DRAFT –DELIBERATIVE DOCUMENT – FOIA EXEMPT

Date: November 6, 2012

Subject: Reconsideration of the National Emissi on Standards for Hazardous Air Pollutants (NESHAP) Maximum Achievable Contro l Technology (MACT) Floor Analysis

for Coal- and Oil-fired El ectric Utility Steam Generating Units, Proposed Rule

From: Stephen M. Boone (RTI International)

To: Bill Maxwell and Nick Hutson OAQPS/SPPD/ESG (D243-01) U.S. Environmental Protection Agency Research Triangle Park, NC 27711



### I. Introduction

On February 16, 2012, the U.S. Environmental Protection Agency (EPA) published final rules

entitled “National Emission Standa rds for Hazardous Air Pollutants from Coal- and Oil-fired Electric Utility Steam Generating Units and Sta ndards of Performance for Fossil-Fuel-Fired Electric Utility, Industr ial-Commercial-Institutional, a nd Small Industrial-CommercialInstitutional Steam Generating Units” (77 FR 9304). This rule is commonly referred to as the Mercury and Air Toxics Standards (MATS) . Subsequently, on July 20, 2012, the EPA announced plans to reconsider certain standard s applicable to new s ources under the MATS.

Section 112 of the Clean Air Act (CAA) require s that the EPA establish National Emission Standards for Hazardous Air Pollutants (NESHAP) fo r the control of the h azardous air pollutants (HAP) emitted from new sources in a source cate gory. CAA section 112(d)(2 ) requires that these standards reflect the maximum degree of reduction in HAP emissions that “the Administrator, taking into consideration the cost of achieving such emission reduction, and any non-air quality health and environmental impacts and energy requirements, determines is achievable....” These standards are commonly referred to as “Maximum Achievable Control Technology” or “MACT”

standards.

CAA section 112(d)(3) states that MACT standard s for new sources may not be “less stringent

than the emission control that is achieved in practice by the best-controlled similar source, as determined by the Administrator.” In setting th e minimum stringency leve l, or “MACT floor,”

EPA uses available emission data or other info rmation from the best performing source for each HAP or HAP surrogate in the source categor y. After EPA establishes the MACT floor, it

considers the costs and non-ai r quality health and envir onmental impacts and energy requirements to determine whether a more string ent, or “beyond-the-floo r,” level of control

should be established.

This memorandum describes the EPA’s process fo r establishing the new source MACT floors in the proposed reconsideration rule “Rec onsideration of Certain New Source and Startup/Shutdown Issues: National Emission Sta ndards for Hazardous Air Pollutants from Coaland Oil-fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-DRAFT –DELIBERATIVE DOCUMENT – FOIA EXEMPT

2 Fuel-Fired Electric Utility, Industrial-Commercial-Institut ional, and Small IndustrialCommercial-Institutional Steam Generating Units.”



### II. Scope of Reconsideration of New Source Standards

As stated in the preamble to the proposed r econsideration rulemaking, th e EPA is reconsidering certain new source standards. Specifically, the EPA is proposing new source standards for the identified HAP or HAP surrogates in the follo wing subcategories (using the same subcategory

numbers as were used in doc ket entry EPA-HQ-OAR-2009-0234-20132):

1. Subcategory 1 – New EGUs designed to burn a coal having a calorific value (moist, mineral matter-free basis) of greater than or equal to 19,305 kJ/kg (8,300 Btu/lb) that are not coal-fired EGUs in the “unit designed fo r low rank, virgin coal” – particulate matter (PM), hydrochloric acid (HCl), me rcury (Hg), sulfur dioxide (SO 2 ), lead, and selenium.

2. Subcategory 2 – New EGUs designed to burn and burning nonagglomerating virgin coal having a calorific value (moist, mineral ma tter-free basis) of less than 19,305 kJ/kg (8,300 Btu/lb) that are constructed and operated at or near the mine that produces such coal – PM, HCl, SO 2, lead, and selenium. 1

3. Subcategory 4 – New EGUs locat ed inside the continental United States that burn liquid oil and have an annual oil-fired capacity factor of greater than or e qual to 8 percent – PM

4. Subcategory 7 – New EGUs that burn solid oil-derived fuel – PM and SO 2.

In the December 16, 2011, final rule, the EPA used the stack test data with the lowest emission average submitted by each respondent to the MATS Information Collection Request (ICR) to identify the best performing similar source fo r each HAP or HAP surrogate. The EPA then

calculated the new source MACT fl oors in the final rule using only the single best stack test available for the best performing sources, even if multiple tests were available for the best performing sources. During reconsid eration, the EPA considered all available data in the record for the best performing sources when establishi ng the MACT floors for the proposed new source

limits.

The EPA used the following approach in estab lishing new source MACT floors for the HAP or HAP surrogate standards that are being propos ed in this reconsid eration rulemaking:

Step 1. All available stack test data points (typically based on 3-r un test averages) from the

MATS ICR were ranked from lowest to hi ghest for each HAP or HAP surrogate for each EGU in each subcategory (e.g., Subcate gory 1- EGUs designed to burn a coal having a calorific value (moist, mineral matter- free basis) of greater than or equal to 19,305 kJ/kg (8,300 Btu/lb) that ar e not coal-fired EGUs in the “unit designed for low rank, virgin coal”).

1 Subcategory 1 and 2 identified above ha ve the same limits for PM, HCl, SO 2, selenium, and lead. Only the Hg limits are different between th e two subcategories, and, as stated in the preamble to the proposed rule, EPA is taking co mment on whether to revise the new source Hg limit for Subcategory 2DRAFT –DELIBERATIVE DOCUMENT – FOIA EXEMPT

3 Step 2. For each EGU within a given MACT floor data set (i.e., subcategory), the stack test data point with the lowest emissions rate for the relevant pollu tant was determined and placed in a separate data set.

Step 3. This separate data set was then ranke d, with the highest ranking source (No. 1) defined as the member of the subcategory w ith the lowest reported “single-test 3-run average” emissions rate.

Step 4. As part of selecting the best performing si milar source, we evaluated the design of the unit and other aspects of the unit, including air pollution control equipment, to assess whether the unit was comparable to units built recently that are complying with all federal requirements, including the pre- construction requirements under the EPA’s New Source Review (NSR) program c odified at 40 CFR 52.21 and 40 CFR 51.166. The NSR program includes requirements fo r new EGUs to achieve “the maximum degree of reduction” of regul ated air pollutants, includi ng particulate matter and sulfur dioxide (which are both HAP surr ogates). The EPA undertook this analysis

because in certain situations the controls for one pollutant can increase the emissions of, or negatively impact the control of, ot her pollutants. For example, for PM, if the highest ranked source did not have advanced flue gas desulfurization (FGD) system

for SO 2 control, the source was eliminated from consideration as the unit that

demonstrates the level of control that could be achieved by a new EGU, because state-of-the-art FGD systems can add PM to the flue gas stream.

Step 5. All available data for each best similar s ource were reviewed to determine if there were any quality assurance (QA) issues with the data for the unit. Data that did not pass QA measures within a relevant EP A reference method were not used to

determine the MACT floor.

Step 6. This step was dependant on the quantity and t ype of data available in the record for the best performing source. If data from thr ee or more stack tests were available for the best performing source, test averages (t ypically the average of 3 runs) were used

in the MACT floor calculations. If data from less than three stack tests were available in the record (i.e., one or tw o stack tests were available), data from the individual test

runs were used in the MACT floor calculations.

Step 7. Each set of run averages or test averages was evaluated for Kurtosis and skewness to determine if the data set for the best performing source was normally distributed. If

these tests indicated the data set was norma lly distributed, the data set was treated as normally distributed in subsequent upper pr edictive limit (UPL) calculations. If either

of these tests indicated the data set was not normally distributed, the data set was log transformed, and the log transformed data set was evaluated for Kurtosis and

skewness. If these tests indi cated the data set was log-nor mally distributed, the data set was treated as log-normally distributed in subsequent UPL calculations. If either of these tests indicated the log transforme d data set was not log-normally distributed, the data set was treated as non-normally dist ributed in subsequent UPL calculations.DRAFT –DELIBERATIVE DOCUMENT – FOIA EXEMPT

4 Step 8. After completing the determination of the type of data distribution for the best performing source’s data set, the data set was input to the seri es of calculations necessary to calculate the UPL as discu ssed on pages 5-9 of the MACT Floor Memo published at promulgation; the memo can be viewed in the rulemaking docket (EPAHQ-OAR-2009-0234) and at the following link: http://www.epa.gov/ttn/atw/utility/a1_egu_mact_floor_memo_121611.pdf

Step 9. For each pollutant, the results of the UPL calculation were compared to the emission limit value determined to be equivalent to 3 times the representative detection limit (3xRDL) of the relevant perf ormance test method(s). If the calculated UPL value was less than the emission limit value determined to be equivalent to 3xRDL value, the

3xRDL value was used as the basis for the standard because the 3xRDL value provides the lowest emission rate that can be measured using the performance test method while maintaining a relative method precision on the order of 10 to 20 percent of the measured value. See “Data and pr ocedure for handling below detection level data in analyzing various pollutant emissions databases for MACT and RTR emissions limits” (docket entry EPA- HQ-OAR-2009-0234-20062) for a discussion of the RDL approach generally, and the me mo “Determination of Representative Detection Level (RDL) and 3 X RDL Values for Mercury Measured Using Sorbent Trap Technologies“ (docket EPA-HQ-OAR -2009-0234) for a di scussion of our approach for establishing an RDL for Hg. The RDL and 3xRDL procedures are further described on pages 9 and 10 of the MACT Floor Memo at the link provided in Step 8.

Exhibit II-1 presents the 10 standards proposed for revision in the reconsideration rule.DRAFT –DELIBERATIVE DOCUMENT – FOIA EXEMPT5Exhibit II-1:Reconsidered New Source StandardsSubcategory(Description)HAP orSurrogatePromulgatedStandardReconsideredStandardBestPerformer3xRDL2Countof Testsor RunsDataDistribution3Subcategory 1(New EGUs designed to burn a coalhaving a calorific value (moist,mineral matter-free basis) of greaterthan or equal to 19,305 kJ/kg (8,300Btu/lb) that are not coal-fired EGUsin the “unit designed for low rank,virgin coal”)andSubcategory 2(New EGUs designed to burn andburning nonagglomerating virgincoal having a calorific value (moist,mineral matter-free basis) of lessthan 19,305 kJ/kg (8,300 Btu/lb) thatare constructed and operated at ornear the mine that produces suchcoal)Filterable PM 7.0E–3 lb/MWh(3xRDL)9.0E-2lb/MWhSpringervilleUnit 36.40E-3lb/MWh5TestsLognormalLead (Pb) 2.0E–3 lb/GWh(3xRDL)3.0E-2lb/GWhWestonUnit 42.0E-3lb/GWh6RunsNormalSelenium(Se)6.0E–3 lb/GWh(3xRDL)5.0E-2lb/GWhLoganUnit B016.0E-3lb/GWh5RunsNon normalHydrogenchloride (HCl)4.0E–4 lb/MWh(3xRDL)1.0E-2 lb/MWh4(beyond floor)LoganUnit B014.0E-4lb/MWh6TestsLognormalSulfur dioxide(SO2)4.0E–1 lb/MWh 1.0E0lb/MWhSandowUnit 5A6RunsLognormalSubcategory 1(New EGUs designed to burn a coalhaving a calorific value (moist,mineral matter-free basis) of greaterthan or equal to 19,305 kJ/kg (8,300Btu/lb) that are not coal-fired EGUsin the “unit designed for low rank,virgin coal”)Mercury (Hg) 2.0E–4 lb/GWh 3.0E-3lb/GWh(3xRDL)NuclaUnit 13.0E-3lb/GWh3TestsNormal23xRDL: This value reflects the lowest emission rate that can be measured using the performance test method while maintaining arelative method precision on the order of 10 to20 percent of the measured value. The 3xRDL value is calculated based on a standarddiluent concentration and an F-factor of 9,780.3Data Distribution Type: This is the datadistribution of the sample set of runs ortests used in the MATS statistical analysis.4Beyond-the-floor values; the calculatedUPL floor value was 2.0E-2 lb/MWh.DRAFT –DELIBERATIVE DOCUMENT – FOIA EXEMPT6Subcategory 2(New EGUs designed to burn andburning nonagglomerating virgincoal having a calorific value (moist,mineral matter-free basis) of lessthan 19,305 kJ/kg (8,300 Btu/lb) thatare constructed and operated at ornear the mine that produces suchcoal)Mercury (Hg) 4.0E–2 lb/GWh3.0E-2lb/GWh5SandowUnit 5B3.0E-3lb/GWh6RunsNormalSubcategory 4(New EGUs located inside thecontinental United States that burnliquid oil and have an annual oilfired capacity factor of greater thanor equal to 8 percent)Filterable PM 7.0E–2 lb/MWh 4.0E-1lb/MWhPortEvergladesUnit PPE36.40E-3lb/MWh4TestsNon normalSubcategory 7(New EGUs that burn solid oilderived fuel(e.g., petroleum cokefired units))Filterable PM 2.0E–2 lb/MWh3.0E-2lb/MWhNorthsideUnit 1A6.40E-3lb/MWh3TestsNormalSulfur dioxide(SO2)4.0E–1 lb/MWh 1.0 E0lb/MWhHanfordUnit CB13026TestsNormal5As stated in the preamble to the proposed rule, EPA is taking comment on whether to revisethe Hg limit for Subcategory 2 based on theadditional data in the record.