RE: SJGS BART
	Norem, Nancy 
	to:
	Joe Kordzi
	09/27/2010 03:46 PM
	Cc:
	"Themig, Patrick", "Gannon, Maureen", "McGuffey, Mack", "Fischer, Diane 
M.", "Lucas, Kyle J."
	Show Details



History:	This message has been forwarded.




Joe,
 
Enclosed [PNM Response EPA Q 092710] are answers to some of the 22 questions you sent to me on 
September 23rd.  
 
Nancy Norem

From: Kordzi.Joe@epamail.epa.gov [mailto:Kordzi.Joe@epamail.epa.gov] 
Sent: Thursday, September 23, 2010 7:55 AM
To: Norem, Nancy
Subject: Re: SJGS BART

Hi Nancy, 

Per our conversation this morning, our contractor, Dr. Phyllis Fox, has 
identified the following information that is needed in order to complete 
her task of estimating the cost of installing SCR on the four units of the 
San Juan Generating Station.  We are planning on using Dr. Fox's analysis 
to inform our decision as part of our response tin satisfying our consent 
decree with Wild Earth Guardians.  Under that consent decree, we must 
propose our decision by 11/10/10 and finalize that decision by 5/10/10.  
Please submit this information piecemeal, as soon as it is assembled, in 
order to prevent delay.  We would appreciate receiving as much as possible 
prior to the meeting.  Please let me know you received this. 
1. Electronic copies of the SJGS Units 1-4 SCR retrofit cost Excel 
spreadsheets.   The electronic versions should not be password protected 
nor include hidden spreadsheets or formula.  All calculations should be 
discoverable by clicking on the cells. 
2.  The emission reductions assume 77% NOx control.   Please identify the 
basis and explain why a higher removal efficiency cannot be achieved. 
3.  Plots plans for each unit that show the proposed SCR layout. 

4.  Identify any retrofit constraints and support them with engineering 
calculations, drawings, and photographs. 
5.  Coal quality data for the baseline that reflects the complete range, 
including proximate analyses, ultimate analyses, and mineral analysis of 
ash. 
6. Searchable (pdf or otherwise) copies of all analyses, documents, or 
other information shared with New Mexico. 
7. What is the assumed boiler outlet sulfuric acid mist emission rate?  
What is the basis? 
8. Copies of all studies or analyses of sulfuric acid mist in San Juan 
exhaust gases. 
9. The cost analyses assume a 2 year catalyst life.  Please provide copies 
of all analyses, testing, and vendor information to support the assumed 
life. 
10. Vendor quotes for any component of the SCR retrofit, including the 
cited quote for air preheater modifications. 
11. The SCR bypass cost is based on a similarly size unit, escalated to 
2007 dollars.  Please identify the unit, the cost, the basis for any 
adjustments, and engineering drawings. 
12. The retrofits include converting the existing boilers from forced 
draft to balanced draft.  The increased draft required to support the 
retrofit can be met by adding new ID fans, adding booster fans, modifying 
existing fans, or converting to balanced draft.  Please provide the basic 
fan design information to allow an engineering analysis of these choices 
or supply the analysis.  Balanced draft conversion is the most expensive 
option and is typically chosen when there are other issues, such as an 
aging and degraded pressurized boiler system that would have to be 
replaced regardless of pollution control retrofits.  Thus, please justify 
why the cost of this conversion should be charged against the SCR. 
13. The balanced draft conversion cost is adjusted from a B&V balanced 
draft conversion project based on differences in scope.  Please identify 
the unit, the cost, the basis for the adjustments, including engineering 
drawings and all calculations used to arrive at the estimates for San 
Juan. 
14. The assumptions and calculations used to estimate catalyst cost. 

15. The cost estimates include lost generation during outage.  Please 
explain why the SCR cannot be installed during routine maintenance 
outages. 
16. Construction indirects are based on a B&V labor market review.  Please 
identify all costs included in "construction indirects" and show the 
underlying calculations used to arrive at the estimates for each unit.  
Please provide a copy of the current labor market review and the review 
that was relied on to prepare the 2007 cost estimates.  The indirect costs 
apparently included overtime at time plus one half for all construction 
staff, accounted for reduction in labor productivity due to a "tight labor 
market", and included per diems.  Please identify and justify the specific 
assumptions for each of these items.  Discuss whether these assumptions 
are still valid, given the current and foreseeable unemployment rates. 
17. The SCR retrofit cost estimates assume a contingency of 20%.  Please 
explain the basis for this. 
18. Some of the purchased equipment costs, all direct installation costs, 
and most indirect costs are factored estimates, obtained by multiplying 
capital cost, purchased equipment cost, or direct cost by a percentage.  
Please provide the basis for each percentage for each unit and where there 
are differences from unit to unit, please justify the differences. 
19. What SO2 to SO3 conversion rate is assumed for the catalyst?  Please 
justify. 
20. Many costs are scaled from a B&V database using scaling factors.  
Please provide a copy of the database and the basis for each scaling 
factor. 
21. The units reportedly fire fuel oil during startup.  What is the sulfur 
content of the startup fuel oil? Please evaluate whether natural gas could 
be used as the startup fuel. 
22.  The capital recovery factor was estimated assuming interest rate of 
7.41% and a 20 year life.  Please provide the basis of the interest rate 
and SCR life. 

Regards,

Joe

" ... and miles to go before I sleep."
-- Robert Frost


From: 	"Norem, Nancy" <Nancy.Norem@pnmresources.com> 
To: 	Joe Kordzi/R6/USEPA/US@EPA 
Date: 	09/23/2010 08:28 AM 
Subject: 	SJGS BART




Joe, 
I am sorry I missed your call yesterday.  I have been in Santa Fe at the 
NMED ghg hearings all week.  Please call me this morning as I will be in 
the office for a few hours before returning to Santa Fe. 
Nancy Norem 
505-241-2385