March 16, 1994

MEMORANDUM

SUBJECT: Cost-Effective Nitrogen Oxides (NOx) Reasonably

Available Control Technology (RACT) 

FROM: D. Kent Berry, Acting Director

Air Quality Management Division (MD-15)

TO: Director, Air, Pesticides and Toxics

 Management Division, Regions I and IV

Director, Air and Waste Management Division,

 Region II

Director, Air, Radiation and Toxics Division,

 Region III

Director, Air and Radiation Division,

 Region V

Director, Air, Pesticides and Toxics Division,

 Region VI

Director, Air and Toxics Division,

 Regions VII, VIII, IX, and X 

This memorandum provides guidance for determining NOx RACT

[required by section 182(f) of the Clean Air Act (Act)] as it

relates to nonutility sources and utility boilers which were not

addressed by the Environmental Protection Agency's (EPA's)

previous guidance. The document entitled, "State Implementation

Plans; Nitrogen Oxides Supplement to the General Preamble; Clean

Air Act Amendments of 1990 Implementation of Title I; Proposed

Rule," (NOx supplement) (November 25, 1992, 57 FR 55625)

identifies emission rates that presumptively meet the NOx RACT

requirement for tangential and dry bottom wall-fired utility

boilers. The guidance goes on to state that, for other major NOx

sources, EPA expects that NOx RACT will be set at levels that are

"comparable" to the levels specified for tangential and dry

bottom wall-fired utility boilers. The guidance states that: 

"Comparability shall be determined on the basis of several

factors including, for example, cost, cost-effectiveness, and

emission reductions." This memorandum primarily addresses one of

the factors in a NOx RACT determination--cost effectiveness--and

provides guidance on how to determine which control techniques

are of "comparable cost-effectiveness for NOx RACT." In
addition, this memorandum provides limited discussion of other

factors, including emission reductions.
3

It should also be noted that, in certain areas, States may

require NOx controls based on advanced control technologies;

i.e., control technologies that reduce emissions beyond RACT or

title IV (acid rain) requirements. For example, advanced

controls would be required as part of a serious ozone

nonattainment area's 1994 State implementation plan if modeling

found such controls to be necessary to provide for expeditious

attainment of the ozone national ambient air quality standards. 

In order to avoid or minimize potentially incremental or

repetitive control requirements, States and regulated sources

should consider in advance the implications of all relevant

requirements.

In general, the actual cost, emission reduction, and costeffectiveness levels that an individual source will experience in

meeting the NOx RACT requirements will vary from unit to unit and

from area to area. These factors will differ from unit to unit

because the sources themselves vary in age, condition, and size,

among other considerations. The EPA's general RACT guidance

urges States to judge the feasibility of imposing specific

controls based on the economic and technical circumstances of the

particular unit being regulated. In many cases, these factors

are not the same in all States since the specific NOx RACT

emission limitations and averaging times will differ from State

to State. The EPA's presumptive NOx RACT levels for certain

utility boilers are based on capabilities and problems which are

general to the industry on a national basis. States may adopt

statewide NOx RACT levels which are more stringent than the EPA

levels based on statewide industry conditions. For these

reasons, a single cost, emission reduction, or cost-effectiveness

figure cannot fully describe the NOx RACT requirement. Thus, the

information provided in this memorandum does not prescribe a

single cost-effectiveness figure, but rather provides additional

guidance which States may use as they make NOx RACT

determinations.

For NOx RACT, cost effectiveness is a figure in dollars per

ton of NOx emissions reductions per year. In order to clarify

the "comparable cost-effectiveness for NOx RACT" referred to in

the NOx supplement, EPA reviewed the December 1992 EPA/Northeast

States for Coordinated Air Use Management (NESCAUM) report

(EPA/NESCAUM report) on utility boilers entitled, "Evaluation and

Costing of NOx Controls for Existing Utility Boilers in the

NESCAUM Region" (EPA 453/R-92-010). This report identifies

various NOx control technologies for existing utility boilers and

their associated costs, cost effectiveness, and emission

reductions. As described below, EPA has extracted from the

report the cost effectiveness of controls that are expected to

meet the EPA's presumptive NOx RACT for tangential and dry bottom
4

wall-fired utility boilers at least cost. These cost figures

generally define the "comparable cost-effectiveness for NOx RACT"

referred to in the NOx supplement.

The November 1992 NOx supplement to the General Preamble

specifies the following areawide presumptive NOx RACT emission

limits (lbs NOx per million Btu determined on a rolling 30-day

average) for utility boilers:

Coal: tangential--0.45 wall--0.50

Gas/Oil: tangential--0.20 wall--0.30

Technologies available to meet these NOx RACT levels are

described in section 4 of the EPA/NESCAUM report. Section 5 of

that report describes the cost algorithm used, which includes

consideration of process capital equipment, total plant cost and

investment, fixed and variable operating cost, total capital

requirement and consumable costs. The cost-effectiveness figures

in the report are based on data from different geographic regions

and represent a variety of averaging times. The EPA believes the

data are appropriate to use with respect to the EPA presumptive

NOx RACT 30-day rolling average or to a daily average. 

As described in tables 1-4 and 1-5 of the EPA/NESCAUM

report, the combustion-modification technologies available to

meet EPA's presumptive NOx RACT levels show a range of cost

effectiveness of about $160 to $5100 per ton; and the postcombustion technologies, excluding selective catalytic reduction,

show a range of about $320 to $5200 per ton. These are national

estimates based on constant 1991 (1st quarter) dollars. Some

States may need to make regional adjustments to this range to

reflect prevailing installation and operating labor costs which

are higher or lower than the national average. The data indicate

that some coal burning wall-fired boilers can meet EPA's

presumptive NOx RACT levels by application of low NOx burners at

a cost effectiveness as low as $160 per ton. The data also

indicate that certain tangentially-fired utility boilers may

approach a cost-effectiveness level of $1300 per ton in order to

meet the EPA presumptive NOx RACT levels. Application of

selective catalytic reduction to utility boilers does not appear

necessary in order to meet the EPA presumptive NOx RACT levels. 

In determining the NOx RACT comparable cost-effectiveness

level, EPA believes that it is appropriate to focus on the range

of cost effectiveness. The range is appropriate due to the

variability of the actual cost effectiveness that is expected

from unit to unit. Therefore, NOx technologies with a costeffectiveness range that overlaps the $160 to $1300 range should,

at a minimum, be considered by States in the development of their
5

NOx RACT requirements. 

In some cases, States will need to consider a broader costeffectiveness range. For example, where States adopt NOx RACT

requirements that are more stringent than the EPA's presumptive

RACT, the associated control technologies may result in higher

cost-effectiveness figures and, thus, States should expect to

apply a broader cost-effectiveness range. In addition, since the

EPA's presumptive RACT levels are expected to be met by a

majority of (but not all) sources, States should expect some

sources to experience higher cost-effectiveness levels in order

to meet the NOx RACT requirements. 

While cost effectiveness, as described above, is an

important consideration, it must be noted that other factors

should be integrated into a RACT analysis. For example, emission

reductions and environmental impact should be considered. 

Regarding emission reductions, a comparison of uncontrolled NOx

emission levels (from the EPA/NESCAUM report) with EPA's

presumptive RACT levels indicates that the utility boilers are

expected to achieve emission reductions of about 30 to 50

percent. If control technologies in the $160 to $1300 range are

inadequate to achieve emission reductions in the 30 to 50 percent

range, then the State should consider alternate technologies

which achieve those reduction levels. For example, if a RACT

analysis indicates that a cost effectiveness of $2000 per ton is

necessary to achieve emission reductions in the 30 to 50 percent

range, the State may need to adopt that requirement in order to

achieve comparable emission reductions, consistent with EPA's

guidance.

The environmental impact of various control technologies

should be included in the RACT determination in some cases. For

example, sources that operate intermittently, but whose peak

operating times coincide with the peak ozone periods, should be

considered separately from sources with relatively constant yearround emissions. In addition, where an otherwise acceptable

control technology might significantly increase carbon monoxide

(CO) emissions in a CO nonattainment area, the State should

consider alternate technologies.

Questions concerning this memorandum can be addressed to

John Silvasi at (919) 541-5666; questions on specific

technologies and costs can be addressed to Bill Neuffer at (919)

541-5435.
6