### MEMORANDUM

TO: Ron Jordan, EPA Jezebele Alicea, EPA

FROM: Anna Dimling, ERG Deborah Bartram, ERG

DATE: September 30, 2015

SUBJECT: Evaluation of Verified Retirement s in the Updated Industry Profile Population for the Steam Electric Effluent Guidelines Final Rule

ERG is providing technical support to the U.S. Environmental Protection Agency’s Office of Water, Engineering and Analysis Di vision (EAD) for development of the effluent limitations guidelines and standards (ELGs) fo r the Steam Electric Power Generating Industry. EPA, with the support of ERG, distributed the Questionnaire for the Steam Electric Power Generating Effluent Guidelines (“Steam Electric Survey”; DCN SE05903) to 733 steam electric power plants in the summer of 2010 to gather pl ant-specific data on the steam electric industry. The Steam Electric Survey requested data on pl ant operations in 2009. While the Steam Electric Survey remains the best source of plant specific information fo r the final ELGs, EPA recognizes that plant operations may have changed sin ce 2009. Therefore, EPA incorporated plant

retirements or fuel conversions if the indus try profile change met the following criteria 1 :

1. The retirement or fuel modification had to be to complete by December 31, 2023;

and

2. The retirement had to be substantiated by information directly from the operating company or government entity, either through an article, report, or press release.

EPA has a high degree of confidence that th e identified retirements and fuel conversions will occur because excluded generating unit retire ments and fuel conversions were factored in only if they could be verified by information di rectly from the plant operating company or a government entity. 2 At the request of EPA, ERG conducted an additional review all plants listed in the Updated Industry Profile Population to co nfirm that all announced retirements and fuel conversions have occurred or are still planned to occur. EPA confirmed that 406 of 416 of the steam electric generating units are still retiring or converting fuels before the implementation of the final rule, which represents 98 percent of the total nameplate capacity of units retiring/converting fuels. EPA also identified ad ditional (new) retirements or fuel conversions,

1 EPA also incorporated into the industry profile and th e rulemaking analyses other updates such as FGD treatment system upgrades and wet-to-dry conversions for ash handling systems. Those changes are not discussed in this

memorandum.

2 For the review discussed in this memorandum, which was performed to confirm the status of planned retirements/conversions, additional sources were also consulted. Consideration of a broader range of sources is acceptable for this additional review, since the purpose is mere ly to confirm the status of previously identified plans

for retirement/conversion.Memorandum September 30, 2015 Page 2 during the evaluation of verified retirements. However, these re tirements and fuel conversions were identified too late to be incorporated in EPA’s analyses (for more information see Changes to Industry Profile for Steam Electric Generating Units for Steam Electric Effluent Guidelines

Final Rule ; DCN SE05069).

Generating units that are proj ected to convert fuels (i.e., c ease burning coal or petroleum coke) or retire prior to implementa tion of the final rule will not incur any capital expenditures to comply with the final ELGs nor will they contribute to environmental improvements associated with the ELGs. For the purposes of this memo randum, EPA refers to those generating units excluded from compliance costs and pollutant lo adings due to planned retirements or fuel conversions as part of the Updated Industry Pr ofile Population (for more information on the Updated Industry Profile Popul ation, see Section 4.5.1. of the Technical Development Document for the Final Limitations Guidelines and St andards for the Steam Electric Power Generating Point Source Category (“TDD”; EPA-821-R15-007)).

Table 1 presents the count of steam electric generating units and pl ants in the Updated Industry Profile Population that were identified as retiring or convert ing fuel by December 31, 2023, along with the year that action was scheduled to occur. The table al so includes the total generating capacity for all retiri ng or converting generating units by year. As identified in Table 1, the retired or refueled units in the Updated Industry Profile Population represent a total of 232 GW of generating capacity, of which 209 GW (3 07 generating units located at 126 plants) was

scheduled to retire or convert fu els by the end of 2015. As a resu lt of the additional review, ERG confirmed that 212 GW (340 generating units located at 143 power plants) has already or will be retired or refueled by the end of 2015. The incr ease in the capacity and number of generating units is due to some generating units, previous ly identified as retiri ng/refueling after 2015, having retired/refueled sooner. For more information on each pl ant and steam electric generating

unit reviewed for retirement or fuel conversions, please see DCN SE05702A1.MemorandumSeptember 30, 2015Page 3Table 1. Total Capacity, Count of Units, and Count of Plants Retiring or Converting Fuels by Yearin the Updated Industry Profile Population and Evaluationof Verified RetirementsYear of Retirementor Fuel ConversionUpdated Industry Profile PopulationEvaluation of Verified RetirementsaNumber of SE UnitsRetiring/ConvertingFuelsNumber of PlantsRetiring/ConvertingFuelsTotal NameplateCapacity of UnitsRetiring/ConvertingFuels (GW)Number of SE UnitsRetiring/ConvertingFuelsNumber of PlantsRetiring/ConvertingFuelsTotal NameplateCapacity of UnitsRetiring/ConvertingFuels (GW)Retired/Refueledb8 2 0.375 48 21 5.882010 13 10 0.833 10 7 0.8682011 31 13 164 32 12 1642012 84 39 11.9 80 40 9.732013 39 20 6.85 46 21 7.532014 48 22 9.50 24 10 4.372015 84 33 15.6 100 46 19.92016 82 40 15.6 39 17 8.002017 19 8 4.32 20 8 4.512018 4 3 1.85 3 2 1.302019 0 0 0 0 0 02020 4 3 1.46 4 3 1.462021 0 0 0 0 0 02022 0 0 0 0 0 02023 0 0 0 0 0 0Unconfirmed 0 0 0 10 7 4.83Total 416170c232 416170c232a – ERG identified the year of retirement orfuel conversion from more recent source. Not all sources used for confirming the retirements were substantiated (i.e., directlyfrom the operating company or a government entity). Some sourcesindicated that retirements or fuel conversions were still planned or expected, for these generating unitsERG assumed the same date as was used for the Updated Industry Profile Population. See DCN SE05702A1 for more information.b - No date is available for these generating units but publicly available data indicates that these units have already been removed from service.c - The number of plants by year is not additive as one plant may operate steam generating units identified as retiring or converting fuels in different yearsMemorandum January 28, 2013 Page 4

During the additional review of all plants listed in the Updated Industry Profile Population, ERG was able to conf irm the retirement or fuel c onversion for all but ten of the steam electric generating units (located at seven pl ants) included in the Updated Industry Profile Population. EPA considered a unit retirement or fuel conversion unconfirmed if no source was

identified or if an additional source indi cates the unit is retirin g/converting fuels after implementation of the rule. Table 2 presents a summa ry of the plants and un its that were not able

to be confirmed in this evaluation.

Table 2. Unconfirmed Unit Retirements or Fuel Conversions from the Evaluation of the

Verified Retirements

Plant Name Plant

ID SE Unit

ID Capacity (MW) Updated Industry Profile Population Evaluation of Verified Retirements a

Retirement/

Conversion Year Retirement/

Conversion

Year Additional Data

Astoria b 6727 SE Unit-2 176.3 2016 No Date No source identified.

Big Cajun II 2334 SE Unit-1 626 2015 2025 Retirement date beyond 2023. Big Cajun II 2334 SE Unit-3 619 2015 No Date No source identified. Eddystone b 9768 SE Unit-3 399.5 2012 No Date No source identified. Eddystone b 9768 SE Unit-4 391 2012 No Date No source identified.

Four Corners 3191 SE Unit-4 818.1 2016 2041 Potential retirement date beyond 2023.

Four Corners 3191 SE Unit-5 818.1 2016 2041 Potential retirement date beyond 2023.

Northeastern

Power Station 6933 SE Unit-3 473 2016 2026 Retirement date beyond 2023.

Plant

McIntosh b 3200 SE Unit-1 103.5 2016 No Date No source identified.

Turkey Point b 9963 SE Unit-2 402 2016 No Date No source identified. a – ERG identified year of retireme nt or fuel conversion from more r ecent source. Not all sources used for confirming the retirements were substantiated (i.e., direc tly from the operating company or a government entity). b - These steam electric generating units do not utilize coal or petroleum coke as a fuel (i.e., unit operates on oil or natural gas).

In addition to Table 2, ERG analyzed the unconfirmed units to determine the impact on the ELGs. ERG provides further description of th e plants containing unconfirmed steam electric generating unit retirements and/or fuel conversions below.

 Astoria Generating Station (P lant ID: 6727) SE Unit-1 was originally confirmed with NEEDS database as retiring by 2016, ERG di d not identify an additional source to

confirm the retirement is still scheduled for that date. The company website indicates that

all units run on low sulfur no. 6 fuel oil and natural gas and unit 4 (SE Unit-3) was mothballed since 2012. Therefore, this plan t would not affect the ELG analyses.

 Big Cajun II (Plant ID: 2334) is in the Updated Industry Pr ofile Population as refueling SE Unit-1, SE Unit-2, and SE Unit-3 by 2015. Ho wever, based on additional review it seems that SE Unit-2 converted to natural gas, SE Unit-1 must retire/refuel/retire/retrofit by 4/1/2025, and SE Unit-3 is not planned to retire/convert. However, SE Unit-3 does notMemorandum September 30, 2015 Page 5 generate wastewater and SE Unit-1 only gene rates bottom ash transport water, so the change in compliance cost s would be negligible.

 Eddystone Generating Station (Plant ID: 9768) is in the Updated Industry Profile Population as retiring all 4 units (SE Unit-1 through SE Unit-4) on 12/31/2012. ERG

confirmed SE Unit-1 was retired in 2011 and SE Unit-2 was retired in 2012. ERG did not

find confirmation that SE Unit-3 and SE Unit- 4 retired, however, both of these units run on fuel and/or natural gas so they would not affect the ELG analyses.

 Four Corners (Plant ID: 3191) is in the Updated Industry Profile Population as retiring all 5 units (SE Unit-1 through SE Unit-5) by 7/1/2016. ERG found c onfirmation that SE Unit-1, SE Unit-2, and SE Unit-3 retired in 2014. However, ERG identified another source (from the U.S. Department of the Inte rior: Office of Surface Mi ning) that indicates the Arizona Public Service is petitioning to extend operation of SE Unit-4 and SE Unit-5

to 2041.

 Plant McIntosh (Plant ID: 3200) SE Unit- 1was originally co nfirmed with NEEDS database as retiring by 2016, ERG did not iden tify an additional source to confirm the retirement is still scheduled for that date; however, no sources were identified to suggest that retirement has been cancelled or pos tponed. This unit does not burn coal or petroleum coke as fuel, and therefor e does not affect the ELG analyses.

 Northeastern Power Station (Plant ID: 6933) announced one steam electric generating unit would be retiring in 2016 and the second w ould be retrofitted in 2016 and retired in 2026. In the Updated Industry Profile Popula tion, ERG included SE Unit-3 as retiring in 2016; however, based on this additional review it appears as though SE Unit-4 will retire

in 2016 and SE Unit-3 will retire in 2026. This plant does not generate fly ash or flue gas desulfurization (FGD) wastewater; however, the plant does generate bottom ash transport

water from both Unit-3 and Unit-4. Both steam electric generating uni ts have the same nameplate capacity, therefore the change in compliance costs would be negligible (less than 5% difference in compliance costs for the plant based on bottom ash transport flow reported in the Steam Electric Survey).

 Turkey Point (Plant ID: 9963) SE Unit-2 was originally confirmed with NEEDS database as retiring by 2016, ERG did not identify an additional source to confirm the retirement is still scheduled for that date; however, no sources were identified to suggest that retirement has been cancelled or postponed. This unit does not burn coal or petroleum coke as fuel, and therefore does not affect the ELG analyses.

Plants stated several reasons for unit reti rement and fuel conversions, which varied for each plant and company. ERG has provided a lis ting of some common reasons cited by steam electric power plants for re tiring or converting fuels:

 Market Conditions : Cost of coal and decreased powe r demand was cited as a reason for several plants.

 Age of Plant : Several older plants indicated that th e steam electric generating process was no longer efficient due to the age of the plant and upgrading the system would incur significant costs.Memorandum September 30, 2015 Page 6

 Settlements : There were several settlements between the industry and the EPA or other entities (e.g., Sierra Club) that required plants to retire/r efuel particular steam electric generating units by a certain date.

 State Regulations: Some plants indicated that stat e regulations (e.g., Colorado Clean Air Act, Georgia Environmental Protection Divisi on (EPD) Multipollutant Rule) forced the retirement or refueling of steam electric generating units.

 Federal Regulations: Some plants indicated that the n eed to upgrade pollution controls as

a result of several different fe deral regulations caused the re tirement or fuel conversion at their plant.

 Improve Efficiency: Plants that converted fuels (i.e., na tural gas, biomass) stated that the company aimed to increase the energy output, cut emissions, and/or use renewable fuel.