### MEMORANDUM

TO: Steam Electric Rulemaking Record

FROM: TJ Finseth, ERG

Danielle Lewis, ERG

DATE: April 19, 2013

SUBJECT: Evaluation of Chemical Precipitation Costs for Ash Transport Water

ERG is providing technical support to the U.S. Environmental Protection Agency’s Office of Water, Engineering and Analysis Division (E AD) for development of effluent limitations guidelines and standards (ELGs) for the Steam Electric Power Generating Industry. As part of this technical support, EPA, with support from ERG, evaluated chemi cal precipitation as a potential basis for a technology op tion for the treatment of fly as h transport water and bottom ash transport water. EPA considered including chem ical precipitation as a technology basis for ash transport water in one or more of the propos ed regulatory options (see Section 8 of the Technical Development Document for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category for more details on the proposed regulatory options), with numeri c effluent limitations or standa rds for discharges of fly ash transport water or bottom ash transport water to surface waters. Based on EPA’s analysis, described below, EPA found costs for chemical pr ecipitation treatment of fly ash and bottom ash transport water to be comparable or higher than the cost for conve rting to dry handling or closed loop technologies. Additionally, the chemical precipitation technology re moves fewer pollutants compared to conversion to dry handling; therefor e, EPA did not include chemical precipitation treatment as part of the proposed regulato ry options. This memorandum describes the methodology EPA used to estimate capital costs to install a chemical preci pitation system for the treatment of fly ash transport water and botto m ash transport water, and a comparison of chemical precipitation treatment system capital costs to estimated capital costs for the dry handling or closed loop technologies.

For this evaluation, EPA used the one-stage chem ical precipitation cost module along with plantlevel discharge flow rates for fly ash transport water and bottom ash transport water to estimate plant-level capital costs to install a chemical precipitation treatment system. The one-stage chemical precipitation cost module, as described in the Incremental Costs and Pollutant Removals for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category report (DCN SE01957), is th e same cost module used to estimate costs associated with one-stage chem ical precipitation systems used to treat flue gas desulfurization (FGD) wastewater . As described in Section 6.1 of the report, the one-stage chemical precipitation cost module estimates capital and operating and maintenance (O&M) costs to install and operate a one-stage chemi cal precipitation system specifically designed and operated to treat FGD wastewater. To estimate the capital costs associated with the treatment of ash transport water , EPA summed the capital cost output elements, including purchased equipment (with the exception of the equalizatio n tank), equipment installation, buildings, siteMemorandum April 19, 2013 Page 2

preparation, construction, and engi neering costs, from the cost module for the purposes of this cost analysis. EPA excluded capital costs asso ciated with equalizati on tanks (See Section 6.1.6.2 of DCN SE01957) because EPA believes plants would be likely to continue operating existing ash settling ponds instead of instal ling large holding tanks for equa lization. EPA used the same residence time and other equipment sizing bases as used to cost chemical precipitation for FGD

wastewater.

EPA estimated plant-level capital costs for 50 plants discharging fly ash transport water and 204 plants discharging bottom ash transport water to treat the ash transport water with a chemical precipitation system. The capital costs are based on plant-level discharge flow rates for either fly ash transport water or bottom ash transport water. EPA used discharge flow rates from the “Ash Transport Water Input Table,” (See Section 4.1. 2 of DCN SE01957), which is the basis for the ash transport water loadings cal culations. Where the information was available from responses in the Steam Electric Survey, EPA separated fl ows identified as combined ash sluice into contributions from fly ash sluice and bottom ash sluice. Tables A- 1 and A-2, included as attachments to this memorandum, include the plan t-level discharge flow rates used to estimate the costs associated with a chemical precipitatio n treatment system for fly ash transport water and bottom ash transport water, respectively. Plant-level capital cost estimates were calculated for only those plants whose plant-level fly ash tran sport water flow rate or plant-level bottom ash transport water flow rate could be determined. While not all plants discharging ash transport water were included in this analysis, the results fo r the plants that were included is sufficient to inform how costs for treatment of ash transport water via chemical precipitation compares to dry ash handling conversions. 1

For the 50 plants included in this analysis that discharge fly ash transport water, EPA estimated a total capital cost of $5.4 billion to install one-stage chemical pr ecipitation systems. For the 204 plants included in this analysis that discharg e bottom ash transport water, EPA estimated a total capital cost of $11.8 billion to install one-stage chemical precipitation systems. Tables A-1 and A-2 include the plant-level cost estimates.

EPA compared the capital costs estimated for the chemical precipitation systems to the capital cost estimated for the dry ash handling or clos ed loop ash handling system on a plant-level. Plant-level capital costs for dry handling or cl osed loop ash handling systems are included in Tables A-1 and A-2. For the 50 plants disc harging fly ash transport water, chemical precipitation treatment systems capital costs ar e almost 22 times more expensive than dry handling on an industry-level. For the 204 plan ts discharging bottom ash transport water, chemical precipitation systems capital costs ar e almost two times more expensive than dry handling or closed loop systems on an industr y-level. Because the costs for chemical precipitation treatment were found to be higher than the cost fo r converting to dry handling or closed loop technologies, for both fly ash and bottom ash, EPA chose not to include this treatment technology as part of the proposed regulatory options.

1 EPA estimated plant-level capital costs for 50 of th e 66 plants (76%) incurring fly ash compliance costs (excluding oil-fired and small generating units) and 204 of the 240 plants (85%) incurring bottom ash compliance costs (excluding oil-fired and small generating units).