MEMORANDUM 

TO: Steam Electric Rulemaking Record 

FROM: TJ Finseth, ERG 

Danielle Lewis, ERG 

 Elizabeth Sabol, ERG 

DATE: April 15, 2013 

SUBJECT: Methodologies for Estimating Costs and Pollutant Removals for Steam 

Electric ELG Regulatory Option 4a 

ERG is providing technical support to the U.S. Environmental Protection Agency’s Office of 

Water, Engineering and Analysis Division (EAD) for development of effluent limitations 

guidelines and standards (ELG) for the Steam Electric Power Generating Industry. EPA, with 

the support of ERG, collected data through survey responses, site visits, sampling episodes, and 

from individual power plants and equipment vendors to estimate compliance costs, pollutant 

loadings, and corresponding pollutant removals associated with installing and operating the 

various technologies and practices that make up the regulatory options considered by EPA. EPA 

used these data to develop computerized costs and loadings models, which EPA used to calculate 

plant-specific compliance costs for all power plants that the data suggests would incur costs to 

comply with one or more of the proposed requirements associated with the regulatory options. 

The data and the methodologies used to estimate the compliance costs and pollutant loadings for 

each wastestream are described in EPA’s Incremental Costs and Pollutant Removals for 

Proposed Effluent Limitation Guidelines and Standards for the Steam Electric Generating Point 

Source Category (DCN SE01957). Additionally, the report includes the plant-specific costs and 

loadings output. As described in the report, EPA used the cost and loadings models estimate 

plant specific costs and loadings for each wastestream and five of the eight regulatory options 

(Options 1, 2, 3, 4, and 5). EPA then used the costs and loadings output from these five options 

to estimate the costs and pollutant loadings associated with Options 3a, 3b, and 4a. The purpose 

of this memorandum is to describe the methodology and calculations EPA used to estimate 

compliance costs and pollutant loadings and corresponding pollutant removals associated with 

Regulatory Option 4a. 

 

1.0 SUMMARY OF REGULATORY OPTION 4A

One of the eight regulatory options considered by EPA is referred to as Option 4a. Under Option 

4a, the proposed rule would establish BAT for the following wastestreams for all generating 

units except oil-fired generating units and small generating units (i.e., 50 MW or smaller) that 

include:1

 

1

 The proposed BAT limitations for nonchemical metal cleaning wastes apply to all generating units, including oilfired generating units and small generating units (i.e., 50 MW or smaller). 
Memorandum 

April 19, 2013 

Page 2 

 “Zero discharge” effluent limit for all pollutants in fly ash transport water and 

wastewater from flue gas mercury control systems; 

 Numeric effluent limits for mercury, arsenic, selenium and TDS in discharges of 

wastewater from gasification processes; 

 Numeric effluent limits for copper and iron in discharges of nonchemical metal 

cleaning wastes2; and 

 Numeric effluent limits for mercury, arsenic, selenium, and nitrate-nitrite in 

discharges of FGD wastewater. 

Option 4a would also establish “zero discharge” effluent limits for all pollutants in bottom ash 

transport water, with the exception of all generating units with a nameplate capacity of 400 MW 

or less (for those generating units that are less than or equal to 400 MW, the proposed rule would 

set BAT equal to BPT for discharges of pollutants found in the bottom ash transport water). 

As described in Section 9.2 of the Technical Development Document for the Proposed Effluent 

Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source 

Category (DCN SE01964), there are no incremental compliance costs associated with the 

proposed ELGs for gasification wastewater, flue gas mercury control wastewater, and 

nonchemical metal cleaning wastes because the technology bases are already current industry 

practice or because the industry is already meeting the limits or will be exempt from meeting the 

limits. Additionally, because the proposed requirements under Option 4a are identical to Option 

3 plus the additional requirements for bottom ash transport water, the compliance costs, pollutant 

removals, and NWQI associated with Option 4a are equal to Option 3 plus the associated 

compliance costs, pollutant removals, and NWQI for all generating units with a nameplate 

capacity of greater than 400 MW to convert to dry or closed loop bottom ash handling systems. 

Because EPA already estimated the Option 3 compliance costs, pollutant removals, and NWQI, 

costs and pollutant removals are described in EPA’s Incremental Costs and Pollutant Removals 

for Proposed Effluent Limitation Guidelines and Standards for the Steam Electric Generating 

Point Source Category and the NWQI are described in the Technical Development Document for 

the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power 

Generating Point Source Category, the remainder of this memorandum focuses on the costs 

pollutant removals and NWQI associated with the bottom ash transport water portion of Option 

4a. 

2.0 CALCULATION OF BOTTOM ASH ADJUSTMENT FACTOR

As described in EPA’s Incremental Costs and Pollutant Removals for the Proposed Effluent 

Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source 

Category, EPA developed plant-level cost estimates and pollutant removals for all generating 

units discharging bottom ash transport water to convert to a dry handling or closed loop system. 

Because these cost estimates and pollutant removals were calculated on a plant level (i.e., not a 

 

2

 As described in Section 8 of the Technical Development Document for the Proposed Effluent Limitations 

Guidelines and Standards for the Steam Electric Power Generating Point Source Category, EPA is proposing to 

exempt from new copper and iron BAT limitations any existing discharges of nonchemical metal cleaning wastes 

that are currently authorized without iron and copper limits. For these discharges, BAT limits would be set equal to 

BPT limits applicable to low volume wastes. 
Memorandum 

April 19, 2013 

Page 3 

generating unit level), EPA developed a methodology to distribute these costs to each individual 

generating unit discharging bottom ash based on the percentage of wet bottom ash tonnage 

produced by each unit expected to incur compliance costs for bottom ash transport water for 

Regulatory Option 4. The sum of these percentages for all units incurring bottom ash costs under 

Option 4a (i.e., all generating units with a capacity greater than 400 MW) was used to adjust the 

plant-level values costs and pollutant removals to reflect the portion associated with only those 

units regulated by Option 4a. These plant-level values used to adjust the costs and pollutant 

removals are hereafter referred to as the “adjustment factors.” 

To calculate these adjustment factors, EPA started with the list of generating units incurring a 

bottom ash cost as identified by the cost input table for bottom ash (see DCN SE01957.A1, Table 

A-3); however, EPA excluded all oil-fired units and those with a capacity of 50 MW or less. 

EPA then calculated the total wet produced bottom ash tonnage per year for the plant for all 

remaining units in the list. Next, EPA calculated the percentage of the total wet produced bottom 

ash tonnage per year for each unit identified as incurring a cost (using the total wet produced 

bottom ash tonnage calculated in the previous step as the denominator). These percentages 

represent the percent of plant-level cost or pollutant removal associated with each generating 

unit. 

EPA then summed the percentages for all units with a capacity greater than 400 MW on a plantlevel to calculate the total percentage of wet bottom ash tonnage that will still receive a cost 

under Option 4a. For example, if a plant operates two units, one with a nameplate capacity of 

250 MW that generates 10,000 tpy of bottom ash and the other with a nameplate capacity of 750 

MW that generates 30,000 tpy of bottom ash, their individual percentages would be 25 percent 

(10,000 tpy/40,000 tpy) for the 250 MW unit and 75 percent (30,000 tpy/40,000 tpy) for the 750 

MW unit. In this example, because 250 MW is less than 400 MW, only the 750 MW unit would 

be required to comply with the “zero discharge” standard and therefore, the adjustment factor for 

this plant is 75 percent. In a case where all units discharging bottom ash transport water at a 

plant have a nameplate capacity greater than 400 MW, the adjustment factor is 100 percent. 

Conversely, in a case where all units discharging bottom ash transport water at a plant have a 

nameplate capacity less than or equal to 400 MW, the adjustment factor is 0 percent. This plantlevel adjustment factor represents the percentage of plant-level costs and pollutant removals 

associated with all units above 400 MW, or all bottom ash units that will be required to comply 

with the proposed “zero discharge” standard for bottom ash transport water under Option 4a. 

After calculating the plant-level adjustment factors, EPA then conducted a further evaluation of 

the plants that incur bottom ash management costs. Because the bottom ash management costs 

are calculated at the plant level and are independent of the number of generating units incurring 

costs, EPA determined that the bottom ash management costs should either be included in its 

entirety or removed completely. Therefore, EPA evaluated each plant incurring a bottom ash 

management cost and whether all units generating bottom ash transport water have a capacity 

less than 400 MW. If all units generating bottom ash transport water have a capacity less than 

400 MW, then the bottom ash adjustment factor was set equal to zero percent. Conversely, if any 

unit generating bottom ash transport water has a capacity greater than 400 MW, the bottom ash 

adjustment factor was set equal to 100 percent. 

Table A-1, included as an attachment to this memorandum, lists the plant-level adjustment 

factors used to convert plant-level bottom ash data (i.e., costs, pollutant removals, NWQI) for the 

group of generating units excluding oil-fired units and those with a capacity of 50 MW or less 
Memorandum 

April 19, 2013 

Page 4 

(Bottom Ash Option 4) to the group of generating units excluding oil-fired units and those with a 

capacity of 400 MW or less (Bottom Ash Option 4a). 

3.0 COMPLIANCE COSTS

EPA used the adjustment factors along with the plant-level compliance costs calculated for 

bottom ash for Option 4 to estimate the compliance costs associated with bottom ash for Option 

4a. EPA multiplied each individual component of the plant-level compliance costs to convert to 

dry or closed-loop bottom ash handling systems (DCN SE01957.A1, Table A-23) by the plantspecific adjustment factor to estimate the compliance costs for plants to only convert those 

generating units with a capacity greater than 400 MW. EPA used the following equation to 

estimate plant-level Option 4a compliance costs, 

Option 4a Plant-Level Bottom Ash Cost Component = Option 4 Plant-Level Bottom Ash Cost * 

Adjustment Factor 

Where: 

Option 4 Plant-Level 

Bottom Ash Cost 

Component 

= Plant-level cost component to convert to dry or closedloop bottom ash handling system (from DCN 

SE01957.A1 Table A-23), and 

Adjustment Factor = Percentage of plant-level cost or pollutant removals 

associated with all units above 400 MW. 

To estimate industry-level costs associated with Option 4a, EPA added the Option 3 costs (i.e., 

costs for FGD wastewater treated with chemical precipitation followed by biological treatment 

and costs for fly ash dry handling conversion) to the costs calculated for bottom ash Option 4a. 

Table 1 presents the total costs for Option 4a by wastestream. 

Table 1. Estimated Industry-Level Compliance Costs by Wastestream for Option 4a 

[In millions of 2010 dollars] 

Wastestream Technology Option 

Number 

of 

Plants 

Capital 

Cost 

Annual 

O&M 

Cost 

One 

Time 

Costs 

Recurring Costs 

3-year 5-year 6-year 10-yeara

FGD 

Wastewater 

Biological Treatment 

(Based on Oil-Fired 

Units and Units 50 

MW or less Not 

Installing Technology 

Basis) 

116 $2,500 $257 $0 $0 $0 $9.90 ($33.0) 

Fly Ash Zero Discharge 

(Based on Oil-Fired 

Units and Units 50 

MW or less Not 

Installing Technology 

Basis) 

66 $398 $177 $0 $0 $0 $0 ($20.7) 
Memorandum 

April 19, 2013 

Page 5 

Table 1. Estimated Industry-Level Compliance Costs by Wastestream for Option 4a 

[In millions of 2010 dollars] 

Wastestream Technology Option 

Number 

of 

Plants 

Capital 

Cost 

Annual 

O&M 

Cost 

One 

Time 

Costs 

Recurring Costs 

3-year 5-year 6-year 10-yeara

Bottom Ash Zero Discharge 

(Based on Oil-Fired 

Units and Units 400 

MW or less Not 

Installing Technology 

Basis) 

115 $2,580 $255 $0.31 $1.12 $37.8 $0 ($35.6) 

Option 4a Total 200b $5,478 $689 $0.3 $1 $38 $10 ($90) 

Note: Costs are rounded to three significant figures. 

Note: All costs are indexed to 2010 dollars using RSMeans Historical Cost Indices. 

a – The values in this column are negative because they represent cost savings. 

b – The total number of plants incurring costs under Option 4a is not additive by wastestream as some plants incur 

costs for multiple wastestreams. 

4.0 POLLUTANT LOADINGS

EPA used the adjustment factors along with plant-level pollutant removals calculated for bottom 

ash for Option 4 to estimate the pollutant removals and post compliance pollutant loadings for 

Option 4a. For each plant discharging bottom ash transport water, EPA calculated the Option 4 

bottom ash pollutant removals by subtracting the Option 4 bottom ash post-compliance loadings 

based on oil-fired units and units with a capacity of 50 MW or less not installing the technology 

basis (DCN SE01957.A1 Table A-41) from the bottom ash baseline loadings (DCN SE01957.A1 

Table A-39). EPA then multiplied the plant-level bottom ash pollutant removals by the plantspecific adjustment factor to estimate the pollutant removals associated with plants converting 

only those generating units with a capacity greater than 400 MW. EPA used the following 

equations to estimate plant-level pollutant removals for Option 4a: 

Plant-Level Option 4 Bottom Ash Pollutant Removals = Bottom Ash Baseline Loadings – Option 

4 Bottom Ash Post-Compliance Loadings 

Plant-Level Option 4a Bottom Ash Pollutant Removals = Plant-Level Option 4 Bottom Ash 

Pollutant Removals * Adjustment Factor 

Where: 

Bottom Ash Baseline 

Loadings 

= Plant-level baseline loadings for bottom ash transport 

water (from DCN SE01957.A1 Table A-39), 

Option 4 Bottom Ash PostCompliance Loadings = Plant-level technology option loadings for bottom ash 

transport water based on oil-fired units and units 50 

MW or less not installing the technology basis (from 

DCN SE01957.A1 Table A-41), and 

Adjustment Factor = Percentage of plant-level bottom ash costs and 

pollutant removals associated with units with a 

capacity greater than 400 MW.
Memorandum 

April 19, 2013 

Page 6 

EPA then used the plant-level Option 4a bottom ash pollutant removals along with the plantlevel baseline loadings to calculate the Option 4a bottom ash post-compliance loadings using the 

following equation, 

Plant-Level Option 4a Bottom Ash Post-Compliance Loadings = Bottom Ash Baseline Loadings 

– Plant-Level Option 4a Bottom Ash Pollutant Removals 

Where: 

Bottom Ash Baseline 

Loadings 

= Plant-level baseline loadings for bottom ash transport 

water (from DCN SE01957.A1 Table A-39), and 

Plant-Level Option 4a 

Bottom Ash Loadings 

= Plant-level technology option loadings for bottom ash 

transport water based on oil-fired units and units 400 

MW or less not installing the technology basis 

(calculated value). 

To estimate the industry-level loadings and pollutant removals associated with Option 4a, EPA 

added the Option 3 post-compliance loadings for FGD wastewater treated with chemical 

precipitation followed by biological treatment and fly ash dry handling conversions to the Option 

4 bottom ash post-compliance loadings. Option 4a post-compliance loadings also include the 

baseline loadings for landfill leachate, as this wastestream is not regulated under the proposed 

Option 4a. Table 2 presents the total loadings and pollutant removals for Option 4a by 

wastestream. 

Table 2. Estimated Pollutant Loadings and Pollutant Removals by Wastestream for 

Regulatory Option 4a

Wastestream Technology Option 

Total Industry Loading Total Industry Pollutant Removals a

Pounds/Year TWPE/Year Pounds/Year TWPE/Year 

FGD 

Wastewater 

Biological Treatment 

(Based on Oil-Fired Units 

and Units 50 MW or less 

Not Installing Technology 

Basis) 

2,080,000,000 411,000 1,160,000,000 2,620,000 

Fly Ash Zero Discharge 

(Based on Oil-Fired Units 

and Units 50 MW or less 

Not Installing Technology 

Basis) 

6,750,000 33,500 471,000,000 2,490,000

Bottom Ash Zero Discharge 

(Based on Oil-Fired Units 

and Units 400 MW or less 

Not Installing Technology 

Basis) 

710,000,000 1,140,000 991,000,000 1,550,000 

Landfill 

Leachate 

Baseline 89,800,000 56,500 0 0 

Option 4a Total 2,870,000,000 1,640,000 2,620,000,000 6,680,000 

a - Compared to baseline. 

Note: Excludes loadings for BOD, COD, TDS, and TSS. 

Note: Removals are rounded to three significant figures. The removals may not equal the sum of the removals 

presented in the tables in this section from the various wastestreams due to rounding. 
Memorandum 

April 19, 2013 

Page 7 

5.0 OPTION 4A NON-WATER QUALITY ENVIRONMENTAL IMPACTS

Option 4a non-water quality environmental impacts (NWQI) are equal to the values associated 

with Option 3 plus the NWQI associated with bottom ash handling conversions for all generating 

units with a capacity greater than 400 MW that discharge bottom ash transport water estimated 

using EPA’s methodology described in the memorandum “Steam Electric Effluent Guidelines 

Non-Water Quality Impacts” (DCN SE02025). These fly ash, bottom ash, and FGD chemical 

precipitation followed by biological treatment NWQI values are the same values used to 

calculate Option 4 NWQI for the following NWQI categories: 

 Energy requirements (measured as electrical energy usage (MWh)); 

 Fuel consumption (in gallons per year); 

 Air emissions associated with transportation (in tons per year); 

 Sludge production (in tons per year); and 

 Water intake reductions (in million gallons per year). 

To account for the 400 MW threshold for bottom ash proposed for Option 4a, EPA multiplied 

the plant-level NWQI associated with the categories identified above by the bottom ash 

adjustment factors calculated in Section 2.0. The resulting plant-level values were summed to the 

industry level and added to the Option 3 NWQI outputs for categories above to calculate the 

Option 4a NWQI. Because only FGD biological treatment contributes to sludge production, the 

value estimated for Option 4a is equal to Option 3. See DCN SE02957 for the plant-level fly ash 

NWQI estimates associated with energy, sludge production, and transportation air emissions for 

fly ash dry handling conversions, bottom ash handling conversions, and FGD chemical 

precipitation followed by biological treatment. See DCN SE02980 for plant-level water intake 

reductions associated with fly ash and bottom ash dry handling conversions and FGD recycle. 

Additionally, EPA estimated air emissions associated with increased auxiliary energy required to 

operate the systems needed to comply with the new ELGs. For Regulatory Option 1, 2, 3, 4, and 

5, EPA estimated auxiliary energy air emissions for each option at a plant-level (i.e., not 

specifically by wastestream) (see DCN SE02896). Because these air emissions are at the option 

level, EPA had to estimate the portion of Option 4 air emissions associated with bottom ash only; 

therefore, EPA estimated the percent of electrical energy usage (in MWh), which is estimated at 

the waste stream level, associated only with the conversion to dry bottom ash handling out of the 

entire Option 4 electrical energy usage (in MWh). EPA selected electrical energy usage because 

it is the variable used to estimate air emissions associated with increased air emissions. EPA 

determined that 47.8 percent of the electrical energy usage for Option 4 (673,780 MWh) is 

associated only with the conversion to dry bottom ash handling (321,780 MWh). EPA multiplied 

the plant-level Option 4 air emissions by 47.8 percent to obtain an estimate of the air emissions 

associated with increased auxiliary energy for dry bottom ash conversions.. After performing this 

calculation, EPA applied the bottom ash adjustment factors described in Section 2.0 to estimate 

the bottom ash auxiliary energy air emissions associated with Option 4a. EPA then summed the 

plant-level bottom ash air emissions to calculate the air emissions for the industry and added that 

value to the calculated Option 3 auxiliary energy emissions to estimate total auxiliary air 

emissions for Option 4a. 
Memorandum 

April 19, 2013 

Page 8 

EPA also estimated air emissions associated with the change in industry profile projected by 

IPM3, which were only calculated for Options 3 and 4. To estimate the total emissions for Option 

4a (transportation, auxiliary energy, and change in industry profile projected by IPM), EPA 

added the changes to air emissions projected by IPM for Option 3 because they are more 

conservative (i.e., they overestimate the emissions). The contribution of NOx is unchanged 

compared to Option 3 and 4; therefore, EPA assumed this would also be the contribution for 

Option 4a. For SOx and CO2, the contribution associated with Option 4 are lower (i.e., more 

negative); therefore, because EPA used the Option 3 values, the values presented in Table 3 are 

maximum values. Table 3 presents a summary of the industry-level NWQI estimated for Option 

4a. 

Table 3. Industry-Level Non-Water Quality Impacts Estimates for 

Option 4a 

Energy 

Electrical Energy Usage 472,369 MWh/year 

Fuel Consumption 4,617,848 gal/year 

Air Emissions 

NOX 1,320 tons/year 

SOX < -2,580 tons/year 

CO2 < -1,002,9 metric tons/year 

CH4 7.9 tons/year 

Sludge Production

Sludge 1,218,691 tons/year 

Water Intake Water Reductions

Water Reduction 103,000 million gal/year 

6.0 RETIREMENTS

As part of evaluating the population of steam electric generating units affected by the proposed 

effluent limitation guidelines (ELGs), EPA gathered information on an ongoing basis from 

public sources, including company press releases and information from technology vendors to 

account for the following changes to the industry: 

 Plants retiring units; 

 Plants converting fuel types to eliminate fossil fuel combustion residuals, 

especially residuals from coal or petroleum coke; 

 Plants upgrading a flue gas desulfurization (FGD) or leachate wastewater 

treatment system; and 

 Plants converting one or more units to a dry fly ash or bottom ash handling 

system. 

The memorandum entitled, “Changes to Industry Profile for Steam Electric Generating Units for 

the Steam Electric Effluent Guidelines Proposed Rule” (DCN SE02033), describes the process 

 

3

 It does not include an estimate for methane. 
Memorandum 

April 19, 2013 

Page 9 

EPA used to identify and verify the changes in the industry and documents those retirements or 

fuel conversions that were expected to occur before 2014. These changes were incorporated in 

the proposed ELGs. A second memorandum, “Additional Announced Retirements Not 

Accounted for in the Proposed ELGs” (DCN SE02133) describes additional retirements and fuel 

conversions identified after all analyses for the proposed ELGs were completed and evaluates the 

effect of including all changes that will occur before 2022. 

EPA evaluated how these retirements and fuel conversions would affect the subset of plants 

incurring costs for bottom ash under Option 4a and determined that over 90% of the units 

planning to retire by 2022 currently wet sluice their bottom ash and are under 400 MW. Because 

these units have already announced plans to retire, they will not incur costs under the final ELGs. 

Table A-2, included as an attachment to this memorandum, lists all generating units that have 

announced plans to retire by 2022. This table also includes the capacity of each unit and an 

indicator for whether or not the unit currently wet sluices bottom ash.