From: Stevens, William
To: Kordzi, Joe
Cc: Stevens, William Subject: FW: Question on SDA IPM cost algorithm
Date: Thursday, August 13, 2015 3:38:04 PM
Attachments: FGD S&L White Bluff.pdf FGD Sargent & Lundy Dry FGD 9-02.pdf

Joe – As a basis for estimating the capital and O&M costs for retrofit spray dry FGD technology in our IPM modeling, EPA uses the Sargent & Lundy (S&L) “SDA FGD Cost Development Methodology,” prepared for EPA and available at http://www.epa.gov/airmarkets/documents/ipm/attachment5_2.pdf

. I was the EPA reviewer for the S&L work, as noted beneath the Legal Notice in the document.

Regarding your question as to whether the costs given by this methodology include a fabric filter: It has always been my understanding that a fabric filter is included in the scope and cost of the SDA as modelled by S&L. The question came up a few years ago as well, and I recall then confirming verbally with S&L that a fabric filter is indeed included. I note and agree with the observations of your consultant, Dr. Fox, who came to that same conclusion.

Regards -
Bill

William Stevens Senior Advisor - Power Technologies Office of Atmospheric Programs
Clean Air Markets Division U.S. Environmental Protection Agency stevens.william@epa.gov

202-343-9642

From: Kordzi, Joe
Sent: Monday, August 10, 2015 2:54 PM

To: Stevens, William Subject: Question on SDA IPM cost algorithm

Hi Bill,

Your reply to this email will go in our final docket for this action.

We received some comments critical of our SDA cost estimates for the Tolk facility. Tolk sells their fly ash and they have stated that if they install an SDA upstream of their existing baghouse, it will contaminate their fly ash and make it unsalable, requiring a $2M addition to their annual operating

cost. They also stated they would have to build a landfill to dispose of it. If instead they install the SDA downstream of their existing baghouse, they are claiming they would have to install anadditional tail-end baghouse to capture the spent reagent (the ash would be captured in the existing baghouse and could still be sold). When they met with us, I told them I thought the IPM SDA module did include a baghouse but they are claiming that is incorrect. Would you please
confirm which is true?

Some observations from Dr. Fox, who we have hired to help us in addressing some of the comments
we have received:

Referring to the S&L SDA IPM report:

p. 1, 2nd parag. says: "The curve fit was set to represent...a "typical" SDA FGD retrofit for removal of
95% of the inlet sulfur." A substantial amount of the SO2 removal achieved by an SDA occurs in the tail end baghouse because the ash is rich in lime. Without the tail-end baghouse, the SDA would only achieve about 75% SO2 control. As the IPM algorithms are based on 95% SO2 control, I am almost certain the costs include a tail-end baghouse. See discussion of this latter point in the S&L White Bluff cost report [Bill I’ve attached it], pp. 2-2 and 2-9, attached.

p. 4, third bullet says: "The fixed maintenance materials and labor (includes bag replacement) is a direct function of the process capital cost..." I always understood this to mean that the costs estimated by the CDS module include a tail end baghouse. Why else include bag replacement
costs? Further, based on the magnitude of "balance of plant costs" in the IPM SDA model, I've always assumed the baghouse was included there. In my experience, a tail end baghouse is commonly included in an SDA cost estimate. See the previously attached S&L reports prepared for the National Lime Association [Bill, I’ve attached it]. In them, you will see SDA costs broken out, rather than lumped together like in the IPM model. By studying these broken out costs, it seems pretty clear to me that the IPM SDA module indeed includes tail end baghouse costs, most likely in the category called "balance of plant costs". See also the S&L detailed cost estimates for Big Sandy Unit 2 and White Bluff, which also break out the costs.

Joe Kordzi EPA Region 6

" . . . and miles to go before I sleep." - Robert Frost