Technical Support Document (TSD) for the Cross State Air Pollution Rule Supplemental Rulemaking

Docket ID No. EPA

- HQ

- OAR

- 2009

- 0491



# Determination of State Budgets for the

Final Ozone Supplemental of the

Transport Rule

U.S Environmental Protection Agency

Office of Air and Radiation

December 20112 EPA finalized the Transport Rule in July of 2011 1

. At the same time, EPA also issued a Supplemental Notice of Proposed Rulemaking (SNPR)

proposing to bring six states into the Transport Rule ozone

- season NO X program. In th is final rulemaking

, EPA is finalizing FIPs to address significant

contribution to nonattainment and inte rference with maintenance in Iowa, Michigan, Missouri, Oklahoma, and Wisconsin. For two of these states (Iowa and

Missouri), the state budgets in this final rule are unchanged from those budgets as quantified at proposal. F or three of the se states (Michi gan, Oklahoma, and

Wisconsin) , EPA is finalizing state budgets that reflect adjustments in certain unit

- level assumptions that result in changes from the budgets presented for

these states in the proposal. S ee Section III. E of the preamble for an explanat ion of these adjustments . This technical support document (TSD) show s the

underlying data and calculations used to determine the amount by which each of these three states have their budget adjusted from proposal

. The fir st

section b elow summarizes final budgets for all of the states for which EPA is finalizing a FIP under this rule

. The second section identifies each specific

unit

- level adjustment and quantifies its impact on the relevant state budget and the number of allowances pu t into the relevant new unit set

- aside (NUSA)

, 2

as well as the impact to the relevant assurance level 3

Section A : Summary of State Emission Budgets for that state, using the methodologies described in the final Transport Rule.

EPA is finalizing FIPs to control ozone

- season NO X emissions from five state s. The state budgets determined for these states maintain a consistent

application of the methodology described in the final Transport Rule to quantify and eliminate emissions that significantly contribute to nonattainment and

interfere with maintenance of the NAAQS assessed in that rulemaking

. EPA’s regulatory impacts analysis (RIA) of the July 2011 final Transport Rule

included coverage of these states for ozone

- season NO X reductions using their state budgets as quantified in the proposal of this supplemental rulemaking.

As shown in further detail below, the final ozone

- season NO X budgets for these states in 2014 (the year of analysis in that RIA) vary collectively by less than

3,500 tons from t h e budgets as originally modeled. 4

Final Ozone

- Season NO X Budgets (thousand tons)

Final Budget

State 2012 2014

Michigan 28.041 27.016

Oklahoma 3 6.56 7 21.835 5

1 Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals (76 FR 48208).

2 The “Total NUSAs” presented for each state in section B of this document include allowances under both the State NUS A and the Indian Country NUSA (where the latter

exists in the given state).

3 EPA has also proposed in a separate action to amend the effective date of the assurance provisions in all states to start in 2014 instead of in 2012. Please see 76 FR 63860

for more information on that proposal.

4 For more information, please see the final Transport Rule Regulatory Impact Analysis in the docket for this rulemaking ( EPA

- HQ

- OAR

- 2009

- 0491

- 4409 ).

5 Budget effective in 2013 and thereafter

.3 Wisconsin 14.784 14.296

Iowa 16.532 16.207

Missouri 22.762 21.073

Section B : Quantification of State Emission Budgets , Assurance Levels, and NUSAs Affected by Unit

- Level Adjustments

1)

As described in the preamble, EPA is finalizing Michigan’s 2012 and 2014 ozone

- season (OS) NO X budget with an adjustment to account for no

SCR being installed at Monroe Unit 2 . This results in a 2,28 9 t on increase to the state’s ozone

- season NO X budget s in 2012 and 2014

. Michigan

Table 1.a: Calculation to Determine Michigan Ozone S eason Budget Increase Assuming N o SCR at Monroe U nit # 2

A B C D E F

Plant Unit Emissions from

TR_Remedy

Final_2012 (1000

tons) HI from

TR_Remedy_Final_2012

(Tbtu) Remedy Emission Rate

from from

TR_Remedy_Final_2012

(lbs/mm B tu) Adjusted

Emission Rate

(lbs/mm B tu) Adjusted

Emissions Budget

Adjustment

(1000 tons)

Calculation A/B D x B E

- A

Monroe 2 0.675 19.46356305 0.07 0.3046 2.964300653 2.289

C olumn s A, B, and C show the OS NO X emissions, heat input, and emission rate from the TR_Remedy_Final_2012 modeling when a n SCR is

assumed to be present at Monroe U nit 2 . Because n o SCR is present, EPA modified the emission rate to reflect the “controlled NO X policy rate” in the

NEEDS version fr om the September 1, 2010 TR Notice of Data Availability (NODA) (column D)

. 6

The final values for the state ’s ozone

- season NO X budget, assurance level, and new unit set

- aside s are given in the preamble. This value reflects the NO X emission rate assumed in

EPA’s modeling of the Transport Rule as originally proposed , when EPA did not assume an SCR to be present at the unit. This value approximates the

emission rate expected at the unit at a cost threshold of $500/ton when no SCR is present at the unit. EPA multiplied this NO X rate (shown in column D) by

the remedy heat input shown in column B to obtain a revised emission projection for the unit (column E) . The difference between this revised emi ssion

projection ( no SCR assumed) and the final Transport Rule remedy analysis emission projection (SCR assumed) determines the amount of the adjustment to

the state’s ozone

- season NO X b udget as compared to the budget presented at proposal (column F)

.

6 See National Electric Ener gy Data System (NEEDS) v4.10 available at http://www.epa.gov/airmarkets/progsregs/epa

- ipm/BaseCasev410.html45 2) Oklahoma

As explained in the preamble section I II of the final supplemental rule, EPA has recalculated Oklahoma’s state budget for the 2012 ozone season

such that it does not reflect the installation or upgrade of any new combustion controls (see Appendix) . This recalculation demonstrates that ozone

- season

NOX emissions would be 9,522 tons higher in the 2012 ozone season without the new and upgraded combustion controls previously assumed; EPA has

adjusted the final state budget for the 2012 ozone season only to reflect these emissions. The table below sh ows the values and calculations used to derive

the 9,522 figure.

Table 2a. Ok lahoma Ozone Season NO X Budget Adjustment for the 2012 Ozone Season Reflecting N o Combustion C ontrol

U pgrade or I nstallation

(1000 tons)

A B C D E F G H I

Plant Name ORIS

Plant

Code Unit ID 2012 OS

NO X Remedy

Emissions

(1000

tons) 2012 H eat

Input

(Tbtu) Emission

Rate with

LNB

Upgrade Base

Emission

Rate

(lbs/mm B tu) Adjust ed

Emissions

(1

, 000 tons) Adjustment

Amount

(1

, 000

tons)

Muskogee 2952 6 1.036 14.216 0.146 0.347 2.466710049 1.430

Muskogee 2952 4 1.045 14.613 0.143 0.321 2.343145371 1.298

Sooner 6095 1 1.071 14.939 0.143 0.319 2.386135045 1.315

Muskogee 2952 5 1.042 14.647 0.142 0.314 2.301435722 1.260

Sooner 6095 2 1.111 15.580 0.143 0.314 2.445420837 1.334

GRDA 165 1 1.465 14.507 0.202 0.349 2.528559526 1.063

Northeastern 2963 3314 1.704 13.160 0.259 0.394 2.594200981 0.890

Northeastern 2963 3313 1.649 13.137 0.251 0.382 2.511937905 0.863

Hugo 6772 1 1.269 14.103 0.180 0.190 1.336456463 0.067

Total 9.522

Columns A, B, and C provide unit level information about the facility. Columns D, E, and F provide projected emissions, heat input and ozone season NO X

emission rate s from EPA’s 2012 TR_Remedy_Final modeling. The emission rate in column F, which formed the basis for the column D expected

emissions, was based on the assumption that the facilities would make certain upgrades or installations with respect to combustion controls. Column G

reflects the ozone

- season NO X emission rate at these facilities assuming no combustion control upgrades or installation. That is, column G reflects emissi on

rates that are typical to that unit’s historic operations. This value is obtained from “controlled NO X Base ra te” in the NEEDS v.410 used for the Final6 Transport Rule . Column H reflects the emission values expected for each unit when the projected heat input (column E) is multiplied by the hi storic

emission rate (column G). The difference between column H and c olumn D (when summed) reflects the total amount by which the Oklahoma ozone

- season

NOx budget is adjusted as compared to the budget presented at proposal

.

Also, as explained in preamble section III, EPA is finalizing an Oklahoma state budget specifically for the 2012 ozone season that reflects revised

projected emissio ns at oil/gas steam generators consistent with an immediate

- term dispatch pattern that maintains the firm power supply arrangements

already in place to serve local electricity demand

. The t able below i llustrates the calculations used to derive the adjustment to the Oklahoma state budget for

the 2012 ozone season assuming a dispatch pattern of oil/gas steam generation in 2012 consistent with recently observed operational data at those units

.

Table 2b. Oklahoma Ozone Season NO X Budget Adjustment Reflecting No Major Curtailment of O/G S team Generating Units

A B C D E F G H I J

Plant Name Plant Type ORIS

Code Unit

ID 2012 OS

NO X Remedy

Heat Input

(mmBtu) 2012 OS NO X Remedy

Emissions

(1

, 000 tons) 2010 Heat Input

(mmBtu) NEEDS

C ontrolled NO X

Base Rate

(lbs/mmBtu) Emissions

A ssuming 2010

Heat Input

(1

, 000 tons) Emission

Adjustment for

2012

(1

, 000 tons)

Anadarko Plant O/G Steam 3006 3 0 0 1,917 0.22 0.000 0.000

Horseshoe Lake O/G Steam 2951 6 0 0 3,022,970 0.28 0.427 0.427

Horseshoe Lake O/G Steam 2951 8 0 0 5,904,903 0.14 0.405 0.405

Mooreland O/G Steam 3008 1 0 0 52,018 0.34 0.009 0.009

Mustang O/G Steam 2953 1 0 0 648,384 0.20 0.066 0.066

Mustang O/G Steam 2953 2 0 0 636,546 0.15 0.048 0.048

Mustang O/G Steam 2953 3 0 0 1,700,657 0.24 0.200 0.200

Mustang O/G Steam 2953 4 0 0 1,884,097 0.35 0.325 0.325

Northeastern O/G Steam 2963 3302 0 0 8,298,493 0.40 1.644 1.644

Ponca O/G Steam 762 2 0 0 1,895 0.19 0.000 0.000

Riverside O/G Steam 4940 1502 0 0 6,559,178 0.23 0.742 0.742

Southwestern O/G Steam 2964 8002 0 0 457,715 0.33 0.075 0.075

Southwestern O/G Steam 2964 8003 0 0 4,603,800 0.44 1.005 1.005

Southwestern O/G Steam 2964 801N 0 0 244,030 0.25 0.031 0.031

Southwestern O/G Steam 2964 801S 0 0 244,058 0.21 0.025 0.025

Tulsa O/G Steam 2965 1402 0 0 1,029,085 0.18 0.094 0.0947 Tulsa O/G Steam 2965 1403 0 0 112,296 0.28 0.015 0.015

Tulsa O/G Steam 2965 1404 0 0 1,058,014 0.19 0.099 0.099

Total 0 0 36,460,055 5.210 5.210

Columns A, B, C and D provide unit level information about the facility. Columns E, and F provide projected ozone season hea t input and emissions from

EPA’s 2012 TR_Remedy_Final modeling. The heat input in column E, which formed the basis for the column E expected emissions, was based on the

assumption that the facilities would reduce uneconomic generation from these less efficient sources under the Transport Rule market incenti ves. Column G

reflects the 2010 ozone

- season NO X heat input at these facilities. Column H reflects emission rates that are typical to that unit’s historic operations and

assumed as the “controlled NO X Base rate” in the NEEDS IPM version 4.10 used for the final Transport Rule. Column I reflects the emission values

expected for each unit when the 2010 heat input (column E) is multiplied by the emission rate (column H ). The difference betwee n column I and column F

(when summed) reflects the total amount by which the Oklahoma ozone

- season NO X budget is adjusted as compared to the budget presented at proposal

.

The final values for the state ’s ozone

- season NO X budget, assurance level, and new unit set

- asides are given in the preamble.8 3) Wisconsin

As explained in the preamble section III.E of the final supplemental rule, EPA has recalculated Wisconsin’s 2012 and 2014 ozone

- season budget

such that it does not reflect the installation of SCR control technology at J P Madgett. This results in a 1,080 ton increase to the state’s ozone

- season NO X

budget relative to what was proposed in the SNPR. The table below details the values and calculations used to arrive at that amount.

Table 3.a: Calculation to Determine Wiscons in O zone S eason NO X Budget Adjustment Assuming N o SCR at J P Madgett

A B C D E F

Plant Name Unit

ID Emissions

from

TR_Remedy

Final_2012

(1000 tons) Heat Input from

TR_Remedy_Final_2012

(Tbtu) Remedy Emission Rate

fromTR_Remedy_Final_2012

(lbs/mmbtu) Revised

Emission

Rate

(lbs/mmbtu) Revised

Emissions

(1000

tons) Net Budget Adjustment

(1000 tons)

Calculation A/B D x B/2 E

- A

J P Madgett B1 .257068143 10.28272555 .05 .26 1.337 1.080

Columns A, B, and C show the emissions, heat input, and emission rate from the 2012 remedy modeling for the J P Madgett unit. However, the

emission rate in column C reflects the existence of a SCR. Because no SCR is present, EPA calculates the source ’ s e xpected emissions using the emission

rate shown for this unit in the EPA’s analysis of the base case for the final Transport Rule, as found in the TR_Base_Case_Final for 2012 (column D) of 0. 26

lbs/mm B tu

. This ozone

- season NO X emission rate reflects generation at this unit without the operati on of the assumed SCR, which did not operate in the

final Transport Rule base case because it was modeled as a “ dispatchable ” control that was not found to be economic to operate in that scenario. 7

The final values for the state ’s ozone

- season NO X budget, assurance level, and new unit set

- asides are given in the preamble. Moreover,

this emission rate reflects one typically observed at past operation of the facility when no SCR was present. The J P Madgett emission rate without operating

an SCR (column D) multiplied by the remedy heat input (column B) yields the projected emissions from the unit if no SCR were assumed to be in place.

The difference between the projected emissions when no SCR is in place (column E) and the projected emissions when an SCR is assumed (column A)

determines the amount of the adjustment to the state’s 2 012 and 2014 ozone

- season NO X budget s as compared to the budget presented at proposal (column

F)

.

7 See "WebReady_ParsedFile_TR_Base_Case_Final_2012" in the Transport Rule docket or on EPA's CSAPR website9 APPENDIX

Assessment of Resource Adequacy for the 2012 Ozone Season in Oklahoma

EPA is setting the Oklahoma state budget for the 2012 ozone season at a level that does not necessitate the installation of new low

- NO X burners

. S ee

preamble section III for further dis cussion. At proposal, EPA quantified Oklahoma’s 2012 ozone

- season NO X state budget assuming that a number of units

representing 4,452 MW of capacity would install new low

- NO X burners (LNB) before the 2012 ozone season. See Table 1 for a list of those uni ts showing

each unit’s net summer dependable capacity.

Table 1. Oklahoma Units Projected to Install Low

N O X Burners under the Transport Rule

Plant Name Unit ID County Capacity

(MW)

GRDA 1 Mayes 490

Muskogee 4 Muskogee 511

Muskogee 5 Muskogee 522

Muskogee 6 Muskogee 515

Northeastern 3313 Rogers 450

Northeastern 3314 Rogers 450

Sooner 1 Noble 535

Sooner 2 Noble 540

Hugo 1 Choctaw 440

Total 4452

As explained in preamble section III , EPA assessed the relationship of the capacity identified in Table 1 to the relevant region’s total available capacity that

is taken into account in resource adequacy determinations. This assessment shows that if the capacity identified in Table 1 were t o be unavailable due to the

installation of low

- NO X burners during the 2012 ozone season, the ozone

- season planning reserve margin in the IPM region containing Oklahoma (SPPS)

would fall below the target planning reserve margin of 13.6% (see Table 2).10 Ta ble 2. IPM 2012 Ozone

- Season Reserve Margin Projections for

SPPS

Including All

Plants in IPM With Table 1

Capacity

Removed

Capacity (MW) 39,093 34,641

Ozone

- Season Peak Load (MW) 31,785 31,785

Margin (MW) 7,308 2,856

Reserve Margin † 23.0% 9.0%

Target Planning Reserve Margin 13.6% 13.6%

† The reserve margin is calculated as the margin (third row) divided by the

available peak load ( second row)

The potential unavailability of this capacity would only frustrate the region’s target planning reserve margin during the ozone season, because the ozone

season period represents the highest projected load (electricity demand). Even without this capacity available, the regional reserve margin would remain

higher than the target planning reserve marg in during the remainder of the year, as shown in Table 3. Because these units would be able to complete LNB

installation without impairing the region’s ability to meet its target planning reserve margin after the 2012 ozone season, E PA is not adjusting Ok lahoma’s

state budgets for years subsequent to 2012 from the budget as quantified at proposal.

Table 3. IPM 2012 Non

- Ozone

- Season Reserve Margin Projections for

SPPS

Including All

Plants in IPM With Table 1

Capacity

Removed

Capacity (MW) 39,093 34,641

Non

- Ozone

- Season Peak Load (MW) 24,025 24,025

Margin (MW) 15,068 10,616

Reserve Margin† 62 % 44 %

Target Planning Reserve Margin 13.6% 13.6%

† The reserve margin is calculated as the margin (third row) divided by the peak

load ( second row)