1

MEMORANDUM

DATE: April 2, 2010

SUBJECT: Revised Conversion Costs and Baseline Emissions - Conversion from Mercury 

Cell Chlor-Alkali to Membrane Cell Chlor-Alkali Technology

FROM: Donna Lee Jones, PhD, EPA/OAQPS/SPPD/MMG 

TO: Project File

INTRODUCTION AND PURPOSE

On December 19, 2003, the U.S. Environmental Protection Agency (EPA) promulgated 

40 CFR part 63, subpart IIIII (the Mercury Cell MACT). The compliance date for the Mercury 

Cell MACT was December 19, 2006. On February 17, 2004, the National Resource Defense 

Council (NRDC) filed petitions on the final rule in DC District Court. One of the issues raised 

by NRDC was that EPA failed to consider non-mercury technology as beyond-the-floor MACT

for existing sources. NRDC stated in the petition that eliminating the mercury cell process 

would completely eliminate mercury emissions and would be cost effective. In order to stop 

using the mercury cell process, the facilities currently in operation would need to convert to one 

of the non-mercury technologies, such as membrane cell. 

On June 11, 2008, EPA proposed amendments addressing the NRDC petition issues 

(73 FR 33258). As a part of the development of these proposed amendments, EPA estimated the 

cost impacts associated with conversion of these mercury cell processes to a non-mercury 

technology (membrane cells).1

 After publication of the 2008 proposal, EPA issued memoranda 

with revised estimated conversion cost impacts, in June 20092 and September 2009,3 that 

reflected comments received on the previous conversion cost analyses from both the chlorine 

industry4,5,6,7,8,9,10,11,12 and Oceana,13,14,15 an international organization focused on ocean 

conservation that is in agreement with NRDC’s goal to eliminate mercury in the environment. 

The purpose of this memorandum is to present EPA’s revised cost estimates associated 

with the conversion of the operating mercury cell chlor-alkali plants that have been generated 

considering all of the comments received to date. A separate memorandum has been prepared 

and placed in the rule docket (EPA-OAR-HQ-2002-0017) that addresses the reduction of 

mercury air emissions and other mercury wastes from these conversions.16

INDUSTRY STATUS

There are four mercury cell chlor-alkali plants currently operating in the United States in 

2010 that have the combined capacities to produce approximately 500,000 tons of chlorine per 

year. These plants are Olin Corporation in Augusta, Georgia (Olin GA); Olin Corporation in 
2

Charleston, Tennessee (Olin TN); PPG Industries in New Martinsville, West Virginia (PPG); and 

ASHTA Chemicals in Ashtabula, Ohio (ASHTA). 

CAPITAL AND ANNUAL COST ESTIMATES

In order to estimate the capital and annual costs associated with a conversion from 

mercury cell chlor-alkali technology to membrane cell technology, information was used from 

the following resources:

• EPA’s Mercury Report to Congress17

• Recent news reports regarding plants converting or considering converting18,19,20,21,22,23, 

24

• EPA waste minimization study25

• Fact sheet from the conversion of a Canadian facility26

• General chlor-alkali reference27

• European Best Available Techniques Document28

• Information from Oceana13,14 ,15and the Chlorine industry

4,5,6,7,8,9,10,11,12

In addition to reviewing the Oceana correspondence, all directly relevant references cited by 

Oceana in their comments were obtained, reviewed, and considered. These references are 

compiled and available in the docket as one docket entry.29

Capital Costs

Initially, to determine capital costs of conversion to nonmercury technology, EPA 

collected capital cost data for mercury cell conversion projects that occurred between 1992 and 

2008 from the search of the resources listed above.2

 In their September 15, 2009 

memorandum,15 Oceana pointed out that several of the capital cost data points were not 

appropriate because either the costs were from unsubstantiated estimates or they were developed 

from conversions that were done so long ago that they did not apply to membrane cell 

technologies currently being used. 

Initially, Oceana identified seven capital cost data points for conversion to non-mercury 

technology that were derived from estimates rather than actual conversions. These were:

• One 1997 estimate published by a HoltraChem facility where the conversion did 

not in actuality occur;

• One 1988 estimate for a facility in the U.S. that could not be identified;

• One 1992 estimate for a “model plant” representing a mid-range facility size, with

no documentation included; and 

• Four European estimates for conversions to non-mercury technology,14 which did 

not include information on plant production capacities. 

In addition, Oceana stated that conversion project costs prior to 1995 are not applicable to 

current-day conversion costs. According to Oceana, newer membrane-cell technology uses 

bipolar electrolyzers, which were not commercially available until around 1997.14 The 
3

conversions prior to 1995 would have used the older monopolar electrolyzers. Therefore, we 

agree with Oceana’s position that for this analysis it is not appropriate to include the data points 

derived from conversions that took place prior to 1995; thus these data points were not used in 

our current analysis. 

We developed capital cost factors for conversion to membrane cell technology in units of 

dollars per ton ($/ton) of chlorine (Cl2) production using data from conversions anywhere in the 

world that took place after 1995, excluding the cost data described above. These costs and cost 

factors are shown in Table 1. The cost factors ranged from $267 to $941/ton Cl2 produced and 

averaged $535/ton Cl2. In addition, Table 1 shows the average of the cost factors from only the 

most recent US conversions (since 2000), which is $596/ton Cl2.

Since membrane cells are smaller than mercury cells, in some conversions the companies 

have elected to use the extra available space to install additional membrane cells, thus increasing 

the chlorine and caustic production capacity of the facility. Therefore, for some conversion 

projects included in Table 1, an increase in production capacity was also included. Oceana 

indicated in their comments14 that a conversion cost analysis should either exclude the costs 

attributed to expanding capacity or include the cost saving benefits derived from expanding 

capacity. We do not believe that it is appropriate to make an assumption about savings because 

any benefits derived from additional sales due to increased capacity assumes that product 

demand would simultaneously increase. We do not disagree that the additional incremental costs 

of the expanded capacity should be excluded. However, the available information does not 

provide a breakdown of the costs associated with conversion versus the costs associated with the 

increased capacity. Therefore, the capital costs for some conversions may include expansion 

costs. This could result in the capital costs based on these data being biased high.

When providing comments on the June 2009 memorandum, ASHTA stated that 

differences in size, the new or expanded infrastructure required, and the end products desired 

(e.g., vapor or liquid chlorine, dilute or merchant concentration of caustic) all impact the actual 

cost of conversion.6 ASHTA suggested that, minimally, conversion cost estimates should take 

into account economies of scale. However, Oceana expressed concern with the use of an 

equation that relates increasing size to lower conversion costs to estimate the cost of conversion 

for the four remaining facilities, since extrapolation of the costs to very small or very large 

capacities produces illogical conclusions. But we do believe that there could be some economies 

of scale. An equation we developed using the limited data set of the recent U.S. conversions 

showed a good correlation (correlation coefficient (R2),

b 3 = 0.9981) of costs to facility 

size/capacity. However, when the entire data set (in Table 1) was plotted, a similar correlation 

was not observed. 

Figure 1 presents these cost factors versus plant chlorine capacity for all the facilities. As 

shown in Figure 1, there is little correlation between cost factor and plant chlorine capacity (R2= 

0.0102) for all global conversions with documented data. Therefore, we agree with Oceana that 

it is most appropriate to use a single cost factor to estimate the capital costs of conversion.

 b The correlation coefficient is a measure of how accurately a regression predicts a value. The regression is most 

accurate when R2 is equal to one (1).
4

Table 1. Cost Factors for Conversion of Mercury Cell Chlor-Alkali Facilities

to Membrane Cell Technology ($/ton Cl2 produced)

Year of 

Estimate

Location of 

Conversion

Capital Cost 

(as provided)

Capacity

(ton Cl2 /yr)

Capital Cost Factor 

($/ton Cl2 produced/yr)

Base Year 2007 Reference a

1997 Europe $104,946,640 173,063 $606 $824 28

1997 Europe $32,856,014 110,231 $298 $405 28

1998 Europe $16,334,213 66,139 $247 $333 28

1998 Europe $13,094,369 66,139 $198 $267 28

1998 Europe $29,923,557 44,092 $679 $915 28

1998 US (OxyTech)a $57,327,236 135,033 $425 $573 28

1998 Asia $39,775,832 182,983 $217 $293 28

1999 Europe $131,159,254 330,693 $397 $533 28

1999 Europe $31,026,058 82,673 $375 $505 28

2002 US (Westlake, KY) $86,100,000 205,000 $420 $497 22

2004 Belgium $171,032,583 363,762 $470 $556 23

2005c US (PPG, LA) $90,000,000 275,000 $327 $367 20

2007c US (Pioneer, LA) $117,000,000c 197,000 $594 $594 19

2007c Germany $109,678,733 250,000 $439 $439 24

2008c US (ERCO, WI) $107,112,676b 118,000 $908 $908 21

Average $535

Average of Recent US Conversionsb $596

N/A = Not Available a The conversion to 2007 dollars was estimated using the Chemical Engineering Plant Cost Index Economic 

Indicators. Base year costs were adjusted to 2007 dollars using the ratio of the 2007 economic indicator and the 

base year economic indicator. See Reference 30 b

 Refers to conversions that occurred in the United States after 2000.

.

c Used in this analysis to develop an average factor for near future U.S. conversions.

In order to develop capital cost factors for the current four mercury cell facilities, the 

chlorine production capacities from the 1997 Directories of Chemical Producers31 were obtained 

and are shown in Table 2. The capital costs of converting to membrane cell technology for the 

four facilities in current operation were then estimated using these capacities. As shown in 

Table 2, capital costs were estimated using both the average capital cost factor for the entire data 

set ($535/ton Cl2) in Table 1, and then also using the average of only the four most recent U.S. 

conversions ($596/ton Cl2) since 2000. 

Because of several known factors, including environmental regulations and process 

safety management, we do not believe the broad range of data represented by all the facilities 

shown in Table 1 to be as accurate as the recent conversions that have occurred since 2000 in the 

U.S. to use to estimate the potential capital costs of conversion for the four remaining U.S. 

facilities. We believe that the average cost factor from the four recent U.S. conversions results in 

the best estimate of the capital costs that would occur for all four mercury cell chlor-alkali plants 
5

Figure 1. Capital Cost Factor ($/ton Cl2 produced) vs. Capacity

Table 2. Estimated Capital Costs for Existing Mercury Cell Chlor-Alkali Facilities

Facility

Cl2 Production 

Capacity (ton/yr)a

Capital Costs ($)

Based on Entire 

Data Setb

Based on Recent 

U.S. Conversionsc,d

ASHTA 47,421 25,375,938 28,246,460

Olin GA 119,031 63,695,899 70,901,169

Olin TN 262,451 140,442,954 156,329,838

PPG 72,848 38,982,173 43,391,830

Totals 268,496,964 298,869,297 a From Reference 31. b Calculated using average capital cost factor of $535/ton Cl2 for entire data set. c Calculated using average capital cost factor of $596/ton Cl2 for recent (i.e., after 2000) U.S. Conversions. d Used in this analysis to develop costs for near future U.S. conversions.
6

to convert to membrane cells. The total estimated capital cost of conversion for all four 

facilities, therefore, is approximately $300 million, which is also shown in Table 2.

Annual Costs

The annual costs associated with the conversion of mercury cells to membrane cells 

include costs related to capital recovery, unused mercury storage costs, and energy costs due to 

the need for increased steam required to further concentrate caustic. However, some of these 

additional annual costs will be offset by savings realized due to the elimination of mercury, e.g., 

mercury-related environmental compliance costs and the reduced energy needs for the membrane 

cell process. Each of these costs and savings are described below.

Capital Recovery Cost

Annualization of the capital costs involves establishing an annual “payment” sufficient to 

finance the investment over the expected lifetime of the equipment or loan period. This payment 

is typically referred to as the “capital recovery cost.” The three key inputs into the capital 

recovery costs are the capital costs, the interest rate, and the finance period. The estimates for 

capital costs were discussed above; the remainder of this discussion is focused on the interest 

rate and the finance period.

As pointed out by Olin in their February 2, 2010, correspondence,

10 “access to capital and 

available interest rates are a function of many things, including the overall financial 

environment, the financial condition of the prospective borrower (including its debt load), and 

the amount and length of the loan.” In their June 25, 2009 correspondence,

5 Olin also stated that 

“a 7 percent interest rate is simply not available to industry in this economy.” They suggested 

replacing the 7 percent rate with a 10 percent, or even a 14 percent rate. In their February 2010 

correspondence, Olin provided an example to support the use of an interest rate higher than 

7 percent. Olin reported that they sold $150 million in Senior Notes, and that these notes had an 

interest rate of 8.875 percent and a maturity date of August 2019. According to Olin, the 

effective interest rate was over 9 percent considering the costs and discount.

The interest rate can result in significant differences in total annualized costs. For 

example, for a finance period of 15 years, the difference in capital recovery costs is 

approximately 20 percent higher for a 10 percent interest rate than for a 7 percent interest rate. 

This difference is even more profound for longer finance periods.

The policy of EPA’s Office of Air Quality Planning and Standards is to use an interest 

rate of 7 percent for all analyses used in regulatory decision making. While we do not disagree 

with Olin’s information, we feel that it is important to maintain uniformity to allow decisionmakers to consider consistent information across various regulatory decisions. Therefore, in this 

present analysis, an interest rate of 7 percent was used in the development of the capital recovery 

cost. In previous versions of this analysis, a finance period of 15 years was used. Oceana 

commented that this underestimates the useful life of the equipment and overestimates the 

annualized costs.14 Oceana suggested that a 30-year finance period was more appropriate, and 

cited a previous analysis for the mercury cell industry where EPA used a 30-year period to 
7

estimate the capital recovery costs.32 However, it is important to note that the use of a 30-year 

finance period in the analysis cited by Oceana was for a stationary building and not an operating

industrial process. Therefore, we do not agree that this example establishes a precedent that is 

pertinent to our analysis.

To illustrate the importance of the choice of finance period, consider the fact that the 

capital recovery costs for a 30-year finance period at 7-percent interest rate would be 

approximately 30 percent lower than those for a 15 year finance period. Table 3 shows the 

annual capital recovery costs for both a 15-year and 30-year period, using the capital cost 

estimates based on the cost factor from the average of recent U.S. conversions shown in Table 2 

of the previous section. While we recognize that a 15-year finance period may understate the 

lifetime of the membrane cell process equipment, we believe that the use of a 30-year period will 

bias the annualized costs unreasonably low. Therefore, we chose to base our capital recovery 

cost estimates on a 20-year finance period which is higher than our previous estimate of 15 

percent. This results in total annualized costs for the four U.S. facilities of approximately 

$30 million/yr, which we believe represent the best estimate of the capital recovery costs, as 

shown in Table 3.

Annual Costs Associated with Storage of Unused Mercury 

According to the Chlorine Institute, there were 1,376 tons of mercury available at the five 

mercury cell plants operating in 2008.33 These plants operated a total of 264 mercury cells, 

which equates to 5.2 tons of mercury per cell (ton Hg/cell) on the average. To estimate the 

amount of mercury available at each of the four currently operating facilities, that would need to 

be stored if they converted to membrane cells, this average factor was multiplied by the number 

of cells in each of the facilities. As shown in Table 4, this results in an estimated total of 1,272 

tons of mercury to be stored, ranging from 125 tons at ASHTA to over 550 tons at Olin TN.

There were two sources of information identified that provided estimates of mercury 

storage costs. EPA’s Office of Pollution Prevention and Toxics and the EPA Office of Solid 

Waste and Emergency Response34 has estimated future mercury storage costs at a private facility 

would be between $0.081 and $0.186 per year per pound of mercury stored, with an average of 

$0.134 per year per pound. The Defense National Stockpile Center also has presented 

information indicating that the cost associated with the federal mercury storage is $0.0561/yr/lb 

Hg.35

Table 4 shows the estimated storage costs using both the average factor from EPA 

($0.134/yr/lb) and the factor from the Department of Defense ($0.0561/yr/lb). While there is a 

considerable difference in these estimates, the sources of the information are reliable. Use of 

either factor could bias the annual cost estimates high or low. Therefore, we assumed that these 

two points represent the upper and lower bounds of the storage costs, and that the midpoint of the 

range of storage costs represents the best estimate of the mercury storage costs that would be 

incurred. These midpoint costs, which are also shown in Table 4, total just over $240,000 per 

year for all four plants.
8

Table 3. Estimated Capital Recovery Costs for Varying Finance Periods

(Using 7 percent interest rate)

Plant

Best Estimate of 

Capital Cost ($)a

Capital Recovery Costs ($/yr)

15 years

(CRFb = 0.1098)

30 years

(CRFb = 0.0806)

20 yearsc

(CRFb = 0.0944)

ASHTA $28,246,460 $3,101,309 $2,276,281 $2,666,266

Olin GA $70,901,169 $7,784,567 $5,713,670 $6,692,569

Olin TN $156,329,838 $17,164,176 $12,598,059 $14,756,431

PPG $43,391,830 $4,764,190 $3,496,792 $4,095,882

Totals $32,814,242 $24,084,802 $28,211,147 a Using the average cost factor from recent U.S. Conversions (See Table 2).

b CRF = Capital Recovery Factor.

c Used in this analysis to develop costs for near future U.S. conversions.

Table 4. Estimate of Annual Mercury Storage Costs

Facility

Number 

Cellsa

Available 

Mercury

(ton) b

Mercury Storage Costs ($/yr)

Using EPA 

Factor 

($0.134/yr/lb)

Using DOD 

Factor 

($0.0561/yr/lb)

Midpoint of 

EPA and DOD 

Factorsc

ASHTA 24 125 $33,399 $14,035 $23,717

Olin GA 60 313 $83,498 $35,088 $59,293

Olin TN 106 552 $147,513 $61,989 $104,751

PPG 54 281 $75,148 $31,579 $53,364

Totals 244 1,271 $339,558 $142,691 $241,125 a Reference 31. b Total amount of available mercury (5.28 tons/cell) distributed by number of mercury cells (see Reference 33). c Used in this analysis to develop costs for near future U.S. conversions.

Costs Savings Associated with the Elimination of Mercury-Related Environmental 

Compliance Costs

There are some expected costs savings related to the conversion from a mercurycontaining process to the membrane cell process due to the elimination of compliance costs 

associated with the use of mercury. These savings can be categorized into three environmental 

elements: air, waste, and water. Air-related environmental compliance cost savings are realized 

when the facility no longer has to comply with mercury-related air regulations, as well as labor 

due to the elimination of mercury-related air monitoring, reporting, abatement measures, and 

occupational exposure monitoring. Waste-related environmental compliance cost savings are 

realized when a facility no longer incurs costs due to recycling, retorting, transporting, storing 

and/or disposing of mercury wastes. Water-related environmental compliance cost savings are 

realized when the facility no longer is required to operate mercury wastewater treatment 

programs. 
9

We used information from the literature36 (with costs converted from Euros to U.S.

dollars using the average 2004 exchange rate37 of 1.2439) and cost information presented to the 

State of Ohio by ASHTA as a part of their consent order38

31

to estimate the cost savings. 

Information related to annual compliance costs associated with reducing mercury air emissions 

from the hydrogen and end box vent streams, presented to the Ohio EPA by ASHTA under the 

consent order, indicated that ASHTA would spend approximately $228,000 annually on air 

compliance. This value was converted to a $/ton Cl2 value based on ASHTA’s capacity of 

47,421 ton Cl2/yr, resulting in a cost factor of $4.81/ton Cl2 capacity. Since these costs would 

no longer be incurred after conversion, this factor represents a savings. In contrast, European 

information indicates that a savings of approximately $2.20/ton Cl2 in expenditures related to air 

compliance could be realized from the elimination of mercury.36 

In addition to the air-related compliance costs described above, ASHTA presented to the 

Ohio EPA that they would be spending approximately $256,500 annually on fugitive mercury 

emission-related activities (including the implementation of leak detection and repair standards). 

Upon conversion to membrane cells, this would represent a savings. These costs and savings are 

not relevant for the other three facilities because ASHTA is the only facility that did not install a 

cell room instrumental monitoring program and, therefore, is required to perform a leak program.

ASHTA also presented information to the Ohio EPA related to costs for their water 

treatment system. According to ASHTA, they spend approximately $98,000 annually on their 

storm water recovery system. This converts to a cost/savings factor of $2.07/ton Cl2 capacity for 

elimination of water-related compliance costs due to mercury use. The European information 

indicates that a cost savings of approximately $1.92/ton Cl2 could be realized by the eliminations 

of a mercury wastewater treatment system.36

Waste-related environmental compliance cost savings are realized by facilities no longer 

being required to recycle, retort, transport, store and/or dispose of mercury-containing wastes. 

The only information available was the European data that indicated that facilities could expect a 

cost savings of $6,470/ton waste, at an average mercury waste production rate of 4.2x10-5 ton 

waste per ton Cl2.

36 This results in a waste-related cost savings of $0.27/ton Cl2 capacity for 

elimination of waste-related compliance costs due to mercury use.

Table 5 presents the cost savings factors for each environmental compliance element 

discussed above from both the information from ASHTA as well as the European literature. A 

total environmental compliance cost savings factor was obtained from the sum of all the 

individual elements in each data set. Since ASHTA did not provide data related to annual cost of 

handling mercury-related wastes, the value from the literature was used to obtain a total from all 

media. With this approach, a value of $7.15/ton Cl2 shown in Table 5, was developed from data 

mostly from ASHTA, and a value of $4.63/ton Cl2 was developed from the European literature.
10

Table 5. Environmental Compliance Cost Savings Factors from

Elimination of the Mercury Process

Environmental 

Element

Cost Saving Factors from 

Elimination of Mercury ($/ton Cl2)

ASHTA Factora Literature Factorb

Air 4.81 2.20

Water 2.07 2.16

Waste 0.27c 0.27

Totals 7.15 c,d 4.63 a See Reference 38. b See Reference 36. c Since ASHTA did not provide data related to annual cost of compliance for 

mercury-related wastes, the value from the literature was used for this element. d Used in this analysis to develop costs for near future U.S. conversions.

Table 6 presents the estimated annual cost savings from the elimination of mercuryrelated compliance costs for each of the four U.S. facilities using both total environmental 

compliance saving cost factors from Table 5. Since the cost data found in the literature were 

based on facilities in Europe and not from actual U.S. facilities, we believe that the annual cost 

savings from the elimination of mercury that is based mostly on the ASHTA cost factors

represent the best estimate of the cost savings for the remaining U.S. facilities. 

Energy Savings and Costs

The membrane cell process requires less energy than the mercury cell process. 

Therefore, there are reduced energy requirements with membrane cells as compared to mercury 

cells. Energy savings were estimated using information from literature and average State energy 

prices.28 Although there could be variations in local energy costs, according to the information 

in the literature, the energy used by the membrane cell technology is approximately 2,500

kilowatt hours per ton chlorine produced (kWh/ton Cl2), which is about 700 kWh/ton Cl2 less 

than that used by the mercury cell process (3,230 kWh/ton Cl2).

28 This equates to an 

approximately 22 percent reduction in energy requirements. Oceana provided information that 

indicated that a 37.5 percent reduction was possible.14 Applying a 37.5 percent reduction to the 

mercury cell process energy usage estimate of 3,230 kWhr/ton Cl2 would yield a reduction in 

energy usage of approximately 1,211 kWhr/ton Cl2.

These energy savings are slightly offset by an increase in energy required to concentrate 

the caustic co-product generated in the membrane cell process. Mercury cells produce caustic at 

the market concentration of 50 percent, and membrane cells produce caustic at a 33 percent 

concentration. Therefore, there is an increase in energy use (in the form of steam) due to the 

need to further concentrate the caustic produced with the membrane cell technology.4,5,6,7
11

Table 6. Annual Cost Savings from Elimination of the 

Mercury Processes, by Facility

Facility 

Chlorine 

Capacity (tpy)

Savings from Hg Elimination ($/yr)

ASHTA Factora Literature Factorb

ASHTAc 47,421 595,386 595,386

Olin GA 119,031 850,634 550,600

Olin TN 262,451 1,875,561 1,214,017

PPG 72,848 520,592 336,970

Totals 3,842,173d 2,696,973 a Using the ASHTA factor of 7.15 $/ton Cl2 presented in Table 5. 

b Using the literature factor of 4.63 $/ton Cl2 presented in Table 5. c As discussed above, the ASHTA compliance costs savings include $256,500/yr related to 

their fugitive emissions compliance costs (that includes a leak detection and repair element, as 

well as the installation of a temporary canopy for the cell room); whereas, the other facilities 

do not include these costs because ASHTA was the only facility that did not install an 

instrumental monitoring program to comply with the NESHAP.

d Used in this analysis to develop costs for near future U.S. conversions. 

The energy requirement (in the form of steam) to concentrate the caustic to 50 percent was 

estimated to be 601 kWh/ton Cl2 ($13.6/ton Cl2), as obtained from the average of estimates 

provided for three U.S. facilities.

5,7 This cost was deducted from the energy savings described 

above to develop an estimate of overall energy cost savings with membrane cell technology due 

to reduced energy needs. The energy cost savings are shown in Table 7. 

Further evaluation of Oceana’s claim of a 37.5 percent energy reduction39

14

shows that 

although the estimate is for an actual facility, it is not clear whether steam costs are included. In 

addition, Oceana also indicated in their September 16, 2009, letter that a 25 percent reduction 

was commonplace. Therefore, we believe that the total energy cost savings based on the 

22 percent energy reduction represents the best cost estimate

In their September 29, 2009, letter,15 Oceana stated that the steam cost was an 

overestimate of the required energy needs to concentrate the caustic. Oceana argued that even 

though additional energy is required to generate steam, the steam could be obtained without 

additional expense. According to Oceana, facilities could use byproduct hydrogen as fuel to 

generate the necessary steam.15 While it may be possible to assume that byproduct hydrogen 

could be used to generate the steam required to concentrate caustic from a membrane cell, we 

agree with industry’s claim that increases in the demand for and the value of high purity 

chemical hydrogen make this use of byproduct hydrogen economically impractical. Therefore, 

we have not made adjustments to the energy usage costs (in the form of steam) based on the use 

of byproduct hydrogen as fuel.
12

Table 7. Energy Savings Associated with Conversion from the Mercury Cell to the Membrane Cell Process

Facility

Chlorine 

Capacity 

(tpy)

Average 

Industrial 

Retail 

Electricity Cost 

(cents/kWh)a

Steam Cost

($/yr)b

Annual Energy Savings 

($/yr)

Total Energy Cost Savings 

($/yr)f

22% 

Energy 

Reductionc,d

37.5% 

Energy 

Reductione

22% 

Energy 

Reductionc,d

37.5% 

Energy 

Reductione

ASHTA 47,421 5.77 644,788 1,911,268 3,313,692 1,266,480 2,668,904

Olin GA 119,031 5.48 1,618,476 4,556,346 7,899,639 2,937,870 6,281,163

Olin TN 262,451 5.40 3,568,575 9,901,023 17,166,059 6,332,448 13,597,484

PPG 72,848 3.90 990,515 1,986,964 3,444,931 996,449 2,454,416

Totals 11,533,247 25,001,967 ` a Average retail price of electricity to ultimate customers by end-use sector, by state (Reference 40 b Steam cost associated with concentrating caustic produced by membrane cells from 33 percent to 50 percent at an average cost of $13.60/ton Cl2

).

(Reference 28). c Calculated using a 22 percent energy savings associated with the conversion, at 699 kWh/ton Cl2. (Reference 28). d Used in this analysis to develop costs for near future U.S. conversions. e Calculated using a 37.5 percent energy savings associated with the conversion, at 1,211 kWh/ton Cl2. (Reference 15). f Energy Cost Savings = Energy Savings ($/yr) – Steam Cost ($/yr).

Table 8. Ranges of Individual Annual Cost/Savings Elements for the Conversion of Mercury Cells to Membrane Cells

Facility

Capital Recovery Costs ($/yr)a Mercury Storage 

Costs ($/yr)b

Environmental Compliance 

Savings ($/yr) Energy Savings ($/yr)

7% and 

30 years

7% and 

15 years EPA Factor DOD Factor ASHTA Factorsc

Literature 

Factors

22% Energy 

Reductionc

37.5% Energy 

Reduction

ASHTA $2,276,281 $3,101,309 $33,399 $14,035 ($595,386) ($595,386) ($1,266,480) ($2,668,904)

Olin GA $5,713,670 $7,784,567 $83,498 $35,088 ($850,634) ($550,600) ($2,937,870) ($6,281,163)

Olin TN $12,598,059 $17,164,176 $147,513 $61,989 ($1,875,561) ($1,214,017) ($6,332,448) ($13,597,484)

PPG $3,496,792 $4,764,190 $75,148 $31,579 ($520,592) ($336,970) ($996,449) ($2,454,416)

Totals $24,084,802 $32,814,242 $339,558 $142,691 ($3,842,173) ($2,696,973) ($11,533,247) ($25,001,967) a

 A recovery period of 20 years and 7% was use in the final analysis. b

 The midpoint of the EPA and DOD factor range was used in the final analysis. c

 These data were used in the final analysis.
13

OVERALL ANNUAL COSTS

For each of the costs and savings elements discussed in the previous sections, there is 

credible information that would result in different estimated levels of costs/savings. For each 

element, this resulted in a high- and low-end estimate. These values are shown in Table 8.

For each element, we chose the method of estimation that we believe is the best estimate 

of the cost or savings, as follows:

• For capital recovery costs and mercury storage costs, we concluded that neither 

the high-end nor the low-end of the ranges represented the best estimate of the 

costs that would be incurred. Instead, we concluded that using a 20-year finance 

period provided the best estimate. (See Table 3 above.)

• For the mercury storage costs, we determined that the midpoint of the range of 

data from two sources (list) was the best estimate. (See Table 4 above.)

• For the environmental compliance savings element, we chose the higher estimated 

savings, using the cost factors developed mostly from ASHTA data to provide the 

best estimate for these U.S. facilities. (See Table 6 above.)

• For the energy savings, we believe that the lower savings level based on a 

22 percent energy reduction provides the best estimate. (See Table 7 above.) 

Table 9 shows the estimates for each facility for each individual cost element that 

incorporate the choices described above, and also shows the total annual costs calculated using 

these estimates for each facility for conversion to non-mercury technology. The values in Table 

9 represent our best estimate of the annual costs that would be incurred due to the conversion of 

the four currently operating mercury cell facilities to membrane cells. These annual costs range 

from less than $1 million per year for ASHTA to almost $7 million per year for Olin TN, and a 

total estimate of $13 million for all four facilities.

Uncertainty Analysis

While we selected the values that we believe provide the best estimates of the costs that 

would be incurred and savings that would be realized in the conversion from mercury cells to 

membrane cells at these four facilities, there is some uncertainty associated with the estimates. 

While most of the information obtained and provided by commenters appears to be credible and 

representative of actual conversions that have occurred, there is a high amount of variability. 

This is most likely due to the fact that the conditions associated with the potential conversion of 

each mercury cell plant are different, resulting in potentially significant differences in the costs 

and savings. 
14

Table 9. EPA Estimates of the Annual Costs of Conversion of Mercury Cells to Membrane Cells

Facility

Capital Recovery 

Costs ($/yr)a

Annual Costs

Total 

Annual Costs 

($/yr)

Mercury Storage 

Costs ($/yr)b

Environmental 

Compliance 

Savings ($/yr)c

Energy Savings 

($/yr)d

ASHTA $2,666,266 $23,717 ($595,386) ($1,266,480) $828,117

Olin GA $6,692,569 $59,293 ($850,634) ($2,937,870) $2,963,358

Olin TN $14,756,431 $104,751 ($1,875,561) ($6,332,448) $6,653,173

PPG $4,095,882 $53,364 ($520,592) ($996,449) $2,632,205

Totals $28,211,147 $25,325,589 ($3,842,173) ($11,533,247) $13,076,853 a Using 20 year finance period with a resulting CRF of 0.0944

b

 Using midpoint of EPA and DOD factors. c Using ASHTA factors for air and water compliance costs and a literature value for waste compliance costs not provided in ASHTA data.

d

 Using an estimate of 22 percent energy reduction with membrane process.

Table 10. Results of the Monte Carlo Simulation Compared to the EPA Estimates

Facility

EPA Estimate 

Total Annual Costs 

($/yr)

Monte Carlo Simulation Mean

Total Annual Costs 

($/yr)

ASHTA $828,117 $736,743

Olin GA $2,963,358 $2,821,114

Olin TN $6,653,173 $6,349,942

PPG $2,632,205 $2,608,708

Totals $13,076,853 $12,516,508
15

In order to consider the uncertainties, we conducted a simple Monte Carlo simulation.

‡

 

For this simulation, we assumed a normal distribution for each variable. We set the peak of the 

distribution at our best estimate. For the elements where we believe one end of the range 

provides the best estimate (i.e., the environmental compliance savings and the energy savings), 

we truncated the distribution so that the peak of the distribution curve was at the best estimate. 

We ran the simulation with 100,000 calculations to create distributions of the individual plant 

annual costs over all annual costs. The results are shown in Table 10. As can be seen, the results 

of this analysis are very close to our best estimated costs. This shows that collectively, 

considering the ranges of each parameter/input to the annual costs, a mean value is obtained from 

the simulation that is only slightly lower (4 percent) than our estimate. Attachment 1 contains 

the report of this simulation.

SUMMARY OF RESULTS

This memorandum provided estimated costs for the conversion of the four currently 

operating mercury cell chlor-alkali facilities to membrane cells. The EPA estimate of the total 

capital cost for this conversion is slightly under $300 million, with the EPA estimate of total 

annual costs at approximately $13 million. Per facility estimated costs range from a low of 

$828,117 (ASHTA) to $6,653,173 (Olin TN).

REFERENCES

1. Memorandum from Brown, H. P., EC/R Incorporated, Chapel Hill, NC, to Jones, D. L., 

U.S. Environmental Protection Agency, Research Triangle Park, NC. Cost Impacts 

Associated with the Conversion from Chlorine Production Utilizing Mercury Cell ChlorAlkali Technology to Membrane Cell Technology (Docket No.: EPA-HQ-OAR-2002-

0017-0088). May 30, 2008. 

2. Memorandum from Brown, H. P., EC/R Incorporated, Chapel Hill, NC, to Jones, D.L., 

U.S. Environmental Protection Agency, Research Triangle Park, NC. Updated Cost 

Impacts Associated with the Conversion from Chlorine Production Utilizing Mercury 

Cell Chlor-Alkali Technology to Membrane Cell Technology. (Docket No. EPA-HQOAR-2002-0017-0098). June 5, 2009.

3. Memorandum from Jones, D.L. U.S. Environmental Protection Agency, Research 

Triangle Park, NC, and H.P. Brown, EC/R Incorporated, Chapel Hill, NC, to Project File. 

Revised Conversion Costs and Baseline Emissions - Conversion from Mercury Cell 

Chlor-Alkali to Membrane Cell Technology. (Docket No. EPA-HQ-OAR-2002-0017). 

September 15, 2009.

 ‡ Monte Carlo simulation is a computerized mathematical technique that is used to account for uncertainty in 

quantitative analyses and is often used in decision making and risk analysis. The simulation technique builds 

models of possible results by substituting a range of values –often a probability distribution—for any factor that has 

inherent uncertainty, and then recalculates the results numerous times, each time using a different set of random 

values from the probability functions. The results of Monte Carlo analyses are distributions of possible outcome 

values.
16

4. Letter from Dunlap, D., Chlorine Institute, Arlington, VA, to Jones, D.L., U. S. 

Environmental Protection Agency, Research Triangle Park, NC. Docket No. EPA-HQOAR-2002-0017 - National Emission Standards for Hazardous Air Pollutants: Mercury 

Emissions from Mercury Cell Chlor-Alkali Plants –Chorine Institute Comments on Cost 

Impacts Associated with the Conversion from Mercury Cell to Membrane Cell ChlorAlkali Technology. (Docket No. EPA-HQ-2002-0017-0100). June 29, 2009.

5. Letter and Attachments from Hall, R.K., Olin Chlor-Alkali Products, Charleston, TN, to 

Jones, D.L., U.S. Environmental Protection Agency, Research Triangle Park, NC. . 

(Docket No. EPA-HQ-OAR-2002-0017-0101). June 25, 2009.

6. Letter from Jackson, R.L., ASHTA Chemicals, Inc., Ashtabula, OH, to Jones, D.L., U.S. 

Environmental Protection Agency, Research Triangle Park, NC. Docket No. EPA-HQOAR-2002-00L7 - National Emission Standards for Hazardous Air Pollutants: Mercury 

Emissions from Mercury Cell Chlor-Alkali Plants – ASHTA Chemicals Inc. Comments 

and Rebuttal on Recent EC/R Study. (Docket No. EPA-HQ-OAR-2002-0017-0102). 

June 30, 2009.

7. Letter from Smith, T.P., PPG Industries, Monroeville, PA, to Jones, D.L., U.S. 

Environmental Protection Agency, Research Triangle Park, NC. Docket No. EPA-HQOAR-2002-00L7 - National Emission Standards for Hazardous Air Pollutants: Mercury 

Emissions from Mercury Cell Chlor-Alkali Plants - Memo: "Updated Cost Impacts 

Associated with the Conversion from Chlorine Production Utilizing Mercury Cell ChlorAlkali Technology to Membrane Cell Technology", from Heather P. Brown, P.E. (EC/R 

Inc.) to Donna Lee Jones, PhD (USEPA), dated June 5,2009. (Docket No. EPA-HQOAR-2002-0017-0103). July 13, 2009.

8. Letter and Attachments from Smith, T.P., PPG Industries, Monroeville, PA, to Jones, 

D.L., U.S. Environmental Protection Agency, Research Triangle Park, NC. Responses to 

Request for Information under Section 114 of the Clean Air Act, 42 U.S.C. §7414, Dated 

December 4, 2009, with regards to the Mercury Cell Chlor-Alkali MACT and 

background data to support the estimates provided to USEPA by PPG in a letter dated 

July 13, 2009. (Docket No. EPA-HQ-OAR-2002-0017). January 18, 2010.

9. Letter from Jackson, R.L., ASHTA Chemicals Inc. , Ashtabula, OH, to Jones, D.L., U.S. 

Environmental Protection Agency, Research Triangle Park, NC. Response to USEPA 

Questions. (Docket No. EPA-HQ-OAR-2002-0017). January 19, 2010.

10. Letter and Attachments from Hall, R.K., Olin Chlor-Alkali Products, Charleston, TN, to 

Jones, D.L., U.S. Environmental Protection Agency, Research Triangle Park, NC. 

Information requested pursuant to section 114 of the Clean Air Act. (Docket No. EPAHQ-OAR-2002-0017). February 2, 2010.

11. Letter and Attachments from Jackson, R.L., ASHTA Chemicals Inc. , Ashtabula, OH, to 

Jones, D.L., U.S. Environmental Protection Agency, Research Triangle Park, NC. 

Response to USEPA Questions. (Docket No. EPA-HQ-OAR-2002-0017). February 15, 

2010.
17

12. Letter and Attachments from Smith, T.P., PPG Industries, Monroeville, PA, to Jones, 

D.L., U.S. Environmental Protection Agency, Research Triangle Park, NC. Response to 

Request for Information under Section 114 of the Clean Air Act, 42 U.S.C. §7414, Dated 

December 4, 2009, with regards to the Mercury Cell Chlor-Alkali MACT and 

background data to support the estimates provided to USEPA by PPG in a letter dated 

July 13, 2009. (Docket No. EPA-HQ-OAR-2002-0017). February 18, 2010.

13. Oceana. Cleaning Up: Taking Mercury-Free Chlorine Production to the Bank. (Docket 

No. EPA-HQ-OAR-2002-0017-0094.3). July 2007. 

14. Letter and Attachments from Warner, K.A., et al, Oceana, Washington, DC, to Jones, 

D.L., U.S. Environmental Protection Agency, Research Triangle Park, NC. Docket No. 

EPA-HQ-OAR-2002-0017 - National Emission Standards for Hazardous Air Pollutants: 

Mercury Emissions from Mercury Cell Chlor-Alkali Plants, Proposed Rule, 73 Fed. Reg.

33258 (June 11, 2008). (Docket No. EPA-HQ-OAR-2002-0017-0107). September 16, 

2009.

15. Memorandum from Oceana, Washington, DC. Oceana Analysis of EPA Cost Estimate 

for Conversion of Mercury-Cell Chlor-Alkali Facilities to Membrane-Cell Technology

Re: “Revised Conversion Costs and Baseline Emissions - Conversion from Mercury Cell 

Chlor-Alkali to Membrane Cell Technology.” (Docket No. EPA-HQ-OAR-2002-0017-

0106). September 29, 2009.

16. Memorandum from Norwood, P., EC/R Incorporated, Chapel Hill, NC, to Jones, D.L., 

U.S. Environmental Protection Agency, Research Triangle Park, NC. Mercury Emission 

Reductions and Other Mercury Waste Impacts – Conversion from Mercury Cell ChlorAlkali to Membrane Cell Chlor Alkali Technology. (Docket No. EPA-HQ-OAR-2002-

0017). March 15, 2010.

17. U.S. EPA. Mercury Study Report to Congress Volume VIII: An Evaluation of Mercury 

Control Technologies and Costs. U.S. Environmental Protection Agency, Office of Air 

Quality Planning and Standards, Research Triangle Park, NC. December 1997.

18. Bradbury, D. Portrait of a Polluter. Portland Press Herald. 1997.

19. Markets - News Release. Houston Chronicle. January 30, 2007.

20. McCoy, M. PPG to Convert Chlorine Cells. Chemical and Engineering News. 

August 8, 2005.

21. Wise, A. Port Edwards sells School Forest Land to ERCO Worldwide; Nekoosa 

Considers Similar Deal. Wisconsin Rapids Tribune. January 13, 2009. Available on the 

Internet at: www.wisconsinrapidstribune.com. 
18

22. Westlake Chemical Corporation (2003, December 31). Form 10-K, United States 

Securities and Exchange Commission. Available on the Internet at 

http://www.sec.gov/Archives/edgar/data/1262823/000095012904001565/h13929e10vk.ht

m

23. Chlorine/Chlorate Newsletter. “Tessenderlo Upgrades Chlorine; Expands VCM, PVC.” 

March 2002. p. 10-11. Available on the Internet at:

http://www.eltechsystems.com/newsletter/ELTECH%20Newsletter%20March%202002.

pdf. Accessed 3/2/2007.

24. Hydrocarbon Processing (2007, November 19). "Uhde Opens New Electrolysis Plant."

25. Drabkin, M. and Rissmann, E. Project Summary Waste Minimization Audit Report: 

Case Studies of Minimization of Mercury Bearing Wastes at a Mercury Cell Chlor-alkali 

Plant. EPA/600/S2-88/011. U.S. Environmental Protection Agency, Hazardous Waste 

Engineering Research Laboratory, Cincinnati, OH. March 1988.

26. Fact Sheet No. 12. PPG Canada. St Lawrence Vision 2000, Beauhamois, Quebec, 

Canada. 1996.

27. Modern Chlor-Alkali Technology, Volume 2. Jackson, C., Editor. Society of Chemical 

Industry, London, England. 1983.

28. Reference Document on Best Available Techniques in the Chlor-Alkali Manufacturing 

Industry. European Integrated Pollution Prevention and Control (IPPC) Bureau, Seville, 

Spain. December 2001. Available on the Internet at 

http://eippcb.jrc.es/reference/cak.html. 

29. Memorandum from Brown, H.P., EC/R Incorporated, Chapel Hill, NC, to Docket EPAHQ-OAR-2002-0017. Capital and Annual Costs References Cited By Oceana in Their 

Comments on EPA’s Cost Analysis of the Conversion of Mercury Cells to Membrane 

Cells. (Docket No. EPA-HQ-OAR-2002-0017). March 15, 2010.

30. Chemical Engineering Plant Cost Index. Chemical Engineering. February 2009. 

Available on the Internet at www.che.com. 

31. 1997 Directory of Chemical Producers - United States of America. Stanford Research 

Institute International. Menlo Park, CA. 1997. 

32. Memorandum from Brown , H.P., EC/R Incorporated, Chapel Hill, NC, to D.L. Jones, 

U.S. Environmental Protection Agency, Research Triangle Park, NC. Documentation of 

Building Replacement Cost Estimates. June 5. 2008.

33. The Chlorine Institute, Inc. “Chlor-Alkali Industry 2008. Mercury Use and Emissions in 

the United States (Twelfth Annual Report).” August 2009.

34. Mercury Storage Cost Estimates – Final Report. U.S. Environmental Protection Agency. 

Office of Pollution Prevention and Toxics and Office of Solid Waste and Emergency 
19

Response, Washington, DC. November 6, 2007. Page 28, Exhibit 15. Available on the 

Internet: http://www.epa.gov/mercury/stocks/Storage_Cost_Draft_Updated_11-6-

final.pdf

35. Lynch, Dennis, Environmental Protection Specialist. Presentation made at the Asia 

Mercury Storage Project Inception Workshop on March 4, 2009 at the Defense National 

Stockpile Center, Fort Belvoir, VA.

36. Maxon, Peter, Director. Concorde East/West Sprl. Status Report: Mercury Cell ChlorAlkali Plants in Europe. Prepared for European Environmental Bureau, Brussels, 

Belgium. October 2006.

37. Historic Exchange Rates. Prepared by GOCurrency.com. Available on the Internet at 

www.gocurrency.com. Accessed April 1, 2009 and April 30, 2009.

38. ASHTA Chemicals. Early MACT Compliance. Consent Agreement. Exhibits B and C. 

(Docket No. EPA-HQ-OAR-2002-0017). August 2004.

39. Government of India Bureau of Energy Efficiency. 2006. “The Travancore-Cochin 

Chemicals Limited.” December 14. http://www.beeindia.nic.in/sidelinks/EC%20Award/eca06/Award2006_CD/06ChlorAlkali/TheTravancor

e-CochinChemicalsLimited.pdf . 

40. U.S. Department of Energy. Average Retail Price of Electricity to Ultimate Customers 

by End-Use Sector, by State for 2006. Available on the Internet at 

http://www.eia.doe.gov/cneal/electricity/epm/table5_6_b.html. Accessed February 24, 

2009.
Attachment 1

Report of Monte Carlo Simulation

Costs of Conversion for

Mercury Chlor-alkali Facilities

March 2010
Inv Plant Run REPORT.xls

Page 1

Crystal Ball Report

Simulation started on 3/2/10 at 20:49:30

Simulation stopped on 3/2/10 at 20:59:38

Forecast: ASHTA Cell: G2

Summary:

Display Range is from $100,000 to $1,300,000 

Entire Range is from ($89,585) to $1,262,515 

After 99,999 Trials, the Std. Error of the Mean is $684

Statistics: Value

Trials 99999

Mean $736,743

Median $735,141

Mode ---

Standard Deviation $216,247

Variance $46,762,643,543

Skewness 0.00

Kurtosis 2.37

Coeff. of Variability 0.29

Range Minimum ($89,585)

Range Maximum $1,262,515

Range Width $1,352,100

Mean Std. Error $683.84

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 2

Forecast: ASHTA (cont'd) Cell: G2

Percentiles:

Percentile Value

0% ($89,585)

10% $450,773

20% $537,872

30% $609,958

40% $673,558

50% $735,141

60% $796,520

70% $861,928

80% $936,064

90% $1,029,823

100% $1,262,515

End of Forecast

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 3

Forecast: OLINGA Cell: G3

Summary:

Display Range is from $2,300,000 to $3,300,000 

Entire Range is from $1,628,267 to $3,272,924 

After 99,999 Trials, the Std. Error of the Mean is $583

Statistics: Value

Trials 99999

Mean $2,821,114

Median $2,853,762

Mode ---

Standard Deviation $184,278

Variance $33,958,401,275

Skewness -0.87

Kurtosis 3.79

Coeff. of Variability 0.07

Range Minimum $1,628,267

Range Maximum $3,272,924

Range Width $1,644,657

Mean Std. Error $582.74

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 4

Forecast: OLINGA (cont'd) Cell: G3

Percentiles:

Percentile Value

0% $1,628,267

10% $2,565,442

20% $2,673,985

30% $2,746,711

40% $2,804,326

50% $2,853,762

60% $2,898,178

70% $2,940,154

80% $2,979,573

90% $3,023,648

100% $3,272,924

End of Forecast

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 5

Forecast: OLINTN Cell: G4

Summary:

Display Range is from $5,250,000 to $7,500,000 

Entire Range is from $3,633,806 to $7,303,391 

After 99,999 Trials, the Std. Error of the Mean is $1,264

Statistics: Value

Trials 99999

Mean $6,349,942

Median $6,421,196

Mode ---

Standard Deviation $399,437

Variance 2E+11

Skewness -0.88

Kurtosis 3.86

Coeff. of Variability 0.06

Range Minimum $3,633,806

Range Maximum $7,303,391

Range Width $3,669,586

Mean Std. Error $1,263.14

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 6

Forecast: OLINTN (cont'd) Cell: G4

Percentiles:

Percentile Value

0% $3,633,806

10% $5,799,566

20% $6,032,395

30% $6,190,153

40% $6,313,524

50% $6,421,196

60% $6,517,855

70% $6,607,508

80% $6,692,043

90% $6,788,912

100% $7,303,391

End of Forecast

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 7

Forecast: PPG Cell: G5

Summary:

Display Range is from $2,400,000 to $2,800,000 

Entire Range is from $2,222,889 to $2,825,561 

After 99,999 Trials, the Std. Error of the Mean is $216

Statistics: Value

Trials 99999

Mean $2,608,708

Median $2,617,427

Mode ---

Standard Deviation $68,229

Variance $4,655,208,792

Skewness -0.60

Kurtosis 3.57

Coeff. of Variability 0.03

Range Minimum $2,222,889

Range Maximum $2,825,561

Range Width $602,672

Mean Std. Error $215.76

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 8

Forecast: PPG (cont'd) Cell: G5

Percentiles:

Percentile Value

0% $2,222,889

10% $2,516,657

20% $2,554,236

30% $2,579,823

40% $2,600,169

50% $2,617,427

60% $2,633,124

70% $2,647,947

80% $2,664,141

90% $2,687,576

100% $2,825,561

End of Forecast

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 9

Forecast: TOTAL ANNUAL Cell: G7

Summary:

Display Range is from $11,000,000 to $14,000,000 

Entire Range is from $9,613,214 to $14,021,330 

After 99,999 Trials, the Std. Error of the Mean is $1,570

Statistics: Value

Trials 99999

Mean $12,516,508

Median $12,558,622

Mode ---

Standard Deviation $496,234

Variance 2E+11

Skewness -0.49

Kurtosis 3.31

Coeff. of Variability 0.04

Range Minimum $9,613,214

Range Maximum $14,021,330

Range Width $4,408,116

Mean Std. Error $1,569.24

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 10

Forecast: TOTAL ANNUAL (cont'd) Cell: G7

Percentiles:

Percentile Value

0% $9,613,214

10% $11,856,133

20% $12,114,524

30% $12,290,083

40% $12,432,022

50% $12,558,622

60% $12,681,120

70% $12,805,043

80% $12,940,515

90% $13,118,004

100% $14,021,330

End of Forecast

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 11

Assumptions

Assumption: C2 Cell: C2

 Normal distribution with parameters:

Mean 0.0944

Standard Dev. 0.0094

Selected range is from 0.0806 to 0.1098

Assumption: D2 Cell: D2

 Normal distribution with parameters:

Mean $23,717

Standard Dev. $2,372

Selected range is from $14,035 to $33,399

Assumption: D3 Cell: D3

 Normal distribution with parameters:

Mean $59,293

Standard Dev. $5,929

Selected range is from $35,088 to $83,498

Assumption: D4 Cell: D4

 Normal distribution with parameters:

Mean $104,751

Standard Dev. $10,475

Selected range is from $61,989 to $147,513

0.0661 0.0802 0.0944 0.1086 0.1227

C2

$16,602 $20,159 $23,717 $27,275 $30,832

D2

$41,505 $50,399 $59,293 $68,187 $77,081

D3

$73,326 $89,038 $104,751 $120,464 $136,176

D4

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 12

Assumption: D5 Cell: D5

 Normal distribution with parameters:

Mean $53,364

Standard Dev. $5,336

Selected range is from $31,579 to $75,148

Assumption: E3 Cell: E3

 Normal distribution with parameters:

Mean $850,634

Standard Dev. $85,063

Selected range is from $550,600 to $850,634

Assumption: E4 Cell: E4

 Normal distribution with parameters:

Mean $1,875,561

Standard Dev. $187,556

Selected range is from $1,214,017 to $1,875,561

Assumption: E5 Cell: E5

 Normal distribution with parameters:

Mean $520,592

Standard Dev. $52,059

Selected range is from $336,970 to $520,592

$37,355 $45,359 $53,364 $61,369 $69,373

D5

$595,444 $723,039 $850,634 $978,229 $1,105,824

E3

$1,312,893 $1,594,227 $1,875,561 $2,156,895 $2,438,229

E4

$364,414 $442,503 $520,592 $598,681 $676,770

E5

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results
Inv Plant Run REPORT.xls

Page 13

Assumption: F2 Cell: F2

 Normal distribution with parameters:

Mean $1,266,480

Standard Dev. $126,648

Selected range is from $1,266,480 to $2,668,904

Assumption: F3 Cell: F3

 Normal distribution with parameters:

Mean $2,937,870

Standard Dev. $293,787

Selected range is from $2,937,870 to $6,281,163

Assumption: F4 Cell: F4

 Normal distribution with parameters:

Mean $6,332,448

Standard Dev. $633,245

Selected range is from $6,332,448 to $13,597,484

Assumption: F5 Cell: F5

 Normal distribution with parameters:

Mean $996,449

Standard Dev. $99,645

Selected range is from $996,449 to $2,454,416

End of Assumptions

$886,536 $1,076,508 $1,266,480 $1,456,452 $1,646,424

F2

$2,056,509 $2,497,190 $2,937,870 $3,378,551 $3,819,231

F3

$4,432,714 $5,382,581 $6,332,448 $7,282,315 $8,232,182

F4

$697,514 $846,982 $996,449 $1,145,916 $1,295,384

F5

Mercury Chlor-alkali Supplemental Proposal Monte Carlo Simulation Results