3/27/13

Steve,

Per earlier discussions regarding the cost effectiveness estimates prepared for LSFO controls on Alcoa’s Wenatchee Potline No. 5, please find the estimates that were prepared using information that is currently available. The enclosed estimates reflect both the estimate Alcoa believes to be the proper cost effectiveness estimate, and the other estimate included herein reflects the assumptions and adjustments made by Region 10 to comparable cost effectiveness calculations during the Region’s evaluation of the Washington State’s Regional Haze SIP [77 FR 76190].

If you have any questions after your review of the enclosed estimates, do not hesitate contacting me at either of th e phone numbers provided below, or via e:mail.

Jimmy Jones

Alcoa Inc.

EHS Services

Phone No. (865)

- 977

- 3071 Cell No. (865)

- 548

- 8059

Attachments:

4/9/13

Steve,

Thank you for arranging the April 4 th conference call to further discuss public comments received by EPA reg arding Washington Ecology’s determination that the Alcoa Wenatchee facility is exempt from BART. We understand that EPA is considering whether to disapprove Ecology’s visibility modeling based on the use of

a refined 500

- m modeling grid rather than a 4

- km screening grid.

Alcoa fully agrees with Ecology’s determination and believes that refined modeling for the Wenatchee facility was appropriate and necessary given the location of the facility, and the fact that a 4

- km grid spacing does not properly repre sent the complex terrain and regional/local wind patterns

.

In follow

- up to our conversation, Alcoa plans to conduct no further analysis of emission controls, control costs or visibility impacts for Wenatchee until such time that EPA proposes and makes a final decision regarding Ecology’s visibility modeling

for Wenatchee.

As discussed on the call, Alcoa is open to participating in technical discussions with EPA and Ecology modeling personnel if EPA seeks to make a more informed decision regarding app ropriate modeling details for the Wenatchee facility.

Thanks again for arranging the callJimmy

Phone No. (865)

- 977

- 3071 Cell No. (865)

- 548

- 8059

5/1/13



### Steve,

We really don’t understand the EPA’s need for a new potline control cost estimate for

the We natchee Smelter, given the existing quote was adequate for your proposed SIP action for Intalco; and given that there would be unnecessary costs for a potential vendor’s time and travel to develop a site specific bid specification and cost estimate.

We ac knowledge that the 2006 cost estimates may be “stale,” however, we also recognize that the 2006 potline control estimate will likely be lower than any 2013

estimate. Our thinking is that if EPA bases their decision on the “stale” but lower

control costs e stimate, a more costly estimate in current dollars will only make the control costs more costly. This makes the usage of the old cost quote as the basis to prove that add

- on controls are not cost effective easily justified.

After consulting with the re st of our team, we are willing to contact one of the original vendors to see if they are willing to provide us with some non

- binding, generalized information indicating how much more the estimate for the overall cost of the 2006 Tennessee control system wo uld have gone up over the last seven years (e.g. approximately +% more now than originally quoted). If they are amenable to something of this nature, then you could adjust the 2006 costs accordingly.

If you think this approach would get you to where you want to be, let me know.

Jimmy

Phone: 865

- 977

- 3071

Cell: 865

- 548

- 8059

From: Body, Steve [ mailto:Body.Steve@epa.gov ]

Sent: Tuesday, April 30, 2013 2:36 PM

To: Jones, James D. Subject: EXT: Wenatchee BART

Jimmy... As we begin our BART analysis for the Alcoa Wenatchee Operation, one key item will be the cost of LSFO equipment. We feel that the old vendor quotes used for

Intalco are too stale. I doubt vendors would provide EPA a quote, as we are not potentia l clients.

Is this something Alcoa could ask vendors and provide us the information?

Steve5/13/13

Steve,

We were informed earlier this morning by the vendor that we contacted in response to EPA’s request for updated scrubber cost information, that they had looked at the original proposal and concluded that the 2006 indicative proposal cost would have increased by approximately 20

– 25%, if they were to quote the same Tennessee project today. This is their “best guess” based on their current pricing and cost s.

They explained that it is somewhat difficult for them to reach a firm conclusion on the exact amount of the increase because of what has happened since the original quote was prepared. They indicated that in the latter half of 2006, there was a larg e and sudden global escalation in steel prices driven by demand in the Chinese market. After that run

- up, prices receded somewhat and then remained flat or have increased slowly. This is relevant because carbon and alloy steel comprise a significant portio n of a WFGD’s costs. Also, there has been a decline in demand for WFGD systems over the past five years and consequently, they don’t have a good, recent benchmark to use for comparison.

Today’s information affirmed our earlier belief, that the 2006 pot line control estimate is lower than a comparable 2013 estimate. Even the “stale” estimate shows that at the substantially lower 2006 cost, the installation of a wet scrubber on Potline No. 5 at Wenatchee is not cost

effective. Please refer to the cost ef fectiveness estimates that were provided via electronic mail to you on March 27. With this current information, it would appear that EPA should be able proceed with its analysis using the detailed 2006 information, knowing that using the “stale”

estimate is justified by the fact that a more recent estimate would only make the outcome even

less cost effective.

Hopefully this information enables you to move forward with your evaluation and response to comments on EPA’s proposed actions relative to the State of Washington’s Regional Haze State Implementation Plan.

Jimmy Jones

Alcoa Inc.

EHS Services

Phone No. (865)

- 977

- 3071 Cell No. (865)

- 548

- 8059