Cleveland Cliffs Incorporated: United TaconiteBART Report - <Appendix A> Emission Control Cost Analysis<Table 1 >: Cost SummaryNOxControl Cost SummaryControl TechnologyControlEff %ControlledEmissions T/yEmissionReduction T/yrInstalled CapitalCost $Total Annual Cost$/yrPollution ControlCost $/tonIncrementalControl Cost$/tonSelective Catalytic Reduction(SCR)+ ReheatLine 1 Pellet Induration80% 399.7 1751.5 $44,591,384$22,183,231 $12,665 NALine 2 Pellet Induration80% 35.0 1598.3 $70,838,846 $33,856,894$21,183 NALine 2 Pellet Induration NG80% 188.7 7975.8 $72,298,312 $36,202,334$4,539 NASO2Control Cost SummaryControl TechnologyControlEff %ControlledEmissions T/yEmissionReduction T/yrInstalled CapitalCost $Total Annual Cost$/yrPollution ControlCost $/tonIncrementalControl Cost$/tonWet Walled Electrostatic Precipitator (WWESP)Line 1 Pellet Induration80% 2.8 11.1 $29,805,809 $27,741,768 $2,501,963NALine 2 Pellet Induration80% 549.9 2199.7 $41,621,612 $70,537,972 $32,066 $98,901Wet Scrubber (Additional)Line 1 Pellet Induration60% 5.5 8.3 $19,419,261 $6,120,650 $736,009NALine 2 Pellet Induration60% 1099.9 1649.8 $55,586,576 $16,148,884$9,788NAP:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)Cost Summary10/17/2007 Page 1 of 1Cleveland Cliffs Incorporated: United TaconiteBART Report - <Appendix A> Emission Control Cost Analysis<Table 2>: - Summary of Utility, Chemical and Supply CostsOperating Unit:Line 1 Pellet IndurationStudy Year2006Emission Unit Number EU 040Stack/Vent Number SV 046Operating Unit:Line 2 Pellet IndurationEmission Unit Number EU 042Stack/Vent Number SV 048 & 049Line 1 furnace mmbtu 190Line 2 furnace mmbtu 400ReferenceItem Unit Cost Units Cost Year Data Source NotesOperating Labor45.31 $/hr 2006Site Specific - United Taconite.Maintenance Labor47.22 $/hr 2006Site Specific - United Taconite.Construction Labor Rate.Electricity0.04 $/kwh 2006Site Specific - United Taconite.Purchased Cost.Natural Gas12.81 $/mscf 2006Site Specific - United Taconite. $12.02/MMBtu @ 1066 Btu/scf.Water2.07 $/mgal 2006Site Specific - United Taconite.Purchased Cost.Cooling Water0.28 $/mgal 0.23 1999EPA Air Pollution Control Cost Manual, 6thed. Section 3.1 Ch 1.Ch 1 Carbon Absorbers, 1999 $0.15 - $0.30 Avg of 22.5 and 7 yrs and3% inflation.Compressed Air0.32 $/mscf 0.25 1998EPA Air Pollution Control Cost Manual 6th Ed2002, Section 6 Chapter 1 .Example problem; Dried & Filtered, Ch 1.6 '98 cost adjusted for 3%inflation.Water Treatment-nanofiltration33.00 $/mgal 2007Site Specific - United Taconite. Cost to install and operate reverse osmosis.Chemicals & SuppliesLime88.98 $/ton 88.98 2006Ammonia (29% aqua.)0.12 $/lb 0.101 2000EPA Air Pollution Control Cost Manual 6th Ed2002, Section 5 Chapter 2, page 2-50.Annual costs for a retrofit SCR system example problem. '00 costsadjusted for 3% inflation.Caustic484.56 $/ton 280 2003 United Taconite 2006 costSCR Catalyst141.00$/ft3Cormetech, Inc.OtherSales Tax6.5% %Interest Rate7.00% %EPA Air Pollution Control Cost ManualIntroduction, Chapter 2, section 2.4.2.Social (discount) rate used as a default.Operating InformationAnnual Op. Hrs EU0406599 HoursBART spreadsheet.Maximum hours of operation 2004-2005 with a 10% safety factor.Annual Op. Hrs EU0428688 HoursBART spreadsheet.Maximum hours of operation 2004-2005 with a 10% safety factor.Utilization Rate93%Equipment Life20 yrsStandardized Flow RateSV 046 308,345 scfm @ 32o FCalculated.SV 048 & 049 615,086 scfm @ 32o FCalculated.P:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)Utility Chem$ Data10/17/2007 Page 1 of 2ReferenceItem Unit Cost Units Cost Year Data Source NotesTemperatureSV 046 129 Deg FBART spreadsheet.SV 048 & 049 121 Deg FBART spreadsheet. Weighted average.Moisture ContentSV 046 13.8% 2005Y:\23\69\948 United Taconite Post EERPTesting\Data\Waste Gas Stack. Average from test results in : Line 1 WG pm 5-2-05.SV 048 & 049 13.8% 2005Y:\23\69\872 United Tac\Data. Weighted average from test results in: SV049 2BPM and SV048 2APM.Y:\23\69\872 United Tac\Data\SV048 2APMActual Flow RateSV 046 369,137 acfmBART spreadsheet.SV 048 & 049 726,000 acfmBART spreadsheet.Standardized Flow RateSV 046 330,907 scfm @ 68o FCalculated.SV 048 & 049 660,092 scfm @ 68o FCalculated.Dry Std Flow RateSV 046 285,110 dscfm @ 68o FCalculated.SV 048 & 049 568,896 dscfm @ 68o FCalculated.Max Emis Actual Emissions lb/hr ton/yearPollutant Lb/Hr Ton/year ('04&'05 Max) ppmv ppmvlb/mmbtuNitrous Oxides (NOx)SV 046 651.3 2,151.2 319 240.2 3.428070175 2005 plus 10%SV 048 & 049 375.2 1,633.3 92 91.4 8.279997057 2004 plus 10%SV 048 & 049 with NG only 2021.0 8,164.5 495 457.0Sulfur Dioxides (SO2)SV 046 4.2 13.9 1 1.1 2004 plus 10%SV 048 & 049 632.2 2,749.7 111 110.5 2004 plus 10%P:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)Utility Chem$ Data10/17/2007 Page 2 of 2Cleveland Cliffs Incorporated: United TaconiteBART Report - <Appendix A> Emission Control Cost Analysis<Table 6>: SOxControl - Wet ScrubberOperating Unit:Line 2 Pellet IndurationEmission Unit Number EU 042 Stack/Vent Number SV 048 & 049Standardized Flow Rate 615,086 scfm @ 32o FExpected Utilization Rate 93% Temperature 121 Deg FExpected Annual Hours of Operation 8,688 Hours Moisture Content 13.8%Annual Interest Rate 7.0% Actual Flow Rate 726,000 acfmExpected Equipment Life 20 yrs Standardized Flow Rate 660,092 scfm @ 68o FDry Std Flow Rate 568,896 dscfm @ 68o FCONTROL EQUIPMENT COSTSCapital CostsDirect Capital Costs (1)Purchased Equipment (A)5,101,881Purchased Equipment Total (B) 22% of control device cost (A)6,198,786Installation - Standard Costs 85% of purchased equip cost (B)5,268,968Installation - Site Specific Costs33,072,587Installation Total5,268,968Total Direct Capital Cost, DC11,467,753Total Indirect Capital Costs, IC 42%of purchased equip cost (B)2,603,490Total Capital Investment (TCI) = DC + IC55,586,576Operating CostsTotal Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 10,291,311Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,857,573Total Annual Cost (Annualized Capital Cost + Operating Cost)16,148,884ActualEmission Control Cost CalculationEmissionsMax Emis Annual Cont Eff Cont Emis Reduction Cont CostPollutant Lb/Hr T/Yr%T/yrT/yr$/Ton RemNitrous Oxides (NOx) 375.21,633.30% 1633.3 -NASulfur Dioxide (SO2)632.22,749.760% 1099.9 1,649.89,788Notes & Assumptions1Original estimate from STS Consultants. Use 0.6 Power law factor to adjust price to stack flow rate from bid basis of 500,000acfm.2Liquid/Gas ratio = 38 L/G = Gal/1,000 acf.3Water Makeup Rate/Wastewater Discharge = 2.0% of circulating water rate.4Evaporation rate calculated from steam table in Basic Principles and Calculations in Chemical Engineering Third Edition.5CUECost Workbook Version 1.0, USEPA Document Page 2.P:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)EU042 Wet Scrubber10/17/2007 Page 1 of 5Cleveland Cliffs Incorporated: United TaconiteBART Report - <Appendix A> Emission Control Cost Analysis<Table 6>: SOx Control - Wet ScrubberCAPITAL COSTSDirect Capital CostsPurchased Equipment (A) (1)Purchased Equipment Costs (A) - Absorber + packing + auxiliary equipment, EC 5,101,881Instrumentation 10% of control device cost (A) 510,188MN Sales Taxes 7% of control device cost (A) 331,622Freight 5% of control device cost (A) 255,094Purchased Equipment Total (B)22%6,198,786InstallationFoundations & supports 12% of purchased equip cost (B) 743,854Handling & erection 40% of purchased equip cost (B) 2,479,514Electrical 1% of purchased equip cost (B) 61,988Piping 30% of purchased equip cost (B) 1,859,636Insulation 1% of purchased equip cost (B) 61,988Painting 1% of purchased equip cost (B) 61,988Installation Subtotal Standard Expenses85%5,268,968Total Direct Capital Cost, DC11,467,753Indirect Capital CostsEngineering, supervision 5%of purchased equip cost (B) 309,939Construction & field expenses 0%of purchased equip cost (B) 0Contractor fees 5%of purchased equip cost (B) 309,939Start-up 1%of purchased equip cost (B) 61,988Performance test1%of purchased equip cost (B) 61,988Model Studies NAof purchased equip cost (B) NAContingencies 30%of purchased equip cost (B) 1,859,636Total Indirect Capital Costs, IC42%of purchased equip cost (B)2,603,490Total Capital Investment (TCI) = DC + IC14,071,243Retrofit multiplier560% of TCI8,442,746Sitework and foundations Site Specific 1,400,000Structural steel Site Specific 4,800,000Site Specific - Other-Production Downtime Downtime for construction tie-ins for 8 weeks; $479,868/day 26,872,587Total Site Specific Costs33,072,587Total Capital Investment (TCI) Retrofit Installed55,586,576P:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)EU042 Wet Scrubber10/17/2007 Page 2 of 5Cleveland Cliffs Incorporated: United TaconiteBART Report - <Appendix A> Emission Control Cost Analysis<Table 6>: SOx Control - Wet ScrubberOPERATING COSTSDirect Annual Operating Costs, DCAnnual Cost % of Annual CostOperating LaborOperator 37.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 24,603 0%Supervisor 15% 15% of Operator Costs 3,690 0%MaintenanceMaintenance Labor 40.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 25,640 0%Maintenance Materials 100% of maintenance labor costs 25,640 0%Utilities, Supplies, Replacements & Waste ManagementElectricity 0.04 $/kwh, 1,493 kW-hr, annual operating hours, 93% utilization 482,525 3%Water 2.07 $/kgal, 681 gpm, annual operating hours, 93% utilization 683,595 4%WW Treat Neutralization 33.00 $/kgal, 552 gpm, annual operating hours, 93% utilization 8,826,899 55%Lime 88.98 $/ton, 608 lb/hr, annual operating hours, 93% utilization 218,719 1%Total Annual Direct Operating Costs10,291,311 64%Indirect Operating CostsOverhead 60% of total labor and material costs 47,7440%Administration (2% total capital costs) 2% of total capital costs (TCI) 281,425 2%Property tax (1% total capital costs) 1% of total capital costs (TCI) 140,712 1%Insurance (1% total capital costs) 1% of total capital costs (TCI) 140,712 1%Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 5,246,98032%Total Annual Indirect Operating CostsSum indirect oper costs + capital recovery cost5,857,573 36%Total Annual Cost (Annualized Capital Cost + Operating Cost)16,148,884 100%See Summary page for notes and assumptionsP:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)EU042 Wet Scrubber10/17/2007 Page 3 of 5Cleveland Cliffs Incorporated: United TaconiteBART Report - <Appendix A> Emission Control Cost Analysis<Table 6>: SOx Control - Wet ScrubberCapital Recovery FactorsPrimary InstallationInterest Rate 7.00%Equipment Life 20 yearsCRF 0.0944Replacement Catalyst:Equipment Life 20 yearsCRF 0.0000Rep part cost per unit 0$/ft3Amount Required 0ft3Packing Cost 0 Cost adjusted for freight & sales taxInstallation Labor 0 Assume Labor = 15% of catalyst cost (basis labor for baghouse replacement)Total Installed Cost0 Zero out if no replacement parts neededAnnualized Cost0Replacement Parts & Equipment:Equipment Life 3CRF 0.3811Rep part cost per unit 0.00 $ eachAmount Required 0 NumberTotal Rep Parts Cost 0 Cost adjusted for freight & sales taxInstallation Labor 0 10 min per bag (13 hr total) Labor at $29.65/hr OAQPS list replacement times from 5 - 20 min per bag.Total Installed Cost0 Zero out if no replacement parts neededAnnualized Cost0Electrical UseFlow acfm∆P in H2OEfficiency Hp kWBlower, Scrubber 726,000 8.55 0.7 - 1,037.5 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.48FlowLiquid SPGR∆P ft H2OEfficiency Hp kWCirc Pump27,588 gpm 1 60 0.7 - 444.5 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49H2O WW Disch681 gpm 1 60 0.7 - 11.0 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49OtherTotal1493.0Reagent Use & Other Operating CostsCaustic Use 632.17 lb/hr SO2 2.50lb NaOH/lb SO21580.42 lb/hr CausticLime Use 632.17 lb/hr SO2 0.96lb Lime/lb SO2608.46 lb/hr lime, lime addition at 1.1 times the stoichiometric ratioLiquid/Gas ratio238.0 * L/G = Gal/1,000 acfCirculating Water Rate 27,588 gpmWater Makeup Rate/WW Disch3=2.0% of circulating water rate + evap. loss = 681 gpmEvaporation Loss4=129 gpmBlowdown = makeup - evap 552 gpmP:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)EU042 Wet Scrubber10/17/2007 Page 4 of 5Cleveland Cliffs Incorporated: United TaconiteBART Report - <Appendix A> Emission Control Cost Analysis<Table 6>: SOx Control - Wet ScrubberOperating Cost Calculations Annual hours of operation: 8,688Utilization Rate: 93%Unit Unit of Use Unit of Annual Annual CommentsItem Cost $ Measure Rate Measure Use* CostOperating LaborOp Labor 45.31 $/Hr 0.5 hr/8 hr shift 543 24,603 $/Hr, 0.5 hr/8 hr shift, Annual Operating HoursSupervisor 15% of Op. NA 3,69015% of Operator CostsMaintenanceMaint Labor 47.22 $/Hr 0.5 hr/8 hr shift 543 25,640 $/Hr, 0.5 hr/8 hr shift, Annual Operating HoursMaint Mtls 100 % of Maintenance Labor NA 25,640 100% of Maintenance LaborUtilities, Supplies, Replacements & Waste ManagementElectricity 0.040 $/kwh 1493.0 kW-hr 12,063,123 482,525 $/kwh, 1,493 kW-hr, annual operating hours, 93% utilizationWater 2.07 $/kgal 681.2 gpm 330,239 683,595 $/kgal, 681 gpm, annual operating hours, 93% utilizationWW Treat Neutralization33.00 $/kgal 551.8 gpm 267,482 8,826,899 $/kgal, 552 gpm, annual operating hours, 93% utilizationLime 89.0 $/ton 608.5 lb/hr 2,458 218,719 $/ton, 608 lb/hr, annual operating hours, 93% utilization*annual use rate is in same units of measurement as the unit cost factorSee Summary page for notes and assumptionsP:\Mpls\23 MN\69\2369A59 UTAC BART\WorkFiles\UTAC control cost ss\United Taconite Control Costs (2007-10-17)EU042 Wet Scrubber10/17/2007 Page 5 of 5