The Clear Skies Act

Technical Support Package S

eptember 2002 
Introduction

• On February 14, 2002, President Bush proposed the Clear Skies I

mandatory program for the control of sulfur dioxide (SO2), nitrogen 

(NOx) and mercury (Hg) from the electricity generation sector. 

• On July 26, 2002, Chairman Billy Tauzin and Chairman Joe Barton 

the Clear Skies Act in the U.S. House of Representatives (H.R.526

July 29, 2002 Senator Bob Smith introduced the legislation in the S

(S.2815) by request of the Administration. 

• Extensive information on Clear Skies is currently available on EPA

at www.epa.gov/clearskies. This package is designed to provide a

technical support to accompany the newly introduced legislation. 
Table of Contents

• Section A: Program Elements in the Clear Skies Act..................

• Section B: Human Health and Environmental Benefits...............

• Section C: Projected Costs...................................................• Section D: Projected Impacts on Generation and Fuel Use.........• Section E: Projected Impacts at the State and Regional-Level......

• Section F: Factors Affecting the Installation of Control Technologi

• Section G: Summary of the Models used for this Analysis............
Notes on this Analysis

• EPA used a number of different analytical tools to prepare this an

projections are EPA‘s estimates; modeling by other Agencies, su

Energy Information Administration (EIA), would likely show diffe

œ The economic impacts, as well as the impacts on generation and emission

developed using the Integrated Planning Model (IPM®). 

œ Air quality impacts were projected using: 

• (1) Regional Modeling System for Aerosols and Deposition (REMSAD) and, • (2) Comprehensive Air Quality Model with Extensions (CAMx). 

œ Several additional models were used for the economic and benefit analysi

in section G. 

• Many of the results presented in this analysis are compared to a 

œ The EPA 2000 Base Case in IPM includes Title IV, the NOx SIP Call, and 

caps in Connecticut, Missouri and Texas, all finalized before March 2001. 

does not include any actions finalized after this date. 

œ The REMSAD Base Case includes the rulemakings in the EPA 2000 Base 

as the Tier II and Heavy Duty Diesel rules. 
Section A: 

Program Elements in the Clear Skies Act
Caps and Timing for the Electric Po

w

er Sector 

under the Clear Skies Act 

2004: T

he N

Ox SIP call (su

m

m

erti

me 

NOx cap in 19 Eastern S

t

a

tes + D.C.) 

2008: Clear Skies NOx Phase I (2.1 million ton ann

ual cap assig

n

ed to 

t

wo Zones 

with trading progra

ms) 

2018: Clear Skies NOx Phase II (1.7 

million ton ann

ual cap assig

n

ed to 

t

wo Zones 

with trading progra

ms) 

20042008

2012

2016

2020

2010: Clear Skies Hg 

annual cap 

with a nat

progra

m) 

2010: S

O2 Phase I (4.

annual cap 

with a nat

progra

m) 

2018: Clear Skies Hg annual cap 

with a nat

progra

m) 

2018: Clear Skies SO2 

million 

t

on a

nnu

al c

ap 

trading progra

m) 
Affected Sources 

Definition of Affected Units: • For O S 2 and NOx, the program will cover all fossil fuel-fired boilers and turbines serv

generator unit with a nameplate capacity greater than 25 MW and producing electric

cogeneration units that produce for sale less than 1/3 of the potential electrical outpu

that they serve. 

• For mercury, the program will cover all coal-fired units serving an electric generator w

capacity greater than 25 MW; the same exclusion for cogenerators applies as for NO

• For new units, there would not be a generator size cut-off, except for new gas-fired u

New units would have the same cogeneration exception as existing units. 

Factors Considered in Defining Coverage: • Since 1990, there have been dramatic changes in the electric power industry associa

emergence of competitive markets for electricity generation. 

œ Most new generation comes from non-utility generators. œ Many existing —utility“ plants are being purchased by Independent Power P

and operate as non-utility wholesale power suppliers. 

œ Applicability of the program should recognize the emergence of competitiv

• The need for emissions reductions from the electricity generating sector was balance

to not discourage combined heat and power (CHP). 

• The program includes units generating significant amounts of electricity that compete 

generation market. 
Affected Sources 

• Sources covered under the Clear Skies Act would include the 2,792 Acid Rain 

electric generating units. 

• As many as 400 additional electric generating units, currently not in the Acid R

may be covered by the Clear Skies Act. 

œ This number is based on units in the IPM analysis, which includes all electric ge

with firm sales contracts to the electric grid 

œ This number likely over-estimates the number of units, since cogeneration units 

than one-third of their generation are excluded. 

The majority of non-Acid Rain units a

these non-Acid Rain sources emitted ab

and 160,000 tons of N

Gas-fired sources represent the largest percentage of Acid 

Rain units. 2000, Acid Rain sources emitted about 11.2 

million tons of SO2 and 5.11 million tons of NOx. 

Source: EPA 2000 Scorecard Source: NEEDS 2000 

In
The Clear Skies Sulfur Dioxide (SO

2) Pro

gram 

• U

n

d

er 

Title IV of the C

AA, S

O2 

e

missions 

f

rom t

he 

ele

c

t

ric po

w

er s

e

c

tor a

r

50

% from a 1980 emissio

ns le

v

el o

f 17.5 million to

n

s to 8.95 millio

n to

n

s in 

• T

he Clear S

kies 

A

ct establish

e

s a n

ew 4.5 millio

n t

o

n S

O2 

c

a

p in 2010 and 

cap to 3.0 millio

n to

n

s in 2018. 

œ 

Clear S

kies maintains the annual, n

ational tradin

g pro

gram e

stablished un

œ

E

xisting S

O2 allowance

s d

ated 2010 and later removed from accounts and 

proportion

ately s

maller amount of 

Clear S

kies allowance

s. 

œ S

O2 allowance all

ocations gradually repla

ced by auction over 52 years. 

œ

The 

W

e

stern Regional Air P

artnership‘s (

W

R

A

P) 2018 S

O2 emission

s mile

generators in 9 State

s would be honored through a backstop cap-and-trad
The Clear Skies SO2 Program

• Why a national program? 

œ The human health and environmental effects to which SO2 emissions 

of national concern. Emissions of SO2: 

• Contribute to fine particulate (PM2.5), which in aggregate is associated 

mortality, chronic bronchitis, respiratory and cardiovascular related ho

admissions, and asthma attacks. 

• Cause PM2.5 NAAQS non-attainment, regional haze, and acid rain. 

œ Atmospheric transport of emissions can pose problems in neighborinœ Most of the plants that would be subject to the Clear Skies Act are cu

participants in the national Acid Rain SO2 Program. 

• Building off the existing SO2 trading program minimizes disruption of t

allowance market and ensures lower costs for power companies and c

• Current banked allowances would retain their value and sources woul

have an incentive to reduce their emissions early. 
The Clear Skies Nitrogen Oxides (NOx) Program • 

The Clear Skies 

A

c

t has 

t

wo 

trading zones 

f

or N

Ox. 

* 

Note: Values f

or 2000 represent a

ctual e

mission levels, r

ather than the caps. 

• Significant N

O

x reductions are required in the E

a

st to protect human health and 

environmental i

s

sues. Less strin

g

e

nt redu

ctions are required in the 

W

est, and a

at m

aintai

ning good visibility. There

fore, the Clear Ski

es A

ct creates tw

o trading 

would be no trading between the two zones to ensure that the different air quality 
The Clear Skies NOx Program

• T

h

e Zone bounda

rie

s a

re e

s

t

a

blished ba

s

e

d on 

t

h

e na

t

ure, magnitude, and 

enviro

n

mental c

o

ncern

s. 

• All t

h

e St

a

t

es in Zone 1 eit

h

e

r hav

e ozone/PM2.5 

nona

t

t

ainment c

onc

e

rns 

so

u

rces that co

n

trib

u

t

e to o

t

h

er S

tates‘ o

z

o

n

e/ P

M2.5 nonattainme

nt. 

• Zone 2 include

s: 

œ

S

tates p

articipatin

g in th

e WR

AP 

p

r

ocess: 

Arizona, C

alifornia, C

olorado

Montana, N

e

vada, N

e

w Me

xico, N

orth D

akota, Oregon, South D

akota, Uta

Wy

o

min

g. 

œ 

N

e

b

raska: 

Nebraska doe

s not appear to contribute to ozone or P

M2.5 non-

œ

T

he Western p

o

rtio

n o

f Texas: 

T

e

x

as 

w

as divided between Zone 1 and Z

the State‘s Air Q

uality regulations and Electri

city Ind

u

stry R

estructuring Leg

• As wit

h S

O

2, during t

he fi

r

st phase t

he EPA 

A

dmi

nis

t

r

a

t

or 

will r

e

view new 

technolog

y, and cost information; if necessar

y, EPA 

c

an recommend that 

adjust th

e P

hase II N

Ox cap. 
The Clear Skies Mercury Program 

• Me

r

cur

y deposition is a nation

wid

e is

s

u

e: 

œ 

Currently 42 Stat

e

s h

a

v

e fish advisories.

œ 

The emissions red

uctions may allo

w States to redesig

n

ate local w

ater bod

• P

o

w

e

r generatio

n is the largest r

emaining man-made source o

f m

e

r

cur

y e

U.S. (ap

p

r

o

ximatel

y 37% 

o

f total). 

œ In 1999, coal-fired power generator

s emitted 48 tons o

f mercury. T

h

e Clea

cut mer

cury emissions from coalfire

d power generators by 69% when f

ull

y 

• T

he Clear Skies 

A

ct establishes a national, annual cap of 26 tons in 2010, 

the c

a

p to 15 to

n

s in 2018. 

œ

Under Clear S

kies, the primary reduction

s in mercury emissions will be i

n t

form of mer

c

ury that is prone to deposit clo

s

e t

o its s

ource. 

œ

During t

he fir

st phase, the EPA Administr

ator will revie

w ne

w scienti

fic, tec

in

f

ormation; if n

ece

s

s

ary, EPA c

an re

c

omme

n

d that C

o

n

gress a

djust the P

target. 

œ

As is the case currently, States can require facility-specific reduction

s to ad

concern

s. 
Projected Emissions from Electric Generating U

• The Clear Skies A

ct will result in sig

nifica

nt over-compliance in the early years, 

SO

2, b

ecause s

o

urces are allowed t

o ban

k excess emissions reductions and u

s

The u

s

e of the

se banke

d allowances for c

ompliance i

n t

h

e later years of the pro

2020) results in S

O2 and mercury emissions initially above the second phase ca

declining to the c

ap lev

el. 

Note: Projected e

missions data for SO2, NOx and 

m

ercur

y are from IPM. 
Economic Growth and Environmental Improvem

Sources: 1980 - 1999 emissions data are from the National Air Pollutant Emissions Trend Report (EPA, March 2000). Pro

and mercury are derived from the Integrated Planning Model (IPM). GDP data for 1980, 1990 and 2000 is from the Bureau 

U.S. Department of Commerce. The GDP projection for 2010 is from OMB‘s Analytical Perspectives Report for 2003, Tab

2020 projection follows EIA‘s assumptions in AEO 2001 of 3% growth per year. 
Section B:

Human Health and Environmental Benefits
Overview of the Assessment 

This assessment analyzes the impacts of the Clear Skies Act. It compares air qual

deposition, and ecosystem conditions projected to occur under Clear Skies to curr

and to those expected to occur in the future under EPA regulations that have been 

yet fully implemented (the Base Case). 

Specifically, this assessment analyzes the effects of reducing power plant emissions on m

health and environmental issues, including: 

• Fine Particles (PM2.5) 

• Ozone 

• Visibility • Acid Deposition (sulfur and nitrogen deposition) • Freshwater Acidification • Mercury Emissions • Mercury Deposition 

The assessment estimates monetized benefits due to reduced PM2.5 and ozone concentr

improvements in human health and visibility. 
Summary of Results The Clear Skies Act would improve human health, visibility, and a diverse range of 

further reducing emissions and deposition of SO2, NOx, and Hg. 

By 2020, the benefits of reductions in PM2.5 and ozone are estimated to be $96 billion annually (1999$), 

• $93 billion in annual human health benefits. This would include the value of avoiding: 

• 11,900 premature deaths; • 7,400 new cases of chronic bronchitis; • 11,900 total hospitalizations and emergency room visits for cardiovascular and respirato

œ 2,900 fewer emergency room visits for asthma attacks. 

• 15 million days with respiratory-related symptoms, including work loss days, restricted ac

asthma attacks; 

œ 370,000 days with asthma attacks; 

• An alternative estimate projects over 7,000 premature deaths prevented and $11 billion in health b

2020. 

• $3 billion in annual visibility benefits from improving visibility at select National Parks and Wilderne

visibility benefits would likely increase if emissions reductions under the WRAP were included in th

• There are additional health and environmental benefits, such as reduced human exposure to merc

lakes, that cannot currently be quantified or monetized but nevertheless are expected to be signifi

By 2020, based on initial modeling, Clear Skies is expected to: 

• bring 54 additional counties, home to approximately 21 million people, into attainment with the new 

as compared to existing programs (Base Case). The remaining counties are expected to move clo

• bring 8 additional counties, home to 4 million people, into attainment with the new ozone standard 

existing programs. The remaining counties are expected to move closer to attainment. 
Summary of Results cont‘d 

Compared to current conditions, by 2020 the Clear Skies Act, along with implemen

existing programs, would: 

• Reduce PM2.5 concentrations in large portions of the East and Midwest by more than 20%; • Improve visibility in a large portion of the East and Midwest by 2-3 deciviews from current levels; in 

southern Appalachian Mountains (e.g. Great Smoky Mountain National Park) visibility would impro

deciviews;* 

• Reduce sulfur deposition (one component of acid deposition) over much of the sensitive eastern U• Reduce nitrogen deposition (the other component of acid deposition) over much of the sensitive ea

including coastal areas, by up to 60%; and 

• Virtually eliminate chronic acidity -- the most serious form of acidification -- in Northeastern lakes 

Adirondack Park) and prevent further deterioration of acidic Southeastern streams. 

Compared to the Base Case in 2020, Clear Skies would: • Reduce fine particle concentrations in the East and Midwest by 10-20%; • Improve visibility in the East and Midwest by 1-2 deciviews; • Reduce sulfur deposition to sensitive ecosystems in the East by more than 30%; and • Reduce nitrogen deposition across the East by 15-30%. 

Note: A deciview is a measure of visibility which captures the relationship between air pollution and human perception of visibility. When 

that cause visibility degradation, the Deciview Haze Index is zero. The higher the deciview level, the poorer the visibility; a one or two dec

a noticeable change in visibility for most individuals. 
Air Quality Modeling: Base Case and Clear Skie

What is included in the air quality modeling Base Case? The air quality Base Case includes all finalized EPA regulations that are expected to be i

and 2020. It includes such recent actions as: 

• the Title IV Acid Rain Program for controlling SO2 and NOx from electric generating units • the NOx SIP Call • the Tier 2 rule for new cars and light trucks • the Heavy Duty Diesel truck rules for 2004 and 2007 covering new vehicles • additional state regulatory requirements in finalized form by 2000 

What is not included in the air quality modeling Base Case? The air quality Base Case does not include: 

• Proposed or planned major regulations that the EPA will pursue in addition to the Clear Skie

emissions across the country. (e.g. EPA plans to propose substantial controls on non-road 

• Voluntary emissions reduction programs, such as the diesel retrofit program, and pending fe

actions that are not predictable. 

• Additions to State Implementation Plans to ensure compliance with the NAAQS or some very 

state laws, such as the one in North Carolina, that address air pollution. 

What is included in the Clear Skies air quality Case? The Clear Skies Case includes all projected Base Case emissions minus the reductions 

mercury that would be achieved by the Clear Skies Act. 
Overview of SO2, NOx, and Mercury Emissions, 

Transport, and Transformation 

• When emitted into the atmosphere, 

sulfur dioxide, nitrogen oxides, and 

mercury undergo chemical 

reactions to form compounds that 

can travel long distances. 

• These chemical compounds take 

the form of tiny solid particles or 

liquid droplets and can remain in 

the air for days or even years. 

• These and other pollutants can 

return to the earth through the processes of wet and dry atmospheric deposition. 

• Wet deposition removes gases and particles in the atmosphere and deposits them to the Earth's surface 

sleet, snow, and fog. 

• Dry deposition is the deposition of particles and gases to land and water surfaces without precipitation. • Depending on the chemical form in which it is emitted, mercury is a pollutant of concern at local, regional

Mercury emissions in the ionic form are prone to deposit closest to their source. 
Overview of the Health and Environmental EffectSO2, NOx, and Mercury 

Effects of Nitrogen Oxides (NOx) • Contributes to premature death and 

serious respiratory illness (e.g., asthma, 

chronic bronchitis) due to fine particles 

and ozone. 

• Lowers worker productivity due to 

ozone. 

• Acidifies surface water, reducing 

biodiversity and killing fish. 

• Damages forests through direct impacts 

on leaves and needles, and by soil 

acidification and depletion of soil 

nutrients. 

• Damages forest ecosystems, trees, 

ornamental plants, and crops through 

ozone formation. 

• Contributes to coastal eutrophication, 

killing fish and shellfish. 

• Contributes to decreased visibility 

(regional haze). 

• Contributes to —brown clouds“ in some 

major western cities. 

• Speeds weathering of monuments, 

buildings, and other stone and metal 

structures. 

Effects of Sulfur Dioxide (SO2) 

• Contributes to premature death and 

serious respiratory illness (e.g., asthma, 

chronic bronchitis) due to fine particles. 

• Acidifies surface water, reducing 

biodiversity and killing fish. 

• Damages forests through direct impacts 

on leaves and needles, and by soil 

acidification and depletion of soil 

nutrients. 

• Contributes to decreased visibility 

(regional haze). 

• Speeds weathering of monuments, 

buildings, and other stone and metal 

structures. 

Effects of Mercury (Hg) 

• Impairs cognitive and m

of women who consum

during pregnancy bein

• Increases risk of cardio

pressure regulation, he

heart coronary heart d

adults. 

• Impairs reproductive, i

systems. 

• Causes adverse effect

and neurological effect

and other fish-eating a

• Bioaccumulates so tha

the fish and animals w

times the concentratio
How Do Fine Particles (PM2.5) Affect Human Health

• Particulate matter is the term used for a mixture of solid particles and liquid droplets found in the air; fine part

than 2.5 microns (millionths of a meter) in diameter (PM2.5). 

• Power plants emit particles directly into the air, but the major contribution of power plant emissions to fine pa

air pollution is the emissions of SO2 and NOx, which are converted into sulfate and nitrate particles in the atm

can be transported for hundreds of miles. 

• The health effects of exposure to fine particles include: 

• Increased premature deaths, primarily in the elderly and those with heart or lung disease; • Aggravation of respiratory and cardiovascular illness, leading to hospitalizations and emergency room 

particularly in children, the elderly, and individuals with heart or lung conditions; 

• Decreased lung function and symptomatic effects such as those associated with acute bronchitis, parti

children and asthmatics; 

• New cases of chronic bronchitis; • Increased work loss days, school absences, and emergency room visits; and • Changes to lung structure and natural defense mechanisms. 
How Does Ozone (Smog) Affect Human Health and Vegetation? 

• Nitrogen oxides and volatile organic compounds react in the atmosphere in the presence of sunlight to form g• Ground-level ozone is a major component of smog in our cities and other areas of the country. Though natura

the stratosphere provides a protective layer high above the earth, the ozone that we breathe at ground level w

respiratory illness and other health and environmental problems. 

• Health and environmental effects from high levels of ozone include: 

• Moderate to large (more than 20%) decreases in lung function 

resulting in difficulty in breathing, shortness of breath, and 

other symptoms; 

• Respiratory symptoms such as those associated with 

bronchitis (e.g., aggravated coughing and chest pain); 

• Increased respiratory problems (e.g. aggravation of asthma, 

susceptibility to respiratory infection), which often result in 

hospital admissions and emergency room visits; 

• Reduced productivity for workers in outdoor jobs; • Repeated exposure to ozone could result in chronic 

inflammation and irreversible structural changes in the lungs 

that can lead to premature aging of the lungs and other longterm respiratory illnesses; and 

• Damage to forest ecosystems, trees and ornamental plants, 

and crops. 
Attainment with PM2.5 and 8- hour Ozone 

Standards (Current Data*) 

• Based on available 1999-2000 PM2.5 data, 157 counties in the East and 173 counties nat

likely to exceed the fine particle standard (projected concentrations greater than 15 μ/m3, 

annual fine particle standard). 

• Currently 82 million people nationwide, including 59 

million in the East, live in 

counties that would not meet 

the standard. 

• There are currently 333 counties 

(306 counties in the east) 

estimated to exceed the 8-hour 

ozone standard. 

• Currently 120 million 

people live in counties with 

projected ozone 

concentrations greater than 

85 ppb (the 8-hour ozone 

standard). 

Note: To permit comparisons among various analyses, the air quality data were the most complete and recently available as o

ozone monitoring data and 1999-2000 PM2.5 data). More complete and recent air quality data for ozone and fine particles (199

available. This updated data indicate differences in the likely attainment status of some counties compared to what is shown h

Clear Skies will incorporate the most recent data available. 
Projected Attainment with PM2.5 and 8- hour Ozon

Standards under Clear Skies (2010) 

The Clear Skies Act would 

substantial number of coun

PM2.5 and 8-hour ozone st

they would under the exist

PM2.5 attainment status in 

• Based on initial model

Act would bring 34 ad

(home to approximate

into attainment with thstandard (as compare

Ozone attainment status in 2010: 

• Based on initial modeling, the Clear Skies 

Act would bring 10 additional counties 

(home to over 7 million people) into 

attainment with the 8-hour ozone standard 

in 2010 (as compared to the Base Case). 

Base Case 2010 

Clear Skies 2010 

Note: This analysis shows the counties that would come 

into attainment due to Clear Skies alone in 2010. Additional federal and state programs are designed to 

bring all counties into attainment by 2017 at the latest. 
Projected Attainment with PM2.5 and 8- hour Ozon

Standards under Clear Skies (2020) 

Base Case 2020 

Clear Skies 2020 

PM2.5 attainment status i

• Based on initial mod

Skies Act would brin

counties (home to a

million people) into a

fine particle standarthe Base Case). 

Ozone attainment status in 2020: 

• Based on initial modeling, the Clear 

Skies Act would bring 8 additional 

counties (home to over 4 million 

people) into attainment with the 8-

hour ozone standard (as compared 

to the Base Case). 

Note: This analysis shows the counties that would come 

into attainment due to Clear Skies alone in 2020. 

Additional federal and state programs are designed to 

bring all counties into attainment by 2017 at the latest. 
Fine Particle Concentrations (2020) 

Percent Change Base Case vs. Clear Skies in 2020 

Percent Change 1996 vs. 2020 with Clear Skies 

Percent Reduction 

-30 - -20 

-20 - -10 -10 - 0 

0 - 10 

10 - 20 20 - 30 

• SO2 and NOx emissions produ

fraction of fine particle concenparticularly in the East. 

• The top map shows that Clear 

reduce fine particle concentrat

and Midwest 10-20% beyond wunder the Base Case. 

• The bottom map demonstrates 

concentrations in a large portio

Midwest would improve more 

current levels under Clear Skie

programs. 

Notes: Title IV reduced over 3 million tons of SO2 

that are not captured by the improvements shown 

base year for the analysis was 1996. 

Emissions from certain sources, such as mining an

expected to increase in the future. These sources

Title IV or Clear Skies, contribute to increases in fi

certain areas (e.g. Northern Minnesota). 

The western U.S. is not shown in these maps beca

reductions expected from the WRAP have not yet 

quality modeling analysis. 
Human Health Benefits of Reducing Fine Particu

Matter and Ozone (2020) 

• Reductions in PM2.5 and ozone1 under Clear Skies would improve public health. By 2020, Americans w

experience approximately; 

• 11,900 fewer premature deaths; 

> An alternative estimate projects 7,200 fewer premature deaths.2 

• 7,400 fewer cases of chronic bronchitis; • 11,900 fewer hospitalizations/emergency room visits for cardiovascular and respiratory symptoms; • 15 million fewer days with respiratory illnesses and symptoms, including work loss days, restricted 

and days with asthma attacks 

• The monetized benefits of the Clear Skies Act would total approximately $96 billion annually in 2020. Th

• $93 billion dollars in health benefits. 

> An alternative estimate projects annual health benefits of $11 billion.2 

• $3 billion in benefits from improving visibility at select National Parks and Wilderness Areas. Note t

benefits would likely increase if emissions reductions under the WRAP were included in this analys

• Many additional, unquantified health benefits, including the benefits of reduced exposure to mercury, w

under Clear Skies. 

1 The ozone benefits were calculated for the eastern U.S. and portions of the West where significant ozone changes are expected; therefo

from reductions in ozone may be slightly higher than what is reflected here. 

2 The two sets of estimates reflect alternative assumptions and analytical approaches regarding quantifying and evaluating the effects of a

health. All estimates assume that particles are causally associated with health effects, and that all components have the same toxicity. Lin

relationships between PM and all health effects are assumed, indicating that reductions in PM have the same impact on health outcomes 

level of PM in a given location. The base estimate relies on estimates of the potential cumulative effect of long-term exposure to particles, 

estimate presumes that PM effects are limited to those that accumulate over much shorter time periods. All such estimates are subject to 

and uncertainties. It is of note that, based on recent preliminary findings from the Health Effects Institute, the magnitude of mortality from s

(alternative estimates) and hospital/ER admissions estimates (both estimates) may be overstated. The alternatives also use different appr

effects damages. The key assumptions, uncertainties, and valuation methodologies underlying the approaches used to produce these res

Addendum: Methodologies for Benefit Analysis of the Clear Skies Act, 2002. 
Human Health Benefits of Reducing Fine Particul

Matter and Ozone (2010) 

• The Clear Skies Act would result in substantial early human health and visibility benefits due to redu

and ozone. 

• By 2010, Americans would annually experience approximately: 

• 6,400 fewer premature deaths; 

> An alternative estimate projects 3,800 fewer premature deaths;1 

• 3,900 fewer cases of chronic bronchitis; • 6,300 fewer hospitalizations/emergency room visits for cardiovascular and respiratory sympto• 8 million fewer days with respiratory illnesses and symptoms, including work loss days, restric

days, and days with asthma attacks. 

• The monetized benefits of the Clear Skies Act would total approximately $44 billion annually in 2010

include: 

• $43 billion dollars in health benefits. 

> An alternative estimate projects annual health benefits of $5 billion.1 

• $1 billion in benefits from improving visibility at select National Parks and Wilderness Areas. N

visibility benefits would likely increase if emissions reductions under the WRAP were included 

analysis. 

• Many additional, unquantified health benefits, including the benefits of reduced exposure to mercury

occur under Clear Skies. 

1 The two sets of estimates reflect alternative assumptions and analytical approaches regarding quantifying and evaluating the effects of airb

health. All estimates assume that particles are causally associated with health effects, and that all components have the same toxicity. Linea

relationships between PM and all health effects are assumed, indicating that reductions in PM have the same impact on health outcomes reg

level of PM in a given location. The base estimate relies on estimates of the potential cumulative effect of long-term exposure to particles, wh

presumes that PM effects are limited to those that accumulate over much shorter time periods. All such estimates are subject to a number of 

uncertainties. It is of note that, based on recent preliminary findings from the Health Effects Institute, the magnitude of mortality from short-te

estimates) and hospital/ER admissions estimates (both estimates) may be overstated. The alternatives also use different approaches to valu

The key assumptions, uncertainties, and valuation methodologies underlying the approaches used to produce these results are detailed in T

Methodologies for Benefit Analysis of the Clear Skies Act, 2002. 
Fine Particles in the Air Decrease Visibility 

• SO2 and NOx emissions form sulfate and nitrate particles in the atmosphere that can be transported many m

from emissions sources. 

• Fine particles (including sulfates and nitrates) in the air scatter light and create hazy conditions, decreasing 

Decreased visibility is sometimes known as —regional haze.“ Humidity intensifies the visibility degradation ca

particles, particularly in the East. 

• Effects of visibility impairment include: 

• Spoiled scenic vistas across broad regions of the country, including those in many National Parks and 

Areas; 

• Reduced visual range by as much as 80% to 10 miles or less on the haziest days in some National Pa• Impaired urban vistas nationwide. 

• In the western U.S.: 

• The primary goal is to maintain clean conditions, although some National Parks and Wilderness Areas 

experience decreased visibility. 

• Sulfates account for 25-50% of haze in the West. • Nitrates contribute between 5% and 45% of visibility problems, with the biggest impacts in California N

many urban areas. 

• Visibility impairment for the worst days has remained unchanged over the decade of the 1990s. 

• In the eastern U.S.: 

• Substantial visibility impairment exists due to regionally high levels of fine particles; • Sulfates cause up to 60-80% of haze in eastern parks and urban areas; • Nitrates contribute less, but are more significant in winter; • Visibility has improved in some areas during the 1990s, but remains significantly impaired throughout 
Visibility (2020)

• Clear Skies would improve visibility over much o

1-2 deciviews beyond what is expected under th

• The greatest improvements (2-3 deciviews

the Appalachians, including the Blue Ridge 

Mountains - areas where visibility has been 

• Under Clear Skies and existing programs, visibi

the East and Midwest would improve 2-3 decivie

• Visibility along the southern Appalachian M

more than 3 deciviews.

• Under Clear Skies, the Western Regional Air Pa

will be honored and the emissions reductions ar

effect.

• This will allow future growth in the West to 

visibility.

• The EPA is also considering other actions, such 

rule, that will help reduce visibility-impairing fine 

throughout the western and eastern U.S.

Deciview Improvement

(On these maps, a positive change in 

deciviews is an improvement in

visibility; a negative change in

deciviews is a decrease in visibility.)

Deciview Change 1996 vs. 2020 with Clear Skies

Deciview Change 2020 Base Case vs. Clear Skies

Notes: Title IV reduced over 3 million ton

1996 that are not captured by the improvbecause the base year for the analysis wEmissions from certain sources, such as 

processing, are expected to increase in t

which are not affected by Title IV or Clea

increases in fine particle concentrations i

Minnesota). 

The western U.S. is not shown in these m

reductions expected from the WRAP hav

air quality modeling analysis.
Monetized Visibility Benefits 

• This assessment projects benefits due to improvements in impaired visibility in National Parks and Wi

Class I areas in the Southeast, Southwest, and California. Note that visibility benefits would likely incre

reductions under the WRAP were included in this analysis. 

• In these areas, Clear Skies would achieve approximately: 

• $0.9 billion in annual visibility benefits by 2010; • $2.8 billion in annual visibility benefits by 2020. 

• This estimate includes benefits in Shenandoah National Park and Great Smoky National Park, two of 

National Parks and areas where some of the greatest visibility improvements are expected under Clea

• This estimate does not include the value of improving visibility in residential areas. It also does not inc

improving visibility at National Parks and Wilderness Areas in other areas of the country (such as the 

improved by Clear Skies. 

Visibility improves as the concentration of airborne fine particles declines. Based upon emissions reductions under Clear Skies, 

calculated changes in air quality and in visibility, measured in terms of deciviews. (A deciview is a standard measure of visibility 

deciview change translates to a noticeable change in visibility for most individuals.) Consistent with previous approaches, the va

improvements is limited to a subset of National Parks and Wilderness Areas and does not include residential areas. Because of 

visibility benefits of the Clear Skies Act are expected to be greater than this primary estimate. 

Left: Acadia National Park on a day with good visibility Right: Acadia National Park 

on a day with poor visibility 
How Does Acid Rain Damage Lakes, Streams, Forests, 

and Buildings? 

• Acid deposition occurs when emissions of 

SO2 and NOx react in the atmosphere to 

create acidic gases and particles which 

reach the Earth in wet and dry forms. 

• The greatest sulfur and nitrogen 

deposition occurs in areas of the Midwest 

and northeastern United States which are 

downwind of the highest SO2 and NOx 

emission areas. 

• Impacts occur in both the eastern U.S. 

and mountainous areas of the West. 

• Effects of acid deposition include: 

• Acidification of lakes and streams, 

making them unable to support fish 

and other aquatic life; 

• Damage to forests through 

acidification of soil, depletion of 

soil nutrients, and direct injury to 

sensitive tree leaves and needles; 

• Harm to buildings, statues and 

monuments. 

Wet Sulfate Deposition (1997-1999) and Acid-Sens

Surface Waters 

Acidic surface waters 

Source: CASTNet/NADP; National Surface Water Survey 

• Despite substantial emissions reductions over the las

of sulfur and nitrogen deposition still enter acid-sensit

leading to high levels of acidity. 

• Southeastern streams would continue to grow more a

significant further reductions in sulfate and nitrogen de

• Many scientists believe that significant further reductio

emissions are necessary to fully protect acid-sensitive 
SO2 and NOx Power Plant Emis

for the Southern Blue Rid

0

500,000

1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,0005,500,0006,000,000

SO2 NOx

Case Study of Emissions Changes: Southern Blue Ridge M

• Clear Skies is projected to result in a 34% 

emissions and a 25% reduction in NOx em

plants located in the airsheds in 2010, com

• In 2020, emission reductions from power 

Blue Ridge region are projected to be sub

Clear Skies than under the Base Case:

• SO2 emissions are projected to decrea

• NOx emissions are projected to decre

Sulfur Airshed*

Nitrogen Airshed

Electric generating 

sources within the airshed area

• This page shows regional airshed maps that were d

Southern Blue Ridge Mountains (which includes Gre

National Park).

• Multiple emission sources in numerous states contr

degradation and acid deposition in the Southern Blu

Note: An —airshed“ depicts a modeled approximation of a large proportion

of sources contributing to air quality in a particular receptor region

Emissions (tons)
Sulfur Deposition (2020) 

Percent Change 2020 Base Case vs. Clear Skies 

• The upper map demonstrates that Clear Sk

significant additional reductions of sulfur de

60% beyond what is expected under the Ba

• • 

The greatest reductions would cente

Mountains from central Pennsylvania 

Blue Ridge and across broad regions 

U.S. 

Sensitive resources in the northeaste

Adirondack and Catskill Mountains, w

reductions of 15-30% 

• The lower map demonstrates that Clear Sk

with existing programs would contribute to 

Percent Change 1996 vs. 2020 with Clear Skies in sulfur deposition from current levels acro

• Reductions of 30-60% would occur i

areas of the Northeast, New England

Appalachian Mountains. 

Notes: Title IV reduced over 3 million tons of SO2 be

not captured by the improvements shown on the map 

analysis was 1996. 

Percent Reduction 

Emissions from certain sources, such as mining and 

petroleum refining and chemical plants, are expected 

some areas. These sources, which are not affected bcontribute to increases in sulfur deposition in certain aThe western U.S. is not shown in these maps becaus

expected from the WRAP have not yet been included 

analysis. 
Reduced Acidity of Adirondack Lakes 

• Lakes in the Adirondack Mountains generally respond rapidly to changes in emissions 

larger decreases in deposition lead to significant reductions in acidity. 

• Under the Base Case, lake conditions improve but 12% of lakes would remain chronica

2030.* 

• With Clear Skies, lake conditions would improve dramatically by 2030: only 3% of lakes 

chronically acidic.* 

• However, a signifi

Adirondack lakes 

Adirondack Lakes 

21% 

12% 

3% 

0 5 

10 15 20 25 

Current Base (2030) Clear Skies (2030) 

% of lakes chronically acidic 

become acidic peseasonal or storm 

Note: This may be an ove

under existing programs 

modeling focuses only on 
Reduced Acidity of Northeastern Lakes and Southeastern Northeast Region • Lakes in the Northeast region (including Adirondack lakes) are both —direct“ and —delaye

systems; some lakes may not completely respond to the deposition changes considere

• Under the Base Case, lake condition improves slightly in the Northeast by 2030, but 6% 

chronically acidic. 

• With the Clear Skies Act, chronic acidity would be virtually eliminated by 2030.* • However, some lakes would still become acidic periodically due to seasonal or storm e

Southeast Region • Large reductions in emissions and 

deposition, such as those 

implemented under Clear Skies, 

are necessary simply to slow the 

long-term decline in stream 

condition in the Southeast. 

• Under existing programs, stream 

condition worsens. 

• Under Clear Skies, the rate of 

stream acidification would slow. 

Northeastern Lakes 

6% 

10% 

0 2 4 6 8 

10 12 

Current Base (2030) 

% of lakes chronically acidic 

Note: This may be an overestimate of recovery under existing programs due to the fact that this modeling focuses only on su
Impacts of Reductions in Sulfur Deposition on Acid-Sensitive Lakes 

Current Base Case 

(2030) 

Clear Skies 

(2030) 

Northeastern Lakes chronically acidic 10% 6% 2% episodically acidic 21% 25% 28% non-acidic 69% 69% 70% Adirondack Lakes chronically acidic 21% 12% 3% episodically acidic 43% 52% 61% non-acidic 36% 36% 36% Southeastern Streams chronically acidic 17% 17% 17% episodically acidic 19% 27% 25% non-acidic 64% 56% 58% 

This table shows the percentage of waterbodies in regions of the Eastern U.S. 

that are chronically, episodically, and non-acidic under Clear Skies as 

compared to current conditions and the Base Case. 

• • • • 

A key indicator of 

sensitive lakes an

to buffer or neutra

This capacity is mneutralizing capac

Chronically acidic 

(less than 0). As A

first become episo

50 μeq/l) and final50). However, wat

more acidic if acid 

In addition to redu

chronically acidic l

and Adirondacks, improve the acid b

lakes in those regi

In the Southeast, Cthe deterioration o

The 

Road 

to 

Recovery 

Episodically acidic water 

significant recovery but water still 

acidified seasonally or after storms 

Non-acidic 

complete recovery of 

even sensitive plants 

surviv

Chronically acidic water 

water acidic all the time; sensitive 

plants and animals cannot survive 

expected under th
How Does Nitrogen Deposition Harm Forests and Coastal E

• NOx emissions from power plants contribute 

significant amounts of nitrogen to coastal waters 

and affected forests. 

• For example, 10-40% of the nitrogen reaching 

East and Gulf coast estuaries is transported and 

deposited via the atmosphere. 

• Excess nitrogen in coastal waters causes 

—eutrophication“ and results in: 

• Algal blooms, some of which are toxic (e.g. 

red and brown tides); 

• Depletion of dissolved oxygen (hypoxia), 

stressing or killing marine life; 

• Loss of important habitat, such as 

seagrass beds and coral reefs; 

• Changes in marine biodiversity and 

species distribution; 

• Economic and social impacts due to loss of 

fisheries and tourism. 

• Two thirds of U.S. estuaries (over 80) experience 

symptoms of moderate to high eutrophication. 

• High nitrogen deposition levels can lead to loss 

declines in sensitive forest ecosystems. 

• Nitrogen saturation occurs when too much nitro

forest soils and begins to leach out, stripping so

impacting water quality. 

• Signs of nitrogen saturation have been observe

forests in the Eastern and Western U.S. (e.g., G

Mountains, Adirondack/ Catskill Mountains, Col

southern California). 

Annual Wet Nitrate Deposition to 

Deposition data measured by CASTNet and NADP, 1997-19
Nitrogen Deposition (2020) 

Percent Chan

g

e 2020 Base Case 

v

s. Clear Skies 

Percent Chan

g

e 1996 

v

s. 2020 

with Clear Skies 

• 

P

erc

e

nt Reduction 

• The upper map d

e

monstrates that 

achie

ve significant 

additional reduc

deposition of 1

5-30% acr

oss muc

h 

what is e

xpect

e

d un

d

er the B

ase C

• The greatest reductions of 3

the southeastern portions of 

Mou

ntai

ns, i

nclu

ding Gre

at S

National Park. 

• Sensiti

ve r

esourc

es i

n the n

o

as the Adirondack a

n

d Cats

e

xperie

nce reductions of up 

• The lower map d

e

m

onstrates that 

e

xisting 

pro

grams would reduce ni

Southeast and mid-Atlantic 

b

y 60% 

le

v

els. 

• The proje

cted large reductions in n

the 

W

est coast are 

due t

o e

xistin

g 

imple

m

e

nted, s

uch a

s the Tier II a

In the 

W

est, Clear Skies 

w

ould pr

e

deterioration of air qualit

y, inclu

din

• Clear Skies would all

o

w gro

w

W

est witho

ut incre

a

sing NO

Note: The increase in nitrogen deposition at a 

of a significant increase in utilization from the b

fa

cility in that state. 

This increase is an artifa

c

(because this baseload fa

cility 

w

as onl

y partial

not have otherwise appeared as an increase. 
Nitrogen Deposition to the Chesapeake Bay Watershed (20

Percent Change 1996 vs. 2020 with Clear Skies 

Cold Season 

• Under the Clear Skies Act, in 2020

nitrogen deposition to the Chesape

watershed would be reduced by m

from current levels. 

• Reductions in oxidized nitrogen de

greatest during the warm season, 

70% across much of the watershe

Warm Season 

Percent Reduction

1996 vs. 2020 with Clear Skies

(oxidized nitrogen)

65-70% 

60-65% 55-60% 

50-55% 45-50% 
methylation 

Mercury Emissions from Power Plants Contaminate Fi

Lake Ocean 

volatilization Atmospheric 

Wet and Dry 

Deposition Power Plant 

deposition 

methylation 

volatilization 

Emissions Mercury transforms into methylmercury in soils 

and water, then can bioaccumulate in fish 

Fishing • commercial • recreational • subsistence 

Humans and wildlife affected 

primarily by eating contaminated fish 

sions 

Reductions 

Reduce Atmospheric Reduce Ecosystem 

Transport 

and Methylation 

Reduce Human and 

Wildlife Exposure 

• By 2020, Clear Skies implementation will double the use of scrubber technology, meaning that approximately 67

capacity under Clear Skies will use technology that efficiently reduces the ionic form of mercury from total merc

• As a result of Clear Skies, ionic mercury emissions are projected to be 50% lower than emissions levels under t• Ionic mercury emissions are responsible for the majority of short-range transport and deposition, the local impac• Mercury deposition is a significant source of mercury to many waterbodies. For example, mercury deposited fro

accounts for more than 50% of the mercury input to the Chesapeake Bay and to Lake Michigan. 

• Most people are exposed to mercury through eating contaminated fish. 
State-By-State Mercury Emissions

Scale:

= approximately

2.6 tons

Notes: While state-level emiss

may increase at specific sourc

emissions under Clear Skies i

emission under Clear Skies in 

Emissions are from coal-fired 

greater than 25MW. 

The EPA Base Case does not 

regulations under the CAA to 

plants.

• The trading provisions inc

do not result in mercury em

any state. 

Mercury Emissions from Power Generation Sources, 2020

Mercury Emissions from Power Generation Sources, 2010

Scale:

= approximately

3.3 tons
Mercury Deposition (2020) 

Percent Change 2020 Base Case vs. Clear Skies 

• The top map demonstrates that Cle

achieve significant additional reduc

across much of the East beyond wh

under the Base Case. 

• The greatest reductions of up t

along the Ohio River, in portion

Atlantic region, and in northern 

Georgia and Alabama. 

• The lower map indicates the large r

mercury deposition expected from 

addition to those expected from rec

programs, including the municipal wand medical waste incinerator MAC

Percent Change 1996 vs. 2020 with Clear Skies • Many areas would see large de

-5 - 5 5 - 25 25 - 50 > 50 

-25 - -5 

Percent reduction 

deposition of more than 50%, iAtlantic, many parts of the Sou

Northeast, and southeastern M

Notes: The small increase in mercury depo

top map is attributable to a single facility mis

Clear Skies mercury cap in the IPM analysis

included in the cap, this increase would not 

increases in in the lower map are due to inc

sources that are not affected by the Clear S

The western U.S. is not shown in these map

reductions expected from the WRAP have n

quality modeling analysis. 
Section C: 

Projected Costs
Projected Costs of the Clear Skies Act 

• T

he net pres

e

the differ

ence i

Clear Ski

es a

nd 

Ca

s

e is $65.37 

the p

eriod b

etw

Note: Cost projections are based on 

modeling using IPM. These pr

ojections show the c

osts to p

o

w

er generators over and abo

to 

meet statutor

y and regulator

y requirements that are already in eff

e

ct. 

The pr

ojections do not include c

osts asso

ciated with th

from the au

ction. In the absence of Clear Skies legislation, there are existing statutor

y pr

o

visions that will, in the futur

e, r

equire 

impose additional requir

e

ments (and thus additional c

osts) on power generators between no

w and 2020. 

When c

o

mpared to e

requir

e

ments, Clear Skies 

m

a

y actually r

esult in c

ost s

avings because a 

cap-and-trade approa

ch is 

much 

m

ore efficient than e

progr

a

ms. When the Acid Rain Program w

as implem

ented using a cap-and-trade progr

a

m, c

o

mpliance c

osts 

w

ere significantly 

sour

c

es took advantage of the flexibility pr

o

vided b

y a cap and trade progr

a

m. 

The net present value c

alculations are als

o based on IPM. See chapter 7, table 7.1 of the IPM documentation for m

ore inf

orma

used for v

arious plant t

ypes. (www.epa.gov/air

m

arkets/epa-ipm/index.html#documentation). 
Projected Allowance Prices under Clear Skies 

Note: under the Clear Skies Act, the m

NOx reductions are well below $2,000/tmercury reductions are below $1,000/o

The dollar value is the projected allowa

marginal cost (i.e., the cost of reducing 

reductions. Marginal costs are based o
--

--

Distribution of Allowances under Clear Skies 

• The distribution of allowances under the Clear Skies Act occurs through th

combination of an auction and an allocation: 

œ During the first year of the new trading program, 99% of the SO2, NOx and mercu

would be allocated to affected units with an auction for the remaining 1%. 

œ Each subsequent year, an additional 1% of the allowances for twenty years, and 

additional 2.5% thereafter, will be auctioned until eventually all the allowances ar

• For the first twenty years of the trading programs, the majority of allowanc

distributed for free via the allocation. Because of the time value of money, 

allocated for these earlier years are generally more valuable in the allowan

than allowances allocated for later years. 

œ EPA analyzed the net present value (NPV) of the stream of allowances that woul

through 2030, as well as through 2061. 

Despite the prevalence of the auction in the later years, EPA‘s analysis show

majority of the net present value of the allowances is distributed for free via 

For the period between 2008/2010 and 2030, 90-92% of the total NPV is allocate

For the period between 2008/2010 and 2061, approximately 80% of the total NPV 

Note: The net present value calculations are based on allowances prices in IPM. 
Marginal Costs for SO2 and NOx reductions 

Million tons of SO2 emitted Million tons of NOx em

Note: Analysis uses the Technology Retrofit and Updating Model which tends to over predict SO2 marginal costs because 

freedom than IPM (see Section G for a description of this model); costs projected by IPM would be lower. Analysis assum

emissions are at the levels of the caps. 
Marginal Costs for Mercury 

Reductions 

* 

Tons of mercur

y emitted 

Note: Cur

ves are based on different assumptions regarding the Hg r

e

m

oval efficienc

y of a c

o

mbination of SCR and F

GD. An

T

echnolog

y Retrofit and Updating Model 

which tends t

o over predict Hg m

arginal c

osts because it has fe

w

er degrees of freed

G for a description of this model); c

osts pr

ojected b

y IPM 

w

ould be lo

w

er. 

In the IPM m

odel, EPA assum

es that 

m

ercury re

m

oval efficiencies for c

ontr

ol technolog

y configurations vary depending on co

technolog

y. See the IPM d

o

cumentation, chapter 5, table 5.7a (http://www.epa.gov/air

m

arkets/epa-ip

m/index.html#do

cument

and 5.3.2 for a definition of —Alternati

ve Emission Modific

ation 

F

a

ctors (

EMFs)“. An EMF is the r

atio of outlet m

ercur

y concent

concentr

ation; EMF‘s capture the 

m

ercur

y reductions attributable to different unit configurations and different configurations of 

contr

ols. 
Varying Industry Growth Rates

• If electricity demand were 15-20% higher than assumed in the Integrated Planning Model, the margin

SO2 and NOx would be approximately 10% higher, though the marginal cost of mercury would be lower

• As demand rises, there is greater constraint on sources under the NOx cap than under the mercury c

fired generating capacity has some NOx emissions, but no mercury emissions. The decline in the marg

abatement arises because of the increased use of the NOx controls, which enables the mercury cap to 

lower cost. 

Change in electricity demand from 2010 baseline Change in electricity demand f

Note: The projected emissions under the Clear Skies Act in 2010 were used for this analysis. Analysis uses the Technology 

Model (see Section G for a description). 
Impact on Electricity Prices and Fuel Prices 

• Retail electricity prices are expected to gradually decline with or without Clear Skies because of effic

and ongoing restructuring in the electricity generating sector. 

Note: Retail prices through 2003 are from AEO2000. Prices for the period after 2003 were calculated using the Retail Electri

Section G for a description of the Model). 

The coal price represents an average minemouth price across all twelve grades of coal in the model. The natural gas price is 

Average national fuel prices are EPA‘s estimates. 
Section D:

Projected Impacts on Generation and Fuel Use
National Coal Production in 1990 and 2000, and Projected Production under Clear Skies in 2020

1990 National C

o

al 

Prod

uction 

2000 National C

o

al 

Prod

uction 

2020 National C

o

al 

Produ

ctio

n under CSA 

Note: In 1990, EIA did not report the coal produced for power 

generators. From 1998-2000, 85% of coal produced was for the power 

generation sector. For an estimate of coal produced for the power 

generation sector in 1990, EPA assumed the same percentage (85%). 

Note: 2020 national coal production projections 1990 data: Coal Industry Annual 1994, Table 4 (

2000 data: Coal Industry Annual 2000, Table 4 

(2000)), January, 2002. 

2020 production for the power generation sector

Planning Model. 

2020 production for other sectors: Derived from 

System. 
Chan ges in Coa l Min in g Jo bs un der Cle ar Skies,

r ela tive to t he Base Case

Coal Pr o duc n g Region 2005 2020

A pp alach ia

Interi or

West

Nati on al To tal 95 2 1,399

Coal Production and Employment Impacts 

Coal Production in 1990 and 2000, and Projected in 2020 under Clear Skies (million tons) 

Region 1990 2000 2020 under Clear Sk

Appalachia 

Interior 

West 

489 206 334 

421 145 510 

461 214 481 

Total 1,029 1,076 1,155 

Note: 2020 national coal production projections are EPA estimates from IPM. Totals may not sum due to rounding. Regions are based 

definitions. Appalachia includes Northern, Central and Southern Appalachia. Interior includes Midwest, Central West and Gulf. West inc

1990 and 2000 data: Coal Industry Annual 1994, Table 4 (DOE/EIA-0584 (1994)), and Coal Industry Annual 2000, Table 4 (DOE/EIA-

2000 data: 2020 production under Clear Skies: Derived from the Integrated Planning Model and the National Energy Modeling System

Chan ges in Coa l Min in g Jo bs un der Cle ar Skies, 

r ela tive to t he Base Case 

Coal Pr o duciin g Region 2005 2020 

A pp alach ia 

Interi or 

West 

-460 

2,000 

-588 

491 

2,519 

-1,611 

Nati on al To tal 95 2 1,399 

Source: ICF Analysis, September 2002. 

Notes: Regions are based on DOE regional definitions. Appalachia includes Northern, Central and 

Southern Appalachia. Interior includes Midwest, Central West and Gulf. West includes far West. 
Projected Generation Mix in 2020 

G

e

n

erati

o

n mix i

n 2020 i

n E

P

A‘s Base Case Gener

ation mix in 2

0

20 

with 

Note: Controlled Coal includes units with post-combustion S

O2 and/or NOx controls. —Uncontrolled Coal“ could include P

M and/or NOx combustion controls

IPM includes Title I

V, the NOx SIP Call, and state-specific caps in CT, M

O and T

X. 

2020 generation mix: Projections are from EPA‘s modeling using IPM, The —Other“ category includes generation from solar, wind, geothermal, biomass, lan

technology percentages are approximations. —

Scrubbers and SCR“ includes a very s

mall a

mount of S

NCR. —Scrubbers only“ includes a very small a

mount 

very small a

mount of SNCR. —S

N

CR only“ includes a very small a

mount of gas reburn. —ACI“ includes A

CI retrofits on combinations of scrubbers and SCR. 
Technology Response to Varying Cap Levels 

• A

Ne

oogp

w

ui

pugp

w

S

Note and Abbreviations: This analysis used the Technology Retrofit and Updating Model. This analysis did not consider th

controls in the 2010 timeframe. SCR is selective catalytic NOx reduction, carbon injection is a mercury control technology, F

desulfurization (i.e., scrubbers), and SNCR is selective non-catalytic NOx reduction. 
Technology Response to Varying Cap Levels 

• A

cg

sgt

c

uc

st

p

ssr

Note and Abbreviations: This analysis used the Technology Retrofit and Updating Model. This analysis did not consider th

controls in the 2010 timeframe. SCR is selective catalytic NOx reduction, carbon injection is a mercury control technology, F

desulfurization (i.e., scrubbers), and SNCR is selective non-catalytic NOx reduction. 
Technology Response to Varying Cap Levels 

• A

ccp

w

uc

st

p

w

Note and Abbreviations: This analysis used the Technology Retrofit and Updating Model. This analysis did not consider t

controls in the 2010 timeframe. SCR is selective catalytic NOx reduction, carbon injection is a mercury control technology, F

desulfurization (i.e., scrubbers), and SNCR is selective non-catalytic NOx reduction. 
Projected Coal Capacity with Emissions Control• In 2020 under Clear Skies, 85% of all coal-fired generation comes from contro• Graphics show cumulative capacity with existing controls, controls projected to 

under the NOx SIP call and Title IV, and controls projected to be retrofitted und

Note: Retrofit projections are EPA‘s analysis using IPM. 

—Controlled coal“ includes one or more of the following: SCR, 

scrubbers, ACI, gas re-burn and SNCR. 
Impact of Changes in Natural Gas Prices and Me

Control Efficiency 

• Se

v

eral ke

y m

odeling assump

tions in IPM tha

t underlie the analy

sis 

ha

v

e been challenged by 

s

takeholders. T

hese include: 

œ 

The n

atur

al gas pri

c

e

s i

n the model.

œ 

The mercury remov

al efficiency 

of a combination 

of scrubbers and 

SCR.

• EPA has run a n

umber o

f sensitivities t

hat explore the impact of cha

modeling assumptions. Speci

ficall

y: 

œ EPA shifted th

e natural g

as supply curve in IPM up $

0.80/MMBtu, or approxim

analy

z

e con

c

ern

s about low natural g

as pri

c

e

s in the m

o

d

el. 

œ EPA reduced th

e m

ercury r

emov

al efficiency of the com

binati

o

n of scr

u

bbers a

95% to 80. 
Impact of Changes in Natural Gas Prices 

• Shifting the natural gas supply curve in IPM up $0.80/MMBtu, or approximately 

the following impacts on generation and marginal costs. 

Note: For more information on the gas supply curves used in IPM see Chapter 8 and the Appendix to chapter 8 at http://www

ipm/index.html#documentation, 
Varying Effectiveness of Mercury Control Techn

• Impacts of varying the assumptions regarding the mercury removal efficiency o

of SCR and FGD were examined using IPM; the results are compared to the Cl

with standard assumptions. 

Note: See the IPM documentation, chapter 5, table 5.7a (http://www.epa.gov/airmarkets/epa-ipm/index.html#documentation) for more inform

of —Alternative Emission Modification Factors (EMFs)“. An EMF is the ratio of outlet mercury concentration to inlet mercury concentration; EM

reductions attributable to different unit configurations and different configurations of SO2, NOx, and particulate controls. 
Varying Effectiveness of Mercury Control Techn

• Impacts of varying the assumptions regarding the mercury removal efficiency o

of SCR and FGD were examined using IPM; the results are compared to the Cl

with standard assumptions. 

Note: See the IPM documentation, chapt(http://www.epa.gov/airmarkets/epaipm/index.html#documentation) for more 

chapter 5.3.2 for a definition of —Alternativ

Modification Factors (EMFs)“. 

An EMF is the ratio of outlet mercury con

mercury concentration; EMF‘s capture th

reductions attributable to different unit co

different configurations of SO2, NOx, and 

controls. 
Impact of Alternative Scrubber Projections on the Siz

the SO2 Allowance Bank 

• IPM modeling for Clear Skies has projected that approximately 32 GW would be economical to ins

industry groups stated that it would not be able to retrofit this much capacity in such a short period

many units will already be installing controls to comply with the reduction requirements in the NOx 

• EPA conducted a sensitivity analysis in which the scrubber installations were limited to only 10 GW 

approximately 70% less than the model projects would occur. Even with fewer scrubbers installed 

projected to continue banking a significant number of SO2 allowances. 

Projected Size of the SO2 Allowance Bank under Clear Skies 

Note: Projected allowance banking data is from IPM. 
Section E:

Projected Impacts on the State and Regional-Lev
Emissions of Sulfur Dioxide 

Note: T

otal e

missions under the Bas

e Cas

e in 2010 would be 9.6 

million tons; tot

al emissions under Clear Skies in 2010 wou

emissions under Clear Skies in 2020 would be 3.9 million tons. E

missions will continue to decline after 2020 until the cap leve

are fro

m electric generating f

a

cilities greater than 25MW. The EPA 2000 Bas

e C

ase in IPM includes Title IV, the NO

x SIP Ca

in Connecticut, Missouri and T

e

x

as. The Bas

e Case does not include any potenti

al futur

e r

e

gulations to implement the 

curren
Emissions of Nitrogen Oxide 

Note: Total emissions under the Base Case in 2010 would be 4.2 million tons; total emissions under Clear Skies in 2010 wou

emissions under Clear Skies in 2020 would be 1.7 million tons. Emissions are from electric generating facilities greater than 2

Case in IPM includes Title IV, the NOx SIP Call, and state-specific caps in Connecticut, Missouri and Texas. The Base Case 

potential future regulations to implement the current CAA. 
Emissions of Mercury 

Note: Total emissions in 1999 were 48 tons; total emissions under Clear Skies in 2010 would be 26 tons; total emissions under 

be 18 tons. Emissions will continue to decline after 2020 until the cap level is reached. Emissions are from coal-fired electric ge

than 25MW. 
Projected SO2 Emissions from Power Plants Note: he EPA 2000 Base Case in IPM includes Title IV, the NOx SIP Call, and state-specific caps in Connecticut, Missouri and Texas. 

Projected SO2 emissions in 2020, by EPA region, 

under the Clear Skies Act 

T 

include any potential future regulations to implement the current CAA. Subsequent to the development of the latest version of the model u

emissions, SO2 control equipment has been installed at the Centralia Plant in Washington. Since emission reductions from the installation 

included in the base case modeling, the amount of reductions expected under Clear Skies, as well as the benefits associated with those r

the state of Washington (Region X) than projected. 
Projected NOx Emissions from Pow

er Plants 

Proje

cte

d NOx emissio

n

s in 2020, by EP

A region, 

under th

e Cl

e

ar Skies 

A

ct 

Note: The EPA 2000 Base Cas

e in IPM includes Title IV, the NO

x SIP Call, and state-specific caps in Connecticut, Missouri 

Cas

e does n

ot include any potential futur

e r

e

gulations to imple

ment the current CAA. 
Projected Mercury Emissions from Power Plants 

Projected mercury emissions in 2020, by EPA 

region, under the Clear Skies Act 

Note: The EPA 2000 Base Case in IPM includes Title IV, the NOx SIP Call, and state-specific caps in Connecticut, Missou

Case does not include any potential future regulations to implement the current CAA. 
Summary of Projected Impacts in EPA Region I 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region I 

Massachusettsand Vermont. 2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region II 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators

Note: Region II 

New Jersey. 

2020 generatio

using IPM. 199

aggregated fro

www.eia.doe.g

5). 

Electricity price

Electricity Price 

description of t
Summary of Projected Impacts in EPA Region III 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region I

of Columbia, M

and West Virgi2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region IV 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region IV 

Georgia, KentuSouth Carolina 2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region V 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region V 

Michigan, Minn2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region VI 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region V

New Mexico, O2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region VI

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region V

Missouri, and N2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region VI

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region V

North Dakota, Wyoming. 2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region IX 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Projected Emissions Rates from Power Generators Note: Region IX 

and Nevada. 2020 generatio

using IPM. 19

aggregated fro

www.eia.doe.g

(Table 5). 

Electricity price

Retail Electricit

a description o
Summary of Projected Impacts in EPA Region X 

Current Generation Mix and Projected Projected Retail Electricity Prices under Mix Under Clear Skies Clear Skies (2005 - 2020) 

Note: Region X includ

Projected Emissions Rates from Power Generators 2020 generation proje

generation from EIA, 

www.eia.doe.gov/cne

Electricity prices were 

Model (see Section G 

Subsequent to the de

used to project power 

has been installed at 

emission reductions f

not included in the ba

reductions expected u

associated with those 

Washington than proj
% Coal % Natural Gas 

AlabamaAr zonaArkansasCa forn aCo oradoConnec tic utDe awareDist r ct of Co umb a

Flor daGeorg aId ahoIl n o sIn d anaIo waKansasKent uck yLou s anaMa neMary andMass ac et Mich ganM nnes otaMiss ss ppMiss ourMont anaNebras kaNevadaNew Hampsh reNew J erseyNew Mex coNew YorkNorth Caro naNorth Dakot aOh oOk ahomaOregonPennsy van a

Rhode Is andSout h CarolinaSout h Dakot a

Te nn es seeTexasUt ahVermontVirg n aWash ngt onWest V rg n aWiscons n

Wyom ngNat ona 50% 26% 

% Coal % Natural Gas 

Alabama Ariizona Arkansas Calli i forniia Collorado Connec tic ut Dellaware 

Dist ri ict of Col lumbii a 

Floriida Georgiia Id aho Il lli in oiis In diiana Io wa Kansas Kent uck y Loui isiiana Maiine Marylland Mass ach hus u s et tsts Michiigan Miinnes ota Miss i issi ippii Miss ourii Mont ana Nebras ka Nevada New Hampshiire New J ersey New Mexii co New York North Carolliina North Dakot a Ohiio Ok llahoma Oregon 

Pennsy l lvaniia 

Rhode Islland Sout h Carolina Sout h Dakot a 

Te nn es see Texas Ut ah Vermont Virgi i niia Washiingt on West Vi irgi iniia Wisconsiin Wyomii ng 

49% 34% 47% 

2% 

84% 10% 42% 

0% 

39% 47% 

0% 

59% 98% 83% 78% 91% 34% 

5% 

58% 23% 69% 64% 30% 79% 62% 73% 57% 12% 24% 74% 18% 67% 90% 89% 54% 

6% 

59% 

0% 

39% 35% 47% 33% 97% 

0% 

48% 

9% 

99% 78% 98% 

26% 33% 15% 54% 12% 85% 58% 

100% 

45% 33% 37% 11% 

2% 6% 1% 6% 

41% 74% 10% 71% 

8% 6% 

51% 

9% 5% 6% 

31% 21% 55% 25% 47% 

3% 4% 1% 

42% 37% 

7% 

100% 

6% 8% 

19% 56% 

0% 3% 8% 

26% 

0% 

12% 

0% 

Nat i ionall 50% 26% 

Projected State Generation Mix in 2010 

Note: —Other“ includes generation from nuclear, hydroelectric, 

biomass, geothermal, landfill gas, wind, and solar sources. 
C umulative C oal-Ca pacity 

R etrofitted by 2010 (M W)

Cu mulative -Ca p y 

Ret rofitted by 2020 (MW)

SCR Scr ubber ACI SCR Scr ubber ACI

AlabamaArkansasC onnecticut

DelawareFloridaGeorgiaIlli noisIn dianaIowaKan sasKent uckyLou isianaMaryland

M assachusettt s

M ichiganM innesotaM ississipp i

MissouriNew Hampsh ire

New Jersey

New Mexico

New Yor kNort h Carolli naNort h DakotaOh ioOk lahomaPen nsylvania

South Carollin aSouth Dakot aTennesseeTexasVirgin iaWashin gtonWest Virginia

WisconsinGr and Tot al 152,900 51,400 400 193,5000 114,400 2,5500

Projected Retrofits By State in 2010 and 2020 

C umulative C oal-Ca pacity 

R etrofitted by 2010 (M W) 

Cu mulative CCooaall -Ca paaccitity 

Ret rofitted by 2020 (MW) 

SCR Scr ubber ACI SCR Scr ubber ACI 

Alabama Arkansas C onnecticut 

Delaware Florida Georgia Illi nois In diana Iowa Kan sas Kent ucky Lou isiana Maryland M assachuse t s M ichigan M innesota M ississipp i 

Missouri New Hampsh ire 

New Jersey 

New Mexico 

New Yor k 

Nort h Caro i na 

Nort h Dakota Oh io Ok lahoma Pen nsylvania South Caro in a South Dakot a Tennessee Texas Virgin ia Washin gton West Virginia Wisconsin 

9,000 

800 400 

0 

6,900 9,900 6,500 

14,900 

2,300 3,200 

10,700 

700 

2,500 

0 

4,400 2,200 1,400 4,100 

0 0 

1,800 

700 

8,800 1,100 

15,600 

4,400 9,800 3,900 

400 

3,800 

9,300 

900 

0 

12,200 

300 

2,700 

0 0 0 

2,700 7,400 5,400 5,500 

0 0 

900 

0 

2,900 

0 0 0 

900 

0 

300 

0 0 

400 

0 

900 

7,900 

0 

5,800 

0 

400 

0 

2,000 

0 

1,200 4,100 

0 

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

400 

0 0 0 0 0 0 0 0 0 0 0 

9,700 3,800 

400 

0 

7,500 

11,900 

8,600 

15,800 

3,400 4,200 

12,000 

2,900 3,000 1,200 6,900 4,400 2,200 4,600 

0 

400 

1,800 1,400 

10,300 

1,100 

18,500 

4,400 

11,900 

4,100 

400 

4,700 

13,900 

2,100 

0 

12,200 

3,800 

8,300 1,300 

600 400 

4,200 

11,900 

6,800 9,200 1,300 

0 

4,700 

500 

4,400 1,200 1,900 

0 

1,800 

600 300 

1,700 

0 

800 

9,800 1,000 

12,700 

0 

9,100 1,900 

400 

2,300 

2,200 2,200 1,300 8,800 

800 

0 0 0 0 0 0 0 0 0 0 

300 

0 0 0 0 

900 

0 0 0 0 0 0 0 

1,300 

0 0 0 0 0 0 0 0 0 0 0 

Gr and Tot al 152,900 51,400 400 193,5 0 114,400 2, 00 

Note: Table incl

to the NOx SIP c

as Clear Skies. 

SCR = Selective 

ACI = Activated 
Projected Retail Electricity Prices under Clear Sk

• In 1999, the national average retail electricity price was 6.66 cents/kWh. 

Projected Retail Electricity Prices (1999 cents per kilowatt hour) 

NERC Region* States Included 2005 2010 2015 ECAR ERCOT MAAC MAIN MAPP NY NE 

FRCC 

STV SPP PNW RM CALI 

OH, MI, IN, KY, WV, PA 

TX PA, NJ, MD, DC, DE 

IL, MR, WI 

MN, IA, SD, ND, NE 

NY VT, NH, ME, MA, CT, RI 

FL VA, NC, SC, GA, AL, MS, TN, AR, LA 

KS, OK, MR WA, OR, ID MT, WY, CO, UT, NM, AZ, NV, ID 

CA 

6.19 4.95 7.75 6.72 5.48 9.39 

9.24 7.04 5.79 5.97 4.90 6.79 9.39 

5.78 5.36 7.09 6.15 5.46 8.52 8.18 6.94 5.65 5.55 5.02 6.32 

9.35 

5.72 5.52 7.10 6.02 5.21 8.59 8.48 6.83 5.53 5.44 5.01 6.27 9.29 

Lower 48 States 6.54 6.24 6.18 

Note: Information on the North American Electric Reliability Council (NERC) is available at http:// www.nerc.com1999 national average electricity retail price: EIA at http://www.eia.doe.gov/cneaf/electricity/page/fact_sheets/reta2005 - 2020 projections: from the —Retail Electricity Price Model“ (see section G for a description of the Model.) 
Impact of Clear Skies on the NOx SIP Call Regio

• Summertime NOx emissions in the SIP Call region under Clear Skies are signific

the emissions projected under the NOx SIP Call. The additional reductions unde

come from the approximately 23 GW of additional SCR retrofits by 2020. 

Summertime NOx Emissions in the SIP Call 

Region 

0 

50 

100 150 200 250 300 350 400 450 500 

2010 2020 

Thousand Tons 

Base Case Clear Skies 

Coal-Fired Capacity Retrofitted 

the SIP Call Region (G

0 

20 40 60 80 

100 120 140 

2010 

GW 

Base Case Clear Skies 

Note: The NOx SIP call region includes nineteen Eastern states and DC. Summertime emissions occur between May 1 an
Section F: 

Engineering and Economic Factors Affecting the Insta

Control Technologies
Engineering and Economic A

nal

y

sis Introduction 

• Estim

ates 

w

ere m

ade for the resourc

e

s r

equired for the construction and operation of contr

for the Clear Ski

es 

A

ct bas

ed on the projected number of retrofits from IPM modeling anal

y

s

e

s

for resourc

e

s due to the Clear S

kies 

A

ct w

as compared to the current suppl

y in today‘s mar

ke

• It is expected that there 

will be a m

arket response, ho

w

e

v

er not instantaneous, to the dem

an

engineering, labor, construction equipment and mat

erials f

or t

he inst

allation and o

peration of 

number of control technolo

gies. 

œ It i

s projected that t

h

ere are sufficient r

e

s

ources to 

meet t

he p

h

a

se I caps in 

2

010 alth

o

u

g

h s

may be put 

u

nder mor

e press

ure t

han other

s. Boiler

m

a

k

er l

a

b

or i

s one 

of the r

esour

c

es that m

press

ure i

n t

he e

arly p

art of phase I d

u

e to t

he si

m

ulta

neous i

nstallati

o

n of N

O

x contr

ols for the 

œ It is diffic

ult t

o pre

dict the market s

u

p

ply of resources be

y

ond 

p

h

a

se 1, ho

w

e

v

er, if t

h

e c

urre

resourc

es is sust

aine

d, it is e

x

p

e

cte

d that the sup

ply will m

e

et the dem

and be

y

ond 

2010. Suff

time for the 2018 

phase II caps s

h

o

uld allo

w ample ti

m

e for the mar

ket to 

meet t

he r

e

sour

c

e d

e

• Alternative approac

hes to meeting the emission targets 

are li

k

ely t

o produce technolo

gies a

meeting t

he caps 

with les

s r

esourc

e

s t

han w

hat 

w

as projected. 

œ 

Scrub

b

er tec

h

n

olo

g

y i

mprovem

e

nts and switchi

n

g to l

o

w

er sulfur coal un

d

er the Aci

d R

ain P

examples 

of h

o

w alternati

ve a

ppr

o

a

ches r

e

q

uire

d l

ess r

e

s

ources t

h

a

n projected.

œ 

T

he devel

o

p

m

e

nt of contr

ol t

ech

n

olo

g

y alter

nati

ves to SCR 

u

nder t

he N

O

x SIP call i

s a

n

oth

innovation

s w

hich may reduce t

h

e resourc

e r

equirem

e

nt of a given 

progr

a

m.

œ 

Multi-pollutant contr

ol tech

n

olo

gies are b

ein

g devel

o

ped w

hich ma

y provide i

ntegrate

d tr

e

atm

pollutants as oppo

s

e

d to the 

sta

ndard approach of add-on technologie

s f

or ea

c

h polluta

nt.

• Resour

c

e r

equirem

ents for coal-fired installations of sel

e

ctiv

e c

atalytic reduction (SCR) for 

flue gas desulfurization (

FGD) for SO2 control w

ere consider

e

d. Conserv

ativ

ely high assump

resource requir

e

m

ents f

or t

hese single pollut

ant control techn

ologies 

w

ere used. 
Capacity Projected to Install Control Technologie

• The incremental number of SCR and FGD control technology retrofits, beyond wha

by 2000, projected under the Clear Skies Act for 2005 and 2010 are provided below

œ The 2005 projected SCR retrofits include about 72 GW of SCR needed to meet the NOx SIP call 

13 GW for state multi-pollutant rules. None of the SCR retrofits for 2005 are in response to the C

was projected that 6 GW of FGD, more commonly called scrubbers, would be installed by 2005 a

by 2010 due to existing regulatory programs. 

œ IPM modeling projected that 32 GW of scrubbers would be cost effective to install by 2005 during 

installation of SCR for the NOx SIP call. However, a scrubber sensitivity analysis projected that u

scrubbers could be installed before 2005 as resources such as boilermaker labor may be limiting

I l S b b R 

(G ) 

0 

20 40 60 80 

100 

2005 

0 

20 40 60 80 

100 

2005 2010 

Incremental SCR Retrofits (GW) Incremental Scrubber Retro

• Through 2010, 0.4 GW of activated carbon injection (ACI) controls for mercury are 

installed and therefore are expected to have a negligible affect on the availability o

phase I of the program. 
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Control Technology Installation Times • Based on engineering analyses, EPA estimated the time it takes for a typical 500 MW 

control technology, including the time required for engineering review, construction 

control installation, and obtaining an operating permit: 

• 27 months for typical wet limestone scrubber installation 

œ Examples of installation times: 27 months for 890 MW retrofit of two units at Big Bend Station, 24 mon

unit at Centralia from contract award to commissioning 

Single FGD (Months) 12 3456 789 10 11 12 13 14 15 16 17 18 19 20 21 22 

Facility Engineering Review and Aw ard of Contract �������������������������������Control Technology Installation ��������������������������������������������������������������������������������������������������������������������������������������

���������������������������������������������������������������������������������������������������������� Engineering Fabrication Delivery ���������������������������������������������������������������������������������������������������������� Pre Hook Up 

����������������������������������������������������������������������������������

Control Device Hook Up (Eqmt outage) Control Technology Testing 

Construction Perm it �������������������������������������������������������������������� Title V Operating Perm it Modification ����������������������������������������������������������������������������������������������������������������������������������������������������

• 21 months for typical SCR installation 

œ Examples of installation times: 13 months for 675 MW Somerset Station, 19 months for two 900 MW 

Single C S R M ( onths) 1234567 89 10 11 12 13 14 15 16 17 18 19 20 21 

Facility Engine e ring Re view and Aw ard of Contract ������������������������������ Control Technology Installation �������������������������������������������������������������������������������������������������������������������������� Engineering Fabrication Delivery ������������������������������������������������������������������������������������������������������������ Pre Hook Up ����������������������������������������������������������

Control Device Hook Up (Eqmt outage) ������������������ Control Technology Testing 

����������������������������������������������������������������� ��������� Construction Perm it ����������������������������������������������������������������� Title V Ope rating Pe rm it Modification ����������������������������������������������������������������������������������������������������������������������������������������
Control Technology Installation Times 

• Control device hookup to the boiler is typically scheduled during unit shutdown

outside of the peak load summer months. 

œ Typically takes 4-7 weeks for FGD hookup

œ Typically takes 3-5 weeks for SCR hookup

œ Other activities may be scheduled during shutdown which may prolong outage

• Control installation times for multiple retrofits of the same technology (e.g. 2 S

same plant typically add 2 to 3 months to the single unit installation time for ea

much of the work involved in multiple retrofits can be done simultaneously. 

œ Six units were the maximum number of units at one plant projected to be retrofi

2010. It may take from 33-37 months to complete the installation considering n

the peak summer months. 

œ Five units were the maximum number of units at one plant projected to be retro

2010. It may take up to 36-40 months to complete the installation considering n

the peak summer months. 

• Scrubbers and SCRs may be simultaneously installed on the same unit as the

not usually cause much construction interference. In addition, simultaneous in

more efficiently use labor, construction equipment, and outages for hookup to t
Resources for Operation of Control Technologie

U.S. Li

meston

e C

onsu

mption 

v

s Cle

ar Skie

s D

e

mand 

0 

300 600 900 

1,200 1,500 1,800 

2,100 

2005 2010 

Limestone (1,000,000 tons) 

Clear Skies De

mand US Consumption 

U.S. A

m

m

onia C

o

n

s

u

m

ptio

n vs 

C

De

m

a

nd 

0 

5,000 

10,000 15,000 20,000 25,000 

2005 

Ammonia/Urea (1000 tons) 

Clear Skies De

mand US Consump

• The a

m

ount of reagent required to operate air p

ollution control technologie

s (

e.g. limestone f

ammonia f

or SCR) is ver

y small r

elative t

o the US and world supply of these co

m

m

o

dities. 

• Limestone consu

mption in s

crubbers for SO2 reduction i

s projected to require l

ess tha

n 2% o

consumption o

ut t

o 2010. T

his estimate was conservati

v

ely high a

s it assumed o

nly wet limes

be installed on units burning 4% s

ulfur c

oal, achie

ving a 9

5% SO2 r

e

m

o

v

al efficiency, and ha

v

of 8

5%. T

h

e US co

n

sumption includes a 5.1% a

n

nual gr

o

wth of limestone production b

ased o

trends reported in t

he 

Minerals Yearbook b

y U.S. Geolo

gical Sur

v

e

y. 

• A

m

monia consumption in SCR f

or N

Ox reduction is projecte

d to consume a

p

pro

ximatel

y 3% 

consumption o

ut t

o 2010. Recently, t

h

ere was significant productio

n capacity b

uilt i

n the US, A

for

m

er So

viet U

nion, along 

with 1.2 million tons of cap

acit

y built in Trinidad and Ve

n

ezuela wh

accommodate this i

ncrease i

n d

e

m

a

n

d. 
SCR Catalyst Availability

• SCR catalyst is one of the material resources which is unique to the air pollution con

industry. Estimates of demand for SCR catalyst were based on both initial installed 

annual replacement capacity requirements for the projected retrofits and also include

demand from all current world SCR installations. 

Cumulative SCR Catalyst Production Capacity 

vs Cumulative Clear Skies Demand 

0 

100 200 300 400 500 600 700 800 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

Catalyst (1000 m3/yr) 

ClearSkies Cumulative Initial Fill Demand ClearSkies Cumulative Replacement Demand Cumulative Production Capacity 

• Current worldwide SCR catal

for coal-fired SCR applications rmanufacturers is estimated at a

• Catalyst demand is expected 

as it is estimated that about 150 

installed in the US by 2010, with 

SIP call and state rules by 2005

• The sum of the production castarting in 2002 was compared t

Skies demand from each 5 year 

of current cumulative production 

is 45 % in 2005 decreasing to 4

• Early in phase I, the majority o

due to the initial fill of the catalys

installations but the demand beg

Note: Additional catalyst supply from regeneration processes and production 

replacement demand. 

capacity for gas/oil fired SCR applications were not considered in this estimate. 
Resources for Construction of Control Technolo

St

e

el, Ha

r

d

w

a

re 

and Cons

t

ructio

n Equipme

n

t Requir

ement

s: 

• Estimate

s of the cumulative ste

el demand 

n

e

eded to construct the 

control technolo

s

cru

b

b

er and SCR) yi

eld

s l

e

ss than 0.1% d

e

m

and of the tot

al US 

c

o

n

s

u

mption per 

the Census Bureau‘s Current Ind

ustrial Reports. 

• Steel is primarily needed for d

uctw

ork, support steel, storage sil

os, an

d re

a

ctor v

es

control techn

ologie

s. Som

e corrosive resista

nt steel all

oys, rub

b

er-lined steel 

or o

may be u

sed in the corrosive regions of scrubbers. 

• Other 

h

ard

w

are ite

ms such as pipin

g, nozzles, pumps, fans, soot blowers and rela

require

d for ty

pic

al c

o

ntrol tec

hnolo

g

y i

nst

allatio

ns 

are used in large i

ndustries suc

chemical production, a

n

d a

uto production and should be readily available. 

• T

he availability of cranes, u

s

ed to lift 

heavy pieces of equipment, ar

e not expected 

due to the extend

e

d time 

provided for planning install

ations. In addition to the cra

n

available, it i

s e

stim

ated that 12 new cranes can be suppli

e

d every six month

s if ne

Gene

r

al Cons

t

r

u

c

tion Labor Re

q

uir

e

m

e

n

t

s: 

• Labor r

e

q

uire

ments are generally split between two categ

orie

s, one for general co

and 

a

n

oth

er for skilled lab

or (e.g. boil

ermakers, pipe fitter

s, electri

cians). 

• General constru

cti

o

n labor requirem

e

nts for control technology install

ations are ex

than 0.3% of the current national lab

or pool of 6.7 millio

n wor

kers a

s reported by th

Labor Statistics. 
Labor for Construction of Control Technologies 

B

oilerm

a

k

er D

e

m

and by Industry 

Refinery 

Metals 6% 

Chemical 

13% 

Paper 7% 

Utility 60% 6% 

Other 8% 

B

oiler

m

a

k

e

r M

e

m

bership 

T

rends 

0 

5000 

10000 15000 20000 25000 

1994 1995 1996 1997 1998 1999 2000 

Active Members 

• B

oilerm

a

k

ers are a 

s

kille

d l

a

b

or force 

construction of hig

h-energy v

essels. 

apprenti

c

e

ship takes up to 4 

years bu

time d

e

pending on the pri

or w

ork exp

lev

el of the individual. 

• In 2000, 60% 

of the boilermak

er jo

urn

w

orking in the electric utility sector. T

the boilerma

kers w

ere u

sed in the r

ef

metals, or other industries. 

• • • 

B

oilerm

a

k

er nu

mbers decrease

members in 1994 to just over 15

1998. 

Boilermaker membership grew 6

2000 and i

s projected to grow a

5.3% out to 2005 

a

ccor

ding to t

Brotherhood of Boilermaker

s. 

Their numbers h

ave begun to re

years due to the construction 

of 

the NOx SIP call and new comb

projects. 
Labor for Construction of Control Technologies 

B

oilermaker S

upply vs. Clear S

kies D

e

m

and 

0 

5,000 

10,000 15,000 20,000 25,000 30,000 35,000 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Boilermaker Labor 

(1000 man-hrs) 

Other Utility Demand Clear Skies Demand Utility Boilermaker Supply 

• • 

B

oilermaker S

upply vs. Clear S

kies S

ensitivity 

0 

5,000 

10,000 15,000 20,000 25,000 30,000 35,000 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Boilermaker Labor 

(1000 man-hrs) 

Other Utility Demand Clear Skies Sensitiv ity Utility Boilermaker Supply 

• • 

Note: The b

oiler

m

aker lab

or considered to be available for the Clear 

Skies c

ontr

ol technology installations 

w

ere fro

m the portion of 

boiler

m

akers e

mplo

yed in the electric utility industr

y. 

Boilermaker labor require

control techn

ology vendor 

assumed to be approxima

of the total F

GD 

and S

C

R 

respe

ctiv

ely. 

Economic modeling projec

F

G

D is cost effecti

ve to bu

Ho

w

e

v

er, it is estimated th

GW 

o

f F

G

D along with 85 

N

Ox 

SIP call and state reg

would 

e

xceed the current 

of boilerma

ker lab

or. 

It is e

stimated that there is 

boilermaker l

abor to comp

S

CR and up to 10 

G

W o

f 

out t

o 2005. 

More control installations 

constructed by 2005 but it 

cost of 

c

ompliance. 
Electric System Reliability and Installation Experi

• 

R

eliabilit

y: 

œ

Beca

use most control installatio

ns are expected to be hooked-u

p during regula

outag

es, there sh

o

uld be n

o changes in system reliability. 

œ

A 5-20 year implementation time-frame sho

uld allow companie

s to schedul

e the 

difficult retrofits over 

m

ulti

ple 

o

utag

es. 

œ

T

h

e cap-an

d-tr

ade 

a

s

p

e

ct of the 

program 

allows emis

sions 

b

a

n

king which will e

more smo

oth compliance sch

e

d

ule by providing incentives for e

arly installatio

ns 

the hook-up

s. 

• Clear Skies Builds on NOx SIP call Experience: 

œ

L

e

sson

s l

e

arne

d a

s p

art of i

nstall

ation of SCRs for the NO

x SIP call will make i

efficient. 

œ

More boilerma

k

er labor and engineeri

n

g resources h

a

v

e been developed to i

ns

control

s i

n response to the NOx SIP call. The retrofits requir

e

d under this progr

ince

ntives to continue the 

u

se 

of the

s

e resources and possibly expand them. 

œ

Emergi

n

g multi-poll

utant co

ntrol technologie

s could provide m

ore flexibility for in

S

o

m

e of these new tec

hnolo

gies 

are exp

e

cted to 

b

e a

v

aila

ble within the require
Section G:

Summary of the Models used for the Analysis
Description of the Integrated Planning Model (IPM

A

nal

ytical Fram

e

w

ork of IPM 

• EPA uses t

he Int

e

grat

e

d Pl

anning M

o

d

el (IP

M) to anal

y

z

e the proj

e

cted i

m

p

act of e

n

viro

n

m

e

nta

electric p

o

w

er sector i

n the 

4

8 conti

g

uous states a

n

d the District of C

olu

m

bia. D

e

v

elo

p

e

d b

y ICF 

In

c

orp

orated and 

u

sed t

o support public and 

private se

ctor clie

nts, I

PM is a multi-regional, d

y

n

a

m

lin

e

ar progra

m

min

g m

odel of the U.S. electric power s

ector. 

• T

he mo

d

el provides for

e

c

asts of l

east-cost ca

p

acity expansion, electricity dispatc

h, a

nd emissi

o

n 

strategi

e

s for meeting en

ergy d

emand and en

vironme

ntal, tran

s

mission, dis

p

atc

h, and reliability 

can be used to eval

u

ate the c

ost a

nd emi

s

sio

ns i

m

p

acts of propos

e

d p

olicies t

o limit e

mis

sio

ns o

(S

O2), nitrogen oxides (

NOx), car

b

o

n dioxide (

C

O2), and mer

cury (

H

g) from t

he electric po

w

er se

• IPM w

as a key anal

ytical tool in 

d

e

v

eloping the Presid

e

nt's Cle

ar Ski

es pr

o

posal. 

IPM Is Well Suited t

o Model M

ulti-Emission Control Programs 

• A

m

ong the factors that mak

e IPM parti

c

ularly 

w

ell suited to mo

d

el m

ulti-e

missi

o

ns contr

ol progra

ability to capture c

omple

x interacti

o

ns among the 

ele

ctric po

w

er, fuel, a

nd en

vironmental market

rich r

epres

e

ntati

on 

of e

missi

o

n contr

ol o

ptions enc

o

m

p

assing a br

o

ad arra

y of r

etr

ofit tec

h

n

olo

gi

emission r

e

d

ucti

ons through fuel switchi

n

g, c

hanges i

n ca

p

acity mi

x, and electricity dispatc

h str

a

its capability to model a v

ariety of en

vironmental market mechanis

m

s, su

ch 

a

s emission

s ca

p

s, a

trading, a

nd banki

n

g. 

• IPM i

s parti

c

ularly w

ell suited for m

o

d

eling Clear Ski

es b

e

c

ause th

e program r

elies o

n t

he o

pera

allo

w

a

n

c

e market, the a

v

ailability 

of a broad ran

g

e of emissions reducti

o

n opti

o

n

s, and empo

w

e

econ

o

mic actor

s t

o achieve e

missi

o

n limits. 

Ext

ensive documentation of the IPM is available at http://www.epa.gov/airmarkets/e

pa-ipm
Description of Air Quality Modeling

• The results for fine particle concentrations, visibility, sulfur deposition, and nitrogen deposition are based o

Modeling System for Aerosols and Deposition (REMSAD). 

• REMSAD is an Eulerian air quality model developed to simulate regional-scale distributions, sources, form

and removal processes for fine particles and other airborne pollutants. This analysis used REMSAD versi

meteorological inputs previously developed for 1996 using the Mesoscale Meteorological Model (MM-5). 

• The results for ozone concentrations are based on the Comprehensive Air Quality Model with Extensions • CAMx is an Eulerian air quality model developed to simulate local and regional-scale distributions, source

transport, and removal processes for ozone and other photochemical pollutants. This analysis used CAM

meteorological inputs previously developed using the Regional Atmospheric Modeling System (RAMS) for 

July, and August 1995. 

• The Integrated Planning Model (IPM) was used to derive all future projections of electricity generation sou• Emissions inputs for non-electric generating facilities for REMSAD and CAMx were derived from the 1996 

Inventory (NEI). In addition, inventories prepared for the Heavy Duty Diesel Engine rulemaking were the b

emissions projections. 

• For the most part, the modeling results are analyzed in terms of the change in future year air quality relativ

under baseline conditions. In this way, effects of any uncertainties in emissions forecasts and air quality m

minimized. 

• Results for projected annual PM2.5 and 8-hour ozone nonattainment were determined by —rolling back“ cu

levels. This was based on the change in air quality between the 1996 Base Year and each future year sc

ozone modeling was performed for the Western U.S., future ozone nonattainment in the West was determ

emissions scaling analysis that used forecast changes in NOx emissions in the West coupled with the res

emissions changes, as modeled in the East. 

• Maps which display the impacts on PM2.5 concentrations and deposition are reported as a percent reduct

percent reduction (e.g. 30%) is a decrease in concentration or deposition compared to current conditions (

negative percent reduction (e.g. -30%) is an increase in concentration or deposition compared to current c

• Visibility results are reported as a change in deciviews. —Perfect“ visibility is represented by a deciview of z

in deciview is an increase or improvement in visibility. An increase in deciview is a decrease in visibility. 
Description of Benefits Modeling

• The Criteria Air Pollutant Modeling System (CAPMS) is used to quantify human health benefits du

in a population‘s exposure to fine particulate matter and ozone. 

• Using the air quality modeling results, the change in pollutant concentration based on modeling fo

grid cell is determined. This is the level at which the population living in that grid cell is assumed 

• Concentration-response functions from epidemiological studies are applied to each grid cell to pre

in incidences of health outcomes (e.g. asthma attacks) that would occur with the projected chang

• The grid cells are aggregated to estimate the health impact of the change in air quality across the • The estimated economic value of an avoided health outcome (e.g. $41 per asthma attack day) is 

change in events to determine the health benefits of air quality improvements for the entire region

• For visibility, benefits were calculated based on changes in fine particle concentrations, presented 

which are provided by the REMSAD air quality model. 

• Individuals place a value on visibility improvements in recreational areas, such as National Parks 

areas 

• The economic value that people place on improved visibility on a day that they visit a Class I area 

predicted deciview changes and projected number of park visitors affected to attain recreational v

benefits. 
Description of Freshwater Modeling

• The Model of Acidification of Groundwater in Catchments (MAGIC) is used to examine changes 

freshwater chemistry as indicated by changes in acid neutralizing capacity (ANC) in the waterbo

• ANC represents the ability of a lake or stream to neutralize, or buffer, acid. The condition of a lak

improves as the the ANC increases, moving from chronically acidic ➔ episodically acidic ➔ not a

• Episodically acidic lakes (ANC of 0-50 μeq/l) have a greater capacity to neutralize acid depositio

acidic ones. However, these lakes remain susceptible to becoming chronically acidic if acid depo

• Watershed characteristics (e.g., soils, bedrock type, geologic history) affect the rate of water che

to acid deposition. 

•

—Direct response“ lakes or streams manifest changes more quickly, whereas —delayed response“ 

manifest changes over a longer period of time. 

• MAGIC results show the distribution of lakes and streams (by percentage) over the three ANC c• Three regions were modeled (the Adirondacks, the Northeast (including the Adirondacks), and th• Results are reported for current conditions (2000) and in 2030 under the Base Case and the Cle

Results are based on a model called the —Model of Acidification of Groundwater in Catchments“ (MAGIC) used by the National Acid 

Program (NAPAP) to estimate the long-term effects of acidic deposition (sulfur) on lakes and streams. The model simulates 

exchangeable base cations in the soil. As the fluxes to and from the pool change over time due to changes in atmospheric depositio

between soil and soil solution shift to give changes in surface water chemistry. Changes in surface water chemistry are character

Neutralizing Capacity (ANC) œ the ability of a waterbody to neutralize strong acids added from atmospheric deposition. 
Description of the Technology Retrofit and Upda

Uses of the Technology Retrofit and Updating Model • At this time, IPM does not model price elasticity of demand and the effect of multiple allowance a

mechanisms. To study the effect of these variables on electricity prices and markets, ICF devel

driven spreadsheet program termed the —technology retrofit and updating model.“ 

• The model is used to discern trends in marginal costs and retrofits, the approximate magnitudes 

and the reasons for those trends. 

Modeling Approach • The technology retrofit and updating model consists of a set of approximately six hundred —samp

units with varying characteristics. The mix of generation types and sizes was chosen to mirror, i

the nationwide mix of capacities. Each unit is assumed to choose emission control retrofit option

generation levels so as to maximize its own net profit in response to fuel prices, emission allowa

prices of electricity for various demand segments. Prices of fuels can be adjusted in the model i

demand; prices of electricity by demand segment is set in the model so as to meet demand; and 

can be adjusted to cause the industry to meet given caps. 

• To simulate the effects of demand elasticity, the quantity of electricity demanded in each segme

function of electricity prices using an elasticity value that is entered as an input to the model. Fin

the effects of allowance updating, the value of reallocated allowances can be calculated and sub

each unit‘s cost of generation œ thereby inducing each unit to change its profit-maximizing level o

response to a given set of fuel, allowance, and electricity prices. Readjusting the allowance pric

same emission caps then generates results showing the costs of meeting given caps with and w

• An important limitation of this model is that it does not simulate changes over time in the demand 

prices, technology, or other factors considered within IPM. Instead, it is run as though every yea

every other year and is therefore static in its outlook. In addition, it does not recognize the distin

electricity demand regions and the transmission constraints that can keep them separate. Thus

electricity is determined for each demand segment for the entire set of sample plants. 
Description of the Retail Electricity Price Model 

Primary Attributes of the Model • The Model provides a forecast of average retail electricity prices from 2005 to 2020 for 13 region

contiguous U.S., and considers areas of the country that (1) will have competitive pricing of pow

and, (2) are likely to price retail power based on a cost-of-service basis. 

• Combines IPM and EIA information with data from the National Regulatory Research Institute an

Advanced Energy Markets regarding the restructuring of the power industry. 

•

—Main Case“ is EPA‘s forecast of —likely deregulation“ considering areas of the country that shou

generation services for retail customers competitively and those that most likely to use cost-of-se

principles. 

• The Model readily analyzes alternative multi-pollutant and base case scenarios modeled with IP

assumptions on deregulation and future savings/costs, and the implications of different allowanc

approaches. The strongest application of the Calculator occurs from examining the relative price 

between two or more scenarios. 

The Limitations of the Model Include • The Model combines IPM and EIA cost elements that use similar -- but not identical -- assumptio

recovery and aggregate cost data in a similar -- but not identical -- regional manner that needs a

• The Model assumes public and private companies seek the same return and have the same tax 

overstates prices in areas where there are large amounts of public power. 

• The Model focuses on major costs. It assumes for cost-of-service areas (where most of power s

occur) that allowance allocations will not alter pricing of electricity. 

• Uses EIA‘s limited (but best available) data in some areas (e.g. rate base with stranded assets). • The Model cannot address the uncertainty of deregulation created by California‘s experience -- w

competition may increase or decrease in the future. With the phasing in of competition and limite

the full benefits and costs of deregulation still remain unknown.