BAY AREA AIR QUALITY

MANAGEMENT DISTRICT

BACT/TBACT WORKBOOK

GUIDELINES FOR

BEST AVAILABLE CONTROL

TECHNOLOGY

INCLUDING . BEST AVAIIABLE CONTROL TECHNOLOGY FOR TOXICS (rBACT)
Cost-effectiveness = ----------------

- criteria, the permit applicant can petition the Air Pollution Control Officer for

consideration of other mitigation measures.

In conclusion, while TBACT is driven by risk reduction and there are no specific

cost effectiveness triggers, the economic impact of achieving the toxic emission

reductions necessary to reduce the risks must be taken into consideration, as

discussed in Section 12. The fact that TBACT generally "embraces" BACT,

whenever feasible and risk reduction criteria are satisfied, demonstrates these

implicit cost considerations. Similarly, the criteria of commercial availability,

reliability, and demonstrated full scale operation and performance apply to TBACT

as well as BACT.

Finally, in seeking references for additional TBACT candidates, in addition to the

data sources cited in Section 3.1, EPA's MACT Database and CARB's Air Toxic

Control Measures (ATCMS) guidance documents can be searched. Specific

TBACT determinations that have been made by the Bay Area Air Quality

Management District for commonly permitted source categories and equipment are

identified in Section 5.

3.3 Cost-Effectiveness Detennination for BACT

For the purpose of calculating emission control cost-effectiveness for BACT, the

Bay Area Air Quality Management District has adopted the "levelized cash flow

method", otherwise commonly referred to as the annualized cost method. The

annualized method is simple to use and appropriate for the kinds of abatement

projects proposed in the great majority of the District's permit applications. It has

been approved for use by the California Air Resources Board's Office of Air

Quality Planning and Liaison and the U. S. Environmental Protection Agency's

Office ofAir Planning and Standards.

The cost-effectiveness of an abatement system or strategy is defined as the ratio of

the annualized cost of that abatement system over the reduction in annual pollutant

emissions achieved by the system for the pollutant in question. Cost-effectiveness

can be estimated as follows:

Annualized Cost of Abatement System ($Iyr)

Reduction in Annual Pollutant Emissions (tonlyr)

The reduction in annual pollutant emissions is the expected decrease in the source's

pollutant emissions from its baseline uncontrolled level, achieved by the installation

of the abatement system under review. This annual reduction can be calculated as

the difference in emissions with and without the abatement system, using Districtapproved standard emission factors or source test data and the permitted annual

usage or throughput limits expected in the operating permit. Simply put,

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Reduction in Annual Pollutant Emissions (to*) = Baseline Uncontrolled Emissions - Control Option Emissions

As noted above, the emissions reductions are calculated using realistic upper

boundary operating assumptions (permit limit conditions).

The annualized cost of the abatement system can be estimated from the installed

cost of the control and its expected annual operating and maintenance costs.

-

Annualized cost Direct Costs + Indirect Costs

where

and

Direct Costs (Sum of the Following):

Labor

Raw Materials

Replacement Parts

Utilities

Indirect Costs (Sum of the Following):

Overhead (80% of Labor Costs)

Property Tax (1% of Total Capital Cost)

Insurance (1% of Total Capital Cost)

General & Administrative (2% of Total Capital Cost)

Capital Recovery (CRF xTotal Capital Cost) ......

where Total Capital Cost =- Installed Equipment Cost

The capital recovery factor (CRF) recognizes the time value of money and converts

the upfront capital cost (the installed equipment cost) to an annualized cost.

The capital Recovery Factor (CRF) is given by:

i(l + i)n

CRF - HI + i)n_l}

where

and

.

1

n

interest rate (assume i =0.10)

lifetime of abatement system (assume n = 10 years

unless shown to be different)

For example, when i = 0.10 and n = 10, the capital recovery factor CRF = 0.163.

Current District policy is to use a flat interest rate of 10 percent; over the years this

rate has proven to be relatively conservative (actual rates generally less than 10

percent). The 10 percent rate is also consistent with accepted CARR and EPA

guidelines.

8
......

-

For simple cases of cost-effectiveness determinations where the details of operating

and maintenance costs, etc. are not readily available, a rough estimate of costeffectiveness can be obtained as follows:

Annualized Cost = Installed Equipment Cost x [Capital Recovery Factor

+ Tax Factor + Insur. Factor + G & A Factor

+ Annual OperatinglMaintenance Factor]

where CFR = 0.163

Tax = 0.01

Insur. = 0.01

G&A = 0.02

O&M = 0.05

It should be reiterated that this estimation method is to be used as a first cut

projection when case or site specific information is not available and not necessarily

as a .final cost-effectiveness determination. However, it can be useful for

eliminating extreme control options or identifying control strategies worthy of

further consideration.

Finally, is clear that cost-effectiveness needs to be determined or reviewed on a

case-by-case basis. Inherent physical constraints on the source or at the site can

significantly increase the cost of the abatement system under review. Similarly,

operational constraints can affect the cost-effectiveness figure by increasing or

decreasing the potential annual emissions reduction. However, these operational

constraints should be reflected in enforceable conditions in the permit to operate

(e.g., throughput or usage limits).

An example of a cost-effectiveness calculation is given in Appendix C.

3.4 Maximum Cost Guidelines for BACf

As noted above, for BACT determinations based on the "achieved in practice"

category, no cost analysis is necessary. For the "technologically feasible/costeffective" BACT determinations, the District has adopted guidelines for the

maximum cost per ton of air pollutants controlled that would be considered costeffective. These guideline cost maximums are consistent with the broad guidelines

provided by the California Air Resources Board's Office of Air Quality Planning

and Uaison. The Bay Area Air Quality Management District's guideline cost limits

are as follows:

Pollutant

poe

NOx

S02

CO

PMI0

Maximum Cost ($/ton)

17,500

17,500

18,300

nld

5,300

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NPOC 17,500

B.

Note that the cost·effectiveness trigger for NOx has been lowered to 17,500 dollars

per ton, down from the 24,500 figure of an earlier BACT Workbook draft. This

brings the cost-effectiveness trigger for NOx in line with that for precursor organic

emissions, and consistent with Regulation 2, Rule 2, Section 302, which allows the

interchangeability of NOx and POC emission offsets.

For spray booth coating operatkJns, the following cost limits apply for controlling poe

orNPOe emissions:

A Maximum cost. of 17,500 $/ton for the following spray booth coating

operations:

i) Aerospace parts coating operations complying with Regulation

8, Rule 29.

ii) Motor vehicle, rework/body shop coating operations complying

with Regulation 8, Rule 45.

iii) Motor vehicle, assembly plant coating operations complying

with Regulation 8, Rule 13.

iv) Coating operations which have reduced VOC emissions by <

35% through the use of low VOC coatings and/or high transfer

efficiency methods.

Maximum cost of 13,750 $/ton for the following spray booth coating

operations:

i) Wood products coating operations complying with Regulation

8, Rule 32.

ii) Coating operations which have reduced VOC emissions by >

35% to < 80% through the use of low VOC coatings and/or

high transfer efficiency methods.

C. Maximum cost of 10,000 $/ton for the following spray booth coating

operations:

i) Flat wood coating operations complying with Regulation 8,

Rule 23.

ii) Metal coating operations complying with Regulation 8, Rule

19.

iii) Plastic coating operations complying with Regulation 8, Rule

31.

iv) Coating operations which have reduced VOC emissions by

80% through the use of low VOC coatings and/or high transfer

efficiency methods.

The lower maximum cost allowed for specific spray booth coating operations is a

recognition that these specific operations have already significantly reduced their

VOC emissions through the use of lower VOC coatings and/or higher transfer -..

efficiency methods. These emission reductions are reflected in the more stringent

requirements required under their applicable Regulation 8 rules. The high costs of

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