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# OAR Box 

# 1828 Prepped by Ollie Stewart



## Document

Number: 

# 122 ) ll-K - 

# (B ) -11 1

Docket Number: 

# A-83-2 7

Printed 11/12/2008 11:12:52 AM Sheet 122 of 325P. 2



## ENERG Y AN D ENVIRONMENTA L ANALYSIS , INC
.

II-K-(B)-11 1 Ma y 25 , 198 3 V

Mr . Rober t Shor t Economi c Analysi s Branc h U.S . Environmenta l Protection Agenc y Mai l Drop-1 2 Researc hTriangl e Park , N C 2771 1 Subject : EP

A Contrac t No . 68-02-3564 , Wor k Assignmen t # 9
Dea r Robert : Nationa l environmental , energ y an d cos t impact s o f alternative indus tria l boile r NSP S S0 „ emission regulation s wer e forwarde d t o yo u o n Ma y 12 , 1983 . Th e purpos e o f thi s lette r i s t o explai n ho w th e ICF coa l pric e projection s wer e applied t o th e IFCA M coa l type s i n thi s analysis . Projected F.O.B . min e coa l price s fo r the 3 8 IFCA M coa l type s wer e no t adjusted . The

y ar e identica l t o the F.O.B . min e coa l pric e forecas t used i n Marc h198 3 an d earlie r IFCA

M runs . The projecte d IFCA M trans portation cost s wer e adjuste d s o tha t the projecte d IFCA M delivere d coa l pric e approximate d (withi n 5 o r 1 0 cent s pe r millio n Btu ) the appro priat e ICF delivere d coa l pric e (sam e deman d region , sam

e coa l type — bituminou s o r subbituminous , the IFCA M sulfur conten t wa s i n th e sam e sulfur clas s a s the IC F coa l type) . ICF Included projecte d coa l price s fo r al l bituminou s coa l type s i n region s 1 , 2 , 3 , 4 , 5 , 6 , an d 7 . Therefore , al l IFCA M bituminou s coa l type s wer e permitte d t o b e selected i n thes e regions . ICF di d no t includ e bituminou s coa l price s l n region 8 fo r coa l type s wit ha sulfur conten t greate r than 2. 5 lbSO./MMBtu . Therefore , EE A di d no t permi t IFCA

M bituminou s coa l type s wit hsulfur content s greate r than 2. 5 lbS0 2 /MMBt u i n regio n 8 . Anothe r example : ICF di d no t includ e price s for lo w sulfur o r low mediu m sulfur subbituminou s coa l type s i n regio n 9 . IC F di d includ e a pric e for a mediu

m sulfur subbituminou s coa l type . EE A permitte d a mediu m sulfur subbituminou s coa l typ e i n IFCA M an d blocke d lowe r sulfur subbituminou s coa l type s i nregio n 9 .

Economic s /

Engineerin gP. 3

Mr . Rober t Shor t May 25 , 198 3 Pag e 2

IC F ha s a bituminou s lo w sulfur coa l type (<1.0 8 lbS0 2 /MMBtu) . The annua l averag e emission rat e for thi s coa l type i s 0.9 5 lbSO./MMBtu . Thi s coa l type i s a complianc e coa l typ e fo r a 1. 2 lbS0„/MMBt u 30-da y rolling-averag e emission rat e (assume d to b e equivalen t to a 1. 0 lb S0„/MMBt u annua l averag e emission rate) . Ther e ar e no IFCA M bituminou s coa l type s whic hwil l compl y wit hthi s regulation . Ther e ar e example s o f mor e than on e IFCA M coa l type corresponding wit h a singl e ICF coa l type . Fo r example , conside r th e IC F bituminou s mediu m sulfur (1.67-2.5 0 lbS0 2 /MMBtu ) coa l type . Ther e ar e eight IFCA M coa l type s i n thi s categor y fsuppl y

region/l bS0 2 pe r MMBtu) :

• Norther n Appalachia/2.3 , 2.29 , 1.72 , 1.71 ;

• Centra l Appalachia/1.77 , 1.73 ;

• Southern Appalachia/2.27 ; an d

• Rockies/1.85 . I ncase s lik e this , al l eigh t IFCA M coa l type s wer e assigne d approxi matel y th e sam e ICF coa l pric e i n an y on e deman

d region b

y adjusting th

e ol d MEF S industria l coa l transportation costs . Thi s procedur e wa s followed regardles s o f whethe r o r no t th e IFCA M coa l type wa s a ra w coa l or a cleaned coal .
T o summarize , 1 ) ther e wa s one se t o f coa l qualit y characteristic s (sulfur , as han

d Bt u content ) pe r coa l pric e whe n th e IC F coa l type s wer e ru

n I n IFCAM . Ther e wer e a large r numbe r o f coa l qualit y charac teristic s wit hnearl y identica l price s i n the May 12 , 198 3 IFCA

M run s (inth e exampl e summarized i n the previou s paragraph , eight IFCA M coa l type s ha

d nearl y

identica l coa l prices) . Th e IFCA M run s wit hIC F price s an d IFCA M coa l type s included a wide r variet y o f coa l qualit y

character istic s tha

n IFCA M run s wit hICF price s an d coa l types ; 2 ) EE A di d no t attemp t to adjus t th e coa l price s t o reflec t an y qualit y

distinctions . For example , i t i s note d above tha t eight IFCA M coa l type s correspon d t o a singl e ICF coa l type . EE A se t the delivere d price s o f thes e eigh t coa l type s to b e approximatel y equa l regardles s o f thei r variabilit y i n sulfur , as han

d Bt u content ; an

d 3 ) ICF ha s a lo

w sulfur "compliance " bituminou s coa l type an d IFCA M doe s not .
I hop e tha t thi s lette r i s mor e illuminating tha n confusing . Sincerely ,

Tlm Hoga n (j
TH:m k

cc : A l Weh e