public Hearings Appendix A-18b. Hearing Agendas, Si gn-in Sheets, Transcripts, and Certifications Appendix A-18c. Written Comments Received During Comment Period Appendix A-18d. Responsiveness SummaryAppendix A-12 – Pollution Prevention Arizona Regional Haze SIP 

## APPENDIX A-12. POLLUTION PREVENTION

This appendix contains work products a nd references relied u pon by Arizona in the development of Chapter 12 of the Regional Haze SIP.Appendix A-12 – Pollution Prevention Arizona Regional Haze SIP 

## Appendix A-12a. Arizona Pollution Pr evention Work Group Review of WRAP Policy on Renewable Energy and Energy Conservation

### November 13, 2002

Jeff Burks Utah Energy Office Department of Natural Resources 1594 W. North Temple Box 146480 Salt Lake City, UT 84114

R.T. "Hap" Boyd GE Wind Energy 444 S. Flower Street, Suite 4545 Los Angeles, CA 98071

Dear Jeff and Hap:

T he Arizona Regional Haze Pollution Prevention Workgroup (P2WG) would like to provide the following comments on the WRAP ’ s Air Pollution Prevention Forum ’ s renewable energy report , "Recommendations of Air Pollution Prevention Forum to Increase the Generatio n of Electricity from Renewable Resources." Items 1

–10, below, are fairly general in nature and relate to the body of the Report. We have also included an attachment of comments that relate specifically to the Report ’ s Appendix A for Arizona.

The P2W G was very impressed with the report. The group greatly appreciated the wealth of information contained in the report and the fact that the report was one of the few that quantifies the costs and benefits of renewable energy. This type of information wil l be very useful to agencies promoting the use of renewable energy.

We do have a few specific comments and suggestions.

1. The report should include a statement or paragraph that certain economic factors referenced in the report (e.g., financial impact of i ncorporating various recommendations, differential costs of renewable energy) corresponding to a particular state could be significantly different from the regional estimates identified in the report. Adding an explanation in the report to clarify that th e numbers are based on regional averages and must be tailored to each state for specific use would prevent confusion and erroneous expectations.

### Letter to J. Burks and R. Boyd

RE: Renewable Energy Report Comments November 13, 2002 Page Two

2. The Executive Summary should clarify that it will be difficult to meet the 10/20 goals. Although such a statement is included on the bottom of page ii ( “ The 10/20 goals are ambitious by any standard. ” ), it would be helpful to have an expanded explanation that the Regi onal Haze Rule has established the 10/20 goals as just that

–goals. What is expected is a full and reasonable attempt to attain the goals and, if the goals aren ’ t met, an explanation of strategies used to make progress towards the goals. In addition, ea ch state will be unique in its ability to meet or make progress towards the goals. 3. Page III

- 4: Arizona has adopted a Renewable Portfolio Standard, ACC R14

- 2

- 1618

. 4. Page IV

- 1: The Wisconsin report analysis numbers seem very generous, and the report does not have a reference for the cited figures. It would be helpful to add a citation for the Wisconsin report. 5. There appear to be inconsistencies about the cost of state agency renewable purchase requirement. Page III

- 17 of the report states a total cost of a 1 0% renewable purchase requirement at $4.2 million, based on an incremental cost of 1.5 cents/kWh and an additional demand for 280,000 MWh. Page IV

- 15 makes a similar calculation and arrives at a cost of $37.5 million based on an incremental cost of 2.5 ce nts/kWh and an additional demand for 600,000 MWh. 6. The report states different incremental costs for renewable energy in different places. It would be helpful to achieve consistency whenever possible and to explain any remaining differences. In addition th e report should provide a source, evaluation, or other justification for incremental costs presented and qualify that the costs are based on a regional average. The incremental cost for renewable energy for a particular state may vary significantly from t he regional average. 7. The report appears to assume new natural gas or combined cycle is being replaced, but that may not be the case. 8. Pages IV

- 11, 12: The report proposes that a state ’ s contribution to the regional goal should be based on that state ’ s ener gy consumption. This could be problematic for Arizona in that it could require us to rely on out

- of

- state renewable resources to meet that goal, which would dilute the state ’ s investment in its most abundant resource, solar energy. The report should clar ify that there are other feasible approaches. 9. Page IV

- 13: Principal 1 appears to be saying that the majority of State and Federal financial incentives should be directed at landfill gas, low

- impact hydro and wind, and only a small percentage should be di rected at solar. This could put our State at an economic disadvantage, as solar is our most abundant renewable resource. An alternative to this principle is that states should direct the majority of their financial incentives toward the resources that ar e viable and most abundant in that

### Letter to J. Burks and R. Boyd

RE: Renewable Energy Report Comments November 13, 2002 Page Three

state, thereby creating a greater diversity of renewable energy resources

throughout the region. 10. Page I

- 14 says renewab les will probably “ supplant new gas fired generation. ” In many cases, renewables may supplant the oldest and least efficient peaking power plants.

Thank you for the opportunity to comment on the report.

Sincerely,

Ursula Kramer Director, PDEQ

cc: L ee Alter, Western Governors ’ Association Richard Tobin, II, Acting Director, ADEQ

### Appendix Comments

Page I

- 14 states that renewable electricity will probably “ supplant new gas

- fired generation. ” While this is generally true, during peak hours of the s ummer in Arizona, renewables, such as solar, that are operating during peak times (generally from 3 PM to 7 PM) will often supplant the use of the oldest and least efficient gas combustion turbines. These older peakers are much more polluting than the new combined cycle gas units and their delivered costs per kWh are extremely high, due to their inefficiency and relatively few hours of operation each year. It is important to recognize this fact when calculating pollution abatement and the cost differentia l between renewables and the older peakers. Some of the old peakers produce electricity in a cost range that can be equal to or higher than many renewable resource costs.

The following comments relate specifically to the Arizona summary in Appendix A.

The Arizona Environmental Portfolio Standard was adopted after the date of the Draft Report. The following wording is suggested to replace the paragraph in the Draft Report:

Environmental Portfolio Standard

“ In March 2001, the Arizona Corporation Commis sion approved rules implementing the Environmental Portfolio Standard, ACC R14

- 2

- 1618 . The standard requires a minimum percentage of retail electricity sales to be from eligible solar electric or “ environmentally friendly renewable electricity technologie s. ” The standard began with .2% in 2001 and rises to 1.1% in 2007. At least 50% of the portfolio standard must be solar electric in early years, increasing to 60% solar electric in 2004. ”

Further information can be found at http://www.cc.state.az.us/utility/electric/R14

- 2

- 1618.htm

The following is an update for the various incentive programs offered in Arizona:


## Arizona Public Service Projects

APS

- Remote Solar Electric Services : The Remote Solar Electric Services program was created by Arizona Public Service (APS) in 1997. It is designed to provide solar power to off

- grid residential customers (those located more than one

- third mile from power lines). APS stand

- alone systems are available for purchase and include photovoltaic (PV) panels, 120/240 VAC electronic power conditioning equipment, a battery bank that stores electricity for use at night, and a backup propane generator for extra power when needed. APS service and maintena nce can be purchased for an additional annual fee.

APS

- Solar Partners Plus

- EPS Credit Purchase Program Arizona Public Service (APS) offers customers who install photovoltaic systems the opportunity to sell the credits associated with the energy genera ted by these systems to APS. These energy credits will be used to meet APS Environmental Portfolio Standards (EPS)

### requirements. Through the EPS Credit Purchase Program, participating customers receive a

one

- time EPS Energy Purchase Credit of $2.00 per wat t of DC electricity (based on the manufacturer ’ s rating) for purchasing and installing a photovoltaic system capable of producing 5 kilowatts or less.

For grid

- tied systems rated at 5 kW or less:

? ? Customers must purchase a new photovoltaic solar system rated at 5 kW or less. ? ? Installations must meet APS interconnection requirements. ? ? Customers must sign an interconnection agreement with APS. ? ? The system must use UL

- rated components and meet IEEE 929 specifications. ? ? A licensed contractor must install the s ystem. ? ? The system generation must be metered separately and the kWh credits may, at APS' option, be recorded annually. ? ? The meter (not provided by APS) must be placed adjacent to the existing meter and marked "solar meter".

For remote systems rated at 5 kW or less:

? ? The system must use UL components and meet IEEE 929 specifications. ? ? A licensed contractor must install the system.

APS Solar Partner Green Power Program In 1997, the City of Scottsdale joined the Arizona Public Service (APS) Solar Partners Progr am. At that time, the available role for the City was to provide facilities or land where APS, at no charge to them and no cost to the City, could install solar power generating systems. The solar power generated from these systems is added to the power gr id where it became available for Scottsdale residents who subscribe to the Solar Partners Program. The first system installed was an 8,000 square

- foot, 34

- kW PV roofing system on employee parking lot carports at the City ’ s Via Linda Campus. The Civic Cente r Library and Mustang Library are each host to a 2

- kW PV system. The Water Campus system is comprised of two 150

- kW single access tracking systems mounted on water storage reservoirs. The Water Campus system is the largest system of its type in the United States and is the first solar installation on a reservoir.

APS expanded the Solar Partners Program to enable commercial enterprises and those partners whose facilities included APS solar power generating installations to purchase a portion of the solar power they generated. In June 2000, Scottsdale began an annual purchase of 40,500 kWh of solar energy for its Civic Center and Mustang Libraries. Other partners include KNXV TV (34,200 kWh annually) and ST Micro (36,000 kWh annually and who has hosted a 20kW installation at their Phoenix plant).

Net Metering In 1981, the ACC adopted a net metering rule (Decision No. 52345) requiring the state ’ s regulated utilities to offer net metering for renewable and cogeneration resources with a capacity of 100 kilowa tts or less. Excess electricity generated by the system is purchased at

### each utility ’ s avoided cost.

No Arizona utility filed a net metering tariff until Arizona Public Service (APS) company filed in 1994 to allow net metering of all renewable energy generators under 10 kW. Net excess generation under the APS tariff is purchased at the utility ’ s avoided cost. Tucson Electric Power Company (TEP) filed two net metering tariffs in 1996. The first is Tariff 101 applying to commercial customers, and Tarif f 102 applies to all other customers. Under both tariffs, net metering is allowed for QFs 100 kW or smaller. Net excess generation is purchased at fixed seasonal rates. Commercial customers may receive 4.4¢/kWh May through October and 3.5¢/kWh for Novemb er through April. All other customers receive 4.84¢/kWh May through October and 3.85¢/kWh November through April.


## Tucson Electric Power Projects

Tucson

- Solar Dividend The City of Tucson has implemented a Solar Dividend investment policy in which the ra te savings from restructuring are converted into a budget line item for solar energy investment for the municipality. Implemented in fiscal 2000, the policy will be in effect for five years.

For further information, refer to http://www.aps.com/my_community/solar_main.html

.

TEP GreenWatts: Launched in January 2000, GreenWatts is a TEP program that enables supporters to invest directly in the creation of “Green” power. For each GreenWatt that a customer adopts, Tucson Electric Power (TEP) will generate 20

- kilowatt hours per month from renewable energy resources. The first GreenWatt is $2.00 and each additional GreenWatt is $1.50. This amount appears as a line item on a customer ’ s monthly statem ent. Every ten GreenWatts that are adopted save a ton of coal per year from being used and encourages environmental conservation in Southern Arizona. One hundred percent of the dollars raised go directly to building and maintaining renewable facilities in Arizona. The supply of GreenWatts is limited by the amount of “ green ” energy TEP produces.

TEP SunShare: Launched in 2002, TEP ’ s SunShare program is designed to encourage customers to install new photovoltaic equipment at their residence or business. TE P currently offers two options for those who are interested in investing in solar. SunShare, option #1, requires that customers provide their own photovoltaic equipment while SunShare Kit, option #2, requires that customers purchase the solar equipment fro m TEP.

Under the SunShare programs, systems of 1 kW to 5kW are eligible. The customer may either purchase a qualifying system 1 kW or larger from a third party or may purchase a 1

- kW or 5

- kW system kit from TEP.

Under SunShare, option #1, TEP will cre dit the customer $2,000 per AC kW of proven, installed solar generating capacity. Under the SunShare Kit, option #2, TEP will credit the customer $2,000 for the 1 kW system and up to $10,000 for the 5 kW system. The kit

### includes panels, inverter, supports, meter, and meter socket. The retail cost for a 1 kW solar

kit is approximately $9,000 plus installation costs. However, a kit purchased from TEP will cost $4000 after the $2000 credit. TEP also offers a net metering option which credits the customer with the energy sent into the grid on a kWh basis.

To qualify for the buy down program, participants must: 1) be a customer of TEP; 2) have at least 550

- sq. ft. of unobstructed space; 3) have a roof facing true south; 4) be within 100 ft of where tying to t he grid; and 5) have a roof that can accommodate panels at a 32

- degree angle. Installations must have been made after January 1, 1997. Annual inspections and maintenance labor for repairs will be provided by TEP. The PV equipment must meet TEP and Arizona Corporation Commission requirements for self

- generation equipment.

ARIZONA REVISED STATUTES 

### Solar and Wind Energy Systems Tax Credit, ACC R14

- 2

- 1618:

Provides a personal income tax credit of 25% of the cost of a solar or wind energy device. A credit of up to $1,000 can be claimed the year the system is installed. If the credit exceeds a taxpayer ’ s liability in that year, the unused portion of the credit may be carried forward for up to five years. A taxpayer may claim the credit under this section on ly once in a tax year and may not accumulate over different tax years tax credits under this section exceeding, in the aggregate, one thousand dollars for the same residence. Qualifying technologies include passive solar heating, active solar space heatin g, solar water heating, photovoltaics, and wind systems. Passive systems shall clearly be designed as a solar energy device, such as a trombe wall, and not merely as a part of a normal structure, such as a window.

Solar and Wind Energy Equipment Tax Exemp tion:

Provides a sales tax exemption to retail businesses of up to $5,000 for solar and wind energy equipment. Qualifying equipment includes passive solar heating, active solar space heating, solar water heating, photovoltaics, wind electric generators, a nd wind

- powered water pumps. Passive systems shall clearly be designed as a solar energy device, such as a trombe wall, and not merely as a part of a normal structure, such as a window. Before deducting any amount under this exemption, the retailer shall register with the department as a solar energy retailer. By registering, the retailer acknowledges that it will make its books and records relating to sales of solar energy devices available to the department for examination.

### The following is a fact shee t from Salt River Project ’ s Environmental Initiative:
Salt River Project ’ s Environmental Initiative
In February 2000, SRP initiated a four

- year, $29 million program to fund a renewable energy program. This significant investment in the future was made w ithout raising the standard electricity rates of SRP customers. SRP is taking steps to establish renewable energy programs that help protect the environment and provide reassurance for today ’ s families and future generations.

Assessing Clean Technologies EarthWise Energy is the first green power program in Arizona that offers a diverse mix of local renewable energy sources. Participating SRP customers make a small additional payment on their monthly electric bill to help support our effort to build, opera te and maintain new renewable electric generating stations. These new facilities will further improve the quality of the air in the Salt River Valley and reduce our dependence on non

renewable fuels.

EarthWise Energy uses a variety of “ clean ” technologies to achieve the greatest cost effectiveness and environmental benefits for SRP and its customers. Under this new program, we have completed a 200

- kilowatt solar power plant in Glendale and are pursuing other opportunities for solar generation. We have also installed a 4,000

- kilowatt (four megawatt) generation facility on the Salt River Pima Maricopa Indian Community that uses landfill gas from the Tri

- Cities Landfill. This plant will produce enough electricity to power 2000 homes for one year. By capturing this naturally occurring gas and converting it to energy, we are improving community safety and the environment (methane is explosive and is a suspected global warming agent).

SRP ’ s newest project, Arizona Falls, is a low impact hydro facility located on a canal at 56 th 

### Street and Indian School in Phoenix. The power of the 20

- foot drop in elevation in the canal will be used to generate 750

- kilowatts of clean energy.

Implementing The Program SRP established an operations committee to implement the renewab le energy program. The committee is responsible for program design, implementation, budget, administration, management and measurement.

The program will proceed with these goals: ? ? Develop a market for renewable and sustainable energy sources. ? ? Demonstrate t he ability of renewable technologies to improve air quality. ? ? Build community and public relationships to showcase renewable energy technologies. ? ? Establish SRP as a national leader in renewable energy. ? ? Demonstrate fiscal stewardship.

### Involving The Public

In addition to encouraging customers to participate in the program, we have formed a Customer Support Group to help us with program development and evaluation, and to assist in communicating program messages to the community. This committee consists of 30 residential, commercial and industrial customers, educators, media representatives, elected officials and government officials. We have also formed a Technical Advisory Committee of industry experts to review and evaluate new and existing renewable techn ologies, and to provide technical expertise in our program development.

Through a public process, SRP will review the program during its fourth year to determine if the stated goals were met and the future direction of its renewable energy activities.

Mo re than 3,000 residential customers participate in the program by paying an additional $3/per month for a 100

- kwh block of energy. In addition, 45 small commercial customers participate in this program, and a new large governmental customer, Maricopa Coun ty is purchasing the largest amount of green energy in the state.Appendix A-12 – Pollution Prevention Arizona Regional Haze SIP 

## Appendix A-12b. Details of Renewa ble Energy Generation and CapacityAppendix A-12 – Pollution Prevention Arizona Regional Haze SIP 

### Appendix A-12b. Details of Renewabl e Energy Generation and Capacity

Pursuant to 51 CFR 309 (d) (8) (i), The Table below summarizes all renewable energy generation capacity and production in use or planned as of 2002.

Project # SYSTEM Year Installed 2002 kW Planned kW KWh in 2002 Source

Solar APS Installations Flagstaff 82 kW 1997 80 80 168,026 1 Rooftop Demos 1997 4 4 7,560 1 RSES 1997 6 6 11,340 1 Ocotillo #1 1998 80 80 167,980 1 RSES 1998 7 7 13,230 1 Ocotillo #2 1999 93 93 195,447 1 San Luis 1999 2 2 3,780 1 Deer Valley School 1999 4 4 7,560 1 Gilbert High School 1999 2 2 3,780 1 NAU 1999 2 2 3,780 1 Scottsdale Library 1999 2 2 3,780 1 Tempe Recycling 1999 2 2 3,780 1 Scottsdale Parking 1999 34 34 0 1 Glendale #1 1999 78 78 156,897 1 STAR Parking 1999 4 4 5,058 1
STAR Dishes 1999 40 40 301 1 RSES 1999 19 19 35,910 1 STAR Amonix - 2, 3, 4 2000 60 60 116,905 1 ST Micro 2000 22 22 32,260 1 SOL 2000 10 10 18,900 1 RSES 2000 5.5 5.5 10,395 1 Gilbert 2001 122 122 257,760 1 Glendale #2 2001 100 100 178,508 1 Prescott 2001 194 194 445,920 1 STAR Tilted Trackers 2001 60 60 125,191 1 STAR Amonix - 1, 5, 7 2001 75 75 141,897 1 RSES 2001 14.6 14.6 27,518 1 Yucca 2002 103 103 222,640 1 Ocotillo East Yard 2002 125 125 129,200 1 Mustang Library - Scottsdale 2002 2 2 1,890 1 Ocotillo Parking 2002 20 20 23,276 1 Gray Wolf Landfill 2002 24 24 911 1 Scottsdale Water #1 2002 131 131 206,800 1 Scottsdale Water #2 2002 125 125 193,440 1 ADEQ Parking Canopy 2002 127 127 0 1 STAR Amonix - 6 2002 35 35 5,672 1Appendix A-12 – Pollution Prevention Arizona Regional Haze SIP Prescott Airport 2002 734 734 30,310 1 RSES 2002 8.32 8.32 7,862 1
TOTAL 2,556 2,556 2,965,465

Solar Tucson Electric Power Habitat Home 1999 0.75 0.75 2,783 2 Reid Park Zoo 2000 0.84 0.84 3,661 2 Pima Air Museum 2000 0.9 0.9 2,660 2 Stafford Middle School 2000 4.5 4.5 17,684 2 U of A agricultural Station 1996 5.62 5.62 9,280 2 Hayden / Udall #1 2002 21.6 21.6 12,092 2 Hayden / Udall #2 2002 21.6 21.6 12,092 2 Fort Huachuca 1997 30 30 109,427 2 Utility TEP Trailers 1998 3.97 3.97 20,771 2 Gate 2 Solarex Panels 2000 2.31 2.31 11,328 2 OH3 2000 21.6 21.6 74,778 2 OH4 2000 21.6 21.6 74,822 2 Springerville 2000 21.6 21.6 75,715 2 St. John's Test 2000 1.5 1.5 3,512 2 DMP1 2000 108 108 345,118 2 DMP2 2000 108 108 337,002 2 SGS C1 2001 135 135 293,297 2 SGS C2 2001 135 135 304,365 2 SGS C3 2001 135 135 266,390 2 SGS C4 2001 135 135 256,246 2 SGS C5 2001 135 135 245,376 2 SGS C6 2001 135 135 241,712 2 SGS C7 2002 135 135 93,479 2 SGS C8 2002 135 135 101,674 2 SGS C9 2002 135 135 101,757 2 SGS C10 2002 135 135 70,069 2 SGS C11 2002 135 135 127,121 2 SGS C12 2002 135 135 103,941 2 SGS TF1 2001 135 135 268,258 2 SGSTF2 2001 135 135 180,655 2 SGS TF5 2001 129 129 269,654 2 SGS TF6 2001 129 129 289,309 2 SGS TF7 2001 129 129 266,225 2 SGSTF8 2001 129 129 265,986 2 OH SB/ASE Test 2002 1.1 1.1 2,158 2 OH Tc/ASE Test 2002 0.8 0.8 1,109 2 OH/TC/BP Test 2002 1.2 1.2 1,850 2
Tohono Chul 2002 2.8 2.8 310 2
Global Solar Test 2002 1.4 1.4 52 2Appendix A-12 – Pollution Prevention Arizona Regional Haze SIP BP 1.4 Xtal Test 2002 1.4 1.4 55 2 SunShare 29 Units 2002 61.3 61.3 41,457 2
TOTAL 2,850 2,850 4,905,230

Solar Salt River Project

South Mountain Community College 1998 1.8 3,311 5 Scottsdale Community College 2000 1 1,850 5 Cesar Chavez High School 2000 1 1,850 5 Chandler Research House 1997 2.4 4,415 5 Palomino Residence 1998 1 1,850 5 Calex Homes Johnson Ranch 2001 1 1,850 5 Calex Homes Johnson Ranch 2001 0.85 1,564 5 Calex Homes Johnson Ranch 2001 1 1,850 5 Calex Homes Johnson Ranch 2001 0.7 1,288 5 Calex Homes Johnson Ranch 2001 1.4 2,575 5 Calex Homes Gold Canyon 2002 0.5 920 5 ASU East 2002 1 1,850 5 Agua Fria PV 2001 200 431,000 5 Roger Solar Park PV1 and PV2 2003 200 0 5 Rogers Solar Park PV3 2003 200 0 5 Tempe Warehouse 2003 200 0 5 City of Phoenix Park & Ride 2003 100 0 5 City of Mesa Red Mountain Branch Library 2003 25 0 5 TOTAL 214 725 456,173

Solar LAW Fund/Native Sun 2001 Purchases 1997 4.473 4.473 8,454 1 1998 6.491 6.491 12,268 1 1999 1.251 1.251 2,364 1
2000 0.384 0.384 726 1
2001 0.150 0.150 284 1
2002 Purchases 1997 4.511 4.511 1
1998 1.354 1.354 1
1999 0.128 0.128 1
2000 0.000 0.000 1
2001 0.053 0.053 1
2002 14.270 14.270 1
TOTAL 17.260 17.260 24,096

Solar Customer Programs 2002 Systems 2002 28.85 28.85 27,263 1 TOTAL 28.85 28.85 27,263Appendix A-12 – Pollution Prevention Arizona Regional Haze SIP Solar Yuma Proving Grounds 450 System 1997 450 450 897,000 1 SWTR Site 1998 105 105 198,450 1 Signs 1999 0.00 0.00 2 1 Lights 1999 0.20 0.20 1,752 1 Jog Path 2000 0.09 0.09 166 1
TOTAL 555 555 1,097,370

Solar ORC Trough 1MW trough plant 2004 0 1
TOTAL 00 0

Solar IST Prison Water System 1999 1,104,167 1
TOTAL 0 0 1,104,167

Methane TEP Landfill methane 1999 5,500 5,500 45,000,000 1
Butterfield Landfill Methane 2003 70 1
Mesa NW Water Treatment Plant 1 Allied Waste Apache Junction Landfill 1 Tri-Cities Landfill Generation Plant 2001 4,000 4,000 18,715,000 3
TOTAL 9,500 9,570 63,715,000

Wind Army Depot (Wind)
Wind Turbine 1
TOTAL 0 0

Wood Chips Environmental Forest Wood chips 2003 3,000 0 1 TOTAL 0 3,000 0

Low Impact Hydro Salt River Project Arizona Falls Project 2003 750 3
Total 0 750 0Appendix A-12 – Pollution Prevention Arizona Regional Haze SIP Sub-Totals Existing & Planned SOLAR 6,222 6,733 10,579,764 METHANE 9,500 9,570 63,715,000
WIND 0 0 0 WOOD CHIPS 0 3,000 0
LOW-IMPACT HYDRO 0 750 0 TOTAL 15,722 20,053 74,294,764

Sources 1 Information from the Arizona Corporation Commission Environmental Portfolio Tracking March 2002. 2 Information from the Arizona Corporation Commission Environmental Portfolio Tracking March 2002, Tucson Electric Power Photovoltaic Systems Installed and In Service at the End of 2002. 3 See generally http:///www.srpnet.com/environmental/comparison.asp and linked from that page. 4 "Overview of SRP'S Renewable Energy Program," Presentation by Herjinder Hawkins to PPWG on March 24, 2003. 5 Information from Renewable Energy Program filesAppendix A-12 – Pollution Prevention Arizona Regional Haze SIP 

## Appendix A-12c. ICF Assessment of Renewable Energy and Energy Conservation Programs

# REPORT



# Economic Assessment of Implementing

the 10/20 Goals and Energy Efficiency Recommendations

Prepared for

Western Regional Air Partnership Air Pollution P revention Forum

Prepared by

ICF Consulting Group

October 2002Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### i Executive Summary........................................................................................................... iv I. Introduction ............................................................................................................... ..... 1 II. Overview ................................................................................................................... ..... 2 II.1 Background .............................................................................................................. 2 II.2 Objective ................................................................................................................. . 2 II.3 Summary of Key Findings ....................................................................................... 3 III. Analytical Approach ..................................................................................................... 5 III.1 Scenario s Analyzed................................................................................................. 6 III.2 Analytical Tool ....................................................................................................... 8 III.3 Data and Assumptions .......................................................................................... 15 IV. Emissions and Production Costs Impacts................................................................... 26 IV.1 Key Elements Under the Business-As-Usual (BAU) Scenario ............................ 26 IV.2 Electric System Capacity and Generation Impacts............................................... 28 IV.3 Production Costs Impacts ..................................................................................... 31 IV.4 Emissions Impacts ................................................................................................ 34 IV.5 Impact on the Regional Backstop SO 2 

### Trading Program ..................................... 35 IV.6 Wholesale Electric ity Price Impacts..................................................................... 36 V. Secondary Regional Economic Impacts ..................................................................... 41 VI. Caveats and Uncertainties.......................................................................................... 43 VII. Conclusions .............................................................................................................. 45 Appendix I: Regional Economic Impacts........................................................................ 47 Appendix II: Energy Efficiency Analysis and Methodology .......................................... 50Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### ii 

## Preface

Regulatory Framework for Tribal Visibility Implementation Plans

The regional haze rule explicitly recognizes the authority of tribes to implement the provisions of the rule, in accordance with principles of federal Indian law, and as provided by the Clean Air Act §301(d) and the tribal authority rule (TAR) (40 CFR §§49.1– .11). Those provisions create the following framework:

1. Absent special circumstances, reservation lands are not subject to state jurisdiction. 2. Federally recognized tribes may apply for and receive delegation 1 

### of federal authority to implement CAA programs, including visibility regulation, or "reasonably severable" elements of such programs (40 CFR §§49.3, 49.7). The mechanism for this delegation is a tribal implementation plan (TIP). A reasonably severable element is one that is not integrally related to program elements that are not included in the plan submittal, and is consistent with applicable statutory and regulatory requirements. 3. The regional haze rule expressly provi des that tribal visi bility programs are “not dependent on the strategies selected by the state or states in which the tribe is located” (64. Fed. Reg. 35756), and that the authority to implement §309 TIPs extends to all tribes within the GCVTC region (40 CFR §51.309(d)(12)). 4. The EPA has indicated that under the TAR tribes are not required to submit §309 TIPs by the end of 2003. Rather, they may choose to opt-in to §309 programs at a later date (67 Fed. Reg. 30439). 5. Where a tribe does not seek delegation through a TIP, EPA, as necessary and appropriate, will promulgate a federal implementation plan (FIP) within reasonable timeframes to protect air quality in Indian country (40 CFR§49.11). EPA is committed to consulting with tribes on a government-togovernment basis in developing tribe-specific or generally applicable TIPs where necessary (See, e.g., 63 Fed. Reg. 7263-64).

The amount of modification, if any, needed for this report to fulfill tribal needs may vary considerably from tribe to tribe. The authors have striven to ensure that all references to tribes in the document are consistent with principles of tribal sovereignty and autonomy as reflected in the above framework. Any inconsistency with this framework is strictly inadvertent and not an attempt to impose requirements on tribes which are not present under existing law.

1 Tribes also possess a more fundamental source of authority to regulate their environments, based on their inherent authority as sovereign nations, which predates the formation of the United States. However, in the context of air pollution regulation and visibility planning in particular, tribal authority will more likely be based on delegation of federal authority.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### iii Tribal Participation in the WRAP

Tribes, along with states and federal agencies, are full partners in the WRAP, having equal representation on the WRAP Board as states. Whether Board members or not, it must be remembered that all tribes are governments, as distinguished from the “stakeholders” (private interest) which participate on Forums and Committees but are not eligible for the Board.

Despite this equality of representation on the Board, tribes are very differently situated than states. There are over four hundred federally-recognized tribes in the WRAP region, including Alaska. The sheer number of tribes makes full participation impossible. Moreover, many tribes are faced with pressing environmental, economic, and social issues, and do not have the resources to participate in an effort such as the WRAP, however important its goals may be. These factors necessarily limit the level of tribal input into and endorsement of WRAP products.

The tribal participants in the WRAP, including Board members Forum and Committee members and co-chairs, make their best effort to ensure that WRAP products are in the best interest of the tribes, the environment, and the public. One interest is to ensure that WRAP policies, as implemented by states and tribes, will not constrain the future options of tribes who are not involved in the WRAP. With these considerations and limitations in mind, the tribal participants have joined the state, federal, and private stakeholder interests in approving this report as a consensus document.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### iv 

## Executive Summary

With a view towards improving visibility and air quality in the national parks and wilderness areas of the Colorado plateau, the Grand Canyon Visibility Transport Commission (GCVTC) issued several recommendations in 1996 on strategies for air pollution prevention. In its recommendations, the GCVTC emphasized the need to integrate air pollution prevention with cost-effective pollution control strategies in order to prevent degradation of natural resources in the West. 1

Two key recommendations from the GCVTC focused on the development of renewable energy sources and the promotion of energy conservation. Labeled the “10/20 goals”, the recommendation on development of renewable energy sources encouraged states and tribes in the Transport Region to undertake steps that would increase the use of renewable energy to 10 percent of the regional power needs by 2005 and 20 percent of the regional power needs by 2015. For energy conservation, the commission supported the continued development of energy efficiency standards and suggested that the emphasis on energy conservation be maintained within the changing electric power markets. In addition to the 10/20 goals and energy conservation recommendations, the GCVTC suggested that future modeling work be conducted to analyze the potential emission reductions, cost savings and secondary benefits associated with the use of renewable energy, energy efficiency and pollution prevention.

The Regional Haze Rule issued by the US Environmental Protection Agency in April 1999 included the air pollution prevention recommendations of the GCTVC. Under the rule, the states of the Transport Region must include in their State Implementation Plans (SIP) an outline of the programs and policies that each state will rely on to work towards meeting the air pollution prevention recommendations. Tribal governments may seek approval from EPA to incorporate the requirements of the regional haze regulations, including the GCVTC recommendations, in their Tribal Implementation Plans (TIP) under the provisions of the Tribal Authority Rule (TAR).

The Air Pollution Prevention (AP2) forum of WRAP has been charged with implementing the air pollution prevention recommendations of the GCVTC. The AP2 forum commissioned ICF Consulting to analyze the potential emissions reductions, costs and secondary regional economic impacts of meeting the 10/20 goals and energy efficiency recommendations.

This study documents the analytic and technical support to the AP2 forum’s report detailing its recommendations regarding renewable energy and energy efficiency to the WRAP Board. The AP2 forum’s report provides a discussion of the policy imperatives and broader implications of the GCVTC air pollution prevention recommendations, while this report describes the emissions reductions, costs and secondary economic impacts of meeting the 10/20 goals and implementing the energy efficiency recommendations, given the assumptions and scenarios developed by the AP2 forum. The analysis examines the impacts for the nine states and tribal lands of the Transport region and was focused around stationary sources engaged in the production of electricity and

1 “Recommendations for Improving Western Vistas,” The Grand Canyon Visibility Transport Commission, June 1996, page 28.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### v industrial steam along with and process-related SO 2 sources such as refineries and smelters.

Analytical Framework

The AP2 forum developed a three-phase analytical framework to assess the potential emissions reduction, costs and secondary regional economic impacts of implementing the 10/20 goals and energy efficiency recommendations. These included: (1) assumptions and scenario development, (2) modeling of the electric, steam and process source sectors, and (3) modeling of the secondary regional economic impacts.

The AP2 forum developed two types of scenarios in order to examine the emissions, costs and secondary regional economic impacts of meeting the 10/20 goals andimplementing the energy efficiency recommendations. The first was the Business-AsUsual (BAU) scenario that characterized how the future might unfold with the proposed regional backstop SO 2 trading program but without any policy measures designed to accomplish the 10/20 goals and energy efficiency recommendations. The second set of scenarios reflected a future with the regional backstop SO 2 trading program and policy drivers designed to meet the 10/20 goals or energy efficiency recommendations, or both. Assessments of emissions, costs and secondary regional economic impacts were estimated by analyzing the changes in the policy scenarios relative to the BAU scenario.

The AP2 forum selected as the business-as-usual scenario the Annex cap-and-trade scenario developed by the WRAP/Market Trading Forum (MTF) 2 for its economic analysis, with minor modifications to account for the planned additions to renewable energy capacity. The policy scenarios developed by the AP2 forum were focused around objectives of implementing the 10/20 goals and energy efficiency recommendations with some additional scenarios designed to analyze the sensitivity of the results to higher gas prices and improvements in renewable energy technology cost and performance.

In designing the policy scenarios and in developing the data for those scenarios, the AP2 forum modified some of the assumptions on the cost and performance of renewable energy technologies from those used in the MTF Annex scenario. The AP2 recognized that the 10/20 goals had the potential to not only affect the level of renewable energy generation in the West, but would also had to potential to influence the underlying market conditions for those technologies. Under a climate where policies are in place designed to achieve the 10/20 renewable energy goals and energy efficiency recommendations, the AP2 forum believes that the wind resource development costs could improve over time because of the cost benefits of “learning by doing”, because of better alignment of incentives for improving technologies’ cost and performance and because of reduced barriers to entry.

The adjustments in the assumptions for the policy scenarios were focused only around wind technologies because wind was likely to be the largest renewable energy and it was resource also where the forum anticipated most improvements in cost and performance would occur. However, recognizing the uncertainty inherent in such

2 “Economic Impacts of Implementing a Regional SO2 Emissions Program in the Grand Canyon Visibility Transport Region,” Western Regional Air Partnership/ Market Trading Forum, September 2000. (MTF 2000).Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### vi assumptions about technology improvements, the AP2 forum developed a sensitivity scenario to test the cost implications of implementing the 10/20 goals without the assumed improvements in renewable technology cost and performance.

In Phase II of the analysis, ICF Consulting’s Integrated Planning Model (IPM ® ) was used as the analytical tool for modeling the costs and emissions impacts of the policy scenarios. IPM simulates productions activity in the electricity generation and industrial steam production markets using an integrated view of fuel, emissions, capacity and generation markets. Results from IPM served as inputs to modeling of the secondary regional economic impacts in Phase III of the analysis. The Policy Insights model produced by Regional Economic Models Inc. (hereafter referred to as REMI) was used as the analytical tool for estimating the secondary regional economic impacts.

Emissions Reductions and Cost Impacts

The 10/20 goals require renewable energy to satisfy 10 percent of the regional energy needs by 2005 and 20 percent of the regional energy needs by 2015. The energy efficiency recommendations developed by the AP2 forum calls for electricity demand reductions in the Transport Region to grow to 8 percent of the electricity generation demand by 2018. The analysis indicates that both these policy objectives could serve as cost-effective air pollution prevention strategies because they provide opportunities for emissions reductions at modest costs or with some savings.

Because the assessment of impacts are based on analysis of the differences between the policy scenarios and the BAU scenario, some notable elements of the BAU scenario are described below to provide a helpful context for understanding the results. One of the most important components of the BAU scenario driving the results is the growth of gas-fired generation capacity. Under the BAU scenario, the growth in electricity demand is met by additions of new gas-fired combined cycle capacity. As illustrated in Figure ES-1 below, almost 30 GW of new combined cycle capacity is projected under the BAU scenario by 2018. This represents 80 percent of the growth in capacity additions and accounts for 37 percent of all generation in the Transport Region in that year.

Figure ES-1: Capacity Additions Under the BAU Scenario 3

3 O/G steam & Turbines refers to Oil/Gas Steam an d Gas Turbines; combined cycles refer to gas-fired combined cycles and cogeneration refers to combined heat and power. - 5,000 10,000 15,000 20,000 25,000 30,000 35,000

2005 2010 2018Capacity Additions by 2018 (MW) Coal
O/G Steam & Turbines Combined Cycles

Renew ables CogenerationEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### vii The mix of generation and capacity additions under the BAU scenario has important implications both for the growth in emissions under the BAU scenario and the potential for emissions reductions from the 10/20 goals and energy efficiency recommendations. Because generation from new gas capacity is assumed to be relatively clean, NO x emissions under the BAU scenario remains relatively changed between 2005 and 2018, growing by 1 percent to 606 thousand tons in 2018. During that same period, the NO x emissions rate for oil/gas units declines from 0.2 lbs/MWh in 2005 to 0.05 lbs/MWh, reflecting the projected turnover to newer efficient combined cycle generation.

As a result of increased fossil fuel generation, CO 2 emissions under the BAU scenario increases by 19 percent between 2005 and 2018 to 401 million metric tones. SO 2 emissions under the BAU scenario is held to the regional targets specified in the Annex because the scenario includes the assumptions that the regional SO 2 trading program proposed under the Annex will be in place. Because of the SO 2 cap-and-trade program, none of the policy scenarios will result in any changes in SO 2 emissions.

Implementation of the 10/20 goals and energy efficiency recommendations will lead to significant growth in renewable energy capacity, totaling 20 GW by 2018. The growth reflects the requirements of the 10/20 goals and the assumption that the policy climate of the 10/20 goals may better align incentives to spur the improvements in renewable technology cost and performance through accelerated learning by doing and by easing some of the barriers to entry for renewable energy. Figure ES-2 below summarizes the growth in renewable energy capacity under the 10/20 goals and Figure ES-3 below contrasts the generation mix in 2018 between the BAU and 10/20 goals policy scenario. 38%

18% 3% 5% 8% 17% 11%

Coal
O/G Steam & Turbines Combined Cycles
Renewables Cogens Hydro
Nuclear 31%

0%

37% 4% 8%

14% 6% Generation Mix Under BAU

2005 543 thousand GWh 2018 680 thousand GWhEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### viii Figure ES-2: Renewable Energy Capacity Additions Under the 10/20 Goals

0 5 10 15 20 25

Wind Geothermal Landfill GasCapacity Additions by 2018 (GW)

Figure ES-3: Generation Mix in 2018 Under the BAU and 10/20 Goals

As illustrated in Figures ES-2 and ES-3, wind power dominates most of the growth innew renewable capacity and the increased use of renewable energy displaces new gasfired generation. While these results illustrate only the impact for the 10/20 goals, similar impacts occurs with increased use of energy efficiency. The important results in capacity changes of the 10/20 goals and energy efficiency is that new renewable energy capacity and energy conservation compete against new conventional capacity while leaving the existing electricity generation stock relatively undisturbed.

The fact that the renewable energy and energy efficiency are likely to compete against generation from new gas-fired capacity affects the emissions reductions projected under the 10/20 goals and energy efficiency recommendations. As illustrated in Figure ES-4 below, the analysis indicates that under th e 10/20 goals and energy efficiency, the potential savings in NO x emissions are likely to range between 8,000 tons and 14,000 tons (or 1 percent to 2 percent relative to the BAU). In Figure ES-4 below, the bars labeled “10/20 goals” represents the policy scenario with the 10/20 goals, “EE” 31%

0%

37% 4% 8% 14% 6%

29%

0%

26% 4% 7% 14% 6% 14%

Coal
O/G Steam & Turbines Combined Cycles Existing Renewables Cogens Hydro
Nuclear
New RenewablesEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### ix represents the policy scenarios with the energy efficiency recommendations and “EE + 10/20 goals” represents the policy scenario with both the 10/20 goals and the energy efficiency recommendations.

Figure ES-4: Potential NO x Emissions Reductions Under the 10/20 Goals and Energy Efficiency Recommendations

Implementation of the 10/20 goals and energy efficiency recommendations also lead to reductions in CO 2 emissions through displaced fossil fuel generation. As illustrated in Figure ES-5, CO 2 emissions savings in 2018 from meeting the 10/20 goals and implementing the energy efficiency recommendations is projected to range between 40 million metric tones and 55 million metric tones (or 10 percent to 14 percent relative to the BAU).

Figure ES-5: Potential CO 2 Emissions Reductions Under the 10/20 Goals and Energy Efficiency Recommendations

- 10 20 30 40 50 60

2005 2010 2015 2018Change in CO2Emissions Relative to BAU(Million Metric Tonnes of CO2) 10/20 Goals
EE
EE + 10/20 Goals - 2

4 6 8 10 12 14 16

2005 2010 2015 2018Change in NOxEmission Relative to BAU(Thousands Tons of NOX) 10/20 Goals
EE
EE + 10/20 GoalsEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### x Though the emissions reduction potential for NO x and CO 2 appears to be modest, it is important to recognize the source of those reductions and the implications for air pollution prevention. Because these emissions reductions come from new generating sources, the 10/20 goals and energy efficiency recommendations provide opportunities to hedge against future emissions growth.

Implementation of the 10/20 goals and energy efficiency scenarios does not reduce SO 2 emissions because of the regional SO 2 trading program proposed under the Annex. However, because the trading program creates a monetary value for emissions reductions, any potential for emissions reductions is fully offset by increases in SO 2 emissions from sources affected by the trading program. In other words, with the 10/20 goals and energy efficiency, the level of SO 2 emissions in 2013 and 2018 will remain unchanged from the emissions caps specified by the Annex. The 10/20 goals and energy efficiency could, however, decrease the compliance cost of the SO 2 trading program by as much as $ 7 million (or 10 percent of projected compliance cost 4 ) in 2018 and could displace 1,200 MW to 1,700 MW of new scrubber capacity by 2018.

In addition to the potential emissions savings, implementation of the10/20 goals and energy efficiency recommendations could be achieved through modest production cost or with some savings. In particular, implementation of the energy efficiency recommendations leads to net annual levelized production costs 5 savings of $750 million to $1 billion (or 4 percent to 7 percent relative to the BAU scenario). These net savings reflect the cost of implementing the recommendations, the avoided investment costs of transmissions and distribution, and the reductions in electricity and steam production costs resulting from lower electricity demand. Figure ES-6 compares the production cost across the BAU and energy efficiency policy scenarios.

Figure ES-6: Annual Levelized Production Cost Under the BAU and Energy Efficiency Policy Scenarios

$16.4 $16.7 $17.4

$0 $5 $10 $15 $20

BAU EE EE + 10/20 GoalsAnnual Levelized Production Costs (Billion 2001$)

4 MTF 2000. 5 Annual levelized production costs reflect the capital, fuel and operation and maintenance expenditures associated with the production of electricity and industrial steam levelized over the years 2005 – 2022. These modeled production costs do not include the sunk costs (capital cost or carrying charges) of existing units.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### xi Implementation of the10/20 goals by themselves will lead to modest increases in annual levelized production costs. The impact on production costs could range between $300 million and $900 million (or 2 percent to 5 percent relative to the BAU scenario). The range reflects the impacts under alternative assumptions about renewable technology cost and performance: the former includes the assumption that renewable technology cost and performance will improve over time, while the latter cost impacts do not allow for those improvements. The increase in production costs under the 10/20 goals is largely driven by the capital investments in new renewable energy generation capacity and is offset by the production cost savings from the displaced fossil fuel generation. Figure ES-7 compares the annual levelized production costs across the BAU and 10/20 goals policy scenarios.

Figure ES-7: Annual Levelized Production Costs Under the BAU and 10/20 Goals Policy Scenarios

Secondary Regional Economic Impacts

The objective of the secondary regional economic analysis was to assess the impacts of the 10/20 goals and energy efficiency recommendations on the regional economy of the Transport Region. For this analysis, the results from the IPM modeling served as inputs to the REMI model. This assessment of regional economic impacts is focused around changes in employment, gross regional product and personal disposable income.

Implementation of the 10/20 goals and energy efficiency recommendations has little or no impact on the regional economy. Most of the regional impacts are less than one half of one percent. Table ES-1 summarizes the annual average secondary region economic impacts under the policy scenarios for the years 2005 - 2020. $17.7 $18.3 $17.4

$0 $5 $10 $15 $20

BAU 10/20 Goals 10/20 Goals with No Cost & Performance ImprovementsAnnual Levelized Production Costs (Billion 2001$)Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### xii

Table ES-1: Annual Average (2005 – 2020) Changes In Key Economic Indicators for the Transport Region Under the Policy Scenarios

The results of the regional economic analysis indicate that the 10/20 goals and energy efficiency may, on average, lead to an increase in economic activity. Over time, the policies lead to small increases in economic activity in the early years a small decline in later years. The impacts in the 2005 to 2015 time period are largely the result of investment in new renewable energy facilities that increase labor demand and have secondary impacts on output and income. Following the investment and construction boom, the region will see some decline in employment, gross regional product and personal disposable income.

On average, the 10/20 goals will lead to small increases in employment and personal income along with a small decline in gross regional product. Implementation of the energy efficiency recommendations results in small increases in employment, personal disposable income and gross regional product. The economic impacts under the 10/20 goals and energy efficiency are largely the result of increased capital investments in new renewable energy generating capacity. The boom in construction sparked by the investments appears to be the key reason for growth.

Caveats and Uncertainties

This analysis was conducted to help the AP2 forum understand the potential emissions reductions, costs and secondary regional economic impacts of the implementing the 10/20 goals and the energy efficiency recommendations. The assumptions developed by the AP2 for this study are based on a variety of different sources including research of existing literature, data developed by the Energy Information Administration, and the National Renewable Energy Laboratory. Key drivers affecting the results on projections of renewable energy capacity, emissions savings and costs include the assumptions on renewable energy technology cost and performance.

Though the modeling and analytical results provide detailed estimates of potential impacts, it is important to recognize that the magnitude of the results are quite small, particularly in estimates of the regional economic impacts. As with any analytical results, small perturbations are difficult to interpret precisely. In instances where the changes appear to be very small, analysis of broader trends, rather than specific numbers, will often provide a more robust and meaningful description of the impacts.

Conclusions

The analysis indicates that the 10/20 goals and energy efficiency recommendations could both serve as cost-effective air pollution prevention strategies. The 10/20 goals will lead to increases renewable energy capacity, while the energy efficiency recommendations will result in lower energy demand through conservation. Because both the 10/20 goals and energy efficiency displace new additions of fossil fuel capacity and generation, they are likely to provide a hedge against future emissions growth in Employment Gross Regional Product Personal Disposable Income (Persons) (% Change) (Million 2001$) (% Change) (Million 2001$) (% Change) 10/20 Goals 627 0.00% -312 -0.01% 73 0.00% Energy Efficiency (EE) 8,415 0.02% 450 0.02% 776 0.04% 10/20 Goals + EE 4,097 0.01% -58 0.00% 547 0.03%Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Executive Summary; October 2002



### xiii NO x and CO 2 . The 10/20 goals can be achieved under modest cost impacts, while energy efficiency will result some cost savings and both the objectives have little or no regional economic impacts.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 1 

## I. Introduction

This analysis was commissioned by the Air Pollution Prevention (AP2) forum of the Western Regional Air Partnership (WRAP) to help WRAP participants, western states and Indian tribes understand the potential emissions reductions, costs and secondary economic impacts from meeting the 10/20 renewable energy goals and implementing the energy efficiency recommendations. This study builds upon the framework, data and assumptions previously developed by the Market Trading Forum 1 (MTF) of WRAP and examines the impacts on electricity, industrial and process sources located within the nine states and tribal lands of Transport Region.

This report includes seven sections discussing the analytical framework, data, assumptions and results. Specifically:

Section II provides background to the study, describes the key objectives of the analysis and summarizes the main findings.

Section III details the scenarios, data, assumptions and analytical framework. Details on renewable energy technology costs and performance assumptions developed by the AP2 forum are also described. The section also provides an overview of the modeling tools used -- ICF’s Integrated Planning Model ® (IPM) and REMI’s Policy Insights ® model-- and a discussion of the approach used to integrate the two models.

Section IV discusses the emissions and production costs impacts of implementing the 10/20 goals and energy efficiency recommendations based on the IPM modeling results.

Section V discusses the secondary regional economic impacts based on the results of the REMI model. The analysis focuses on impacts on employment, gross regional product and disposable income.

Section VI contains a discussion of the caveats and uncertainties underlying the results.

Section VII describes the conclusions of the study.

1 “Economic Impacts of Implementing a Regional SO2 Emissions Program in the Grand Canyon Visibility Transport Region,” Western Regional Air Partnership/ Market Trading Forum, September 2000. (MTF 2000).Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 2 

## II. Overview

II.1 Background

With a view towards improving visibility and air quality in the national parks and wilderness areas of the Colorado plateau, the Grand Canyon Visibility Transport Commission (GCVTC) issued several recommendations in 1996 on strategies for air pollution prevention in the West. In its recommendations, the GCVTC emphasized the need to integrate air pollution prevention with cost-effective pollution control strategies in order to prevent degradation of natural resources in the West. 2

Two key GCVTC recommendations focused on the development of renewable energy sources and the promotion of energy conservation. The recommendation on development of renewable energy sources encouraged states and tribes in the Transport Region to undertake steps that would increase the use of renewable energy to 10 percent of the regional power needs by 2005 and 20 percent of the regional power needs by 2015 (hereinafter the “10/20 goals”). For energy conservation, the commission supported the continued development of energy efficiency standards and suggested that the emphasis on energy conservation be maintained within the changing electric power markets. In addition to the renewable resource and energy conservation recommendations, the GCVTC suggested that future analysis examine the potential emission reductions, cost savings and secondary benefits associated with the use of renewable energy and energy efficiency.

The Regional Haze Rule issued by U.S. Environmental Protection Agency in April 1999 included the air pollution prevention recommendations of the GCTVC. Under the rule, the states of the Transport Region must include in their State Implementation Plans (SIP) an outline of the programs and policies that each state will rely on to work towards meeting the air pollution prevention recommendations. Tribal governments may seek approval from EPA to incorporate the requirements of the regional haze regulations, including the GCVTC recommendations, in their Tribal Implementation Plans (TIP) under the provisions of the Tribal Authority Rule (TAR) 3

. The AP2 forum of WRAP has been charged with implementing the air pollution prevention recommendations of the GCVTC and commissioned ICF Consulting to examine the potential emissions reductions, costs and secondary economic impacts of meeting the 10/20 goals and energy efficiency recommendations. 

## II.2 Objective

This study serves as the documentation of the analytic and technical support to the AP2 forum’s report detailing its recommendations regarding renewable energy and energy efficiency to the WRAP Board. While the AP2 forum’s report provides a discussion of the policy imperatives and broader implications of the GCVTC air pollution prevention

2 “Recommendations for Improving Western Vistas,” The Grand Canyon Visibility Transport Commission, June 1996, page 28.
3 63 Fed. Reg. 7254-7274, codified at 40 CFR Part 49.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 3 recommendations, this report describes the potential emissions reductions, costs and secondary economic impacts of meeting the 10/20 goals and implementing the energy efficiency recommendations, given the assumptions and scenarios developed by the AP2 forum. The analysis examined the impacts for the nine states and tribal lands of the Transport region and was focused around stationary sources engaged in the production of electricity and industrial steam along with process sources (e.g., copper smelters and refineries). 

## II.3 Summary of Key Findings

The analysis indicates that the 10/20 goals and energy efficiency could both serve as cost-effective air pollution prevention strategies.

The objective of the 10/20 goals is to have renewable energy providing 10 percent of the regional energy demand by 2005 and 20 percent by 2015. The AP2 forum’s recommendations for energy efficiency seeks to reduce electricitydemand in the Transport region by 8 percent by 2018 from the Business-AsUsual (BAU) conditions through energy conservation in the residential, commercial, industrial and manufacturing sectors.

Wind power is expected to provide the largest source of renewable energy generation in meeting the 10/20 goals, accounting for much as 80 percent of the growth in renewable energy capacity. By 2018, the expansion in wind capacity under the 10/20 goals is expected to reach 18 GW. The 10/20 goals will also lead to some expansion of renewable energy generation from geothermal and landfill gas.

Penetration of energy efficiency and renewable energy will primarily compete against new conventional capacity additions. In the absence of energy efficiency and the 10/20 goals, most of the expansion in conventional capacity will likely consist of gas-fired combined cycles. New additions to renewable energy capacity and demand reductions motivated by the 10/20 goals and the energy efficiency recommendations are projected to displace new gas-fired combined cycle capacity while leaving the existing stock relatively unaffected.

Under the scenarios analyzed, energy efficiency and 10/20 goals provide 1 to 2 percent reductions in NO x emissions and 10 to 14 percent reductions in CO 2 emissions. The reduction potential appears to be modest partly because the displaced generation consists almost entirely of relatively clean gas-fired combined cycle. Since the 10/20 goals and energy efficiency primarily displace generation from new fossil fired capacity additions, the 10/20 goals and energy efficiency can provide a hedge against future emissions growth.

The 10/20 goals and energy efficiency do not provide any SO 2 reductions in the presence of a regional SO 2 emissions cap and trading program proposed in the Annex. However, the 10/20 goals and energy efficiency may lower the compliance cost of the trading program by as much as $ 10 million in 2018 (or 7 percent) and displace the need for 1,200 MW to 1,700 MW of new scrubber capacity.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 4The increase in annual levelized production costs under the 10/20 goals will range between $ 300 million and $ 900 million (or 2 percent to 5 percent relative to the business-as-usual scenario). Under an energy efficiency scenario, the savings in annual levelized production cost may range between $ 700 million to $ 1 billion (or 5 percent to 7 percent relative to the business-as-usual scenario).

Implementation of the 10/20 goals and energy efficiency recommendations will have small or no impacts on the regional economy. Under the 10/20 goals scenario, employment and personal income is projected to increase on average by less than one half of one percent per year. Gross regional product is likely to decline by approximately the same percentage impact. Similarly, implementation of the energy efficiency recommendations is projected to lead to small increases in employment, gross regional product and personal income of less than one half of one percent each.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 5 

## III. Analytical Approach

This section describes the analytical approach, data, assumptions, methodology and modeling tools used in the analysis. There were three distinct phases to the analysis: (1) assumptions and scenario development, (2) modeling of the electric and steam sectors, and (3) modeling of the secondary regional economic impacts. Figure I presented below illustrates the three phases of the analysis and the overall analytical approach. Details on each of the phases of the analysis are described below.

Figure I: Overview of Analytical Approach

Phase III: Modeling of Secondary Economic Impact REMITM Modeling

Secondary regional economic impactsEmployment ImpactsGross Regional Product ImpactsIncome Impacts 

# WR

Economic Impacts of Implementing a Regional SO 2 Emissions Program in the Grand Canyon Visibility Transport Region Volume I

Prepared for: Western Regional Air Partnership

Market Trading Forum

Prepared by: ICF Consulting

September 2000 WRAP/MTF Economic Analysis

Served as starting point for analysis

AP2 selected Annex Scenario as Business-As-Usual scenario

Phase I: Assumptions and Scenario Development A P2 Forum

Reviewed and revised assumptions for renewable energy technology

Developed energy efficiency cost and performance assumptions

Developed scenarios for analysis of 10/20 goals and energy efficiency (EE)

Integrated Approach

Environmental

Markets Fuel Markets Electric Markets

IPM ® Modeling

Modeled 10/20 and EE Scenarios developed under Phase IElectric/Steam Sector System ImpactsEmission ImpactsProduction Cost Impacts Phase II: Modeling of Electric and Steam Sector

Demand
Employment Demand
by Industry, by Occupation Market Shares
Local and export market shares
by Industry Output

Final Demand by Type Output by Industry

Wage Rate
Wage Rate, Prices and Profits
by Industry Supply
Population by Age, Gender, Race Labor SupplyEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 6 

## III.1 Scenario s Analyzed

The AP2 forum developed two types of scenarios in order to examine the emissions, costs and secondary regional economic impacts of meeting the 10/20 goals andimplementing the energy efficiency recommendations. The first was the Business-AsUsual (BAU) scenario that characterized how the future might unfold without any policy measures designed to accomplish the 10/20 goals and energy efficiency recommendations. The second set of scenarios reflected a future with policy drivers designed to meet the 10/20 goals or energy efficiency recommendations, or both. Assessments of emissions, costs and secondary regional economic impacts were estimated by analyzing the changes in the policy scenarios relative to the BAU scenario.

This analysis examined the 10/20 goals and energy efficiency recommendations in the context of the regional backstop SO 2 trading program proposed in the Annex. In September 2000 the WRAP/MTF conducted extensive analysis of the economic impacts of the Annex proposal. 4 The AP2 forum selected the WRAP/MTF scenario with the Annex as the basis for the BAU scenario. However, the existing stock of renewable energy plants under the WRAP/MTF Annex scenario was modified to account for firm projected renewable energy plants.

The policy scenarios developed by the AP2 forum were focused around the policy objectives of the 10/20 goals and energy efficiency recommendations. Policy scenarios also included cases designed to test the sensitivity of the impacts to changes in technology improvements and higher gas prices. The results of the sensitivity scenarios are mentioned briefly in the report since they do not appear to add substantively to the insights gained from the core policy scenarios.

In designing the policy scenarios and in developing the data for those scenarios, the AP2 forum modified some of the assumptions on the cost and performance of renewable energy technologies from those used in the BAU scenario. There were two reasons for this. First, the AP2 forum felt that the BAU scenario, which was adopted from the WRAP/MTF Annex scenario, did not contain enough details on renewable energy technologies since that had not been the focus of the WRAP/MTF.

Second, and more importantly, the AP2 recognized that the 10/20 goals would not only affect the level of renewable energy generation in the west, but also had the potential to influence the underlying market conditions for those technologies. Under a climate where policies are in place designed to achieve the 10/20 renewable energy goals and energy efficiency recommendations, the AP2 forum believes that the wind resource development costs could improve over time because of the cost benefits of “learning by doing”, from better alignment of incentives for improving technologies’ cost and performance and from reduced barriers to entry. The adjustments in the assumptions for the policy scenarios were focused only around wind technologies since wind was likely to be the largest sources of renewable energy and it was also where the forum anticipated most improvements in cost and performance would occur.

Recognizing the inherent uncertainty in assumption on technological improvements over time, the AP2 forum developed a sensitivity scenario that did not include the assumed

4 MTF 2000.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 7 improvements in renewable technology cost and performance. The objective of this sensitivity scenario was to capture the higher end of the potential cost impacts of the 10/20 goals. Table 1 presented below provides a summary of the scenarios developed by the AP2 forum.

Table 1: Scenarios

Scenario Assumptions Used

Business-As- Usual Scenario Used WRAP/MTF Annex scenario

Includes firm new renewable projects in existing generation stock

10/20 Goals Updated renewable technology cost and performance assumptions

Includes 10/20 goals as requirements that electric system has to meet

Retained all other assumptions from WRAP/MTF Annex scenario

10/20 Goals and Energy Efficiency Updated renewable technology cost and performance assumptions

Includes energy efficiency recommendations

Includes 10/20 goals as requirements that electric system has to meet

Retained all other assumptions from WRAP/MTF Annex scenario

Energy Efficiency Only Updated renewable technology cost and performance assumptions

Includes energy efficiency recommendations

Retained all other assumptions from WRAP/MTF Annex scenario Policy Scenarios

Sensitivity Scenarios Impact of 10/20 goals assuming no improvements in renewable technology cost and performance over time

Impact of higher gas prices on 10/20 goals

All the scenarios summarized in Table 1 above were modeled under Phase II of the analysis that examined the electric and steam sectors. In Phase III where the regional economic impacts were modeled, only selected policy scenarios were analyzed. These included the 10/20 goals policy scenario, the 10/20 goals and energy efficiency policy scenario and the energy efficiency policy scenarios.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 8 

## III.2 Analytical Tool

Integrated Planning Model (IPM ®

)

ICF’s Integrated Planning Model (IPM) was used as the analytical tool for modeling the costs and emissions impacts of the policy scenarios under Phase II of the analysis. IPM is a well-established electric and industrial boiler sectors model. For the WRAP/MTF analysis of the SO 2 program, it was enhanced to capture emissions from process sources. The model has been used in a wide range of analyses by government and industry. Within WRAP, the model was used by WRAP/MTF for the economic analyses and for the analysis of market issues related to the SO 2 emissions trading program. The model is also currently being used by the National Tribal Environmental Council (NTEC) to analyze issues related to the tribal set-asides under the regional backstop SO 2 trading program.
IPM is a detailed engineering-economic capacity expansion and production-costing model of the power and industrial sectors supported by an extensive database of every boiler and generator in the nation. It is a multi-region model that provides least-cost capacity expansion plans, credible plant dispat ch, and electric prices forecasts. IPM explicitly considers gas, oil, and coal markets, power plant costs and performance characteristics, environmental constraints and emissions markets, and other power market fundamentals.

As illustrated in Figure 2 below, IPM provides an integrated analysis of electricity and steam markets. The model captures the interactions of real world constraints and simulates electric and steam markets based on economic fundamentals using a linear programming structure. Figure 2 illustrates the key components of IPM.

Figure 2: The Integrated Planning Model

IPM models the contiguous U.S. using distinct power markets represented as “model regions.” These regions correspond in most cases to the regions and sub-regions of the North American Electric Reliability Council (NERC). For this analysis, the nine western 

## IPM Environmental Compliance Technologies

and Costs

• Capacity Additions • Fuel Prices • Electric Prices • Asset Values • Emissions • Retrofit Decisions • Compliance Costs • Steam Demand • Electric Demand • Gas Supply • Coal Supply

Environmental

Regulatory Scenario New Electric and CHP TechnologiesEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 9 states and tribes of the GCVTC region are contained within the model regions of California and Southwest Nevada (CNV), Pacific Northwest (WSCP) and interior West (WSCR). The models regions used in this study are illustrated in Figure 3 below.

Figure 3: Regional Structure of IPM for AP2 Forum Analysis

C N V SPPN

ERCT NENG

LILC UPNY

FRCC WUMS

MECS

MACS MACE MACW

SOU SPPS WSCP

WSCR MAPP

TVA ECAO

MANO

VACA

The modeling for this analysis covered the electricity, industrial steam and other industrial process sources of SO 2 emissions (e.g., copper smelters and refineries). The electricity sector includes all existing boilers and generators. IPM forecasts new capacity builds to meet the growth in electricity demand. The industrial steam sector includes sources that sell steam to industrial, commercial and institutional facilities. Expansion in steam demand is met through new boilers and/or combined heat and power (CHP) cogeneration facilities. Process sources of SO 2 such as refineries and smelters are also included in the modeling to capture their potential interactions in the regional SO 2 allowance markets. The analysis does not model production activity of these industrial process sources.

In IPM the 10/20 goals are modeled as electricity generation constraint on the power system that requires that the system must produce at a minimum the renewable generate targets specified by the 10/20 goals. The IPM model determines the optimal mix of renewable energy taking into account the target levels and their timing and geographic scope. In determining the optimal plan, the model also takes into account all existing and future air regulations included in the scenario, fuel prices and availability, and emission markets. The energy efficiency recommendations are modeled as reductions in energy requirements and peak demand levels. Reductions in demand are specified exogenously; the model responds to the new demand and determines the least cost method for satisfying that demand.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 10 Regional Economic Assessment: REMI’s Policy Insights ® Model (REMI)

The Policy Insights ® model produced by Regional Economic Models Inc. (hereinafter “REMI”) was used to estimate the secondary regional economic impacts of the implementing the 10/20 goals and the energy efficiency recommendations. REMI is a widely accepted tool for analyzing regional economic impacts and was previously used by WRAP/MTF for economic analysis of alternative emissions milestones (or caps) on the regional SO 2 trading program.

The REMI model is composed of five basic blocks – output, supply, demand, market shares and wage rate - that broadly characterize the regional economy. These blocks are inter-linked and the model uses a single set of simultaneous equations to estimate how a change from a policy might filter through the economy. Figure 4 illustrates the analytical framework of the REMI model.

Figure 4: Analytical Framework in the REMI Model

The REMI model used in this analysis cons ists of 10 regions, which include Arizona, Colorado, California, New Mexico, Nevada, Utah, Wyoming, Oregon, Idaho and the rest of the country. Because of the analytical difficulty in modeling tribal areas as a separate model region, tribal areas have been integrated in with the state in which they are located.

The AP2 Forum selected three scenarios for analysis of the regional economic impacts. These include:

1. 10/20 Goals; 2. Energy Efficiency Recommendations; and 3. 10/20 Goals and Energy Efficiency Recommendations.

For all the three scenarios, the inputs to REMI are derived from the IPM modeling results. Most of the inputs to REMI require changes relative to a reference point and the Business-As-Usual (BAU) scenario was used as the reference case in developing the inputs to REMI. All REMI inputs are specified by year, state and sector. Demand
Employment Demand
by Industry, by Occupation Market Shares
Local and export market shares
by Industry Output

Final Demand by Type Output by Industry

Wage Rate
Wage Rate, Prices and Profits
by Industry Supply
Population by Age, Gender, Race Labor Supply

Source: REMI ® Demand
Employment Demand
by Industry, by Occupation Market Shares
Local and export market shares
by Industry Output

Final Demand by Type Output by Industry

Wage Rate
Wage Rate, Prices and Profits
by Industry Supply
Population by Age, Gender, Race Labor Supply

Source: REMI ®Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 11 There are three IPM outputs that form the basis for the inputs to REMI. These include

1. Incremental Production Cost Impacts; 2. Changes in Wholesale Electricity Price; and 3. Revenue Changes from Allowance Allocations.

The approach and methodology used in adapting the IPM outputs for use in REMI are discussed in detail below.

Incremental Production Cost Impacts

Incremental production costs in IPM are composed of the capital, fixed operating, variable operating and fuel costs associated with the 10/20 goals and energy efficiency recommendations. Under the 10/20 goals, for instance, the incremental annual levelized production cost was $ 300 million annually and reflects the total change in production costs in meeting the 10/20 targets.

Impacts on production costs of sectors aside from power generators as a result of the policies are captured through REMI variables that reflect the factors of production in these sectors. Within REMI, these changes in production costs affect both market shares and final demand for each sector’s products through changes in the relative price of the products. Industries within these sectors that compete in regional markets (and thus are price setters for their product) are able to pass through cost via regional price increases, while sectors that compete nationally (and thus are “price takers”) experience a change in competitiveness relative to other regions and rest of the U.S.

For electric generators, the production cost impacts are not modeled directly in REMI because the electricity price impact is already known through IPM modeling. Instead, the production cost impacts are combined with the electricity price change and the net revenue impacts are input into REMI as changes in dividends or shareholder income. Changes in dividends and shareholder income directly affect changes in personal income, which in turn affects output and employment demand. For purposes of REMI modeling, avoided transmission and distribution avoided costs under the EE recommendations are treated as changes in production cost.

The capital investments for new electric generation capacity projected in IPM were modeled as construction and electric equipment demand in REMI. An increase in construction demand has a pronounced effect on the regional economy because it leads to an increase in employment, which in turn affects output, income, wages, population and labor supply. The increase in electrical equipment demand also affects output but the regional impacts are less pronounced than construction demand impacts because some of the expenditures flow out of the region for capital purchases made elsewhere. The regional purchase coefficients in REMI determines how much of the expenditures are spent locally versus outside of the region.

Changes in fuel expenditures, which are a component of total production costs, have been modeled in REMI as mining demand impacts. The change in mining demand affects employment and also flows through to changes in income and output.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 12 Figure 5 below illustrates how production cost impacts from IPM have been modeled in REMI and also describes how those impacts relate to changes in the regional economy.

Figure 5: Production Cost Impacts in REMI

Changes in Wholesale Electricity Prices

Wholesale electricity prices are outputs of IPM and have been used in REMI to describe how retail rates might change as a result of the policies. Wholesale electricity price impacts have been converted to retail rates based on the assumption that distribution and retailing cost do not change under the policies and that the changes in wholesale electricity price changes are fully realized by end use customers.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 13 Under the 10/20 goals, the w holesale electricity price impacts modeled in REMI also include the premium necessary for implementing the renewable energy targets. In this analysis, the premium is based on a System Benefits Charge (SBC) type approach where every end user pays the levelized renewable energy credit price. Under the scenarios involving the EE recommendations, the EE implementations cost were also included in the electricity price impacts. EE implementation costs were provided by state and sector and were converted to a kWh basis using the share of electricity demand for that state and sector. In effect, the EE implementation costs are recovered through changes in electricity prices. In sum, th e electricity price changes modeled in REMI include the following components: 1. Wholesale electricity prices; 2. Premium for 10/20 goals; and 3. EE implementation costs.

The changes in electricity prices are modeled separately for the residential, commercial and industrial sectors.

For the industrial and commercial sectors the changes in electricity prices affect their raw material cost. The change in the price of electricity affects the relative price of their factors of production and affects the type of resources (labor, capital) that the sectors might employ in production. With lower electricity prices, these sectors might substitute capital for labor thereby leading to an increase in investments, which in turn affects demand and output.

For the residential sector, the change in electricity price is modeled through the consumer price index. In this case, a reducti on in electricity price implies an increase in income because consumers have more to spend on other goods and services, which in turn increases consumption, demand and output.

Figure 6 below illustrates how the electricity price impacts have been modeled in REMI and its linkages in the regional economy.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 14 Figure 6: Electricity Price Impacts in REMI



### Demand
Employment Demand
by Industry, by Occupation 

### Market Shares
Local and export market shares
by Industry 

### Output

Final Demand by Type Output by Industry



### Wage Rate
Wage Rate, Prices and Profits
by Industry 

### Supply
Population by Age, Gender, Race Labor Supply 

### Demand
Employment Demand
by Industry, by Occupation 

### Market Shares
Local and export market shares
by Industry 

### Output

Final Demand by Type Output by Industry



### Wage Rate
Wage Rate, Prices and Profits
by Industry 

### Supply
Population by Age, Gender, Race Labor Supply

Change in electricity price in the industria l and commercial sector affects the relative
p rice of inputs in the factors of production. Change in electricity price in the residentia l

s ector affects the consumer expenditure price index, which in turn affects income.

Revenue Changes from Allowance Allocation

The revenue changes from allowance allocation account for changes in the allowance position under the SO 2 trading program of the Annex. Although the cap in the trading program does not change under the 10/20 goals and the energy efficiency recommendations, the compliance strategy changes, which in turn affects the number of allowances that sources in a state will have to buy or sell.

The expenditures/revenues from the sale/purchase of allowances is based on the allowance price of the regional SO 2 trading program and the net allowance position of the state. A state that has allowances to sell will realize an increase in revenues, while a state that needs to purchase allowances will see an increase in expenditures. Because these revenues/expenditures accrue to the sources affected by the trading program, the changes in expenditures/revenues from allowance allocations have been modeled in REMI as dividend and shareholder income. The impact of the allowance allocation does not change the overall cost to the region (because expenditures and revenues cancel out) but merely redistributes the impacts across the region. Some of the dividend and shareholder incomes are assumed to flow out of the region based on the income distribution. Figure 7 illustrates how revenue changes from allowance allocations have been modeled in REMI and the related impacts on the regional economy.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 15 Figure 7: Revenue Impacts from Allowance Allocations



### Changes in revenue/expenditures from
p urchase or sale of allowances in the regional SO 2 

### trading program affects dividend and shareholder income.



## Demand
Employment Demand
by Industry, by Occupation 

## Market Shares
Local and export market shares
by Industry 

## Output

Final Demand by Type Output by Industry



## Wage Rate
Wage Rate, Prices and Profits
by Industry 

## Supply
Population by Age, Gender, Race Labor Supply 

## Demand
Employment Demand
by Industry, by Occupation 

## Market Shares
Local and export market shares
by Industry 

## Output

Final Demand by Type Output by Industry



## Wage Rate
Wage Rate, Prices and Profits
by Industry 

## Supply
Population by Age, Gender, Race Labor Supply



## III.3 Data and Assumptions

As noted before, for this analysis the AP2 forum used much of the data and assumptions developed by the WRAP/MTF. These assumptions are fully documents in the economic analysis report produced by the WRAP/MTF in September 2000 5 and have not been replicated in this report. The section describes only the data and assumptions that changed relative to the WRAP/MTF economic analysis. In addition, as noted before, the AP2 forum updated the renewable energy technology cost and performance assumptions for the policy scenarios. Because the BAU scenario did not include any projected additions to renewable energy capacity (outside of firm new capacity), for renewable energy technologies, this section describes only the assumptions used in the policy scenarios.

5 MTF 2000.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 16 Environmental Regulations

Regional and national existing environmental regulations affecting stationary sources that produce electricity and/or industrial steam are represented identically in both the BAU and policy scenarios. The regulations modeled include:

1990 Clean Air Act Amendments Title IV NO x and SO 2 ,Title IV SO 2 national trading program,

Northeast NO x SIPCALL, and

Regional backstop SO 2 trading program proposed under the Annex for the states and tribes of the Transport Region with the assumption that all states/tribes will participate in the trading program. The specific milestones used in modeling the Annex are summarized in Table 2 below.

Table 2: Milestones Used for the Regional Backstop SO 2 Trading Program Proposed In the Annex

2013 2018 Thousands Tons of SO 2 630 507

Natural Gas Prices

The AP2 forum retained the natural gas price assumptions developed by the WRAP/MTF for this analysis. In addition, the AP2 forum developed the high natural gas prices for the sensitivity scenario based on the approach used in the WGA Transmission Report. 6 Table 3 below provides a summary of the natural gas prices assumed in the study. The BAU and policy scenarios both include the base price while the high prices were used only in the high gas price sensitivity policy scenario.

Table 3: Assumptions on Delivered Natural Gas Price

National Average Delivered Natural Gas Price (2001 $/mmbtu) Year Base High Gas Price 2005 $3.16 $4.44 2010 $3.31 $4.99 2020 $3.49 $5.93



### Cost and Performance for Grid Connected Utility Scale Solar Technologies

The AP2 forum assumed that two types of grid-connected utility scale solar technologies -- solar photovoltaic and solar thermal -- would be available under the policy scenarios. Recognizing that some cost improvements in these technologies would occur over time, the forum allowed for some cost decline in both technologies after 2010. Table 4 presented below provides the cost and performance assumptions for solar photovoltaic and solar thermal.

6 “Conceptual Plans for Electricity Transmission in the West,” Report to the Western Governors’ Association, August 2001. High gas prices were based on gas prices in Annual Energy Outlook 2001 plus 50%.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 17 Table 4: Cost and Performance Assumptions for Solar Technologies 7

Overnight Capital Cost Fixed O&M Cost Available Years Technology Annual Average Capacity Factor (2001$/kW) (2001$/kW-Yr) Solar PV 28% 4,576 11 2000-2009 Solar Thermal 42% 3,170 50 Solar PV 28% 2,737 11 2010-2030 Solar Thermal 42% 2,853 50

The analysis reflects the fact that sola r plants are not dispatchable by basing the generation estimates on generation profiles that describe the hourly generation for a typical day in the winter and summer. Furthermore, in order to account for the intermittency in generation from solar technologies, solar photovoltaic and solar thermal plants do not receive capacity credit on their entire nameplate capacity. Instead, the capacity credit is limited to their capacity factor in the peak 30 percent of hours.



### Cost and Performance for Biomass Technologies

The AP2 forum assumed that both direct combustion and biomass gasification combined cycles (BGCC) would be available for commercial application to electricity generation. However, recognizing that BGCC is not yet a mature technology, the forum assumed that BGCC would be available only after 2010. Table 5 presented below summarizes the cost and performance assumptions for biomass technologies.

Table 5: Cost and Performance Assumptions for Biomass Technologies 8

Available Year Technology Heat Rate (Btu/kWh) Overnight Capital Cost (2001$/kW) Fixed O&M (2001$/kW-Yr) Variable O&M (2001mills/kWh)

2000 Direct Combustion 8,219 1,420 48 5.75

2010 Biomass Gasification Combined Cycle 13,000 1,489 66 7.74

Biomass fuel supply is reflected in a composite supply curve containing energy crops, agricultural residue, forestry residue, and urban wood waste and mill residue available for electricity generation. For each model region and year, the supply curve denotes the price-quantity relationship of biomass. 9

7 Annual Energy Outlook (AEO) 2001. 8 Data for Direct Combustion Biomass from Technology Characterization report by DOE-NREL 1997. Data for Biomass Gasification Combined Cycle from Annual Energy Outlook 2001. 9 Biomass supply curve based on data from Annual Energy Outlook 2001.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 18 Cost and Performance for Geothermal Technologies

For geothermal generating technologies, the AP2 forum wanted to ensure that the effects of resource depletion were included in the cost and performance. Consequently, rather than a single option, the policy scenarios include a geothermal supply curve that characterize the relationship between available capacity and development-production cost. The supply curve is specified for each of the three model regions that circumscribe the Transport Region and is presented in Table 6 below.

Table 6: Cost and Performance Assumptions for Geothermal Technologies 10



### Region Potential Capacity

(MW) Overnight Capital Cost (2001$/kW) Fixed O&M (2001$/kW-Yr) Capacity Factor

(%) 653 2,137 75 90 6,782 2,312 98 90 3,806 3,311 122 90 CNV [California and Southern Nevada) 12,836 5,979 258 90 3,500 2,332 72 90 2,200 3,563 130 90 WSCP [Pacific Northwest] 3,075 5,156 195 90 920 2,113 70 90 250 2,735 96 90 5,713 3,515 122 90 WSCR [Interior West] 5,606 6,877 238 90

Cost and Performance for Landfill Gas Technologies

A limited amount of potential landfill gas capacity was expected to be available in the Transport Region in the future and this resource was included by the AP2 in its policy scenarios. The potential capacity reflects landfill gas with a gas collection system already in place; capital costs reflect addition of generating equipment. Table 7 presented below summarizes the cost and performance assumptions for landfill gas generation.

10 Annual Energy Outlook 2001.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 19 Table 7: Cost and Performance Assumptions for Landfill Gas Generation 11

Region Potential Capacity

(MW) Overnight Capital Cost (2001$/kW) Fixed O&M (2001$/kW-Yr) Variable O&M (2001 mills/kWh) Capacity Factor

(%) CNV [California and Southern Nevada] 528 1,291 85 11 87

WSCP [Pacific Northwest] 128 1,291 85 11 87

WSCR [Interior West] 336 1,291 85 11 87



### Cost and Performance for Wind Technologies

Because wind generation is the renewable energy resource most likely to penetrate in the future, the AP2 forum spent considerable time characterizing wind resources for the policy scenarios. In developing the assumptions, the forum sought to capture the issues of intermittency, resource availability, reliability and transmission access that are often associated with wind generation.

The AP2 forum assumed that grid-connected central station wind plants could be located in wind classes 6 or greater, 5 and 4 12 ; lower wind classes were unlikely to support commercial electricity generation. Within each wind class, the total resource is divided into four cost categories to account for resource degradation and impact on electric system reliability stemming from the intermittency in wind generation.

Cost multipliers are applied to each of the four wind classes to reflect these factors. The four cost categories reflect multipliers of 1, 1.2, 1.4 and 1.6 applied to base cost. The result is a wind resource supply curve that limits how much wind capacity is available at each cost point. The AP2 forum assumed that the highest cost category could not exceed 1.6 since at the very most (or at high levels of wind generation) a combustion turbine could be used to provide backup for the intermittency in wind generation to guard against any system reliability concerns. The available wind capacity resources were distributed among the four cost categories as outlined below with the best wind resource being assigned to the lowest cost scalar first. 13

Cost Scalar 1.0: Wind capacity equal to 10 percent of the region’s generation or 10 percent of available capacity whichever is lower;

11 “Energy Project Landfill Gas Utilization Software Manual,” Appendix A, US EPA 1997 and “Turning a Liability into An Asset: A Landfill Gas-to-Energy Project Development Handbook,” US EPA September 1996.
12 Wind classes are based on average wind speed in the area. Class 6 or greater have the highest average wind speeds, while class 4 has the least average wind speed. 13 Data provided by Walter Short, National Renewable Energy Laboratory. A similar methodology was also used in “Scenarios for Clean Energy Future,” Union of Concerned Scientists.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 20Cost Scalar 1.2: Wind capacity meeting 10 percent – 15 percent of region’s generation;

Cost Scalar 1.4: Wind capacity meeting 15% - 20% of region’s generation; and

Cost Scalar 1.6: Remaining wind capacity.

Table 8 presented below summarizes the potential capacity by wind class and cost category for each model region.

Table 8: Potential Wind Capacity by Model Region, Wind Class and Cost Class

To characterize the cost and performance of wind technologies, the AP2 forum developed four technology vintages that become available for commercial application at different times in the planning horizon. The four vintages reflect expectations of declining costs and technological improvements. Table 9 provides a summary of the cost and performance assumptions for wind technologies.

(in MW) Cost Scalars Model Region Wind Class 1 1.2 1.4 1.6 CNV Class 6 1,574 4,543 (California and South- Class 5 2,775 West Nevada) Class 4 4,699 2,145 CNV Total 1,574 12,017 2,145 - WSCP Class 6 678 (Pacific Northwest) Class 5 6,088 Class 4 962 3,316 17,935 WSCP Total 678 7,050 3,316 17,935 WSCR Class 6 6,593 3,297 3,297 55,156 (Interior West) Class 5 32,384 Class 4 292,468 WSCR Total 6,593 3,297 3,297 380,008Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 21 Table 9: Cost and Performance Assumptions for Wind Technologies 14

Available

Years Overnight Capital Costs

(2001$/kW) Fixed O&M (2001$/kW-Yr) Variable O&M (2001 cents/kWh) Annual Average Capacity Factor

Wind Class 6 2000-2004 1000 4.00 0.5 40.4 2005-2009 915 4.00 0.2 45.3 2010-2014 800 4.00 0.18 46.4 2015-onward 770 4.00 0.17 47.9 Wind Class 5 2000-2004 1000 4.00 0.5 35.3 2005-2009 915 4.00 0.2 40.2 2010-2014 855 4.00 0.18 41.3 2015-onward 825 4.00 0.17 42.75 Wind Class 4 2000-2004 1000 4.00 0.5 30.2 2005-2009 915 4.00 0.2 35.1 2010-2014 910 4.00 0.18 36.2 2015-onward 880 4.00 0.17 37.6
Notes: Does not include Production Tax Credit.

For this analysis, the generation output from wind plants is based on generation profiles that describe the hourly generation for a typical day in summer and winter. The annual average capacity factor presented in Table 9 above is therefore a summary characteristic of that generation profile. Furthermore, because wind plants are not dispatchable, the capacity credit for wind is restricted to the average generation in the peak 30% of the hours represented by the profile.

Recognizing that wind technologies may encounter problems with transmission bottlenecks, particularly in the interior West where significant resources are located, the AP2 forum decided to include a transmission cost adder of $208 ($2001/kW) 15 for wind resources located in the interior west. While the cost of interconnection to the grid is reflected in the capital costs reported in Table 9 above, the transmission cost adder for the interior West reflects the fact that these resources may also require some upgrades to the existing transmission system in order to deliver the power to the load centers. Connection to the grid alone does not guarantee delivery because there may not be sufficient capacity on the transmission lines to carry the additional power. The forum felt that this cost was particularly warranted for the interior west because much of the wind resource there is located in Wyoming. The forum felt that developing the resources in the interior west would, at a minimum, require some upgrades to the local transmission system to get the power to the demand centers.

14 Data provided by Walter Short, National Renewable Energy Laboratory. 15 Based on “Conceptual Plans for Electricity Transmission in the West,” Report to the Western Governors’ Association, August 2001. Estimated using the incremental cost between the Gas transmission scenario and the Alternative Fuel Scenarios. Consistent with this report, the transmission cost adder is also applied to new coal capacity in the interior west.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 22 The assumptions presented in Table 9 reflect declining technology costs and improved capacity factors over time. In the sensitivity policy scenario that do not allow for those improvements, the 2000-2004 costs and performance are held constant over all time periods.



### Assumptions on the 10/20 Renewable Energy Goals

The 10/20 goals were an explicit requirement in many of the policy scenarios and the characterization of that policy goal is based on the recommendations of the GCVTC. The AP2 forum assumed that the minimum renewable energy generation targets for the 10/20 goals would be based on the electricity demand in the nine states and tribal land of the Transport Region. The 10/20 goals, as modeled in this analysis, requires that by 2005 10 percent of the regional electricity demand be met by generation from renewable energy and by 2015 20 percent of the regional electricity demand be met by generation from renewable resources. Existing generation from renewable energy also counts towards that target. Figure 8 presented below provides a summary of the targets and the existing generation from renewable energy under the BAU.


### Figure 8: 10/20 Renewable Energy Generation Targets

- 40,000 80,000 120,000 160,000

2005 2010 2015 2018GWh

10/20 Goals Existing RE Generation Under BAU

This analysis assumes that the 10/20 renewable energy targets can be met by generation from wind, solar photovoltaic, solar thermal, biomass gasification combined cycle, biomass direct combustion, landfill gas and geothermal. The analysis did not include options for small hydro (due to data limitations), though small hydro is a potential renewable energy supply option. In addition, the renewable energy targets can be met by generation from renewable technologies located anywhere within the nine states andEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 23 tribal lands of the Transport Region and also within the state of Washington and Montana 16

. 

### Assumptions on Energy/Capacity Savings and Implementation Costs for Energy Efficiency Recommendations

The AP2 forum commissioned the Tellus Institute to develop the energy savings and implementation cost assumptions for the energy efficiency recommendations. A description of the approach and method used for the energy efficiency analysis along with the detailed results are presented in Appendix II.

The assumptions on the energy savings and implementation costs for the energy efficiency measures were developed outside of IPM, the power-industrial-process sources sectors modeling framework. The energy and peak capacity savings associated with energy efficiency were introduced into IPM to estimate the emissions reductions and cost savings resulting from lower energy demand. The potential emissions reductions were estimated using the change in emissions between the energy efficiency policy scenarios and the BAU scenario. The net production costs impacts were determined based on the following: (1) The energy efficiency implementation costs estimated outside of IPM; (2) The avoided investment cost savings in transmission and distribution estimated outside of IPM; (3) The cost saving from reduced generation estimated using IPM.

The assumptions for the energy efficiency recommendations were specified by model region (CNV – California and Southwest Nevada; WSCP – Pacific Northwest; and WSCR – Interior West) to fit in with the modeling specification for IPM. Though the three model regions encompass more than the nine states and tribal lands of the Transport Region, the saving and cost estimates were based only the states and tribal lands of the Transport Region. Savings were characterized as electricity demand savings, the annual reduction in electricity demand inclusive of loss, and peak savings, the avoided generation capacity associated with the electricity demand savings. Figures 9 and 10 presented below describe the total regional energy and capacity savings. The total savings reflects the sum of savings across the industrial, residential and commercial sectors and represents 1 percent of electricity demand in 2005 and growing to 8 percent by 2018 under BAU conditions.

16 Renewable generation located in Washington and Montana were allowed to count towards the 10/20 targets because, in the modeling, these states sh are common electricity markets with many of the states/tribes of the Transport Region.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 24 Figure 9: Annual Electricity Demand Savings Under the Energy Efficiency Recommendations

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000

CNV (California and Southwestern Nevada) WCSP (Pacific Northwest) WSCR (Interior West)Energy Savings (GWh) 2005 2010 2018

Figure 10: Generation Capacity Savings Under the Energy Efficiency Recommendations

0 2 4 6 8 10

CNV (California and Southwestern Nevada ) WCSP (Pacific Northwest) WSCR (Interior West)Peak Demand Savings (GW) 2005 2010 2018

The costs for implementing the energy efficiency recommendations include the costs borne by both the customer and the sponsor and reflect the equipment purchase, fuel, operations, administration and marketing costs. In addition to the implementation costs, the AP2 forum assumed that the energy efficiency measures would lead to avoid investments in the transmission and distribution system at an annual average cost savings of 2.4 cents/kWh (2001 $). Because IPM is a wholesale electricity model that captures cost savings only at the wholesale generation levels, it was necessary toEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 25 account for these avoided transmission and distribution (T&D) costs outside the model. Figure 11 provides a summary of the assumptions on total implementation costs and avoided T&D investments costs savings for the energy efficiency recommendations. In IPM modeling of the energy efficiency scenarios, the projected production cost savings from IPM are compared against the assumed implementation and avoided T&D costs to estimate net savings.

Figure 11: Annual Implementation Costs and Avoided T&D Cost Savings Under the Energy Efficiency Recommendations

(2,000) (1,500) (1,000)

(500)

- 500 1,000 1,500 2,000

2005 2010 2018Million 2001$

Implementation Costs T&D Savings Net Annual CostsEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 26 

## IV. Emissions and Production Costs Impacts

This section describes the emissions and costs impacts on the electricity, industrial and process source sectors under the policy scenarios. The impacts are described in terms of the changes relative to the BAU scenario, thus the first section outlines the notable elements under the BAU scenario. 

## IV.1 Key Elements Under the Bu siness-As-Usual (BAU) Scenario

The BAU scenario represents a projection of the future without additional efforts to promote renewable energy and energy efficiency in the West. It provides a good reference point for analyzing the impacts of meeting the 10/20 goals and implementing the energy efficiency recommendations. The BAU scenario includes about 1 GW of additional renewable resources that are currently under construction or near the construction phase. However, no additional renewable resources beyond these planned additions are projected in the BAU. As a point of reference, over the last decade about 2 GW of new renewable resources have been brought on line.

Figure 12: Existing Renewable Energy Capacity 17

5% 24% 4% 20%

47% 0% 4%

21%

15% 49% 49% 19%

2%

11%

19%
Geothermal

Solar/PV

Wind

Landfill Gas

Biomass/Waste
9%

48%
6% 36% 1% Geothermal US

GCVTC Region 10 GW 15 GW



### 1990 1998

4 GW 6 GW

17 1990 Data: Energy Information Administration (EIA) Form 860 and EIA Form 867. Some 1990 capacity has been withheld for confidentiality. 1998 Data: EIA Form 860A and EIA Form 860B.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 27 The BAU does not assume any major policy efforts to increase renewable energy or energy efficiency, aside from the indirect benefits afforded clean energy sources by existing air regulations including the Title IV SO 2 program under the Clean Air Act Amendments and the regional SO 2 backstop trading program proposed under the Annex. The growth in renewable capacity under the BAU is limited to the firm capacity additions planned and/or under construction.

Under the BAU scenario, the growth in electricity demand is likely to be met by additions of new gas-fired capacity. By 2018, almost 30 GW of new combined cycle capacity, representing 80 percent of the total growth in new capacity is projected under the BAU. The new combined cycle capacity will likely consist of new combined-cycle and repowering of the older stock of oil/gas steam units to more efficient combined cycle units. As illustrated in Figure 13, by 2018 gas-fired generation from combined cycles represents 37 percent of all generation in the Transport Region up from 21 percent in 2005 (oil/gas steam and combined cycle). The generation from nuclear, hydro and renewable energy remains unchanged between 2005 and 2018, but accounts for a smaller share of the total generation in 2018.

Figure 13: Capacity Growth and Generation Mix Under the BAU

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000

2005 2010 2018Capacity Additions by 2018 (MW) Coal
O/G Steam & Turbines Combined Cycles

Renew ables Cogeneration

Generation Mix Under BAU

38%

18% 3% 5% 8% 17% 11%

Coal
O/G Steam & Turbines Combined Cycles
Renewables Cogens Hydro
Nuclear 31%

0%

37% 4% 8%

14% 6%

2005 543 thousand GWh 2018 680 thousand GWh

The changes in emissions over time under the BAU scenario reflect the changing mix in capacity and generation. SO 2 emissions under the BAU scenario remain relatively unchanged till 2013, after which the emissions decline as a result of the assumed SO 2Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 28 cap and regional trading program. Though NO x emissions remain relatively unchanged under the BAU scenario between 2005 and 2018, the NO x emissions rate declines significantly as a result of the repowering of existing oil/gas steam units. For CO 2 , the change in emissions between 2005 and 2018 mirrors the increase in fossil fuel usage and rises by 19 percent between the two years. Figure 14 presented below provides a summary of projected emissions under the BAU scenario.

Figure 14: Emissions Under the BAU Scenario



## - 200 400 600 800

2005 2010 2015 2018 CO2 (Million Metric Tonnes) NOx ('000 tons) SO2 ('000 tons)



## IV.2 Electric System Capacity and Generation Impacts

Implementation of the10/20 goals and energy efficiency recommendations lead to significant increases in renewable energy capacity, totaling nearly 20 GW by 2018. The increase in renewable energy capacity is driven by the combination of two key factors. First, under the policy scenarios that include the 10/20 goals there is an explicit requirement that by 2005 10 percent of the regional electricity demand must be met by renewable resources. By 2015, the requirement increases to 20 percent. Second, the growth in renewable energy capacity is spurred by declining renewable technology cost and performance improvements that the AP2 forum assumed would occur in the policy scenarios.

Under the 10/20 goals policy scenario, as illustrated in Figure 15 below, renewable energy generation in the states and tribal lands of the Transport region expands to 18 percent, up from 4 percent under the BAU scenario 18 . Most of this expansion comes from new wind capacity, which accounts for 65 percent of the renewable energy generation.

18 Two percent of the renewable energy generation for the 10/20 goals comes from states and tribal regions outside the Transport Region but that share common elec tric market with the states/tribes in the Transport Region. The scenario assumes that renewable energy generation from such sources can be used towards the 10/20.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 29 Figure 15: Renewable Energy Capacity and Generation Under the 10/20 Goals

0 5 10 15 20 25

Wind Geothermal Landfill GasCapacity Additions by 2018 (GW)

31%

0%

37% 4% 8% 14% 6%

29%

0%

26% 4% 7% 14% 6% 14%

Coal
O/G Steam & Turbines Combined Cycles Existing Renewables Cogens Hydro
Nuclear
New Renewables 

### 2018 Generation Mix

BAU 10/20 Goals

The expansion of renewable energy capacity under the 10/20 goals predominantly displaces new gas-fired capacity. As illustrated in Figure 16 below, by 2018 displaced gas fired combined cycles accounts for almost 80 percent of the 13 GW of the total displaced capacity. The type of displaced capacity (i.e., gas fired combined cycle) reflects the fact that renewable energy c apacity will compete against new fossil capacity additions rather than affect the stock of existing units.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 30 Figure 16: Capacity Displaced Under the 10/20 Goals

Coal Oil/Gas Steam & Gas Turbines

Gas Combined Cycles Cogens

-10,000

-8,000 -6,000 -4,000 -2,000 0 2,000Capacity Displaced by 2018 (MW)

Results of the analysis indicate that wind will remain the dominant renewable energy technology across a range of different sensitivities and assumptions, particularly when renewable energy generation accounts for 10 percent to 20 percent of regional electricity generation. As illustrated in Figure 16 below, across the other policy scenarios analyzed by the AP2 forum, new wind capacity accounts for at least 75 percent of the additions to renewable energy capacity. In Figure 17 presented below, “EE” refers to the energy efficiency policy scenario, “EE + 10/20” refers to the policy scenario that includes energy efficiency along with the 10/20 goals, “10/20 Goals with No Improvements in RE Technologies” refers to the policy scenario that includes the 10/20 goals but does not allow for improvements in renewable technology cost and performance and “High Gas Prices” refers to the policy scenario with 50% higher gas prices.

Figure 17: Renewable Energy Capacity Additions Under Alternative Policy Scenarios

0 5 10 15 20 25 30 35 40

EE EE + 10/20 Goals 10/20 Goals with No Improvements in RE Technologies High Gas PriceCapacity Additions by 2018 ('000 MW) Wind Geothermal Landfill GasEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 31 In summary, the changes in electric capacity and generation under the policy scenarios provide some interesting insights. First, the results of the analysis suggest that wind is likely to be the primary choice for renewable energy technology in the West. Even with renewable energy generation providing over 20 percent of the region’s electricity generation demand, as in the high gas price scenario, wind appears to be the dominant technology of choice. Second, the penetration of the renewable energy capacity and energy efficiency appears to displace mostly new additions to capacity rather than affecting the existing generation stock. Because most of the new capacity additions under the BAU are gas-fired combined cycle, the results indicate that new gas-fired capacity will be primarily displaced under the policy scenarios. The more important, broader implication is also that renewable energy and energy efficiency compete against new capacity in the supplying electricity. 

## IV.3 Production Costs Impacts

Implementing the 10/20 renewable energy goals will lead to increased production costs, while the energy efficiency recommendations will result in production costs savings. Production costs, in this case, reflects the incremental or going forward costs 19 associated with producing electricity and industrial steam and includes incremental capital costs, fuel costs and operation and maintenance costs.

As mentioned previously, the AP2 forum considered the production cost impacts of meeting the 10/20 goals under two alternative policy scenarios. In the first policy scenario, the AP2 forum assumed that the cost of developing renewable energy, particularly wind, would improve in the future as a result of the growth in renewable energy capacity. In the second scenario, the AP2 forum wanted to examine the production costs impacts without allowing for any improvements in renewable technology cost and performance. As illustrated in Figure 18 below, the annual levelized production cost impacts under the two policy scenarios could range between $300 million (2001 $) and $900 million (2001 $) or 2 percent to 5 percent of the production costs under the BAU respectively.

Figure 18: Production Cost Impacts in Meeting the 10/20 Renewable Energy Goal s

$17.7 $18.3 $17.4

$0 $5 $10 $15 $20

BAU 10/20 Goals 10/20 Goals with No Improvements in RE

TechnologiesAnnual Levelized Production Costs (Billion2001$)

19 Embedded cost associated with the capital cost of existing units are not included in modeled production costs.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 32 The increase in production costs in meeting the 10/20 goals is largely driven by the capital expenditures required for new renewable energy projects. While the penetration of renewable energy leads to reductions in costs from displaced fossil fuel generation, it is not sufficient to fully offset the increased capital expenditures. Nonetheless, there is a shift in production costs away from fuel and towards capital. Under the 10/20 goals, operation-and-maintenance costs remain relatively unchanged. Figure 19 presented below highlights the composition of the change in annual levelized production costs for 2018.

Figure 19: Composition of Annual Leveliz ed Production Cost Impacts in Meeting the 10/20 Goals

$14

-$1,216 $1,485 $1,930

$299

-$1,321 -$1,500 -$1,000

-$500 $0 $500 $1,000 $1,500 $2,000 $2,500

10/20 Goals 10/20 Goals with No Improvements in RE TechnologiesChange in Production Cost Relative to BAU(Million2001$) Operations & Maintenance Fuel Capital

Unlike the 10/20 goals, implementation of the energy efficiency recommendation with and without the 10/20 goals leads to annual levelized production costs savings of $730 million to $1 billion (2001 $) respectively. These net savings reflect the cost of implementing the recommendations, the avoided investment costs for transmission and distribution infrastructure and the reduction in electricity production costs from decreased electricity demand. Though the requirements of the 10/20 goals somewhat lowers the savings from energy efficiency, the 10/20 goals and energy efficiency recommendations still result in annual levelized production costs savings of over $700 million. These savings represent 4 percent to 7 percent of the annual levelized production costs of the BAU scenario. Figure 20 presented below contrasts the annual levelized production costs under the BAU and policy scenarios with the energy efficiency recommendations.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 33 Figure 20: Annual Levelized Production Costs Under the BAU and Policy Scenarios with the Energy Efficiency Recommendations

$16.4 $16.7 $17.4

$0 $5 $10 $15 $20

BAU EE EE + 10/20 GoalsAnnual Levelized Production Costs (Billion 2001$)

The projected production costs savings presented in Figure 19 reflects the assumed improvements in renewable energy technology cost and performance. The AP2 forum assumed that the energy efficiency recommendations would occur under a policy regime that would actively promote renewable energy, though without explicit targets, thus leading to enhancements in technology cost and performance.

Much like the policy scenarios with the 10/20 goals, the production cost savings under the policy scenarios with are driven by reductions in fuel expenditures because energy efficiency displaces gas generation. Figure 21 presented below illustrates that by 2018, energy efficiency and energy efficiency with the 10/20 goals leads to almost $ 2 billion in fuel expenditure savings, offset only by increased capital investments in renewable energy capacity.

Figure 21: Composition of Production Cost Impacts Under the Energy Efficiency Policy Scenarios

-$260

-$1,060 $181 $1,189

-$181

-$1,815 -$2,000 -$1,500 -$1,000

-$500

$0 $500 $1,000 $1,500

E E EE + 10/20 GoalsChange in Production Costs Relative to BAU(Million 2001$) Operations & Maintenance Fuel CapitalEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 34 In summary, the production cost impacts of the policy scenarios yield some interesting insights for the 10/20 goals and energy efficiency recommendations. First, the 10/20 goal will results in modest production cost impacts of 2 percent to 5%, while energy efficiency recommendations will achieve production cost savings of 5 percent to 7 percent. Second, and perhaps the most notable feature of these policies is that because both the 10/20 goals and energy efficiency recommendations shift production expenditures away from fuel and towards capital, these policy objectives can offer some security against fuel price volatility and fuel supply shocks. 

## IV.4 Emissions Impacts

Under the 10/20 goals, the em issions reductions occur because conventional fossil fuel generation is replaced with clean or low emissions generation from renewable energy. With energy efficiency, demand savings displaces electricity generation, which in turn creates the opportunities for emissions reductions. The level of associated emissions reductions depends on the pollutant being examined. Fuel based emissions (CO 2 ) generally follow fuel consumption, while technology/fuel dependent emissions such as NO x depends on the relative emission rate of displaced technologies.

Under the policy scenarios of the 10/20 and energy efficiency, the change in NO x emissions relative to the BAU scenario range between 1 percent and 2 percent. As illustrated in Figure 22 below, by 2018 the emissions reduction in NO x from implementing the 10/20 goals and the energy efficiency will be between 8,000 tons and 14,000 tons annually. Most of the emissions reductions are likely to occur after 2010, when the penetration of renewable energy and energy efficiency is most significant.

Figure 22: Reductions In NO x Emissions Under the Policy Scenarios

- 2

4 6 8 10 12 14 16

2005 2010 2015 2018Change in NOxEmission Relative to BAU(Thousands Tons of NOX) 10/20 Goals
EE
EE + 10/20 Goals

The modes emissions reductions in NO x under the 10/20 goals and energy efficiency recommendations reflect that the fact that they largely displaced new gas-fired combined cycles, which are expected to have relatively low NO x emission rates. However, it is important to recognize that because these reductions come from new generation capacity, renewable energy and energy efficiency will provide a hedge against future NO x emissions growth.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 35 Estimated emissions reductions in CO 2 , on the other hand, are driven largely by reductions in fossil fuel use. As highlighted in Figure 23 below, the reductions in CO 2 emissions range between 10 percent and 14 percent under the various policy scenarios. By 2018, when the penetration of renewable energy and energy efficiency are most significant, the reductions are projected to between 40 million metric tonnes and 55 million metric tones.

Figure 23: Reductions In CO 2 Emissions Under the Policy Scenarios

- 10 20 30 40 50 60

2005 2010 2015 2018Change in CO2Emissions Relative to BAU(Million MetricTonnes of CO2) 10/20 Goals
EE
EE + 10/20 Goals

As was true for NO x emissions, because CO 2 emissions reductions derive from reductions in fossil fuel use in new capacity additions, the 10/20 goals and energy efficiency will likely provide a hedge against future CO 2 emissions growth.

Unlike NO x and CO 2 emissions, the analysis projects no reductions in SO 2 emissions reflecting the regional emissions cap and SO 2 trading program as proposed in the Annex and modeled in all scenarios. However, because the SO 2 trading program creates a monetary value for SO 2 emissions, affected sources under the cap and trade program take advantage of reduced fuel use and associated lower emissions to reduce their overall cost of compliance with the cap. Thus, there is an economic benefit to fully offsetting any SO 2 emissions reductions provided by the 10/20 goals and energy efficiency recommendations. This result is not unique to this particular situation but is rather a general outcome under an emissions cap and trading program. Analysis of the extent to which the 10/20 goals might lower the costs of compliance in the regional backstop SO 2 trading program in the Transport Region is discussed below.



## IV.5 Impact on the Regional Backstop SO 2 

## Trading Program

The compliance cost of the regional trading program such as the Annex depends on the level of reductions required. The 10/20 goals and energy efficiency programs help to lower the compliance cost of the regional backstop SO 2 trading program by lowering the amount of reductions needed to meet the milestone. The penetration of renewable energy under the 10/20 goals displaces fossil fuel generation, which in turn provides theEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 36 remaining plants in the trading program with more headroom under the emissions cap. The implementation of the energy efficiency recommendations would have the same effect because it also displaces fossil fuel generation.

The results of the analysis indicate that by implementing the 10/20 goals, the compliance cost of meeting the SO 2 reduction requirements through a trading program as proposed in the Annex could decline by approximately $10 million (or 7 percent of the compliance cost without the 10/20 goals 20 ) in 2018. This estimate is based on a comparison between two scenarios, one including the 10/20 goals without the regional trading program and the other including the 10/20 goals and the regional trading program (i.e., the 10/20 goals policy scenario).

The fact that the 10/20 goals may make it cheaper to comply with the SO 2 cap and trade program can be illustrated by examining projected amount of SO 2 scrubbers constructed under the scenarios. Scrubber installations (or enhancements to existing scrubbers) are likely to be a key compliance strategy in meeting the SO 2 reduction requirements under the Annex trading program. As illustrated in Figure 24 below, 1,200 MW to 1,700 MW, representing 13 percent to 17 percent, of fewer scrubber installations are projected under the policy scenarios relative to the BAU scenario.

Figure 24: Projected Scrubber Installations Under the Annex SO 2 Trading Program

- 2,000 4,000 6,000 8,000 10,000 12,000

2015 2018Installed Scrubber Capacity (MW) BAU 10/20 Goals 10/20 Goals + EE EE

In summary, the results of the analysis suggest that implementation of the10/20 goals and energy efficiency recommendations will help to reduce the compliance cost of the regional backstop SO 2 trading program by as much as $ 10 million (or 7 percent) in 2018 and displaces 1,200 MW to 1,700 MW of new scrubber installations. 

## IV.6 Wholesale Electricity Price Impacts

This section discusses the wholesale electricity price impacts and the renewable energy credit price under the policy scenarios of the 10/20 goals and the energy efficiency recommendations. The distinction between the wholesale electricity price and the renewable energy credit price has been maintained for this discussion because the policy design of the 10/20 goals, particularly on how the compliance cost of the 10/20

20 Ibid., MTF 2000.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 37 goals might be recovered, has not been determined.

In the IPM framework, wholesale electricity pr ices represent the price at which electricity would be sold by a generator to a retail distributor, assuming competitive generation markets. The model is a wholesale power market model and thus does not model retail markets or project electricity retail prices. 21 In IPM, wholesale electricity prices are based on two separate components, energy price and capacity price, which together reflect the price of simultaneously satisfying electricity and reliability demand.

Energy prices reflect the variable cost of operation and include fuel cost, variable operating costs and emissions-r elated costs. Emissions-related costs only exist if an emissions trading program is in place and the allowance price in the trading program is greater than zero.

Capacity prices relate to fixed costs and include the capital and fixed operating costs. Some generating units, such as peaking combustion turbines, often come on-line to serve reliability and only operate a very small fraction of the hours in a year. Such plants often recover their costs through capacity payments. The capacity price can be zero if an electricity market has excess capacity.

The wholesale electricity price is the sum of the energy price and capacity price and both prices reflect the cost of the marginal unit. For energy, the marginal unit is the generating unit that provides the last kWh to satisfy demand and the energy price is based on the variable cost of that marginal unit. All generators, independent of their own cost of generation, receive the same price for the energy sold. Marginal energy prices vary hourly in energy markets. In IPM, marginal energy prices vary by season and load segment (i.e., base, peak, etc). Similarly, the marginal unit in capacity markets is the last unit that has to come on-line to satisfy the peak plus reliability demand and the resulting capacity price is based on the capital and fixed operating costs of that marginal unit.

As illustrated in Figure 24 below, the 10/20 goals and energy efficiency leads to a decline in wholesale electricity prices, of as much as 10 percent under the policy scenario with the 10/20 goals and energy efficiency. The electricity price impacts are differentiated by model region because each of the three regions has separate electricity markets. Though electricity prices often vary within a year and across years, for clarity Figure 25 contrasts the levelized annual average wholesale electricity price between the BAU and policy scenarios.

21 For purposes of regional economic modeling, where changes in prices (rather than the actual price) serve as modeling inputs, we have included the assumption that end-use electricity customers realize the full benefit (or cost) of the change in wholesale electricity price. In other words, the distribution and/or retailing costs between the Business-As-Usual scenario and the 10/20 goals scenario are assumed to remain constant and the changes in wholesale electricity prices fully flows through to retail rates.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 38 Figure 25: Levelized Annual Average Wholesale Electricity Price

$0 $5 $10 $15 $20 $25 $30 $35

CNV (California, Southwest Nevada) WSCP (Pacific Northwest) WSCR (Interior West)Levelized Annual AverageWholesale Electrcity Price (2001 $/MWhr)

BAU 10/20 Goals EE + 10/20 Goals EE

Under the 10/20 goals, the w holesale electricity price declines for two reasons: (1) generation from renewable energy have little or no variable cost of operation and (2) because the 10/20 goals essentially requires the power system to produce the level of generation associated with the targets, in generation markets, wholesale electricity price is determined by the marginal cost in meeting the incremental demand (i.e., the demand left after the generation required by the 10/20 goals have been accounted for). Under energy efficiency, the change in wholesale electricity price results from reduced demand, which eliminates the need for the higher cost units and thus leads to lower prices.

Figure 25 presented above, however, does not account for the “compliance cost” of the 10/20 goals or the implementation costs associ ated with energy efficiency. The issue of how those costs are recovered is more an issue of policy design but for purposes of this analysis the AP2 forum assumed that the costs of meeting the 10/20 goals and implementing the energy efficiency recommendations would be recovered uniformly through all end-users, as in a Systems Benefit Charge (SBC) type framework.

To achieve the 10/20 goals, developers of renewable energy must earn sufficient revenue to cover their investment costs and earn a reasonable return. These required earnings are reflected in the marginal costs of satisfying the goal – or in the language of renewable portfolio approaches – the renewable energy credit (REC) price. The value of the REC represents the incremental costs over the wholesale energy price that the marginal renewable energy producer must earn – over the commodity energy price – to give him sufficient returns and incentives to construct the renewable capacity. RECs reflect the market price implications of achieving the 10/20 goals while production costs impacts only describe the total production cost implications of meeting the 10/20 targets without describing the price implications (opportunity cost) of the target.

Figure 25 presented below summarizes the annual levelized REC for the policy scenarios with the 10/20 goals. In addition, Figure 26 also describes the value of the REC levelized over the electricity demand of the Transport Region.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 39 Figure 26: Renewable Energy Credit Price for the 10/20 Goals

$7.03 $7.96

$0.98 $1.09

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00

10/20 Goals EE + 10/20 Goals2001$/MWh

Renewable Eenergy Credit (REC) Price REC Price Levelized over Electricity Demand

Similarly implementation costs of the energy efficiency recommendations have been translated into price impacts by assuming that the annual levelized implementation costs of $ 45 million 22 will be distributed evenly through all end-users, resulting in an annual levelized cost of $ 0.07/MWh.

The wholesale electricity price along with the renewable energy credit price and the energy efficiency implementation costs provide a better description of electricity price impacts because it explicitly accounts for the compliance cost of the policy objectives. As presented in Figure 27 below, the wholesale electricity price in the Transport Region will increase by 1 percent to 2 percent under the 10/20 goals, decrease by as much as 5 percent with energy efficiency and decrease by as much as 8 percent with energy efficiency and the 10/20 goals. This projected electricity price impact is measured at the wholesale level (the price at which generators will sell to utilities or distribution companies for end-use sales) because it does not account for the distribution and retailing costs. Retail price impacts would be lower in proportion to the share of retail prices that are wholesale price component.

22 Includes implementation costs and avoided investments costs in transmission & distribution, see Section III.2 above for details.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 40 Figure 27: Wholesale Electricity Price Impacts Under the Policy Scenarios

$30.2 $31.8 $31.0 $32.4 $31.4 $31.6 $32.5

$29.6 $31.3 $32.3 $31.1 $32.0

$0 $5 $10 $15 $20 $25 $30 $35

CNV (California, Southwest Nevada) WSCP (Pacific Northwest) WSCR (Interior West)Levelized Annual AverageWholesale Electricity Price (2001$/MWh)

BAU 10/20 Goals EE +10/20 Goals EE In summary, the analysis indicates that th e 10/20 goals can be achieved with modest price impacts of 1 percent to 2 percent, while energy efficiency could help to reduce the wholesale price by as much as 8 percent in some regions. The largest gains appear to be concentrated in regions that achieve the highest levels of renewable energy and energy efficiency penetration.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 41 

## V. Secondary Regional Economic Impacts

This section describes the secondary regional economic impacts resulting from the implementation of the 10/20 goals and the energy efficiency recommendations. The AP2 forum selected three policy scenarios for analysis of the regional economic impacts: (1) 10/20 goals; (2) energy efficiency; and (3) 10/20 goals and energy efficiency. Details of the modeling framework and assumptions on regional economic impacts are contained in Section III.2.

Although the REMI model provides estimates on a variety of different impacts, the analysis has been focused around gross regional product (GRP), employment and real disposable personal income. These selected parameters provide a reasonably clear picture of the overall economic impacts of the 10/20 goals and energy efficiency. Gross regional product is analogous to national gross domestic product and describes the final demand or output of the regional economy. It consists of consumption, investment, government expenditures and net exports, while real personal disposable income describes personal income after taxes.

The most informative aspects of the economic impacts are contained in the estimates ofthe overall regional impacts rather than the state-by-state impacts. While the state-bystate impacts provide a description of how the broader regional impacts may be distributed by state, the state level results may be sensitive to assumption on the distribution of the initial impacts. In particular, the state level results may be sensitive to assumption on how renewable energy investments are allocated across states. IPM projects renewable energy capacity only by model regions and the state level allocations were based on how the renewable energy resources were distribution by state.

On average over the analysis horizon, the 10/20 goals and the EE recommendations have a small impact on GRP, employment and personal income, often less one half of one percent. Most of the impacts are closely aligned with the construction boom that results from capital investment in renewable energy. In addition, the decline in electricity prices from the 10/20 goals and energy efficiency lowers the cost of production in the commercial, industrial and manufacturing sector, which in turns leads to higher income and output. The reduction in electricity prices for the residential sector also leads to higher real income, increased consumption and investments. Table 10 presented below summarizes the change in employment, gr oss regional product and personal disposable income across the three policy scenarios. State/level details are presented in Appendix I.

Table 10: Annual Average (2005 – 2020) Changes In Key Economic Indicators for the Transport Region Under the Policy Scenarios

Under the 10/20 goals, the employment impacts occur mostly in the 2005 to 2015 time period because most of the investment in renewable energy capacity occurs at that time. Employment Gross Regional Product Personal Disposable Income (Persons) (% Change) (Million 2001$) (% Change) (Million 2001$) (% Change) 10/20 Goals 627 0.00% -312 -0.01% 73 0.00% Energy Efficiency (EE) 8,415 0.02% 450 0.02% 776 0.04% 10/20 Goals + EE 4,097 0.01% -58 0.00% 547 0.03%Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 42 Under the scenario that includes only the EE recommendations, the increase in capital investments occur a little later, in the 2011-2015 time period, resulting in an increase in employment over that time period.

The increase in employment also affects gross regional product (or output) through changes in investment and consumption. The increase in employment demand briefly causes wage rates to increase, as labor markets adjust, and this along with the increase in output leads to the increase in personal income. In short, the increase in employment caused by increased investments in renewable energy has the most dominant impact in the regional economy and also leads to related increase in gross regional product and personal income.

The change in employment, though, is temporary and begins to ebb after the 2015 time period as investments in renewable energy decline. The decline in income, which have a less pronounced effect during times of high investments but continue to occur even after the investments have tapered off, add to the regional economic impacts after 2015. The decline in income reflects the drop in profits as a result of the changes in electricity prices and mining revenues from reduced fossil fuel consumption. These income effects are somewhat mitigated by the lower electricity cost faced by the residential, commercial and industrial sector but are not sufficient to offset the decline in income from profits. In addition, wages begins to decline slightly after 2010 as the construction demand begins to taper off and labor markets readjust.

On average over the analysis horizon, the 10/20 goals lead to small increases in employment and personal income and to a minor decline in gross regional product. Energy efficiency leads to increases in employment, personal disposable income and gross regional product over the entire analysis horizon.

In summary, the results of the regional economic analysis indicate that the 10/20 goals and the energy efficiency recommendations will have small or no impacts on the regional economy. The policies may lead to small increases in economic activity in the early years and a small decline in the later years. The impacts in the 2005 to 2015 time period are largely the result of investment in new renewable energy facilities that increase labor demand and have secondary impacts on output and income. Following the investment and construction boom, the region sees some decline in employment, gross regional product and personal disposable income because of the income impacts from lower profits in the electric and mining sector.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 43 

## VI. Caveats and Uncertainties

The objective of this analysis was to assist the AP2 forum in understanding the potential emissions reductions, costs and secondary regional economic impacts of implementing the 10/20 goals and energy efficiency recommendations. The AP2 forum intends for this report to serve as a technical appendix, providing the analytical support for its recommendation to WRAP. As with any analytical assessment, the findings presented in this report should be understood and applied in the context of which it was developed and recognizing the assumptions, analytical framework, caveats and uncertainties underlying the analysis.

One of the key factors driving the results of the analysis is the assumption on renewable energy technology cost and performance. Existing literature on this subject provide a wide range of estimates, particularly in how the cost and performance might change in future years. The assumptions developed by the AP2 forum for the policy scenarios was based on a variety of different sources, including research of existing literature, data developed by the Energy Information Administration, data developed by the National Renewable Energy Laboratory and stakeholder input. The assumptions represent the forum’s best view of renewable energy technologies given the policy climate likely under the 10/20 goals and energy efficiency recommendations.

Outside of the cost and performance assumptions for renewable energy technologies, this analysis was conducted using the data, assumptions and analytical framework developed by the WRAP/MTF in 2000 for the economic analysis of regional trading program in support of the Annex. Those assumptions describe the electric system operation, technology cost and performance including pollution control equipment, fuel prices and economic conditions. 23 In addition, the AP2 forum adopted the WRAP/Annex scenario as the BAU scenario for this analysis with minor modifications to account for the planned additions to renewable energy capacity.

The state level description of the secondary regional economic impacts presented in Appendix I should be used with some caution because the results may be sensitive to the assumptions on how the impacts were allocated by state. A key driver of the regional economic impacts was the capital investments for renewable energy projects. In IPM, which provided inputs for the REMI modeling, the growth in renewable energy capacity is described only by model region and the investments for new capacity were allocated by state based on distribution of renewable resource availability.

Though the modeling and analytical results provide detailed estimates of emissions reductions, cost and secondary regional economic impacts, it is important to recognize that the magnitude of the projected changes are quite small. This is particularly important for analysis of secondary regional economic impacts projected through the REMI model because most of the impacts are less than one half of one percent. Similarly, many of the costs projected from the IPM model are small relative to the total production costs of the sectors modeled. As with any analytical results, small perturbations are difficult to interpret precisely. In instances where the changes appear

23 MTF 2000.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 44 to be very small, analysis of broader trends, rather than specific numbers, will often be a more robust and meaningful description of the impacts.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 45 

## VII. Conclusions

The objective of the analysis was to assist the AP2 forum in assessing the potential emissions reduction, costs and secondary regional economic impacts of meeting the 10/20 goals and implementing the energy efficiency recommendations in the states and tribal lands of the Transport Region. The analysis suggests that the 10/20 goals and energy efficiency could both serve as cost-effective air pollution prevention strategies because they provide opportunities for emissions reductions with modest cost or with some cost savings.

The 10/20 goals require that renewable energy resource satisfy 10 percent of the regional energy needs by 2005 and 20 percent of the regional energy needs by 2015. Most of the expansion in renewable energy is likely to come from wind power, where the greatest improvements in technology cost and performance are expected. Additional penetration of geothermal and landfill gas capacity are also projected under the 10/20 goals. The investments required for this expansion is likely to increase annual levelized production costs by $300 million to $900 million, representing a production cost increase of 2 percent to 5 percent relative to the BAU scenario. The increase in wholesale electricity prices from meeting the 10/20 goals are likely to be less than 2 percent.

The energy efficiency recommendations developed by the AP2 forum calls for electricity demand reductions in the Transport Region growing to 8 percent of the electricity demand by 2018. Implementation of the energy efficiency recommendations will lead to annual levelized production cost savings between $700 million and $1 billion in addition to some reductions in wholesale electricity prices. The savings under the energy efficiency policy scenarios accrue from reduced electricity and steam production cost and from avoided investment costs in transmissions and distribution, but are offset by the energy efficiency implementation costs.

Future expansion of renewable energy capacity and increased penetration of energy efficiency is likely to compete against new conventional generation technologies. Analysis of the BAU scenario indicates that in the absence of 10/20 goals or energy efficiency, the growth of conventional capacity will consist mostly of gas-fired combined cycles. The penetration of renewable energy and energy efficiency under the policy scenario is likely to displace new gas-fired combined cycles, which are relatively low emissions technologies.

For 2018, the analysis indicates that annual emissions savings from implementing the 10/20 goals and energy efficiency recommendations will be between 1 percent and 2 percent in NO x and 10 percent to 14 percent in CO 2 . Though the potential for emissions reductions may appear to be modest because renewable energy and energy efficiency compete against new gas fired generation sources, the 10/20 goals and energy efficiency will provide a hedge against future emissions growth.

Though the 10/20 goals and energy efficiency are unlikely to reduce SO 2 emissions in the presence of regional backstop SO 2 trading program proposed in the Annex, they could help reduce the compliance cost of trading program. By meeting the 10/20 goals, the compliance cost of the trading program could decrease the compliance cost by asEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 46 much as $ 10 million (or 7%) and may displace 1,200 MW to 1,700 MW of new scrubber installations.

The 10/20 goals and energy efficiency are likely to have very small impacts on the regional economy. On average over the analysis horizon, energy efficiency will lead to small gains of less than one half of one percent in employment, gross regional product and personal disposable income. Similarly, on average over the analysis horizon, the 10/20 goals will lead to small increases of less than one half of one percent in employment and personal income along with an equally small decline the gross regional product. The economic impacts under the 10/20 goals and energy efficiency are the result of increased capital investment in renewable technologies and lower electricity prices. In implementing the 10/20 goals and the energy efficiency recommendations, the boom in construction job sparked by the investments along with the lower production costs from lower electricity prices appear to be key reasons for the changes in the regional economy.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 47 

## Appendix I: Regional Economic Impacts

Economic Impacts by State 10/20 Goals Scenario A nnual Average Change in Employment 2005-2010 2011-2015 2016-2020

Persons Percent Persons Percent Persons Percent Annual Average AZ 278 0.01% -768 -0.02% -1,530 -0.04% -614 CA -612 0.00% -4,123 -0.02% -6,724 -0.03% -3,619 CO 651 0.02% 450 0.01% 1,160 0.03% 747 ID 854 0.10% 1,274 0.15% 264 0.03% 801 NM 177 0.02% -522 -0.04% -1,372 -0.11% -525 NV 285 0.02% 451 0.03% 791 0.05% 495 OR -2,541 -0.11% -1,351 -0.06% -1,549 -0.06% -1,859 UT 720 0.05% 172 0.01% -391 -0.02% 201 WY 6,271 1.70% 10,380 2.71% -1,897 -0.48% 5,003 9 States 6,080 0.02% 5,961 0.02% -11,250 -0.03% 627

Economic Impacts by State EE Only Scenario A nnual Average Change in Employment 2005-2010 2011-2015 2016-2020 Annual Average

Persons Percent Persons Percent Persons Percent AZ 902 0.03% 3,434 0.10% 1,837 0.05% 1,986 CA -3,269 -0.01% 5,131 0.02% -11,315 -0.05% -3,158 CO 849 0.03% 4,060 0.12% 6,603 0.19% 3,651 ID 925 0.11% 680 0.08% -193 -0.02% 499 NM 270 0.02% 762 0.06% -406 -0.03% 212 NV -81 -0.01% 724 0.05% 252 0.02% 275 OR 1,084 0.05% 1,871 0.08% 997 0.04% 1,303 UT 321 0.02% 1,347 0.08% -98 -0.01% 511 WY -27 -0.01% 11,148 2.91% -1,071 -0.27% 3,139 9 States 975 0.00% 29,156 0.08% -3,397 -0.01% 8,415

Economic Impacts by State EE + 10/20 Goals Scenario A nnual Average Change in Employment 2005-2010 2011-2015 2016-2020

Persons Percent Persons Percent Persons Percent Annual Average AZ 859 0.03% 2,811 0.08% 3,297 0.10% 2,231 CA -4,828 -0.02% -6,640 -0.03% -10,943 -0.05% -7,305 CO 1,218 0.04% 2,930 0.09% 8,049 0.23% 3,888 ID 986 0.12% 2,573 0.29% -297 -0.03% 1,081 NM 307 0.03% 230 0.02% -274 -0.02% 101 NV 302 0.02% 481 0.03% 543 0.03% 433 OR -923 -0.04% 167 0.01% -1,131 -0.05% -647 UT 959 0.06% 1,048 0.06% 422 0.03% 819 WY 6,169 1.67% 4,843 1.27% -1,055 -0.27% 3,497 9 States 5,050 0.01% 8,441 0.02% -1,389 0.00% 4,097Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 48 Economic Impacts by State 10/20 Goals Scenario Annual Average Changes in Gross Regional Product 2005-2010 2011-2015 2016-2020

Million $ (F Percent Million $ (F Percent Million $ (F Percent Annual Levelized

(million 2001$) AZ 26 0.01% -46 -0.02% -129 -0.05% -29 CA -135 -0.01% -554 -0.03% -958 -0.04% -423 CO 42 0.02% 36 0.01% 90 0.03% 49 ID 31 0.06% 49 0.08% -14 -0.02% 27 NM 4 0.01% -35 -0.04% -98 -0.11% -30 NV 15 0.02% 25 0.02% 56 0.05% 27 OR -148 -0.10% -95 -0.06% -138 -0.07% -129 UT 36 0.04% 7 0.01% -35 -0.03% 12 WY 242 0.95% 392 1.39% -172 -0.54% 185 9 States 112 0.00% -221 -0.01% -1399 -0.04% -312

Economic Impacts by State EE Only Scenario Annual Average Changes in Gross Regional Product 2005-2010 2011-2015 2016-2020

Million $ (F Percent Million $ (F Percent Million $ (F Percent Annual Levelized

(million 2001$) AZ 57 0.02% 249 0.10% 141 0.05% 129 CA -200 -0.01% 293 0.01% -1108 -0.05% -233 CO 63 0.03% 318 0.13% 613 0.22% 251 ID 41 0.07% 42 0.07% -17 -0.02% 27 NM 12 0.02% 40 0.05% -21 -0.02% 13 NV -4 0.00% 53 0.05% 26 0.02% 18 OR 67 0.04% 146 0.08% 77 0.04% 91 UT 22 0.02% 100 0.09% 31 0.03% 46 WY -5 -0.02% 451 1.60% -100 -0.32% 109 9 States 52 0.00% 1,692 0.05% -359 -0.01% 450

Economic Impacts by State EE + 10/20 Goals Scenario Annual Average Changes in Gross Regional Product 2005-2010 2011-2015 2016-2020

Million $ (F Percent Million $ (F Percent Million $ (F Percent A nnual Levelized

(million 2001$) AZ 61 0.03% 194 0.08% 230 0.08% 133 CA -409 -0.02% -720 -0.03% -1232 -0.05% -650 CO 85 0.04% 236 0.09% 712 0.25% 258 ID 38 0.07% 113 0.18% -36 -0.05% 43 NM 8 0.01% 1 0.00% -33 -0.04% -3 NV 16 0.02% 30 0.03% 40 0.03% 24 OR -57 -0.04% 16 0.01% -91 -0.05% -44 UT 52 0.05% 74 0.07% 51 0.04% 57 WY 235 0.92% 156 0.56% -115 -0.36% 125 9 States 30 0.00% 100 0.00% -475 -0.01% -58Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 49 Economic Impacts by State 10/20 Goals Scenario Annual Average Changes in Real Disposable Income 2005-2010 2011-2015 2016-2020

Million $ (F Percent Million $ (F Percent Million $ (F Percent Annual Levelized (million 2001$) AZ 31 0.02% 13 0.01% -35 -0.02% 11 CA -77 -0.01% -221 -0.02% -373 -0.03% -175 CO 42 0.03% 97 0.06% 125 0.07% 75 ID 18 0.05% 36 0.08% 6 0.01% 21 NM 11 0.02% -8 -0.01% -46 -0.07% -7 NV 16 0.02% 45 0.05% 52 0.05% 33 OR -110 -0.10% -85 -0.07% -80 -0.06% -95 UT 29 0.05% 19 0.03% -8 -0.01% 18 WY 183 1.06% 379 2.01% 3 0.02% 193 9 States 143 0.01% 277 0.01% -357 -0.02% 73

Economic Impacts by State EE Only Scenario Annual Average Changes in Real Disposable Income 2005-2010 2011-2015 2016-2020

Million $ (F Percent Million $ (F Percent Million $ (F Percent Annual Levelized

(million 2001$) AZ 72 0.05% 331 0.19% 245 0.13% 182 CA -55 0.00% 217 0.02% -401 -0.03% -40 CO 67 0.04% 382 0.22% 612 0.32% 272 ID 33 0.08% 45 0.10% -3 -0.01% 28 NM 22 0.04% 88 0.14% 32 0.05% 42 NV 9 0.01% 96 0.11% 83 0.09% 50 OR 54 0.05% 110 0.09% 92 0.07% 78 UT 21 0.03% 99 0.14% 48 0.06% 49 WY 2 0.01% 371 1.97% 23 0.11% 115 9 States 224 0.01% 1,741 0.09% 731 0.03% 776

Economic Impacts by State EE + 10/20 Goals Scenario Annual Average Changes in Real Disposable Income 2005-2010 2011-2015 2016-2020

Million $ (F Percent Million $ (F Percent Million $ (F Percent Annual Levelized

(million 2001$) AZ 69 0.04% 285 0.16% 414 0.22% 204 CA -140 -0.01% -352 -0.03% -599 -0.04% -285 CO 76 0.05% 325 0.19% 747 0.39% 288 ID 31 0.08% 90 0.20% 4 0.01% 42 NM 21 0.04% 62 0.10% 70 0.10% 43 NV 24 0.03% 80 0.09% 109 0.11% 58 OR -27 -0.03% 6 0.00% 1 0.00% -12 UT 42 0.07% 83 0.11% 87 0.11% 63 WY 180 1.05% 209 1.11% 21 0.10% 146 9 States 278 0.02% 788 0.04% 854 0.04% 547Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 50 

## Appendix II: Energy Efficiency Analysis and Methodology

ESTIMATION OF POTENTIAL ENERGY EFFICIENCY SAVINGS FOR THE WESTERN REGIONAL AIR PARTNERSHIP BY THE AIR POLLUTION PREVENTION FORUM


## Approach, Methods and Summary Results

David Von Hippel a nd David Nichols Tellus Institute (Revised draft, June 26, 2002)

Introduction Tellus Institute was asked by the Air Pollution Prevention Forum (the AP2 Forum) to prepare estimates of electric energy efficiency savings in order to determine the potential impact of energy efficiency programs on air pollutant emissions from the electricity generation sector in the West. The Forum asked the Tellus team to estimate the achievable potential for electricity savings through energy efficiency programs in three air pollutant modeling regions: the Inte rior West (the "WSCR" region including Utah, Colorado, Arizona, New Me xico, Wyoming, Eastern Idaho, and Nevada excluding the Las Vegas area), part of the Pacific No rthwest (the "WSCP" region, including Oregon and Western Idaho), and California/Las Vegas (the "CNV" region). Energy efficiency programs for the three areas were modele d over the period from 2002 through 2018, with impacts of measures installed under the pr ograms counted through 2026. Only a limited set of energy efficiency measures were included in the program, so the estimates prepared were not, nor were they inte nded to be, fully comprehensiv e assessments of all potential electricity savings. The electricity savings (energy and peak) and the incremental costs of the programs were provided for use in ICF' s IPM modeling system, and were used to generate air pollution scenario results as de scribed in the Draft Final Report on Energy Efficiency and Renewable Energy , to which this document is a supplement. The sections below describe the overall approach used to estimate the potential impacts of energy efficiency programs, present a brief summary of the overall results of the estimation process, and indicate what next steps might be undertaken to elaborate the assessment of energy efficiency opportunities in the West.


## Overall Approach The key steps in the estimation of energy efficiency opportunities in the Interior West and Oregon/Western Idaho regions were as follows:

Identification of energy efficiency measures , by Forum group members and the Tellus team

Measure evaluation , to determine the basic cost-effe ctiveness of individual measure installations.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 51Program evaluation , including assembly of illustrative energy efficiency programs (application of measures to markets) and estimation of program impacts and costs, by
year. Each of these steps is described briefl y below. A different, more aggregate approach was used for the California/Las Vegas region.



## Identification of Measures The Forum group, based on their knowledge of electricity demand in the West, prepared a preliminary list of energy efficiency measures for the Tellus team to evaluate. The measures spanned all customer categories (including residential, commercial/institutional, industrial, and agricultural cons umers), and ranged widely in scope and applicability. Measures designed strictly to reduce or displace load (load response and load management programs), but not save en ergy, were not included, nor were major uses of renewable energy in end-use settings (such as solar water heating). Likewise distributed gene ration technologies without heat production, gas energy efficiency measures, and transportation sector measures were also excluded from the study. The Tellus team performed an initial, qualitative screening of the suggested measures, eliminating (in a relatively few cases) measures from the list, and adding other measures that the team felt merited considera tion. The final list of measures considered in the Interior West is presented in Tabl e 1, below. The same list of measures was considered in the Oregon/Western Idaho regi on, except that two measures for application in the aluminum industry (aluminum produc tion cell retrofit and advanced forming processes) were investigated in the latte r region. Summary descriptions of these measures are provided in Attachment 1 to this document.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 52 Table 1: Energy Efficiency Measures Evaluated, Interior West Region Residential Sector Measures Commercial Sector Measures Industrial Sector Measures Efficient Central Air Conditioning Lighting, Advanced Measures Motor Downsizing Efficient Room Air Conditioning Lighting, Efficient Fluorescent Premium Motors versus Rewinding

Evaporative Cooling Refrigeration, High-cost Measures Premium Motors (versus standard new motors) Indirect-direct Evaporative Cooling Refrigeration, Low-cost Measures Air Compressor System Measures Appliance Recycling (refrigerators) Air Conditioning Improvement Residential-type Central AC Fan System Measures

Compact Fluorescent Torchieres Air Conditioning Improvement Residential-type Room-type AC Pump System Measures

CFL Fixtures--Indoor Air Conditioning Improvement, Small Heat Pumps CHP 24 , 10 MW Combustion Turbine (replacing gas boiler) CFL Fixtures--Outdoor Air Conditioning Improvement, 20- ton Package Units CHP, 3000 kW diesel-type (replacing gas boiler) CFL Bulbs Air Conditioning Improvement, 350- ton Centrifugal Units CHP, 40 MW Combustion Turbine (replacing gas boiler) Duct Test and Seal--Homes with Central AC Air Conditioning, IDDEC 25 , 20, 150, and 350-ton Equivalent Units Industrial CHP, 800 kW diesel-type (replacing gas boiler) Duct Test and Seal--Homes with Electric Space Heat Ground-source Heat Pumps, 1000 to 3000 operating hours/yr High-efficiency Transformers

Energy Star (Vertical Axis) Clothes Washer Efficient Clothes Washers

SEHA (Horizontal Axis) Clothes Washer LED Exit Signs

Appliance Standby Loss Reduction, Incentive Approach LED Traffic Signals

Appliance Standby Loss Reduction-- Standards Approach Retrocommissioning of Buildings

Home Weatherization Space Heat High Efficiency Gas Boiler New Home Building Envelope Improvement to IECC 2000 levels Space Heat, Standard Gas Boiler

New Home Building Envelope Improvement--Enhanced levels Space Heat, Gas Unit Heater

Water Heat Gas Boiler Fuel Switch Water Heater Fuel Switching Water Heating, Heat Pump Unit

24 CHP = Combined Heat and Power (or Cogeneration)
25 IDDEC = Indirect-direct Evaporative CoolingEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 53

Table 1 (Continued): Energy Efficiency Measures Evaluated, Interior West Region Additional Commercial Sector Measures Gas Air Conditioning (with heat recovery displacing Electric WH 26 ) Gas Air Conditioning (with heat recovery displacing Gas WH) Gas Air Conditioning (w/o heat recovery) Building Envelope--Improvements to ASHRAE Standards Building Envelope--Improvements to Enhanced Level Cooling Tower VSD 27 (CA Central Valley-type Climate) Cooling Tower VSD (CA Desert-type Climate) High-efficiency Transformers CHP, 100 kW diesel-type replacing Electric WH CHP, 100 kW diesel-type replacing Gas WH CHP, 30 kW Micro-turbine replacing Electric WH CHP, 30 kW Micro-turbine replacing Gas WH CHP, 800 kW diesel-type replacing Electric WH CHP, 800 kW diesel-type replacing Gas Boiler



## Measure Evaluation For each measure listed in Tabl e 1, plus several other measures 28 

### , MS ExcelTM workbook tools were used to evaluate the meas ure cost-effectiveness. For each measure, cost-effectiveness was calculate d relative to standard technologies, that is, technologies providing the same energy service but with ef ficiencies just meeting existing or planned standards, or technologies that correspond to standard practice for the end-use. Inputs to the measure cost-effec tiveness calculation included:

Measure cost information , including incremental or total measure capital cost (of both the energy-efficient and standard meas ure) per unit, and incremental or total non-fuel annual operating and maintenance (O&M) costs.

Energy use impacts , including annual energy and peak power savings or usage, and annual gas use, if applicab le, expressed on the same unit basis as the costs.

An assumed discount rate (4.88 percent per year on a real basis).

Real levelized avoided capacity and energy costs , in this case, estimates based on "proxy" gas-fired combustion turbine or combined-cycle units, using gas prices as defined by the Forum for use in the IPM m odeling process. Note that these costs were used for rough screening purposed only, and are not the same as the costs used in the IPM modeling work to derive the impacts of energy efficiency programs on overall power system costs.

Estimated electricity rates , calculated very roughly as the weighted averages of year 2000 electricity rates in the regions being st udied, by sector, escalated at 1 percent annually (on a real basis).

Gas avoided costs based on the costs used in the IPM modeling work. The data elements above were derived from a wide variety of national and regional publications. Additional inputs we re developed through consultation with experts in the energy-efficiency field. In cases where electricity usage in a measure was

26 WH = Water Heating
27 VSD = Variable Speed Drive
28 Including fuel cell-based and other types/sizes of combined heat and power equipment, as well as several energy-efficiency measures that proved less than cost-effective.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 54 likely to be weather-sensitive (space cooling, for example), adjustments to national or regional values were made based on conditions in the region (Interior West or Oregon/W. Idaho) modeled. Attachment 2 to this document provides a tabular summary of key measure cost and savings figures, as well as key program-related inputs to the energy efficiency analysis. The outputs of the measure cost analyses included life-cycle costs, for those measures where standard units were compar ed directly with higher-than-standardefficiency measures, and in all cases benef it-cost ratios for energy-efficiency measures relative to standard practice were calculated. The resulting ratios thus represent “incremental” measure costs and savings, rela tive to standard equipment. Benefit-cost ratios calculated from a total resource cost perspective were the primary yardstick used to assess whether measures should be included in programs, but in some cases participant cost measures were used to (roughly) info rm the level of incentives that might be required.


## Program Evaluation Increasing the market penetration of ener gy-efficiency measures in an aggressive manner generally implies the provision of fina ncial incentives to customers. As a consequence, the program evaluation phase of the development of energy-efficiency estimates for use by the AP2 Forum focused on estimating the sponsor costs of reaching a broader market for energy efficiency measures 29 

### . The estimation of energy-efficiency program costs and benefits involved the following steps:

Grouping of measures into "programs" based, typically, on the end-uses and sectors addressed by the measures.

Estimating the program market by consideration of the electricity demand in the sector and end-use addressed by the program, and of the nature and current market for the measure to be implemented. Sources for information on markets for energyefficiency measures included national end-use surveys, statistics on electricity use by sector, State, and utility area, and a host of specific studies on particular markets from the national and regional literature.

Estimating program penetration rates based on a combination of penetration rates historically achieved by utilities mounting ag gressive energy efficiency efforts, and on program targets that were felt to be "aggressive but achievable" in the markets studied.

Estimating expenditures for administering energy-efficiency programs, including both start-up and ongoing costs, based on consideration of the types of activities and interactions with customers that would be required to initiate the energy efficiency programs considered and to carry them out on an ongoing basis. In a few cases, program impacts were ba sed on the assumption that mandatory standards would be implemented in the futu re (for example, in 2008), which would raise

29 The AP2 Forum wished to leave open the question of what types of agencies might organize and offer energy-efficiency programs of the types implied in the work described here. Accordingly, the organizations offering the programs are referred to as "sponsors", which could include government agencies, energy-efficiency program administrators retained to coordinate the use of funds collected through systems benefit charges, or, as in the past, distribution utilities.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 55 effective program participati on to near 100 percent (and reduce sponsor measure costs to zero). The ECO2TM DSM analysis software package, developed at Tellus Institute, was used to evaluate the candidate energy-effic iency programs. Key program inputs—such as the number of participants annually per me asure, program administrative costs, and shares of measure costs assumed paid by th e sponsor and by customers—were developed and documented in the same se t of workbooks used to develop measure data. Program results from the ECO2 runs included annual energy savings, peak power savings (summer and winter peak), customer m easure costs, sponsor measure costs, administration costs, customer O&M costs, net fuel (gas) and water costs (if any), estimated energy and capacity costs avoided by the program (from the perspectives of customers and society), and end-use pollutant emissions for the years 2002 through 2026. Net present values of program costs (and estimated benefits), as well as costs of saved energy, were calculated in a set of Excel wo rkbooks that compiled ECO2 results for each region. Specific examples, for several of th e measures and programs evaluated, of the overall analytical approach used to estimate energy efficiency costs and impacts for the WSCR and WSCP regions, are provided in Attachment 3 to this document.



## Approach Used in the CNV Modeling Region Savings and costs for energy efficiency in the CNV (California/Las Vegas) region were estimated based on a pa rameterization of a nationa l (American Council for an Energy Efficient Economy or ACEEE) study. Based on its national analysis, ACEEE provided Tellus with estimated electricity reductions by sector for a number of policies. The Tellus team used results of some of th ese policies ("Applianc e Standards", "Public Benefits Funds", and "Tax Credits") as a base for a rough estimate of potential electricity savings in the CNV modeling region. National electricity reductions through application of energy efficiency measures were allocated to the region based on the base case level of electricity consumption from NEMS (National Energy Modeling System) runs for each sector. From NEMS output, the Tellus team de termined the region's electricity sales by sector as a fraction of national sales by sect or. This fraction was applied to the national estimate of electricity use reductions from ACEEE to determine CNV reductions. A similar approach was used to estimate program costs 30



### . Once estimates based on ACEEE results we re obtained, these estimates were "trued-up" for consistency with end-use base d energy efficiency costs and savings as estimated by the Tellus team for the Interior West and Oregon/W. Idaho regions. In the process, ACEEE savings estimates were reduced by nearly two-thirds 31 

### . The results of this "true-up" procedure should be cons idered only a rough approximation of the probable results if an end-use method were applied for the California/Las Vegas region.

30 The ACEEE source document for which the original ACEE E estimates were prepared is Nadel, S. and H. Geller with the Tellus Institute (2001), Smart Energy Policies: Savings Money and Reducing Pollutant Emissions Through Greater Energy Efficiency . American Council for an Energy-Efficient Economy, Report No. E012, September, 2001.
31 Note that this "true-up" also implicitly excludes savings due to free-riders, since the WSCR savings used to accomplish the true-up exclude savings from free-riders.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 56 

## Selection of Measures and Prog rams for Use in IPM Emissions Modeling Effort The AP2 Forum reviewed the results of the energy-efficiency analyses described above in order to decide which results to carry forward for use in the IPM emission modeling effort. In addition to deciding to exclude the results of the combined heat and power analyses (see discussion below), the Fo rum felt that it would be prudent to remove the costs and savings for those measures with higher costs of saved energy from the packages of energy-efficiency programs modeled in each region. A threshold of 5.4 cents (2001 dollars) per kWh saved (on a leveliz ed basis) was set, based very roughly on current average avoided costs for electricity generation in the West regions, and measures with costs higher than the threshold level were accordingly excluded from the final packages of energy-efficiency programs for which energy/power savings and costs were included in the IPM modeling effort. The cost and savings of the resulting packages of energy-efficiency programs are described below.



## Summary Results The summary results provided below presen t energy and peak power savings, as well as costs, estimated for the energy-efficiency programs and measures included in the final package of programs used in the IPM modeling effort. Results are presented by region, and on an overall basis.


## Energy Savings Figures 1 through 3 show annual GWh electricity savings for the years 2002 through 2018 in the WSCR (Interior West), WSCP (Oregon/W. Idaho), and CNV (California/Las Vegas) regions, respectively. Results are shown by sector, and indicate that commercial sector savings dominate the package of programs (though the suite of industrial measures examined was relativel y limited), followed by residential sector savings. By 2018, annual electricity saving s from the package of energy efficiency programs in the Interior West totals about 20,000 GWh, versus about 5,200 GWh in the Oregon/W. Idaho region, and about 28,000 in California/Las Vegas 32



### .

32 Note that these figures do not include credit for avoided transmission and distribution losses, so the net effect on required generation will be higher than the end-use savings indicated here.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 57 Figure 1: Energy Savings from AP2 Forum Energy Efficiency Recommedations: Interior West

- 5,000 10,000 15,000 20,000 25,000

2 0 01 200 2 2 0 03 200 4 2 0 05 2 00

6 2 0 07 2 00

8 2009 2 01

0 2011 2 01

2 2013 2 0 14 2015 2 0 16 2017 2 0 18Annual GWH Industrial

Commercial/Institutional

Residential



### Figure 2:
Energy Savings from AP2 Energy Efficiency Recommendations: WSCP Region

- 1,000 2,000 3,000 4,000 5,000 6,000

2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8Annual GWH Industrial
Commercial/ Institutional
ResidentialEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 58 Figure 3: Estimated GWH Savings from Energy Efficiency Programs: CNV Region

- 5,000 10,000 15,000 20,000 25,000 30,000 35,00020022003200420052006200720082009201020112012201320142015201620172018GWh Industrial--EE
Commercial--EE
Residential--EE



### Figure 4 indicates the magnitude of en ergy savings for each of the programs included in the energy-efficiency package for the Interior West.

Figure 4:
Energy Savings for Illustrative Interior West DSM Programs

- 5,000 10,000 15,000 20,000 25,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Annual GWH Resident. Evap. Cooling Res. Appliance Recycle Res. CFL Bulb Introduct. Res. CFL Fixtures Res. CFL Torchieres Resident. Clothes Washers Res. Appl. Standby Redn. Resident. Weather-ization C/I Lighting C/I Refrig. C/I Cooling Efficiency C/I Cooling IDDEC C/I Gas AC C/I GSHP C/I Misc Devices C/I Retro-Commiss C/I Gas Space Heat C/I Water Heat C/I VSD Cooling Towers C/I and Industrial Transform Industrial Motors Industr. Drive Systems



## Peak Power Savings Figures 5 and 6 present annual summer peak power savings, by region and by sector, for the Interior West and Oregon/W. Idaho regions. By 2018, summer peak savings in the Interior West are over 6,000 MW, and savings in the Oregon/W. Idaho region are over 1,400 MW. Total summer peak power savings for the California/LasEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 59 Vegas region from the energy-efficiency pa ckage were estimated at approximately 780 MW in 2005, 3,500 MW in 2010, 6,600 MW in 2015, and 8,700 MW in 2018. Figure 7 shows summer peak savings by sector for the period 2002 to 2018 in the Interior West. Figure 5:
Summer Peak Savings from AP2 Energy Efficiency Recommedations: WSCR Region

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2 0 0 1 2

0 0 2 2 0 0 3 2

0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2

0 1 0 2 0 1 1 2

0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2

0 1 6 2 0 1 7 2 0 1 8Summer Peak MW Industrial
Commercial/ Institutional
Residential



### Figure 6:
Summer Peak Savings from AP2 Energy Efficiency Recommendations: WSCP

- 200 400 600 800 1,000 1,200 1,400 1,600

2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8Summer Peak MW Industrial
Commercial/ Institutional
ResidentialEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 60 Figure 7:
Summer Peak Savings for Illustrative Interior West DSM Programs

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018MW Savings Resident. Evap. Cooling Res. Appliance Recycle Res. CFL Bulb Introduct. Res. CFL Fixtures Res. CFL Torchieres Resident. Clothes Washers Res. Appl. Standby Redn. Resident. Weather-ization C/I Lighting C/I Refrig. C/I Cooling Efficiency C/I Cooling IDDEC C/I Gas AC C/I GSHP C/I Misc Devices C/I Retro-Commiss C/I Water Heat C/I VSD Cooling Towers C/I and Industrial Transform Industrial Motors Industr. Drive Systems



## Program Costs The total incremental costs of the packages of energy-efficiency programs for each region are presented in Figures 8 through 10 for the three regions modeled. These costs are presented as annualized costs, that is, incremental capital costs for purchase of measures are levelized so that a portion of those costs are ascribed to each year in which a given device installed under the program is in operation. By 2018, total annualized costs in the Interior West region reach about $550 million and costs in the Oregon/W. Idaho region reach $130 million, both in year 2018 dollars (or about $340 and $80 million 2001 dollars, respectively), while total annualized costs in the California/Las Vegas region reach approximately $1,100 million 2001 dollars.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 61 Figure 8:

Total Annual Costs of AP2 Forum Energy Efficiency Recommendations for Interior West Region (Measure Costs Annualized)

$- $50 $100 $150 $200 $250 $300 $350 $400

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Million 2001 Dollars Customer Gas Costs
Customer Water Costs
Customer O&M Costs Sponsor Admin Costs Sponsor Measure Costs
Customer Measure Costs



### Figure 9:

Total Annual Costs of AP2 Forum Energy Efficiency Recommendations for Oregon/Western Idaho Region (Measure Costs Annualized)

$- $10 $20 $30 $40 $50 $60 $70 $80 $90

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Million 2001 Dollars Customer Gas Costs
Customer Water Costs Customer O&M Costs Sponsor Admin Costs Sponsor Measure Costs
Customer Measure CostsEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 62 Figure 10: Annualized Program Costs by Sector: California/Las Vegas Region

$- $200 $400 $600 $800 $1,000 $1,20019992000200120022003200420052006200720082009201020112012201320142015201620172018Million 2001 Dollars Industrial
Commercial
Residential



## Costs of Saved Energy Figure 11 show the curve of the cost of saved energy for the measures ultimately included in the Interior West energy efficiency package. Table 2 presents the same information in a tabular format that identifies the measures at each cost level. Note that the costs shown in Table 2 are discounted to tal incremental program costs for the period 2002 to 2026 33 

### . Cost curve results for the Oregon/W. Idaho region are not shown here, but are similar.

Figure 11:
Cost of Saved Energy vs. Lifetime GWh Savings for Measures Included in Interior West Energy Efficiency Study

-$0.06 -$0.04 -$0.02 $0.00 $0.02 $0.04 $0.06

- 50,000 100,000 150,000 200,000 250,000 300,000 350,000

GWh Lifetime SavingsReal Levelized $/kWh Saved

33 Note that the discounting formulae used to prepare the values in Tabl e 2 incorporate zero cost values for 2001, so the values shown are effectively in year 2001 dollars.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 63 Table 2: Cost Of Saved Energy Results Sorted By Cost Per kWh:

Measure Discounted TRC Cost ($1000) MWh Savings Through 2026 Real Levelized Cost of Saved Energy ($/kWh) Percent of Total Cummul. Package Savings Cummulative MWh Savings through 2026 Percent of Total Cummul. Package

Costs Cummulative Discounted TRC Cost Residential Evaporative Cooling (111,017) $ 5,007,946 (0.0489) $ 1.7% 5,007,946 -4.4% (111,017) $ Residential IDDEC Cooling (15,554) $ 2,305,001 (0.0151) $ 2.5% 7,312,947 -5.0% (126,571) $ Comml/Instit. Space Heat Std. Gas Boiler (458) $ 465,659 (0.0022) $ 2.6% 7,778,606 -5.0% (127,029) $ Comml/Instit. Space Heat High Eff. Gas Boiler (565) $ 962,327 (0.0013) $ 3.0% 8,740,933 -5.1% (127,594) $ Comml/Instit. Water Heat Gas Boiler Fuel Switch (1,145) $ 3,325,686 (0.0008) $ 4.1% 12,066,619 -5.1% (128,739) $ Comml/Instit. Water Heater Fuel Switching (505) $ 3,484,222 (0.0003) $ 5.3% 15,550,841 -5.1% (129,244) $ Comml/Instit. Space Heat Gas Unit Heater 422 $ 803,719 0.0011 $ 5.6% 16,354,560 -5.1% (128,821) $ Industrial Fan System Measures 7,041 $ 2,473,382 0.0062 $ 6.4% 18,827,942 -4.8% (121,780) $ Industrial Air Compressor System Measures 23,789 $ 8,347,664 0.0062 $ 9.2% 27,175,606 -3.9% (97,991) $ Residential CFL Torchiere 62,045 $ 21,232,172 0.0067 $ 16.5% 48,407,778 -1.4% (35,946) $ Industrial Motor Downsizing 3,416 $ 865,684 0.0086 $ 16.8% 49,273,462 -1.3% (32,531) $ Comml/Instit. Refrigeration, Low-cost Measures 29,224 $ 6,446,877 0.0098 $ 19.0% 55,720,339 -0.1% (3,307) $ Residential CFL Bulbs 49,797 $ 8,999,064 0.0099 $ 22.0% 64,719,403 1.8% 46,490 $ Comml/Instit. Water Heating, Heat Pump Unit 4,169 $ 833,390 0.0106 $ 22.3% 65,552,793 2.0% 50,659 $ Comml/Instit. LED Exit Signs 10,551 $ 2,212,350 0.0109 $ 23.1% 67,765,143 2.4% 61,210 $ Comml/Instit. Lighting, Efficient Fluorescent 120,842 $ 22,406,144 0.0117 $ 30.7% 90,171,287 7.2% 182,052 $ Residential CFL Fixtures--Indoor 24,370 $ 4,477,776 0.0124 $ 32.2% 94,649,063 8.2% 206,422 $ Industrial Premium Motors 32,469 $ 4,640,110 0.0137 $ 33.8% 99,289,173 9.5% 238,891 $ Residential Appl. Standby Loss Red.--Mandatory 186,808 $ 31,092,432 0.0138 $ 44.4% 130,381,605 16.9% 425,699 $ Residential Appl. Standby Loss Red.--Incentive 19,091 $ 2,018,494 0.0148 $ 45.1% 132,400,099 17.7% 444,789 $ Comml/Instit/Industrial Transformers (C/I) 14,260 $ 1,903,312 0.0172 $ 45.7% 134,303,411 18.2% 459,050 $ Industrial Pump System Measures 130,051 $ 15,459,078 0.0183 $ 51.0% 149,762,489 23.4% 589,101 $ Comml/Instit. Retrocommissioning 35,765 $ 4,203,554 0.0186 $ 52.4% 153,966,043 24.8% 624,866 $ Comml/Instit. Refrigeration, High-cost Measures 30,151 $ 3,487,028 0.0188 $ 53.6% 157,453,071 26.0% 655,018 $ Residential Appliance Recycling 40,598 $ 2,593,122 0.0204 $ 54.5% 160,046,193 27.6% 695,616 $ Comml/Instit/Industrial Transformers (Industrial) 2,150 $ 223,428 0.0220 $ 54.6% 160,269,621 27.7% 697,766 $ Residential CFL Fixtures--Outdoor 5,562 $ 515,112 0.0228 $ 54.7% 160,784,733 27.9% 703,328 $ Comml/Instit. AC Impr., 20-ton Package Units 296,085 $ 28,046,667 0.0236 $ 64.3% 188,831,400 39.7% 999,414 $ Comml/Instit. Ground-source HP, 3000 hrs/yr 30,955 $ 2,745,355 0.0249 $ 65.2% 191,576,755 40.9% 1,030,369 $ Comml/Instit. Lighting, Advanced Measures 795,012 $ 64,744,193 0.0266 $ 87.2% 256,320,948 72.4% 1,825,380 $ Comml/Instit. AC Impr., Residential-type CAC 57,876 $ 4,042,410 0.0307 $ 88.6% 260,363,358 74.7% 1,883,257 $ Comml/Instit. LED Traffic Signals 13,697 $ 931,600 0.0322 $ 88.9% 261,294,958 75.3% 1,896,954 $ Comml/Instit. Efficient Clothes Washers 15,511 $ 914,946 0.0335 $ 89.2% 262,209,904 75.9% 1,912,465 $ Comml/Instit. AC Impr., Small Heat Pump 93,753 $ 5,867,466 0.0343 $ 91.2% 268,077,370 79.6% 2,006,218 $ Comml/Instit. Ground-source HP, 2000 hrs/yr 30,955 $ 1,830,237 0.0373 $ 91.9% 269,907,607 80.9% 2,037,173 $ Comml/Instit. AC Impr., Res. Room-type AC 66,814 $ 3,738,494 0.0383 $ 93.1% 273,646,101 83.5% 2,103,987 $ Residential Weatherization 109,264 $ 5,824,614 0.0402 $ 95.1% 279,470,715 87.8% 2,213,251 $ Comml/Instit. Gas AC, w/ heat recov. (EWH) 53,763 $ 2,896,170 0.0420 $ 96.1% 282,366,885 90.0% 2,267,014 $ Comml/Instit. Cooling Tower VSD--Desert Climate 6,408 $ 336,718 0.0431 $ 96.2% 282,703,603 90.2% 2,273,422 $ Industrial Prem. Motor vs. Rewind 10,383 $ 436,716 0.0464 $ 96.4% 283,140,319 90.6% 2,283,805 $ Residential SEHA Clothes Washer 66,392 $ 3,052,546 0.0476 $ 97.4% 286,192,865 93.3% 2,350,197 $ Residential Energy Star Clothes Washer 57,518 $ 2,527,540 0.0498 $ 98.3% 288,720,405 95.6% 2,407,715 $ Comml/Instit. AC, IDDEC, 150-ton Equiv. Units 111,958 $ 5,072,414 0.0501 $ 100.0% 293,792,819 100.0% 2,519,673 $ ALL MEASURES/ALL PROGRAMS 2,519,673 $ 293,792,819 0.0186 $



## Combined Heat and Power Based on the results of two national studies, the Tellus team identified a considerable achievable potential for the application of combined heat and power (CHP) in all three of the modeled regions. Implem entation of CHP could result in significant cost savings, displacement of capacity (a bout 7.5 GW at the end-use level), and overall fuel (gas) savings relative to separate produc tion of power and heat, and would also help, in many instances, to ease transmission constr aints by providing distributed generation. Gas-fired CHP systems do, however, produce emissions of nitrogen oxides (NO x 

### ) that might , depending on the type of CHP used and th e type and extent of emissions control equipment with which it is fitted, result in an increase of NO x 

### emissions relative to separate heat production and power generation. This result is far from certain, as it depends on the average emission factors for CHP systems meeting current standards in major air sheds in the West. Though any increase in NO x 

### emissions from the implementation of modern, regu lations-compliant CHP system is likely to be modestEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 64 relative to overall NO x 

### emissions from power generation in the West, Forum members were sufficiently concerned about the pot ential impact of CHP systems on local and regional air quality, as well as about the ultima te "marketability" of CHP systems, that a consensus decision was made to leave saving s (and costs) of CHP programs out of the total energy-efficiency savings figure passed on to the IPM modeling effort.



## Summary Results, All Regions Figures 12, 13, and 14 show, respectively the energy savings, summer peak savings, and annualized costs of the sum of a ll three regional energy efficiency packages modeled for the AP2 Forum. Together, the energy efficiency packages save approximately 54,000 GWh of electricity annua lly by 2018, with peak savings in that year of about 16,000 MW, at an annualized cost in 2018 of about $1.6 billion (2001 dollars). The savings, both energy and peak power, from the energy efficiency packages in the three regions combined are shown by sector (residential, commercial/institutional, and industrial) in Figures 15 a nd 16 (peak results are not available by sector for the CNV region).

Figure 12:
Estimated Total Energy Efficiency (EE) Savings by Region, AP2 Forum Recommendations

- 10,000 20,000 30,000 40,000 50,000 60,000

2 0 0 2 2

0 0 3 2

0 0 4 2

0 0 5 2

0 0 6 2

0 0 7 2

0 0 8 2

0 0 9 2

0 1 0 2

0 1 1 2

0 1 2 2

0 1 3 2

0 1 4 2

0 1 5 2

0 1 6 2

0 1 7 2

0 1 8Annual GWh Savings

CNV-EE
WSCP-EE
WSCR-EE



### Figure 13:
Estimated Energy Efficiency (EE) Summer Peak Savings by Region: AP2 Forum Recommendations

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2

0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2

0 1 6 2 0 1 7 2 0 1 8MW Summer Peak Savings

CNV-EE
WSCP-EE
WSCR-EEEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 65 Figure 14:

Estimated Annualized Incremental Costs of Energy Efficiency Programs by Region

0 200 400 600 800 1000 1200 1400 1600 1800

2002 2003 2004 2 005 2006 2007 2008 2009 2 010 2011 2012 201 3 2014 2015 2016 2017 201 8M illion 2001 Dollars

CNV
WSCP
WSCR



### Figure 15: Estimated Energy Efficiency Savings by Sector (all Regions): AP2 Forum Recommendations

- 10,000 20,000 30,000 40,000 50,000 60,000

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8Annual GWh Savings

Industrial
Commercial
Residential



### Figure 16:Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 66 Estimated Energy Efficiency (EE) Summer Peak Savings by Sector: AP2 Forum Recommendations

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8MW Summer Peak Savings California (All Sectors) Industrial (WSCR + WSCP) Commercial/ Institutional (WSCR + WSCP) Residential (WSCR + WSCP)



## Potential "Next Steps" in Energy Efficiency Analysis for the West The analysis described above has identif ied a number of significant energy efficiency opportunities in the West. As with most energy-efficiency analyses of this type, the reliability and accuracy of the wo rk done for the Forum might, given time and resources, be broadened, deepened, and follo wed-up in a number of ways. Possible "next steps" in identifying, evaluating, and implementing energy-efficiency programs in the West include:

Obtain additional expert review of the assumptions and other inputs used in the energy-efficiency analysis.

Preparing a measure-by-measure estimate of energy-efficiency potential, similar to that done for the other two regions, for the California/Las Vegas region.

Review the air pollutant emissions (especially NO x 

### ) impacts of potential combined heat and power systems, factoring in local regulations on new emissions sources and the types of pollution control used on new CHP systems.

Deepen the overall analysis by evaluating additional measures, and by incorporating more region-, state-, tribe- and utility-area-specific information into the estimates wherever possible.

Provide the energy-efficiency analysis on a St ate-by-State or Tribal level and/or work with state- or tribe-level teams (for example, from State Energy Offices or Tribal groups) to develop individual stat e- or tribal-level analyses.

Identify and tailor approaches for implementation of energy-efficiency programs on regional, statewide, or tribal area bases.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 67 

## ATTACHMENT 1: BRIEF DESCRIPTIONS OF MEASURES CONSIDERED IN THE WESTERN REGIONAL AIR PARTNERSHIP (WRAP) ENERGY EFFICIENCY ANALYSES

Background Several members of the Air Pollution Pa rtnership (AP2) Forum have requested, on behalf of their constituents, a listing with brief definitions of the energy efficiency measures considered during the WRAP energy efficiency analyses carried out for the WSCR (Interior West) and WSCP (Northwest—Oregon and Western Idaho) regions. The listing below is divided into residentia l, commercial/institutiona l, industrial, and combined heat and power (CHP ) measures. This listing is intended to supplement the document Estimation of Potential Energy Efficiency Savings for the Western Regional Air Partnership by the Air Pollution Pr evention Forum: Approach, Methods and Summary Results , itself an annex to Final Report on Energy Efficiency and Renewable Energy , which reports on the overall pollution impacts modeling effort overseen by the AP2 Forum. The descriptions that follow cover all of the energy efficiency measures evaluated, including some measures (higher cost and CHP measures) ultimately not included in the package of energy efficiency measures used in pollutant emissions modeling. For each of the descriptions, na mes in italics and pare ntheses (for example

" Residential Efficient CAC ") correspond to the short measure names found in tables of "Cost of Saved Energy Results" presented in Estimation of Potential Energy Efficiency Savings for the Western Regional Air Partne rship by the Air Pollution Prevention Forum: Approach, Methods and Summary Results (to which these descriptions are attached) and used by the AP2 Forum to review the energy efficiency analyses.

RESIDENTIAL SECTOR MEASURES Residential Appliance Recycling : The appliance recycling program approach provides incentives to customers to allow their operable refrigerators or freezers to be disposed of. Appliance recycling has been operated suc cessfully in several regions. A recycling company is contracted to collect the appliances and dispose of them in an environmentally responsible way. The electri city savings result from the fact that the average stock of refrigerators and freezers now in use consumes more than twice the electricity of the new units av ailable on the market today (" Residential Appliance Recycling "). Residential Air Conditioning—High-efficiency Units : Compressor, control, fan, heatexchanger, seal, and other improvements in central and room air conditioners make the most efficient residential units available substantially more efficient than those just meeting standards (" Residential Efficient CAC ", " Residential Efficient Room AC "). Residential Air Condition ing—Evaporative Cooling : In contrast to typical compressor-driven air conditioners, evaporativ e coolers lower indoor temperatures by evaporating a mist of water, which carries aw ay heat. Evaporative or "swamp" coolers are effective in low-humidity areas, and use only a small fraction of the electricity used by compressor-driven air conditioners (" Residential Evaporative Cooling ").Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 68 Residential Air Conditioning—IDDEC : A variant of residential evaporative cooling called indirect/direct evapora tive cooling, or IDDEC, is under development that will provide reliable cooling with significantly less electricity input than typical compressordriven air conditioning, and is useful in app lications where standard evaporative cooling might not be appropriate (" Residential IDDEC Cooling "). Residential Heating an d Cooling—System and Duct Service and Repair : Many existing heating systems can be made significantly more efficient by applying a package of system and duct repair measures, includi ng tune-ups for heat-pump condenser and evaporator units, cleaning, sealing and insu lating duct work, or re-routing duct work to make the flow of heat from the furnace to living areas more efficient (evaluated as two measures: " Residential Duct Test and Seal--CAC ", and " Residential Duct Test and Seal-- ESH "). Residential Heating and Cooling—Weatherization Retrofits : The thermal performance of a dwelling—the degree to whic h a heated house stays warm and a cooled house stays cool, is a function of many factor s, including how well insulated the house is, the integrity of its windows and doors, whether it has been well-sealed to control the incursion of outside air, its overall design, its orientation relative to sun and wind, and its proximity to nearby vegetation. Of these fact ors, the first three are usually addressed by measures installed during a weatherization retrofit of an existing dwelling (" Residential Weatherization "). Residential Heating and Cooling—Better -than-Code Building Envelopes for New Homes : Although some parts of the West already have state (and sometime local) residential building codes that mandate quite high residential building performance, there are opportunities to exceed code levels. Ther e are also opportunities to ensure that more buildings are actually built to code, thr ough improved code enforcement, and to strengthen building codes to other states. For the WRAP energy efficiency analysis, incentives were assumed used until 2009 to bring homes to IECC 2000 (International Energy Conservation Code) levels (" Residential Building Envelope Impr.--IECC 2000 "), and that thereafter code ch anges mandate enhancements in performance beyond the IECC 2000 level (" Residential Building Envelope Impr.--Enhanced "). Residential Lighting—Compact Fluorescent (CFL) Bulbs : Over the last decade or so, compact fluorescent light bulbs (CFLs) design ed for use in incandescent fixtures – and lamps and fixtures specifically designed to use CFL technology – have been making inroads in the U.S. market. CFLs use roug hly one-quarter of the electricity to produce the same amount of light as incandescen t bulbs, and last up to 10 times longer (" Residential CFL Bulbs "). Residential Lighting—Indoor CFL Fixtures : CFLs work best when used in fixtures specifically designed for them (" Residential CFL Fixtures--Indoor "). Residential Lighting—Outdoor CFL Fixtures : Using CFLs in outdoor fixtures presents an attractive way to save both mone y and electricity, as long-lived CFL bulbs are used for many hours per day when installe d for outdoor security lighting. In addition, as many outdoor incandescent bulbs design ed for outdoor use are both expensive and short-lived, there are significant operation and maintenance savings from using outdoor CFL-based fixtures (" Residential CFL Fixtures--Outdoor "). Residential Lighting—CFL Torchieres : The "torchiere" style of tall floor lamp gained tremendous popularity in recent years as inexpens ive units have become widely available.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 69 Most units use bright, but inefficient, halo gen bulbs, while some use incandescent bulbs. Their high electricity use and the fire hazards created by high temperature halogen units have prompted the development of the CFL torchiere. The CFL torchiere produces the same light output as the halogen and inca ndescent units, using 20-30 percent of the electricity and eliminating an important fire risk (" Residential CFL Torchiere "). Residential Appliance Standby Loss Reduction : Even when turned off, many household electronic devices cons ume small amounts of electri city. While insignificant on an individual device basis, the total ener gy consumed by standby equipment adds up to about 5 percent of current residential elec tricity use, due to the multitude of devices and their steady power drain. The EPA Energy Star program already includes an initiative to encourage the reduction in aver age standby consumption from 4.4 to 1 watt per device, a drop of over 75 percent. For WRAP, introduction of measures for standby loss reduction were modeled as an incentive program through 2009 (" Residential Appl. Standby Loss Red.--Incentive "), and as a mandatory standard thereafter (" Residential Appl. Standby Loss Red.--Mandatory "). Residential Clothes Washing : Improvements in clothes wa shers allow clothes to be cleaned with less hot water use, and often "spi n" clothes faster so that less energy is required to dry them. Two types of higher-t han-standard-efficiency clothes washers were included in the WRAP analysis: vertical-axis Energy Star -qualified machines (" Residential Energy Star Clothes Washer "), and horizontal-axis washers (" Residential SEHA Clothes Washer ", where SEHA is "Super-Efficient Home Appliance").

COMMERCIAL/INSTITUTIONAL SECTOR MEASURES Commercial/Institutional C ooling—"Package" AC and Chillers : Use of higher-thanstandard efficiency "package" air conditioning (AC) units and centrifugal chillers for small-to-medium-sized and large commercia l/institutional buildings produce more cold air (or chilled water) per unit of electri city input than standard models (" Comml/Instit. AC Impr., 20-ton Package Units " and " Comml/Instit. AC Impr., 350-ton Centrif. Units "). Commercial/Institutional C ooling—Residential-type Units : Many smaller commercial buildings use units that are the same as, or larger but similar to, the AC systems used in homes. For the WRAP study, models of room-type air conditioners, central air conditioners, and heat pumps with energy effi ciency ratings significantly higher than standard units were evaluated (" Comml/Instit. AC Impr., Res. Room-type AC ",

" Comml/Instit. AC Impr., Residential-type CAC ", " Comml/Instit. AC Impr., Small Heat Pump "). Commercial/Institutional Cooling—Evaporative Cooling : Evaporative cooling technologies use the latent heat of vaporizati on of water to cool air. One of the most promising configurations, indirect-direct ev aporative cooling (IDDEC) can substantially reduce electricity requirements relative to conventional coo ling systems and operate well in the relatively low humidity conditions that prevail during Western summers. For WRAP measures in three size classes were modeled for use in different types of commercial/institutional buildings , based on the size of conve ntional AC equipment that would otherwise be used (" Comml/Instit. AC, IDDEC, 20-ton Equiv. Units ",

" Comml/Instit. AC, IDDEC, 150-ton Equiv. Units ", and " Comml/Instit. AC, IDDEC, 350- ton Equiv. Units ").Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 70 Commercial/Institutional Coo ling—Gas-fired Ai r Conditioning : Electricity use can be reduced by replacing electric air conditi oners with gas-fired air conditioners. Gasfired air conditioners use either an absorp tion cooling cycle or a gas-fired internalcombustion engine that turns an air conditioni ng compressor. Additional energy is saved by using waste heat from the gas-fired engi ne to heat water. Three gas-fired AC configurations were evaluated: without heat recovery (" Comml/Instit. Gas AC, w/o heat
recovery "), with heat recovery and with the recove red heat avoiding the use of a gas-fired water heater (" Comml/Instit. Gas AC, w/ heat recov. (GWH) "), and with the recovered heat displacing an electric water heater (" Comml/Instit. Gas AC, w/ heat recov. (EWH) "). Commercial/Institutional Cooling—C ooling Tower Variable-Speed Drives : Cooling systems for large buildings often have coo ling towers, where waste heat is exhausted using fans. Variable-speed drives for the fa n motors on cooling tower allow the speed of the fans to be adjusted to cooling needs, a nd thus save electricity. Efficiency savings were estimated for WRAP using data from different regions of California. For example, for the WSCP (Oregon/Western Idaho) region, " Comml/Instit. Cooling Tower VSD-- Valley Climate " denotes an installation in a climate similar to that of the Central Valley in California, while " Comml/Instit. Cooling Tower VSD--N. Coast Clim. " Uses a California North Coast climate as an analog. Commercial/Institutional Space Heat : Electricity, and energy overall, can be saved byswitching from electric resistance heating to gas-fired heating systems, preferably gasfired systems of higher than standard effici ency. In some cases, gas-fired heaters and boilers are less expensive to buy (as well as operate) than electric ones of equivalent capacity. Three measures were evaluated for WRAP: High efficiency and standard gas boilers replacing electric resistance boilers (" Comml/Instit. Space Heat High Eff. Gas Boiler " and " Comml/Instit. Space Heat Std. Gas Boiler "), and gas "unit heaters" (standalone or ceiling-mounted, fan-forced heaters of ten used in spaces such as warehouses or workshops; (" Comml/Instit. Space Heat Gas Unit Heater "). Commercial/Institutional Ground-Source Heat Pumps : Ground-source heat pumps (sometimes called "geothermal" heat pumps) are used for both heating and cooling, and differ from typical heat pumps in that they use buried "loops" of piping with water or other fluid running through it to extract heat from (or, in cooling mode, exhaust heat to) the earth below ground level. The relatively c onstant temperature of the earth allows the heat pump to run more efficiently, under some conditions, than a typical air-source heat pump. As the number of hours a ground-source heat pump will need to run depends on climate, insta llations with running times (both he ating and cooling) of 1000, 2000, and 3000 hours per year were assumed (" Comml/Instit. Ground-source HP, 1000 hrs/yr ",

" Comml/Instit. Ground-source HP, 2000 hrs/yr ", and " Comml/Instit. Ground-source HP, 3000 hrs/yr "). Commercial/Institu tional Water Heat : Water heating electricity use can be reducedsubstantially by switching from standard electric resistance-type water heaters to heatpump-type water heaters (" Comml/Instit. Water Heating, Heat Pump Unit "). Switching from electric water heating to natural gas-fire d water heating, using both boilers and tanktype water heaters, can also reduce both el ectricity use and overall energy requirements after losses in electricity generation are accounted for (" Comml/Instit. Water Heater Fuel Switching ", " Comml/Instit. Water Heat Gas Boiler Fuel Switch ").Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 71 Commercial/Institutional Building "Retrocommissioning" : Retrocommissioning is defined as "a process of thoroughly identifying the current needs for services within a building, assessing the functionality and a ppropriateness of the e quipment now serving the building, devising and implementing a systematic plan for repairing, rejuvenating or replacing the existing systems, and finally creating operations and maintenance practices to assure continued functionality of the systems" . It is therefore the process of reviewing all of the energy uses in an existing build ing, and making changes to maintenance and operation, and in some cases in equipment, to make sure that the building operates as efficiently as possible (" Comml/Instit. Retrocommissioning "). Retrocommissioning usually is designed to reduce a building's need for heating, cooling, and/or lighting. Commercial/Institutional Building Standards : Higher standards for insulation, window performance, thermal seals, and othe r building components help reduce heating and cooling energy use. Two levels of building standards, one meeting ASHRAE (American Society of Heating, Refriger ating and Air-Conditioning Engineers) 90.1.99 building guidelines (" Comml/Instit. Building Envelope--ASHRAE Stds. "), and one exceeding ASRAE guidelines by about 20 percent (" Comml/Instit. Building Envelope-- Enhanced Level "). Commercial/Institutional Refrigeration : Commercial sector refrigeration ranges from large refrigerators not much different from re sidential units to walk-in or building-sized cold storage rooms or freezers. Options for improving the energy efficiency of refrigeration systems in the commercial sector include improving door seals, compressors, insulation, and controls. Th e WRAP analysis included two sets of measures, one of which includes measures ha ving payback times of less than two years ("lower-cost measures", " Comml/Instit. Refrigeration, Low-cost Measures ") and the other having offering paybacks of between two and five years (" Comml/Instit. Refrigeration, High-cost Measures "). Commercial/Institutional Lightin g—Fluorescent Bulbs and Ballasts : Replacing standard bulbs and ballasts in the four-foot fluorescent fixtur es that are most common in office and other applications with high-effici ency bulbs and ballasts produces significant savings (" Comml/Instit. Lighting, Efficient Fluorescent ". Commercial/Institutional Lighti ng—Advanced Ligh ting Measures : This measure includes a "package" of "emerging" lighting measures, ranging from use of daylighting to lighting controls to the use of advanced bul bs and fixtures, offering average energy savings over standard practice of more than 50 percent (" Comml/Instit. Lighting, Advanced Measures "). Commercial/Institutional Lighting—LED Exit Signs : LEDs are also increasingly used in commercial and institu tional exit signs in place of incandescent or fluorescent bulbs. LED exit signs save a considerable amount of energy, and may not need to be replaced for a decade or more, si gnificantly reducing maintenance (" Comml/Instit. LED Exit Signs "). Commercial/Instituti onal Clothes Washers : Upgrades in commercial clothes washers, as with residential washers, can yield significant energy savings in water heating and clothes drying, as well in the washer itself (" Comml/Instit. Efficient Clothes Washers "). LED Traffic Signals (" Comml/Instit. LED Traffic Signals "): Light emitting diodes (LEDs) have been widely used in electroni cs for years, are now starting to find new lighting applications. As with LED exit signs, long-lasting LED traffic signals, thoughEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 72 they cost more per bulb than incandescent signals, dramatically reduce energy use (by 90%) as well as O&M costs. Although LED traffic signals do not produce the same amount of overall light as incandescent sign als, the focused points of bright light produced by LEDs make them easy for the eye to pick out, and thus ideal for traffic lights and other signage. Commercial/Institutional/Industrial Electrical Transformers : In larger commercial buildings and in industrial in stallations, transformers are used to "step down" highvoltage power from the electrical grid to usable lower voltages. Transformer losses are not substantial, but as each kWh of electricity used in a building typically must pass through a transformer, even a small reduction in losses improves the energy-efficiency of the entire building. The measures " Comml/Instit/Industrial Transformers (C/I) " and

" Comml/Instit/Industrial Tr ansformers (Industrial) " model the purchase of higherefficiency "TP-1" transformers instead of standard units.

INDUSTRIAL SECTOR MEASURES Industrial Motors Efficiency Improvements : The efficiency of industrial motors can be improved in several ways: by replacing failed motors with premium (highest efficiency) instead of standard models (" Industrial Premium Motors "), by substituting premium motors where motors would otherwise be rewound (" Industrial Prem. Motor vs. Rewind "), and by downsizing motors to appropriate capacity for the systems they power (" Industrial Motor Downsizing "). These types of improvements typically save only 1-4 percent of motor electricity requirements, but when applied across the large number of industrial motors, the saving s can be considerable. Industrial Motor System Improvements : Even greater savings of motor electricity use can be achieved by modifying the design and operation of systems that motors drive: air compressors, pumps and valves, fans, and othe r systems (such as conveyors). For the WRAP energy efficiency analysis, the potential savings for improving each of three types of motor systems (" Industrial Air Compressor System Measures ", " Industrial Fan System Measures ", and " Industrial Pump System Measures ") were evaluated. Savings for these measures can range, on average, from 5 percent for fans to nearly 20 percent for pumps and air compressors. Industrial—Aluminum Production Process Improvements : Primary aluminum production – as opposed to secondary production from recycled aluminum feedstocks -- is a very energy-intensive process. One of the key options for reducing electricity consumption per unit of aluminum produced is to retrofit aluminum production cells for higher electrolytic efficiency and lower heat loss (" Industrial Aluminum Process Impr.: Cell Retrofit "). Other technological advances are po ssible, such as advanced forming and near net-shape casting. These advances are designed to save energy by producing aluminum in shapes that are close to their final form, can provide considerable O&M and thermal energy (typically gas energy) savings, though typically small electricity savings (" Industrial Aluminum Process Impr.: Adv. Forming "). Industrial Electrical Transformers : (see listing under Commerc ial/Institutional sector, above)

COMBINED HEAT AND POWEREconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 73 From half to two-thirds of the energy us ed for fuel-based electricity generation is typically lost as waste heat. Combined heat and power (CHP) systems effectively capture this waste heat and supply it to a facility’s pr ocess or building heat requirements, and can thereby approximately double the overall efficiency of fuel use to 80 percent or so. We included in our analysis several type s of natural gas-fired CHP systems in several size classes:

Internal Combustion Engines : Internal combustion (IC) engines have been used in stationary power generation a pplications for a century or more, and are a very mature technology. Heat from gas-fired water-c ooled IC engines can be captured from the engine's coolant system via a radiator, and used to heat or pre-heat air or water to help provide space or water heat.

Combustion Turbines : Conventional combustion turbines (CT) are a newer, but still quite mature, electric genera tion option, having been in wide use for decades. Here heat can be captured from the hot exhaust gases of the turbine via a heat exchange unit, and used for space or water heat, or (more likely) for process heat in industrial plants. We incorporated 10 and 40 MW combustion turbines into the industrial sector CHP initiative that we evaluated.

"Micro" Turbines : Micro-turbines (MT) are sel f-contained CHP devices that are new on the market. These units, the size of a large household refrigerator (in the 30 kW size) produce heat and electricity using a high-speed but very reliable miniature turbine coupled to a generator. Thes e units, recently commercialized, will be available in size classes other than 30 kW soon, but only the 30 kW units are included in our analysis. The types of CHP systems included in the commercial/institutional and industrial sector WRAP energy efficiency analyses are as follows:

Commercial CHP : CHP measures in the commercial sector included 30 kW MT units, 100 kW IC units, and 800 kW IC units, with some of the units displacing grid electricity and heat from electric resistance boilers or water heaters (" Comml/Instit. CHP, 30 kW MT repl. Elect. WH ", " Comml/Instit. CHP, 100 kW IC repl. Elect. WH ", and " Comml/Instit. CHP, 800 kW IC repl. Elect. WH "), and other units displacing grid electricity and heat from gas-fired boilers or water heaters (" Comml/Instit. CHP, 30 kW MT repl. Gas WH ", " Comml/Instit. CHP, 100 kW IC repl. Gas WH ", and

" Comml/Instit. CHP, 800 kW IC repl. Gas Blr. ")

Industrial CHP : For the industrial sector, our estimate included 800 and 3000 kW IC units, and 10 and 40 MW CT units. All co-generated heat from these units was assumed to displace gas-fired boilers or process heating equipment (" Industrial CHP, 800 kW IC repl. Gas Blr. ", " Industrial CHP, 3000 kW IC repl. Gas Blr. ", " Industrial CHP, 10 MW CT repl. Gas Blr. ", and " Industrial CHP, 40 MW CT repl. Gas Blr. ")Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 74 

## ATTACHMENT 2: TABULAR SUMMARY OF DSM MEASURE AND PROGRAM INPUTS AND ASSUMPTIONS

WSCR, Residential Sector

SUMMARY OF DSM MEASURE AND PROGRAM ASSUMPTIONS USED IN EVALUATING AN ENERGY EFFICIENCY PORTFOLIO FOR THE INTERIOR WEST (WSCR) REGION

PROGRAM /MEASURE Units of Measure Application Measure Lifetime (years) A nnual kWh Savings per Unit Summer Peak Savings: kW/Unit Incremental Installed Cost ($/unit) Incremental A nnual O&M Cost ($/unit) Program Incentives Ongoing Admin. Costs Start-up Admin. Costs

Residential Efficient Cooling Equipment 6.5% of spon. Costs $1,000,000

High-efficiency Central AC AC Units 15 863 0.98 $550 $0 70% of incr. cost

High-efficiency Room AC AC Units 15 121 0.21 $150 $0 70% of incr. cost

Residential Evaporative Cooling 10% of spon. Costs $1,000,000

Direct Evaporative Cooling AC Units 15 1,870 2.14 (1,000) $ 63 $ $550

Indirect/Direct Evaporative Cooling AC Units 15 1,578 1.80 (300) $ 63 $ $550

Residential Lighting--CFL Bulbs 50% of spon. Costs $500,000

Compact Fluorescent Lamps (CFL) Bulbs 9 60.2 0.0181 $2.50 $0 $3.75

Residential Lighting--CFL Fixtures 65% of spon. Costs $1,000,000

CFL Fixtures--Indoor Fixtures 19 167 0.050 $14.21 $1.10 100% of incr. cost

CFL Fixtures--Outdoor Fixtures 11 143 0.0128 $17.14 ($10.60) 100% of incr. cost

Residential Lighting--Torchieres 20% of spon. Costs $500,000

CFL Torchieres Lamps 20 599 0.1797 $40.00 ($4.88) 75% of incr. cost Residential Appliance Recycling $500,000

Second Refrigerator Pickup Appliances 6 1,149 0.196 $125 $0 $75/unit (see note)

Residential Clothes Washers 15% of spon. Costs $500,000

EnergyStar Vertical Axis Washers Appliances 15 674 0.280 $324 $0 50% of incr. cost
SEHA Horizontal Axis Washers Appliances 15 814 0.339 $374 $0 50% of incr. cost

EnergyStar Devices, Incentive Program Devices 7 29.8 0.0034 $2.50 $0 50% of incr. cost 15% of spon. Costs $500,000
EnergyStar Devices, Mandatory Program Devices 7 29.8 0.0034 $2.50 $0 none none $500,000

Residential "Weatherization" 6.6% of spon. Costs $500,000

Weatherization of Elect. Heated Homes Homes 15 1,344 1.02 $529 $0 20% of incr. cost

0.242 16% of spon. Costs $500,000
Duct Measures, Space Heating Savings Homes 10 212 0.242 $309 $0 70% of incr. cost
Duct Measures, Space Cooling Savings Homes 10 153 0.175 $309 $0 70% of incr. cost 8.6% of spon. Costs
Improvements to IECC 2000 Level Homes 50 230 0.096 $1,161 $0 50% of incr. cost $1,000,000

Enhancements beyong IECC 2000 Homes 50 491 0.205 $2,253 $0 none $3,000,000 Residential Electronics Standby Loss Reduction

Residential Duct Testing and Sealing

Residential New Construction Building Shell ImprovementsEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 75 PROGRAM /MEASURE Units of Measure Application Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Notes

Residential Efficient Cooling Equipment

High-efficiency Central AC AC Units 10,666 21,412 36,058 37,187 37,064 37,239 SEER 13.5 vs. 10.5

High-efficiency Room AC AC Units 4,646 9,316 15,639 15,978 15,941 15,993 SEER 10 vs. 8.5

Residential Evaporative Cooling

Direct Evaporative Cooling AC Units 3,555 7,137 14,423 14,875 14,826 14,895 Evaporative vs. direct cooling

Indirect/Direct Evaporative Cooling AC Units 178 1,784 7,212 7,437 7,413 7,448 IDDEC vs. direct cooling

Residential Lighting--CFL Bulbs

Compact Fluorescent Lamps (CFL) Bulbs 237,961 729,749 994,749 1,018,306 1,041,666 1,065,305

Residential Lighting--CFL Fixtures

CFL Fixtures--Indoor Fixtures 20,450 62,713 106,859 109,389 111,899 114,438

CFL Fixtures--Outdoor Fixtures 3,870 11,869 20,223 20,702 21,177 21,658

Residential Lighting--Torchieres

CFL Torchieres Lamps 26,812 63,952 140,102 143,420 146,710 150,040 Compares CFL torchiere with std halogen or incand. lamp Residential Appliance Recycling

Second Refrigerator Pickup Appliances 186,004 190,138 0 0 0 0 Measure cost includes pickup cost and administrative costs

Residential Clothes Washers

EnergyStar Vertical Axis Washers Appliances 5,463 10,954 18,389 18,790 18,744 18,800

SEHA Horizontal Axis Washers Appliances 5,463 10,954 18,389 18,790 18,744 18,800

EnergyStar Devices, Incentive Program Devices 518,428 1,038,328 1,737,351 1,758,052 1,755,797 1,758,995 I ncen ti ve program en d s i n 2009

EnergyStar Devices, Mandatory Program Devices 20,105,881 20,173,792 20,265,715 20,489,221 20,484,333 20,522,500 M an d a t ory program s t ar t s i n 2010

Residential "Weatherization" Includes savings of both

Weatherization of Elect. Heated Homes Homes 16,739 16,944 17,157 17,400 17,637 17,876 heating and cooling energy.

Duct Measures, Space Heating Savings Homes 16,848 17,075 17,292 17,511 17,738 17,997 Winter peak savings
Duct Measures, Space Cooling Savings Homes 15,996 16,211 16,417 16,625 16,841 17,087 Summer peak savings

Improvements to IECC 2000 Level Homes 24,458 24,592 24,963 26,093 25,970 26,144 I ncen ti ve program en d s i n 2009

Enhancements beyong IECC 2000 Homes 241,068 243,198 244,371 245,181 246,049 246,352 M an d a t ory program s t ar t s i n 2010 A nnual Program Participation (in measure units)

Residential Electronics Standby Loss Reduction

Residential Duct Testing and Sealing

Residential New Construction Building Shell ImprovementsEconomic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 76 

## ATTACHMENT 3: EXAMPLES OF ENERGY EFFICIENCY MEASURE AND PROGRAM EVALUATIONS PERFORMED FOR THE WESTERN REGIONAL AIR PARTNERSHIP (WRAP)



### The three "text boxes" that follow provide example of the procedures used in the evaluation of energy efficiency measures for the Air Pollution Partnership Forum of WRAP. The examples shown—for Commerc ial/Institutional/Industr ial Transformers, Residential Air Conditioning, and Commercial Refrigeration—illu strate the process used in the "bottom-up" (end-use based) energy effi ciency analysis carried out for the Interior West and Oregon/Western Idaho regions, and provide examples of some of the data sources and assumptions used. Each example documents three analytical “steps” for the measures and programs considered. The fi rst two steps, compilation of measure costs and performance data and measure benefit/cost analysis, and estimation of program markets and participation, are carried out and documented in MS ExcelTM workbooks. The third step, estimation of program cost s and savings, was accomplished using the ECO energy-efficiency program analysis software tool, developed by Tellus Institute.

Commercial/Institutional/Industrial Transformers Step 1: Compilation of Measure Cost and Performance Data, and Measures Benefit/Cost Analysis: Incremental costs for commercial-sized units were taken to be $4.42 per kVA, and for industrial-sized transformers, $1.81 per kVA (where “kVA” is thousand volt-amps, a measure of transformer capacity). These high-efficiency “TP-1” transformers save, for commercial and industria l applications, respectively, an average of 23.3 and 7.4 kWh per kVA of transformer capacity, relative to standard new transformers 34 

### . In order to estimate peak savings, a “peak factor” of 0.156 kW per MWh of energy savings was used, along with a transformer lifetime of 30 years 35



### . The measure cost and savings data described above were used, along with rough estimates of avoided energy and capacity costs for electricity generation, to estimate benefit/cost ratios for the two transformer measures. Both proved very cost-effective (with benefit/cost ratios of about 3.3 for commercial transformers and 2.6 for industrial units), and were thus included in the WRAP energy efficiency package.

34 Data on incremental costs and savings for high-efficiency transformers were derived based on Tables 5.4, 5.7, and 5.8 of Supplement to the "Determination Analysis" (ORNL-6847) and Analysis of the NEMA Efficiency Standard for Distribution Transformers , by P. R. Barnes, S. Das, B. W. McConnell, and J. W. Van Dyke. This Oak Ridge National Laboratory Report No. ORNL-6925, dated September 1997, was received as ORNL6925.pdf from Jan Berry of ORNL, 10/24/01. The designation "TP-1" refers to a USEPA EnergyStar program standard for transformers. An ORNL expert on transformer technology (Mr. Lance McCord) was consulted regarding estimates fo r other parameters needed to estimate average transformer costs and savings.
35 The peak factor used, 0.000156 kW per kWh saved, is taken from the "National" worksheet of the workbook "neep1017.xls", prepared by various researchers for the NEEP (Northeast Energy Efficiency Partnerships, Inc.) energy efficiency analyses, and summarizing national energy savings potential for a variety of energy efficiency improvements, most related to appliance or equipment standards. The average lifetime of transformers is also from this source.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 77 Step 2: Program Market and Particip ation Estimation, and Estimation of Administration Costs The markets for commercial and industrial transformers in the Interior West (WSCR) region were estimated starting with an estimate that of nationwide annual sales of “drytype” transformers in 2000 totaled 22 million kVA 36 

### . In order to estimate the fraction of these transformers that were sold in each sector, average commercial-sector and industrial-sector load factors of 20 and 40 percent, respectively, were applied 37 

### . Using these load factors, the implied distribution of transformer sales na tionally was calculated as 14.7 million kVA in the commercial sector, and 7.3 million kVA in the industrial sector. Based on WSCR region commercial and industrial electricity sales in 2000 (61,615 and 54,858 GWh, respectively) and analogous figures for the U.S. as a whole, estimated year-2000 sales of tr ansformers in the WSCR were calculated as 870,654 kVA in the commercial sector, and 375,684 kVA in the industrial sector 38 

### . These year-2000 sales by sector were then extrapolated through 2018 using the rates of growth in commercial and industrial electri city sales included in National Energy Modeling System (NEMS) projections for the Mountain Census Region, yielding estimates of the markets for transformer sales during the 2002 to 2018 program period. Program participation was assumed to be 15 percent of transformer sales in the first program year, and 30 percent in subsequent ye ars. This participa tion rate was based on judgment as to what a well-advertised, aggressive program might accomplish, and included the assumption of a budget of $500,000 to start up the program (the equivalent of perhaps 5 full-time staff, plus funds for developing program mark eting materials), and a sponsor incentive equal to 50 percent of th e incremental cost of the transformers. Administrative costs equal to 15 percent of sponsor measure costs were assumed, based on consideration of the effort likely to be required to process incentive payments and for ongoing program marketing, and the “free- ri der” fraction was taken to be 15 percent 39



### .



## Step 3: Program Costs and Savings Estimates Measure cost, savings, and lif etime estimates prepared as described in Step 1, above, together with estimates of a nnual program participation for each measure, administrative cost factors, sponsor cost fractions, and fre e-ridership estimates estima ted as described in Step 2, were entered into the ECO software tool, together with estimates of parameters such as discount rates (4.88 percent annually, on a real ba sis) capital recovery factors (based on device lifetimes and the assumed discount rate), and the future inflation rate (2.8 percent annually) 40 

### . ECO was then used to calculate streams of annual costs (on

36 From the 1997 ORNL report cited earlier.
37 See, for example, The Cadmus Group, Inc (1999), Metered Load Factors for Low-Voltage, Dry-Type Transformers in Commercial, Industrial, and Public Buildings . File 120799_cadmus.pdf, downloaded 10/23/01 from www.neep.org.
38 National and state-level electricity sales data from the Energy Information Administration (EIA) of the US Department of Energy (USDOE).
39 “Free-riders” are program participants that would have adopted the measure even in the absence of the sponsor’s incentive program. In practice, “free-ridership” is sometimes measured by post-program evaluation surveys or by market studies, but in many instances, for planning of DSM programs, values in the range of 10 to 20 percent are assumed.
40 The discount rate used here is similar to real discount rates used by large utilities operating in the West.Economic Assessment of Implementing the 10/20 Goals and Energy Efficiency Recommendations Report; October 2002



### 78 both “expensed” and annualized bases) and sa vings (electrical energy and peak power) for each of the two measures (commercial and industrial transformers) in the program, as well as for the program as a whole. Cost data from ECO (presented as customer and sponsor measure costs, and sponsor adminis trative costs) and savings data were aggregated with costs from other programs, and savings data were likewise aggregated, and the “package” of annual costs and savi ngs results was summarized for consideration by the Air Pollution Prevention Forum and for inclusion in air pollution and economic impacts modeling using ICF, Inc.’s IPM software tool.Appendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

## APPENDIX A-13. OTHER GCVTC OPTIONS

This appendix contains work products a nd references relied u pon by Arizona in the development of Chapter 13 of the Regional Haze SIP.Appendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

## Appendix A-13a. Arizona’s Assessment of Other Recommendations Of The Grand Canyon Visibility Transport CommissionAppendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

## ARIZONA’S ASSESSMENT OF OTHER RECOMMENDATIONS OF THE GRAND CANYON VISIBILITY TRANSPORT COMMISSION

To Satisfy the Requirements of 40 CFR 51.309(d)(9)

Arizona Department of Environmental Quality October 2003Appendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

### Regulatory History and Requirements

The recommendations of the GCVTC are presente d throughout the June 1996 final report with varying degrees of specificity. Not all are incl uded in the Regional Haze Rule. However, some of the recommendations were intended as a menu of options, with no expectation that any geographic area would implement all of them. Th e GCVTC pointed out in its final report that:

“Some of the Commission's recommendations ask the EPA to take specific actions or institute particular programs , in cooperation with the tribes, states and federal agencies as implementing bodies. Other recommendations provide a range of potential policy or strategy options for consideration by the EPA and implementing entities. As the EPA develops policies and takes actions based on this report, this dis tinction between "actions" and "options" should be maintained with diligence. That is, reco mmendations intended as policy options should not become mandated actions or regulatory programs .” [ bold emphasis in original.] 1



### The EPA acknowledged the discretion that should be afforded by states, and the need to report on what measures in the pream ble to the rule (64 FR 35755):

“ 9. Implementation of Additional Requirements. 

### In section 51.309(d)(9), EPA requires SIPs to provide for implementation of other GCVT C Report policy and stra tegy options that can be practicably included as enforceable emissions limits, schedules of compliance or other enforceable measures to make reasonable progress toward the national visibility goal for the 16 Class I areas. The GCVTC’s recommendations included items that are not appropriate to directly translate to SIP requirements for every State. The EPA supports State choice of appropriate actions on other options and measures identified by the GCVTC and has, therefore, established a general provision for SIPs calling for them to consider and adopt additional measures as necessary and appropriate. The rule further requires States to report to EPA in 2003, 2008, 2013 and 2018 on what measures have been adopted and the status of implementation of those measures.”

(a) Evaluation of additional Grand Canyon Visibility Transport Commission recommendations. Pursuant to 40 CFR 51.309(d)(9), Arizona has evaluated the “a dditional” recommendations of the Grand Canyon Visibility Transport Commissi on, to determine those recommendations have be, or may be, implemented based on national, regi onal, state, and or loca l initiatives. Arizona reviewed the GCVTC’s 1996 report, Recommendations for Improving Western Vistas , to identify those recommendations that were not incorporated into Section 309 of the Regional Haze Rule as specific requirements. Arizona has concluded that many of the can not be practicably included in this SIP at this time. Arizona will re view the status of implementation of these recommendation in future SIP plan revi sions required under 40 CFR 51.309(d)(10).

(b) Implementation of Additional Recommendations. Based on the evaluation made by the State of Arizona, the following are actions and program s that have been adopted that support the

1 Recommendations for Improving Western Vistas. Grand Canyon Visibility Transport Commission, Western Governors' Association. Denver CO, June 1996. Page i.Appendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

### additional recommendations of the GCVTC described in 309(d)(9). As is noted, the majority of these programs are related to mobile sources although a limited number of programs in other areas have been performed.Appendix A-13 Other GCVTC Options Arizona Regional Haze SIP GCVTC Options/ Recommenda tions Status of Implementation

National Strategies for Mobile Sources Modeled by WRAP

(see WRAP TSD for details)

1. Adopt 49- state LEV standards The National Low Emission Vehicle Program (NLEV) program is a voluntary program to introduce cleaner cars and light trucks in all parts of the country. The NLEV program will continue to exist until the cleaner Federal Tier 2 emission standards become effective in the 2004 model year. Regulated by EPA. Effective from model year 1996. 62 FR 31192, June 6, 1997

Although A.R.S 49-556 allows Arizona to ad opt the NLEV program it also provides the state an opportunity to adopt the federal Clean Fuel Fleet program in lieu of the federal LEV program. The federal Clean Fu el Fleet program was, however, replaced by the Cleaner Burning Gasoline program. A.R.S 49-556 Yes

Yes

New PM standards for Urban Buses for 1996 and later model years (0.5 g/mile) Regulated by EPA. Effective from model year 1996. 61FR 6949, Feb. 23, 1996. Yes 2. Support development of heavy duty vehicle (HDDV) standards New stringent emission standards and test procedures for all heavy duty diesel vehicles (HDDV) >8,500 lbs Gross Vehicle Weight Rating (GVWR) Regulated by EPA 66 FR 5002, Jan. 18, 2001 Yes

Off-road standards for construction and other equipment phased in three stages - Tier 1 through Tier 3. Regulated by EPA. Effective from model year 1996 through 2008. 61 FR 58102, November 12, 1996. Yes 3. Negotiateand adopt offroad standards

Proposed off-road standards for constructi on equipment, industrial, agriculture, etc (comment period ended Aug 2003). Regulated by EPA. Effective from model year 2008. No

Federal low sulfur diesel (15 ppm) standard for highway HDDV. Developed as part of the new heavy duty engine and vehicle standards and to treat the engine and fuel as one system. Regulated by EPA. Effective from 2007. 66 FR 5002, Jan. 18, 2001 Yes 4. Promote broader application of cleaner fuels

Federal Tier II gasoline standard requires refiners to produce gasoline with average sulfur standard of 120 ppm (300 ppm cap) beginning in 2004 and by 2006, average standard to be reduced to 30 ppm (80 ppm cap). Regulated by EPA. Phase in beginning 2004. 65 FR 6698, February 10, 2000 YesAppendix A-13 Other GCVTC Options Arizona Regional Haze SIP GCVTC Options/ Recommenda tions Status of Implementation

National Strategies for Mobile Sources Modeled by WRAP

(see WRAP TSD for details)

Locomotives: Standards phased in three stages - Tier 0, Tier 1 and Tier 2 Regulated by EPA. Effective from model year 2001 through model year 2005. 63 FR 18978, April 16, 1998

* Model by WRAP note: modeled for a diesel sulfur content of 500 ppm. Yes

Recreational marine diesel engines vessels gr eater than 50 hp, used in pleasure craft and yachts, and cruisers. (Less than 50 hp marine vessels are regulated under the Tier 2 and Tier 3 federal off-road engine standards). Regulated by EPA. Phased-in beginning model year 2006. 67 FR 68242, November 8, 2002. No

Commercial marine diesel engines vessels Regulated by EPA. Phased-in beginning model year 2004. 67 FR 68242, November 8, 2002. No

Aircraft gas turbine engines with rated thrust greater than 26.7 kilo newtons. New standards align with International Civil Aviation Organization . 62 FR 25355, May 8, 1997 Yes

All federal executive agencies are required to provide information to the Office of Management and Budget, regarding improvements made to federal facilities and activities aimed towards reducing pollution. Exec. Order #12088, 1978 No 5. Pursue strategies for diesel locomotives, boats, airplanes and federal vehicles

EPA’s Partnership Plan includes measures su ch as Transit, Telecommute, rideshare and alt fueled fleet vehicles to reduc e pollution from mobile sources. No

7. Support improved control of evaporative emissions On-board refueling vapor recovery system reduces evaporative emission during refueling in cars. Regulated by EPA. Phased-in from 1998- 40%, 1999-80%, 2000-100% 59 FR 16262, April 6, 1994

Stage II vapor recovery systems are to be used in gas refueling stations in ozone nonattainment areas. In Arizona, regulated by ADWM. Effective from 1993 YesAppendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

### GCVTC Options / Recomme ndations Status of Implementation

Mobile Sources – Regional/Local Strategies Modeled by WRAP (see WRAP TSD for details)

1. Establish Clean Fuel Demonstrati on Zones Fuel-based programs in the state Area A:

1. Reformulated gasoline (Ari zona Cleaner Burning Gasoline) 2. Vehicle emissions inspection programs 3. Stage II vapor recovery systems 4. Vehicle Fleet Alternative Fuel Vehicle conversion requirement

Area B: 1. Oxygenated gasoline 2. Vehicle emissions inspection program Yes

2. Analyze Pricing and Incentive Approaches Nothing at this time

3. Explore Inspection Programs for Heavy Duty Vehicles Since 1975, ADEQ has implemented a pr ogram for heavy duty on-road diesel vehicles in Area A and Area B. Yes (as existed in 1996)

3. Explore Inspection Programs for Heavy Duty Vehicles (cont.) Emissions inspections for diesel vehicles in Area A and Area B. Yes

All pre-1988 engines operated in Area A to meet 1988 or newer standards (GVWR ≥ 26,000 lbs.) 1 Effective from January 1, 2004; Regulated by ADEQ A.R.S 49-542(f)(7) No 3. Explore Inspection Programs for Heavy Duty Vehicles (cont.) Sulfur content of diesel fuel limited to 500 ppm in Area A. Effective from 1993. Regulated by ADWM. A.R.S. § 41-2083 Yes

4. Promote vehicle maintenance Since 1975, the State of Arizona has implemented a vehicle emissions inspection
program. Regulated by ADEQ. Arizona Administrative Code, R18-2-1001 through R18-2-1013 YesAppendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

### GCVTC Options/ Recommend ations Status of Implementation

Other Recommendations Modeled by WRAP

1. Develop emission fees
programs. Fees for emissions are charged in the Op erating Permits program, as required under 40 CFR Part 70. No

WRAP has acquired emission inventory information for Mexican sources; see the WRAP Technical Support Document for regional haze SIPs for a complete description. Yes 2. Develop comprehensive emissions inventory for Mexican sources In addition, EPA has funded various en tities including the Western Governors' Association to work with Mexican to improve the quality of the information. NoAppendix A-13 Other GCVTC Options Arizona Regional Haze SIP 

## Appendix A-13b. Summary of Discussions with Federal Land Managers on Emissions In-and-Near the Four Arizona GCVTC Class I Areas1Appendix A-13b. Table 1: Summary of Reported InformationRegarding Dust Emissions: Grand Canyon National ParkSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)Paved and unpavedroadsThere are approximately 30-40 miles of scenic paved drivesalong each rim of the canyon and about 60 miles of unpavedroads (and additional residential and service roads, especiallyin Grand Canyon Village). Unpaved roads are reported toreceive very little traffic and carry less than five percent ofthe 41 million vehicle miles traveled annually (forcomparison, 71 million vehicle miles are traveled inMaricopa County each day). Visitors to the South Rim ofthe Canyon can use a shuttle bus system (4.8 millionboardings in 2001). Road dust mitigation measures includewet sweeping.Paved and unpaved dirt roads exist, especially south and east ofthe canyon. Use of unpaved dirt roads is reported to haveincreased recently in the south.Mining activityNo activity reported.A limestone mine is located approximately 30 km south of thePark near Peach Springs. Newly established national monumentsto the northwest of the Park will most likely restrict miningactivities. There are numerous uranium claims in the area, but nomining at present.Agriculture activityNo activity reported. No activity reported.Grazing activitySome wildlife grazing is reported. Some livestock and wildlife grazing is reported. Commercialcattle grazing occurs south andnorth of the Grand Canyon (USFS,BLM, and private lands), and family livestock operations (mostlysheep and horse, some cattle) on the Navajo Nation to the east.2Appendix A-13b. Table 1: Summary of Reported InformationRegarding Dust Emissions: Grand Canyon National ParkSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)Wind generatedemissionsSeveral dry lake beds and beaches are potentially sources ofwind generated dustbut are only a few acres in size.Sparsely vegetated areas and increasing activities do exist.Thelargest is the Red Lake dry lakebed north of Kingman and 40 kmsouth of the Canyon. Sparse vegetation on grazed lands of theCoconino Plateau south of the Park may also be a source of windblown dust in the Spring. The Colorado River delta in Lake Meadarea appears to be rapidly colonized by tamarisk, minimizing it asa dust source.Off-highway vehicles(OHV)There is no off-highway vehicle (OHV) activity Minimaloff-highway vehicle activity is reported. An OffHighway Vehicle Management Plan under development for the 7National Forests in the state including the Kaibab National Forestnear the Grand Canyon. When implemented the proposed planwill help restrict OHV use to specific areas and times of the yearwhen soil and vegetation impacts will be minimized andpotentially reduce the amount of bare soil exposed to winderosion.Logging activityNo significant activity reported. Limited thinning occursadjacent to developed areas for wildfire protection and forestrestoration.No significant activity reported. Limited thinning occurs adjacentto developed areas for wildfire protection and forest restorationConstruction activityVarious construction projects occur, but are of limited scope(a few new buildings, repaving projects, etc.)Unknown at this timeOther area dustsourcesFoot and pack animal (mule) traffic occurs within the Park Unknown at this timeResidential woodburningApproximately 55 woodstoves are used in the Park.Estimated fuel use is 3 cords/year.Some residential wood-burning activity occursPrescribed burningand WildfiresWildfires have occurred with noticeable smoke emissions.Prescribed fires also occur.Occasional wildfires are reported with noticeable smokeemissions. Prescribed fires also occur.Point sourcesNo activity reported. Coal fired power plant 20 km east of the Park1Appendix A-13b. Table 2: Summary of Reported Information Regarding Dust Emissions: Mt. Baldy Wilderness AreaSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)Paved and unpaved roadsNo paved or unpaved roads arereported within the Wildernessarea.More than 3,000 miles of roads surfaced in native orunspecified materials and over 400 miles of paved or gravelroads are reported on Forest Service lands. Road dust isreported to be the most common type of dust observed in thearea.Observed emissions are reported primarily due to unimprovedroads or high-speed dirt roads and are broadly dependant onroad use and climate. Road access and use is seasonal,normally from May through October. Dust emissions aregenerally reduced from July through mid September, due to anincrease in monsoonal rainfall. Road maintenance and pavingprojects are under development for selected routes. Plansinclude a paving project for a stretch of State Route 377, ahigh recreational use gravel roadnorth of the Wilderness. TheApache-Sitgreaves National Forests Land Management Planincludes a goal to reduce open road density to a maximum of2.5 miles per square mile by 2020.Fort Apache Reservation road density (west of the Wildernessarea) is reported to be similar to Forest Service areas but mayhave less vehicular traffic.Mining activityNo activity reported.Areas of material mining (cinder and gravel pits) exist.Materials from these operations are used for road maintenance.Agriculture activityNo activity reported. Common agricultural activities are related to meadow hay andalfalfa. These activities are generally downwind of theWilderness area.Grazing activityNo activity reported. Livestock grazing has not been allowedwithin the wilderness area for 10 years.Livestock grazing is a common activity. Historic grazingpractices are reported to have impacted plant coverage andincreased soil loss from wind erosion in isolated locations.Grazing is generally downwind of Mt. Baldy. The ForestManagement Plan includes a goal to balance permitted2Appendix A-13b. Table 2: Summary of Reported Information Regarding Dust Emissions: Mt. Baldy Wilderness AreaSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)numbers of livestock with estimated land capacities.A reported potential source ofdust emissions are seasonally fedstock tanks and irrigation reservoirs. These earthen structurescan dry out in early summer and fall, exposing sediments towind erosion.Wind generated emissionsNo activity reported. Area winds show a diurnal pattern with prevailing flow fromthe southwest. Some localized areas of open (low vegetationdensity and low precipitation, particularly to the northeast) ordisturbed land subject to wind erosion occur in the area but aregenerally downwind of the wilderness.Off-highway vehicles(OHV)No activity reported. Frequent OHV activityis reported in Forest lands east of thewilderness. An OHV Management Plan under development forthe 7 national forests in the State, including the ApacheSitgreaves National Forest near Mt. Baldy. Whenimplemented, the plan will help restrict OHV use to specificareas and times of the year when soil and vegetation impactswill be minimized and potentially reduce the amount of baresoil exposed to wind erosion. To date, a hardened trail systemhas been constructed east of the wilderness to provide managedATV use (near Springerville and south of Eager).Logging activityNo activity reported. Logging is currently minimal in the Forest area (east).Emissions generation during logging activities are reportedprimarily due to log trucks operating on haul roads. Currentlogging activity on the White Mountain Fort ApacheReservation (west) is reported to be limited to salvageoperations in recently burned-over areas.Construction activityNo activity reported. Some development isreported to the northeast and northwestthough limited private land is available near the wilderness.Other area dust sourcesNo activity reported. Recreational trailsare used primarily by hikers andbackpackers.3Appendix A-13b. Table 2: Summary of Reported Information Regarding Dust Emissions: Mt. Baldy Wilderness AreaSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)Area ski slopes have good groundcover and little activity inthe summer.Residential wood burningNo activity reported. A small number of wood stove activity is reportedapproximately six miles northeast, and downwind of theWilderness. This activity is notlikely to affect the Wildernessarea, though may affect a nearby IMPROVE monitoring site.Prescribed burning andWildfiresNo prescribed fires are planned. Wildfires are reported withnoticeable smoke emissions.Occasional wildfires are reported with noticeable smokeemissions. Prescribed fires also occur to the southwest.Point sourcesNo activity reported. Point sources include a power plant and a co-generation plantlocated northeast of the Wilderness area that uses forestproduct fue. A lumber mill is reported to the southwest. Apower plant is also located northeast beyond 50 km from theWilderness.Other defined sourcesNo activity reported. No activity reported.1Appendix A-13b. Table 3: Summary of Reported InformationRegarding Dust Emissions: Petrified Forest National ParkSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)Paved and unpaved roadsThere are approximately 40 miles of two-lane paved road inthe Park. A 4.5 mile portion of Interstate 40 passes throughthe northern portion of the park. In addition there are anunknown number of miles of unpaved roads. However,about half of the unpaved roads are closed and the remainderare used only by Park personnel.Paved roads and unpaved dirt roads exist, some of whichaccess the park boundary. Unpaved road use is primarilyresidential and truck traffic going to a natural gas depot FromI-40 to the Adamana gas plant which borders the park.Mining activityNo mines are in operation within the Park.An aggregate mine is in operation approximately 15kmsouthwest of the Park.Agriculture activityNo agricultural activities are reported within the Park.Some agricultural activities (general farming) are reportedwithin 50km south of the Park boundaries and hay farmingactivities within 50km northwest of the Park.Grazing activityThere is grazing of native animals only within the Park.Livestock grazing occurs near the Park. Historic grazingpractices may have impacted coverage and increased soilloss from wind erosion in certain locations.Wind generated emissionsSome localized areas of naturally occurring open (lowvegetation density and low precipitation), disturbed land,and dry riverbeds may result in fugitive dust. Windgenerated dust is reported tobe the most common typeobserved in the area and is most common in spring.Some localized areas of naturally occurring open (lowvegetation density and low precipitation) or disturbed landmay result in fugitive dust. Wind generated dust is reportedto be the most common type observed in the area and is mostcommon in spring.Off-highway vehicles (OHV)OHV activity is not allowed. Recreational or OHV activity is reported near the Park,although it is unrestricted, and the extent of the activity is notknown.Logging activityNo activity reported. No activity reported.Construction activityNo activity reported. Some population growth and development is occurring in thearea.Other area dust sourcesThere are approximately 10 miles of trails that are used onlyfor hiking.No activity reported.2Appendix A-13b. Table 3: Summary of Reported InformationRegarding Dust Emissions: Petrified Forest National ParkSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)Residential wood burningThere appears to be some residential word-burning stoves.There appears to be some residential word-burning stoves.Prescribed burning andWildfiresVegetation in the park is shrub and grassland, with few trees.No prescribed fires are currently conducted in or within 50km of the Park. Wildfires are not common in the area.No prescribed fires are currently conducted in or within 50km of the Park. Wildfires are not common in the area.Point sourcesNo activity reported.Coal fired utility power plants are located 35 km west of thePark and 52 km southeast of the Park.1Appendix A-13d. Table 4: Summary of Reported Information Regarding Dust Emissions: Sycamore Canyon Wilderness AreaSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)Paved and unpavedroadsThere are no paved roads or unpaved roads within the wildernessarea.Paved roads exist near the wilderness area and are reportedto be increasing in number.The number of unpaved roads is reported to be stable ordeclining in number, although use of existing roads isincreasing.Mining activityNo activity reported. There are currently no mines in operation. Inactive miningfacilities have the potential to cause an impact if theyreopen.Agriculture activityNo activity reported.Some agricultural activity occurs in the Verde Valley/CampVerde areas, south/southwest of the Wilderness area.Grazing activityThere is some grazing of domestic animals, however wildlife arereported to be the most common grazers in the wilderness.There is very little grazing and occurs primarily on theMogollon Rim and Colorado plateau areas.Wind generatedemissionsNo activity reported. Winds in the area show a diurnal pattern. Prevailing windsare generally from the south/southwest and may be gustyduring the day, with lighter down-canyon winds at night.Wind generated dust is reported to be the most commontype of localized source of observed dust and is mostprevalent in April-July timeframe, and with front-drivenweather events in the fall. Areas of bare soil at the mouth ofSycamore Canyon and in the Sedona area are sheltered andare not considered to be frequent emission sources.Off-highway vehicles(OHV)No activity reported.OHV use is observed to be increasing but is seasonal(fall/winter/spring). This activityappears to be concentratedto the east of the Wilderness area and any emissions aregenerally transported away from the area on prevailingwesterly winds.Logging activityNo activity reported. Historically, logging activity (dust emissions from logging2Appendix A-13d. Table 4: Summary of Reported Information Regarding Dust Emissions: Sycamore Canyon Wilderness AreaSource CategoryActivities Within the Class I AreaActivities Near the Class I Area (within 50 km)trucks) has occurred primarily east of the wilderness. Nocurrent activity is reported.Construction activityNo activity reported. Growth and development is occurring in theCottonwood/Verde Valley and Prescott Valley areas to thesouth and southwest of the Wilderness Area.Other area dustsourcesRecreational use has increased within the Wilderness, such ashiking, backpacking, and some horseback riding.No activity reported.Residential woodburningNo activity reported.Some residential wood-burning activity occurs.Prescribed burningand WildfiresThere have been no prescribedburns reported within thewilderness area.. Occasional wildfires are reported withnoticeable smoke emissions.Occasional wildfires are reported with noticeable smokeemissions. Prescribed fire adjacent to the wilderness isplanned and occurs in the fall through late spring.Point sourcesNo sources reported. A cement facilityis located to the southwest nearPerkinsville and is permitted to operate.OtherNo activity reported.There is agricultural burningin the Verde Valley/CampVerde areas (south/southwest of the Wilderness Area).Appendix A-14 – Projection of Visibility Arizona Regional Haze SIP 

## APPENDIX A-14. PROJECTION OF VISIBILITY

This appendix contains work products a nd references relied u pon by Arizona in the development of Chapter 14 of the Regional Haze SIP.

### December 2, 2002

Ms. Alice Edwards Air Non-Point & Mobile Sources Program Alaska Department of Environmental Conservation 410 Willoughby Avenue, Suite 303 Juneau, AK 99801-1795

Mr. Dennis Schwehr Strategic Issues Management Group Inc. P.O. Box 2166 Thompson Falls, MT 59873

Mr. Bobby Ramirez Salt River Pima-Maricopa Indian Community 10005 E. Osborn Road Scottsdale, AZ 85256

Dear Ms. Edwards, Mr. Schwehr, and Mr. Ramirez:

The Arizona Regional Haze Emissions Inventory Workgroup (EIWG) would like to provide the WRAP Emissions Forum with the results of our review of the 1996 WRAP Emissions Inventory. While the EIWG understands that it is not possible to change WRAP's 1996 emissions inventory, we are requesting that the WRAP Emissions Forum consider the recommendations.

The enclosed report, “Review of 1996 WRAP Emissions Inventory For Use in Arizona's Regional Haze State Implementation Plan," summarizes EIWG's review and recommendations to enhance the inventories for certain emission source categories. An overview of this report will be presented by me at ADEQ's December 5, 2002, Regional Haze public workshop. The EIWG also requests that issues in the Report related to fire and dust emissions inventories be referred to the appropriate WRAP Forums.

### – 2 –

We appreciate the WRAP’s hard work and diligence in developing an initial comprehensive emissions inventory for the western states. ADEQ and its stakeholders are committed to working with the Emissions Forum in its future work. For additional information on this report, please contact Randy Sedlacek, ADEQ, at 602-771-2352 or rfs@ev.state.az.us

.

Sincerely,

Steven E. Peplau EIWG Chair, Maricopa County Air Quality Division Manager

encl: 1

cc: Tom Moore, WRAP Lee Gribovicz, Wyoming DEQ

## Review of 1996 WRAP Emissions Inventory For Use in Arizona **'** s Regional Haze State Implementation Plan

Emissions Inventory Workgroup

November 25, 2002

### ii 

## EXECUTIVE SUMMARY

The Emissions Inventory Work Group (EIWG) reviewed the 1996 Western Regional Air Partnership's (WRAP) Emissions Inventory (E I) for use in Arizona's Regional Haze SIPs submitted after Year 2003. The majority of the review was based on comparisons between the WRAP EI and local emissions inventories developed by Maricopa County, Maricopa Association of Governments, Pima County, Pima Association of Governments, and Pinal County. Following is a summary of the EIWG's review and recommendations to ADEQ for working with WRAP to enhance WRAP emission source categories:

1. Onroad Emissions - The vehicle miles traveled (VMT) data in the 1996 WRAP EI were larger than the VMT data in local emissions inventories and did not match the seasonal allocation of VMT. The EIWG suggests that local VMT data be used for developing the mobile onroad emissions for Arizona Regional Haze SIPs submitted after Year 2003, with parti cular attention to allocating VMT by season, because Arizona does not follow the national pattern for maximum VMT occurring during the summer season.

2. Nonroad Emissions - Generally, the nonroad emissions data in the 1996 WRAP EI were higher than the nonroad em issions data in local emissions inventories. Since the temporal pattern of nonroad equipment activity in Arizona can be quite different from the national average, the EIWG recommends that local Arizona nonroad emissions data be used in the Arizona Regional Haze SIPs submitted after Year 2003.

3

. Point Sources - Emissions data for point sour ces, greater than 100 tons per year, in the 1996 WRAP EI were larger than the emissions data for Maricopa County, and much larger than the point source emissions data in Pima County and Pinal County emissions inventories (e.g ., as much as an order of magnitude for PM10 emissions from point sources in Pima County). In July 2002, both Maricopa and Pima Counties submitted corre cted point source emissions data to WRAP's contractor. The EIWG recommends that emissions data from the state, local governments, and tribal entities be used instead of national surrogates for Arizona Regional Haze SIPs submitted after Year 2003. The EIWG also recommends that a decision be made whet her fugitive dust emissions should be included as part of the point source inv entory for Arizona Regional Haze SIPs submitted after Year 2003.

### iii 4. Area Sources - Emissions data for area sources in the 1996 WRAP EI were in relatively good agreement with the emissi ons data in Maricopa County (except for certain subcategories such as NOx fr om stationary source fuel combustion, which were grossly overestimated), but were not in good agreement with the emissions data for area sources in Pima County. The EIWG suggests that area source emissions in the WRAP EI be reviewed for accuracy before these data are used in Arizona Regional Haze SIPs submitted after Year 2003.

5. Forest Fires - The WRAP EI and the Arizona Smoke Management Program may use different emission factors (but use the same activity data) to estimate emissions from forest fires. The EIWG suggests that forest fire emissions from the WRAP EI be compared to the Ar izona Smoke Management Program's and for WRAP to lobby USEPA to use the most current emission factors for estimating emissions from forest fires (currently WRAP is using AP-42 emission factors).

6. Agricultural / Rangeland Burning - Emissions data on agricultural / rangeland burning are planned to be included in the WRAP’s Year 2018 Fire EI. The EIWG suggests that the WRAP’s emissions estimates for this category be used, since little data are collected on agricultural / rangeland burning in Arizona. In the future, a statewide tracking system for the location, size, fuel type, fuel loading, and time of burning would greatly benefit the understanding of the contribution of this emission source to regional haze.

7. Biogenics - The WRAP biogenic emission estimates for Maricopa County are much smaller than those calculated by t he Maricopa Association of Governments (MAG) estimates. The EIWG plans to investigate this discrepancy further after receiving biogenic emissions data grouped by counties from the WRAP Modeling Center at the University of California - Riverside.

8

. Wind Erosion - This emission category is scheduled to be added to the WRAP EI after completion of a WRAP research contract. Estimating emissions from wind erosion entails accounting for a number of factors including local variations in soil type, wind patterns, precipit ation patterns, vegetation growth, and topography. Due to the inherent comp lexity of developing wind erosion estimates for a region as large as Ar izona, the EIWG suggests that the wind erosion data produced by the WRAP’s cont ractor be used in Arizona Regional Haze SIPs submitted after Year 2003.

### iv TABLE OF CONTENTS

BACKGRO UND............................................................................................................... 1 Federal M andate .................................................................................................. 1 History - ADEQ ..................................................................................................... 1 Role of Emissions In ventory Wo rkgroup............................................................... 3 WRAP Emissions Inventory.................................................................................. 3

DISCUSS ION.................................................................................................................. 3 Mobile S ources ..................................................................................................... 3 Onroad Emissions - Maricopa C ounty ....................................................... 3 Onroad Emissions - Pima C ounty.............................................................. 4 Nonroad Emissions - Maricopa C ounty...................................................... 5 Nonroad Emissions - Pima C ounty ............................................................ 5 Point Sour ces ....................................................................................................... 5 Maricopa C ounty........................................................................................ 5 Pinal C ounty .............................................................................................. 6 Pima C ounty .............................................................................................. 7 Area Sour ces........................................................................................................ 8 Maricopa C ounty........................................................................................ 8 Pima C ounty .............................................................................................. 9 Forest Fi re .......................................................................................................... 10 Agricultural / R angeland Burnin g........................................................................ 10 Biogenics ............................................................................................................ 10 Maricopa C ounty...................................................................................... 10 Pima Count y ............................................................................................ 10 Ammonia ............................................................................................................ 11 Power Plant s ...................................................................................................... 11 Wind Erosio n ...................................................................................................... 11

CONCLUSION S............................................................................................................ 12 Onroad Emi ssions .............................................................................................. 12 Nonroad Emi ssions ............................................................................................ 12 Point Sour ces ..................................................................................................... 12 Area Source s...................................................................................................... 13 Forest Fi res ........................................................................................................ 13 Agricultural / R angeland Burnin g........................................................................ 13 Biogenics ............................................................................................................ 13 Ammonia ............................................................................................................ 13 Power Plant s ...................................................................................................... 13 Wind Erosio n ...................................................................................................... 13

### v TABLE OF CONTENTS - CONTINUED

REFERENCE S.............................................................................................................. 14

APPENDIX .................................................................................................................... 15 Maricopa County Onroad Mobile Source Data (MAG)........................................ 15 Pima County Onroad Mobile Source Data (MAG) .............................................. 16 Improving the Estimation of Emissions from Agricultur al Burnin g....................... 16

LIST OF FIGURES

Figure 1 - Arizona Class I Ar eas ..................................................................................... 2

LIST OF TABLES

Table 1 - Maricopa County V ehicle Miles Travel ed ........................................................ 4 Table 2 - Pima County V ehicle Miles Travel ed ............................................................... 4 Table 3 - Pima County Onroad Emissions (tons per day) ............................................... 4 Table 4 - Maricopa County Nonroad Emissions (tons per day) ....................................... 5 Table 5 - Pima County Nonroad Emissions (tons per day).............................................. 5 Table 6 - Comparison of Maricopa Count y and WRAP Point Sour ce Emissions ............ 6 Table 7 - Comparison of Pinal County and WRAP Point Source Emissions ................... 6 Table 8 - Comparison of Pima County and WRAP Point Source Emissions .................. 7 Table 9 - 1996 Pima County Point S ources (> 100 tons per year) .................................. 7 Table 10 - Comparison of Maricopa Count y and WRAP Area Source Emissions .......... 9 Table 11 - Comparison of Pima Count y and WRAP Area Source Emissi ons ................. 9

### vi ACRONYMS AND ABBREVIATIONS

ADEQ Arizona Department of Environmental Quality

ATR Automated Traffic Recorders
CO Carbon Monoxide EI Emissions Inventory EIWG Emissions Inventory Work Group
EPA United States Environm ental Protection Agency GCVTC Grand Canyon Visibility Transport Commission GIS Geographic Information System HPMS Highway Performance Monitoring System MAG Maricopa Association of Governments MCESD Maricopa County Environmental Services Division NEI National Emissions Inventory

NH3 Ammonia NOx Nitrogen Oxides
PAG Pima Association of Governments PM10 Particulate Matter Less Than Or Equal To 10 Microns PM2.5 Particulate Matter Less Than or Equal to 2.5 Microns SIP State Implementation Plan
SO2 Sulfur Dioxide
U.S. United States
USEPA United States Envir onmental Protection Agency

VMT Vehicle Miles Traveled VOC Volatile Organic Compounds WRAP Western Regional Air Partnership

### 1 BACKGROUND

Federal Mandate As part of the Clean Air Ac t Amendments in 1977, Congress set a national goal of remedying existing visibility impairment, and pr eventing future impairment, from manmade pollution at the 156 national parks and wilderness areas across the United States (see Figure 1 for map of Arizona Class I Areas). Section 169 A was added to the Clean Air Act to address visibility impairment from existing stationary s ources operating in and near national parks or wilderness areas. In this ca se, the visibility impairment could be found directly associated with or caus ed by the stationary source (i.e ., reasonably attributable). Section 169B was added to address visibility im pairment due to regional haze. Regional haze is defined as, "visibility im pairment that is caused by t he emission of air pollutants from numerous sources locat ed over a wide geographic area. Such sources include, but are not limited to, major and minor stationary s ources, mobile sources, and area sources." (40 CFR § 51.301). The Regional Haze Rule, adopted July 1, 1999, requires states to develop programs to assure reasonable progress toward meeting the national visibility goal. The way in which states develop and implem ent programs to address air pollution is through a state implementation plan (SIP) [1].

History - ADEQ The state of Arizona has been actively involv ed in visibility and regional haze issues, beginning with the Grand Canyon Visibility Tr ansport Commission (GCVTC) and continuing with the Western Regional Air Partnership (WRAP), the successor organization to the GCVTC. Each Arizona work group has a desi gnated person to monitor the WRAP process and report items of interest and concern to the relevant group. The WRAP forums are expected to produce many work products that will be available for Arizona’s consideration as it develops its Regional Haze SIP.

Beginning in August 2001, ADEQ launched Phase 1 of a stakeholder pr ocess to determine which schedule to follow in its development of a Regional Haze SIP. The federal Regional Haze Rule provides two choices for states and Indian tribes in the nine state GCVTC region. States submitting SIPs in 2003 will be implementing GCVTC recommendations per 40 CFR § 51.309 (“309 SIP”). States submitti ng SIPs in the 2004-2008 time frame will be focusing on a broader range of sources and programs, per 40 CFR § 51.308 (“308 SIP”).

The stakeholder process that began in A ugust 2001 ended in early November 2001 with a consensus that ADEQ pursue the option to submit a SIP by De cember 31, 2003, in accordance with 40 CFR § 51.309. The stakehol ders further agreed that the SIP should include the eight Arizona mandator y Federal Class I areas outside of the GCVTC region in addition to the four GCVTC region Class I areas [1].

### 2

### 3 Role of Emissions Inventory Workgroup The Emissions Inventory Work Group is respons ible for the review and recommendation of emission baseline and projections used in the SIP analysis. Specific responsibility areas include:

• Develop and review emission inventory work products, as needed.

• Review WRAP emission inventories/projections.

• Consult with long-term strategy work gr oups to identify data gaps, and review projections of the effect of long-term strategies on emissions.

• Develop updates for emission inventories/pr ojections to be forwarded to the WRAP Regional Modeling Center [1].

WRAP Emissions Inventory The 1996 WRAP emissions inventory (EI) incl udes four separate inventories for point sources, mobile sources, area sources, and fire by county for the thirteen states that are WRAP members. ADEQ and some counties in Arizona supplied point source emission estimates to the WRAP point source EI. T he mobile source emissions were compiled by the WRAP Mobile Sources Forum us ing EPA’s MOBILE6 and NONROAD emissions models for onroad and offroad sources. Arizona area source emissions in the WRAP EI were based on estimates from the 1996 National Emissions Inventory and did not include geogenic wind blown dust from undisturbed natural soils. Fire emissions were compiled by the WRAP Fire Emissions Joint Forum [2].

DISCUSSION The Emissions Inventory Workgroup (EIWG) has met four times: June 19, 2002; July 17, 2002; August 14, 2002, and Septem ber 16, 2002. During these meetings, EIWG members reviewed the Arizona portion of the WRAP EI, discussed the methodology used to develop the WRAP EI and how to utilize the WRAP EI in Arizona Regional Haze SIPs submitted after Year 2003 (e.g., 309G / 308 SIPs), and suggested enhancements to the WRAP EI for making Year 2018 forecasts. The following sections summarize the EIWG members’ review of the methodology and emissions dat a for the 1996 WRAP EI source categories.

Mobile Sources Onroad Emissions - Maricopa County Based on very limited model-compatible data, the WRAP EI’s onroad CO emission rates for 1996 are comparable to MAG estimates for 1994 (Table 1). The WRAP EI does overstate 1996 Maricopa County VMT by about 8% in the winter (CO), 13% on an average annual day (PM-10), and 25% in the summer (VOC, NOx). In addition, WRAP summer season VMT in 1996 (from onroad spreadsheet) is 13% higher than winter VMT. This is opposite to MAG’s VMT data that shows higher VMT in the winter than in the summer.

### 4 Table 1 – Maricopa Count y Vehicle Miles Traveled 1996 WRAP Onroad Inventory 71,538,442 mi/day 1996 MCESD Onroad Inventory 51,329,514 mi/day Difference 20,208,928 mi/day % Difference -28.2%

Both emissions inventories did use the MO BILE6 emissions model. The higher WRAP VMT estimates in the summer woul d explain some, but not all, of the higher VOC and NOx emissions listed for Maricopa County in the WRAP EI.

Onroad Emissions - Pima County For Pima County, the local VMT value used fo r the Pima Association of Government’s (PAG) 2003 Transportation Improv ement Program (TIP) is 10. 93% lower than the Year 2003 VMT (average over 4 seasons) used for the WRAP EI. It is also important to note that the Year 2003 VMT used for the TIP only applies to eastern Pima County, which is the transportation planning area. The results are displayed in Table 2.

Table 2 – Pima County Vehicle Miles Traveled 2003 WRAP Onroad Inventory 21,760,515 mi/day 2003 TIP 19,382,125 mi/day Difference 2,378,390 mi/day % Difference -10.93%

The WRAP average annual daily VMT for Pima County (1996) is 19.4% higher than the Highway Performance Monitoring System (HPMS) average annual daily VMT for Pima County (1996). A discrepancy also exists with t he seasonal VMT allocation in the WRAP EI for Pima County. The highest VMT for t he WRAP Onroad EI was applied to the summer season. However, the summer season in Pima County typically yields the lowest VMT, with the spring season having the highest VMT. Table 3 lists the onroad emissions in the WRAP EI and the PAG EI.

Table 3 – Pima County Onroad Emissions (tons per day) VOC NOx CO 2003 WRAP EI 57.8 53.6 517.7 2003 PAG Onroad Mobile 37.3 55.9 370.7 % Difference -35.5% +4.3% -28.4%

### 5 Nonroad Emissions - Maricopa County 1996 Maricopa County periodic inventories ar e lower than the WRAP EI for VOC (-43%) and NOx (-84%), and slightly hi gher (+21%), for CO (Table 4). Note that the periodic inventories were developed for a smaller CO/Ozone Nonattainment Area of about 2,000 square miles versus Maricopa County, which is 9,200 square miles in area, which was used for the WRAP EI. The EPA NONROAD model used by WRAP is known to overstate nonroad activity levels. It is understood that a new and improved NONROAD model will be used by WRAP in the future. This should reduce some, if not all, of the disparity between WRAP’s and Maricopa County's estimates of VOC and NOx emissions.

Table 4 – Maricopa County Nonroad Emissions (tons per day) VOC NOx CO (winter) PM10 1996 WRAP EI 115.4 196.7 375.1 13.8 1996 MCESD EI 66.3 32.0 452.4 NA %Difference -42.5% -83.7% +20.6% NA

Nonroad Emissions - Pima County PAG developed a nonroad mobile source invent ory for the Year 2000. The PAG EI nonroad mobile emission estimates were co mpared with the Year 1996 nonroad mobile emissions estimates (tons/day) for t he WRAP EI and are listed in Table 5.

Table 5 – Pima County Nonroad Emissions (tons per day) VOC NOx CO PM10 PM2.5 SO2 1996 WRAP EI 19.30 35.30 220.89 3.82 3.57 6.74

2000 PAG EI 16.53 20.75 198.90 2.56 2.35 4.90 %Difference -14.4% -41.2% -10.0% -33.0% -34.2% -27.3%

Note that the area included in the PAG nonroad EI was the Tucson Air Planning Area (TAPA), which includes the bulk of the populat ion within eastern Pima County (~96.5%), while the estimate for the WRAP EI includes all of Pima County.

Point Sources Maricopa County The accuracy of the data on large point sources (>100 TPY) in the revised WRAP EI appears to be in generally good agreement wit h Maricopa County’s EI (Maricopa County submitted updated point source emissi ons data to WRAP contractors to revise the WRAP EI). Table 6 compares Maricopa County’s emissions with the emissions in the original WRAP EI. The emissions data that Maricopa County submitted to WRAP

### 6 in 2001 contained all point sources included in the 1999 periodic emissions inventory for Maricopa County, with some sources having annual emissions as small as ten tons per year. Since the WRAP point source data onl y includes those sources greater than 100 tons per year, Maricopa County submitted a re vised set of point source data to WRAP contractors in July 2002.

Table 6 – Comparison of Maricopa County and Original WRAP Point Source Emissions (tons per year)

VOC NO X CO WRAP Maricopa County 1996 EI Base Case 5,866 3,319 736

Maricopa County 1996 EI 1,489 2,536 266 % Difference between local and original WRAP/NEI data -75% -24% -64% Difference between local and original WRAP/NEI data in Tons -4,377 -783 -469



### Pinal County There appear to be large discrepancies betw een the WRAP EI and Pinal County’s data on point source emissions. Tables 7 lists the results of comparing the Pinal County’s point source emissions with the WRAP EI.

Table 7 – Comparison of Pinal County and Original WRAP Point Source Emissions (tons per year)

VOC NO X CO SO2 PM10 PM2.5 NH3
WRAP Pinal County 1996 EI Base Case 144 2,076 483 27,974 2,531 990 2

Pinal County 1996 EI 188 1,059 254 16,678 3,252 267 0.00

% Differences (Increases from using WRAP/NEI data) -23.4 +96 +90.2 +67.7 -22.2 +270.7 Na

Differences (Increases from using WRAP/NEI data) in Tons -44 +1,017 +229 +11,296 -721 +723 +2

Grand Total [Differences (Increases from using WRAP/NEI data) in tons]: +10,552

### 7 Pima County There also appear to be large discrepancies between the original WRAP EI and Pima County’s data on point source emissions. T able 8 lists the results of comparing the Pima County’s point source emissions with t he original WRAP EI. In July 2002, Pima County also submitted corrected point source emissions data to WRAP contractors and the mentioned discrepancies in Pima County’ s point source emissions should have been corrected in the revised WRAP EI.

Table 8 – Comparison of 1995 Pima County and 1996 Original WRAP Point Source Emissions (tons per year)

VOC NO X CO SO2 PM10 PM2.5 NH3 WRAP Pima County 1996 EI Base Case 358 9,312 4,827 8,338 11,236 6,308 4

Pima County 1995 EI 56 7,142 5,520 2,787 1,167 (5,116)* NA NA

% Differences (Increases from using WRAP/NEI data) +539 +30.4 -12.5 +199 +862 (+119)* NA NA

Differences (Increases from using WRAP/NEI data) in Tons +302 +2170 -693 +5551 +10,069 (+6,120)* +6,308 +4

Grand Total [Differences (Increases from using WRAP/NEI data) in Tons]: +13,995; (+10,046)* * Totals with Fugitives



### Five facilities in Pima County were identified as PM 10 

### point sources that emitted more than 100 tons per year in 1996 based on Pima County and ADEQ permitted source records. These facilities and their associated PM 10 

### emissions are listed in Table 9.

Table 9 – 1996 Pima County Point Sources (> 100 tons per year) Permitted By Facility Name PM 10 

### Total With Fugitives PM 10 

### Total Without Fugitives ADEQ Cypress Sierrita (now known as Phelps Dodge Sierrita) 2,633 tons 185 tons

ADEQ Arizona Portland Cement 1,585 tons 84 tons ADEQ Tucson Electric Power 121 tons 121 tons PDEQ ASARCO Unknown 650 tons PDEQ Silver Bell Mining L.L.C. Unknown 127 tons Total 4,339 1,167

### 8 As shown in Table 9, fugitive PM 10 

### emissions can make a significant difference in the PM 10 

### emission totals, especially with respect to sour ces such as mines. Thus, a determination needs to be made whether or not fugitive dust em issions should be included as part of the point source inventory that will be used in Arizona Regional Haze SIPs submitted after Year 2003. If it is determined that fugitive dust emissions should be included in the point source inventory, then this needs to be applied cons istently among all of Arizona counties’ emissions inventories.

In order to ensure more accurate point and area source emission inventory reporting for future WRAP EI’s, the EIWG recommends that WRAP rely more on state/local/tribal entities for emissions data wherever possibl e, rather than using national surrogates. For example, there was little or no co mmunication between WRAP’s contractor and Pinal and Pima counties during the building of the 1996 WRAP EI base case. This resulted in some discrepancies in the emissi ons for these counties that could have been corrected with input from the counties.

Area Sources The EIWG reviewed the WRAP EI at the county level, and se lected several subcategories for comparison with locally developed emissions estimates.

Maricopa County Four emissions subcategories, that had t he potential for large discrepancies between WRAP and Maricopa County values, were investigated further:

• PM10: WRAP data for PM10 fr om industrial processes agree well with local 1995 estimates.

• VOC: WRAP estimates of VOC emissions from solvent use appear to be reasonably close to local numbers.

• NOx: WRAP emission values for NOx from stationary source fuel combustion are grossly overestimated for Maricopa County and presumably statewide.

• CO: WRAP data on emissions from waste di sposal, treatment and recovery show nearly 9,000 tons of CO emissions from re sidential incineration in Maricopa County. However, there should be nearly no emissions from this source category because residential incineration is rare in Maricopa County.

### 9 Table 10 compares WRAP estimates of area s ource emissions in Maricopa County with values from the County's 1995 Periodic Emission Inventory.

Table 10 – Comparison of 1995 Maricopa County and 1996 WRAP Area Source Emissions (tons per year)

VOC NO X CO WRAP Maricopa County
1996 EI Base Case 64,712 36,797 22,470

Maricopa County 1995 EI 39,550 4,589 1,678

% Difference (Increases from using WRAP/NEI data) -39% -88% -93%

Difference (Increases fr om using WRAP/NEI data) in Tons -25,162 -32,207 -20,792



### Pima County Area source emission totals in the Pima C ounty portion of the WRAP EI were compared with Pima County’s emissions data. The difference in the seven emission categories ranged from a negative 24% to a plus 107%. Table 11 lists the total emissions and differences for area sources in Pima County.

Table 11 – Comparison of 1995 Pima County and 1996 WRAP Area Source Emissions (tons per year)

VOC NO X CO SO2 PM10 PM2.5 NH3 WRAP Pima County 1996 EI Base Case 19,627 4,185 8,435 400 7,294 2,697 1,503

Pima County 1996 EI 9,443 7,822 11,106 2,213 5,786 NA NA

% Differences (Increases from using WRAP/NEI data) +107 -46.5 -24.1 -81.3 +26 NA NA

Differences (Increases from using WRAP/NEI data) in Tons +10,184 --3637 -2671 -1813 +1,508 +2,697 +1,503

Grand Total (Difference / Increases from using WRAP/NEI data in tons): +12,029

### 10 Forest Fire The Arizona Smoke Management Program, conduct ed by the U.S. Forest Service in conjunction with ADEQ, makes daily decisi ons on which prescribed fires should be approved based on weather conditions, fuel loading, location of fires, size of fires, and other fires in an air basin. The Arizona Smoke Managem ent Program also tracks wildfire activity in Arizona. Annually, there are approximately 100 days when prescribed burning can take place in Arizona. The decision to approve a prescribed burn must balance both the need to promote forest health and the negative effects of fire on air quality. In the future, the number of prescribed fires will likely increase, while the number of wildfires will probably remain constant. The WRAP EI uses the activity data collected by the Arizona Smoke Management Program. The WRAP EI may use different emission fa ctors than the ones use by Arizona Smoke Management Program; therefore, the EIWG suggests that forest fire emissions from the WRAP EI be compared to the Ar izona Smoke Management Program’s and for WRAP to lobby USEPA to us e the most current emission factors for estimating emissions from forest fires (WRAP is currently using AP-42 emission factors).

Agricultural / Rangeland Burning Agricultural burning was not included in the 1996 WRAP Fire EI, but it is planned to be included in the 2018 Fire Emissions Inventory. Currently, there are little specific data collected on agricultural / rangeland burning by WRAP, by counties, or the state of Arizona. (See appendix for overview of recommendations for improving collection of activity data for agricultural burning emissions).

Biogenics Maricopa County A comparison of the WRAP es timates of biogenic VOC and NOx emissions with those developed as part of the Maricopa County ozone nonattainment area inventory for 1996 shows that WRAP EI estimates are much smaller (30 to 70 ti mes) than the county-derived estimates. The WRAP modeling center in Riverside, California has been requested to prepare biogenic emissions, by county in Arizona, to facilitate further in vestigation of these large discrepancies.

Pima County In 1998, PAG contracted with the University of Arizona to develop a biogenic emissions inventory for roughly the eastern half of Pima County. This in ventory indicated that 50% of the total VOCs for this study area are emitt ed by biogenic sources. In contrast, for the Tucson metropolitan study area (developed urban and suburban area without surrounding elevated regions), 6% of the total VOCs are emitted by bi ogenic sources. Pima County biogenic emissions will be compared to the WRAP’s biogenic emissions when these data are received from the WRAP Modeling Center.

### 11 Ammonia The ammonia emission factors us ed for the WRAP EI are lower than those used to develop the 1994 Maricopa County PM10 inventory. Only livestock emissions could be compared, since Maricopa County did not calculate ammoni a emissions from crops. The difference in the two sets of livestock emissions is proportional to the difference in emission factors, thus the activity numbers used in the WRAP EI and the 1994 Maricopa County PM10 Inventory are in good agreement.

Power Plants The EIWG assumed that power plant emissions in the WRAP EI would be fairly accurate because these data are based on the acid rain reports submitted to U.S. agencies.

Wind Erosion Emissions from wind erosion were not in cluded in the 1996 WRAP EI. However, WRAP recently submitted a Request for Proposal for a contractor to add this emissions category to the WRAP EI.

### 12 CONCLUSIONS The WRAP is to be commended for developing a comprehensive emissions inventory for the western states. The Ariz ona portion of the WRAP EI will be an integral part of Arizona Regional Haze SIPs submitted after Year 2003. Following are the EIWG’s review and recommendations for enhancing certain emission source categories in the WRAP EI for use in Arizona Regional Haze SIPs submitted after Year 2003.

Onroad Emissions WRAP’s VMT in Maricopa County overstates Maricopa County‘s VMT with the discrepancy being largest for the summer season (e.g., 8% more in winter and 25% more in summer). Pima County’s VMT may be also overstated (11%), and as wit h Maricopa County’s VMT, the WRAP seasonal allocation does not agree with Pima County’s data. The EIWG suggests that local VMT dat a be used for developing the m obile onroad emissions for Arizona Regional Haze SIPs submitted afte r Year 2003 with particular attention to allocating VMT by season, because Arizona does not follow the national pattern for high VMT occurring during the summer season.

Nonroad Emissions The WRAP used an updated NONROAD model fo r developing their nonroad emissions. However, a new NONROAD model, to be releas ed soon by EPA, shows significantly lower nonroad activity levels. The technical s upport document being dev eloped by ENVIRON will shed more light on the differences in assu mptions and models that produced the WRAP EI estimates. However, since the temporal pa ttern of nonroad equipment activity in Arizona can be quite different from the national aver age, the EIWG recommends that local Arizona nonroad emissions data be used in the Arizona Regional Haze SIPs submitted after Year 2003.

Point Sources Emissions data for point sources, greater than 100 tons per year, in the 1996 WRAP EI were larger than the emissions data for Mari copa County, and much la rger than the point source emissions data in Pima County and Pi nal County emissions inventories (e.g., as much as an order of magnitude fo r PM10 emissions from point sources in Pima County). In July 2002, both Maricopa and Pima Counties s ubmitted corrected point source emissions data to WRAP's contractor.

In order to ensure more accurate point and area source emission inventory reporting for future WRAP EIs, the EIWG suggests that emissions data from the state, local governments, and tribal entit ies be used, instead of nati onal surrogates, for Arizona Regional Haze SIPs submitted after Year 2003. The EIWG also recommends that a decision be made whether fugitive dust emissions should be included as part of the point source inventory for Arizona Regional Haze SIPs submitted after Year 2003.

### 13 Area Sources WRAP data for PM10 emissions from industrial processes and VOC emissions from solvent use agree well with Maricopa County data. Ho wever, WRAP emission values for NOx from stationary source fuel com bustion are grossly overestimated for Maricopa County and presumably statewide. WRAP dat a on area source emissions for Pima County were not in good agreement with Pima County’ s EI data. The EIWG s uggests that area source emissions in the WRAP EI be reviewed for a ccuracy before these data are used in Arizona Regional Haze SIPs submitted after Year 2003.

Forest Fires The WRAP EI and Arizona Smoke Management Progr am may use different emission factors (but same activity data) to estimate emissions from forest fires. T he EIWG suggests that forest fire emissions from the WRAP EI be compared to the Arizona Smoke Management Program’s and for WRAP to lobby USEPA to us e the most current emission factors for estimating emissions from forest fires.

Agricultural / Rangeland Burning Emissions data on agricultural / rangeland burning are planned to be included in the WRAP’s Year 2018 Fire EI. The EIWG suggests that the WRAP’ emissions estimates for this category be used, since t here are little data co llected on agricultural / rangeland burning in Arizona. In the future, a statewide tracki ng system for the location, size, fuel type and loading, and time of burning would greatly benef it the understanding of the contribution of this emission source to regional haze.

Biogenics The WRAP biogenic emission estimates for Ma ricopa County are much smaller than Maricopa County’s estimates. The EIWG plans to investigate this discrepancy further after receiving biogenic emissions data grouped by c ounties from the WRAP modeling center.

Ammonia Ammonia emissions from livestock in t he WRAP EI appear to be reasonable when compared to Maricopa County’s ammonia emissions data.

Power Plants The EIWG assumes that the power plant emi ssions in the WRAP EI are fairly accurate, because these data are based on the acid rain reports submitted to U.S. agencies.

Wind Erosion This emission category is scheduled to be added to the WRAP EI after completion of a WRAP research contract. Estimating emissions from wind erosion will entail taking into account local variations in so il type, wind patterns, precipitation patterns, vegetation growth, and topography. Due to the inherent complexity of developing wind erosion estimates for a region as large as Arizona, the EIWG suggests that the wind erosion data produced by WRAP’s contractor be used in Arizona Regional Haze SIPs submitted after Year 2003.

### 14 REFERENCES

1. ADEQ Website (Regional Haze): http:// www.adeq.state.az.us/envir on/air/plan/haze.html

2. WRAP Website (Emissions Forum): http://www.wrapair.org/forums/ef/index.html

3. Eastern Research Group Inc. (ERG) and Enviro-Tech Communications, technical paper, dated February 15, 2002: "Non-Burning Management Alternat ives on Agricultural Lands in the Western United States , Draft Final, Prepared for The Fire Emissions Joint Forum of the Western Regional Air Partnership."

### 15 APPENDIX

Maricopa County Onroad Mobile Source Data (MAG) The following data and assumptions were used in developing MAG’s onroad emission estimates:

• The 1996 average annual vehicle miles of travel (VMT) used by WRAP in developing onroad emissions is 13% higher than comparable 1996 MAG VMT estimates and 15% higher than the Highway Performance Monitoring System (HPMS).

• VMT from 1996 MAG traffic assignment = 58. 85 million/weekday in the transportation modeling area

• Factor to expand from MAG modeling area to Maricopa County = 1.11

• Maricopa County average weekday VM T = 58.85 x 1.11 = 65.32 million/day

• Factor to convert from average weekday to average annual day (including weekends) = .91

• 1996 Maricopa County average annual daily VMT = 65.32 x .91 = 59.44 million/day

• 1996 HPMS average annual daily VMT for Mari copa County reported to the Federal Highway Administration = 58.66 million/day

• 1996 WRAP average annual daily VMT (fro m ENVIRON onroad spreadsheet) for Maricopa County = 67.26 million/day

• Seasonal variations in VMT used by WRAP are not consistent with traffic counts in Maricopa County.

• WRAP summer season VMT in 1996 (from onroad spreadsheet) is 13% higher than winter VMT.

• The WRAP 1996 seasonal VMT estimates are 7. 5% higher than the automatic traffic recorder-based estimates in winter and 25.3% higher in summer.

• Automated traffic recorders (ATR) in Maric opa County indicate winte r season traffic is consistently higher than summer traffic.

• Based on ATR data, the 1996 VMT in the winte r was 59.04 million/day and in the summer was 57.08 million/day.

• The conclusions for Maricopa County onroad and nonroad emissions are derived from analyses of spreadsheets obtained from ENVIRON in July 2002.

### 16 Pima County Onroad Mobile Source Data (PAG) PAG calculated the Year 2003 onroad emissions fact ors using the MOBILE6 emissions model with the following inputs:

• Low altitude only

• Averaging summer and winter

• Average freeway speed = 44.8 mph

• Arterial speed = 35.4 mph

• Local speed = 12.9 mph

• The MOBILE6 emission factors we re then applied to the estimated VMT for each roadway type (provided by PAG-Transportation Planning Division).

Average Annual Daily VMT for Pima County

• 1996 HPMS average annual daily VMT for Pima County = 15.71 million/day

• 1996 WRAP average annual daily VMT for Pima C ounty = 18.75 million/day, an increase of +19.4% over the HPMS data.

Seasonal VMT Allocations - Tucson Permanent Traffic Count Recorders

• March daily VMT is generally 7% higher than average daily VMT

• July daily VMT is generally 5% less than average daily VMT

Improving the Estimation of Emissi ons from Agricultural Burning $ As stated in the draft report, N on-Burning Management Alternatives in Agricultural Lands in the Western U.S. [3]: “...obtaining agricultural bur ning data presented a significant challenge... Documented agricultural burning acti vity data exist for only a portion of the 15- state domain, although agricultu ral burning is known to occur in nearly every state". Accordingly, all 15 western states shoul d consider having mandatory organized smoke management programs that track agr icultural burning activities.

• Require all sources which obtain agricultural open burn permits to expand reporting parameters to include acres burned, duration of burn, exact location, (example: section/township/range) fuel loading specifications, and crop species to permitti ng agencies. This should be accomplished by amending current open burn permit regulati ons throughout the western region.

• Capture agricultural burn permit parametric in formation in a regional database with a common/ consistent computerized format that can be easily utilized by various governmental agencies.

• Display agricultural burning data utilizing a geographic information system (GIS). The goal is to illustrate the level of open burning in acres and to show, county by county, burning locations and type of residue burned.

• Every state, local and tribal entity should implement a single agricultural burning reporting standard for continuity and cons istency of parametric data.

### 17 • Periodic agricultural burn site visits (i.e., random checks) should be conducted by governmental personnel to verify the accuracy and completeness of burning information provided by sources.

• Resolve, or at least note differ ences, in permitted agricultural burn restrictions between counties or other localities. For example, Pima Count y and Maricopa County no lo nger allow the burning of agricultural fields as part of their count ies’ open burning programs, whereas Pinal County continues to allow burning of agricultural fiel ds. Pima County and Maricopa County do allow burning of ditch banks.

• Establish a statewide agricultura l burning program for tr acking agricultural burning for location, size, fuel type and loading, and time of burning. To take it a st ep further, this program could be used as a control measure by ma king daily approval / disapproval of agricultural burning similar to the Arizona Smoke Management Program for prescribed forest fires. Currently, ADEQ’s statewide open burn permits are issued in advanc e for one year and only have restrictions on the time of day and season to conduct the agricultural burning. No data are collected on size, fuel type and loading, and time of burning as part of ADEQ’s open burn permits.Steven E. Peplau Division Manager 1001 N. Central Ave. # 695 Phoenix, Arizona 85004 Phone: (602) 506-6701 Fax: (602) 506-6179 

# Maricopa County

Environmental Services A

ir Qualit y



### July 8, 2003

Ms. Alice Edwards Air Non-Point & Mobile Sources Program Alaska Department of Environmental Conservation 410 Willoughby Avenue, Suite 303 Juneau, AK 99801-1795

Mr. Dennis Schwehr Strategic Issues Management Group Inc. P.O. Box 2166 Thompson Falls, MT 59873

Mr. Bobby Ramirez Salt River Pima-Maricopa Indian Community 10005 E. Osborn Road Scottsdale, AZ 85256

Dear Ms. Edwards, Mr. Schwehr, and Mr. Ramirez:

The Arizona Regional Haze Emissions Inve ntory Work Group (EIWG) would like to provide the WRAP Emissions Forum with th e results of our revi ew of the WRAP’s projections for Year 2018. It is important to note that if the EIWG’s suggestions for improving the 1996 WRAP emissions inve ntory (December 2, 2002 letter from EIWG to WRAP) are not implemented befo re applying the growth factors for the Year 2018, then the Year 2018 WRAP emissi ons inventory will reflect the same errors noted in the Year 1996 WRAP emissions inventory.

Following are general observations and comments from the EIWG, and specific comments from two EIWG members, Maric opa Association of Governments (MAG) and Pima Association of Governments (PAG) regarding vehicle miles traveled (VMT) and population projections.


### General Observation of Long-Ra nge Econometric Projections

The Arizona Regional Haze Emission Invent ory Work Group examined the accuracy of earlier projections of population grow th used by the Grand Canyon Visibility Transport Commission that relied on the REMI model. The REMI modeling performed by the GCVTC subdivided the stat e into three economic sub-regions. The projections of the 2000 population were co mpared to the 2000 Census. Generally,

### 2 Steven E. Peplau Division Manager 1001 N. Central Ave. # 695 Phoenix, Arizona 85004 Phone: (602) 506-6701 Fax: (602) 506-6179 

### projected annual compound growth factors we re lower than the actual, with a 95% confidence interval of approximately 1% per year. A similar analysis against Arizona Department of Economic Security projections showed that uncertainties in prediction could be as high as 3%. Thus, it is reasonable to expect that differences in projections from different sources could be 10% per decade.

There are two major urban areas in Ariz ona. The following are observations from Maricopa Association of Governments (MAG) and Pima Association of Governments (PAG) regarding VMT and population projecti ons that could be used by WRAP to improve future projections.


### Review of WRAP 2018 VMT and Population Estimates for Maricopa County

The rate of growth (3.1% annually) in average annual VMT for Maricopa County between 1996 and 2018, used by the WRAP, is comparable to the VMT growth rate based on the ASU Center for Business Re search population projections (Middle series). However, for the summer season, th e rate of growth (3.5% annually) in the WRAP projections is much higher, re sulting in a 2018 VMT for Maricopa County that is about 10-11 % more than 2018 es timates using the latest ASU population projections. Since visibility impairment at the Class I areas on the Colorado Plateau tends to be highest during the summer, the over-estimation of summer VMT will overstate Maricopa County's contribution to regional haze on the 20 % worst days. This problem can be corrected in future WRAP modeling for the desert Southwest by reversing the seasonal factors so that they are lower in the summer and higher in the winter. Appropriate seasonal factors for ve hicle travel in Maricopa County can be obtained from the Maricopa Associati on of Governments (see enclosure for supporting documentation for calculations).

MAG’s population data as a whole falls with in 10% of the WRAP population data. It is useful to compare MAG’s own populati on projection done in 1993 that predicted a population of 2.95 million in the Year 2000. The actual population in the Year 2000 was 3.1 million, a 4.8% difference.


### Review of MAG Growth Factors for Agricultural Activity

MAG developed a set of emissions growth factors for agricultural activity projected from 1996 to 2018 and compared them with those used in WRAP. Please note that MAG’s comments can only be made based on the comparable pairs, since a direct comparison between MAG’s and WRAP’s pr ojections cannot be made because many

### 3 Steven E. Peplau Division Manager 1001 N. Central Ave. # 695 Phoenix, Arizona 85004 Phone: (602) 506-6701 Fax: (602) 506-6179 

### of the SCC codes either use different growth factor references or are not used in MAG's inventory.

The comparison reveals no significant discrepancies between the WRAP and MAG agricultural growth factors, except for the emissions from agricultural equipment. The surrogate used for agriculture equipment is the harvested area. The Arizona Agricultural Statistics showed that the harv ested area in Maricopa County decreased from 449,160 acres in 1980 to 236,000 acres in 1999. Based on that, the growth factor MAG derived for agricultural equi pment from 1996 to 2018 is 0.28. However, the growth factor for agricultural equi pment used in WRAP is 1.61, implying an increase in that source category.

As previously noted, the WRAP growth fact or for agricultural equipment is projected to increase in the WRAP modeling. Agricultural activity in Maricopa County is, in fact, decreasing. The EIWG recommends that the WRAP should examine the growth factors for agricultural activities, especially in urbanized counties, to ensure the projections are reasonable.



### Review of WRAP 2018 VMT and Population Estimates for Pima County

The Pima Association of Governments (PAG) developed draft population growth factors for Pima County based on Year 2000 Cens us data. These data are still in draft form and will be utilized for PAG’s Year 2030 Regional Transportation Plan planning process. The projections repres ent the traffic analysis zones comprising eastern Pima County and part of southeaste rn Pinal County. PAG’s projected growth factors were compared with the GCVTC IAS growth factors for population (e.g., 1990 compared to 2000, 2010, 2020 and 2030). It appears that the IAS Years 2000 and 2010 growth factors compare well w ith PAG’s, however the Years 2020 and 2030 factors used by PAG are higher than those used by the WRAP (e.g., Year 2020 = 1.956 vs. 1.757 and Year 2030 = 2.303 vs. 1.973). Year 2040 projections have not yet been developed by PAG.

With respect to VMT, it is difficult to co mpare locally developed data with WRAP data because the data have been develope d in different formats and for different years. However, it is probably safe to a ssume that the concerns of Maricopa County for VMT can be mirrored by Pima County. WRAP's numbers tend to overestimate locally-derived VMT numbers, particularly in the summer, which is the worst season for regional haze. For the Year 2003, the local VMT value used for the PAG 2003 Transportation Improvement Program (TIP ) is 11% lower than the 2003 VMT used for the WRAP EI. In a similar pattern to Maricopa County, the Tucson metropolitan

### 4 Steven E. Peplau Division Manager 1001 N. Central Ave. # 695 Phoenix, Arizona 85004 Phone: (602) 506-6701 Fax: (602) 506-6179 

### region records its lowest VMT in the su mmer and its highest VMT in the spring

season.



### General Observation and Recommendation

The Emission Inventory Work Group notes th at the growth factors used by WRAP are within the expected range of uncertainty for long-range projections. In development of future projections it is recommended that WRAP consider utilizing local population and VMT projections, and seasonally correct for the fact that summer activity data is generally lower than the winter.

We appreciate the WRAP’s hard work and diligence in developing Year 2018 projections for the western states. ADE Q and its stakeholders are committed to working with the Emissions Forum in its fu ture work. For additional information on this report, please contact Randy Sedlacek, ADEQ, at 602-771-2352 or rfs@ev.state.az.us

.

Sincerely,

Steven E. Peplau EIWG Chair Air Quality Division Manager Maricopa County Environmental Services Department

cc: Tom Moore, WRAP Lee Gribovicz, Wyoming DEQ

### 5 Steven E. Peplau Division Manager 1001 N. Central Ave. # 695 Phoenix, Arizona 85004 Phone: (602) 506-6701 Fax: (602) 506-6179



### ENCLOSURE

Maricopa County VMT projections for 1996-2018

In May 2001, MAG provided 1996 and 2018 tr affic assignments for Maricopa County to WRAP consultants. They we re also given growth factors for the intermediate years: 2003, 2008 and 2013. The MAG traffic assignments were produced on the 1272 TAZ system which did not cover all of Maricopa County. The consu ltants were advised to factor the VMT produced by the assignments by 11% to expa nd the VMTs to cover all of Maricopa County. Based on the information provide d, the VMTs for Maricopa County should have been as follows:

Maricopa County VMT Growth Factors (in 1000's per weekday) Provided to ENVIRON 1996 65,321 2003 82,850 1.27 2008 95,176 1.46 2013 106,386 1.63 2018 116,854 1.79

Average annual VMT growth rate: 1996-2018= 2.70% Note that the VMTs above represent an average weekday and should have been multiplied by .91 to obtain VMT on an averag e annual day (before applying seasonal factors).

The ASU population projections done by the Center for Business Research in 2001 show a 2.64% growth rate between 2000 and 2020 (for the Middle projection series). MAG is in the process of using these same ASU projections for Maricopa County to prepare interim small area population and empl oyment projections that, at the end of May, will be presented for approval to the MAG Regional Council. MAG has completed preliminary traffic assignmen ts on a 1941 TAZ system using the draft interim projections. The resultant VMTs (w hich include most of the populated areas of both Maricopa and Pinal Counties) produ ce an average annual VMT growth rate of about 3.09% for 2000-2020.

An analysis of the WRAP VMT proj ections provided by Alison Pollack of ENVIRON on 7/11/02 can be found in the attached spreadsheet.

### 6 Steven E. Peplau Division Manager 1001 N. Central Ave. # 695 Phoenix, Arizona 85004 Phone: (602) 506-6701 Fax: (602) 506-6179 

### The WRAP's average annual growth factor s are slightly lower than the factors calculated in Environ spreadsheet. However, this does not take into account the overestimation of 1996 VMTs, as documented in the Fall of 2002 for the EIWG. In that previous analysis, the WRAP's 1996 VMT estimates were found to be 13% high on an average annual basis, 8% high for the winter season, and 25% high for the summer season. Reducing the WRAP's 1996 VMTs by these amounts and comparing them with the WRAP's projected VMTs, results in the adjusted growth factors shown at the bottom of the attached spreadsheet.

The rate of growth between 1996 and 2018 for the average annual VMT used by the WRAP is approximately the same (3.07%) as for the new VMT projections in #2 above (3.09%). However, in the summer, the rate of growth between 1996 and 2018 (3.54%) is much higher. Using the latest ASU population projections, results in a Maricopa County VMT projection for 2018 th at is about 10-11 % higher than VMT estimates.

# A RIZONA 

# D EPARTMENT
OF 

# E NVIRONMENTAL 

# Q UALITY

1110 West Washington Street y Phoenix, Arizona 85007 (602) 771-2300 y www.adeq.state.az.us Janet Napolitano Governor Stephen A. Owens Director

Northern Regional Office 1515 East Cedar Avenue y Suite F y Flagstaff, AZ 86004 (928) 779 0313 Southern Regional Office 400 West Congress Street y Suite 433 y Tucson, AZ 85701 (520) 628 6733 Printed on rec y

cled p a

p

e

r 

### October 20, 2003

Tom Moore Technical Coordinator Western Regional Air Partnership Cooperative Institute for Res earch in the Atmosphere Colorado State University 1375 Campus Delivery Fort Collins, CO 80523-1375

Dear Tom:

Arizona’s Regional Haze Technical Assessm ent Work Group (TAWG) met on August 14, 2003, to review the draft WRAP Technical Support Document (T SD) for Regional Haze State Implementation Plans (July 14, 2003). Informal feedback wa s provided to you a few days later; and TAWG appreciates the change s reflected in the August 27, 2003, draft TSD. In September, the group met again to discuss this later version and produced several comments that are attached to this letter. The following points summarize the detailed comments.

• Some technical materials are better relega ted to appendices, esp ecially all of the Integrated Assessment Section, most of th e SMOKE, and some of the CMAQ sections. For example, in SMOKE, the specific file names and dates, as well as much of the detailed descriptions of the emission proces sing mechanics, while useful for modelers, make it difficult for others to understand the work done.

• TAWG requests that additional work be done related to redoing the ammonia emissions inventory and performing a CMAQ modeling ru n to determine the sensitivity of fine particulates and visibility from Mexican sources.

• The protracted discussion on the non-road m odels did not explain which model was used to generate which emissions for which are quality modeling run. This needs to be clarified. If the NONROAD2002 work was onl y emission sensitivity testing, then this needs to be so stated. The reader is left with the impression that differences in non-road estimates are significant and important, but th e discussion fails to explain how or whether these differences affected the outcome of the modeling.

### • In spite of the descriptions of the many methods employed to construct the inventory, the fire emissions section needs a clear explana tion of what and why certain emissions were used for the 1996 model validation work and what emission were used for the 1996 base case. A table that presents these emissions for agricultural, prescr ibed, and wild fire burns for all of the important 1996 and 2018 air quality modeling runs would be helpful.

• It was unclear how point sources emitting <100 tons of sulfur dioxide per year were treated. Are they included in the area source totals?

• Throughout the document, the tabulated data and charts covered different numbers of states: sometimes six, sometimes nine, sometimes 13, sometimes 20+. This inconsistency should be remedied, if, by no ot her means, than by giving the subtotals for the various group of states in each chart.

• Several sections would benefit from some basic explanatory material (for example, biogenic VOC emissions come from plants and biogenic nitrogen oxi de emissions come from microbial activity in the soil.) On the first page of the Technical Analysis Approach, some introductory material would be helpful before getting in the details of emissions. The relationship of emissions inventories, SMOKE, MM5, MCIP, and CMAQ could be shown in a simple diagram. The general modeling ap proach needs to be explained in terms of reconstructed visibilit y. In addition, the general modeling approach needs to be discussed in terms of the speciat ed fine particulates measurements of the IMPROVE network. Although this material w ould amount to no more than two or three paragraphs, through it, the reader would be in formed at the beginning of all the various interlocking pieces of the modeling system.

On behalf of the Technical Assessment Work Gr oup, I thank you for the opportunity to review the draft TSDs and am willing to discuss anything in further detail. I may be reached at (602) 771-7642.

Cordially,

Peter Hyde, Chair Arizona Regional Haze Technical Assessment Work Group

Attachment

cc: TAWG Members Nancy Wrona Corky Martinkovic

# A RIZONA 

# D EPARTMENT OF 

# E NVIRONMENTAL 

# Q UALITY

1110 W. Washington Street • Phoenix, Arizona 85007 (602) 771-2300 • www.adeq.state.az.us Stephen A. Owens Director Janet Napolitano Governor

Southern Regional Office 400 West Congress Street • Suite 433 • Tucson, AZ 85701 (520) 628-6733 Printed on recycled paper Northern Regional Office 1515 East Cedar Avenue • Su ite F • Flagstaff, AZ 86004 (928) 779-0313 

### September 23, 2003

The following comments on the WRAP TSD for regional haze are from various members of the Arizona Regional Haze SIP Technical Assessment Work Group. The first set of comments comes from an August 14, 2003, meeting, and immediate follow-up. The version of the TSD for these comments is July 14, 2003.

FIRST SET

COMMENTS ON THE DRAFT REGIONAL W RAP TSD FOR THE REQUIREMENTS OF §309 OF THE REGIONAL HAZE RULE Shawn Kendall distributed copies of his comment s. Discussion and changes suggested to the TSD, as posted to the ADEQ website on July 16, 2003, included:

 (website) – Kendall and Rory MacArthur suggested deleting the subchapter pieces of the TSD due to wrong legends appearing on the pdf files.

 Table of Contents – Change headings for chapters 3-8 to read “Assessment of ...” (Kendall).

 P. 9, line 17 – Change to “with a simplified chemistry” (MacArthur, Kendall).

 P.11 – MacArthur asked about Mexican emissions. Kendall and others said that this information was used and modeled, but not singled out for comment. TAWG members agreed that WRAP should be asked to assess the impact of Mexico’s emissions. Kendall suggested that WRAP also cross check the inventory for Mexico for new and upcoming sources scheduled to begin operations prior to 2018.

 P. 16 – Hyde noted that emissions inventories are available for Nogales and Agua Prieta, Sonora.

 Bill Wiley commented that the commercial marine emissions information needs to be moved up to the international emissions section.

 P. 16 – Kendall said that it appears that geogenic information was not included, and that 2018 PM figures will equal those for 1996. He said that PM will need to be able to be modeled in the future.

 MacArthur asked if wind erosion had been calculated for property lots. Don Gabrielson said that there is an overall lack of windblown inventory.

 P. 18, top – Kendall asked about the relevance of the P2 information. The group agreed to eliminate the chart, but keep the information.

 P. 19 – Hyde noted that the charts do not show off-shore emissions.

 P. 19 – Kendall suggested showing tons reduced in the 2018 pie chart.

 Wiley asked about sources of NH 3 

### emissions. Gabrielson said that he believes this is feed lots and dairies.TAWG Draft Meeting Notes, 9-10-03 

### 2  Gabrielson asked if the pie charts are available showing state-by-state results. Kendall said he does not think these are available, but could be generated if the data was obtained.

 P. 23, line 23 – Hyde asked if the date was necessary. Kendall said this helps explain which version of the data was used.

 Hyde asked about emissions from point sources emitting less than 100 tpy. Kendall said this limit was used since this is the value used in determining sources eligible to participate in the SO 2 

### trading program. Wiley asked if sources below this threshold were included in the area source emission inventory. TAWG members agreed this issue should be pursued.

 P. 24 – The workgroup agreed that the NH 3 

### inventory needs to be reworked.

 P. 25 – Members commented that the Integrated Assessment Section does not seem relevant.

 P. 27 – Hyde questioned why the PM figures don’t decrease from Table 2 to Table 3.

 Add a table with the WRAP annex results (Gabrielson).

 P. 28 – Explain the delineation between stationary source and those under 100 tpy (Gabrielson). Also, name the important subcategories (Hyde).

 P 29, line 1 – Expand the discussion of other windblown dust categories that are not included (Gabrielson, Hyde).

 P. 31, lines 6 and 8 – Kendall suggested improving the subtitle formatting, adding titles to these tables, and reviewing the document globally for this concern.

 Tables 4 and 5 – add column showing the percent change for the nine GCVTC states and 13 WRAP states (Ruey-in Chiou).

 P. 32, line 10 – Hyde said that the off-road mobile equipment does not include commercial marine. Kendall noted that commercial marine was in a later section.

 A summary should be added showing relevant emission of aircraft, locomotives, and commercial marine (Hyde).

 P. 32 – MacArthur noted that it was unclear which non-road model was used to calculate emissions.

 P. 34, line 26 – MacArthur asked how nonroad modeling was used. If the results of NONROAD2002 weren’t used, this information does not need to be included in this preliminary section (Hyde).

 Add tables to consistently show nonroad sources (Kendall).

 Break down subcategories of nonroad (Hyde).

 MacArthur commented that the mobile source significance issue is very sensitive, and noted that the WRAP policy group determined that reasonable progress must be made. Kendall remarked that the discussion is too detailed to appear in the TSD. Hyde and MacArthur said that the mobile information should be improved.

 Wiley noted a lack of consistency in the states included for analysis. Add a subtotal of the nine GCVTC states.

 MacArthur was concerned that commercial marine and locomotives are discussed simplistically. Kendall suggested referencing material used for aircraft, commercial marine and locomotive categories.

 P. 42 – Wiley noted that six states were used in the table, and that too many different domains are referenced. Remove Table 6 and change text on p. 43 to read “see Chapter 8 for a detailed discussion.”TAWG Draft Meeting Notes, 9-10-03 

### 3  Hyde said that it is not clear whether 1996 and 2018 prescribed fire figures were included in the base case. He would like additional information included. Kendall commented that WRAP used 2018 “typical” wildfire data.

 Wiley asked about missing agricultural burning information. Kendall replied that agricultural burning is quite low.

 Kendall distributed the draft of Table 14-1 and Appendix A-14.1a,b, and c and said that the TSD should report whether typical or actual 1996 data was used for model calibration. He also noted that the anticipated growth in prescribed fire is not shown. Kendall and Wiley commented that the fire emissions data for 1996 is missing. Kendall said that the spread sheets provided by WRAP don’t show the change, but the pie charts do.

 P. 47 – Add tables showing 1996 acreage and emissions of fires; plus, a similar summary for 2018 (Hyde).

 P. 56, biogenic emissions – Replace the detailed variable list with a narrative description of the ASCII file. Show total VOC emissi ons in Table 10. Describe where biogenics emissions come from and how they are produced. Revamp this section and include a discussion of biogenics as the largest source of VOCs.

 Windblown dust – Discuss how days with windblown dust would impact results. Table 11 is too extensive. Change to a description of the scenarios in the TSD and move the table to the appendix.

 P. 64-66 – Clarify which states the pie charts represent.

 SMOKE section – Most of the section needs to go into an appendix. The introductory paragraph should include generic information on how a computerized tool manipulates files to produce usable information for use in air quality.

 Gabrielson asked about the target audience of the document. The group agreed that the body of the TSD should be aimed at the technical/policy analysts, with detailed information needed for reconstructing the modeling in appropriate appendices.

 P. 65-70 pie charts – Kendall asked if one-day averages are relevant. Hyde responded positively, saying that if the average weekday was used, the information is relative, except perhaps in fire emissions.

 P. 65, scales for off-road for VOCs for biogenics; and p. 67, SO 2 

### columns – Delete these pie charts and reduce the corresponding narrative.

 P. 86 – Hyde suggested writing this in layman’s terms as much as possible. Eliminate tables 22, 23, 24 and much of the discussion.

 P. 87, line 6 – The TSD currently reads “performed well.” Chiou suggested that actual performance information replace this conclusion.

 Gabrielson suggested that overall, the narrative should address somewhat technical policymakers and other information should be shifted to the back of the document. There was general work group agreement.

 P. 93 – Kendall suggested adding a flow model.

 Gabrielson suggested that each discussion of a model include information about where the reader can get more information.

 MacArthur commented that the MSIP was known to have a bug and asked if the subsequent WRAP modeling addressed this issue.

 Kendall commented on how robust the CMAQ modeling is, compared to other models. MacArthur agreed, saying that this should be a consideration.TAWG Draft Meeting Notes, 9-10-03 

### 4 o Kendall was concerned about the lack of information on PM speciation (elemental carbon and organic carbon). P. 91, line 2 – Add a lead paragraph that compares and contrasts the GCVTC air quality modeling with the described anticipated modeling, including the benefits.

 MacArthur requested more information about performance in the summer versus winter months.

 P. 101 – Hyde suggested that the axis on the scatter plots be reduced in value, which would result in showing more accurate information. The group agreed that this was not a crucial issue.

 P. 113 – Add language to the effect that many of the 20% dirtiest days occur in the summer, when the model performance is best.

 P. 114, line 20 and globally – eliminate use of “we” (Kendall).

 P. 114, line 20 – Wiley said this section needs to explain that this is the best model available, and that it works best in the summer. Kendall said that there should be anacknowledgment that there are other ways to evaluate a model rather than paired-in-timeand-space, and include language to the effect “nonetheless, the modeling represents the best available science...”

 P. 114, line 20 – Paragraph should be changed to support the use of the modeling results in general, since this is the best available modeling, and acknowledge that it works best in the summer, which is during Arizona’s 20% worst days (Kendall, Wiley, MacArthur).

 Gabrielson commented that these “other approaches” that could be used would have more uncertainty than this model. Kendall suggested acknowledging uncertainties with a neutral voice, and eliminate personal expressions and the use of “we.”

 P. 114, line 36. Gabrielson said the reference to §308 was not relevant and should be replaced with future SIP processes, since 309(g) is also a future path . Other changes also accepted by the group included:

o Line 22 – uncertainty in the meteorology and chemistry results in constant uncertainty for prescribing new emissions control strategies.

o Line 28 – Change “that that” to “than that.”

o Line 29 – Strike “we believe that.”

o Line 31 – SOx emissions which constitutes a policy question.

o Line 32 – Add, “should ideally be based...”

 P. 117 – Gabrielson suggested moving the formula for light extinction to p. 11 in the WRAP analytical approach and include a discussion of the use of the equation versus forensic observation to explain the difference between a mathematical analysis of visibility, and a direct measurement. Point to the location where readers can find additional information. Kendall recommended leaving the current materials in place but adding a paragraph in the introduction to explain the differences between measured light extinction, modeled light extinction, and the policy basis for using modeled light extinction (focus on PM mass speciated measurements for control strategy development and elimination of meteorology (humidity) as a variable for control strategy development).

 P. 118 – Hyde said that the “1-2 deciview” reference should be more specific.

 Kendall noted increases in emissions in the 20% best days at four parks may be due to anticipated increases in prescribed fires.

 P. 121, line 14 – explain results (Hyde).TAWG Draft Meeting Notes, 9-10-03 

### 5  P. 121, line 22 – Delete the sentence that begins on line 22. Add fire information. (Hyde.)

 P. 121, line 26 – Explain why 1996 data is not used in tables 30 and 31 (Gabrielson).

 Kendall said to replace “1996 baseline” with from the 1997-2001 current visibility conditions . Explain the three different baselines and why the baseline from the most recent five years is used.

 P. 127, Figure 24 – Map shows tribal information which is irrelevant in this context. Delete Figure 24; Figure 25 can be used. (Kendall.)

 Chapter 4 – Change 13 WRAP states to 9 GCVTC states.

 MacArthur –

o Add a chart similar to Figure 36 showing the ammonium nitrate delta and ammonium sulfate.

o Explain which mobile source model was used for representation on nonroad diesel rule and how it was used.

 Wiley was concerned about the stationary source Figure 33 conclusion. He said to add stationary source-only with SO 2 

### , or remove. Figure 33 doesn’t belong in this section.

 Kendall –

o Additional comments are included in the memo previously distributed.

o Concerned that it looks as if WRAP endorses EPA draft guidance default values for natural conditions without appropriate peer review.

o Concerned that Chapter 9 appears to provide “presumptive reasonable progress goals” based on the EPA draft guidance default values for natural conditions which may challenge future SIP efforts by states establishing natural conditions based on improved science.

o Add modeling results for mobile sources, since the rule change is not finalized. MacArthur would like the history of mobile source significance included. Kendall noted that the information is in the body of the SIP, and is not appropriate for the TSD.

 Gabrielson – Wants to see a clear statement of fire emissions modeling regarding 1996 and 2018 and what actual data was used for computing the relative reduction factors.

 Kale Walch did not have additional comments.

• Chris Janick, Salt River Project -- What is the basis for the 100 acre wildfire threshold? I would think they should be included in some fashion or another, rather than excluded altogether, unless there is some reason to be lieve all of those are insignificant compared to the larger fires.

• Shawn Kendall, The Kendall Group, Inc . -- Table 4 and 5 present area source emissions (pg 30), but nowhere is there a list of the source category codes that were included in this inventory. The SCC codes should be in an appendix for each of the key emission inventories presented (stationary, area, mobile-on road, mobile-non road, road dust, fires etc).TAWG Draft Meeting Notes, 9-10-03 

### 6 SECOND SET: FROM TELEPHONE CALL OF SEPTEMBER 10, 2003

The following comments are on the August 27, 2003 version of the TSD

 P. 159 – Rory MacArthur said that a figure showing the delta of ammonium nitrate increases/reductions with SO 2 

### reductions had not been added to the TSD. This data is available on the WRAP website under “better than BART” information. Kendall and MacArthur agreed to add the figure to Chapter 3, in the SO 2 

### BART sensitivity section. MacArthur will ask Gail Tonnesen to draft la nguage, and will forward the draft to Hyde.

 P. 118, line 24 – Kendall said this paragraph is improved, and asked TAWG members to review it.

 P. 45 – Hyde would like to see a major revision to the document regarding fire emissions inventories which details: the emissions that were used, for what reason, and in which model run. Kendall reviewed pp. 47 and 55, which provides contradictory information on agriculture burning. Hyde will ask for a modified smoke section, and a table showing what data went into what modeling.

 (global) – Kendall said that the emissions inventories used to validate the model should be shown, overall. Hyde agreed that the information should be provided as a courtesy to the reader, even if it is noted elsewhere in the document.

 P. 119 – Hyde noted the document reads “no prescribed or agriculture burning.” He was also concerned about using the typical wildfire information for 1996.

 Hyde asked about the 1996 and 2018 deciview values. He questioned whether there would be a different prediction by using these artificially lowered 1996 emissions compared to actual values. Kendall reviewed the Class I Areas in Table 2.2.2.1 for deciview changes from 1996 to 2018. Eight of the 16 are predicted to get worse, and all are located in the southern Colorado/northern New Mexico area. Kendall asked if the culprit may be the use of 1996 as typical wildfire data. He said that he believes there is a lot of smoke contamination, but can’t make this determination because the data is not presented.

MacArthur reviewed additional items:

 P. 16 – Graphic is not appearing properly in the Acrobat version of the document.

 P. 67, table 1.2.1.3a – 1996 legend does not correspond with figure in the Acrobat version.

 P. 68 – Road dust does not look like the pie chart that is shown for PM. Legend graphics are unrelated to the graphics used in the pie charts. Kendall said the Word version should also be checked.

 The non-road discussion has not been improved. Throughout the document, the reader does not know what they did or what they used. Kendall said that 2002 information was not used. Hyde agreed that this should be addressed similarly to the fire emissions, with additional references to which data was used to support which modeling. Hyde said that this must be updated for the December version of the document.

 It is not clear whether MOBILE5B or MOBI LE6 was used. Kendall thinks that the 1996 modeling was MOBILE5B. The document should specify what modeling was used in NEI6.TAWG Draft Meeting Notes, 9-10-03 

### 7 Kendall noted that it will be necessary to know what WRAP is doing with 2018 CENRAP inventory for next year. He said that the TSD is acceptable for the SIP in its current form, but would prefer to see improvements such as exposing fire, mobile and road data used for modeling in the text.

THIRD SET

The following comments are from Peter Hyde, and concern the August 27, 2003 version of the TSD.

Section 1.1.7 Fire emissions, pp 48-55

P 46, line 40

“The 2018 fire projections should not be comp ared directly with the 1996 fire emission inventories. Etc. Etc.”

Recognizing the unique difficulties of constructi ng fire emission inventories, and acknowledging the uncertainties inherent in the 2018 forecast, this plea for a “separation” falls on deaf ears and would be best removed. Fire emissions are of pa rticular importance in western states, and base year estimates will be compared with future year estimates, despite the plea.

This section – the entirety of fire emissions -- is in desperate need of some tabular emissions data and of an additional subsection that explains what model runs used what emissions. The tabular data should present the following:

wildfires prescribed fire ag fire Total 1996 actual wildfire 1996 average wildfire 2018 average wildfire

These data would go a long ways to understanding the relative importance of each type of emissions.

Of particular aggravation is the impossibility of finding out what emissions went into each model run. Yes, one can consult tables in the emissions processing or modeling sections, but the narrative needs to give the reader – in this section – a clear picture of which emissions went into which model run and why. For example, on page 119, Table 1.2.6.1 states that the 1996 base case for model validation had actual wildfire but no prescribed fire emissions. Why not prescribed fire emissions? The same table states that the 1996 base case with typical wildfire uses average wildfire emissions, but 2018 emissi ons for prescribed and ag burning emissions. How is one to make sense of this? The reader needs to come away from this sectionTAWG Draft Meeting Notes, 9-10-03 

### 8 understanding not only how the inventories were compiled; but, more importantly, what decisions were made and why about which inve ntories actually went into which model runs.

This section also lacks a discussion on how reducing the actual wildfire emissions to average wildfire emissions – a fivefold reduction -- might affect the outcome of the projected visibility values. Although this discussion might fit better in the modeling section, it needs to come in somewhere. The following considerations should be weighed:

• Wildfire emissions are 41% of the base y ear inventory, dropping to 14% of the future year inventory of PM 2.5 

### . Prescribed fire emissions are 3% of the base year and 27% of the future year PM 2.5 

### . How are these significant contributions to PM 2.5 

### affected by the five-fold reduction from actual to typical wildfires?

• If we use average wildfire emissions in both 1996 and 2018, instead of the actuals for both years, then effectively we are artificially reducing the size of a constant contributor to visibility impairment. As the size of this constant decreases, there is more latitude for change in the variable contributors. The net change in visibility, then, may be inflated by this wildfire reduction. Perhaps some sensitivity tests would be in order to estimate the magnitude of this somewhat artificial emissions change.

• Some discussion of the wildfire and prescribed f ire emissions in the period 1997-2001 would seem to be in order, given that this is the baseline visibility period. For example, those Class I areas subject to above average fire emissions would have projections that error on the high side, and visa versa.

2.2.2 Visibility modeling results using relative reduction factors

The explanation of projected visibility increases and decreases at Class I areas, based on their proximity to large power plants slated for SO2 reductions, or alternatively, subject only to increasing emissions from the nonroad sector, sounds convincing, but a quick matching of the SO2 emission changes (Figure 2.2.2.1, page 131) with the visibility changes brings up a pattern of ambiguities that defies this paradigm. The table below gives the percentage change in visibility for the 20% best and 20% worst visibility days for the 16 Class I areas, along with the SO2 emission changes in the four counties contiguous with and generally west of the site. The emission changes are in tons per year. Negative percentages are visibility decreases; positive are visibility increases. The Class I areas are presented in the order of visibility changes for the worst days.TAWG Draft Meeting Notes, 9-10-03 

### 9 Class I area best worst County 1 county 2 county 3 County 4 Total San Pedro Parks -39.8 -15.2 750 750 15000 0 16500 West Elk -25.5 -5.6 0 0 0 750 750 Maroon Bells-Snowmass -25.8 -5.2 0 0 0 750 750 Flat Tops -27.7 -5.1 0 0 750 -15000 -14250 Bryce 9.1 -3.9 0 0 0 0 0 Capitol Reef 13.4 -3.4 0 0 0 750 750 Arches 11.8 -2.6 750 0 750 0 1500 Canyonlands 13.0 -2.6 750 750 0 0 1500 Weminuche 13.7 1.9 00000 Black Canyon 15.4 3.5 0 0 0 750 750 Grand Canyon 0.8 5.5 -50000 750 750 -25000 -73500 Mesa Verde 20.0 6.6 0 15000 750 0 15750 Petrified Forest 20.3 7.8 -50000 15000 750 750 -33500 Zion 35.4 10.8 750 -25000 0 0 -24250 Mount Baldy 0.2 14.5 750 15000 -750 750 15750 Sycamore Canyon 23.0 24.5 -50000 750 750 -750 -49250



### Of the top four areas with the greatest degrada tion on the best days, only one, San Pedro Parks, has a large S02 increase; of the other three, two have almost no change and one has a large decrease. Among the best performing areas – the last five entries in the table – Mesa Verde shows decided improvement despite a hefty SO2 increase, and Mount Baldy shows less improvement with the same increase in SO2 emissions. While county-wide emission changes do not equate with source-receptor dynamics, a more in-depth discussion, or at least one that acknowledges these ambiguities, would be appropriate here.

Several other aspects of these projected visibility changes warrant further discussion. For example, it would be illuminating to explore the contrast between the percentage changes in visibility between the best and worst days. With three exceptions -- Grand Canyon, Mount Baldy, and Sycamore Canyon – the visibility change for the best days is on average four times that of the worst days. Is this readily understood from a physical or mathematical basis? Four Utah sites display improvement for the best days but degradation for the worst days. How can this be explained by emission changes? Two sites exhibit virtually no change in the best days but considerable improvement in the worst: Grand Canyon and Mount Baldy. Can we really be cleaning the air to the tune of a 14.5% visibility improvement for the worst days at Mount Baldy, without a concomitant improvement for the best days? Attempting to answer this set of questions would be doing the inquisitive reader a service.

Section 1.2.4 Model Performance Results (p 112)

L 31 “The model substantially underpredicts soil and coarse mass. This most likely can be attributed to the lack of a fugitive dust emissions inventory...”

This explanation is inadequate if not misleading. Area source dust emissions were inventoried, as were unpaved and paved road dust. The only omission was wind-blown dust, which, on anTAWG Draft Meeting Notes, 9-10-03 

### 10 annual basis, with a frequency of 3 to 7 events per year, would not be expected to perturb a 100- sample comparison. A more likely reason for the underprediction can be found on page 43, line 10, where the authors state that the net effect of revising silt loading values, of revising average daily traffic counts, and of incorporating trans port fractions was an 89% decrease in road dust emissions from the original estimate. Maybe the original estimates weren’t so bad after all. In any case, the lack of a wind-blown inve ntory cannot explain the underprediction.

Section 1.2.5 Model Uncertainties and Quality Assurance

P 116

This discussion explains “two key issues [about ] assessing the model performance for use in the 309 analysis.” [ line 40]

A third issue ought to be recognized, and is stated as follows:

Virtually all air quality models, including CMAQ, were developed principally to predict shortterm, episodic, relatively high air pollutant concentrations. The application of these models to predicting speciated fine particulates concentrations in pristine areas on an annual basis constitutes a use for which they were not expressly designed. It should surprise no one that the model performance in this arena has been questionable in certain aspects.

4.2 Stationary source NOx and PM sensitivity testing

P 155, line 14

“The fact that stationary source NOx emissions are not as well controlled as stationary source PM 10 

### emissions in the West actually lends some relevance to the outcome that NOx emissions are altered more in the sensitivity analysis than PM 10 

### emissions.”

This sentence is confusing. Usually the “outcome” of a model sensitivity test is a change in pollutant concentrations, not emissions. If NOx emissions are altered more, then it’s because of the greater contribution of point-source NOx to the total inventory. If they comprise a greater share of the inventory because they’re not well controlled, then OK. My suspicion is that even if they were well controlled, they would still contribute more to the inventory than the 10% PM 10


### . I’m still confused.Appendix A-14 – Projection of Visibility Arizona Regional Haze SIP 

## Appendix A-14b. Summary of Emission Inventories used in WRAP ModelingAppendix A-14b. Table 1.Changes in Emissions - 1996 vs 2018 w/309 Programs(Thousands of Tons per Year)A. ARIZONA EMISSIONS BY SOURCE CATEGORYPM2.5 CM SOX NOXVOCArea Sources 1996 23.049.03.249.3115.42018 w/309 25.248.25.379.0140.5% Change 10% -2% 68% 60% 22%Point Sources 1996 11.710.6195.8108.710.52018 w/309 9.517.2113.9134.610.8% Change -18% 63% -42% 24% 3%Mobile Sources - On-Road 1996 4.60.62.9140.5150.42018 w/309 1.70.10.847.355.6% Change -63% -88% -74% -66% -63%Mobile Sources - Non-Road 1996 9.00.79.298.651.52018 w/309 7.60.512.666.227.0% Change -16% -18% 37% -33% -48%Road Dust1996 4.521.2---2018 w/309 5.221.0---% Change 16% -1% N/AN/AN/ASub-Total - Non-Fire Emissions 1996 52.882.1211.2397.1327.82018 w/309 49.387.1132.6327.1233.8% Change -7% 6% -37% -18% -29%Agricultural Burning 1996 0.20.00.00.10.22018 w/309 0.10.00.00.00.0% Change -73% -80% -83% -74% -74%Prescribed Fire on Wildlands 1996 65.811.84.649.328.02018 w/309 64.811.74.648.627.6% Change -1% -1% -1% -2% -1%Wild Fire 1996 29.14.82.17.516.42018 w/309 29.14.82.17.516.4% Change 0% 0% 0% 0% 0%Sub-Total - Fire Emissions 1996 95.116.76.756.944.62018 w/309 94.016.56.656.144.1% Change -1% -1% -1% -1% -1%TOTAL EMISSIONS IN ARIZONA1996 147.998.8217.9454.0372.32018 w/309 143.3103.6139.3383.2277.8% Change -3% 5% -36% -16% -25%Appendix A-14b. Table 1. Page 1Appendix A-14b. Table 1.Changes in Emissions - 1996 vs 2018 w/309 Programs(Thousands of Tons per Year)B. EMISSIONS IN FIVE 309 STATES (AZ,NM,OR,UT,WY) PM2.5 CM SOX NOXVOCArea Sources 1996 148.6279.737.3158.2560.62018 w/309 197.0282.146.8227.8541.2% Change 33% 1% 25% 44% -3%Point Sources 1996 54.241.5541.3512.783.52018 w/309 54.750.4384.9556.7100.3% Change 1% 21% -29% 9% 20%Mobile Sources - On-Road 1996 14.91.910.7439.7424.02018 w/309 5.90.32.1132.6136.7% Change -60% -86% -80% -70% -68%Mobile Sources - Non-Road 1996 27.12.247.9388.5189.92018 w/309 26.02.174.4309.9114.7% Change -4% -3% 55% -20% -40%Road Dust1996 20.596.3---2018 w/309 25.0108.5---% Change 22% 13% - - -Sub-Total - Non-Fire Emissions 1996 265.3421.6637.21,499.21,258.02018 w/309 308.7443.3508.21,227.1893.0% Change 16% 5% -20% -18% -29%Agricultural Burning 1996 3.20.20.21.22.92018 w/309 1.20.10.10.41.0% Change -62% -64% -67% -65% -65%Prescribed Fire on Wildlands 1996 230.241.416.2178.897.32018 w/309 224.040.315.8172.794.8% Change -3% -3% -3% -3% -3%Wild Fire 1996 111.418.57.928.762.92018 w/309 111.418.57.928.762.9% Change 0% 0% 0% 0% 0%Sub-Total - Fire Emissions 1996 344.960.124.3208.7163.12018 w/309 336.758.923.7201.8158.7% Change -2% -2% -2% -3% -3%TOTAL EMISSIONS IN FIVE 309 STATES 1996 610.2481.7661.41,707.91,421.12018 w/309 645.3502.2532.01,428.81,051.7% Change 6% 4% -20% -16% -26%Appendix A-14b. Table 1. Page 2Appendix A-14b. Table 1.Changes in Emissions - 1996 vs 2018 w/309 Programs(Thousands of Tons per Year)C. EMISSIONS IN THE NINE GCVTC STATES PM2.5 CM SOX NOXVOCArea Sources 1996 304.3698.261.0297.21,094.62018 w/309 352.4698.774.7377.81,156.1% Change 16% 0% 22% 27% 6%Point Sources 1996 97.977.1770.4849.4193.12018 w/309 110.1101.1510.0852.7251.4% Change 12% 31% -34% 0% 30%Mobile Sources - On-Road 1996 39.89.120.61,458.31,268.82018 w/309 23.08.65.4407.8359.0% Change -42% -6% -74% -72% -72%Mobile Sources - Non-Road 1996 67.95.7140.1984.3463.22018 w/309 61.15.1175.3700.3277.3% Change -10% -11% 25% -29% -40%Road Dust1996 59.8272.8---2018 w/309 66.5278.2---% Change 11% 2% - - -Sub-Total - Non-Fire Emissions 1996 569.71,062.9992.23,589.13,019.72018 w/309 613.11,091.6765.52,338.52,043.8% Change 8% 3% -23% -35% -32%Agricultural Burning 1996 15.80.81.08.015.32018 w/309 6.50.40.53.25.8% Change -59% -58% -50% -60% -62%Prescribed Fire on Wildlands 1996 387.469.727.3297.5164.12018 w/309 384.869.327.1292.5163.2% Change -1% -1% -1% -2% 0%Wild Fire 1996 223.937.215.857.6126.32018 w/309 223.937.215.857.6126.3% Change 0% 0% 0% 0% 0%Sub-Total - Fire Emissions 1996 627.0107.744.1363.0305.72018 w/309 615.2106.843.4353.3295.4% Change -2% -1% -1% -3% -3%TOTAL EMISSIONS IN THE NINE GCVTC STATES 1996 1,196.71,170.61,036.33,952.13,325.32018 w/309 1,228.31,198.4808.92,691.82,339.2% Change 3% 2% -22% -32% -30%Appendix A-14b. Table 1. Page 3Appendix A-14b. Table 1.Changes in Emissions - 1996 vs 2018 w/309 Programs(Thousands of Tons per Year)D. EMISSIONS IN THE 13 WRAP STATES PM2.5 CM SOX NOXVOCArea Sources 1996 523.21,398.2141.8352.61,411.92018 w/309 578.01,403.0167.4449.61,508.3% Change 10% 0% 18% 27% 7%Point Sources 1996 118.189.91,196.51,085.0224.52018 w/309 132.0115.1763.81,104.2289.3% Change 12% 28% -36% 2% 29%Mobile Sources - On-Road 1996 48.810.328.31,755.71,565.52018 w/309 26.38.76.5485.3444.4% Change -46% -15% -77% -72% -72%Mobile Sources - Non-Road 1996 95.08.0213.31,367.8621.32018 w/309 84.27.1272.1949.4365.1% Change -11% -12% 28% -31% -41%Road Dust1996 84.4399.9---2018 w/309 93.7410.7---% Change 11% 3% - - -Sub-Total - Non-Fire Emissions 1996 869.51,906.31,579.94,561.03,823.22018 w/309 914.31,944.61,209.82,988.52,607.1% Change 5% 2% -23% -34% -32%Agricultural Burning 1996 20.91.11.410.120.32018 w/309 9.40.50.74.38.5% Change -55% -55% -49% -58% -58%Prescribed Fire on Wildlands 1996 445.580.231.4342.3188.72018 w/309 442.779.731.2336.7187.8% Change -1% -1% -1% -2% 0%Wild Fire 1996 231.538.416.359.6130.62018 w/309 231.538.416.359.6130.6% Change 0% 0% 0% 0% 0%Sub-Total - Fire Emissions 1996 698.0119.749.1412.0339.62018 w/309 683.6118.648.3400.5327.0% Change -2% -1% -2% -3% -4%TOTAL EMISSIONS IN THE 13 WRAP STATES 1996 1,567.42,026.01,629.04,973.04,162.92018 w/309 1,597.82,063.21,258.13,389.02,934.1% Change 2% 2% -23% -32% -30%Appendix A-14b. Table 1. Page 4Appendix A-14b. Table 1.Changes in Emissions - 1996 vs 2018 w/309 Programs(Thousands of Tons per Year)Year Definitions"1996" is the WRAP Inventory used for validation of WRAP Modeling to generate relative reduction factors"2018 w/309" is the WRAP Inventory projection assuming all 309 programs are implemented.Pollutant Definitions"PM2.5" - Fine Particulate Matter < 2.5 Micron"CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 Micron"SO2" - Sulfur Dioxide - Precursor to Sulfate Particles"NOX" - Oxides of Nitrogen - Precursor to Nitrate Particulate"VOC" - Volitile Organic Carbon Gases - Precursor to "OC"Appendix A-14b. Table 1. Page 5

### Appendix A-14b. Table 2. WRAP Emissions by Pollutant (Thousands of Tons Per Year)

Modeled Pollutants >>>

A. ARIZONA EMISSIONS BY SOURCE CATEGOR Y 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 Area Sources 23.0 25.2 25.2 49.0 48.2 48.2 Point Sources 11.7 20.1 9.5 10.6 18.1 17.2 Mobile Sources - On-Road 4.6 1.7 1.7 0.6 0.1 0.1 Mobile Sources - Non-Road 9.0 7.6 7.6 0.7 0.5 0.5 Road Dus t 4.5 5.2 5.2 21.2 21.0 21.0 Sub-Total - Non-Fire Emissions 52.8 59.9 49.3 82.1 88.0 87.1 Agricultural Burning 0.2 0.2 0.1 0.0 0.0 0.0 Prescribed Fire on Wildlands 65.8 65.8 64.8 11.8 11.8 11.7 Wild Fire 29.1 29.1 29.1 4.8 4.8 4.8 Sub-Total - Fire Emissions 95.1 95.1 94.0 16.7 16.7 16.5 TOTAL EMISSIONS IN ARIZON A 147.9 155.0 143.3 98.8 104.7 103.6

B. EMISSIONS IN FIVE 309 STATES (AZ,NM,OR,UT,WY) 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 Area Sources 148.6 197.0 197.0 279.7 282.1 282.1 Point Sources 54.2 72.0 54.7 41.5 54.7 50.4 Mobile Sources - On-Road 14.9 5.9 5.9 1.9 0.3 0.3 Mobile Sources - Non-Road 27.1 26.0 26.0 2.2 2.1 2.1 Road Dus t 20.5 25.0 25.0 96.3 108.5 108.5 Sub-Total - Non-Fire Emissions 265.3 326.0 308.7 421.6 447.7 443.3 Agricultural Burning 3.2 3.2 1.2 0.2 0.2 0.1 Prescribed Fire on Wildlands 230.2 230.2 224.0 41.4 41.4 40.3 Wild Fire 111.4 111.4 111.4 18.5 18.5 18.5 Sub-Total - Fire Emissions 344.9 344.9 336.7 60.1 60.1 58.9 TOTAL EMISSIONS IN FIVE 309 STATES 610.2 670.8 645.3 481.7 507.8 502.2

C. EMISSIONS IN THE NINE GCVTC STATES 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 Area Sources 304.3 352.4 352.4 698.2 698.7 698.7 Point Sources 97.9 127.4 110.1 77.1 105.4 101.1 Mobile Sources - On-Road 39.8 23.0 23.0 9.1 8.6 8.6 Mobile Sources - Non-Road 67.9 61.1 61.1 5.7 5.1 5.1 Road Dus t 59.8 66.5 66.5 272.8 278.2 278.2 Sub-Total - Non-Fire Emissions 569.7 630.4 613.1 1,062.9 1,095.9 1,091.6 Agricultural Burning 15.8 15.8 6.5 0.8 0.8 0.4 Prescribed Fire on Wildlands 387.4 387.4 384.8 69.7 69.7 69.3 Wild Fire 223.9 223.9 223.9 37.2 37.2 37.2 Sub-Total - Fire Emissions 627.0 627.0 615.2 107.7 107.7 106.8 TOTAL EMISSIONS IN THE NINE GCVTC STATES 1,196.7 1,257.4 1,228.3 1,170.6 1,203.7 1,198.4

D. EMISSIONS IN THE 13 WRAP STATES 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 Area Sources 523.2 578.0 578.0 1,398.2 1,403.0 1,403.0 Point Sources 118.1 149.0 132.0 89.9 119.4 115.1 Mobile Sources - On-Road 48.8 26.3 26.3 10.3 8.7 8.7 Mobile Sources - Non-Road 95.0 84.2 84.2 8.0 7.1 7.1 Road Dus t 84.4 93.7 93.7 399.9 410.7 410.7 Sub-Total - Non-Fire Emissions 869.5 931.3 914.3 1,906.3 1,948.9 1,944.6 Agricultural Burning 20.9 20.9 9.4 1.1 1.1 0.5 Prescribed Fire on Wildlands 445.5 445.5 442.7 80.2 80.2 79.7 Wild Fire 231.5 231.5 231.5 38.4 38.4 38.4 Sub-Total - Fire Emissions 698.0 698.0 683.6 119.7 119.7 118.6 TOTAL EMISSIONS IN THE 13 WRAP STATES 1,567.4 1,629.3 1,597.8 2,026.0 2,068.6 2,063.2

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 Micron "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particulate "VOC" - Volitile Organic Carbon Gases - Precursor to "OC" Coarse Material (> 2.5 micron) (CM) Fine Material < 2.5 Micron (PM2.5) Soil and Dust Particulate Emissions

Appendix A-14b. Table 2. Page 1

### Appendix A-14b. Table 2. WRAP Emissions by Pollutant (Thousands of Tons Per Year)

Modeled Pollutants >>>

A. ARIZONA EMISSIONS BY SOURCE CATEGOR Y Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN ARIZON A

B. EMISSIONS IN FIVE 309 STATES (AZ,NM,OR,UT,WY) Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN FIVE 309 STATES

C. EMISSIONS IN THE NINE GCVTC STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE NINE GCVTC STATES

D. EMISSIONS IN THE 13 WRAP STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE 13 WRAP STATES

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 M i "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particula t "VOC" - Volitile Organic Carbon Gases - Precursor to "OC " 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 3.2 5.3 5.3 49.3 79.0 79.0 195.8 131.5 113.9 108.7 138.6 134.6 2.9 0.8 0.8 140.5 47.3 47.3 9.2 12.6 12.6 98.6 66.2 66.2

- - - - - - 211.2 150.2 132.6 397.1 331.1 327.1 0.0 0.0 0.0 0.1 0.1 0.0 4.6 4.6 4.6 49.3 49.3 48.6 2.1 2.1 2.1 7.5 7.5 7.5 6.7 6.7 6.6 56.9 56.9 56.1 217.9 156.9 139.3 454.0 388.0 383.2

1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 37.3 46.8 46.8 158.2 227.8 227.8 541.3 481.1 384.9 512.7 587.8 556.7 10.7 2.1 2.1 439.7 132.6 132.6 47.9 74.4 74.4 388.5 309.9 309.9

- - - - - - 637.2 604.4 508.2 1,499.2 1,258.2 1,227.1 0.2 0.2 0.1 1.2 1.2 0.4 16.2 16.2 15.8 178.8 178.8 172.7 7.9 7.9 7.9 28.7 28.7 28.7 24.3 24.3 23.7 208.7 208.7 201.8 661.4 628.7 532.0 1,707.9 1,466.9 1,428.8

1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 61.0 74.7 74.7 297.2 377.8 377.8 770.4 642.1 510.0 849.4 885.7 852.7 20.6 5.4 5.4 1,458.3 407.8 407.8 140.1 175.3 175.3 984.3 700.3 700.3

- - - - - - 992.2 897.6 765.5 3,589.1 2,371.6 2,338.5 1.0 1.0 0.5 8.0 8.0 3.2 27.3 27.3 27.1 297.5 297.5 292.5 15.8 15.8 15.8 57.6 57.6 57.6 44.1 44.1 43.4 363.0 363.0 353.3 1,036.3 941.7 808.9 3,952.1 2,734.6 2,691.8

1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309

141.8 167.4 167.4 352.6 449.6 449.6 1,196.5 985.9 763.8 1,085.0 1,133.2 1,104.2 28.3 6.5 6.5 1,755.7 485.3 485.3 213.3 272.1 272.1 1,367.8 949.4 949.4

- - - - - - 1,579.9 1,431.9 1,209.8 4,561.0 3,017.5 2,988.5 1.4 1.4 0.7 10.1 10.1 4.3 31.4 31.4 31.2 342.3 342.3 336.7 16.3 16.3 16.3 59.6 59.6 59.6 49.1 49.1 48.3 412.0 412.0 400.5 1,629.0 1,481.0 1,258.1 4,973.0 3,429.5 3,389.0 Sulfur Dioxide (SOX) Oxides of Nitrogen (NOX)

Precursor Gases Forming Sulfate and Nitrate Particles

Appendix A-14b. Table 2. Page 2

### Appendix A-14b. Table 2. WRAP Emissions by Pollutant (Thousands of Tons Per Year)

Modeled Pollutants >>>

A. ARIZONA EMISSIONS BY SOURCE CATEGOR Y Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN ARIZON A

B. EMISSIONS IN FIVE 309 STATES (AZ,NM,OR,UT,WY) Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN FIVE 309 STATES

C. EMISSIONS IN THE NINE GCVTC STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE NINE GCVTC STATES

D. EMISSIONS IN THE 13 WRAP STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE 13 WRAP STATES

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 M i "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particula t "VOC" - Volitile Organic Carbon Gases - Precursor to "OC " 1996 2018 Base 2018 w/309 115.4 140.5 140.5 10.5 17.2 10.8 150.4 55.6 55.6 51.5 27.0 27.0

- - - 327.8 240.1 233.8 0.2 0.2 0.0 28.0 28.0 27.6 16.4 16.4 16.4 44.6 44.6 44.1 372.3 284.7 277.8

1996 2018 Base 2018 w/309

560.6 541.2 541.2 83.5 115.1 100.3 424.0 136.7 136.7 189.9 114.7 114.7

- - - 1,258.0 907.7 893.0 2.9 2.9 1.0 97.3 97.3 94.8 62.9 62.9 62.9 163.1 163.1 158.7 1,421.1 1,070.8 1,051.7

1996 2018 Base 2018 w/309 1,094.6 1,156.1 1,156.1 193.1 266.2 251.4 1,268.8 359.0 359.0 463.2 277.3 277.3

- - - 3,019.7 2,058.5 2,043.8 15.3 15.3 5.8 164.1 164.1 163.2 126.3 126.3 126.3 305.7 305.7 295.4 3,325.3 2,364.2 2,339.2

1996 2018 Base 2018 w/309 1,411.9 1,508.3 1,508.3 224.5 303.7 289.3 1,565.5 444.4 444.4 621.3 365.1 365.1

- - - 3,823.2 2,621.5 2,607.1 20.3 20.3 8.5 188.7 188.7 187.8 130.6 130.6 130.6 339.6 339.6 327.0 4,162.9 2,961.1 2,934.1 V olatile Organic Carbon (VOC) Gases Forming Organic Particles

Appendix A-14b. Table 2. Page 3

### Appendix A-14b. Table 3. WRAP Emissions by Year

(Thousands of Tons per Year)

Modeled Pollutants >>> PM2.5 CM SOX NO X V OC A. ARIZONA EMISSIONS BY SOURCE CATEGOR Y 1996 1996 1996 1996 1996 Area Sources 23.0 49.0 3.2 49.3 115.4 Point Sources 11.7 10.6 195.8 108.7 10.5 Mobile Sources - On-Road 4.6 0.6 2.9 140.5 150.4 Mobile Sources - Non-Road 9.0 0.7 9.2 98.6 51.5 Road Dus t 4.5 21.2 - - - Sub-Total - Non-Fire Emissions 52.8 82.1 211.2 397.1 327.8 Agricultural Burning 0.2 0.0 0.0 0.1 0.2 Prescribed Fire on Wildlands 65.8 11.8 4.6 49.3 28.0 Wild Fire 29.1 4.8 2.1 7.5 16.4 Sub-Total - Fire Emissions 95.1 16.7 6.7 56.9 44.6 TOTAL EMISSIONS IN ARIZON A 147.9 98.8 217.9 454.0 372.3

B. EMISSIONS IN FIVE 309 STATES (AZ,NM,OR,UT,WY) 1996 1996 1996 1996 1996 Area Sources 148.6 279.7 37.3 158.2 560.6 Point Sources 54.2 41.5 541.3 512.7 83.5 Mobile Sources - On-Road 14.9 1.9 10.7 439.7 424.0 Mobile Sources - Non-Road 27.1 2.2 47.9 388.5 189.9 Road Dus t 20.5 96.3 - - - Sub-Total - Non-Fire Emissions 265.3 421.6 637.2 1,499.2 1,258.0 Agricultural Burning 3.2 0.2 0.2 1.2 2.9 Prescribed Fire on Wildlands 230.2 41.4 16.2 178.8 97.3 Wild Fire 111.4 18.5 7.9 28.7 62.9 Sub-Total - Fire Emissions 344.9 60.1 24.3 208.7 163.1 TOTAL EMISSIONS IN FIVE 309 STATES 610.2 481.7 661.4 1,707.9 1,421.1

C. EMISSIONS IN THE NINE GCVTC STATES 1996 1996 1996 1996 1996 Area Sources 304.3 698.2 61.0 297.2 1,094.6 Point Sources 97.9 77.1 770.4 849.4 193.1 Mobile Sources - On-Road 39.8 9.1 20.6 1,458.3 1,268.8 Mobile Sources - Non-Road 67.9 5.7 140.1 984.3 463.2 Road Dus t 59.8 272.8 - - - Sub-Total - Non-Fire Emissions 569.7 1,062.9 992.2 3,589.1 3,019.7 Agricultural Burning 15.8 0.8 1.0 8.0 15.3 Prescribed Fire on Wildlands 387.4 69.7 27.3 297.5 164.1 Wild Fire 223.9 37.2 15.8 57.6 126.3 Sub-Total - Fire Emissions 627.0 107.7 44.1 363.0 305.7 TOTAL EMISSIONS IN THE NINE GCVTC STATES 1,196.7 1,170.6 1,036.3 3,952.1 3,325.3

D. EMISSIONS IN THE 13 WRAP STATES 1996 1996 1996 1996 1996 Area Sources 523.2 1,398.2 141.8 352.6 1,411.9 Point Sources 118.1 89.9 1,196.5 1,085.0 224.5 Mobile Sources - On-Road 48.8 10.3 28.3 1,755.7 1,565.5 Mobile Sources - Non-Road 95.0 8.0 213.3 1,367.8 621.3 Road Dus t 84.4 399.9 - - - Sub-Total - Non-Fire Emissions 869.5 1,906.3 1,579.9 4,561.0 3,823.2 Agricultural Burning 20.9 1.1 1.4 10.1 20.3 Prescribed Fire on Wildlands 445.5 80.2 31.4 342.3 188.7 Wild Fire 231.5 38.4 16.3 59.6 130.6 Sub-Total - Fire Emissions 698.0 119.7 49.1 412.0 339.6 TOTAL EMISSIONS IN THE 13 WRAP STATES 1,567.4 2,026.0 1,629.0 4,973.0 4,162.9

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 Micron "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particulate "VOC" - Volitile Organic Carbon Gases - Precursor to "OC"

Appendix A-14b. Table 3. Page 1

### Appendix A-14b. Table 3. WRAP Emissions by Year

(Thousands of Tons per Year)

Modeled Pollutants >>> A. ARIZONA EMISSIONS BY SOURCE CATEGOR Y Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN ARIZON A

B. EMISSIONS IN FIVE 309 STATES (AZ,NM,OR,UT,WY) Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN FIVE 309 STATES

C. EMISSIONS IN THE NINE GCVTC STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE NINE GCVTC STATES

D. EMISSIONS IN THE 13 WRAP STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE 13 WRAP STATES

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 M i "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particula t "VOC" - Volitile Organic Carbon Gases - Precursor to "OC " PM2.5 CM SOX NO X V OC 2018 Base 2018 Base 2018 Base 2018 Base 2018 Base 25.2 48.2 5.3 79.0 140.5 20.1 18.1 131.5 138.6 17.2 1.7 0.1 0.8 47.3 55.6 7.6 0.5 12.6 66.2 27.0 5.2 21.0 - - - 59.9 88.0 150.2 331.1 240.1 0.2 0.0 0.0 0.1 0.2 65.8 11.8 4.6 49.3 28.0 29.1 4.8 2.1 7.5 16.4 95.1 16.7 6.7 56.9 44.6 155.0 104.7 156.9 388.0 284.7

2018 Base 2018 Base 2018 Base 2018 Base 2018 Base 197.0 282.1 46.8 227.8 541.2 72.0 54.7 481.1 587.8 115.1 5.9 0.3 2.1 132.6 136.7 26.0 2.1 74.4 309.9 114.7 25.0 108.5 - - - 326.0 447.7 604.4 1,258.2 907.7 3.2 0.2 0.2 1.2 2.9 230.2 41.4 16.2 178.8 97.3 111.4 18.5 7.9 28.7 62.9 344.9 60.1 24.3 208.7 163.1 670.8 507.8 628.7 1,466.9 1,070.8

2018 Base 2018 Base 2018 Base 2018 Base 2018 Base 352.4 698.7 74.7 377.8 1,156.1 127.4 105.4 642.1 885.7 266.2 23.0 8.6 5.4 407.8 359.0 61.1 5.1 175.3 700.3 277.3 66.5 278.2 - - - 630.4 1,095.9 897.6 2,371.6 2,058.5 15.8 0.8 1.0 8.0 15.3 387.4 69.7 27.3 297.5 164.1 223.9 37.2 15.8 57.6 126.3 627.0 107.7 44.1 363.0 305.7 1,257.4 1,203.7 941.7 2,734.6 2,364.2

2018 Base 2018 Base 2018 Base 2018 Base 2018 Base 578.0 1,403.0 167.4 449.6 1,508.3 149.0 119.4 985.9 1,133.2 303.7 26.3 8.7 6.5 485.3 444.4 84.2 7.1 272.1 949.4 365.1 93.7 410.7 - - - 931.3 1,948.9 1,431.9 3,017.5 2,621.5 20.9 1.1 1.4 10.1 20.3 445.5 80.2 31.4 342.3 188.7 231.5 38.4 16.3 59.6 130.6 698.0 119.7 49.1 412.0 339.6 1,629.3 2,068.6 1,481.0 3,429.5 2,961.1

Appendix A-14b. Table 3. Page 2

### Appendix A-14b. Table 3. WRAP Emissions by Year

(Thousands of Tons per Year)

Modeled Pollutants >>> A. ARIZONA EMISSIONS BY SOURCE CATEGOR Y Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN ARIZON A

B. EMISSIONS IN FIVE 309 STATES (AZ,NM,OR,UT,WY) Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN FIVE 309 STATES

C. EMISSIONS IN THE NINE GCVTC STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE NINE GCVTC STATES

D. EMISSIONS IN THE 13 WRAP STATES Area Sources Point Sources Mobile Sources - On-Road Mobile Sources - Non-Road Road Dus t Sub-Total - Non-Fire Emissions Agricultural Burning Prescribed Fire on Wildlands Wild Fire Sub-Total - Fire Emissions TOTAL EMISSIONS IN THE 13 WRAP STATES

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 M i "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particula t "VOC" - Volitile Organic Carbon Gases - Precursor to "OC " PM2.5 CM SOX NO X V OC 2018 w/309 2018 w/309 2018 w/309 2018 w/309 2018 w/309 25.2 48.2 5.3 79.0 140.5 9.5 17.2 113.9 134.6 10.8 1.7 0.1 0.8 47.3 55.6 7.6 0.5 12.6 66.2 27.0 5.2 21.0 - - - 49.3 87.1 132.6 327.1 233.8 0.1 0.0 0.0 0.0 0.0 64.8 11.7 4.6 48.6 27.6 29.1 4.8 2.1 7.5 16.4 94.0 16.5 6.6 56.1 44.1 143.3 103.6 139.3 383.2 277.8

2018 w/309 2018 w/309 2018 w/309 2018 w/309 2018 w/309 197.0 282.1 46.8 227.8 541.2 54.7 50.4 384.9 556.7 100.3 5.9 0.3 2.1 132.6 136.7 26.0 2.1 74.4 309.9 114.7 25.0 108.5 - - - 308.7 443.3 508.2 1,227.1 893.0 1.2 0.1 0.1 0.4 1.0 224.0 40.3 15.8 172.7 94.8 111.4 18.5 7.9 28.7 62.9 336.7 58.9 23.7 201.8 158.7 645.3 502.2 532.0 1,428.8 1,051.7

2018 w/309 2018 w/309 2018 w/309 2018 w/309 2018 w/309 352.4 698.7 74.7 377.8 1,156.1 110.1 101.1 510.0 852.7 251.4 23.0 8.6 5.4 407.8 359.0 61.1 5.1 175.3 700.3 277.3 66.5 278.2 - - - 613.1 1,091.6 765.5 2,338.5 2,043.8 6.5 0.4 0.5 3.2 5.8 384.8 69.3 27.1 292.5 163.2 223.9 37.2 15.8 57.6 126.3 615.2 106.8 43.4 353.3 295.4 1,228.3 1,198.4 808.9 2,691.8 2,339.2

2018 w/309 2018 w/309 2018 w/309 2018 w/309 2018 w/309 578.0 1,403.0 167.4 449.6 1,508.3 132.0 115.1 763.8 1,104.2 289.3 26.3 8.7 6.5 485.3 444.4 84.2 7.1 272.1 949.4 365.1 93.7 410.7 - - - 914.3 1,944.6 1,209.8 2,988.5 2,607.1 9.4 0.5 0.7 4.3 8.5 442.7 79.7 31.2 336.7 187.8 231.5 38.4 16.3 59.6 130.6 683.6 118.6 48.3 400.5 327.0 1,597.8 2,063.2 1,258.1 3,389.0 2,934.1

Appendix A-14b. Table 3. Page 3

### Appendix A-14b. Table 4. WRAP Emissions County State (Thousands of Tons Per Year)

Modeled Pollutants >>>

A. ARIZONA EMISSIONS BY COUNT Y 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 Apache Co 12.8 12.9 13.3 4.1 4.3 4.4 Cochise Co 2.8 3.0 2.9 4.0 4.2 4.1 Coconino Co 31.5 31.8 31.6 8.4 8.7 8.7 Gila Co 14.0 14.7 14.8 4.8 5.3 5.4 Graham Co 8.9 8.9 8.7 3.5 3.4 3.4 Greenlee Co 5.6 6.0 6.1 2.3 2.6 2.6 La Paz 0.9 0.9 0.8 1.9 1.9 1.9 Maricopa Co 18.4 16.7 16.6 27.0 26.2 26.1 Mohave Co 8.9 8.9 8.3 3.7 3.7 3.6 Navajo Co 13.5 13.6 13.7 5.7 5.6 5.6 Pima Co 14.2 20.2 9.4 12.7 17.3 16.3 Pinal Co 4.6 5.5 5.5 9.6 10.8 10.7 Santa Cruz Co 0.6 0.6 0.6 1.3 1.3 1.3 Yavapai Co 8.1 8.3 8.1 4.7 4.8 4.8 Yuma Co 3.1 3.0 2.8 5.1 4.7 4.7 TOTAL EMISSIONS IN ARIZON A 147.9 155.0 143.3 98.8 104.7 103.6

B. EMISSIONS IN 309 SIP STATES 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 Arizona 147.9 155.0 143.3 98.8 104.7 103.6 New Mexico 131.9 133.7 125.4 107.6 116.6 115.2 Oregon 185.5 229.8 227.7 148.0 147.0 146.8 Utah 85.4 92.5 87.3 63.7 74.7 71.6 Wyoming 59.5 59.9 61.6 63.7 64.8 65.1 SUB-TOTAL EMISSIONS IN 309 SIP STATES 610.2 670.8 645.3 481.7 507.8 502.2

C. EMISSIONS IN OTHER GCVTC STATES 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 California 316.5 315.3 314.9 302.7 298.4 298.8 Colorado 110.6 113.8 112.7 219.0 234.8 234.6 Idaho 124.1 119.3 116.6 120.0 111.7 111.6 Nevada 35.3 38.1 38.7 47.2 51.0 51.1 SUB-TOTAL EMISSIONS IN OTHER GCVTC STATE S 586.5 586.6 582.9 688.9 695.9 696.2

TOTAL EMISSIONS IN GCVTC NINE STATE REGION 1,196.7 1,257.4 1,228.3 1,170.6 1,203.7 1,198.4

D. EMISSIONS IN OTHER WRAP STATES 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 Montana 94.7 94.3 95.1 166.0 170.9 171.1 Norht Dakota 74.8 73.0 71.3 253.3 254.7 255.0 South Dakota 66.6 66.2 65.8 234.5 240.5 240.4 Washington 134.6 138.3 137.4 201.6 198.9 198.3 TOTAL EMISSIONS IN OTHER WRAP 370.7 371.8 369.6 855.4 865.0 864.8

TOTAL EMISSIONS IN 13 WRAP STATE REGION 1,567.4 1,629.3 1,597.8 2,026.0 2,068.6 2,063.2

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 Micron "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particulate "VOC" - Volitile Organic Carbon Gases - Precursor to "OC" Soil and Dust Particulate Emissions Coarse Material (> 2.5 micron) (CM) Fine Material < 2.5 Micron (PM2.5)

Appendix A-14b. Table 4. Page 1

### Appendix A-14b. Table 4. WRAP Emissions County State (Thousands of Tons Per Year)

Modeled Pollutants >>>

A. ARIZONA EMISSIONS BY COUNT Y Apache Co Cochise Co Coconino Co Gila Co Graham Co Greenlee Co La Paz Maricopa Co Mohave Co Navajo Co Pima Co Pinal Co Santa Cruz Co Yavapai Co Yuma Co TOTAL EMISSIONS IN ARIZON A

B. EMISSIONS IN 309 SIP STATES Arizona New Mexico Oregon Utah Wyoming SUB-TOTAL EMISSIONS IN 309 SIP STATES

C. EMISSIONS IN OTHER GCVTC STATES California Colorado Idaho Nevada SUB-TOTAL EMISSIONS IN OTHER GCVTC STATE S

TOTAL EMISSIONS IN GCVTC NINE STATE REGION

D. EMISSIONS IN OTHER WRAP STATES Montana Norht Dakota South Dakota Washington TOTAL EMISSIONS IN OTHER WRAP

TOTAL EMISSIONS IN 13 WRAP STATE REGION

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 M i "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particula t "VOC" - Volitile Organic Carbon Gases - Precursor to "OC " 1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 36.1 43.7 27.8 43.5 43.3 42.9 9.5 7.9 7.9 20.7 13.3 13.1 66.4 7.6 7.7 54.5 63.9 62.8 40.1 30.5 31.6 12.6 11.9 12.0 0.7 0.7 0.7 6.6 5.0 4.8 0.5 0.6 0.6 5.8 6.2 6.3 0.1 0.2 0.2 2.0 1.1 1.1 6.7 7.5 7.4 165.0 116.3 115.5 1.0 1.2 1.1 11.3 9.4 9.0 13.5 24.2 24.1 32.2 33.9 32.7 11.9 14.3 11.1 52.6 46.2 45.9 29.3 16.1 16.6 18.4 15.8 15.8 0.2 0.2 0.2 2.5 1.4 1.4 1.3 1.5 1.6 16.6 14.7 14.6 0.6 0.8 0.8 9.5 5.6 5.4 217.9 156.9 139.3 454.0 388.0 383.2

1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309

217.9 156.9 139.3 454.0 388.0 383.2 180.0 173.8 157.9 330.2 286.7 274.3 44.5 64.8 46.3 369.7 282.2 279.8 66.8 72.7 65.6 269.6 221.1 202.7 152.2 160.5 122.9 284.5 288.9 288.8 661.4 628.7 532.0 1,707.9 1,466.9 1,428.8

1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309

122.8 91.1 90.4 1,497.1 738.5 737.5 136.1 128.7 94.6 421.3 271.3 268.9 46.1 41.6 40.6 144.9 105.2 103.9 69.7 51.5 51.4 181.1 152.7 152.7 374.8 313.0 276.9 2,244.3 1,267.7 1,263.0

1,036.3 941.7 808.9 3,952.1 2,734.6 2,691.8

1996 2018 Base 2018 w/309 1996 2018 Base 2018 w/309 62.9 58.3 48.7 191.1 147.2 147.6 318.6 336.7 268.2 251.9 197.2 201.4 49.0 60.2 56.3 120.6 73.9 73.3 162.3 84.0 75.9 457.3 276.5 275.0 592.7 539.3 449.2 1,020.8 694.9 697.2

1,629.0 1,481.0 1,258.1 4,973.0 3,429.5 3,389.0 Precursor Gases Forming Sulfate and Nitrate Particles Sulfur Dioxide (SOX) Oxides of Nitrogen (NOX)

Appendix A-14b. Table 4. Page 2

### Appendix A-14b. Table 4. WRAP Emissions County State (Thousands of Tons Per Year)

Modeled Pollutants >>>

A. ARIZONA EMISSIONS BY COUNT Y Apache Co Cochise Co Coconino Co Gila Co Graham Co Greenlee Co La Paz Maricopa Co Mohave Co Navajo Co Pima Co Pinal Co Santa Cruz Co Yavapai Co Yuma Co TOTAL EMISSIONS IN ARIZON A

B. EMISSIONS IN 309 SIP STATES Arizona New Mexico Oregon Utah Wyoming SUB-TOTAL EMISSIONS IN 309 SIP STATES

C. EMISSIONS IN OTHER GCVTC STATES California Colorado Idaho Nevada SUB-TOTAL EMISSIONS IN OTHER GCVTC STATE S

TOTAL EMISSIONS IN GCVTC NINE STATE REGION

D. EMISSIONS IN OTHER WRAP STATES Montana Norht Dakota South Dakota Washington TOTAL EMISSIONS IN OTHER WRAP

TOTAL EMISSIONS IN 13 WRAP STATE REGION

Data Column Definitions "1996" is the WRAP Inventory used for model validation "2018 Base" is the WRAP Inventory w/o 309 Programs "2018 w/309" is the WRAP Inventory w/ 309 Programs

Pollutant Definitions "PM2.5" - Fine Particulate Matter < 2.5 Micron "CM" - Coarse Material (Soils/Dusts) > 2.5 Micron & < 10 M i "SO2" - Sulfur Dioxide - Precursor to Sulfate Particles "NOX" - Oxides of Nitrogen - Precursor to Nitrate Particula t "VOC" - Volitile Organic Carbon Gases - Precursor to "OC " 1996 2018 Base 2018 w/309 15.0 11.9 12.0 9.6 6.5 6.4 26.3 23.7 23.7 11.0 9.3 9.3 7.8 6.4 6.3 3.2 2.8 2.8 2.3 1.6 1.6 167.6 128.5 122.1 10.4 9.0 8.8 18.2 13.5 13.6 55.5 39.8 39.7 15.7 10.9 10.9 3.7 2.6 2.6 14.0 9.6 9.6 12.2 8.5 8.3 372.3 284.7 277.8

1996 2018 Base 2018 w/309

372.3 284.7 277.8 200.0 157.0 153.5 588.7 425.0 423.5 172.2 130.3 122.4 87.8 73.8 74.4 1,421.1 1,070.8 1,051.7

1996 2018 Base 2018 w/309 1,332.6 883.2 880.8 297.2 203.9 203.4 167.7 125.9 122.6 106.7 80.5 80.7 1,904.2 1,293.4 1,287.5

3,325.3 2,364.2 2,339.2

1996 2018 Base 2018 w/309

126.3 96.2 96.5 102.7 90.7 89.4 82.7 63.1 62.6 525.9 347.0 346.4 837.5 597.0 594.9

4,162.9 2,961.1 2,934.1 Gases Forming Organic Particles

V olatile Organic Carbon (VOC)

Appendix A-14b. Table 4. Page 3Appendix A-18 – Public Participation Arizona Regional Haze SIP 

## APPENDIX A-18. PUBLIC PARTICIPATION

This appendix contains work products a nd references relied u pon by Arizona in the development of Chapter 18 of the Regional Haze SIP.1110 W. Washington Street • Phoenix, Arizona 85007 (602) 771-2300 • www.adeq.state.az.us 

# A RIZONA 

# D EPARTMENT OF 

# E NVIRONMENTAL 

# Q UALITY

Stephen A. Owens Director Janet Napolitano Governor

Northern Regional Office 1515 East Cedar Avenue • Su ite F • Flagstaff, AZ 86004 (928) 779-0313 Southern Regional Office 400 West Congress Street • Suite 433 • Tucson, AZ 85701 (520) 628-6733 Printed on recycled paper



### MEMORANDUM

DATE: October 24, 2003

TO: Regional Haze Stakeholders

FROM: Nancy C. Wrona, Director Air Quality Division

SUBJECT: Public Comment Period and Public Hearing Dates Proposed Regional Haze State Implementation Plan

On Friday, October 24, 2003, Arizona’s proposed Regional Haze State Implementation Plan (SIP) will be available for public review and comment. The proposed SIP will be available in electronic format via the ADEQ Web page at www.adeq.state.az.us/environ/air/haze/html . It will also be available for review in hard copy format at both the ADEQ library and the Flagstaff City/Coconino County Library.

Two public hearings are scheduled: Monday, November 24, 2003, 5:00 p.m., Room 250, ADEQ, 1110 W. Washington Street, Phoeni x; and Monday, November 24, 2003, 4:30 p.m., Flagstaff City/Coconino County Library, Program Room, Flagstaff. The close of public comment is 5:00 p.m., Wednesday, December 3, 2003.

ADEQ greatly appreciates the sustained and valued input many stakeholders contributed to the development of the Regional Haze SIP, and we l ook forward to your continued involvement with the Regional Haze SIP development under Section 309(g) of the Regional Haze Rule.

If you have any questions, please call me at (602) 771-2308 or Corky Ma rtinkovic at (602) 771- 2372; (800) 234-5677, extension 771-2372, or martinkovic.deborrah@ev.state.az.us . Comments on the proposed SIP should be sent directly to Corky Martinkovic at the above e-mail or by fax at (602) 771-2366.

# Public Notice

Printed on recycled paper 

### ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY PUBLIC HEARING ON ARIZONA’S REGIONAL HAZE STATE IMPLEMENTATION PLAN

The Arizona Department of Environmental Quality (ADEQ) will hold a public hearing to receive comments on Arizona’s proposed Regional Haze St ate Implementation Plan (SIP) to address visibility impairment at four of Arizona’s Cla ss I areas (e.g., national pa rks and wilderness areas) as part of the 16 Class I areas on the Colorado Plateau. This SIP specifically addresses the requirements under the federal Regional Haze Rule, 40 CFR 51.309.

A public hearing on the proposed Regional Haze SIP will be held on Monday, November 24, 2003, at 5:00 p.m., ADEQ, Room 250, 1110 W. Washington Street , Phoenix, Arizona (602-254- 5790). All interested parties will be given an oppor tunity at the public hearing to submit relevant comments, data, and views, orally and in wri ting. Written comments must be received at ADEQ by 5:00 p.m. on Wednesday, December 3, 2003. ADEQ anticipates completion of the final SIP by early December. The deadline for submittal to EPA is December 31, 2003.

All written comments should be a ddressed, faxed, or e-mailed to:

Corky Martinkovic Air Quality Planning Section Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 FAX: (602) 771-2366 E-Mail: dam@ev.state.az.us

Copies of the proposal are available for re view beginning Friday , October 24, 2003, at the following locations:

Arizona Department of Envi ronmental Quality Library First Floor – General Services 1110 W. Washington Street Phoenix, AZ 85007 Lorraine Cona, (602) 771-2217; 771-4389 (fax)

The proposed SIP is also available at ADEQ Web page for Regional Haze at www.adeq.state.az.us/environ/air/plan/haze.html

# Public Notice

Printed on recycled paper 

### ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY PUBLIC HEARING ON ARIZONA’S REGIONAL HAZE STATE IMPLEMENTATION PLAN

The Arizona Department of Environmental Quality (ADEQ) will hold a public hearing to receive comments on Arizona’s proposed Regional Haze St ate Implementation Plan (SIP) to address visibility impairment at four of Arizona’s Cla ss I areas (e.g., national pa rks and wilderness areas) as part of the 16 Class I areas on the Colorado Plateau. This SIP specifically addresses the requirements under the federal Regional Haze Rule, 40 CFR 51.309.

A public hearing on the proposed Regional Haze SIP will be held on Monday, November 24, 2003, at 4:30 p.m., Flagstaff C ity/Coconino County Library, Progr am Room, Flagstaff, Arizona (928-779-7670). All interested parties will be given an opportunity at the public hearing to submit relevant comments, data, and views, oral ly and in writing. Written comments must be received at ADEQ by 5:00 p.m. on Wednesd ay, December 3, 2003. ADEQ anticipates completion of the final SIP by early December. The deadline for submittal to EPA is December 31, 2003.

All written comments should be a ddressed, faxed, or e-mailed to:

Corky Martinkovic Air Quality Planning Section Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 FAX: (602) 771-2366 E-Mail: dam@ev.state.az.us

Copies of the proposal are available for re view beginning Friday , October 24, 2003, at the following locations:

City of Flagstaff/Coconino Count y Library (see address above)

Arizona Department of Envi ronmental Quality Library First Floor – General Services 1110 W. Washington Street Phoenix, AZ 85007 Lorraine Cona, (602) 771-2217; 771-4389 (fax)

The proposed SIP is also available at ADEQ Web page for Regional Haze at www.adeq.state.az.us/environ/air/plan/haze.html

# Public Notice

Printed on recycled paper 

### ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY PUBLIC HEARING ON ARIZONA’S REGIONAL HAZE STATE IMPLEMENTATION PLAN

The Arizona Department of Environmental Quality (ADEQ) will hold a public hearing to receive comments on Arizona’s proposed Regional Haze St ate Implementation Plan (SIP) to address visibility impairment at four of Arizona’s Cla ss I areas (e.g., national pa rks and wilderness areas) as part of the 16 Class I areas on the Colorado Plateau. This SIP specifically addresses the requirements under the federal Regional Haze Rule, 40 CFR 51.309.

A public hearing on the proposed Regional Haze SIP will be held on Monday, November 24, 2003, at 4:30 p.m., Flagstaff City/Coc onino County Library, Program Room, Flagstaff , Arizona (928-779-7670). Concurrently, a public heari ng will be held on Monda y, November 24, 2003, at 5:00 p.m., ADEQ, Room 250, 111 0 W. Washington Street, Phoenix , Arizona (602-254-5790). All interested parties will be given an opportuni ty at the public hearing to submit relevant comments, data, and views, orally and in wri ting. Written comments must be received at ADEQ by 5:00 p.m. on Wednesday, December 3, 2003. ADEQ anticipates completion of the final SIP by early December. The deadline for submittal to EPA is December 31, 2003.

All written comments should be a ddressed, faxed, or e-mailed to:

Corky Martinkovic Air Quality Planning Section Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, AZ 85007 FAX: (602) 771-2366 E-Mail: dam@ev.state.az.us

Copies of the proposal are available for re view beginning Friday , October 24, 2003, at the following locations:

City of Flagstaff/Coconino County Library (see address above), and Arizona Department of Envi ronmental Quality Library First Floor – General Services 1110 W. Washington Street Phoenix, AZ 85007 Lorraine Cona, (602) 771-2217; 771-4389 (fax)

The proposed SIP is also available at ADEQ Web page for Regional Haze at www.adeq.state.az.us/environ/air/plan/haze.htmlAppendix A-18 – Public Participation Arizona Regional Haze SIP 

## Appendix A-18b. Hearing Agendas, Sign-in Sheets, Transcripts, and CertificationsOrder of agenda items is subject to change. For additional information regarding the meeting, please call Corky Martinkovic, ADEQ Air Quality Division, at ( 602) 771-2372 or 1-800-23 4-5677, Ext. 771-2372.

Persons with a disability may request a reasonable a ccommodation such as a sign language interpreter, by contacting Katie Huebner at (602) 771-4794 or 1-800-234-5677, Ext. 4794. Requests should be made as early as possible to allow sufficient time to ma ke the arrangements for the accommodation. This document is available in alternative formats by contacting ADEQ TDD phone number at (602) 771-4829. 

# Public Hearing Agenda

Printe d on rec y cled p a p e r Pursuant to [cite 40 CFR § 51.102 for SIP hearings and ARS § 49-425 for air quality rule hearings], notice is hereby given that the above referenced meeting is open to the public.



### Public Hearing Arizona Proposed Regional Haze State Implementation Plan Monday, November 24, 2003, 5:00 p.m. Arizona Department of Environmental Quality, Room 250 1110 W. Washington Street, Phoenix, Arizona

AGENDA

1. Welcome and Introductions

2. Purposes of the Oral Proceeding

3. Procedure for Making Public Comment

4. Brief Overview of the Arizona Propose d Regional Haze State Implementation Plan

5. Question and Answer Period

6. Oral Comment Period

7. Adjournment of Oral ProceedingPUBLIC HEARING 11/24/2003

1

1 ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY

2

3 IN THE MATTER OF ARIZONA'S ) PROPOSED REGIONAL HAZE STATE ) PUBLIC HEARING 4 IMPLEMENTATION PLAN. ) )

5

6

7

8

9

10

11

12 At: Phoenix, Arizona

13 Date: November 24, 2003

14 Filed:

15

16 REPORTER'S TRANSCRIPT OF PROCEEDINGS

17

18

19 ARIZONA REPORTING SERVICES, INC. 20 Court Reporting Suite Three 21 2627 North Third Street Phoenix, Arizona 85004-1103 22 By: MICHELE E. BALMER, RPR 23 Certified Court Reporter Certificate No. 50489 24 Prepared for:

25 ADEQ

ARIZONA REPORTING SERVICE, INC. (602) 274-9944 Realtime Specialists Phoenix, AZPUBLIC HEARING 11/24/2003

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1 BE IT REMEMBERED that the above-entitled and

2 numbered matter came on regularly to be heard before

3 the Arizona Department of Environmental Quality at

4 1110 West Washington Street, Room 250, Phoenix,

5 Arizona, commencing at 5:00 p.m. on the 24th day of

6 November, 2003.

7 BEFORE: CATHY O'CONNELL, HEARING OFFICER 8

9 APPEARANCES:

10 THERESA A. PELLA, Environmental Program Manager, Air Quality Planning Section on 11 behalf of ADEQ;

12 IRA DOMSKY, Air Quality Division on behalf of ADEQ; 13

14 MICHELE E. BALMER Certified Court Reporter 15 Certificate No. 50489

16

17

18

19

20

21

22

23

24

25

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1 HEARING OFFICER O'CONNELL: Good evening,

2 ladies and gentlemen. I now open this oral proceeding.

3 The subject of this oral proceeding is the Arizona

4 Proposed Regional Haze State Implementation Plan.

5 It is Monday, November 24, 2003 at 5:01 p.m.

6 The location is room 250, Arizona Department of

7 Environmental Quality, 1110 West Washington Street,

8 Phoenix, Arizona.

9 My name is Cathy O'Connell, and I have been

10 appointed by the Director of the Arizona Department of

11 Environmental Quality to preside at this proceeding.

12 The purposes of this proceeding are to provide

13 the public an opportunity, one, to hear about the

14 substance of the proposed State Implementation Plan;

15 two, to ask questions regarding the proposed plan; and

16 three, to present oral argument, data and views

17 regarding the proposed plan in the form of comments on

18 the record.

19 Representing the Department are myself, Theresa

20 Pella of the Air Quality Planning Section, and Ira

21 Domsky of the Air Quality Division.

22 The procedure for making a public comment on

23 the record is straightforward. If you wish to comment,

24 you need to fill out a speaker slip, which is available

25 at the sign-in table, and give it to me. Using speaker

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1 slips allows everyone an opportunity to be heard, and

2 allows us to match the name on the official record with

3 the comments.

4 You may also submit written comments to me

5 today in person or by mail, e-mail, or fax, to Corky

6 Martinkovic -- and I'm going to spell that for you.

7 The first name is Corky, C-O-R-K-Y. The last name is

8 Martinkovic, M-A-R-T-I-N-K-O-V-I-C -- by the end of the

9 comment period.

10 The comment period ends at 5:00 p.m. on

11 Wednesday, December 3, 2003. If mailed, e-mailed or

12 faxed, written comments must be postmarked no later

13 than December 3, 2003.

14 Submit your comments to Corky Martinkovic, Air

15 Quality Planning Section, Arizona Department of

16 Environmental Quality, 1110 West Washing Street,

17 Phoenix, Arizona, 85007. The fax number is area code

18 (602) 771-2366. Corky's e-mail address is -- and I'll

19 spell this all out for you -- Martinkovic,

20 M-A-R-T-I-N-K-O-V-I-C, period, Deborrah,

21 D-E-B-O-R-R-A-H, @ev.state.az.us.

22 Her business cards are also at the table up

23 there, and it includes her e-mail address if you did

24 not get that.

25 Comments made during the formal comment period

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1 are required by law to be considered by the Department

2 in the preparation of the final State Implementation

3 Plan. This is done through the preparation of a

4 responsiveness summary in which the Department responds

5 in writing to written and oral comments made during the

6 formal comment period.

7 The agenda for this hearing is simple. First,

8 Theresa will present a brief overview of the proposed

9 State Implementation Plan.

10 Next, I will conduct a question and answer

11 period. The purpose of the question and answer period

12 is to provide information that may help you in making

13 comments on the State Implementation Plan.

14 Thirdly, I will conduct the oral comment period

15 of this proceeding. At that time, I will begin to call

16 speakers in the order in which I have received speaker

17 slips.

18 Please be aware that any comments you make at

19 today's hearing that you want the Department to

20 formally consider must be given either in writing or on

21 the record during the oral comment period of this

22 proceeding.

23 At this time, Theresa Pella will give a brief

24 overview of the proposed State Implementation Plan.

25 MS. PELLA: Thank you, Cathy.

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1 Can you hear me in the back? Okay.

2 What I'm going to briefly do is kind of talk

3 about the purpose of the plan in general, and then what

4 each of the specific chapters are so folks who are not

5 familiar with the process we've been going through kind

6 of know what is in what chapter.

7 So if you're interested in making a comment on

8 a particular subject, hopefully this will help direct

9 you as to where to go look for that particular issues

10 or items that you're looking for.

11 So I'm going to take about 15, 20 minutes, and

12 I would appreciate it if you have questions, jot them

13 down on the little handout slips that you have, and

14 hold them until the question/answer session so we can

15 kind of keep the flow moving here.

16 But anyway, to get us started, this is -- as

17 was indicated, this is the proposed State

18 Implementation Plan for Arizona's Regional Haze SIP

19 developed under 40 CFR Section 309.

20 And this SIP has a specific purpose, and that

21 specific purpose is to address -- is to address things

22 that the Grand Canyon Visibility Transport Commission,

23 which was formed as part of the Clean Air Act Section

24 169(B), developed as recommendations and submitted to

25 EPA back in 1996.

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1 And as a result of that, EPA came out with a

2 regional haze rule, which was basically a two-phase

3 regional haze rule, with Phase One being Section 309.

4 And that section is basically taking a look at the

5 Grand Canyon Visibility Transport Commission's 1996

6 report, and giving a status on what the state and what

7 has happened at the regional level since 1996.

8 And so that's kind of what this plan really is.

9 And so the initial slide said that there were -- in

10 addition to Arizona, there's four other states who are

11 doing SIPs under Section 309. Those four states are

12 Utah, Wyoming, New Mexico, and Oregon.

13 In addition, there is a local air quality

14 control district in New Mexico, Bernalillo County,

15 which has statutory authority in that state to do a

16 regional haze SIP, and they've also done a regional

17 haze SIP. So there's six of these plans that are out

18 there, and we're actually the last state to do our

19 public hearing. All of the others have gone through

20 theirs.

21 So what is in our plan? The first part of it,

22 the first three chapters, are kind of just background.

23 Mostly background information. It does state in the

24 Executive Summary that this plan is only for Arizona's

25 four Grand Canyon plateau areas, and only for areas

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1 that are under the State's jurisdiction. We do not

2 have jurisdiction to do controls or regulations on

3 tribal lands, so nothing in this plan relates to tribal

4 lands. It also includes a description of those four

5 Class I areas and lists the other -- all of the 16

6 ones.

7 The four areas that we're talking about in this

8 plan are, of course, the Grand Canyon, Mount Baldy,

9 Sycamore Canyon Wilderness and -- I just lost it. The

10 fourth one is the Petrified Forest. Thank you.

11 So after the introductory chapters, Chapter 4

12 is kind of an initial technical chapter. What we tried

13 to do in 4 was take the technical science, the science

14 of regional haze, and put it into layman terms so the

15 average reader could understand what regional haze is,

16 what are the types of sources that emit the pollutants

17 that form regional haze, and kind of as background

18 information.

19 So, of course, your types of sources are

20 similar to the types of sources that we need to address

21 in this plan via the Transport Commission's Report are

22 stationary sources, most notably SO2 from large

23 stationary sources. We needed to take a look at mobile

24 sources. We needed to take a look at fire. We needed

25 to take a look at road dust, and then we also needed to

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1 look at pollution prevention. So those are the five

2 main categories that this particular plan addresses.

3 And pollutants that cause haze, that contribute

4 to haze, some that we're all very familiar with as

5 criteria pollutants, most notably particulates, both

6 fine particulates and course particulates. Again, S02,

7 NOX, and ammonia.

8 So we start getting into -- Chapter 5 starts

9 moving into the specific measures and kind of what

10 we're doing. Actually, Chapter 5 is kind of a cleanup.

11 For us it's a cleanup chapter to remove a Federal

12 Implementation Plan that's been on the books in Arizona

13 since the mid-1980s.

14 This, again, goes back to a requirement of 169

15 of the Clean Air Act that required states to actually

16 do a visibility state implementation plan and submit

17 that to EPA in the early '80s. Arizona, along with 30

18 some other states, failed to submit those SIPs, and so

19 ultimately we all got FIP'd. We got issued with

20 Federal Implementation Plans.

21 This particular chapter addresses the main

22 component of what Arizona needs to do to request from

23 EPA the removal of that particular FIP. So it's kind

24 of taking away a long-term FIP there.

25 And it's connected to regional haze, because

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1 the term -- and it actually should be reasonably. That

2 should be a "Y," not an "E" -- Reasonably Attributable

3 Visibility Impairment is a situation where a federal

4 land manager who has control over a federal area, a

5 park or a forest, can actually certify that there is

6 visibility impairment at that park or forest, or

7 whatever national land.

8 And then that federal land manager notifies the

9 agency that has jurisdiction over that, and the agency

10 then has to set into motion some plan to do an analysis

11 of, number one, is there really some impairment; number

12 two, if there is impairment, can it be attributed to a

13 single source or small group of sources; and number

14 three, if that is correct, then what is going to be

15 done to resolve that impairment or improve the

16 visibility for that particular area.

17 So DEQ started on a stakeholder process 2000 --

18 a few years ago to actually develop a state rule to

19 establish a process on what would happen if a federal

20 land manager does certify impairment at a particular

21 Class I area. And what this rule does is actually

22 promulgates those specific requirements. And it has

23 gone through the rulemaking process. We finished the

24 stakeholder process. It's gone before the Governor's

25 Regulatory Review Counsel. In September I think it was

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1 approved by GRRC, and so right now we're waiting for

2 the notice of final rulemaking to be published in the

3 Arizona Administrative Register.

4 And we're anticipating that that publish date

5 -- or it's actually been published. It's been

6 published. We're doing -- under a new law, a rule

7 becomes effective 60 days after it's been published in

8 the register. So it has been published in the register

9 60 days before December 2nd. So we've got a rule that

10 will be a final rule, and so we're going to include

11 that final version in the plan that goes to EPA.

12 So one of the other things that the federal

13 rule requires and required the Grand Canyon Commission

14 to do is to take a look at a clean air corridor. And

15 the Commission itself had actually identified a clean

16 air -- one clean air corridor on the plateau. And this

17 is a map of what that corridor looks like.

18 And you'll see that it actually stops at the

19 Northern Arizona border. So no part of Arizona is

20 included in that clean air corridor. So as it relates

21 to what we needed to put in our regional haze SIP, it

22 was pretty much minimal. We could put in just the

23 regional analysis that explained that there is one

24 clear air corridor, but none of that part is in the

25 state of Arizona. So that's what Chapter 6 pretty much

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1 contains.

2 Chapter 7 starts getting into one of the source

3 categories of specifics that we needed to address, and

4 that is the stationary sources. And what that chapter

5 includes in it is specific for S02. It talks about the

6 showing of the 13 percent S02 reduction that came from

7 stationary sources in the region from 1990 to the 2000

8 time frame.

9 It also talks about -- it includes a summary of

10 NOX and PM stationary source report that's recently

11 been completed by the WRAP, which is the Western

12 Regional Air Partnership. And it includes a commitment

13 from the state to continue to further study NOX and PM

14 as we move forward in the planning process.

15 And it also includes a trading commitment from

16 Arizona to complete a trading rule program. And

17 Chapter 8 actually gets into more details about that

18 particular trading program.

19 And what's in the proposed SIP is a regional --

20 is the model rule that was developed by a regional

21 group of state folks and EPA folks. And what we're

22 doing now is we're actually hoping to have an Arizona

23 specific trading rule to include with the final SIP

24 when it goes to EPA. The model rule was used as a

25 placeholder. EPA would like us to include our own

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1 state rule as much as possible. So we've been working

2 with the stationary source work group that was formed

3 to develop these particular two chapters, had been

4 involved in review of the model rule, the regional

5 model trading rule, and so they're familiar with what

6 that says. And we'll be probably going back to them

7 for a final read through before we finish that

8 particular process for Arizona's rule.

9 So it also includes the bottom line there,

10 geographical enhancement. One of the requirements is

11 that you need to look at beyond kind of the region

12 where you're at. And if you identify sources that may

13 be contributing to problems outside of a particular

14 Class I area, then you need to look at potential

15 control strategies for those sources.

16 So this particular part of this chapter

17 actually goes back to -- points a finger back to the

18 Chapter 5 which is the Reasonably Attributable

19 Visibility Impairment chapter. So we figure we can use

20 what we call the RAVI rule to help us comply with any

21 requirements under the geographical enhancement portion

22 of the EPA rule.

23 Chapter 9 is mobile sources. And mobile

24 sources was one of those subjects that was of great

25 interest to our stakeholders and our work group. And

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1 that was one of those issues that kind of midstream EPA

2 came out with a proposed rule which ultimately, if it

3 goes final, will kind of make this chapter a lot easier

4 than what it reads now.

5 What you see in the proposed SIP, we've got two

6 versions of that chapter. Version number one is what

7 will be in the final SIP if EPA's proposed rule to

8 basically -- decision that says that mobile sources

9 were not a significant category for the 309 SIP, and,

10 therefore, that's what we will put in there is and give

11 the date of EPA's final rule.

12 The other version that's in there is a version

13 that says if the EPA rule does not go final before the

14 Arizona SIP gets submitted to EPA, we're going to

15 include the version in there that commits Arizona to

16 look at mobile sources and potential necessary controls

17 if the emissions trend for mobile sources does not

18 continue to go down. Right now there is a downward

19 trend for all mobile sources both on road and off road

20 if you group them together.

21 And so we've got a commitment in there to look

22 at that if EPA's rule that's pending before them

23 doesn't get finalized. So that's why you see two

24 versions in there.

25 Chapter 10 is where we address the rule

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1 requirements for fire, and that includes -- basically

2 there were a lot of new things that we had to look at

3 for our prescribed fire program that we've got and

4 we've had in place for several, several years.

5 But we looked at ways on how we could enhance

6 that program by revising our rules and including some

7 specific emission reduction techniques, and also

8 committing to participating in the emissions tracking

9 system that's being developed at the regional level to

10 better track fire emissions. It's one of the great

11 unknowns in the world of haze right now, and so this is

12 one way that we're trying to get a handle on what

13 occurs in Arizona and also report that at the federal

14 level.

15 So the crux of this chapter is the rule

16 revisions that we're making not only to our open

17 burning rules, but also to our range management fire

18 and range management rules. And those particular set

19 of rules have gone to the Governor's Arizona Regulatory

20 Review Counsel.

21 Again, these rule revisions were developed by

22 our stakeholder work group, which we had a lot of great

23 support. And so we're getting to the final stages of

24 that.

25 So the rules themselves are scheduled to

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1 hopefully be on the GRRC's calendar for action in their

2 January meeting. I think it's January 6th is their

3 date. And following that, assuming that the GRRC

4 approves those rules, they'll go final, get published.

5 Or they'll get published in the Arizona Administrative

6 Register, and then be final 60 days after that.

7 So we're probably looking at an effective date for

8 those rule revisions to be about end of March, first

9 part of April.

10 Chapter 11 in the SIP is the road dust issue.

11 And this was one of those things that at the regional

12 level as well as the state level it was rather

13 difficult to get a handle on road dust. There's just a

14 whole lot of technical issues out there and just work

15 that needs to be done that we're trying to figure out

16 how to do in order to adequately capture road dust.

17 And this is the -- the in-and-near approach

18 refers to the fact that road dust is one of those

19 things that because it's mostly large particulates, you

20 will have your emissions most closely to individual

21 Class I areas. You don't get a lot of transport from

22 large, large particles. And so there is a WRAP group,

23 the in-and-near group, that has been looking at how to

24 better get a handle on road dust.

25 So this chapter, the bottom line is that we

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1 commit to continue to working and studying that

2 particular issue along with other states and interested

3 stakeholders.

4 The pollution prevention chapter, Chapter 12,

5 was another one that was a lively stakeholder process

6 that we went through as this chapter was developed by

7 the stakeholders. What's in there now is the list of

8 those renewable energy and energy efficient programs

9 that have been identified as being implemented now

10 within the state, throughout the state, or also

11 programs that have funding, they are funded, and have

12 some start date on them.

13 The primary component, the standard that we

14 looked at and the work group used was the Environmental

15 Portfolio Standard which is already being managed by

16 the Arizona Corporate Commission.

17 There were some nonconsensus items that this

18 particular work group came up with that were eventually

19 submitted up to the ADEQ Director Steve Owens for

20 further consideration.

21 And we just heard Director Owens has reviewed

22 those recommendations. And because he doesn't want to

23 slow up the SIP process, you know, he's not suggesting

24 or recommending or directing the Air Quality Division

25 to change what's in the proposed SIP at this point in

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1 time. So if there are questions or there's specific

2 comments that anybody wants to make related to what's

3 in the proposed SIP, you're encouraged to make them

4 during the public comment period.

5 The remaining chapters is other GCVTC

6 recommendations. In addition to those five main

7 categories, there were several other recommendations

8 that were included in that 1996 report. And what this

9 chapter is is just kind of a list of what those others

10 are and a status check on the various measures that

11 were not addressed elsewhere in the SIP.

12 Projection of Visibility Improvement. Again,

13 this one is kind of one of the technical chapters. One

14 of the things that we need to do is to actually show

15 for each of those Class I areas what is the projected

16 visibility improvement between the base year of 1996

17 and the projected year for the planning period, which

18 is out to 2018. So this chapter includes a table and

19 lists all of the 16 areas, and how much the visibility

20 is expected to improve based upon the control measures

21 that had been identified earlier in the SIPs.

22 15 and 16, these are kind of just catch-all

23 chapters. Because this is a regional haze plan and we

24 put the SIPs together using a regional process as

25 opposed to kind of going our own route as a state, this

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1 chapter contains a commitment for Arizona to continue

2 to work with other states and other stakeholders via

3 the WRAP process. And so it also, again, acknowledges

4 that the SIP is not applicable to tribes per the Clean

5 Air Act and the regional haze rule and others. The

6 tribal authority rule has the option of submitting

7 their own regional haze SIPs.

8 The Chapter 16 is a commitment to periodic

9 review. This particular SIP goes to EPA the end of

10 2003. We have to take a look and review in 2008. We

11 also have to review it in 2013. And then we have to do

12 a final review in 2018.

13 So I guess the message here is, you know, this

14 is not a plan that we submit to EPA and falls in a

15 black hole. We have to continue to pay attention to

16 what's in it and periodically go back and check on the

17 measures that we include in there and give a status

18 check on whether or not they're working, how they're

19 working, should we do more type stuff. So that will be

20 in 2008 is the first one.

21 This particular chapter is just a commitment

22 that Arizona will submit a second or a follow-up SIP

23 for all of the other Class I areas that we've got in

24 this state. So this map shows you the four Class I

25 areas that this December SIP is being submitted to EPA

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1 for. Then the next stage -- one of the next stages

2 that we'll be working on is putting together -- we have

3 to do a regional haze SIP for those other eight

4 particular areas. And we will be working with

5 stakeholders starting next year on putting together

6 plans for those particular areas.

7 And this just gives you -- if you haven't found

8 them yet, or you haven't seen the technical supporting

9 document in the appendices or the two big binders that

10 are over there. So we didn't -- we only brought one

11 copy. So if you're interested, you can go over there.

12 But this just gives you the websites of information on

13 where you can find additional documents.

14 And a reminder that the public comment period

15 closes at 5:00 p.m. on December 3. Comments go to

16 Corky Martinkovic as Cathy mentioned. And that's it.

17 So thank you very much for listening.

18 HEARING OFFICER O'CONNELL: Well, that

19 concludes the explanation period of this proceeding on

20 the proposed State Implementation Plan.

21 Are there any questions before we move to the

22 oral comment period?

23 Sir, could you give us your name for the court

24 reporter.

25 MR. SCHLEGEL: Sure. Jeff Schlegel.

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1 S-C-H-L-E-G-E-L.

2 On the slide on Chapter 7, stationary sources,

3 the second bullet, what caused the -- what largely

4 caused the 13 percent S02 reduction during that decade?

5 MS. PELLA: Ira, can you fill that in, please?

6 MR. DOMSKY: I would say most of it related to

7 the cleanup of the smelters to get into compliance with

8 sulphur dioxide national ambient air quality standard.

9 There are other improvements that were made at other

10 sulphur dioxide sources throughout the West in addition

11 to that. And Navajo generating station, that was --

12 scrubbed it 90 percent starting in October 1999 for all

13 of its units.

14 MS. ORMOND: Amanda Ormond. O-R-M-O-N-D.

15 You talked about the recommendations that were

16 afforded by the pollution prevention work group. There

17 were four specific recommendations.

18 Can you comment on each recommendation and what

19 exactly was the outcome of each recommendation? I can

20 tell you what they are if you like. I'm just curious.

21 Because to say, well, we're not doing anything in this

22 SIP, I don't know what that means. I don't know.

23 These were very specific recommendations.

24 MS. PELLA: Right. Okay. If you wouldn't

25 mind, Amanda, because I don't have them in front of me

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1 right now.

2 MS. ORMOND: The first one was to advocate for

3 an energy policy where it has a direct effect on

4 regional haze. And the example was given at the state

5 legislature at the Corporation Commission or with the

6 Governor's office for DEQ to provide technical

7 information on policies that would affect either

8 positively or negatively regional haze.

9 So the question is is the Department not going

10 to do that function between now and, I guess, the first

11 reporting period in 2008?

12 MR. DOMSKY: Can I help you?

13 MS. PELLA: You sure can.

14 MR. DOMSKY: Okay. The status right now is

15 that the Director is reviewing the recommendations.

16 And he has not made a decision on what specifically we

17 will do, including what changes he would like to see in

18 the regional haze SIP.

19 So we will be discussing that with him over the

20 next two to three weeks in order to weigh exactly what

21 it was -- what it will be that he thinks ought to be in

22 the regional haze SIP. And then if the recommendations

23 are not something that he believes should be in the

24 regional haze SIP, what else the Department might do to

25 implement portions or all of the specific

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1 recommendations.

2 And that's the status. That's all we can say

3 at this point.

4 MS. ORMOND: And that was my concern was that

5 these were submitted in July, and we've never found out

6 what happened with them.

7 So the answer is that they're still under

8 consideration; is that right?

9 MR. DOMSKY: That's the answer. Yes.

10 MS. ORMOND: Will there be an opportunity,

11 since the public comment period ends December 3rd which

12 is next Wednesday, is this -- whatever decisions are

13 made by the Department then will go into the plan and

14 then there's no opportunity for public comment after

15 that? I'm just trying to get an idea of process.

16 MR. DOMSKY: That would be correct. We have to

17 respond to comments that we receive, and we're

18 authorized to make changes to the SIP in response to

19 those comments. Just because the plan is going to be

20 submitted by December 31st of this year, this is a

21 process that really takes us through the year 2064.

22 And even for this first planning period that

23 ends in 2018, there will ample opportunity to make

24 amendments to the plan, to add additional policies,

25 statutes, whatever is appropriate that will shore up

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1 the regional haze program that the State will be

2 implementing.

3 MS. ORMOND: Okay.

4 MS. KNIGHT: A follow-up. This is Gaye Knight,

5 G-A-Y-E, K-N-I-G-H-T, with the City of Phoenix.

6 Just a clarification then. When I read the

7 plan, I won't see those four recommendations because

8 they have not been included in the plan?

9 MR. DOMSKY: They have not been included in

10 this draft plan.

11 MS. KNIGHT: But there's a subcommittee report

12 someplace?

13 MR. DOMSKY: Right.

14 MS. ORMOND: They're not on the web. They're

15 nowhere.

16 MS. PELLA: Aren't they under the work group

17 meetings? Yeah.

18 MS. ORMOND: I don't think so. Okay. Yeah.

19 MS. PELLA: I thought those --

20 MR. DOMSKY: They should have been posted.

21 MS. PELLA: Yeah.

22 MS. ORMOND: And so just a follow-up on that

23 follow-up, one of the questions I have, too, is that

24 how does an average citizen or a person monitor,

25 especially in the pollution prevention section, that

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1 DEQ is doing some things so when it comes to 2018 they

2 can show progress?

3 What I heard you say was that there will be

4 potentially additions and changes to the plan. My

5 understanding I thought was that you wouldn't really

6 report on the plan until 2008. You're saying that

7 there is possible changes between now and 2008 with

8 updates, revisions, all kinds of different things

9 possible.

10 MR. DOMSKY: We can reopen the SIP at any time

11 that it's appropriate, whether we get instructions from

12 the Governor, from the legislature, if there are other

13 things that -- changes that EPA requires us to put in.

14 We have to in 2008 do a full review and what we

15 call a true-up to the State Implementation Plan. But

16 that doesn't bar us from taking additional actions in

17 the intervening years.

18 MS. ORMOND: Okay. Thank you.

19 HEARING OFFICER O'CONNELL: Any other

20 questions?

21 Gaye.

22 MS. KNIGHT: Gaye Knight with the City of

23 Phoenix again. Just I wanted to see her four

24 recommendations. How does the public see her four

25 recommendations? She said that the subcommittee made

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1 some --

2 MS. PELLA: I will verify, but I think they're

3 up on the website under the work groups. They should

4 be under the pollution prevention work group section of

5 the regional haze SIP. I'm pretty sure they were.

6 I'll verify that, and if they're not we'll get them

7 loaded. But these are the papers that were presented

8 to the SAC, to the Stakeholders Advisory Committee.

9 But they should be up there.

10 MS. KNIGHT: Okay. Thank you.

11 HEARING OFFICER O'CONNELL: Any other questions

12 before we move on?

13 (No response.)

14 HEARING OFFICER O'CONNELL: All right. Then

15 this concludes the question and answer period of this

16 proceeding.

17 I'm going to now open the proceeding for oral

18 comments. And I'm going to call speakers in the order

19 in which I have received speaker slips.

20 I've only received two speaker slips. Speaker

21 slips are on the table right in the front. If you wish

22 to speak, I need a speaker slip.

23 The first speaker is Wayne Leipold.

24 L-E-I-P-O-L-D. The floor is yours, sir.

25 MR. LEIPOLD: Madam Hearing Officer, I'm going

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1 to be brief. I have written comments that I will

2 submit to you.

3 HEARING OFFICER O'CONNELL: Thank you, sir.

4 MR. LEIPOLD: My name is Wayne Leipold. I'm

5 Chief Environmental Engineer at Phelps Dodge Miami

6 facility which -- and there's a copper smelter located

7 at that facility.

8 My comments are being offered in support of the

9 Regional Haze State Implementation Plan for the State

10 of Arizona that ADEQ is proposing to submit. Most of

11 my comments relate specifically to the smelter set-

12 aside portion. And one of my comments answers a

13 question that was asked during the question and answer

14 period, so I would just like to read that part.

15 To show the commitment from these two sectors,

16 the two sectors being the utility sector, the

17 coal-fired utility sector and the smelting sector, I

18 would like to review their emissions for the years 1990

19 and 2000. In 1990, the smelters and coal-fired power

20 plants emitted approximately 611,000 tons of sulphur

21 dioxide, or approximately 74 percent of the 829,000

22 tons emitted by all of the sources that emitted at

23 least 100 tons in the nine state region.

24 In the year 2000, the total emissions had been

25 reduced to 622,000 tons, or a 25 percent reduction,

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1 with 112,000 tons of that coming from the copper

2 smelters. Some of them were due to the temporary

3 cessation of two smelters. But even without -- but

4 even with them taken out, the reduction would have been

5 in the order of 70,000 tons. The electric utility

6 sector reduction was approximately 54,000 tons.

7 HEARING OFFICER O'CONNELL: Thank you.

8 Second speaker, Mr. Schlegel. Jeff Schlegel.

9 Did I pronounce it correctly?

10 MR. SCHLEGEL: Yes, you did. Thank you. This

11 is Jeff Schlegel from the Southwest Energy Efficiency

12 Project.

13 First I would like to thank ADEQ for preparing

14 the SIP and note our support for the SIP. I want to

15 speak to one recommendation that was already discussed

16 from the pollution prevention work group, and that was

17 recommendation number 4.

18 A group of --- a majority group of the work

19 groups supported a nonconsensus recommendation that

20 ADEQ should increase its support to preserve and expand

21 energy conservation and energy efficiency efforts.

22 There were two parts to this. One was to preserve and

23 expand existing efforts. The other part was to expand

24 energy efficiency efforts based on new activities, new

25 efforts.

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1 Section 309 noted that the SIP must provide for

2 programs to preserve and expand energy conservation

3 efforts, but it stopped there. What was unclear was

4 that the section did not say existing, planned, future,

5 or other words that may have made that section clearer.

6 And it did not state a goal explicitly for energy

7 efficiency as it did for renewables. The Grand Canyon

8 Visibility Transport Commission had set a goal for

9 renewables, the 20 percent goal, but it did not set a

10 similar goal for energy efficiency.

11 The work group discussed this at some length,

12 as work group members will remember. And the majority

13 of the group felt that simply listing existing programs

14 is not enough, and it does not meet the requirement of

15 preserving and expanding energy efficiency. Therefore,

16 that group went forward and made some recommendations,

17 again, majority recommendations, that would preserve

18 and expand energy conservation, both existing efforts

19 and additional efforts.

20 The reason that the group made this

21 recommendation was that Arizona is a high load growth

22 state, meaning that it's a state that has both

23 population growth and electricity usage growth. And as

24 all of us know, the more electricity is used, the more

25 emissions there will be, all else being equal. And we

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1 recommended a significant portfolio of energy

2 efficiency efforts that we recommended ADEQ support.

3 The bottom line is that now -- now there are

4 opportunities before the Arizona Corporation Commission

5 for ADEQ to actually begin to take action. The Arizona

6 Corporation Commission is reviewing energy efficiency

7 programs and renewables programs. And the

8 recommendations that we made to ADEQ could be

9 implemented today if ADEQ would take such action.

10 And we again reiterate our recommendation

11 number 4, and encourage ADEQ to increase its support

12 for energy efficiency efforts. Thank you.

13 HEARING OFFICER O'CONNELL: Thank you, sir.

14 The third speaker slip, Amanda Ormond.

15 MS. ORMOND: As Jeff Schlegel mentioned, the

16 majority of the pollution prevention work group members

17 came up with four recommendations which heretofore have

18 not been addressed by the Arizona Department of

19 Environmental Quality related to the State

20 Implementation Plan.

21 Number one was to advocate for energy policies

22 which have a direct effect on reducing regional haze.

23 And this is at the Corporation Commission, at the

24 legislature, or the Governor's office.

25 The second one was that ADEQ should directly

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1 support the Environmental Portfolio Standard, because

2 that was identified by the group as the number one

3 thing that would address -- or the number one policy

4 that would address the regional haze 10/20 goal.

5 The third one is that the Department of

6 Environmental Quality should quantify the impacts and

7 benefits of energy efficiency and renewable energy in

8 compliance. This is especially important given the

9 fact that in 2008 the State is going to be responsible

10 for coming back and showing progress in energy

11 efficiency and renewable energy.

12 Without having quantified what are the

13 reductions and costs and benefit of doing this program,

14 the Department is going to have a very difficult time

15 in coming back and saying what progress has been

16 achieved. Because if no baseline information is

17 collected, they'll have nothing to benchmark off of.

18 So I would encourage the Department to look

19 carefully at those recommendations and incorporate as

20 they see fit those recommendations into this current

21 State Implementation Plan which is to be submitted in

22 2003.

23 I would also like to say that I believe that

24 the plan is incomplete in the fact that it proposes no

25 future actions, nor any kind of strategies that the

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1 State will make between now and 2008 to achieve the

2 10/20 goal. There is not anything beyond a listing of

3 programs, as Mr. Schlegel stated.

4 Also, I would like to caution the Department.

5 Because in the energy efficiency section, there is a

6 comprehensive listing of programs that are operated by

7 the Arizona Department of Commerce and Energy office.

8 That office does not have secure funding through 2008.

9 In fact, they're funding may only go through the next

10 couple of years.

11 If the State of Arizona relies upon those

12 energy efficiency programs in this particular SIP, then

13 when it comes to 2008 either you're going to need to

14 report on what happened to those. And I would

15 recommend that you only include those programs that you

16 have a reasonable certainty that will be around when

17 2008 comes around.

18 Thank you.

19 HEARING OFFICER O'CONNELL: Thank you. Speaker

20 number four, Douglas V. Fant. F-A-N-T. Mr. Fant.

21 MR. FANT: Yes, ma'am. Thank you. Speaking on

22 behalf of myself.

23 I would like to talk about some renewables

24 issues that might be incorporated into the draft SIP

25 revisions. You're probably familiar with the effort by

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1 the Western Governor's Association to create a regional

2 renewable energy credit trading system. It's moving

3 into high gear, and it's slated for completion and --

4 completion in early 2005, implementation by June 2005.

5 And what it will allow, of course, are

6 renewable energy credits to trade regionally in the

7 Western -- probably in the Western Grid. It may

8 include some of the what I call eastern interconnect

9 territories on the far east side of the states like

10 Montana, Colorado. That's an issue to be handled in

11 the future.

12 But the Western Governor's Association -- and

13 this program will probably end up at the Western

14 Electricity Coordinating Council, WECC, will set up a

15 system to track, verify, and authorize RECs on a

16 regional basis.

17 It might be worthwhile, even though it's late

18 in the game. All of the programs in the SIP, of

19 course, are nonbinding in terms of renewable energy

20 currently, but at least incorporating this thought into

21 the final SIP that this effort is underway.

22 Along those lines it might be worthwhile, and

23 it might be an adjunct or a product that grows from the

24 SIP, it may be worthwhile for the Arizona Department of

25 Environmental Quality to quantify the values of the

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1 offsets in these RECs for haze for particulate matter,

2 with potential credits to trade for on a regional basis

3 in terms of satisfying the regional haze SIP

4 requirements. And that might be a way to encourage

5 renewable energy, to allow actual offsets to qualify

6 under the SIP.

7 On December 15, here in about two or three

8 weeks, the Western Governor's Association is sponsoring

9 a series of meeting on the first steps on implementing

10 the WREGIS. That's the actual physical tracking system

11 for the regional program.

12 I might encourage the Arizona Department of

13 Environmental Quality to come to the meetings and try

14 and get individuals on these various committees so they

15 potentially can push the regional program in the

16 direction which would be positive for the State of

17 Arizona in terms of satisfying its SIP requirements for

18 regional haze or, of course, NOX, S02, NOX, SOX, C02,

19 if that becomes an issue in the future. It's tradeable

20 currently already on a commercial basis, and it may

21 have an enforcement value too.

22 So I just wanted to raise those points and

23 suggest that perhaps a reference to the WGA's regional

24 REC program might be incorporated into Chapter 12, or a

25 least the appendix. I think it's A-12 in the appendix

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1 for Chapter 12 in the SIP. Just a thought.

2 HEARING OFFICER O'CONNELL: Thank you.

3 Speaker number five, Gaye Knight. The floor is

4 yours.

5 MS. KNIGHT: Gaye Knight with the City of

6 Phoenix again.

7 On page 99 of the draft plan, it mentions that

8 the City of Phoenix Park & Ride Photovoltaic project is

9 in the planning process or in a planning stage.

10 I've had recent discussions with our legal

11 staff, and it's very important that anything that is

12 included in the SIP must be approved by our counsel in

13 order for it to be acceptable, even if it's something

14 that's well underway.

15 And so we can't legally include anything that a

16 city or any government agency has done unless they pass

17 a resolution recognizing -- giving you the blessing to

18 say, yes, you can mention that in your SIP.

19 Even though the language on page 99 is somewhat

20 tempered by the text above it, I don't believe our

21 counsel -- no one contacted me. I don't believe we had

22 a representative on that P-2 subcommittee. And so --

23 and I see other things from, like, the City of

24 Scottsdale.

25 I just wondered if all of those cities where

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1 you mentioned some project either existing or planned

2 for the future have to be approved and be accompanied

3 by a resolution. So that needs some further legal

4 review and we can discuss it in additional detail

5 later.

6 HEARING OFFICER O'CONNELL: Thank you. Any

7 other speakers wishing to make formal comments on the

8 record?

9 (No response.)

10 HEARING OFFICER O'CONNELL: Therefore, I

11 conclude the oral comment period of this proceeding.

12 I encourage everyone to submit written comments

13 on the proposed State Implementation Plan. Your

14 participation is an essential part of the process.

15 MR. FANT: Excuse me. I'm sorry. I didn't

16 mean to interrupt. When are the written comments due?

17 HEARING OFFICER O'CONNELL: I was just coming

18 to that.

19 Again, you may submit written comments by mail,

20 e-mail or fax to Corky Martinkovic. And her business

21 card is on the table here. That will give you her

22 correct address and e-mail.

23 The end of the comment period is 5:00 p.m.,

24 Wednesday, December, 3, 2003. Please make sure your

25 comments if mailed, e-mailed, or faxed are postmarked

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1 no later than December 3, 2003.

2 I want to thank you all for attending this

3 hearing. The time is now 5:50. I now close this oral

4 proceeding.

5 (The Public Hearing concluded at 5:50 p.m.)

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1 STATE OF ARIZONA ) ) ss. 2 COUNTY OF MARICOPA )

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5

6 I, MICHELE E. BALMER, Certified Court Reporter

7 No. 50489 for the State of Arizona, do hereby certify

8 that the foregoing printed pages constitute a full,

9 true and accurate transcript of the proceedings had in

10 the foregoing matter, all done to the best of my skill

11 and ability.

12

13 WITNESS my hand this 8th day of December, 2003.

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16 MICHELE E. BALMER 17 Certified Court Reporter Certificate No. 50489 18

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ARIZONA REPORTING SERVICE, INC. (602) 274-9944 Realtime Specialists Phoenix, AZOrder of agenda items is subject to change. For additional information regarding the meeting, please call Corky Martinkovic, ADEQ Air Quality Division, at ( 602) 771-2372 or 1-800-23 4-5677, Ext. 771-2372.

Persons with a disability may request a reasonable a ccommodation such as a sign language interpreter, by contacting Katie Huebner at (602) 771-4794 or 1-800-234-5677, Ext. 4794. Requests should be made as early as possible to allow sufficient time to ma ke the arrangements for the accommodation. This document is available in alternative formats by contacting ADEQ TDD phone number at (602) 771-4829. 

# Public Hearing Agenda

Printe d on rec y cled p a p e r Pursuant to [cite 40 CFR § 51.102 for SIP hearings and ARS § 49-425 for air quality rule hearings], notice is hereby given that the above referenced meeting is open to the public.



### Public Hearing Arizona Proposed Regional Haze State Implementation Plan Monday, November 24, 2003, 4:30 p.m. Program Room, Coconino Library 300 West Aspen Avenue, Flagstaff, Arizona

AGENDA

1. Welcome and Introductions

2. Purposes of the Oral Proceeding

3. Procedure for Making Public Comment

4. Brief Overview of the Arizona Proposed Regional Haze State Implementation Plan

5. Question and Answer Period

6. Oral Comment Period

7. Adjournment of Oral ProceedingTranscripts_Flagstaff Public Hearing_11-24-03.txt 1

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5 TRANSCRIPT OF PUBLIC HEARING

6 ARIZONA'S REGIONAL HAZE STATE IMPLEMENTATION PLAN

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8 ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY

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13 Flagstaff, Arizona

14 November 24, 2003
15 4:36 p.m.

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22 NORTHERN ARIZONA REPORTERS REPORTED BY: 23 413 NORTH SAN FRANCISCO, SUITE 2 JOHN A. DALSIN, RPR FLAGSTAFF, ARIZONA 86001 AZ CCR NO. 50270 24 TELEPHONE: (928) 774-0442 1-800-544-4313 25 FAX: (928) 779-3624

NORTHERN ARIZONA REPORTERS

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1
2 Transcript of public meeting on Arizona's
3 Regional Haze State Implementation Plan, held by the
4 Arizona Department of Environmental Quality, on Monday, Page 1Transcripts_Flagstaff Public Hearing_11-24-03.txt
5 November 24, 2003, in the Jan Romero Stevens Community
6 Room of the Flagstaff City - Coconino County Public
7 Library, 300 West Aspen Street, Flagstaff, Arizona,
8 called to order at 4:36 p.m., reported by John A.
9 Dalsin, a Registered Professional Reporter and a
10 Certified Court Reporter in and for the State of

11 Arizona.

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13

14

15 ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY PERSONNEL:
16 ERIC C. MASSEY, Environmental Program Manager, Air Quality Division; Meeting Chairperson 17 DEBORRAH "CORKY" MARTINKOVIC, Environmental 18 Program Specialist, Air Quality Division

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NORTHERN ARIZONA REPORTERS

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1 I N D E X PAGE
2 WELCOME AND INTRODUCTION - Chairperson Massey 3

3 PURPOSES OF THE ORAL PROCEEDING 4

4 PROCEDURE FOR MAKING PUBLIC COMMENT 4

5 BRIEF OVERVIEW OF THE ARIZONA PROPOSED RHSIP 6

6 QUESTION AND ANSWER PERIOD 15

7 ORAL COMMENT PERIOD 15

8 ADJOURNMENT OF ORAL PROCEEDING 18
Page 2Transcripts_Flagstaff Public Hearing_11-24-03.txt 9

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15 P R O C E E D I N G S
16 CHAIRPERSON MASSEY: I now open this oral
17 proceeding.

18 WELCOME AND INTRODUCTIONS

19 CHAIRPERSON MASSEY: Good afternoon, and thank
20 you for coming.
21 This oral proceeding is on the Arizona
22 Proposed Regional Haze State Implementation Plan. This
23 is a proposed plan to direct the State of Arizona.
24 It is now Monday, November 24th, 2003,
25 4:36 p.m. The location is Coconino Library, 300 West

NORTHERN ARIZONA REPORTERS

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1 Aspen Avenue, Flagstaff, Arizona. My name is Eric
2 Massey, and I have been appointed by the Director of
3 the Arizona Department of Environmental Quality to
4 preside at this hearing.

5 PURPOSES OF THE ORAL PROCEEDING
6 CHAIRPERSON MASSEY: The purposes of this
7 proceeding are to provide the public an opportunity to
8 do three things today.

9 The first is to hear about the substance
10 of the proposed State Implementation Plan; second is to
11 ask questions regarding the proposed plan; and the
12 third is to present oral arguments, data and views
13 regarding the proposed plan in the form of comments on Page 3Transcripts_Flagstaff Public Hearing_11-24-03.txt

14 the record.
15 Representing the Department are myself
16 and Corky Martinkovic of the Air Quality Planning

17 Section.

18 PROCEDURE FOR MAKING PUBLIC COMMENTS
19 CHAIRPERSON MASSEY: The procedure for making a
20 public comment on the record is straightforward. If
21 you wish to comment, you need to fill out a speaker
22 slip, which are available at the sign-in table, and
23 give it to me. Using speaker slips allows everyone an
24 opportunity to be heard and allows us to match the name

25 on the official record with the comments.

NORTHERN ARIZONA REPORTERS

5
1 You may also want to submit written
2 comments to me today in person; or by mail, e-mail or
3 fax, to Corky Martinkovic by the end of the comment
4 period. The end of the comment period is 5:00 o'clock
5 on Wednesday, December 3rd, 2003. And that is 5:00
6 o'clock p.m. If mailed, e-mailed or faxed, written
7 comments must be "postmarked" no later than December

8 3rd of 2003.
9 Submit your written comments to: Corky
10 Martinkovic, Air Quality Planning Section, Arizona
11 Department of Environmental Quality, 1110 West
12 Washington street, Phoenix, Arizona, 85007, or by fax
13 at 602 - 771-2366, or by e-mail at martinkovic.

14 deborrah@ev.state.az.us

15 For additional information, I would
16 recommend that you pick up one of Corky's business

17 cards in the back.
Page 4Transcripts_Flagstaff Public Hearing_11-24-03.txt 18 Comments made during the formal comment
19 period are required by law to be considered by the
20 Department in the preparation of the final State
21 Implementation Plan. This is done through the
22 preparation of a responsiveness summary in which the
23 Department responds in writing to written and oral
24 comments made during the formal comment period.
25 The agenda for this is simple. First, we

NORTHERN ARIZONA REPORTERS

6
1 will present a brief overview of the proposed State
2 Implementation Plan.
3 Next, I will conduct a question-and-
4 answer period. The purpose of the question-and-answer
5 period is to provide information that may help you in
6 making comments on the proposed State Implementation

7 Plan.

8 Third, I will conduct the oral comment
9 period. At that time I will begin to call speakers in
10 the order that I have received speaker slips.
11 Please be aware that any comments you
12 make at today's hearing that you want the Department to
13 formally consider must given either in writing or on
14 the record during the oral comment period of this
15 proceeding.
16 At this time Corky Martinkovic will give
17 a brief overview of the proposed State Implementation

18 Plan.

19 BRIEF OVERVIEW OF THE ARIZONA PROPOSED RHSIP

20 PROGRAM SPECIALIST MARTINKOVIC: For the
21 overview of the Arizona Proposed State Implementation
22 Plan, today what I am going do is take you through Page 5Transcripts_Flagstaff Public Hearing_11-24-03.txt
23 basically what is in the State's Implementation Plan
24 chapter by chapter.
25 The purpose of the State Implementation

NORTHERN ARIZONA REPORTERS

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1 Plan, the purpose of "the Plan", is to address the
2 Clean Air Act Section 169, the National Visibility Goal
3 requirements.
4 Basically, the National Visibility Goal
5 asks for all states to protect visibility in the
6 national parks and wilderness areas and remedy any
7 existing visibility impairments and prevent any future
8 impairment.
9 It is also to fulfill the requirements of
10 the federal Regional Haze Rule.

11 Arizona and four other western states are
12 doing a plan under Section 309 of the Regional Haze

13 Rule.
14 And for your information, the four other
15 states are Utah, New Mexico, Wyoming and Oregon.
16 The Executive Summary & Background,
17 Chapters 1 through 3.
18 The Executive Summary, which is a normal
19 stage of the Implementation Plan, provides a general
20 overview of the State Implementation Plan, or SIP for

21 short.
22 Chapter 1 gives the background and
23 regulatory history.
24 Chapter 2 gives the physical, demographic
25 and economic descriptions of the state of Arizona.

NORTHERN ARIZONA REPORTERS
Page 6Transcripts_Flagstaff Public Hearing_11-24-03.txt 8
1 And Chapter 3 gives descriptions of the

2 four Class I areas and a list of the 16 Colorado

3 Plateau areas.
4 The four Class I areas in this particular
5 system we are dealing with are: the Grand Canyon
6 National Park; Mount Baldy; Petrified Forest; and
7 Sycamore Canyon.
8 Chapter 4 is basically what we call our
9 "technical chapter". It deals with "What Is Haze" and
10 discusses what pollutants contribute and how they
11 contribute to regional haze; what types of sources emit
12 those pollutants; what visibility is like at the 16
13 Grand Canyon Visibility Transport Commission Class I
14 areas; and then the summary of Arizona's visibility
15 monitoring strategy.
16 Chapter 5 we call the "RAVI chapter". It
17 stands for Reasonable Attributable Visibility
18 Impairment. Visibility in specific stationary sources.
19 "Stationary sources" are utilities, or smelters or
20 other sources that are permanently located in specific

21 areas and do not move around.
22 This chapter also contains commitments to
23 fulfill Sections 51.302 through 307 of the Regional
24 Haze Rules to remove the Federal Implementation Plan,

25 which now exists in the state of Arizona.

NORTHERN ARIZONA REPORTERS

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1 It also contains Arizona's RAVI rule,

2 which will be effective December 2nd, '03, that
3 establishes the procedures to determine controls should
4 a stationary source be certified and found Page 7Transcripts_Flagstaff Public Hearing_11-24-03.txt

5 attributable.
6 Chapter 6 deals with "Clean Air

7 Corridor".
8 This chapter contains a summary of the
9 Grand Canyon Visibility Transport Commission's

10 conclusion that there is one clean air corridor on the
11 Colorado Plateau. And Arizona does not have any part

12 of the clean air corridor held within the state.

13 It also contains a commitment for Arizona
14 to cooperate in regional emissions tracking program

15 for clean air corridors.
16 This is a map of the clean air corridor.

17 It's not too clear here, but Arizona is down to the 18 Grand Canyon (indicating on projection). Arizona is

19 the lowest state there. That shows where the clean air

20 corridor is located.
21 Chapter 7 is the "Stationary Sources"
22 chapter, which contains a brief history of the
23 stationary sources approach and rationale for the
24 backstop market trading program, otherwise known as the
25 "Annex" under the Regional Haze Rule.

NORTHERN ARIZONA REPORTERS

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1 It also contains the monitoring
2 requirements, the showing of thirteen percent sulfur
3 dioxide, or SO-2, reduction, and a summary of the NOx
4 and PM Report.
5 It also contains a commitment to complete
6 the Arizona rule for the trading program as soon as
7 practicable.
8 Chapter 8 is "WEB Trading Program for
Page 8Transcripts_Flagstaff Public Hearing_11-24-03.txt 9 Stationary Sources". This is the actual trading
10 program.
11 The SO-2 Milestones and Backstop Trading
12 Program contains milestones, the default allocation
13 process, pre-trigger and post-trigger requirements for
14 monitoring and record keeping and geographical en15 hancement.
16 I should say at this point: If anybody
17 has some questions about these specific things, feel
18 free to ask them during the presentation.
19 Chapter 9, "Mobile Sources".
20 Chapter 9 contains an explanation of the
21 GCVTC's work, WRAP's subsequent technical analysis and
22 federal regulatory actions.
23 And "GCVTC" stands for Grand Canyon
24 Visibility Transport Commission, and "WRAP" is the
25 Western Regional Air Partnership.

NORTHERN ARIZONA REPORTERS

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1 This also contains a summary of Arizona's
2 approach and conclusions to non-significance deter-
3 mination issue for multiple sources.

4 And it contains two versions to account
5 for probable federal rule revision, which was proposed
6 on July 3rd -- That should be "03". Excuse me. It
7 says "02", but it should read "03".
8 And it is my understanding that that rule
9 should be becoming final shortly. We have not received
10 any further information at this point.
11 Chapter 10 is the "Fire" chapter, which
12 contains the Enhanced Smoke Management Plan, including
13 emission reduction techniques, or "ERTs", for short, Page 9Transcripts_Flagstaff Public Hearing_11-24-03.txt
14 and the tracking system to track emissions from various
15 types of fires.
16 It contains commitment to develop a
17 process for dealing with administrative barriers to
18 nonburning activities, and contains revisions to
19 R18-2-602, which is Arizona's open burning rule, and
20 Article 15, which is Arizona's range management rule
21 submitted to the Governor's Regulatory Review Council
22 for final action this past November 17, 2003.
23 Chapter 11 is the chapter on "Road Dust",
24 which contains GCVTC's acknowledgment that dust
25 requires additional tracking and modeling.

NORTHERN ARIZONA REPORTERS

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1 It also contains a commitment to track
2 emissions from paved and unpaved road dust.
3 It discusses the "In & Near" approach, 4 suggested as a way to address road dust under 309(g),
5 which is a supplemental section, and future SIP
6 revisions as modeling and inventories improve.
7 Chapter 12 is the "Pollution Prevention"
8 chapter, which contains a list of current renewable
9 energy and energy efficient programs in Arizona.
10 The primary component in this chapter is
11 the Environmental Portfolio Standard, administered by
12 the Arizona Corporation Commission.
13 And it also has ADEQ considering the
14 future role in energy programs and how best to
15 contribute to the regional energy goal, which is a
16 ten-point goal, outlined in the Regional Haze Rule.
17 Chapter 13 is a section in the GCVTC
Page 10Transcripts_Flagstaff Public Hearing_11-24-03.txt 18 recommendations called "Other GCVTC Recommendations",
19 and we opted to put this in a separate chapter for
20 clarity. It provides a review of recommendations from
21 the 1996 report not addressed elsewhere in the SIP.
22 And categorical by stationary, mobile,

23 area and multi-sector.
24 It includes a summary of the federal land
25 managers' information provided for the four Class I

NORTHERN ARIZONA REPORTERS

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1 areas covered by this SIP.
2 Chapter 14 is what we call the
3 "Projection chapter". "Projection of Visibility
4 Improvement".

5 It includes the 1996 and 2018 emission
6 inventory information for the following source 7 categories: area, stationary point, mobile (on- and
8 non-road), road dust (paved and unpaved), fire
9 emissions (prescribed, agricultural and wildfire) and
10 biogenic.
11 It also includes projected improvement

12 from 1996 to 2018 for each of the 16 Colorado Plateau
13 Class I areas, considering identified control
14 strategies.
15 Chapters 15 and 16 are part of the

16 "Coordination and Review" that are contained in almost
17 all Arizona's SIP, and includes two things: Arizona's
18 commitment to participate in regional planning via the

19 WRAP, and coordinate with other stakeholders;
20 acknowledgement that Arizona's SIP is not applicable to
21 tribes; and a commitment, within Chapter 16, to
22 periodically review for determination of reasonable Page 11Transcripts_Flagstaff Public Hearing_11-24-03.txt
23 progress. 24 Chapter 17 is the "309(g) Commitment".

25 Declaration of Arizona's commitment to

NORTHERN ARIZONA REPORTERS

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1 address the remaining eight Class I areas in a SIP 2 revision under the requirements of 40 CFR 51.309(g).
3 Briefly, what this means is: There are
4 twelve Class I areas in Arizona. We are tackling the

5 first four in the 309 SIP. What we need to address are
6 the remaining eight. And the Regional Haze Rule allows 7 us to do that under 309, Section (g), of the Regional
8 Haze Rule. And we will be working on that SIP within
9 the year 2004.
10 This is just a map of the Arizona Class
11 I Area. You will see the red ones. They are the ones
12 we are dealing with right now. And the remaining blue
13 ones are the eight that we will be addressing in the 14 309(g) SIP.
15 Along with the base SIP, the actual SIP
16 document itself, there are two other major documents
17 that come along with the SIP. One is the Western
18 Regional Air Partnership Technical Support Document,
19 which is also listed on their WRAP web page, which is
20 wrapair.org.
21 We also have it posted on the ADEQ web
22 page. And the appendices are referenced for the 309
23 states. They also are on the WRAP web page.

24 We have the SIP, the TSD and the
25 appendices for Arizona also on the Arizona Regional

NORTHERN ARIZONA REPORTERS
Page 12Transcripts_Flagstaff Public Hearing_11-24-03.txt 15

1 Haze website, which is listed there.
2 And again, I remind you that the public
3 comment period closes at 5:00 p.m. on December 3rd.

4 CHAIRPERSON MASSEY: This concludes the
5 explanation period of this proceeding on the proposed
6 State Implementation Plan.

7 QUESTION AND ANSWER PERIOD
8 CHAIRPERSON MASSEY: Are there any questions
9 before we go to the oral comment period? 10 (No audible response.)
11 CHAIRPERSON MASSEY: OK. Hearing none, this
12 concludes the question-and-answer period of this
13 proceeding on the proposed State Implementation Plan.

14 ORAL COMMENT PERIOD
15 CHAIRPERSON MASSEY: I now open this proceeding

16 for oral comments.

17 Mr. Carl Bowman?
18 MR. BOWMAN: My name is Carl Bowman. I am the
19 Air Quality Specialist with the National Park Service
20 at Grand Canyon National Park.
21 I am very glad to be here this afternoon.
22 In fact, I have been looking forward to it since August

23 15th, 1991. That afternoon I was a somewhat bewildered
24 participant at the first formative meeting of some
25 "thing" called the "Grand Canyon Visibility Transport

NORTHERN ARIZONA REPORTERS

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1 Commission".

2 Since that time, we in the National Park
3 Service have been working with hundreds of others
4 through the Commission and its successor organization, Page 13Transcripts_Flagstaff Public Hearing_11-24-03.txt
5 the Western Regional Air Partnership, to develop a
6 regional plan to address the haze that can obscure the
7 magnificent vistas of the Grand Canyon as well as the
8 other Class I areas of the Colorado Plateau. Today we
9 see this work coming to fruition here in Arizona with
10 the draft State Implementation Plan for Regional Haze

11 before us.
12 As a participant in the plan's
13 development process, I would like to commend the
14 Arizona Department of Environmental Quality for their
15 effort in developing this plan with an open, stake16 holder - based process. This process relies heavily on
17 the various groups affected by this plan. Government,
18 industry and environmental groups were all welcome at
19 the table. I am sure it wasn't easy for ADEQ leading
20 this process, considering and consolidating the many
21 viewpoints offered and producing this plan. In the
22 end, though, I believe we have a plan that will guide
23 us along the path to reduce the haze of air pollution
24 in our parks and wilderness areas.
25 The draft plan meets our expectations and

NORTHERN ARIZONA REPORTERS

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1 appears to meet the requirements under the Regional
2 Haze Rule promulgated by the EPA. We do have a few
3 comments that we believe will clarify some portions of
4 the plan.
5 The provisions regarding future emission
6 milestones for nitrogen oxides and particulate matter
7 in Section 7.3 can still use a bit of tweaking. This
8 should avoid any inadvertent impressions that decisions
Page 14Transcripts_Flagstaff Public Hearing_11-24-03.txt 9 have already been made regarding future options and
10 best available retrofit technology for these
11 pollutants.

12 Section 8.5 discusses the criteria the

13 National Park Service intends to follow for certifi14 cation of visibility impairment by sources of sulfur
15 dioxide. A memorandum of agreement regarding these
16 criteria has not been formally completed between the

17 National Park Service and the State of Arizona;
18 however, we are prepared to move forward on the basis
19 of the existing draft agreement used for Section 8.5.

20 We will address these issues in more
21 detail and some other minor points in our written

22 comments, which we will submit before the close of the
23 comment period on December 3rd. We have worked long
24 and hard to get to this point, and I look forward to
25 seeing the difference we can make.

NORTHERN ARIZONA REPORTERS

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1 CHAIRPERSON MASSEY: Thank you.
2 I have no other speaker slips at this
3 time. Are there any others that would like to make

4 oral comments? 5 (No audible response.)

6 ADJOURNMENT OF ORAL PROCEEDING
7 CHAIRPERSON MASSEY: Seeing no additional
8 speaker slips, this concludes the oral comment period
9 of this proceeding.
10 I encourage everyone to submit written
11 comments on the proposed State Implementation Plan.
12 Your participation is an essential part of this
13 process. Page 15Transcripts_Flagstaff Public Hearing_11-24-03.txt
14 Again, you may also submit written
15 comments by mail, e-mail or fax to Corky Martinkovic by
16 the end of the comment period. The end of the comment
17 period is 5:00 p.m. on Wednesday, December 3rd, 2003.

18 If mailed, e-mailed or faxed, written comments must be
19 "postmarked" no later than December 3rd, 2003.
20 Please submit your written comments to:
21 Corky Martinkovic, Air Quality Planning Section,
22 Arizona Department of Environmental Quality, 110 West
23 Washington Street, Phoenix, Arizona 85007; or by fax at
24 602 - 771-2366; or by e-mail at martinkovic.

25 deborrah@ev.state.az.us

NORTHERN ARIZONA REPORTERS

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1 Thank you all for attending.
2 The time is 4:54 p.m., and I now close
3 this oral proceeding. 4 (The public hearing concluded at 4:54 p.m.,
5 November 24, 2003.)

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NORTHERN ARIZONA REPORTERS

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1 STATE OF ARIZONA ) ) REPORTER'S CERTIFICATE 2 COUNTY OF COCONINO )

3
4 I, John A. Dalsin, do hereby certify that
5 I am a Certified Court Reporter within the State of
6 Arizona and a Registered Professional Reporter;
7 I further certify that the foregoing
8 proceedings were taken in stenotypy by me at the time
9 and place herein set forth and were thereafter reduced
10 to typewritten form, and that the foregoing constitutes
11 a true and correct transcript of the notes taken at

12 that time;
13 I further certify that I am not related
14 to nor employed by or for any of the parties or
15 attorneys herein nor in any way interested in the

16 outcome of the within action;

17 In witness whereof I have hereto affixed
18 my signature this 5th day of December, 2003.

19

20

21 _______________________________ JOHN A. DALSIN 22 Arizona Certified Page 17Transcripts_Flagstaff Public Hearing_11-24-03.txt Court Reporter No. 50270 23

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NORTHERN ARIZONA REPORTERS

Page 18Appendix A-18 – Public Participation Arizona Regional Haze SIP 

## Appendix A-18c. Written Comments Received During Comment PeriodF: \ raid \ WinKendallGroup \ ADEQ02

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031231_Final \

Comments \ AEPCO Comments_Downey.rtf 

### November 26, 2003

Corky Martinkovic Air Quality Planning Section Arizona Department of Environmental Quality 1110 W. Washington St. Phoenix, AZ 85007

RE: COMMENTS ON REGIONAL HAZE STATE IMPLEMENTATION PLAN

Arizona Electric Power Cooperative, Inc. (AEPCO) is a customer

- owned, nonprofit, electric utility with approximately 300 employees headquartered in Benson, Arizona. We are the owner/operator of Apache G enerating Station (Apache Station), a 560 MW generating station with two gas/coal

- fired steam electric generation units, one gas/oil

fired combined cycle steam generation unit, and three gas/oil

- fired turbine units. Apache Station supplies power to six el ectric distribution cooperatives, which serve more than 270,000 people in portions of Arizona, California and New Mexico.

As you are aware, AEPCO has participated as a stakeholder in the Arizona Department of Environmental Quality ’ s (ADEQ) process to deve lop the draft revisions to the State Implementation Plan (SIP) that will implement regional haze regulations in Arizona. Previous to this effort, through our affiliation with WEST Associates, we provided input to the Grand Canyon Visibility Transport Comm ission (GCVTC) and its successor body, the Western Regional Air Partnership, as they worked on their recommendations and plans to reduce visibility impairment in the national parks and wilderness areas of the Colorado Plateau.

Throughout our involvement w e have continued to support and advocate the approach to visibility management that is presented in Arizona ’ s draft SIP. Specifically, AEPCO supports the SIP ’ s recognition that to realize progress in achieving visibility goals we must have a program that encompasses not only industrial facilities, but also a wide range of emission sources that contribute to visibility degradation, including vehicles, agricultural activities and forest fires. We also strongly support the SIP ’ s adoption of the GCVTC ’ s recom mendation to implement a voluntary program for sulfur dioxide (SO 2 

### ) emissions reductions from industrial sources. This program is structured to ensure that

### Regional Haze SIP Comments

Page 2 November 26, 2003

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### the reduction commitments from these sources are achieved by including a “ backstop ”
cap

- and

- trade p rogram that would be imposed if voluntary efforts were unsuccessful.

The pursuit of SO 2 

### reductions per the program included in the regional haze SIP is beneficial to the environment as it offers reductions from major sources of emissions not addressed by Best Available Retrofit Technology (BART) regulations. In addition, relying on voluntary reductions and a “ backstop ” emissions trading program is a more
cost

- effective approach to regulation than a typical command

- and

- control program.

We understand that this SIP is an initial step in implementing regional haze regulations in Arizona and additional work has yet to be accomplished in developing and proceeding with the details of the visibility management programs included in the SIP. We look forward to our continuing role as a stakeholder in these efforts, and appreciate ADEQ ’ s broad inclusion of those affected by these rules in the agency ’ s activities to date.

If you have any questions regarding these comments, please contact Kara Downey at (520) 586

- 3631 or kdowney@ssw.coop.

Sincerely,

Mark W. Schwirtz Senior Vice President & Chief Operating Officer

Via Facsimile and Electronic Mail

c/ J. Andrew K. Downey P. Cooper P. Ledger R. Hewlett M. Nelson File: ADEQ Correspondence, Air Quality

### Dec 3, 2003

Deborrah Martinkovic, Air Quality Division Arizona Department of Environmental Quality 1110 W. Washington St. Phoenix, AZ 85007

Re: Regional Haze State Implementation Plan

- Draft of October 24, 2003

Dear Ms. Martinkovic

Ar izona Public Service Company (APS) has actively participated in the state stakeholder process and strongly supports the Arizona Section 309 Regional Haze State Implementation Plan (SIP). We believe the draft plan meets all federal and state requirements a nd provides effective and workable strategies towards making ‘ reasonable
progress ’ on reducing regional haze in Arizona and the west.

To maximize public participation and plan effectiveness, this plan was developed in coordination with the Western Regiona l Air Partnership (a coalition of western states and Indian nations) and provided numerous opportunities for all stakeholders to be involved. This outreach and cooperation has resulted in an innovative plan that demonstrates real progress and stakeholder o wnership.

APS has engaged in the development of this innovative regional haze program through the Grand Canyon Visibility Transport Commission and the subsequent Western Regional Air Partnership. We have also been active in the State Regional Haze process and, although we are disappointed by the resolution of the state SO2 allocation methodology as incorporated in the backstop

- trading program, we remain committed to the overall program success. Please see additional comments in the attachment.

. Thank you for the opportunity to participate

Sincerely

William D. Wiley Senior Environmental Policy Advisor

Attachment

- Specific comments

### APS Comments On Regional Haze State Implementation Plan for Arizona Public Review Draft October 24, 2003

APS apprecia tes the opportunity to participate in the state regional haze process and supports submittal of the Arizona 309 Regional Haze State Implementation Plan (SIP). We believe, however that the SIP would be enhanced with the following changes.

1. Please clari fy in the SIP that references and appendices are for reference only and are not enforceable as part of this SIP (e.g. TSD, NOx/PM report, P2 appendix, etc.).

2. Sections 7 and 8 . These Sections refer to Stationary Source requirements and the Backstop SO 2 Trading program. Please clarify what is required under the expanded 10

- year record

- keeping requirement. Does it include all documents currently required under our Title V permits (this includes hourly emissions values and monitor maintenance records), o r is there a selected subset, i.e. annual emissions inventory or Title IV annual emission sums?

3. Table 8

- 2 (page 42) . Table 8

- 2 erroneously suggests that APS ’ Four Corners Power Plant, which is located on the Navajo Nation Indian Reservation, is subje ct to the jurisdiction of the Navajo Nation. This is not accurate. The plant is subject to EPA Region IX jurisdiction, not Navajo jurisdiction. We strongly encourage the state to address this issue in a clarifying footnote, next to entry 10 on Table 8

- 2 ( “Navajo Nation ” ), stating, “Although the Four Corners Power Plant is located on the Navajo Nation Indian Reservation, the plant is subject to environmental regulation by EPA Region IX. ” We understand that this same issue applies to SRP ’ s Navajo Power P lant in Page, Arizona.

4. Section 8.1.3

–Determination of Program Trigger

- Changes in flow rate
measurements . The new test methods (2F, 2G, and 2H) are not used to continuously monitor flow rates. Instead, they may be used to initially characterize a continuous flow monitor system and then be used for ongoing quality assurance audits. Importantly, reductions in flow rates are not realized unless a continuous flow monitor is first re

characterized using one or all of the new methods (Question 3.13 of EPA ’ s Part 75 Emissions Monitoring Policy Manual

–October 28, 2003). Using the new methods should only reduce the reference method flow rate, resulting in the reference method being lower than the flow monitor reads. Also, Acid Rain regulations require that all hourly measurements be biased based on the most recent quality assurance testing. However, this bias is only applied when the flow monitor reads are lower than the reference method. Therefore, a source that chooses to use one or all of the new m ethods for ongoing quality assurance without first re

- characterizing the monitor will not reduce the flow rates measured by the continuous flow monitor.

### Further, the new methods were published for use in mid 1999 as EPA ’ s answer to several

claims that co nventional methods resulted in overestimating flow rates. However, EPA has subsequently determined that, in fact, this may not be the case (Question 3.6 of EPA ’ s Part 75 Emissions Monitoring Policy Manual

–October 28, 2003). EPA now believes these claims are counterbalanced by evidence that little or no overestimation has been seen. Because of this recent information published by EPA, the language in this section requiring adjustments based on the use of the new flow methods should be deleted. If the lan guage is not deleted then it should be clarified that adjustments should only be required when an existing flow monitor is re

- characterized using the new methods and where the monitor ’ s coefficients had to be changed because the old and new methods produce d different results.

5. Section 8.3.1 (g) renewable energy allocations . Please clarify that renewable energy allocations are only available for renewable energy physically located within the participating five state 309 region.

6. Section 8.3.1 (g) (6) . We believe this Section should be revised to specifically provide for public notice and comment prior to finalizing the State (and facility specific) Allocation Report for Arizona.

7. Section 12 Pollution Prevention and Renewable Energy Programs

. All participants in the pollution prevention subcommittee supported this section of the SIP . APS supports the current language of the proposed SIP, as it recognizes the importance of existing programs and authorities in supporting renewable energies and e nergy efficiency in Arizona. The Arizona Corporation Commission is reviewing these programs in ongoing workshops and is the appropriate authority for evaluating their place in the state ’ s energy mix, while considering energy reliability and affordability. ADEQ need not and should not duplicate regulatory efforts in these areas.

8. Miscellaneous . There are several typographical errors and minor corrections needed throughout the document. (e.g. pg.15

- Mt Baldy is in ‘ eastern ’ AZ., pg. 21

- ‘ Mesa Verde Nati onal Park ’ , pg. 37

- backstop ‘ market ’ instead of ‘ marking ’ , etc).I attended the comment meeting last night and thank you for an informative, capsulated

presentation of the Arizona SIP. I have a couple follow

- up questions: 1. I do not find the City of Phoenix four recommendations on the website. Would you please direc

t me to the location? 2. Are any power plants or proposed power plants desiganted as stationary sources?

Caroline Butler, CLA Legal Division Arizona Corporation Commission 1200 West Washington Phoenix, Arizona 85007 Phone: 602

- 542

- 3402 FAX: 602

- 542

- 487 0To the Editor:

With "Officials map war on haze," the Tribune maintains it's practice of uncritically filling print with press releases from self

- serving government bureaucracies. Why the unquestioning acceptance that "officials" can indeed "do somethin g" about the haze? It's bad enough the headline declares another "war"

-- along with the War on Drugs, the War on Hunger, and the War on Obesity, presumably

-- but there's no apparent attempt to keep public officials honest. For example, there

are no ans

wers to tough questions for ADEQ director Steve Owens, questions such as,

"Mr. Owens, how much will the haze be reduced by your planned measures? How will you measure this reduction? How long will it take to meet the planned reduction? How will you kno w when to declare 'victory'? How much will this cost taxpayers? Will there be a limit to the amount expended for haze reduction? What additional sacrifices may be required of valley residents? Will there be a cost

- benefit analysis? If plans are predict

ed to be uneconomical or improvement negligible, will we be told to just live with the haze? How did Congress come to 'target' the Tonto National 'Forest' for this blessing?"

The result of this new war declaration is predictable: we're in for another o pen

- ended expenditure of public funds wasted on a declared problem that can be realistically solved only by the mass exodus of residents from the Valley of the Sun. But not to worry, Valleyites, short of that extreme measure the parasite classes will co ntinue to provide the illusion they're "doing something" about it, at your expense, of course. And if there is still haze after ten years, why, they'll just work harder at it! And meanwhile, the Tribune will continue transcribing instead of reporting.

Richard D. Welling MesaThe camer's and instrument's are not going to get

rid of anything. The picture of the inversion on the front page of the Rrib show's you how to do it.

Duane Harrison navigatordhr@wmconnect.com

Corky Martinkovic: There are natural means of ridding

our selves of pollution using off the shelf product's. Concentrate on the answer and not the problem.

Duane Harrison

Navigatordhr@wmconnect.com

### Regarding the plan to reduce haze in scenic areas. I am not sure if you are

taking comments about the Superstition Wilderness, but I have heard that Maricopa County is about to grant a permit modification to allow SRP to burn diesel at the San Tan plant w hen natural gas supplies are low. The haze around the plant in the winter is already thick in the winter. The Superstitions are much less visible in the area of the San Tan plant than from Mesa where the air is clearer. Is there anything the state can do about this being allowed? Sincerely, Suzanne PagerFYI

- without attachments LC

>Date: Wed, 12 Nov 2003 14:06:12

- 0700 >To: dam@ev.state.az.us >From: Lee Comrie < LComrie@pagnet.org > >Subject: Regional Haze SIP >Cc: mswg@pagnet.org,mm

> >As Chair of the Mobile Source Working Group, and on behalf of its m embers, >I would like to notify you of an apparent error in Appendix A

- 9. Mobile >Sources. The appendix includes a letter sent to Ms. Wrona from myself >dated July 10, 2003 with the attached report entitled "Arizona Regional >Haze Mobile Source Worki ng Group Mobile Source Significance >Determination". This version was later updated to reflect the comments >and suggestions made at the Stakeholder Advisory Committee meeting held on >July 24, 2003. I am attaching the updated letter and report to rep lace >the previous version for inclusion in this Appendix. I would also like to >add that an overall review of the document for typographical errors is >needed. Please contact me if you have any questions. >LC

> >Leonore "Lee" Comrie >Air Quality Mana ger

> >Pima Association of Governments >177 N. Church Ave., Suite 405 >Tucson, AZ 85701

> >Ph: (520) 792

- 1093 Fax: (520) 620

- 6981

### December 3, 2003

Deborrah Martinkovic Arizona Department of Environmental Quality 1110 W. Washington Street Phoenix, Arizona 85007

RE: Comments on the Arizona Regi onal Haze State Implementation Plan

Dear Ms. Martinkovic:

This letter provides comments on the pollution prevention portion of Arizona Department of Environmental Quality’s ( ADEQ) Regional Haze State Implementation Plan (Haze SIP). Environmental Defense, Grand Canyon Trust, the Southwest Energy Efficiency Project and Wester n Resource Advocates (formerly the Land and Water Fund of the Rockies) have participated in and monitored the development of the Arizona Haze SIP through the efforts of Rick Moore (Stakeholder Advisory Committee Member) and Amanda Ormond and Jeff Schlegel (Pollution Prevention Work Group Members).

We commend the state on the stakeholder pr ocess used to develop the entire Haze SIP. The process allowed a broad constituency to play an active role in the development of the components related to energy efficiency an d renewable energy. We also recognize and applaud the efforts of the Pollution Prevention Work Group (P2WG) Chair and Co-Chair, Ursula Kramer and Ray Williamson, respectivel y, and the assistance of Theresa Rigney, ADEQ.

The state has done a good job addressi ng many of the pollution prevention requirements in the (RHR) 40 CFR 51.309(d)(8). However, in reviewing and comparing the requirements of the Regional Haze Rule with the SIP draft presented for public comment, we find serious, material omissions in the pollution prevention section (Chapter 12).

By its own admission, the ADEQ has deve loped the 2003 SIP as a “baseline” or “foundational” SIP and, as suc h, the plan lacks any commitme nt to action. The Pollution Prevention section of the SIP is little more than a catalogue of existing programs or efforts. The Haze SIP, as drafted, proposes no future actions. The plan does not:

• propose any strategy that the state will undertake to ensure that progress will be made towards achieving the goal that renewable energy will comprise 10 percent of the regional power needs by 2005 and 20 percent by 2015, nor

### Page 2 of 4 Comments on Arizona Haze SIP

• propose strategies to expand energy efficiency efforts.

The state is required to repor t on progress made in the area of pollution prevention between submittal of the plan in 2003 and the first reporting period in 2008. Unless the state develops a strategy to promote renewabl e energy and calculates its contribution to the 10/20 renewable energy goal, th e requirement that it “expl ain why meeting the State’s contribution was not feasible” will be a hollow exercise. In addition, if no commitments to action are enumerated in the plan there will be no way for the public and interested parties to monitor the state’s progress over the next five years. Therefore, the state should include, in the 2003 SIP, what concrete actions it is going to take toward meeting the 10/20 renewable energy goals.

For example, the Arizona Corporation Commission is currently considering changes to, and possible expans ion of, the existing environmental portfolio standard and the return of funding to energy efficiency programs. The ADEQ could commit in the 2003 SIP to monitor this regulatory process and provide technical input on benefits from expansion of renewable energy and energy effi ciency programs on regional haze. This action was recommended by a majority of memb ers of the pollution prevention work group for consideration by ADEQ.

The RHR requires reporting certain types of data rela ted to renewable energy and energy efficiency. Although Arizona does pr ovide detailed information on existing and planned renewable energy generation data and energy efficiency programs, information is lacking in the following areas:

40 CFR 51.309(d)(8)(i) clearly requires the state’s plan to include “the State’s anticipated contribution toward the renewabl e energy goals for 2005 and 2015.” While the SIP does quantify that Arizona’s current c ontribution is about 0.08% in 2002, nowhere in the pollution prevention section, Chapter 12, nor elsewhere in the plan, does Arizona quantify its anticipated contribution to th e 10/20 goals for 2005 and 2015, as required by the RHR. The State needs to provide numbers that reflect Arizona’s anticipated contribution to the regional renewable energy goals of 10 percent by 2005 and 20 percent by 2015.

The RHR section 40 CFR 51.309(d)(8)(i ii) requires the state to document “programs to preserve and expand energy cons ervation efforts”. Ener gy efficiency efforts can be one of the most cost-effective appro aches for reducing emissions from power plants and addressing regional haze. Table 12-8 in the state’s draft plan provides a list of energy efficiency programs. With the exception of th e first two of the 34 programs in Table 12-8, the programs listed were existing programs as of 2002, and ther e is no information provided on programs that will be, or are expected to be, e xpanded in the future. Simply listing existing energy efficiency programs is not su fficient to meet the RHR requirement to “preserve and expand energy conservation efforts.” The non-consensus recommendations submitted to the ADEQ fr om the majority of the P2WG members provided a list of energy efficiency efforts th at the ADEQ should consider supporting. The

### Page 3 of 4 Comments on Arizona Haze SIP

ADEQ should state in th e 2003 its commitment to pursue such efforts. The state needs to add information on actions or program s to expand energy efficiency efforts (including future programs it will suppor t) as required in 40 CFR 51.309(d)(8)(iii)

. Also related to the efficiency programs listed in Table 12-8 by virtue of being included in this section, it is presumed that all energy efficiency programs listed in the table are the programs that th e state anticipates will be pr eserved and reported on in 2008. This is problematic because the State Energy Office operates the majority of programs listed, yet the Energy Office does not have funding through 2008 to operate all programs listed. Energy Office funding is predominatel y from Petroleum Violation Escrow (PVE) funds, which are limited and nearly exhausted. If these programs are discontinued, due to lack of funding, the state will not have preser ved energy efficiency programs. In fact it will have reduced the state’s energy efficiency programs. Indeed, a core Clean Air Act (CAA) requirement of all SIPs is the duty of the state to have adequate funding to carry out the programs in the plan. See CAA §110( a)(2)(E), 42 U.S.C. § 7410(a)(2)(E). The State should review the list of energy efficiency programs listed in Table 12-8 and only include those programs that the state belie ves will be fully funded and in existence through the first reporting period in 2008. Alternatively, the state should add qualifying language explaining that, abse nt additional funding, the listed Energy Office programs are likely to be el iminated prior to reporting in 2008.

In the same table few programs provide quan tification of actual or expected energy reductions. This information is needed for fu ture milestone reports to document progress in energy conservation. Although baseline information on energy use reduction resulting from energy efficiency programs is not required to be reported in the 2003 SIP, the state should develo p and collect this data for use in reporting progress in 2008.

To satisfy the requirement of 40 CFR 51.309(d)(8)(iv) to provide “documentation of the potential for renewable energy resources ” the state has included resource maps from the National Renewable Energy Laboratory. However, information on the total electricity generation potential for various renewable en ergy sources cannot be derived from these
maps. We suggest that Arizona use the Rene wable Energy Atlas of the West (as other states have) for satisfying this provision of the rule, since the atlas provides estimates of the electricity generation potential from each renewable resource for each state in the West.

The submittal of the 2003 Arizona Haze SI P in December culminates over a decade of work to define methods and enact polic y and regulations to reduce haze-causing emissions. The Grand Canyon Visibility Tran sport Commission clearly recognized the potential contributions of energy efficiency and renewable energy to help reduce regional haze and lower the cost of compliance. The We stern Regional Air Partnership and its Air Pollution Prevention Forum spent several year s developing products and recommendations for use by states related to energy. Arizona professionals have spent hundreds of hours participating on various work groups and forums to develop the draft Haze SIP. While the

### Page 4 of 4 Comments on Arizona Haze SIP

state has done a good job addres sing many of the requirements in the pollution prevention section of the RHR, it needs to address the a bove items to submit a complete Haze SIP.

In conclusion, to complete the job, we strongly encourage ADEQ to identify specific energy efficiency and renewable energy measures to be carried out, to determine Arizona’s contribution to the region’s renewable energy goals , to increase its direct involvement in state-sponsored initiatives and legislation related to renewable energy and energy efficiency, and to quantify the benef its of these programs. These are core requirements of the regional haze program under 40 CFR 51.309 and, importantly, the lasting foundation for cleaner, healthier air.

We look forward to reviewing ADEQ’s m odifications in the pollution prevention section of this SIP.

Respectfully submitted,

Vickie Patton Rick Moore Attorney Associate Director Environmental Defense Grand Canyon Trust

Howard Geller John Nielsen Executive Director Energy Project Director Southwest Energy Efficiency Projec t Western Resource Advocates

### N3615(8213)

Deborrah Martinkovic, Air Quality Planning Section Air Quality Division Arizona Department of Environmental Quality 1110 West Washington Street Phoenix, Arizona 85007

Dear Ms. Martinkovic

Thank you for the opportunity to comment on the fina l draft of Arizona’s St ate Implementation Plan for Visibility Protection and Regional Haze. As you know, visibility protection is a critical air quality concern for Grand Canyon National Park and the other National Park System units in Arizona and on the Colorado Plateau. Like the State of Arizona, we have been partners in this effort since the first formative meeting for the Grand Canyon Visibilit y Transport Commission in August 1991, and are pleased to see the Commission’s work, and that of the Western Regional Air Partnership that built on it, reaching this stage.

Arizona’s proposal, which is based on the recomme ndations of the Grand Canyon Visibility Transport Commission (GCVTC) as codified in Environmenta l Protection Agency’s (E PA) regional haze rule under 40CFR 51.309, will implement measures to improve visibility by reducing regional haze in the 16 mandatory federal Class I areas on the Colorado Plateau (located in the States of Colorado, New Mexico, Utah and Arizona) through the year 2018. On a periodic basis, additional measures may need to be adopted by the State to ensure that reasona ble progress is being made to attain the national visibility goal of no human-caused impairment to visi bility in mandatory federa l Class I areas. Using the templates developed by the Western Regional Ai r Partnership (WRAP), Arizona’s proposed plan appears to contain all th e major components required for inclusi on in State implementation plans as specified in EPA’s regional haze rule.

We appreciate the open, participator y process you have used in deve loping this plan. We believe hearing and incorporating th e views of stakeholders from across th e State have benefited this effort. Since the National Park Service was able to participat e in developing the Plan, we were able to resolve our issues and concerns, and have few comments at this stage.

We do believe section 7.3 (regarding future regula tion of nitrogen oxides and particulate matter) needs some adjustment to better reflect the findings of the Western Regional Air Partnership and the requirements of Section 309(d)(4)(i i-iv) of the Regional Haze Rule.

A Memorandum of Agreement between the State of Arizona and the National Park Service regarding certification of impairment by sulfur dioxide sources has not been signe d. However, we are ready to move forward on the basis of the draft Agreem ent developed through the Western Regional Air Patnership.

### A line-by-line review of these and other mi nor issues is attached to this letter.

We look forward to continued progress in reducing the haze over the Nati onal Parks and Wilderness Areas of Arizona and her surrounding states as we move on to address the other eight Class I areas of southern Arizona and those in nearby states unde r Section 51.309(g) of th e Regional Haze Rule.

If you have any questions, please don’t hesitate to contact Mr. Carl Bowman, Grand Canyon National Park’s Air Quality Specia list, at (928) 638-7817 or carl_bowman@nps.gov

. Sincerely

Joseph F. Alston Superintendent

attachment

bcc with attachment: GRCA: Jeff Cross ARD-DEN: John Bunyak, Brian Mitchell, Bruce Polkowsky National Park Service - AIR P. O. Box 25287 Denver, CO 80225-0287 IMRO: John Reber PEFO: Lee Baiza (Supt.), Karen Beppler-Dorn (Res.Mgmt.) Petrified Forest National Park P.O. Box 2217 Petrified Forest National Park, AZ 86028

### Attachment

Regional Haze State Implementation Plan for the St ate of Arizona, Public Review Draft of 10/24/03

Specific line comments by the National Park Service, Grand Canyon National Park

page: line

15:18 Geographic error, “land on the western eastern side of the state and is one of the many extinct volcanoes found throughout the state.”

21:31 Typographic error, “Mesa Vera Verde National Park, Colorado – Spanish for “green table,” Mesa Verde allows vis itors to experience”

21:44 Typographic error, “large amount of visitors every year . There are over 100,000 miles of trail, and despite peaks that rise”

22:9-12 This section describes Oregon’s Blac k Canyon National Wilderness Area, rather than the Black Canyon of the Gunnison National W ilderness Area in Colorado. A possible substitute is taken from the park’s website , “The Black Canyon of the Gunnison's unique and spectacular landscape was formed slowly by th e action of water and rock scouring down through hard Proterozoic crystalline rock. No other canyon in North America combines the narrow opening, sheer walls, and startling de pths offered by the Black Canyon of the Gunnison. ” Other statistics that may be of use in clude the depth of the gorge (up to 2,600’ deep), visitation in 2002 (174,349), and the portion of the Canyon w ithin the park (the most spectacular 12 miles of the total 53).

23:27 This may be a bit of an oversimplification, sin ce the eye only responds to vi sible, not all, light. Suggested change: “frequencies , or wavelengths, of visible light simultaneously.”

24: Figure 4.1 This illustration is a good way to explain these concepts.

27:25-26 In addition to the state-sponsored IM PROVE monitoring, the National Park Service has maintained IMPROVE monitors (transmissometer and particle samplers) in Petrified Forest and Grand Canyon national parks since 1987, providing a long baseline of visibility measurements

. 39:17 The wording of Section 7.3 does a better job th an previous versions to reflect Arizona’s commitment to evaluate the need for additional NO x 

### and PM controls. However, line 25 goes somewhat beyond the WRAP NO x 

### and PM report’s, and thus Arizona’s, findings on the adequacy of this work to support a determina tion. The report states, “The WRAP’s current modeling system, while sufficient for analyzing th e regional impact of some emission changes, is not predicting nitrate concentrations well enough to support a decision on whether or not stationary source NOx controls are an effective way at achieving reasonable progress – the results are simply too uncertain. Several improvements to the modeling system are underway, but until the model produces better nitr ate results, other means of assessment will be necessary to determine the appropriate le vel of NOx control in future SIPs” ( Stationary Source NOx and PM Emissions in the WRAP Region: An Initial Assessment of Emissions, Controls, and Air Quality Impacts , pp I-4&5, emphasis added).

### Given the current indeterminate need for contro ls, the SIP should also address how this need will be determined. Although this determination could be implied from the wording of lines 25- 28, it would be better to simply state that the determination process and necessary programs will be part of the 2008 SIP revision. Suggested wording of lines 23-28 to clarify these issues is:

23 included in Appendix A-7c. The report re presents the State of Arizona’s initial assessment of stationary 24 source NOx and PM strategies for re gional haze. The State of Arizona has can not determined that the need for NOx and PM 25 strategies are not needed at this time. The State of Arizona commits to adopting long

term strategies and 26 Best Available Re trofit Technology (BAR T) requirements for stationary sources of NOx and PM as a SIP 27 revision in 2008, addressing long-term st rategies and Best Available Retrofit Technology (BART) requirements for st ationary sources of NOx and PM. if Arizona determines such emission control strategies are needed to demonstrate 28 reasonable progress.

48:42-48 These lines call for the b ackstop trading program to be tr iggered by either a “consensus” (line 42) or a “unanimous” (line 45) decision by participating states and tribes. The language should be consistent to avoid later misunders tanding, should consensus to trigger the program be reached without unanimous assent, or to make clear Arizona’s intentions if consensus is reached without unanimity.

68:17 The language in section 8.5(a )(1)(i-iii) generall y agrees with the most recent Draft Memorandum of Agreement posted to the WRAP website ( http://wrapair.org/forums/mtf/docum ents/ravi_bart/M OAonRA_BARTrev012003.doc ). The Agreement has not yet been completed and signe d between the National Park Service and the State of Arizona. The following language corr ects discrepancies betw een the Draft SIP and Draft MOA:

69:1 Clarify the status of the agreement, “P ark Service and U.S. Forest Service intend agree to use the following screen ing process in making”

69:7 Update criterion, “(ii) There are BART-eligible sources of sulfur dioxide within 150 km 100 miles of the mandatory Federal”

77:13 Missing verb, “smoke. In addition, a statewid e inventory and emissions tracking system must be established for volatile”

78:18 Typographic error, “including the State Depa rtment of Agriculture, State Land Department, Federal Land Managers’s ,”

79: Table 10-1 is a good addition to the Plan.

118 Descriptions of the two National Parks describe them as “recreational” areas, while their statutory purpose is as preserve s (the courts have determined the “conserve” phrase of 16 USC 1 §1 as the primary, and the “provide” phrase as the secondary purpose of national parks: “...

### which purpose is to conserve the scenery and th e natural and historic ob jects and the wild life therein and to provide for the enjoyment of the same in such manner and by such means as will leave them unimpaired for the enjoyment of fu ture generations”). The following corrections reflect this fundamental purpose.

118:21-22 Recreational use of na tional parks is limited to those activities that do not compromise the long-term preservation of their features. A correction reflecting this mission and better defining the park’s high use is, “a nd adjacent uplands. This high use recreational

area natural preserve is under the jurisdiction of the U.S. National Park Service. Intensive use is confined to relatively small areas on the Nort h and South rims, while most of the park is remote and primitive. ”

118:37 In land management, the term “multiple use” includes activities such as grazing and mining, which are not permitted in the Park. Correction, “this multi

- use tou rist and recreational

area popular preserve includes information on wind generated emissions. A”

124: Table 14.3 Typographic error, “Capital Capitol Reef national Park”

125: Table 14.4 Typographic error, “Capital Capitol Reef national Park”

Appendix A-13b. Table 1 (Grand Canyon National Park): Point Sources within 50 km: add a coal fire d power plant 20 km east of the Park (Navajo)

Appendix A-13b. Table 3 (Petrified Forest National Park): Paved and Unpaved Roads: There are approximate ly 40 miles of two-lane paved road in the Park, and a 4.5 mile portion of Intersta te 40 passes through the northern portion.

Wind-generated emissions: add “dry riverbeds” to the sources of windblown dust both within and adjacent to the Park.

Prescribed Burning and Wildfire: Vegetation in the park is shr ub and grassland, with few trees. No prescribed fires are currently conducted in or within 50 km. of the park. Wildfires (grass)

are rare.
Point Sources: Coal fired power plants are 35 km west (Cholla) and 52 km southeast (Coronado) of the Park.Embedded e

- mail from Chris Janick attached to SRP ’ s formal comments

Corky:

SRP's comments on the draft SIP are presented in the attached letter (you will receive a copy in the mail as well). In addition to those comments, there is one other item that should be changed. Page 97, under the heading "Green Pricing", makes reference to SRP's Solar Choice program and solar equipment at Santan. This program has been replaced with what we now call EarthWise Energy (as referenced in a few other parts of the Pollution Prevenion section), and now includes not only solar, but other renewable energy sources as well. In addition, in order to make room for the expansion of our Santan plant, the solar equipment referenced in this paragraph was relocated to the Roge rs Substation (as reflected in Appendix A

- 12b). As such, SRP requests that this paragraph be revised to read as follows:

Salt River Project: SRP provides a renewable energy purchase option to its customers. Dubbed EarthWise Energy, SRP customers can pu rchase 100

- watt blocks of renewable capacity for $3.00 per month. For more details see http://www.eren.doe.gov/greenpower/gp_munipu.html#srpOne South Church Avenue, Post Office Box 711 Tucson, Arizona 85702

Area Code 520 Telephone 571-4000

December 3, 2003

Ms. Deborrah Martinkovic Air Quality Division Sent via e-mail Arizona Dept. of Environmental Quality and facsimile 1110 W. Washington Street Phoenix, AZ 85007

RE: Comments to the ADEQ proposed Region al Haze SIP published October 24, 2003

Dear Ms. Martinkovic:

Tucson Electric Power (TEP), a wholly-owned subsidiary of UniSource Energy Corporation (NYSE: UNS), is pleased to submit these comments regarding the Regional Haze State Implementation Plan (SIP). TEP owns and operates electric generation, transmission, and distribution assets and serves more than 350,000 customers in Sout hern Arizona. TEP genera tes electricity both from firing fossil fuels as well as renewable resources.

On October 24, 2003, the Arizona Department of Environmental Quality issued, for public comment, a proposed Regional Haze State Implementation Plan (S IP). This SIP has been prepared to satisfy Arizona’s obligations, under dele gated authority by the Environmental Protection Agency, for addressing Regional Haze. The Regional Haze Ru le became effective on August 30, 1999, and delegated States are required to incorporate the require ments of the rule into their SIPs. As Arizona has selected to prepare a SIP in accordance with 40 CFR Part 51, Sec tion 309, the SIP document is due no later than December 31, 2003.

TEP has been actively involved in the deliberations l eading up to and including the preparation of this SIP. In 2001, ADEQ initiated a stakeholder pro cess to evaluate which of the available regulatory schemes the State would use to satisfy the requireme nts of the Regional Haze Rule. TEP participate in that process and we supported the outcome, to prepare a “309 SIP.” More recently TEP participated in the Stationary Sources and Pollutio n Prevention workgroups, wh ich were charged with providing recommendation to ADEQ relating to the preparation of this SIP.

TEP supports the process under which the SIP was developed and commends ADEQ for their efforts in soliciting stakeholder input.

TEP was unable to provide comments to the entire SIP and has limited its comments to the two areas in which has actively participated as interested stakeholder during the SIP draft development: the Stationary Sources and the Pollution Preventi on workgroups. Our specific comments follow.

Comments related to Chapter 8 – SO 2 Milestones and Backstop Trading Program

Page 51, Section 8.3.1

TEP agrees that for Category 1 utility sources the floor allocation should be based on a “clean unit” emission rate for each unit. TEP also and very st rongly believes that the heavier burden should be borne by the BART eligible sources since the purpose of the Regional Haze program is to specificallyMs. Deborrah Martinkovic Arizona Dept. of Environmental Quality December 3, 2003 Page 2

address those sources. As such, the “clean unit” de finition for purposes of allocating the floor portion of the allowances need not be the same for all units.

TEP worked very hard and cooperated with several utility stakeholders as well as members of the WRAP and ADEQ during the SIP development to set forth an allocation methodology that would be fair to all participants. Several meetings were held including one in Tucson, Arizona, where an agreement was seemingly reached, only to be later discarded. At that meeting, the following assumptions/agreements were made for purposes of defining “clean unit.”

1. Coal-fired units that in 1999 were operati ng with a baghouse for particulate control, but otherwise uncontrolled for SO 2, would be assumed to be at 20% control efficiency.

2. BART eligible sources that in 1999 were operating with a control efficiency below 70% would be assumed to have a control efficiency of 85%. Units that were controlled at between 70% and 80% were assumed to increase control efficiency by 5%. Units controlled above 80% would remain at that level.

3. Sources with known mandated future controls , other than BARTable sources, would be assumed controlled at that level.

4. Units not subject to BART:

a. For sources with existing control at or below 50% assume a control efficiency of 50%.

b. For sources with existing controls between 50% and 70% assume a control efficiency of 70%.

c. Sources with existing controls above 70 % assume the existing level of controls.

5. For purposes of floor allocations to all sources assume operation at 85% capacity factor.

TEP strongly suggests that the above “clean unit” definition be adopted. The above “clean unit” definition addresses all the principles and equity issues described in the SO 2 Milestone/Backstop Trading Program at page 52. It would also provide the stakeholders with the certainty and direction regarding potential future capital expenditures to address compliance with Regional Haze and/or other SO 2 compliance programs.

Certainty was fundamental in TEP's, and the other utilities, support of the Regional Haze Section 309 option.

The Arizona Utility Stakeholders also provided, as a group, an allocation methodology that utilizes the method used by the Market Trading Forum (M TF) in establishing the milestone levels and is based on the opt-in/opt-out table. This methodology also would allow each state to establish statespecific allocation methodologies by assigning a specific number of SO 2 allowances to each state and then specify an allocation methodology in each individual SIP.

TEP strongly suggests that either the “clean unit” definition as above for “floor” allocations or the total allocation methodology that has previously been submitted by the Arizona Utilities be adopted into the SIP.Ms. Deborrah Martinkovic Arizona Dept. of Environmental Quality December 3, 2003 Page 3

Page 58, Section 8.3.3

In Section 8.3.1, WEB sources are divided into tw o categories. Category 1 are those WEB sources that commence operation prior to January 1, 2003, while Category 2 are those that commence operation after January 1, 2003. Ca tegory 1 would be eligible to r eceive reducible portions of the allocation, while Category 2 would not. Both would receive floor allocations. The Category 2 allocations are to be taken from the new source set aside.

The draft rule at R18-2-1610.B defines an existi ng source as one that commences operation prior to the program trigger and new web source as one co mmencing operation after the program trigger. Therefore, a unit that commences operation after Janua ry 1, 2003, but before the program trigger date, would be considered an existing unit.

Section 8.3.3, Distribution of the New Source Allo cations, sets the availability of these allowances for a new WEB source and an existing WEB source . However, a Category 2 WEB source that commences operation after January 1, 2003, but befo re the program trigger date would, for purposes of receiving allocations under Section 8.3.3, be an ex isting source. It is not clear how such a source would receive its share of allocations. TEP suggest s that the new source set-aside be available for three categories instead of two. The third categor y to be added under Section 8.3.3 is as follows:

8.3.3(1)(c) – Category 2 floor allocations as established in Section 8.3.1(1)(b)(iii).

Comments related to Chapter 12 – Pollution Prevention and Renewable Energy Programs

TEP fully supports the pollution prevention provisions of the SIP as presented in Chapter 12. This chapter represents the consensus recommendations of the Pollution Prevention Workgroup, in which TEP participated, and which deliberated for nearly a year in order to formulate a consensus position. In accepting the consensus recommendation and re jecting certain non-consensus recommendations, ADEQ recognized two important concepts relating to the pollution prevention provisions of the Regional Haze Rule.

First, the Regional Haze Rule does not mandate the implementation of any specific energy policies. EPA clarified the relationship between the “10/20 goals” and States’ requirements relating to the pollution prevention by stating in the preamble to th e rule that “The [10/20] goals themselves are not enforceable and States are not required to meet the renewable energy goals.” “Rather, EPA is setting enforceable requirements for the States to assess progress toward [the] goals...”

Secondly, Arizona’s contribution to the “10/20 goa l” should be commensurate with the renewable resources available. Section 12.1 of the SIP re ferences a letter sent by the Pollution Prevention Workgroup to the co-chairs of the WRAP Polluti on Prevention Forum, which provides comments to the WRAP document titled “Renewable Energy and Energy Efficiency as Pollution Prevention Strategies for Regional Haze.” This letter, whic h represents the consensus position of the P2WG, presents the workgroup’s concerns relating to the proposed method for assigning each State’s contribution to the “10/20 goals.” Arizona’s most abundant rene wable resource is solar energy; therefore, Arizona should work to develop this resource. However, as the incremental costs of producing electricity from solar energy is consid erably higher than other resources, Arizona’s contribution will have to be less than that of other States in the region.Ms. Deborrah Martinkovic Arizona Dept. of Environmental Quality December 3, 2003 Page 4

In addition to these two points, it is important to note that, based on the work of the WRAP, even if the 10/20 goals were met and certain energy effici ency measures were adopted, there is expected to be a mere 2% decrease in NOx emissions for the region and essentially no decrease in SO2 emissions.

Thank you for the opportunity to provide these comme nts and for the excellent work you and other ADEQ staff have done in preparing the proposed SI P and for allowing for substantial stakeholders input.

If you have any questions, please call me at (520) 884-3642.

Sincerely,

TUCSON ELECTRIC POWER COMPANY

Cosimo De Masi Manager, Corporate Environmental ServicesAppendix A-18 – Public Participation Arizona Regional Haze SIP 

## Appendix A-18d. Responsiveness Summary

### RESPONSIVENESS SUMMARY to Testimony Taken at Oral Proceedings and Written Comments Received on Arizona Regional Haze St ate Implementation Plan

The oral proceedings on the Arizona Regional Haze State Implementation Plan (SIP) were held at 4:30 p.m., Monday, Novemb er 24, 2003, at Coconino Library, Flagstaff, Arizona; and at 5:00 p.m., Monday, Novemb er 24, 2003, at Arizona Department of Environmental Quality, Phoenix, Arizona. Th e public comment period closed at 5:00 p.m., Wednesday, December 3, 2003. Oral and written comments received and Arizona Department of Environmental Quality’s (ADEQ) responses are described below. During its final review of the proposed SIP, ADEQ de termined some further clarifications were appropriate. These clarificati ons are also included below.

1) Issue: There is no information in the SIP regarding impacts to the Tonto National Forest or the Superstitions. Response: This SIP addresses the federal mandatory Class I areas in Arizona that are part of the Colorado Plateau. The Superstition Wilderness Area is a Class I area, but is not part of the Colorado Plateau and will be addressed in a later SIP under Secti on 309(g) of the Regional Haze Rule. The Tonto National Forest is not a federally protected Class I area and will not be addressed under the requirements of the Regional Haze Rule.

2) Issue: The Pollution Prevention Chapter of this SIP does not include language that discusses how ADEQ would act to preserve and promote renewable energy and energy efficiency programs. Response: Detailed reports prepared by the Regional Haze Pollution Prevention Work Group (P2WG) that present differing views of ADEQ’s role in energy-related programs have been reviewed by the Director and are considered invaluable as ADEQ continues to take an active role in energy policy in Arizona. ADEQ believes this SIP meets the initial requirements of the Regional Haze Rule as it pertains to energy programs under Section 309.

3) Issue: Some of the programs listed in th e Pollution Prevention Chapter could be eliminated due to a loss of funding. Re moval of these programs could then be considered a retreat from the requirements of the SIP, or continued funding of a program could be required under the federal enforceability of a SIP. Response: This SIP is a “snap-shot in time” of renewable energy and energy efficiency programs already in place or planned in response the requirements of the Regional Haze Rule. A listing of these programs in the SIP does not make them federally enforceable. Also, programs a ssociated with pollution prevention are reviewed in relation to the region al Energy Renewable Goal and are not considered control measures.

4) Issue: The SIP should include a pointer (with greater detail in future SIP revisions) to the concept of Renewable Energy Credits (RECs) currently being investigated by the Western Governors’ Association. Response: ADEQ is

### aware of the REC concept and unde rstands the Western Regional Air Partnership (WRAP) Air Pollution Pr evention Forum (AP2 Forum) may be looking into this in greater detail in the near future. Inclusion of RECs in this SIP, however, is premature.

5) Issue: The Pollution Prevention Chapter of this SIP does not include a quantification of energy programs relate d to the regional Renewable Energy Goal nor an approach for tracking program imp act. In addition, Arizona did not use the Renewable Energy Atlas of the West for documenting the potential of renewable
energy resources. Response: The Regional Haze Pollution Prevention Work Group (P2WG) attempted to quantify c ontributions and potentials related to energy programs and their impact on regiona l haze. The task was difficult due to formula assumptions modeled on regiona l characteristics that did not serve Arizona-specific conditions enough to make the results reliable. Work on this issue is included within Sections 12. 9 through 12.11 of the Pollution Prevention Chapter of this SIP. Additional inform ation can be found in related sections of the Technical Support Document submitted with this SIP. ADEQ will consider the use of the Renewable Energy Atlas of the West in any future work related to the regional Renewable Energy Goal.

6) Issue: It is unclear where the four recommendations on pollution prevention developed by the City of Phoenix were included in this SIP, and if any Arizona utilities were classified as stationary sources. Response: The four recommendations were developed no t by the City of Phoenix but by the Regional Haze Pollution Prevention Work Group. The recommendations, presented as nonconsensus reports, are posted to the ADEQ Web page under Air Quality Planning, Regional Haze, Pollution Prevention Work Group (P2WG) at http://www.adeq.state.az.us /environ/air/plan/haze.html . A list of sources classified as stationary sources, incl uding utilities, can be located in both Chapter 5 and Chapter 8 of this SIP.

7) Issue: ADEQ should not have develope d this SIP as current products available could prev ent air pollution. Response: ADEQ appreciates the comment but is required by law to de velop a SIP to address the existing conditions that contribute to regional haze as well as activities that could prevent future impairment.

8) Issue: Numerous issues related to the stationary source program, SO 2 

### Milestones and Backstop Trading Program (see SO 2 

### Milestones/Backstop Chapter of this SIP), are yet unresolved. Response: Arizona will be an active participant in the Western Regional Air Partne rship (WRAP) forums such as the Stationary Sources Forum, formerly Market Trading Foru m, and the newly created Coordination Committee (described in the Stationary Sources Chapter of this SIP). It is ADEQ’s understanding that work will comm ence in 2004 to discuss and revise as necessary the SO 2 

### Milestones and Backstop Trading Program.

### 9) Issue: It is not clear if the 10-year reco rd keeping requirement for sources participating in the WEB Trading Program includes all the existing required documents under the current 5-year re quirement or a “selected subset” of documents. Response: It is ADEQ’s understanding that any documents retained under the current 5-year retention requir ement in the WEB Trading Program Rule would be expanded to cover 10 years. In addition, any r ecords pertinent to satisfying the pre-trigger requirements of the Web Trading Program Rule would also be retained for 10-years. Any clar ification to the specifics of the trading program, however, will be reviewed and re vised as necessary as outlined in No. 8 of this Responsiveness Summary. Any nece ssary revisions or clarifications to the WEB Trading Program Rule will be made pr ior to the rule’s final approval by the Governors’ Regulatory Review Council.

10) Issue: Table 8-2 (Chapter 8 of this SIP) leads to a possible misconception that the Four Corners Power Plant is not under the jurisdiction of the Region IX of the EPA. Response: This table is a duplicate of th e Table included in the federal Regional Haze Rule for the stationary source emission reduction program, and is included in the program description of all states submitting a SIP under Section 309 of the Regional Haze Rule. Clarificat ion should be provided at the federal rule level, and then incorporated into the SIPs.

11) Issue: It should be clarified that rene wable energy allocations (under the WEB trading Program) are only available fo r renewable energy ph ysically located within the participating fi ve states participating in SIPs under Section 309 of the Regional Haze Rule. Response: The WEB Trading Program is a regional program and one state cannot dictate the specifics of the program. As stated earlier, however, any clarification to the specifics of the trading program, however, will be reviewed and revised as necessary as outlined in No. 8 of this Responsiveness Summary.

12) Issue: Section 8.3.1(g)(6) of the Web Tradi ng Program (Chapter 8 of this SIP) should be revised to specifically prov ide for public notice an d comment prior to the finalizing of the State’s (and facility specific) Allocation Report for Arizona. Response: A necessity to develop a propos ed Allocation Report for Arizona would also necessitate a SIP revision. This SIP re vision would be subject to public notice and comment, including th e Allocation Report for Arizona. Again, as stated previously, any clarification to the specifics of the trading program, will be reviewed and revised as nece ssary as outlined in No. 8 of this Responsiveness Summary.

13) Issue: There should be clarifi cation in the SIP that refe rences and appendices are for reference only and are not enforceable as part of this SIP. Response: It is ADEQ’s understanding that only those programs or activities that constitute committed measures or incorporated state- specific rules are considered federally enforceable. Programs or activities relate d to goals versus control measures have been noted throughout the SIP.

### 14) Issue: (1) Arizona should not commit to a specific regional haze implementation approach until after EPA has responded to the court’s remand of the RHR (Regional Haze Rule); (2) the Department’s proposed SIP does not meet the minimum requirements of either Ariz ona statute or 40 CF R §51.309 and Arizona must therefore pursue a RHR SIP under 50 CFR §51.308; and (3) The RHR Section 309 Annex is not a rational or cost-effective approach for improving visual air quality in Arizona or other western states. Response: ADEQ appreciates the analysis of these issues , but does not share in the conclusions. EPA has stated that the court’s remand of the RHR does not aff ect states wishing to pursue an implementation approach under Section 309 of the RHR, and believes the Arizona SIP complies with the requirements of the Regional Haze Rule.

15) Issue: Work completed by the Western Regional Air Partnership (WRAP) regarding the emission reduction milestone s under the Annex (s tationary source SO 2 

### reduction program) provide greater r easonable progress than would be achieved by the application of best ava ilable retrofit controls for all federal mandatory Class I areas in the regio n, not just the 16 Class I areas on the Colorado Plateau. This would include the remaining eight Class I areas in Arizona not addressed by this SIP. Response: ADEQ concurs with WRAP’s findings, but this SIP addresses the 16 Class I areas on the Colorado Plateau, four of which are contained in the northern portion of Arizona. Th is issue will be revisited as Arizona continues to ad dress regional haze in a SIP under Section 309(g) of the Regional Haze Rule as well as the SIP revisions required for periodic review. This issue is di scussed further in the Technical Support Document that accompanies this SIP.

16) Issue: Language in the Stationary Sources Chapter of this SIP needs to better reflect the findings of the Western Re gional Air Partnership (WRAP) regarding the future regulation of nitrogen oxides and particulate matter. Response: ADEQ believes the language is appropriate for this SIP, and the inclusion of the NOx – PM Report as an Appendix to this Chapter discusses the need for further analysis of these pollutants related to regional haze. ADEQ will be an active participant with the Western Regional Air Partnership in this endeavor.

17) Issue: The 1996 mobile sources emissions in ventory and the subsequent mobile source emissions projections developed by the Western Regional Air Partnership (WRAP) over-estimated emi ssions for Maricopa County. Response: ADEQ is aware of this issue and the Regiona l Haze Emissions Inventory Work Group (EIWG) addressed the con cern in their report to the WRAP. The EIWG report is included in Appendix A-14 to Projection of Visibility Chapter of this SIP.

18) Issue: Page 97 of the proposed SIP under the heading, “Green Pricing,” in the Pollution Prevention Chapter that refere nces SRP’s Solar Choice program and solar equipment at Santan needs to be corrected. This program is now called,

### “EarthWise Energy” and includes not only solar but other renewable energy sources as well. Response: ADEQ has made the clarification.

19) Issue: There were several expressions of support for the SIP, and the WEB Trading Program specifically. Response: ADEQ appreciates the positive comments and commitment to the national visibility goal.

20) Issue: There were several expressions of appreciation for the opportunity to participate in the development of this SIP. Response: ADEQ appreciates their involvement and contribution to this SIP and encourages their on-going support and participation.

21) ADEQ initiated changes to th e SIP include the following: Updates related to final regulations, appendix documents, and Technical Support Document (TSD); and spelling, grammatical, and formatti ng corrections throughout the document.