# s AMERICAN 

### E11CfRIC POWER June 24, 2013 Mary Pettyjohn Arkansas Department

of Environmental Quality 5301 Northshore Drive Little Rock, AR 72118 Dayana Medina U.S. Environmental Protection Agency, Region

6 Multimedia Planning and Permitting Division Air Planning Section (6PD-L) 1445 Ross A venue Dallas, TX 75202 Re: BART Determination

for S02 and NOx Flint Creek Power Plant, Gentry, Arkansas (AFIN 04-00107) Dear Ms. Pettyjohn and Ms. Medina:

American Electric Power 1201 Elm Street, SUite 800 Dallas, TX 75270 AEP.com Below are the responses

to each of the questions/requests

sent to Southwestern Electric Power Company (SWEPCO)

on May 22, 2013, regarding
the BART five factor analysis for the Flint Creek Power Plant. We have borrowed text used in your May 22, 2013 email
to set off the specific responses. We have numbered
the each issue for the sake of clarity. 1a. 

### It does not appear that any new information was provided related

to the cost estimate for the NOx control options. As we indicated

in comments provided
on 02/08/2013, very little documentation

has been provided for the capital and operating costs for the LNBIOFA and SCR control options.

In particular, for the LNB/OFA option, there
is no breakdown provided for the estimated capital and installation costs.
A breakdown

of these costs should be provided, along with
a copy of any pertinent documents related

to the "Public Service Commission Docket 12- 008-U" referenced under footnote

1, and any other documentation

to support the LNB/OFA cost estimate. 1 b. The cost estimate for the SCR option also provides
no breakdown

of the capital costs and very little detail of the O&M costs. Footnote

1 indicates that the SCR capital and O&M cost estimates were developed

by AEP based on engineering estimates that were informed
by AEP's experience with SCR installation

at other plants owned by AEP. Please provide documentation to support the SCR cost estimate. We use

a phased approach

to project cost estimating that generally follows the Association

for the Advancement

of Cost Engineers (AACE) recommended practice
on major environmental compliance projects. The costing information

we have presented

is considered

an AACE Class

5 estimate with no site specific feasibility

or conceptual engineering
and design. AEP's Class

5Letter
to Ms. Pettyjohn and Ms. Medina June 14, 2013 Page

2 of8 of the high-level estimate categories

of material, labor and other project costs (i.e., for the LNB/OFA estimate).

A more defined, site specific cost estimate will not be performed/available until funding

is approved

to assemble

a project team and initiate

a Phase

1 Planning, Conceptual Engineering
and Feasibility evaluation effort. The current AACE Class

5 capital direct cost estimate
of $16MM for the LNB/OF

A option was developed
by AEP Region Engineering

in early 2012. This information

is included

in Attachment

A on the enclosed CD. The estimate indicates

a 2015-2016 cash flow, but it has been revised and escalated

to the current AEP/SWEPCO
long range plan (LRP) cash flow years of 2017-2018.

At this project phase, the material estimate

is based on the assumed highest cost burner technology proposed and available from the OEM, B&W. The $16MM ($381Kiburner) cost estimate for Flint Creek
is roughly comparable-

on a total cost and cost per burner basis (adjusted
for escalation)-

to actual costs experienced

by AEP for Amos

1 in 2011 for $17.4MM ($483klburner), Amos

2 in 2010 for $16.4MM ($456klburner)

and Rockport

I in 2004 for $20.1MM ($205klburner). The operating costs for the LNB/OFA option are relatively minor compared

to the capital cost for this option, and for the purpose
of the BART analysis these costs are based on guidance/methods

in the EPA's CCM. The current AACE Class

5 capital direct cost estimate
of $121MM
for the SCR option was developed using

a levelized $/kW total cost approach
by interpolation between two other Class

5 SCR estimates

in the AEP LRP: Rockport

at $203/kW and Conesville

6 at $234/kW (2016 basis).

A levelized $230/kw direct cost was selected. No other breakdown

of capital and installation costs are available for the Flint Creek SCR option. The Flint Creek SCR cost estimate was the subject of several interrogatory questions and answers associated with the APSC Docket 12-008-U. Relevant excerpts from the docket are included

as Attachment Bon the enclosed CD. The same $230/kW SCR direct cost estimate was used
by witness Scott Weaver

in the AEP Strategist cost analysis model discussed

in his testimony. The operating costs for the SCR option are based on estimates obtained from AEP experience
for catalyst replacement, commodity (urea) use, and fixed operations and maintenance.
For example, the catalyst replacement

is based on a yearly levelized cost of 50 percent
of the 1300- MW Rockport plant SCR catalyst replacement.
The information
that formed the basis of the SCR O&M cost estimates

is included

as Attachment Con the enclosed CD. 2. 

### We also note that the LNB/OFA cost estimate assumes

a 15 year equipment life. Unless proper documentation

is provided

to demonstrate that the anticipated equipment
life of this control option

is limited

to 15 years, we believe that an anticipated

30 year equipment
life would be more appropriate

to use in the cost analysis. Since EPA's Control Cost Manual (CCM) does not provide equipment
life information

for combustion controls, we referenced
the WRAP guidance document, 

### Analysis
of CombustionLetter
to Ms. Pettyjohn and Ms. Medina June 14, 2013 Page

3 of8 

### Controls for Reducing NOx Emissions From Coal-fired EGUs

in the WRAP Region, Final Report, September

6, 2005,
to inform our BART-related
cost effectiveness calculations. This document uses an equipment
life of 15 years for combustion controls.



### It is our understanding that

a 15-year equipment
life for combustion controls

is typical for BART analyses, and this

is consistent with our recent experience, where improved controls have been installed

in response to more stringent environmental requirements sometimes

in less than 15 years. Extending
the equipment
life of the combustion controls

to 30 years would not change the outcome
of the BART analysis. 3. 

### In addition,
we note that the SCR cost estimate assumes

a 20 year equipment life. Unless proper documentation

is provided

to demonstrate that the anticipated equipment
life of SCR
is limited

to 20 years, we believe that an anticipated

30 year equipment
life would be more appropriate

to use in the cost analysis. The EPA Control Cost Manual (CCM) explicitly assumes

an economic life of 20 years for SCR.

1 The above comment contradicts

a previous directive

to conform our equipment
life assumptions to those used in the CCM. Comment

#5 in Ms. Dayana Medina's November

1, 2012 email
to Ms. Mary Pettyjohn states: 

### The OAQPS Control Cost Manual (CCM) assumes
an economic lifetime of20 years for an SNCR system. Therefore, unless AEP provides proper documentation to demonstrate that the anticipated equipment
life is limited

to I 5 years, AEP should assume

a 20 year equipment
life for SNCR. As
a result of the November

1, 2012 comments,
we prepared

a revised BART report that assumed 20-year economic life values for both SNCR and SCR. Moreover,

it is our understanding
that 20 years
is typical
in BART analyses for SNCR and SCR. 4. 

### In addition,

as we noted
in previous written comments, additional justification should be provided for the selection of0.23 lb/MMBtu

as the NOx BART emission limit using LNBIOFA. The BART report states that this limit was selected based on experience with similar boilers and vendor discussions.

A vendor quote should be provided
or a list of similarly configured boilers should be compiled along with emissions data from CAMD for these similar boilers

in support of the 0.23 lb/MMBtu NOx BART emission limit for the Flint Creek unit. AEP has solicited
an OEM (Babcock

& Wilcox, B&W) proposal for LNB/OFA that supports the performance used in the LRP and BART analysis. We have obtained

a non-confidential, redacted version
of this proposal from B&W and are providing

a copy as Attachment Din the enclosed CD. OEM marketing information boasts NOx performance guarantees less than the 0.23 lb/MMBtu 1 See Section 4.2, Chapter

2, page 2-48.LettertoMs.PettyjohnandMs.MedinaJune14,2013Page4of8levelcurrentlyselectedintheBARTanalysis;however,wearereluctanttospecifyalowerNOxrate.OurjustificationisbasedonactualoperatingCAMDdatawithsimilargeneratingunitsandtheexpectedFlintCreekLNB/OFAperformance.TheOEMproposalincludesalistingofunitssimilartoFlintCreekthathaveoperatingexperiencewithsimilarLNB/OFAequipmentandconfiguration.ActualNOxperformancedataontheseunitsweretakenfromCAMD,andthisinformationisincludedasAttachmentEontheenclosedCD.TheNOxperformanceguaranteespecifiedintheOEMmarketinginformationarebasedonspecificoperatingconditionsthatcannotbeconsistentlyachievedinpracticeastheCAMDdataindicates.WemusttakeintoconsiderationthetotalimpactonNOxlevelduetofuelsupplyflexibility,plantoperatingconditions,testversusCEMSNOxmeasuringequipment,andactualinstalledLNB/OFAoperatingperformance.Further,basedontheOEMproposal,theexpectedNOxemissionratespansarangeofpossibleperformanceofbetween0.145lb/MMBtuand0.218lb/MMBtu.5.PleaseprovideacopyoftheEPRIcalculationsusedtoestimateS04emissionsforallmodelingscenarios.Thecalculationsareincludedinthe"ConsolidatedSpreadsheet_2013-04-05.xlsx"(cellsH19:N22ofthe'Inputs'tab)providedtoMs.MaryPettyjohnonApril11,2013.Wehopethatthisinformationwillsatisfactorilyaddressyourquestionsandconcerns.Ifyouhaveadditionalquestions,AEP/SWEPCOreiteratesitsoffertomeetwithEPAandADEQinDallas.Pleasecontactmeat(214)777-1113tomakearrangementsforsuchameeting,ortoprovideanyadditionalinformationyoumayrequire.KristenP.GausEncl:CDcontaining:AttachmentA -LNB/OFAcapitalcostestimateAttachmentB-ExcerptsfromAPSCDocket12-008-UregardingtheSCRcostestimateAttachmentC-B&WproposalforLNB/OFAAttachmentD-SCRO&McostestimatesAttachmentE-ComparableNOxdatafromCAMDAttachmentALNB/OFAcapitalcostestimateAttachmentBExcerptsfromAPSCDocket12-008-UregardingtheSCRcostestimateAttachmentCSCRO&McostestimatesAttachmentDB&WproposalforLNB/OFA(redacted)AttachmentEComparableNOxdatafromCAMD