Emission Reduction Costs for the Beyond-the-Floor Mercury Rate in the 

Toxics Rule

EPA’s IPM modeling of beyond-the-floor (BTF) mercury reduction from subcategorized units 

subject to the proposed Toxics Rule projects two methods for compliance: fuel switching from 

lignite to subbituminous coal or retrofitting of activated carbon injection systems. This technical 

support document (TSD) presents the modeled ACI retrofit costs and incremental fuel switching 

costs from the proposed Toxics Rule policy case analysis. The estimated compliance cost can be 

compared with the projected mercury reductions to consider the cost-effectiveness on a cost-perton basis for beyond-the-floor mercury reductions from these subcategorized units. 

Fuel Switching costs (based on IPM modeling of unit coal choice):

EPA’s IPM modeling of the proposed Toxics Rule projects that about 4.7 GW of capacity would 

switch from lignite to sub-bituminous fuel to meet the subcategorized beyond-the-floor mercury 

emissions rate standard, at a total incremental fuel cost (weighted by generation changes) of 

about $24.8 million (in 2007-year dollars). These units collectively achieve about a 1,580-lb 

reduction in mercury emissions from the base case; therefore, the average emission reduction 

cost from fuel-switching at these units is about $15,696 per lb Hg removed. 

Subcategorized 

Capacity 

Projected to 

Switch Coal 

Incremental 

Generation 

Incremental 

Fuel Cost 

GenerationWeighted 

Incremental 

Fuel Cost 

Mercury 

Reduction 

Cost of 

Mercury 

Removed 

4.7 GW -65 GWh $23.9 million $24.8 million 1,580 lbs $15,696/lb 

ACI Retrofit Costs (based on IPM modeling assumptions derived from Sargent & Lundy 

engineering analysis):

For units adopting ACI retrofits, this cost analysis is weighted based on whether the retrofitting 

capacity has a pre-existing fabric filter (IPM includes separate ACI retrofit options with and 

without Toxecon on this basis). 

EPA’s IPM modeling projects that about 3.2 GW of capacity would adopt ACI with Toxecon to 

meet the subcategorized beyond-the-floor mercury emissions rate standard, at a total annualized 

retrofit cost of about $2.34 million (in 2007-year dollars). This analysis excludes capital costs 

for installing the Toxecon fabric filter system on the basis of its use for PM control under the 

Toxics Rule. The representative unit shown in the table below achieves a 180.9-lb reduction in 

mercury emissions from the base case at an annualized retrofit cost of $2.34 million; therefore, 
the average emission reduction cost from ACI retrofitting at these units is about $12,935 per lb 

Hg removed. The proposed Toxics Rule modeling also projects that 2.2 GW of capacity with 

existing fabric filters would adopt ACI without Toxecon; the representative unit in this category 

would incur a total annualized retrofit cost of about $5.09 million while achieving about 111.2 

lbs of mercury emission reductions for an average cost of $45,773/lb reduced. 

Type of Retrofit ACI with Toxecon ACI without Toxecon 

Subcategorized Capacity 3.2 GW 2.2 GW 

Average Capacity per Unit 451 MW 247 MW 

Average Capital Cost (excluding 

fabric filter) 

$9 /kW $13 /kW 

Average Fixed Operation & 

Maintenance Cost 

$0.57 /kW $0.06 /kW 

Average Variable Operation & 

Maintenance Cost 

$0.48 /MWh $2.56 /MWh 

Total Annualized Cost of Retrofit $2.34 million $5.09 million 

Mercury Reduction 180.9 lbs 111.2 lbs 

Cost of Mercury Removed $12,935/lb $45,773/lb 

(calculations assume an 85% capacity factor and a capital charge rate of 11.4%) 

Average Cost-Effectiveness of Mercury Reduced for Beyond-the-Floor

Compliance Strategy Estimated Annual Mercury 

Reductions 

Estimated Annual Costs 

Coal-Switching 1,580 lbs $24.8 million 

Retrofit ACI with Toxecon 1,284 lbs $16.6 million 

Retrofit ACI without Toxecon 990 lbs $45.3 million 

Total 3,854 lbs $86.7 million 

Based on total estimated mercury reductions and annual costs in the table above, the average 

removal cost for mercury emissions from these subcategorized units fuel-switching and 

retrofitting with ACI is estimated to be $22,496/lb. Based on these results, EPA believes that the 

projected compliance behavior for the subcategorized capacity under the proposed Toxics Rule 

would yield cost-effective mercury reductions at the beyond-the-floor emissions rate standard.