June 30, 2011 

MEMORANDUM 

From: William H. Maxwell 

EPA/SPPD/ESG (D243-01) 

To: Docket Number EPA-HQ-OAR-2009-0234 

Subject: Discussion held in conjunction with a DOE presentation on a meta analysis of 

modelling done on EPA’s utility rules 

Attendees: 

See attached. 

Discussion: 

A general discussion of the Mercury and Air Toxics Standards was held. 

U.S. Environmental Protection Agency

June 30, 2011

EPA’s Power Plant Regulations 
Many of the modeling exercises have 

considered four regulations

• The Air Transport Rule

• The Power Plant Mercury and Air 

Toxics Rule

• The Cooing Water Intake Rule

• The Coal Combustion Residuals Rule

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• Important Clean Air Act-required power plant controls have been 

delayed more than a decade.

• The Act required states by 2000 to adopt rules to control interstate 

pollution

– NOX SIP Call Rule (1998) partially addressed ozone transport, but 

did not address fine particles.

– Previous administration finalized Clean Air Interstate Rule (CAIR) in 

2005 but court found legal flaws and ordered EPA to replace it. 

CAIR remains in place in the interim.

• The Act also required control of hazardous air pollutants from power 

plants.

– Positive determination in 2000 meant final rule due by 2002.

– Previous Administration issued Clean Air Mercury Rule for power 

plants in 2005 but court found rule legally flawed and vacated it. 

Also, rule failed to address all air toxics.

Key Clean Air Power Plant Rules Overdue -

Public Heath Protection Delayed
40

200

123

62 51

2

6

113

110

167

112

0 5

100

200

300

400

500

600

>60 years 51-60 41-50 31-40 11-30 10 or younger

number controlled

number uncontrolled

4

991

Total number of units

478

• 60% of the uncontrolled units are 31 years or older

• These units lack advanced controls for SO2 and NOX

• ~100 GW out of total of 300+ GW of coal are without SO2

scrubbers

Many Plants Lack Controls
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What is the Transport Rule?

• The Transport Rule will limit pollution from fossil fuel-fired power plants 

that are located in 31 eastern, southern, and Midwestern states and DC

• The CAA requires each state to be a “good neighbor” and do its fair share 

to avoid sending air pollution to other states

• This proposal reduces emissions contributing to fine particle (PM2.5) and 

ozone nonattainment that travel across state lines:

• Sulfur dioxide (SO2) and nitrogen oxides (NOx) contribute to PM 2.5

transport

• NOx contributes to ozone transport

• The Transport Rule will reduce millions of Americans’ exposure to fine 

particles and ozone
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States Covered

• Reduces both fine particle (SO2 and annual NOx) and ozone-season NOx 

emissions in 2012

• Requires further SO2 reductions in 2014 in some states

States controlled for both fine particles (annual SO2 and NOx) 

and ozone (ozone season NOx) (21 states +DC)

States controlled for fine particles only (annual SO2 and NOx) (6 states)

States controlled for ozone only (ozone season NOx) (4 states)

States not covered by the Transport Rule
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• EPA is proposed one approach and taking comment on two alternatives. 

• EPA’s preferred approach -- allows intrastate trading and limited interstate 

trading among power plants but assures that each state will meet its 

pollution control obligations.

• To meet this proposed rule, EPA anticipates power plants will:

– Operate already installed control equipment more frequently, 

– Use lower sulfur coal, or

– Install pollution control equipment such as low NOX burners, 

Selective Catalytic Reduction, or scrubbers (Flue Gas 

Desulfurization).

• CAIR remains in place until this rule is finalized.

• The first Transport Rule emission control requirements take place in 2012 

for SO2 and NOx

• Additional SO2 requirements take effect in 2014

• Final rule is expected in this summer.

Transport Rule 
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Air Quality Improvements Are Widespread

Before Transport Rule After Transport Rule
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Health Effect Number of Cases Avoided

Premature mortality 14,000 to 36,000

Non-fatal heart attacks 23,000

Hospital and emergency department 

visits

26,000

Acute bronchitis 21,000

Upper and lower respiratory symptoms 440,000

Aggravated asthma 240,000

Days when people miss work or 

school

1.9 million

Days when people must restrict their 

activities

11 million

* Impacts avoided due to improvements in PM2.5 and ozone air quality in 2014

Estimated Number of Adverse Health Effects Avoided Due to Implementing the 

Proposed Transport Rule*

Health Benefits for Millions of Americans
Power Plant Mercury and Air Toxics Rule

• On March 16, EPA proposed the Mercury and Air Toxics Standards, the first national 

standards to reduce emissions of toxic air pollutants from new and existing coal- and 

oil-fired power plants – often the biggest contributors to air pollution

• Standards would reduce emissions of:

• Metals, including mercury (Hg), arsenic, chromium, and nickel

• Acid gases, including hydrogen chloride (HCl) and hydrogen fluoride (HF)

• Particulate matter

• These pollutants are linked to cancer, IQ loss, heart disease, lung disease and 

premature death

• Standards create uniform emissions-control requirements based on proven, currently 

in-use technologies and processes

• Compliance time line set by Clean Air Act: up to 4 years (3 years plus an additional 

year if granted by the permitting authority)

• EPA also proposed a new source performance standard (NSPS) for particulate, sulfur 

dioxide (SO2), and nitrogen oxide (NOX) emissions from new sources

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The Standards

• Pollutants are in three groups

– Mercury

– Other metals

– Acid gases

• For each there is an existing and new source standard

• A number of flexible features:

– Choice in format – input or output standard

– Facilities can choose standards within a group (e.g. 

total metals, metal by metal, or PM)

– Averaging allowed – across units, and over time

• Work place standards for organic pollutants

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Proposed Toxic Rule Health Benefits

• The value of the improvements to health alone total $59 billion to $140 billion 

each year 

• This means that for every dollar spent to reduce this pollution, we would get 

$5-$13 in health benefits

• Each year, the proposed rule would prevent serious health effects including:

– 6,800-17,000 premature deaths

– 11,000 heart attacks

– 120,000 asthma attacks

– 850,000 missed work or “sick” days

• Avoiding “sick days” saves companies and families money. It is particularly 

important for the millions of Americans whose jobs do not provide paid sick 

leave and who risk losing their jobs if they miss work too often

– The proposed rule would also prevent 12,200 hospital admissions and 

emergency room visits; 4,500 cases of chronic bronchitis; and 5,100,000 days 

when people must restrict their activities each year

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Source: EPA Regulatory Impact Analysis
CWA §316(b) Existing Facility Rule
Proposed Existing Facility Rule – Generally 

• Applies to existing facilities that withdraw at least 2 

million gallons per day (MGD) of cooling water

• 1,260 facilities 

– 670 power plants (coal, gas, nuclear)

– 590 manufacturing (pulp and paper, petroleum refining, 

chemical, iron and steel, food processing)

• Annual costs and benefits of $384 million and 615 million 

fish

• New units at existing facilities subject to more stringent 

requirements; impingement requirement for all facilities; 

no national entrainment requirement.

• Final rule in July 2012; compliance date would be after 

other three rules’ compliance dates

Page 14
Proposed Existing Facility Rule – New 

Units & Impingement

• New Units

– Required to have closed-cycle cooling to address impingement 

and entrainment

– Definition of new unit – newly built units added to increase 

capacity; does not include rebuilt, repowered or replaced units

• Impingement

– Numeric limits on impingement mortality

• Compliance can be met with any technology, but limits are based on 

modified, fish-friendly traveling screens with fish return

– Compliance alternative – reduce intake velocity to 0.5 

feet/second

– Ocean or tidal water facilities – reduce impingement mortality of 

shellfish to a level comparable to that achieved by properly 

deployed and maintained barrier nets. 

Page 15
Management of CCRs

136 million tons of CCRs were generated by coal-fired electric utilities in 2008

76 million tons of CCRs were disposed in 2008

(by comparison, 2 million tons of RCRA hazardous waste were disposed in landfills and surface 

impoundments in 2009*)

Beneficially Used –

50 million tons (37%)

Did not propose to change 

Bevill exemption for CCRs 

beneficially used.

Example uses:

- 12.6 M tons of fly ash used 

in concrete

- 8.5 M tons of FGD gypsum 

used in wallboard

- 1.5 M tons of boiler slag 

used as blasting grit & roofing 

granules

Used as Minefill –

10 million tons (8%)

Proposal did not address 

minefill uses. DOI OSM will 

develop federal regulations.

Disposed in Landfills –

46 million tons (34%)

Disposed in Surface 

Impoundments – 30 

million tons (22%)

16 * Source: 2009 National Biennial RCRA 

Hazardous Waste Report (Exhibit 2.5)

The CCR rule will regulate

Coal Combustion Residuals Rule
June 2010 Proposal

• In June 2010, EPA proposed regulations for the disposal of CCRs from electric 

utilities and independent power producers.

• Key features of the proposal: 

– Co-proposed 2 regulatory options for disposal, one under Subtitle C and one under Subtitle D

– Proposed to retain the Bevill exclusion for CCRs being beneficially used; 

– Did not propose to regulate beneficial use (BU), but proposed to define placement of CCRs in large 

scale fills and sand and gravel pits as disposal.).

– Did not propose regulations for minefilling.

• Affected universe: approximately 300 landfills and 676 surface impoundments 

for 500 power plants in 45 states. 

• Sought comment on over 100 issues. 

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Coal Combustion Residuals Rule
Comments Received

• Over 1,400 individuals testified at the eight public hearings.

• Over 450,000 comments received; a significant number of these are 

from mass mailing campaigns. 

– Nearly 13,000 submissions (over 2 million pages) have “unique content” 

requiring analysis.

• Environmental groups favor Subtitle C regulations.

• ASTSWMO, ECOS, individual states (36), industry groups (electric 

utilities, recycling firms, trade associations) largely favor Subtitle D 

regulations. 

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Coal Combustion Residuals Rule
Next Steps

• Due to comments received and to ensure adequate public comment on new 

information submitted to EPA, we expect to issue a NODA. 

– AA for OSWER announced this at the 4/14/11 hearing before the House Subcommittee on the Environment 

and Economy, Committee on Energy and Commerce.

• EPA is working to finalize a rule as expeditiously as possible.

Draft Deliberative/Do Not Quote or 

Cite

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EPA Analysis of 

Proposed Air Regulations

June 30, 2011

Sam Napolitano

Office of Air and Radiation

U.S. EPA
Context

• EPA is required to perform detailed economic assessments of the 

impacts of its regulatory actions, and takes this responsibility very 

seriously.

• The Agency has invested significant resources and developed 

sophisticated analytical capabilities to inform and support its actions.

• For the power sector, EPA relies upon a detailed bottom-up sectoral 

model that is also used by industry to inform decision making.

• While discussions tend to focus solely on costs and other economic 

impacts, the significant health benefits to public are often overlooked in 

the public discourse. For instance, the air rules are anticipated to 

provide at least $180 to $430 billion in annual benefits by 2015.

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Detail on EPA Tools and 

Analytic Approach

EPA uses the Integrated Planning Model (IPM) to project the impact of environmental 

policies on the U.S. Electric power sector:

• Uses a linear programming formulation to find an optimal (least cost) solution.

• Provides bottom-up detail which allows fine grain parameter variations and detailed 

disaggregate information.

• Comprehensive coal and natural gas supply, demand, and infrastructure (rail and 

pipeline) embedded within the model. 

• Very detailed bottom up representation of 32 U.S. power market regions and every 

electric generating unit and its emission controls.

• 6 load segments, 14 coal grades, nearly 40 coal supply and 200 demand regions, 2 

seasons.

• Generating technology options: Coal with CCS, Coal without CCS, Coal to Gas 

conversions, Combustion Turbines, Combined Cycle, Integrated Gasification, 

Combine Cycle (IGCC), Nuclear, Wind, Biomass, Solar, Geothermal, Landfill Gas, 

Fuel Cells.

• Many emission control retrofit options based upon best available engineering cost 

and performance data. 3
Data Sources and IPM 

Decision Algorithm

• Data Sources & Assumptions: Derived from a variety of Federal Agencies, 

industry experts, engineering and construction firms, and other consultants (EIA, 

DOE, NERC, States, EPRI, NETL, Sargent & Lundy, MIT, Wood Mackenzie, etc.)

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Sophisticated View of Power Sector:

Detailed and accurate representation of 

all existing generating units and their 

configuration

All commercially viable future technology 

options

Electric generating technologies

Emission control technologies

All factors affecting operation, 

performance, and expansion or 

contraction of the power sector

Economic behavior of power sector

Emission constraints on power sector
Proposed Air Rules

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Coverage Proposed

Transport Rule SO2 & NOx (for PM and 

ozone), Eastern half of U.S.

July 2010

Mercury and Air

Toxics Rule

Hazardous Air Pollutants, 

Nationwide

March 2011
Economic Analysis Topics

• Installation of Pollution Controls

• Construction of New Power Plants

• Facilities Uneconomic to Maintain

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Pollution Control Analysis & 

New Power Plants

Assumptions for Pollution Controls:

• Retrofit cost and performance assumptions for SO2, NOx, Mercury, and acid gases 

controls based on detailed bottom-up engineering analysis

• Developed with assistance from Sargent & Lundy

• Reflect recent installation costs

Assumptions for New Power Plants:

• New/projected unit cost and performance assumptions reflect current market conditions 

supported by engineering review and comparative analysis with other models.

• Sourced from extensive discussions with engineering, procurement, and construction 

(EPC) firms and other industry sources (Annual Energy Outlook 2008, 2009, 2010, 

National Energy Technology Laboratory, Electric Power Research Institute, Harvard 

University, Massachusetts Institute of Technology, Union of Concerned Scientists)

EPA analysis shows an additional 3.4 GW of additional natural gas 

capacity in response to proposed EPA air rules by 2020.

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New Pollution Controls with 

Proposed Air Regulations

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Factors Influencing Economics 

of Plant Closure

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• National and regional electricity demand

• Price and availability of fuels

• Prevailing price of electricity within region and 

neighboring regions

• Reserve margins

• Replacement costs

• Efficiency of facility

• Level of existing investment in facility (for pollution 

controls, refurbishing, etc.)
Total Existing Capacity, Existing Coal Capacity, and 

Coal Capacity Projected to be Uneconomic to 

Maintain (by 2015)

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