## UtilityWaterActGroup

August 19, 2015
VIA ELECTRONIC MAIL 

### Mr. Vlad Dorjets Office ofInformation and Reguiatory Affairs Office ofManagement and Budget 725 17th Street, NW Washington, DC 20503 Dear Mr. Dorjets, Steering!Audit Committee Alan R
. Wood, P.E., Chairman Raymond Averitt C
. Richard Bozek Russell J
. Furnari Donna B
. Hill Claudette B
. Horn David M. Lee Robert Matty Jennifer A. Stenger, P .E
. Keith Stephens



### Thank you for the opportunity to meet and discuss the ramifications ofEPA's proposed Steam Electric Effluent Guidelines Rule
. This letter describes in more detail our issues with EPA's proposed limits for FGD wastewater and our recommendations for a more feasible and cost-effective approach. 

### I. UWAG's Cost Effectiveness Analysis As we explained at our recent meeting and in our 2013 comments, only physical/chemical treatment is cost effective for FGD wastewater. UWAG estimated the costeffectiveness ofapplying physical/chemical treatment to all units above 50 MWs at $311 per TWPE ($1981). The cost-effectiveness ofincremental biological treatment, in contrast, is $1346 per TWPE ($1981). See UWAG 2013 Comments, Attachment 14, p. 16. Incremental biological treatment, therefore, is more than three times higher than EPA's highest ever cost per TWPE ($404 per TWPE, for the Electrical and Electronic Components industry) (as referenced in the proposed Steam Electric Rule, 78 Fed. Reg. at 34,504). There are several reasons why EPA's TWPEs and costs per TWPEs for FGD wastewater are different from UWAG's, and we wanted to highlight the most important ones, as described below. 

### 11. EPA Counted TWPEs for Pollutants not Removed by theBiological Portion ofthe Treatment System As we noted in our 2013 Comments, using the EPA sampling data, the TWPEreductions for boron, magnesium, manganese, cadmium, and cyanide account for 87% ofthe TWPEs removed by biological treatment. Butthose TWPEs are not accurate. The apparent removal is

Hunton & Williams LLP • Counsel to UWAG • 2200 Pennsylvania Ave., N.W. Washington, D.C. 20037,-------------- ---------

# v~**·' n~**  UtilityWaterActGroup Mr. Vlad Dorjets August 19, 2015 Page 2
caused by EPA's mismatching ofinfluent to, and effluent from, the biological treatment system. EPA used average concentration values from the physical/chemical effluent for three facilities, Hatfield, Keystone, and Miami Fort, and applied these values as ifthey were actual influent concentrations to the biological treatment systems at Allen and Belews Creek. See UWAG 2013 Comments, pp. 132-47. EPA did this despite having actual characterization data for the influent to the biological portion ofthe treatment systems at Allen and Belews Creek. EPRI also commented on this issue, noting that "plants used for CP [chemical/physical] evaluation have much higher average concentrations ofmanganese, cyanide, magnesium, and boron than the two plants [Allen and Belews Creek] used for Biological Effluent. This leads to the false appearance ofconstituent removal." EPRI 2013 Comments, p. 4-10. EPRI provides the following table illustrating the correct percentage removals at Allen and Belews Creek for four parameters based on EPA sampling data: 

### Evaluation ofTrue Biological Removal ofFour "Artifact" Constituents at Allen and Belews Creek Parameter Allen Belews Creek Biological Biological Removal Biological Biological Removal

Influent Effluent 

### (%) Influent Effluent 

### (%)

(ug/1) (ug/1) (ug/1) (ug/1) Magnesium 675,500 676,000


### --- 702,500 739,000


### --- Cyanide 1 88 104


### --- 33.4 33.0 I Manganese 1,279 1,072 16 2,701 2,844


### -- Boron 94,717 78,616 17 164,431 168,000


### --- EPRI 2013 Comments, p. 4-11 (based on EPA SER data). In addition to the mismatches for magnesium, cyapide, manganese, and boron, UWAG also identified cadmium as a constituent for which EPA erroneously claimed levels ofremoval

1All ofEPA's cyanide data are questionable. UWAG commented that EPA's cyanide data which it used to calculate FGD TWPEs were invalid because ofthe potential interferences with the chosen analytical method, 4500 CN E. In fact, all ofEPA's cyanide data was qualified by its laboratory due to analytical issues such as: (I) inadequate preservation ofsamples; (2) measurements were less than the MDL, (3) measurements were less than the RL; (4) matrix spikes and/or matrix spike duplicates were not within laboratory control limits; or (5) cyanide was found in the blank. See UWAG 2013 Comments, pp. 141-44.

# .J utilityWaterActGroup Mr. Vlad Dorjets August 19,2015 Page 3
within the biological portion ofthe treatment system due to mismatched data. UWAG 2013 Comments, pp. 133-34. Therefore, EPA's method ofestimating FGD wastewater removals was not scientifically valid, as is evident from EPA's own data, when the Allen and Belews Creek physical/chemical effluent is compared to the Allen and Belews Creek biological effluent. 

### III. EPADid Not Evaluate Incremental Biological Treatment Another major difference between EPA's and UWAG's approach to FGD TWPEs and cost per TWPE arises from EPA's choice to assess pollutant removals and costs collectively for physicat/chemical and biological treatment. In contrast, UWAG separately examined the pollutant removals and resulting TWPEs for physical/chemical treatment and incremental biological treatment. UWAG's approach is supported by EPA and OMB guidelines, which recommend assessing incremental costs and benefits for regulatory alternatives.2 Because physical/chemical treatment is so effective and removes a large majority ofthe pollutants, EPA's combined TWPEs are high in comparison to UWAG's for incremental biological treatment. Based on EPA's flawed approach, UWAG's experts estimated EPA's cost per TWPE for physical/chemical plus biological to be $61 perTWPE ($1981). This is very low compared to UWAG's for incremental biological treatment ($1346 perTWPE ($1981)). 

### IV. UWAG's Analysis ofFGD Thresholds As one ofits preferred options, EPA proposed to apply limits based on physical/chemical treatment plus biological to plants with a total wet scrubbed capacity greater than 2000 MWs, and "bestprofessionaljudgment" limits below that threshold. 78 Fed. Reg. at 34,458. UWAG proposes a similar option. UWAG proposes that EPA promulgate adjusted mercury and arsenic limits consistent with physical/chemical treatment only for plants with a total wet scrubbed capacity (not including dry scrubber units or other scrubbed units that do not discharge, such as those with solid fixation processes, spray dryers or those which evaporate FGD wastewater and use the concentrate to condition ash prior to landfilling) below 2000 MWs. For plants equal to 2000 MWs or greater total wet scrubbed capacity (again, not including dry scrubbers or other scrubbed units that do not discharge), UWAG proposes that EPA promulgate adjusted mercury, arsenic and selenium limits based on physical/chemical treatment plus biological treatment.

2

### See U.S. EPA, Guidelines for Preparing Economic Analyses, p. ll-5 (2010). Also, OMB Circular A-4 (p. 5) states: "Once an agency identifies the least burdensome tool for achieving its regulatory objective, measuring the incremental benefits and costs ofsuccessively more stringent regulatory alternatives will allow an agency to identify the alternative that maximizes netbenefits."

### • 

# --.) UtilityWaterActGroup Mr. Vlad Dorjets August 19,2015 Page 4
UWAG has carefully studied the industry's fleet ofscrubbed units. We started with the released ICR data and then collected additional and updated data on scrubbers during the comment period. We used the updated data (which included some technology upgrades not reported in the ICR) to define the universe ofplants with wet scrubbers and the individual plants' levels ofFGD wastewatertreatment. We used EPA's FGD characterization data (adjusted to address false removals, as discussed above) to develop TWPE estimates and costs per TWPE. Attachment 37to the UWAG 2013 Comments documents our analysis. Based on that analysis, ifEPA applies mercury, arsenic, and selenium limits based on physical/chemical and biological treatment to those plants with a total wet scrubbed capacity above 2,000 MWs, and applies limits for mercury and arsenic based on physical/chemical treatment only for plants between 50 MWs and 2000 MWs, the approach will remove 92% of total TWPEs that would be removed ifthe combined physical/chemical and biological treatment were applied to all plants. As we discussed, EPA's proposed limits for arsenic, selenium, and mercury are not feasible as industry-wide standards. EPA's failure to consider whether physical/chemical plus biological treatment is appropriate for plants burning Powder River Basin coal is a serious gap in the record. Moreover, as coal-fired units react to new market and regulatory conditions, they need the flexibility to adjust coal blends and will move from baseload to peaking units. These transitions will affect the operation ofbiological treatment units. Again, thank you for meeting with us and please contact me (205-257-5234) or Kristy Bulleit (202-955-1547) ifyou have any questions about UWAG's recommendations. Very truly yours, 

### Is/ Donna B. Hill UWAG Effluent Guidelines Chair



### •