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East Texas Electric Generating Facilities (EGFs) 

Stakeholder Meeting Summary

TCEQ East Texas EGF rulemaking concept 

Friday November 18, 2005 1:30 PM to 4:00 PM 

TCEQ Campus, Building D, Room 191, Austin, Texas 

Moderators: Ashley Forbes, Karen Hill, and Ita Ufot 

I. Opening Remarks: Commissioner Ralph Marquez 

 Commissioner Larry Soward 

David C. Schanbacher, P.E., Chief Engineer 

Candice Garrett, Director, Air Quality Planning and 

Implementation Division 

II. TCEQ Staff Presentations 

DFW SIP Information presented by Tom Lawshae 

Transport in DFW, East & Central Texas presented by Zhaohua Fang 

DFW Modeling Electric Generation Utility Sensitivity Tests presented by 

Pete Breitenbach 

Question and Answers: 

• A stakeholder expressed concern regarding the real world application of 

the presented models and how the reduction of NOx from east Texas 

utilities would effect the ozone concentration in DFW. 

• A stakeholder asked if future growth was assumed in the model 

o Staff replied that future growth is assumed in the model 

• A stakeholder asked about the timeframe of the model 

o Staff replied that the model is for 2010. 

• There was a discussion regarding associated costs and whether other 

measures were planned in the DFW area for the 8-hour ozone SIP. 

o This stakeholder meeting is to discuss one of eleven concepts 

currently being explored by the TCEQ. NCTCOG has other 

strategies under consideration posted on the organization’s website 

(see http://www.dfwcleanair.com/sip/new_cont_strat.html). 

• A stakeholder stated that he was prepared to supply the TCEQ with cost 

data. 

• A stakeholder expressed concern with the monitoring locations. 

o Staff responded that three years ago TCEQ had a limited number 

of monitors, but more monitors have been installed and operated 

since then. 
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III. Open Discussion 

• Several stakeholders representing several east Texas utilities made 

comments on the following issues: 

o The east Texas utilities provide 84% of Texas’ electricity and these 

utilities have already made reductions. 

o Claims that the agency cannot prove that further reductions from 

east Texas EGF’s would significantly reduce ozone in DFW area. 

o The 1.1 parts per billion (ppb) that the model presents is a small 

fraction of the needed ozone reductions. 

o The rule would require that all units install SCR. 

 SCR cannot work on lignite units and would be so costly on 

gas-fired units that they would shut down. 

 The cost of installing SCR, converting from lignite, and 

replacing the gas units would be about $10 billion. 

 The dollar/ton method of cost is inaccurate. There is not 

enough time to retrofit all the units with SCR by 2009. 

 The lignite mining industry would be destroyed and the shut 

down of gas-units during retrofit would result in electricity 

shortages. 

 The Agency should further evaluate the CAIR rules as an 

alternative. 

o The proposed rule would cause large price increases for electricity, 

adversely affecting low income and fixed income elderly population. 

o The rule effectively sets energy policy in the state. 

o The only way to get DFW in attainment is to reduce the contribution 

from mobile sources. Over 100 natural gas-fired units would have 

to be retired. The lignite mining industry would be shut down. Each 

SCR would cost between $100 and $150 million. The rule would 

narrow fuel diversity during a looming electricity crisis. 

• Stakeholders from the lignite mining industry and the mining and 

reclamation industries made the following comments: 

o Support the comments made by EGF representatives. 

o TCEQ should look at $/ppb ozone not $/ton NOx. 

o TCEQ should do a technology feasibility study for lignite. 

o The economic impact of eliminating the lignite mining industry 

would be huge. 

o It is a $10 billion industry that employs 30,000 people 

o The rule would have large negative impact on property tax for 

schools. 

o Fuel diversity is critical to Texas’ well being. 

o The Perryman report/RP 49, which looked at east and northeast 

Texas, stated that lignite is a $1.356 billion industry and employs 

7210 people, 2500 of which are in mining. 
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o In Rusk County, 48% of the people are in the lignite business. 

• A stakeholder stated that the biofuels industry cannot meet the standards 

in the rulemaking concept. 

o The rulemaking concept would end fuel diversity. 

o SB 7 encouraged biofuels use. 

o The rulemaking concept would close his small company down. 

• A stakeholder for a public interest group stated: 

o Any final decision will not be made lightly. 

o In 1999, the EGFs had the same concerns but were able to meet 

the regulations. 

o Without these controls, the state could lose federal highway 

funding. 

o The cost of healthcare far outweighs the cost of energy. 

o The cost is $825 million/year for respiratory illness in DFW alone. 

o Emissions from cars are already going down and will soon be as 

low as possible. 

o Oil and gas industry will have to make reductions. 

o Federally exempted sources like locomotives and airplanes should 

be looked at for further reductions. 

o The reductions from 1999 regulations will not be enough. 

o The 7 new proposed coal plants will add 40 tons per day (tpd) 

(TCEQ says 55 tpd) to east Texas. 

• A stakeholder from a public interest group stated: 

o The agency does not make rash decisions and put a lot of thought 

into the rulemaking concept. 

o The estimated 1.1ppb reduction is worth looking at. 

o All sources in east Texas will have to make reductions. 

o Everyone must do their part. 

• A Stakeholder from the utility industry stated: 

o Their company has spent over $700 million and has reduced NOx

emissions by 75 to 90% in the HGB area. 

o One plant has achieved a 50% reduction from low NOx burners 

alone, but there is concern about the need for more, based on the 

rulemaking concept. 

o Utility NOx is not as effective as urban NOx in forming ozone. 

o The SCR on the HGB unit worked relatively well for 2 years, but is 

now having problems due to unexpected fly ash build-up. 

o SCR has cost the company between $300 and $400 million. 

o There is not enough time for all units to install SCR due to limits in 

skilled labor and materials. 

o The company exceeded its initial SCR cost estimate of $500 million 

by $200 million. 
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o The rulemaking concept would require excessive capital 

expenditure for little benefit and would result in companies deciding 

not to build new coal units. 

o The company is willing to work with the agency to find a workable 

solution. 

• A stakeholder from the utility industry stated: 

o Their company has 12 units in east Texas - 4 units that would 

require SCR, and 8 gas-fired units would need to be retired. 

o Gas makes up 20% of the company’s fuel used, but incurs 60% of 

the cost. 

o Customers in Louisiana and Arkansas would also bear cost of any 

Texas rules. 

• A stakeholder from the coal industry presented the agency with copies of 

the Perryman report and the Governor’s executive order and stated that 

the rulemaking concept requires an extensive economic analysis. 

• A stakeholder from a public interest group: 

o Requested that comments be posted on the Agency website. 

o Stated that NOx has been reduced by 10 ppb over the last 10 

years; 

o Stated the needed reductions (estimated to be 6 ppb) can be 

achieved over the next 3 years. 

• A stakeholder from a utility company stated: 

o Their company converted from lignite to Powder River Basin (PRB) 

coal and spent $8 million on the conversion, with a 60% staff 

reduction. 

o The company also spent $12 million on low NOx burners. 

o Estimate that SCR would cost $53 million. 

o Stated that the TCEQ failed to discuss simple cycle gas turbines. 

o Stated the supply of PRB coal is less than the current demand. 

 There are only 2 western railroad lines and they are 

expected to reduce their schedules. 

 PRB usage is going to grow even without the rule and it is 

going to be very difficult to secure the necessary supply in 

the future. 

 The mines and the railroads are not prepared for the growth 

in PRB demand. 

IV Closing Remarks 

• Everyone was invited to join the SIP List-Serv for updates on this topic 

and other SIP related topics
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• Informal comments should be submitted to Karen Hill 

khill@tceq.state.tx.us or Ashley Forbes aforbes@tceq.state.tx.us by close 

of business, December 2, 2005. Staff will then prepare briefings for 

executive management and the commissioners on the topic.