### BART Comments on Omaha Public Power District Nebraska City Station Unit # NC 1

January 14, 2011

Omaha Public Power District’s (OPPD) Nebraska City Station contains one operating 650 MW
coal

- fired (Powder River Basin coal) boiler (NC1), with a second 660 MW coal

- fired boiler currently permitted and under construction (NC2)

. Since NC2 has been permitted it is considered part of the electric generation capacity of Nebraska City Station and as such the two permitted emission units within N ebraska City Stati on generate more than 750 MW of electricity

. Electric Generating Units within a 750 MW power plant which are greater than
200 MW in size are subject to specific, presumptive control requirements for SO 2 and NO

x emissions under the Environmental Protectio n Agency ( EPA ) Best Available Retrofit Technology (BART) Guidelines. 1 Of course, the only unit within the facility that is subject to the presumptive requirements of BART is NC1.

Even setting aside the presumptive requirements discussion for a moment, t he SO 2 control alternative of Spray Dryer Absorber (SDA) with f abric f ilter was assumed to meet a control level
of 0. 10 lb./MMBtu, which is more stringent than the presumptive 0.15 lb./MMBtu control level. The $1,636 per ton of SO 2 controlled using the SDA system is very reasonable. Many examples of proposed SO 2 control for BART can be cited that far exceed $1,636 per ton. Some examples are Boardman, OR

- $3,053/ton; Brayton Point, MA

- $3,043/ton; Bridger, WY $2,551/ton; Canal Station, MA

- $3,170/ton ; Martin Drake, CO

- $2,765; Johnston, WY

- $4,743; Kincaid,

IL

- $4,274; Mystic Station, MA

- $4,270; Silver Bay Power, MN

- $7,309; Salem Harbor, MA

- $3,043; Stanton, ND

- $2,006 and Taconite Harbor, MN

- $5,300. The EPA BART Guidelines state, “A reaso nable range would be a range that is consistent with the range of cost effectiveness values used in other similar permit decisions over a period of time.” 2 In summary, $1,636 per

ton for SDA with a fabric filter is reasonable and should be considered as B ART for the NC1
unit.

The $78.9 million cost per deciview of visibility improvement at Hercules Glades for
installation of SDA with a fabric filter was considered by the Nebraska Department of Environmental Quality (NDEQ) to trump the reasonable cost per ton as a reason to reject this

SO 2 control alternative. Chapter 8 of the Regulatory Impact Analysis (RIA) the EPA prepared for the Regional Haze rule stated that high cost control measures that have only minimal effect on visibility improvement can be av oided. The functional words are “high cost control
measures”. SDA with fabric filter was shown above to not be a high cost control measure. Correspondingly, this control alternative should not be dismissed solely on the basis of a high er cost of visibil ity improvement at only one Class I area.

Further, the Clean Air Act, Section 169A(g)(2) states:

1 See 40 CFR Part 51, Appendix Y, Section IV.E.4 and 5.

2 Ibid., See Section IV,D. Step 4,f

.“. . . in determining best available retrofit technology the State (or the

Administrator in determining emission limitations which reflect such technolo gy)
shall take into consideration the costs of compliance, the energy and non

- air quality environmental impacts of compliance, any existing pollution control technology in use at the source, the remaining useful life of th e source, and the degree of improv ement in visibility which m a y reasonably be anticipated to result from the use of such technology.”

This wording indicates that the various considerations listed are to be used for help in determining a “ best ” available retrofit technology from among th e various alternatives being considered. It does not state that a questionable outcome for any particular consideration may result in the outright dismissal of all choices for selection of a control technology.

There is a single conceptual idea prese nted in the EPA BART Guidelines from Section IV.D.Step 4, “Evaluate Impacts and Document the Results” to Section IV.D.Step 4.i, “How do I analyze non

- air quality environmental impacts?” to Section IV.D.Step 5, “Evaluate Visibility Impacts” to Section IV.E, “How do I select the “best” alternative using the results of Steps 1 through 5?” The single concept is that these sections present methods for deciding which alternative control is the “best” alternative from among the technically feasible and cost feasi ble alternatives. These sections do not provide a means to entirely delete all alternatives from consideration.

This position then addresses the NDE Q concern that both SO 2 control alternatives, the wet scrubber and SDA will require obtaining water rights that may be detrimental to stream flows in Nebraska. The EPA BART Guidelines state, “. . . where you or the source owner can show that unusual circumstances at the proposed facility create greater problems than experienced elsewhere, this may provide a b asis for the elimination of that
control alternative as BART.” 3 First, this provides a good basis for selecting SDA over the wet scrubber. Second, SDA should be the selected alternative for BART, because

NDE Q likely cannot show that water availability in Nebraska is more acute than in many
other Western states which have installed SDA or other SO 2 controls that require
additional water.

OPPD made judgments on cost per deciview based up on only the most impacted Class I area,
Hercules Glade s

. We con tinue to believe that it is appropriate to consider both the degree of visibility improvement in a given Class I area as well as the cumulative effects of improving visibility across all of the Class I areas affected. It simply does not make sense to use the same metric to evaluate the effects of reducing emissions from a BART source that impacts only one Class I area as for a BART source that impacts multiple Class I areas. And, it does not make sense to evaluate impacts at one Class I area, while ignorin g others that are similarly significantly impaired. If emissions from Nebraska City Station are reduced, the benefits will be spread well beyond only the most impacted Class I area, and this must be accounted for

.

NDEQ proposes to require that OPPD mee t the NO

x presumptive emission limit of

3 Ibid., See Section IV,D

. Step 4, i.2.0.23 lb/MMBtu by installing retrofitted Low NO

x Burners (LNB) combustion control technology

to complement the existing over

- fire air system (OFA) at an estimated cost of $1 3 6 per ton and $ 4

. 6 million/deciview of vis ibility improvement

. OPPD proposes no additional NO

x , SO 2 or particulate matter ( PM ) BART controls. OPPD cited the reasons for no additional controls were excessive cost per deciview for Selective Catalytic Reduction ( SCR ) for NO

x control , excessive

cost per deciview for a spray dryer absorber (SDA) for SO 2 control and “negligible impact” on visibility for PM control alternatives

.

The addition of SCR to the proposed LNB/OFA results in $2,706 cost per ton of NO

x control.
This is considered as a reasonabl e cost. Some other examples of proposed BART using SCR include Boswell Energy Center, MN

- $3,201/ton; Healy, AK

- $3,374; Jim Bridger, WY

- $2,298; and Boardman, OR

- $3,096. This alternative was discarded on the basis of excessive cost per deciview ($8 2.4 million/dv at He rcules Glades). The same arguments that were discussed above for SDA apply to installation of LNB/OFA/SCR as BART.

Page 7 of the 2007 OPPD BART Analysis document indicates that cost estimates were developed following guidance provided in the January 2002 OAQPS Control Cost Manual, using
“limited vendor data obtained from various vendors in 2003” and then “scaled

- up” to the present. Since it has been almost eight years since the 2003 vendor cost estimates were made, OPPD
should obtain current cost estimates for all alternatives rather than simply scaling old 2003 information to the present. Current v endor cost estimates may be quite different and the errors of scaling could be large. In an effort to make OPP D ’s results for a ll control alternatives comparable to the universe of other companies’ BART determination s, cost calculat ions based
on use of the most recent OAQPS Control Cost Manual should be performed

. 4

Regarding PM control through continued use of the existing electrostatic pr ecipitator (ESP)

, it
should be noted that the EPA BART Guidelines provide that upgrades/improved operation
should be considered as a BART alternative. The addition of collection fields should be considered as an upgrade as indicated in the EPA BART Guidel ines. 5

Section 3.1 of the 2007 OPPD BART Analysis document attempts to make a case that certain visibility improvements are “well below the minimum perceptible dV change”

. It is incorrect to dismiss a control strategy on the basis that the resulting imp rovement is not perceptible or significant. EPA states in the preamble to its BART Guidelines that, “ Even though the visibility improvement from an individual source may not be perceptible, it should still be considered in setting BART because the contribu tion to haze may be significant relative to other source
contributions in the Class I areas. Thus, we disagree that the degree of impairment should be contingent upon perceptibility. Failing to consider less

- than

- perceptible contributions to visibility

im pairment would ignore the CAA’s intent to have BART requirements apply to sources that contribute to, as well as cause, such impairment.” 6

4 Ibid., See Section IV.D.Step 4.a.5.

5 Ibid., See Section IV.D.Step 3.4.

6 See 40 CFR Part 51, Appendix Y. The U.S. Environmental Protection Agency finalized its BART Guidelines on June 15, 2005, and published the preamble and final rul e text in the Federal Register on July 6, 2005. The rulemaking action added Appendix Y to Part 51, titled “Guidelines for BART Determinations Under the Regional Haze Rule.” See Preamble, 70FR30129, middle column.