Region 6 Comments on Entergy Lake Catherine BART Report

03/29/13

1. Fuel Oil Firing Scenario

 The BART report states that “If conditions ch ange such that it becomes economic to burn fuel oil, a five factor analysis will be submitted for approval in the SIP. The combustion of fuel oil [at Unit 4] would not occur until final SIP approval.” ADEQ should ensure that the source’s air permit is revised or that langu age is included in the Arkansas BART rule to capture the condition that Unit 4 will not bur n fuel oil until BART for all pollutants for the fuel oil firing scenario is approved into the SIP.

2. NOx Baseline Emissions/Controlled Emission Rates

 In reviewing the draft NOx BART analysis there are a number of issues with how the

baseline emissions the cost and effectiven ess of various control technologies are

estimated that make it difficult to evalua te whether a reasonable decision is being

recommended for BART. These issues are outlined below. We would welcome the opportunity to discuss further.

 The baseline annual emission rate that is used to estimate the control efficiency of NOx

controls and to calculate the annual tons reduced in the cost effectiveness calculations is 0.48 lb/MMBtu, based on the 24-hr maximum em ission rate during the baseline period. However, based on CEMS data from CAMD (see table below), it appears that the average annual NOx emission rate from the 2001-2003 baseline period is 0.18 lb/MMBtu, and the maximum is 0.198 lb/MMB tu. The maximum 30-day rolling average during the baseline period is 0.377 lb/MMBtu; however, this is driven by one unusually high day. The maximum 30-day rolling average that excludes the highe st day falls below 0.3 lb/MMBtu (see graph below), and the sec ond highest 24-hr emi ssion rate during the baseline period is 0.346 lb/MMBtu. Based on this information, presented in the table and graph below, it appears that using 0.48 lb/MMBtu as the baseline may not be representative of actual emi ssions from the baseline peri od and that the emission rates achievable by the NOx controls are potentially lower than what was evaluated in the BART analysis. Appendix Y to Part 51 provides the following:

“The baseline emissions rate should repr esent a realistic depiction of anticipated annual emissions for the source. In general, for the existing sources subject toBART, you will estimate the anticipated annual emissions based upon actual emissions from a baseline period” (A ppendix Y to Part 51, section IV.D.4.d).

ADEQ should ensure that the baseline emissi on rate that is used is in accordance with Appendix Y to Part 51. In addition, a BART evaluation requires that “in analyzing the technology you take into account the most stri ngent emission control level that the technology is capable of achieving” (70 FR 39166). ADEQ should ensure that this requirement has been met for all NOx controls evaluated. We note that in 2000, we approved into the Texas SIP a NOx emission limit of 0.10 lb/MMBtu based on a daily average for utility boilers loca ted in the Beaumont/Port Arthur area (65 FR 64148). In the supporting documentation included in the SIP submittal, Texas explained that since the majority of the boilers affected by that lim it were tangentially-fired gas boilers, it was expected that the limit would be achievabl e with combustion modification techniques. Lake Catherine Unit 4 is the same type of boile r as this. Please ensure that the controlled emission rates evaluated for all NOx controls reflect the most stringent emission level achievable by that technology.

Year Operating

Time Avg. NOx Rate (lb/MMBtu) NOx (tons) Heat Input (MMBtu) Capacity factor*

2001 6987.75 0.1943 1724.201 1.443E+07 28.2%

2002 5651.25 0.198 1421.07 1.242E+07 24.2%

2003 3972 0.1465 540.117 5.770E+06 11.3%

2004 1534.22 0.1238 139.971 1.904E+06 3.7%

2005 2058.55 0.1339 195.917 2.413E+06 4.7%

2006 314.05 0.1422 25.58 2.917E+05 0.6%

2007 415.91 0.4014 89.304 4.121E+05 0.8%

2008 883.79 0.1751 113.288 1.161E+06 2.3%

2009 823 0.2666 191.427 1.416E+06 2.8%

2010 1488.69 0.1428 150.545 1.800E+06 3.5%

2011 1303.19 0.1471 145.149 1.499E+06 2.9%

2012 4312.99 0.1881 927.544 7.346E+06 14.3%

* Calculated as: annual heat input / (5850 MMBtu/hr *8760 hr/yr) The NOx removal efficiency of BOOS assume d in the BART analysis is based on an estimate from Entropy Technology and Environmental Consultants, while the removal efficiencies of FGR, LNB/ SOFA, SCR, and SNCR are based on estimates from Sargent & Lundy. Please provide documentation of these estimates.

 Entergy assumes an historical 10 percent capacity factor in determining BART. EPA agrees that Unit 4 historically operated at less than a 10 perc ent capacity factor during the 2004-2011 period. However, the unit’s capacity factor for the 2001-2003 baseline period should be used for the BART analysis. Ba sed on our calculations, the average annual capacity factor during 2001-2003 was 21.2% (see table above). Otherwise, a 10 percent capacity factor may be assumed in the BART an alysis as long as this is made into an enforceable limit. This is important because in the cost effectiveness calculations, Entergy estimates the annual tons removed from baseline annual emissions that are calculated by multiplying the baseline emission rate by an annual heat input that reflects Unit 4’s capacity factor. Therefore, using a 10 percent capacity fact or underestimates the

annual tons reduced for all the control scenario s. As such, the NOx controls evaluated are potentially more cost effective than estim ated by Entergy. As Appendix Y to Part 51

states:

“The baseline emissions rate shou ld represent a realistic depiction of anticipated annual emissions for the s ource. In general, for the existing sources subject to BART, you will estimate the anticipated annual emissions based upon actual emissions from a baseline period. When youproject that future operating parame ters (e.g., limited hours of operation or capacity utilization, type of fuel, ra w materials or product mix or type) will differ from past practice, and if this projection has a deciding effect in the BART determination, then you must make these parameters or assumptions into enforceable limitations. In the absence of enforceable limitations, you calculate baseline em issions based upon continuation of past practice” (Appendix Y to Part 51, section IV.D.4.d).

3. NOx Cost Evaluation

 For the cost estimate for the BOOS contro l option, please explain why the first year O&M costs are considerably higher than for subsequent years ($871,000 vs. $21,000).

 The estimates for the capital costs for LNB/SOFA, LNB/SOFA+SNCR, and LNB/SOFA+SCR; the first-year O&M costs fo r BOOS; the fixed O&M costs for all NOx control options; and the variab le O&M costs for BOOS, SNCR (alone), and SCR (alone) are based on the “NOx Control Technology Cost and Performan ce Study” provided by Sargent & Lundy. Please provide a copy of this document.

 The estimates for the variable O&M costs for LNB/OFA are based on an equation

documented in the 2005 Eastern Research Group report “Analy sis of Combustion Controls for Reducing NOx Emissions from Co al-fired EGUs in the WRAP Region.” As this report was based on coal fired EGU da ta, ADEQ should demonstrate that the data and costing methods used are appropriate and applicable to Lake Catherine Unit 4, which

does not combust coal.

 The BART evaluation assumes a 15 year actual service life for all NOx control options.

Footnote 1 under the BOOS cost estimate in Appendix A states that implementation of BOOS would not require capital additions. Si nce it appears that B OOS would not require the installation of additional equipment, plea se explain why a 15 year actual service life

was assumed in the cost evaluation. We believe that an anticipated 30 year equipment life is more appropriate to use in the cost an alysis for all the NOx control options. Unless proper documentation is provided to demonstrat e that the anticipated equipment life is limited to 15 years, ADEQ should ensure that the cost analysis assumes a 30 year equipment life for all BART determinations.

 The cost evaluations of all NOx control scen arios, with the exception of BOOS, includes

AFUDC costs. AFUDC costs are not allo wed under the EPA Control Cost Manual (CCM), and therefore should not be included in the cost evaluation.