SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 1

APPENDIX C 

COST EFFECTIVENESS ANALYSIS FOR PROPOSED AMENDMENTS

TO RULE 4306 AND RULE 4307 AND PROPOSED NEW RULE 4320 

October 16, 2008 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 2

APPENDIX C 

COST EFFECTIVENESS ANALYSIS

I. INTRODUCTION 

The California Health and Safety Code 40920.6(a) requires the San Joaquin Valley 

Unified Air Pollution Control District to conduct both an "absolute" cost effectiveness 

analysis and an incremental cost effectiveness analysis of available emission control 

options prior to adopting each Best Available Retrofit Control Technology (BARCT) rule. 

 The purpose of conducting a cost effectiveness analysis is to evaluate the economic 

reasonableness of the pollution control measure or rule. The analysis also serves as a 

guideline in developing the control requirements of a rule. 

II. SUMMARY AND CONCLUSION 

A. Absolute Cost Effectiveness Analysis 

Absolute cost effectiveness examines the cost of reaching the proposed emission limits 

using the current emissions as a baseline. Cost effectiveness is calculated as the 

added annual cost (in $/year) of a control technology or technique, divided by the 

emission reduction achieved (in tons reduced/year). The annual costs include 

annualized capital equipment costs and engineering design costs plus the annual labor 

and maintenance costs. Higher cost numbers are typically for smaller, low-use units 

since the annual costs result in relatively lower emission reductions. The analysis 

shows that the cost effectiveness values improve for larger units, units with a higher 

operating capacity factor, and more restrictive NOx limits relative to the current limits. 

The detailed analyses showing the costs for installed capital equipment, electricity, fuel, 

and operations and maintenance costs are shown in Tables C-2 to C-19. Results are 

summarized in Table C-1, below. The Rule 4320 Advanced Emission Reduction Option 

(AERO) limits are meant to be the most stringent technologically feasible options but 

may not be economically feasible for all units to achieve. The controls required to 

reach the final NOx emission levels are either Selective Catalytic Reduction (SRC) or 

Ultra-Low NOx Burners (ULNB). As summarized in Table 1, cost for these controls can 

be very high and implementation may not be possible due to space limitations that 

would prevent installation of the control equipment. As discussed in the Staff Report, 

an option for operators to pay a lower-cost emission fee is included in the rule to 

mitigate the economic feasibility of the proposed limits. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 3

Table C-1 Cost Effectiveness Summary 

Compliance Scenario Average Cost 

Effectiveness 

($/ton) 

Absolute Cost 

Effectiveness Range 

($/ton)

RULE 4320 

SCR (15 ppmv to 5 ppmv) $22,000 to $37,000 $11,000 to $81,000 

SCR (9 ppmv to 5 ppmv) $60,000 to $90,000 $26,000 to $200,000 

SCR (5 ppmv) 

Stakeholder info $51,000 to $69,000 $29,000 to $240,000 

ULNB (30 ppmv to 9 ppmv) $8,600 to $13,000 $6,600 to $19, 000 

Refinery (30 ppmv to 9 

ppmv) – Stakeholder info $25,000 

Refinery (30 ppmv to 5 

ppmv) – Stakeholder info $134,000 $86,000 to $180,000 

ULNB (15 ppmv to 9 ppmv) $31,000 to $46,000 $23,000 to $67, 000 

ULNB (15 ppmv to 9 ppmv) 

- Stakeholder info $41,000 $22,000 to $68,000 

SOx Controls – 

Stakeholder info $89,000 $21,000 to $89,000 

RULE 4307 

Low NOx (82 ppmv to 30 

ppmv) $12,000 to $18,000 $10,000 to $23,000 

ULNB (30 ppmv to 9 ppmv) 

new unit $100,000 $58,000 - $130,000 

ULNB (30 ppmv to 9 ppmv) 

retrofit burner $7,700 $3,300 - $16,000 

Note: The Average Value is the average for the range of units with a spread indicating 

the different fuel usages that were analyzed. The Absolute Value is the lowest and 

highest values calculated under that compliance scenario and typically represent the 

cost for a large, high-use unit and a small, low-use unit. All values were rounded to two 

significant digits due to uncertainty in the data and variations between units. 

B. Incremental Cost Effectiveness 

Incremental cost effectiveness (ICE) is indicates the additional cost for further 

controlling a unit from the proposed limit to the lowest possible level. Costs are 

evaluated similar to absolute costs but are only calculated for the controls and 

reductions beyond what is required to comply with the rule. ICE does not reveal the 

emission reduction potential of the control options, but examines the more stringent 

options which were not considered to be cost effective. Due to the increased costs 

and marginal emission reductions, the ICE calculations are typically much higher cost 

effectiveness than the absolute cost effectiveness values are not directly comparable. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 4

The incremental cost effectiveness analysis result would be similar to those shown in 

Tables C-4 and C-5. For the ICE analysis, the emission reduction is the difference 

between the proposed 9 ppmv and going to a 5 ppmv. Those tables show that the 

cost-effectiveness for the smaller units. Table C-18 to C-19 detail the cost 

effectiveness for Rule 4307. 

 

III. SOURCES OF COST DATA

District staff used cost information provided by control equipment manufacturers and 

vendors, and from stakeholders to conduct a cost effectiveness analysis of the 

proposed NOx limits in Draft Rule 4320. Specifically the data used in the analysis came 

from the following sources: 

1. Alzeta (Rule 4306 project in 2003) 

2. Applied Utility Systems, Inc. 

3. Belco Technologies Corporation 

4. California League of Food Processors 

5. Chevron U.S.A. 

6. CRI Catalyst 

7. Kern Oil & Refining Co. 

8. Manufacturers Council of the Central Valley 

9. Nationwide Boiler 

10. San Joaquin Refining, Inc. 

11. Tricor Refining, LLC 

12. Western States Petroleum Association 

Cost information submitted to the District was used to create the range of costs located 

in Tables C-1 through C-20. 

IV. COST EFFECTIVENESS ANALYSIS PROCEDURE 

A. Cost Effectiveness Analysis Procedure 

To illustrate the cost effectiveness of complying with the proposed limits, District staff's 

method of analysis provides varying cost effectiveness values depending on the size of 

the unit and the annual capacity factor that the unit is operated. The actual compliance 

costs and cost effectiveness values would depend on several factors such as the type 

of unit, site-specific operating conditions, and the appropriate emission limits the unit 

has to meet. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 5

B. Absolute Cost Effectiveness (ACE) Calculation Method 

The absolute cost effectiveness of a control technology is calculated as follows: 

1. Determine an equivalent annual equipment cost using a capital recovery 

factor based on an assumed interest rate of 10 percent and equipment life 

of 10 years. The annualized capital equipment cost is calculated by 

multiplying the installed capital equipment cost by the capital recovery 

factor of 0.163. 

2. Determine the annual electricity, fuel, and operation and maintenance 

costs of a control technology. 

3. Calculate the annual cost by adding the costs calculated in Step 1 and 

Step 2. 

4. Calculate the emission reduction in tons/year. 

5. Calculate the absolute cost effectiveness by dividing the cost in Step 3 by 

the emissions reduction in Step 4. 

C. Incremental Cost Effectiveness (ICE) Calculation Method 

The incremental cost effectiveness of a control technology is calculated as follows: 

1. Identify the complying control options appropriate to the existing 

equipment. 

2. Estimate the annual average cost of each control option by using Steps 1 

to 3 of the ACE calculation method. 

3. Calculate the potential emission reduction for each control option. The 

potential emission reductions (PE) are the difference between the current 

emissions and the potential emissions using the new control technology. 

D. Cost Calculation Details 

For Rule 4320, District staff analyzed the absolute cost effectiveness based on 

installing and operating an ultra low NOx (ULNB) burner system or a selective catalytic 

reduction (SCR) system. Most units would need to operate an SCR system to achieve 

the proposed NOx limit of 5 ppmv. The absolute cost effectiveness analysis was 

conducted for several sizes of units operating at 50% and 75% capacity factors relative 

to 15 ppmv and 9 ppmv NOx baselines versus the 9 ppmv and 5 ppmv emission limits. 

For Rule 4320, cost effectiveness for SO2 control equipment was conducted for units 

operating at 75% capacity factors relative to an uncontrolled emission factor of 0.0633 

lb SO2/MMBtu baseline versus a controlled emission factor of 0.0169 lb SO2/MMBtu. 

The 75% capacity reflects the typical operations for oilfield and refinery equipment, 

according to the emissions inventory. Oilfield and refinery units make up the main 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 6

group of units which have to install SOx controls since they are the units most likely to 

be fired on non-PUC quality gas. 

For Rule 4307, NOx limit compliance costs were based on installing and operating a 

low NOx burner system which meets the initial 30 ppmv limit. There could be situations 

where existing units could not be retrofitted because of control equipment design 

limitations, so a cost effectiveness analysis for replacing existing units with new units is 

also included. Costs for new units or replacement units that are installed after the final 

compliance dates and must meet a 9 ppmv or 12 ppmv NOx limit were not specifically 

analyzed. Preliminary information suggests that costs for the ultra-low NOx burners 

(ULNB) may be 1/3 higher than costs to comply with 30 ppmv burner. Since the ULNB 

would only be required when the entire unit was installed or replaced, the additional 

cost of the ULNB would not be as significant as if they were required as a retrofit option. 

E. Cost Effectiveness Tables 

 

Currently, two groups of units have Rule 4306 NOx emission limits of 15 ppmv, oilfield 

steam generators and load-following units. Table C-2 presents the details for the cost 

of installing SCR on current oilfield steam generators units to reach the 5 ppmv NOx 

emission level. The 75% capacity factors represent the typical use for these units, 

according to the emissions inventory. These units have a nominal size of 62.5 

MMBtu/hr so the average cost effectiveness of approximately $23,000/ton would be 

representative for this group. 

Table C-2 SCR Cost Effectiveness Calculation for Units at 75% Capacity Factor 

15 ppmv to 5 ppmv Cost Effectiveness 

Actual 

Size Capital Cost NH3 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx

250 $472,500 $76,876 $9,166 $18,000 $104,041 9.691 $10,736 

200 $405,000 $65,894 $7,332 $13,500 $86,726 7.753 $11,186 

150 $360,000 $58,572 $5,499 $11,250 $75,321 5.814 $12,955 

100 $292,500 $47,590 $3,666 $9,000 $60,255 3.876 $15,546 

50 $270,000 $43,929 $1,833 $6,750 $52,512 1.938 $27,096 

30 $247,500 $40,268 $1,100 $5,400 $46,768 1.623 $28,816 

20 $225,000 $36,608 $734 $4,500 $41,841 0.775 $53,988 

 

Average Cost 

Effectiveness $22,903.29
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 7

Table C-3 indicates costs that may be applicable to the load-following units which 

operate seasonally. The larger, greater than 100 MMBtu/hr units are typically baseload with medium sized units being used to follow the highly variable loads. The 

average cost effectiveness of approximately $37,000/ton is considered to be 

representative of the costs for this category. 

Table C-3 SCR Cost Effectiveness Calculation for Units at 50% Capacity Factor 

15 ppmv to 5 ppmv Cost Effectiveness

Actual 

Size Capital Cost NH3 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx

250 $472,500 $76,876 $9,166 $18,000 $104,041 6.461 $16,103 

200 $405,000 $65,894 $7,332 $13,500 $86,726 5.168 $16,781 

150 $360,000 $58,572 $5,499 $11,250 $75,321 3.876 $19,433 

100 $292,500 $47,590 $3,666 $9,000 $60,255 2.584 $23,319 

50 $270,000 $43,929 $1,833 $6,750 $52,512 1.292 $40,644 

30 $247,500 $40,268 $1,100 $5,400 $46,768 0.775 $60,346 

20 $225,000 $36,608 $734 $4,500 $41,841 0.517 $80,930 

 

Average Cost 

Effectiveness $36,793.71

Most units rated greater than 20 MMBtu/hr have a Rule 4306 NOx emission limit of 9 

ppmv. Tables C-4 and C-5 indicate the costs associated with controlling these units to 

meet a 5 ppmv NOx emission limit. Because these units are currently controlled to a 

lower level than the oil field steam generators, their emission reductions would be less, 

resulting in a higher cost effectiveness cost for the same controls. These higher cost 

effectiveness levels have been offset by the inclusion of extended compliance schedule 

to allow for cheaper burner technology to be developed. Operators also can opt to pay 

an annual emissions fee, which would be used by the District to generate emission 

reductions. 

Table C-4 SCR Cost Effectiveness Calculation for Units at 75% Capacity Factor 

9 ppmv to 5 ppmv Cost Effectiveness 

Actual 

Size Capital Cost NH3 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx

250 $472,500 $76,876 $9,166 $18,000 $104,041 3.942 $26,393 

200 $405,000 $65,894 $7,332 $13,500 $86,726 3.154 $27,497 

150 $360,000 $58,572 $5,499 $11,250 $75,321 2.365 $31,848 

100 $292,500 $47,590 $3,666 $9,000 $60,255 1.577 $38,209 

50 $270,000 $43,929 $1,833 $6,750 $52,512 0.788 $66,640 

30 $247,500 $40,268 $1,100 $5,400 $46,768 0.473 $98,875 

20 $225,000 $36,608 $734 $4,500 $41,841 0.315 $132,829 

 

Average Cost 

Effectiveness $60,327.29
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 8

Table C-5 SCR Cost Effectiveness Calculation for Units at 50% Capacity Factor 

9 ppmv to 5 ppmv Cost Effectiveness

Actual 

Size Capital Cost NH3 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx

250 $472,500 $76,876 $9,166 $18,000 $104,041 2.628 $39,590 

200 $405,000 $65,894 $7,332 $13,500 $86,726 2.102 $41,259 

150 $360,000 $58,572 $5,499 $11,250 $75,321 1.577 $47,762 

100 $292,500 $47,590 $3,666 $9,000 $60,255 1.051 $57,332 

50 $270,000 $43,929 $1,833 $6,750 $52,512 0.526 $99,833 

30 $247,500 $40,268 $1,100 $5,400 $46,768 0.315 $148,470 

20 $225,000 $36,608 $734 $4,500 $41,841 0.21 $199,243 

 

Average Cost 

Effectiveness $90,498.43
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 9

Stakeholders also provided a variety of cost information which is shown in Table C-6. 

In many cases, these costs are below that calculated by the District. If all 15 values are 

used, the average cost effectiveness is about $70,000/ton which is in the range 

calculated by staff for the units which need to control their NOx emissions from the 

current 9 ppmv limit down to a 5 ppmv limit. If the data is adjusted by removing the two 

highest values, the adjusted average is approximately $51,000/ton. As previously 

mentioned, Rule 4320 contains lower cost options for compliance to mitigate the high 

projected cost-effective numbers. 

Table C-6 Summary of Stakeholder Projected SCR Costs for Various Units 

5 ppmv Cost Effectiveness

Actual Size Capital Cost

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ 

Annualized 

Capital Cost $/yr $/yr tons/yr $/ton NOx

22 $135,000 $21,965 $54,968 $76,933 2.13 $36,119 

25 $150,000 $24,405 $4,380 $28,785 0.53 $54,311 

25 $150,000 $24,405 $4,380 $28,785 0.53 $54,311 

25 $150,000 $24,405 $4,380 $28,785 0.53 $54,311 

30 $200,000 $32,540 $6,570 $39,110 0.63 $62,079 

50 $225,000 $36,608 $7,665 $44,273 1.06 $41,767 

63 $350,000 $56,945 $54,800 $111,745 0.46 $242,924 

72 $631,000 $102,664 $35,200 $137,864 0.98 $140,677 

73 $341,000 $55,481 $30,000 $85,481 2.21 $38,679 

96 $341,000 $55,481 $30,000 $85,481 2.90 $29,476 

96 $341,000 $55,481 $94,000 $149,481 3.77 $39,650 

156 $365,000 $59,386 $94,700 $154,086 2.46 $62,662 

156 $486,281 $79,118 $94,700 $173,818 2.46 $70,686 

156 $696,000 $113,239 $94,700 $207,939 2.46 $84,563 

181 $401,000 $65,243 $100,000 $165,243 5.47 $30,209 

 

Average Cost 

Effectiveness $69,494.93

 

Adjusted Average 

Cost Effectiveness $50,678.69

Ultra-low NOx burners (ULNB) have a significant cost savings over SCR systems. 

While some burners have achieved less than 9 ppmv NOx level, they are currently not 

considered to be 5 ppmv NOx systems. The costs for the ULNB was previously 

submitted by stakeholders for the size units listed. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 10

Table C-7 reflects the costs for installing ULNB on refinery units, which have a 30 ppmv 

NOx limit under Rule 4306, and achieving a 9 ppmv level for initial Rule 4320 

compliance. These units typically operate at a 75% capacity factor and the average 

cost effective level of $8,600/ton is considered representative for the typical unit, 

although the $10,000 to $12,000/ton values for the smaller units is also considered to 

be very cost effective. Table C-8 has costs for lower-use refinery units. 

Table C-7 ULNB Cost Effectiveness Calculation for Units at 75% Capacity Factor 

30 ppmv to 9 ppmv Cost Effectiveness

Actual 

Size 

Capital 

Cost 

Installation 

Cost 

Incremental 

Elec. 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx 

150 $214,411 $40,000 $41,469 $34,995 $4,950 $81,414 12.32 $6,609 

130 $194,560 $40,000 $38,233 $30,329 $4,275 $72,837 10.68 $6,823 

115 $179,672 $40,000 $35,807 $26,829 $3,825 $66,461 9.44 $7,037 

92 $151,766 $30,000 $29,628 $21,463 $3,075 $54,166 7.56 $7,170 

68 $127,200 $30,000 $25,624 $15,864 $2,250 $43,738 5.58 $7,833 

44 $114,172 $20,000 $21,870 $10,265 $1,425 $33,560 3.613 $9,289 

33.8 $94,762 $20,000 $18,706 $7,885 $1,125 $27,716 2.78 $9,988 

14.7 $37,750 $15,000 $8,598 $3,429 $450 $12,477 1.21 $10,337 

8.4 $28,550 $10,000 $6,284 $1,960 $300 $8,544 0.69 $12,400 

Average Cost 

Effectiveness $8,609.56

Table C-8 – ULNB Cost Effectiveness Calculation for Units at 50% Capacity Factor 

30 ppmv to 9 ppmv Cost Effectiveness

Actual 

Size 

Capital 

Cost 

Installation 

Cost 

Incremental 

Elec. 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx

150 $214,411 $40,000 $41,469 $34,995 $4,950 $81,414 8.212 $9,914 

130 $194,560 $40,000 $38,233 $30,329 $4,275 $72,837 7.117 $10,234 

115 $179,672 $40,000 $35,807 $26,829 $3,825 $66,461 6.296 $10,556 

92 $151,766 $30,000 $29,628 $21,463 $3,075 $54,166 5.037 $10,754 

68 $127,200 $30,000 $25,624 $15,864 $2,250 $43,738 3.723 $11,748 

44 $114,172 $20,000 $21,870 $10,265 $1,425 $33,560 2.409 $13,931 

33.8 $94,762 $20,000 $18,706 $7,885 $1,125 $27,716 1.85 $14,982 

14.7 $37,750 $15,000 $8,598 $3,429 $450 $12,477 0.804 $15,519 

8.4 $28,550 $10,000 $6,284 $1,960 $300 $8,544 0.459 $18,614 

 

Average Cost 

Effectiveness $12,916.89
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 11

The stakeholder-provided cost for a small 30 ppmv NOx refinery unit achieving a 9 

ppmv NOx limit is higher than the costs in Table C-7 and C-8, but, at $25,035/ton, is still 

within the cost range from past projects. Based on the limits, these are assumed to be 

for ULNB replacements. 

 

Table C-9 – Stakeholder Projected Refinery Unit Cost Effectiveness Calculation 

9 ppmv Cost Effectiveness 

Actual 

Size 

Capital 

Cost 

Installation 

Cost 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ $ 

Annualized 

Capital 

Cost $/yr tons/yr $/ton NOx 

8.4 $82,330 $30,000 $18,276 $18,276 0.73 $25,035 

The stakeholder-provided costs for a larger 30 ppmv NOx refinery unit achieving a 5 

ppmv NOx limit is higher than the costs in Table C-6, with an average cost of over 

$134,000, compared to the approximately $70,000/’ton provided by the other 

stakeholders. Based on the limits, these are assumed to be for SCR installations. 

Table C-10 Stakeholder Projected Refinery Unit Cost Effectiveness Calculation 

5 ppmv Cost Effectiveness 

Actual 

Size 

Capital 

Cost 

Installation 

Cost 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ $ 

Annualized 

Capital 

Cost $/yr tons/yr $/ton NOx 

18 $1,000,000 $162,700 $162,700 1.88 $86,542 

52.2 $708,890 $6,000,000 $1,091,536 $1,091,536 6 $181,922 

 

Average Cost 

Effectiveness $134,232.00
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 12

As stated earlier, two groups of units have Rule 4306 NOx emission limits of 15 ppmv, 

oilfield steam generators and load-following units. Table C-11 presents the details for 

the cost of installing ULNB on current oilfield steam generators units. The average cost 

effectiveness of approximately $31,000/ton indicates that it may be more cost effective 

to install an SCR at $23,000/ton, than an ULNB. 

Table C-11 ULNB Cost Effectiveness Calculation for Units at 75% Capacity Factor 

15 ppmv to 9 ppmv Cost Effectiveness

Actual 

Size 

Capital 

Cost 

Installation 

Cost 

Incremental 

Elec. 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx 

150 $214,411 $40,000 $41,469 $34,995 $4,950 $81,414 3.45 $23,605 

130 $194,560 $40,000 $38,233 $30,329 $4,275 $72,837 2.99 $24,368 

115 $179,672 $40,000 $35,807 $26,829 $3,825 $66,461 2.64 $25,136 

92 $151,766 $30,000 $29,628 $21,463 $3,075 $54,166 2.12 $25,610 

68 $127,200 $30,000 $25,624 $15,864 $2,250 $43,738 1.56 $27,983 

44 $114,172 $20,000 $21,870 $10,265 $1,425 $33,560 1.01 $33,195 

33.8 $94,762 $20,000 $18,706 $7,885 $1,125 $27,716 0.78 $35,671 

14.7 $37,750 $15,000 $8,598 $3,429 $450 $12,477 0.34 $36,915 

8.4 $28,550 $10,000 $6,284 $1,960 $300 $8,544 0.19 $44,268 

 

Average Cost 

Effectiveness $30,750.11 

Table C-12 indicates costs that may be applicable to the load-following units which 

operate seasonally. The average cost effectiveness of approximately $46,000/ton 

shows that SCR may also be the cost-effective option than ULNB for this category. 

Table C-12 – ULNB Cost Effectiveness Calculation for Units at 50% Capacity Factor 

15 ppmv to 9 ppmv Cost Effectiveness

Actual 

Size 

Capital 

Cost 

Installation 

Cost 

Incremental 

Elec. 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx 

150 $214,411 $40,000 $41,469 $34,995 $4,950 $81,414 2.299 $35,413 

130 $194,560 $40,000 $38,233 $30,329 $4,275 $72,837 1.992 $36,565 

115 $179,672 $40,000 $35,807 $26,829 $3,825 $66,461 1.762 $37,719 

92 $151,766 $30,000 $29,628 $21,463 $3,075 $54,166 1.41 $38,416 

68 $127,200 $30,000 $25,624 $15,864 $2,250 $43,738 1.042 $41,975 

44 $114,172 $20,000 $21,870 $10,265 $1,425 $33,560 0.674 $49,792 

33.8 $94,762 $20,000 $18,706 $7,885 $1,125 $27,716 0.518 $53,506 

14.7 $37,750 $15,000 $8,598 $3,429 $450 $12,477 0.225 $55,454 

8.4 $28,550 $10,000 $6,284 $1,960 $300 $8,544 0.128 $66,747 

 

Average Cost 

Effectiveness $46,176.33 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis October 16, 2008 

Final Draft Staff Report with Appendices 

 for Proposed Amendments to Rule 4306 

 and Rule 4307 and Proposed New Rule 4320

C - 13

Table C-13 lists actual costs provided by stakeholders for ULNB installation projects, 

which seem to be in the same range as the average costs calculated above. 

Table C-13 Stakeholder Actual ULNB Costs for Past Projects 

9 ppmv Cost Effectiveness

Actual 

Size 

Capital 

Cost 

Installation 

Cost 

Incremental 

Elec. 

Incremental 

O&M 

Annualized 

Cost 

NOx 

reduced CE 

MMBtu/hr $ $ 

Annualized 

Capital Cost $/yr $/yr $/yr tons/yr $/ton NOx 

180 $155,827 $25,353 $87,311 $112,664 5.17 $21,792 

96 $220,000 $35,794 $52,499 $88,293 3.77 $23,420 

266 $456,650 $74,297 $126,914 $201,211 7.64 $26,337 

22 $130,503 $21,233 $47,200 $68,433 2.13 $32,128 

96 $317,000 $51,576 $45,227 $96,803 2.9 $33,380 

181 $400,000 $65,080 $157,939 $223,019 5.47 $40,771 

73 $320,000 $52,064 $44,579 $96,643 2.21 $43,730 

120 $349,578 $56,876 $159,205 $216,081 3.45 $62,632 

120 $284,039 $46,213 $170,546 $216,759 3.45 $62,829 

36 $168,768 $27,459 $95,618 $123,077 1.82 $67,624 

 

Average Cost 

Effectiveness $41,464.30 

Stakeholders also provided a wide range of costs for controlling sulfur emissions from 

these units. As result of these cost estimates, staff propose to allow equivalence with 

the sulfur content of PUC quality gas. This reduces the impact of those units requiring 

SOx controls to a smaller number of refinery units and oilfield steam generators firing 

on field gas and waste gas. Extended schedules have also been provided for SOx 

control installations at refineries to recognize the technical and monetary challenges 

presented in the design and construction of these controls. 

Table C-14 Stakeholder SO2 Control Equipment Cost Effectiveness Calculation 

for Units at 75% Capacity Factor 

Capital Cost

Installation 

Cost Incremental O&M 

Annualized 

Cost 

NOx 

reduced CE 

$ $ 

Annualized 

Capital Cost $/yr $/yr tons/yr $/ton NOx 

$650,000 $105,755 $80,000 $185,755 8.5 $21,854 

$2,000,000 $500,000 $406,750 $406,750 8.5 $47,853 

$3,666,666 $596,567 $596,567 8.5 $70,184 

$4,166,666 $677,917 $600,000 $1,277,917 8.5 $150,343 

$6,500,000 $1,057,550 $250,000 $1,307,550 8.5 $153,829 

 

Average Cost 

Effectiveness $88,812.60 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

Final Draft Staff Rep

for Proposed Amen

and Rule 4307 and Prop

C - 14

For Rule 4307, NOx limit compliance costs were based on installing and operating a low NOx burner sthe initial 30 ppmv limit. There could be situations where existing units could not be retrofitted becausequipment design limitations, so a cost effectiveness analysis for replacing existing units with new unit

Tables C-15 and C-16. Because this is existing, off-the-shelf technology, the cost are relatively low co

ULNB and SCR options. The average cost effectiveness of approximately $18,000/ton is considered 

compared to recently adopted rules. As was indicated earlier, many of these units are operated by sc

extended compliance schedule is recommended to mitigate possible financial issues. 

Table C-15 Absolute Cost Effectiveness Calculation for Units at 30 ppmv and operating at 75% 

Boiler Size Capital Equip. Cost Installation Cost Total Capital Cost Total Annual Cost NOx Reduced 

MMBtu/hr New Retrofit New Retrofit New Retrofit New Retrofit Tons/Year 

2.0 $26,000 $18,000 $26,000 $18,000 $52,000 $36,000 $9,076 $6,468 0.42 4.0 $36,000 $26,000 $36,000 $26,000 $72,000 $52,000 $12,336 $9,076 0.82 5.0 $40,000 $28,000 $40,000 $28,000 $80,000 $56,000 $13,640 $9,728 0.97 

Average 

Effective

Table C-16 Absolute Cost Effectiveness Calculation for Units at 30 ppmv and operating at 50% 

Boiler Size Capital Equip. Cost Installation Cost Total Capital Cost Total Annual Cost NOx Reduced 

MMBtu/hr New Retrofit New Retrofit New Retrofit New Retrofit Tons/Year 

2.0 $26,000 $18,000 $26,000 $18,000 $52,000 $36,000 $9,076 $6,468 0.28 4.0 $36,000 $26,000 $36,000 $26,000 $72,000 $52,000 $12,336 $9,076 0.55 5.0 $40,000 $28,000 $40,000 $28,000 $80,000 $56,000 $13,640 $9,728 0.64 

Average 

Effective

Calculations assumed • An uncontrolled baseline of 0.1 lb-NOx/MMBtu (82 ppmv) and final emissions of 0.036 lb-NOx/

The Annualized Cost is based on 10 years and a 10% annual interest rate. 

• Total capital cost includes the capital equipment cost, installation cost and an annual $600 tun

• Total Annual Cost = (Total Capital Cost * 0.163) + Annual Tune-Up Costs 

• The 75% capacity calculations are typical of oilfield units while the 50% capacity is more comm
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

Final Draft Staff Rep

for Proposed Amen

and Rule 4307 and Prop

C - 15

The estimated incremental cost effectiveness values for units rated at 2.0 MMBtu/hr to 5.0 MMare shown in Table C-19. In the ICE analysis, the annual cost and emission reductions for unitppmv NOx limit, shown in Table C-17, are compared with the annual cost and emission reductmeet a 12 ppmv NOx limit, shown in Table C-18. The ICE analysis annual cost and emission rdifference between attaining the 30 ppmv limit and a more stringent limit of 12 ppmv NOx. 

Table C-17 30 ppmv Costs Used in Incremental Cost Effectiveness 

Boiler Size Capital Equip. Cost Installation Cost Total Capital Cost Annual Cost 

MMBtu/hr New Retrofit New Retrofit New Retrofit New Retro

2.0 $26,000 $18,000 $26,000 $18,000 $52,000 $36,000 $9,076 $6,464.0 $36,000 $26,000 $36,000 $26,000 $72,000 $52,000 $12,336 $9,075.0 $40,000 $28,000 $40,000 $28,000 $80,000 $56,000 $13,640 $9,72

Table C-18 12 ppmv Costs Used in Incremental Cost Effectiveness 

Size 

Capital Equip. Cost New 

Capital Equip. Cost Retrofit 

Installation Cost New 

Total Capital Cost New 

Total Annual Cost New 

MMBtu/hr 

WaterTube Fire-Tube Water-Tube to Fire-Tube Water- Tube Fire-Tube Water- Tube Fire-Tube Water- Tube Fire-Tube 

2.0 $65,000 $100,000 $55,000 $65,000 $100,000 $130,000 $200,000 $21,790 $33,200 4.0 $75,000 $110,000 $60,000 $75,000 $110,000 $150,000 $220,000 $25,050 $36,460 5.0 $80,000 $120,000 $65,000 $80,000 $120,000 $160,000 $240,000 $26,680 $39,720 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

Final Draft Staff Rep

for Proposed Amen

and Rule 4307 and Prop

C - 16

The Incremental Annual Cost assumes that the entire unit has to be replaced to achieve the 12 

the retrofit cost assumes that it is possible to reach the lower limit by replacing the burners. Th

reduction indicates the additional reduction which could be obtained by reducing the limit from 3

ppmv limit. As expected, units requiring the complete replacement to meet the limit have a sign

cost-effectiveness than the units which can be retrofit with ULNB. 

Table C-19 Incremental Cost Effectiveness 

Size 

Incremental Annual Cost 

New 

Incremental Annual Cost 

Retrofit 

Incremental 

Reduction3

Incremental 

Cost 

Effectiveness 

New 

(MMBtu/hr) Fire-Tube Water-Tube to Fire-Tube Tons/Year $/Ton 

2.0 $24,124 $3,097 0.19 $126,968 4.0 $24,124 $1,304 0.37 $126,968 5.0 $26,080 $1,467 0.45 $57,956 

Average Cost Effectiveness $103,964.00 

 12 ppmv and 30 ppmv costs used for incremental cost effectiveness are from separate vendors 

It is important to note that the requirement for new and replacement units to meet a 12 ppmv or 

be comparable to the retrofit option. Under this scenario, the operator is committed to installing additional costs for meeting the lower limit is the cost of the new burners. If the rule had a spec

deadline for the switch to the lower unit, cost effectiveness would be similar to the incremental cunits.