Mr. Guy Donaldson, Chief, Air Planning Section (6PD-L), Environmental Protection Agency, Region 6 1445 Ross Avenue, Suite 1200 Dallas, Texas 75202-2733

Via Regulations.gov

September 20, 2013

Re: Proposed Approval of Oklahoma Regional Haze SIP Revision
Docket ID No. EPA-R06-OAR-2013-0227

Dear Mr. Donaldson,

I write on behalf of Sierra Club and its 2.1 million members and supporters, including more than 3,000 members in Oklahoma, in strong support of the proposed approval of the Regional Haze SIP Revision. 1 The SIP Revision meets federal requirements to reduce regional haze and interstate pollu tion from the Northeastern coal-fired power plant in Oologah, Oklahoma. In addition to pr otecting scenic views in the region’s most treasured parks, Public Service Company of Ok lahoma’s (PSO’s) commitment to retire one Northeastern unit by 2016, along with retrofits and a steady ramp-down of capacity at the other toward retirement in 2026, will have en ormous public health benefits. The SIP
Revision is also a more cost-effective solution than requiring the installation of expensive scrubbers on both units. For these reasons, Si erra Club urges EPA to promptly approve and
finalize the SIP Revision and withdrawal of the FIP as it relates to Northeastern.

I. The SIP Revision Protects Our Parks.

In order to protect the “intrinsic beauty and historical and archeological treasures” at national parks, wilderness ar eas, and other designated “Class I” areas,” Congress set a national goal to reduce human-caused haze pollution and achieve natural visibility conditions by 2064. 2 The Clean Air Act requires states to design an implementation plan to

1 More than 250 individual Sierra Club member s have also submitted comments in support of EPA’s proposed action.

2 See H.R. Rep. No.95-294, at 203-04 (1977); See 42 U.S.C. § 7491(a)(1); 40 C.F.R. § 51.308(d)(1)(i)(B).2 of 18 reduce haze from air pollution sources within its borders that cause or contribute to visibility impairment – i.e., hazy views – at any protected area located within or beyond
that state’s boundaries.

Haze-forming pollution from the Northeaster n plant currently impacts visibility in four popular scenic areas in the region: Wichita Mountains National Wildlife Refuge in Oklahoma, Caney Creek Wilderness and Uppe r Buffalo Wilderness in Arkansas, and Hercules Glade Wilderness in Missouri. The Wichita Mountains is the oldest managed National Widlife Refuge in the U.S. Fish and Wildlife system. It was designated as a forest preserve in 1901 and became a NWR in 1903. Scenic mountains and prairies make up the refuge’s 59,020-acre landscape. 3 In 2011, over 118,000 people visited the refuge for enjoyment and recreation. 4 Hercules Glades, Caney Creek and Upper Buffalo are also valuable units of the national forest system. Hercules Glade includes some of “the most scenic and unique country in the Midwest,” while Caney Creek and Upper Buffalo possess breathtaking views of the region from ridge tops and steep slopes. 5 Unfortunately, the views at these recreational areas are suffering from pollution from the region’s coal-fired power plants. Visitors at Caney Creek can expe rience views up to 81 miles on a clear air day, but on hazy days this view is reduced to just 17 miles. 6 If visibility were at natural conditions, people would be able to s ee up to 170 miles into the distance. 7 In Upper Buffalo, visitors can see only 18-78 miles into the dist ance, but under natural visibility conditions they would be able to see between 79 and 171 miles. 8

Current emissions of haze-forming pollution from the Northeastern Units 3 and 4 amount to approximately 32,000 tons per year sulfur dioxide (SO2) and more than 14,000 tons per year nitrogen oxides (NOx). 9 To reduce SO2 emissions, the SIP Revision makes
enforceable PSO’s commitment to retire one unit by April 16, 2016 and requires that PSO retrofit the other with Dry Sorben t Injection by the same date. 10 PSO will reduce the remaining unit’s capacity significantly starti ng in 2021, and retire the unit no later than December 31, 2026. The planned replacement power is a combination of cleaner resources:

3 U.S. Fish and Wildlife , Wichita Mountains Wildlife Refuge

, http://www.fws.gov/refuge/Wi chita_Mountains/about.html

. 4 Phone interview between National Parks Co nservation Association staff and Wichita Mountains Visitor Center representative (July 24, 2012).

5 United States Forest Service, Hercules Glades Wilderness

, http://www.fs.usda.gov/recarea/mtnf/recre ation/hiking/recarea/?recid=21754&actid=51 ; See Univ. of Montana, College of Forestry, www.wilderness.net

. 6 U.S. Dep’t of Agriculture, Caney Creek Wilderness – Natural Background Visiblity, http://www.fs.fed.us/air/technical/ class_1/wilds.php?recordID=10

. 7 Id.

8 Id.

9 Oklahoma Regional Haze SIP Revision (Mar. 20, 2013), at 6 (Table II-1).

10 As EPA has already approved the portion of the Oklahoma SIP that addresses NOx, the SIP Revision properly focuses on SO2.3 of 18 purchased power from an existing combined cy cle natural gas plant, energy efficiency, and demand response programs. 11

Implementation of the SIP Revision w ill drastically reduce both SO2 and NOx emissions by 2016 and fully eliminate them by 2026. By April 16, 2016, assuming an 85% capacity factor at the unit that continues operating past that date, emissions will be slashed to 7,111 tons per year SO2 and 2,667 tons per year NOx. 12 Particulate matter emissions, which also contribute to haze and public health problems, will also see a drastic
reduction.

Clearing the haze at these parks will both protect the health of those who recreate there and promote local tourism by decreasing the number of days when pollution impairs scenic views. The Oklahoma Department of Environmental Quality’s (ODEQ) BART Determination predicts that the SIP Revision will reduce visibility impairment caused by the plant’s SO2 and NOx pollution by 80% or more in each of these regions compared with

current conditions. 13 For example, instead of contributing to an average of 1.5 “deciviews” 14 of visibility impairment at Wichita Mountains, as it does now, after the retirement of one unit and installation of SO2 and NOx controls on the remaining unit, it will cause only .295 deciviews of impairment. Likewise, the reduction of nitrogen oxides (NOx ) will result in 76 fewer days each year in which the Northea stern plant is contributing to visibility impairment in the Wichita Mountains, compared with the baseline, and 95 fewer days of impairment in Caney Creek Wilderness. 15 While EPA’s additional modeling analysis tempers these estimates somewhat by adjustin g the baseline average impairment to reflect a lower SO2 emission rate, the benefits to visibility are still significant.

The improvements in visibility attributabl e to the SIP Revision have a tangible
economic benefit. Sierra Club members and ot her Americans visit national parks, national forests, and wilderness areas to recreate and see amazing views. In doing so, they contribute substantially to the American economy. In 2010, activities associated with

11 Direct Testimony of Steven L. Fate on Behal f of Public Service Company of Oklahoma & Direct Testimony of Scott C. Weaver on Be half of Public Service Company, Oklahoma Corporation Commission, Cause No. PUD 2012000054 (Sept. 26, 2012), attached as Exs. 1

& 2.

12 Oklahoma Regional Haze SIP Revision (June 14, 2013) at 8 (Table II-3).

13 Id. at 8, Table II-4.

14 “The deciview metric provides a scale for pe rceived visual changes over the entire range of conditions, from clear to hazy. Under many scenic conditions, the average person can generally perceive a change of one deciview. The higher the deciview value, the worse the visibility. Thus, an improvement in visibility is a decrease in deciview value.” U.S. EPA, Regulatory Impact Analysis for the Final Clean Air Visibility Rule or the Guidelines for Best Available Retrofit Technology (BART) Determinations , EPA-452/R-05-004 (June 2005).

15 Oklahoma Regional Haze SIP Revision (June 14, 2013), Appendix II, Supplemental BART Determination Information (Nov. 9, 2012) (hereinafter “Supplemental BART Determination”), at 3-1 (Table 3-1).4 of 18 national parks and other Department of Interior lands provided more than 2.2 million jobs, which generated $377 billion in economic activity. 16 National Wildlife Refuges and other US Fish and Wildlife Service land management con tributed over $4 billion to the economy and supported over 32,000 jobs in 2010. 17 According to the Department of Agriculture, national forest land recreation visitors spend nearly $13 billion each year in rural communities surrounding national forests and wilderness areas. 18 This spending results in over $14 billion to the GDP and supports over 224,000 full and part time jobs. 19 As scenic views are an important part of the visitor experience at these parks, clearing away human-caused haze — allowing for visibility exceeding 170 mile s in some areas — will serve to make them even more attractive destinations, with the co rresponding economic benefit. Visitors to National Wildlife Refuges, Wilderness Areas, and National Parks consistently rate visibility and clear scenic vistas as one of th e most important aspects of their experience. 20

Compared to EPA’s federal implementation plan (“FIP”), which EPA is proposing to replace with the SIP Revision, the SIP Revision provides more flexibility for PSO to comply with its obligations under the Clean Air Act’ s haze provisions, but does not compromise public health or visibility. The FIP require s PSO to meet an SO2 emission limit of .06 lbs/mmbtu, consistent with emissions reductions achievable with Dry Flue Gas Desulfurization units with Spray Dry Absorb ers, by January 27, 2017 (five years after the rule’s effective date). While benefits to vi sibility as of January 27, 2017 would be slightly greater under the FIP, the advantage is temp orary. The FIP scenario may have somewhat greater benefits for several years, but the SIP Revision better achieves the overall goals of the Regional Haze program because emissi ons from both units will be completely eliminated by 2026. 21 Under the FIP scenario, both uni ts are permitted to continue operating and polluting beyond 2026 and would likely do so until the plants are no longer economical to operate, regardless of the health or visibility impacts. By 2026,
Northeastern’s contribution to haze in the region’s parks will be zero under the SIP

Revision whereas under the FIP scenario the plants would continue to contribute to more than 1.5 deciviews of impairment (at much greater cost).

In fact, the benefits of the SIP Revision for visibility as compared to the FIP are likely understated in ODEQ’s and EPA’s analys is, even for the first five years. ODEQ

16 Southwick Associates, The Economics Associated with Outdoor Recreation, Natural
Resources Conservation and Historic Preservation in the United States , Oct. 10, 2011 at 4,
available at http://www.trcp.org/assets/pdf/The_Econo mic_Value_of_Outdoor_Recreation.pdf

. 17 Id.

18 U.S. Forest Service, National Visitor Use Monitoring Results USDA Forest Service National Summary Report , 2005-2009, at 2, available at http://www.fs.fed.us/recreation/programs /nvum/nvum_national_summary_fy2009.pdf

. 19 Id.

20 The Clean Air Task Force, Out of Sight: Haze in Our National Parks , Sept. 200, at 2,
available at http://www.catf.us/resources/pub lications/files/Out_of_Sight.pdf

. 21 Supplemental BART Determination, at 4-7; Oklahoma Regional Haze SIP Revision, Appendix III (making enforceable PSO’s comm itment to retire Northeastern).5 of 18 compares emission rates with DSI and NOx limits of .15 lb/mmbtu on one unit and the other unit’s retirement as of April 16, 2016 with the dry scrubber/SDA and the same NOx limit as of December 31, 2017 pursuant to the FIP. See Oklahoma Regional Haze SIP Revision (June 14, 2013), Appendix II, Revi sed BART Determination (hereinafter “Revised BART Determination”), pp. 7-10. EPA appears to have accepted this approach, which has several implications for the analysis. First, ODEQ did not evaluate the likely reductions in visibility impairment as the second unit ramps down capacity between 2016 and 2026, thereby reducing emissions. As a result, it is unclear how long the FIP scenario would hold even its small advantage in terms of visib ility improvements. Additional modeling taking
into account the emissions reductions after 2016 would provide further support for the SIP Revision. Another advantage of the SIP Re vision is that it requires an earlier implementation of lower NOx emission limits than in the original SIP or EPA’s FIP. See
Revised BART Determination at 12. As no ted by ODEQ, “This early implementation schedule reducing emissions by 43% will prov ide previously unanticipated improvements in visibility as well as reductions in local form ation and interstate transport of ozone.” ODEQ did not compare the reductions in visibility impairment during the three years from December 31, 2013, when the SIP Revision be gins to require reductions, to January 2017, when the FIP would have done so. Similarly, the SIP Revision deadline for SO2 reductions of April 16, 2016 is 8.5 months earlier than the January 2017 FIP deadline, leading to an additional reduction of 26,700 tons of SO2. ODEQ did not model these reductions when comparing the visibility benefits of the SIP Re vision with those of the FIP. Nor did EPA model these reductions in any of the scenario s it considered. Although not modeled, EPA does correctly “anticipate that this early im plementation schedule [for NOx] will provide additional improvements in visibility.” TSD Document at 25.

Overall, the SIP Revision is the less po lluting option compared to the FIP. DEQ calculates that due to the decreased capaci ty utilization and early shutdown schedule,
cumulative SO2 and NOx emissions from No rtheastern Units 3 and 4 will ultimately amount to only 36% of the emission that could be emitted under the FIP. See Revised BART Determination at 12. This approach is cons istent with Congress’s goal of eliminating human-caused haze by 2064, moving Oklahoma to ward that goal more quickly than would
the FIP.

Sierra Club recognizes that EPA has no t taken the approach of comparing the SIP Revision to the FIP. Appropriately, EPA has simply reviewed ODEQ’s BART analysis for consistency with the Clean Air Act and the BART Guidelines. However, because in practical terms the Revised SIP will replace the FIP, Sierra Club agrees with ODEQ that the SIP/FIP comparison is worthwhile. The many environmental advantages of the proposed SIP Revision compared to the FIP – which wo uld perpetuate the burning of coal at both units, and all its associated pollution, for years to come –weigh heavily in favor of the SIP

Revision.

II. The SIP Revision Protects Our Health.

Pollutants that cause visibility impairme nt also harm public health. NOx is a precursor to ground level ozone, which is a ssociated with respiratory diseases, asthma6 of 18 attacks, and decreased lung function. In ad dition, NOx reacts with ammonia, moisture, and other compounds to form particulates that can cause and worsen respiratory diseases, aggravate heart disease, and lead to premature death. 22 Similarly, SO 2 increases asthma symptoms, leads to increased hospital visits , and can form particulates that aggravate respiratory and heart diseases and cause premature death. 23 Both these pollutants contribute to formation of fine particulate matter (PM). PM can penetrate deep into the lungs and cause a host of health problems, su ch as aggravated asthma, chronic bronchitis,
and heart attacks. 24 By drastically reducing these pollutants and requiring the eventual retirement of the Northeastern plant, the SIP Revision will have significant public health
benefits.

The Clean Air Task Force, a not-for-prof it advocacy and research organization, commissioned a study by Abt Associates to quantify death and other health effects from coal-fired power plants’ PM pollution. The st udy’s conclusions for the Northeastern plant are reproduced below. Each number represents the impact on an annual basis.

Northeastern Rogers County, Oklahoma

Deaths: 62
Heart Attacks: 94 Asthma Attacks: 1,100 Hospital Admissions: 44
Chronic Bronchitis: 38
Asthma ER Visits: 67

Source: http://www.catf.us/fossil/problems/power_ plants/existing/map.php?state=Oklahoma

.

By dramatically reducing the PM precursors SO2 and NOx, and directly emitted PM, the
SIP revision will save lives and reduce hospital visits and asthma attacks.

22 EPA, Health – Nitrogen Dioxide, http://www.e pa.gov/air/nitrogenoxides/health.html (last visited Apr. 1, 2011).

23 EPA, Health – Sulfur Dioxide, http://www.e pa.gov/air/sulfurdioxide/health.html (last visited Apr. 1, 2011).

24 EPA, Health & Environment – Particulate Matter, http://www.epa.gov/air/particlepollution/health.html (last visited Apr. 1, 2011); National Ambient Air Quality Standards for Particulate Matter; Final Rule , 78 Fed. Reg. 3086, 3088 (Jan. 15, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-01-15/pdf/2012- 30946.pdf . (“EPA is revising the annual PM2.5 standard by lowering the level from 15.0 to 12.0 mg/m3 so as to provide increased protecti on against health effects associated with long-and short-term exposures.... This action provides increased protection for children, older adults, persons with pre-existing he art and lung disease, and other at-risk populations against an array of PM2.5- rela ted adverse health effects that include premature mortality, increased hospital admi ssions and emergency department visits, and development of chronic respiratory disease.”)7 of 18 The Northeastern plant’s NOx emissions, and their contribution to ozone, are particularly problematic for the region’s efforts to maintain healthy air quality levels. Tulsa has recently struggled with numerous “ozone-a lert” days during the summer season. EPA is considering revising the 8-hour ozone Nati onal Ambient Air Quality Standard (NAAQS) from 75 ppb down to 60-70 ppb. EPA has stated that it will propose the revision in 2013 and issue a final rule in 2014. EPA predicts that if the NAAQS for ozone is revised to 65 ppb, the Tulsa metropolitan area will fall out of attainment. 25 A “nonattainment” designation could have significant economic impacts as Tuls a is forced to find ways to cut existing emissions and limit new emissions-causing development. As DEQ has noted, the NOx reductions from the SIP Revision will help ad dress local formation and interstate transport of ozone whereas “the FIP scenario provides no further improvement in ozone.” Revised
BART Determination at 11.

Northeastern’s SO2 emissions also threaten to cause exceedances of federal air quality standards. Sierra Club and EPA Region 6 have both conducted air dispersion modeling showing that the plant’s emissions co ntribute to ambient SO2 levels that exceed
the 1-hour federal standard. 26 The SIP Revision will address this problem by dramatically reducing SO2 emissions. 27

In addition to SO2, NOx, and PM, No rtheastern releases approximately 210 pounds of mercury to the environment each year. 28 Atmospheric deposition of one gram of mercury is enough to contaminate fish in a 20-acre lake. 29 The 210 pounds produced by Northeastern each year amounts to around 95,000 grams. Th e SIP Revision will drastically reduce these harmful releases by 2016 and fully eliminate them by 2026.

As discussed further below, the Clean Ai r Act and the regulations governing DEQ’s BART determination instruct DEQ to consider the “non air-quality environmental impacts,” of emissions of the pollutant in question. 70 Fed. Reg. 39,104, 39,169 (July 6, 2005). “Such

25 EPA, Counties Projected to Violate Primary 8- hour Ground-Level Ozone Standard in 2020, at http ://www.epa.gov/glo/pdfs/Count yOzoneLevels2020primary.pdf.

26 Preliminary 1-Hour SO2 Modeling of Some Co al-Fired EGUs in Oklahoma: Preliminary Results, EPA Region 6 Air Modeling Team (2011); Lette r from A. Issod, Sierra Club to E. Terrill, Air Quality Division Director, attachin g modeling report of C. Sears (June 3, 2011).

27 Sierra Club’s air dispersion modeling fo r the Northeastern plant demonstrated that the Northeastern plant’s emissions causes ambient air concentrations of SO2 that are significantly higher than the 2010 1-hour SO2 NAAQS (259.3 ug/m 3 , compared with the NAAQS of 196 ug/m 3 ). On the assumption that ambient air concentrations correlate to emissions on a roughly linear basis, eliminating half of the plant’s hourly SO2 emissions by 2016 should resolve this problem.

28 See EPA, Toxic Release Inventory, TRI Explorer, at http://iaspub.epa.gov/triexplorer/tri_release.facility (input Oklahoma/Rogers County/mercury compounds/all industries).

29 Minnesota Pollution Control Agency, Michig an Dep’t of Natural Resources, Wisconsin Dep’t of Natural Resources, “Mercury in the Environment: The Waste Connection,” 1995 (discussed at http://www.newmoa.org/prevent ion/mercury/mercurylake.pdf ).8 of 18 environmental impacts include solid or hazardous waste generation and discharges of polluted water from a control device.” Id. Accordingly, ODEQ and EPA can properly
consider that the SIP Revision will ensure that all of the human health and environmental impacts of coal combustion will be addresse d by 2026, not just selected air emissions.

While EPA’s proposed approval of the SIP Revision recognizes certain environmental benefits of the plan described in the revision, such as reductions in mercury deposition and water and energy usage, there are others that EPA does not mention. EPA should note in its final rule the full suite of environmental benefits (“non air-quality environmental impacts”) resulting from the p hased retirement of the Northeastern plant, which is made enforceable by the SIP Revision . This includes impacts on water quality, discussed below, as well as water usage

. See 70 Fed. Reg. at 39,169.

Coal-fired power plants produce huge amounts of coal combustion waste, or coal ash. Laden with heavy metals and other harmful to xics known to contaminate water supplies, these wastes cause injury and death to lives tock and wildlife, and threaten human health with birth defects, cancer, and organ and ne urological damage. The Northeastern plant currently disposes of its waste coal ash (mor e than 200,000 tons of it in 2011) by putting it into an unlined (or “clay-lined”) landfill. This natural barrier does not adequately protect against groundwater contamination. 30 A 2011 review of water samples from groundwater wells contaminated by coal ash from the No rtheastern plant revealed that levels of chromium, a cancer-causing metal, were mo re than four times higher than the federal drinking water standard. 31 The enforceable commitment to re tire Northeastern will help
stem further contamination.

Wastewater discharge from coal-fired po wer plants, particularly those with SO2 scrubbers, also poses major environmental and public health problems. Scrubbers at coalfired power plants have the unfortunate consequenc es of transferring air pollution to water pollution if not properly treated. 32 EPA has stated: “More than 23,000 miles of rivers and streams are damaged by steam electric plant discharges, which include arsenic, mercury, lead, boron, cadmium, selenium,

30 EPA, Frequent Questions: Coal Combustion Residues (CCR) - Proposed Rule. (Available

at http://www.epa.gov/wastes/nonhaz/industria l/special/fossil/ ccr-rule/ccrfaq.htm#8.) (“EPA’s risk assessment suggests, and damage cases confirm, that the management of CCRs in unlined and clay-lined landfills and surface impoundments may present risks to human health and the environment through leaching. For landfills and surface impoundments the primary concern is cancer risk from arsenic in drinking water. Surface impoundments also showed high non-cancer risks from cobalt and nitrate/nitrite in drinking water.”)

31 Lisa Evans, Earthjustice, et al., EPA’s Blind Spot: Hexavalent Chromium in Coal Ash (Feb. 2011), p. 7, available at http://www.psr.org/resources/epas-blind-spot-hexavalentchromium-coal-ash.html

. 32 See Cleansing the Air at the Expense of Waterways , The New York Times (Oct. 12, 2009), at http://www.nytimes.com/2009/10/13/us/13wat er.html?_r=4&ref=us& (describing how

scrubber retrofits on coal-fi red power plants have lead to increased water pollution)9 of 18 chromium, nickel, thallium, vanadium, zinc, nitrogen, chlorides, bromides, iron, copper and aluminum. For example, each ye ar nearly 65,000 pounds of lead and 3,000 pounds of mercury are discharged, leading to lowered IQs among children exposed to these pollutants via drinking water or by eating fish . Many of these toxic pollutants, once in the environment, remain there for years. Addi tionally, each year nearly 80,000 pounds of arsenic is released into surface waters, incre asing the risk of cancers and other health effects in humans exposed to these pollutants through drinking water and by eating fish.” 33

By requiring the retirement of one coal -burning unit in 2016 and the other by 2026, the SIP Revision will reduce both the producti on of dangerous coal ash that leaks into groundwater supplies and the discharge of pollutants in scrubber wastewater.

III. The SIP Revision Will Conserve Water Resources.

In citing the non-air quality benefits of the SIP Revision, EPA correctly recognizes that the SIP Revision will reduce water usag e. The SIP Revision’s impact on the state’s dwindling water resources is important in light of the extreme drought conditions facing Oklahoma. In response to Sierra Club data requests in proceedings before the Oklahoma Corporation Commission, PSO has estimated that the increase in water consumption at the Northeastern plant if it were to add dry scrubb ers to both units would be at least 65 times greater than with a retrofit of ACI and DS I at one unit pursuant to the SIP Revision. 34 Under continued drought, PSO’s daily need for water resulting from s crubber retrofits could increase the potential for conflict with othe r needs in the Tulsa area. The Northeastern units currently intake water from the City of Tulsa, and the surrounding area includes a variety of farms and ranches.

In addition to using less water while the units are still operating, in light of PSO’s enforceable commitment to retire Northeastern, water currently used by one unit will be released for other uses by 2016, and after 2026, the units will no longer demand water resources pursuant to the SIP Revision. Sierra Club supports a plan that will ease pressure on the state’s water supplies.

IV. The SIP Revision is Less Costly Than Requiring Scrubbers.

Due to its agreement to phase out the Northeastern units instead of investing in expensive new flue gas desulfurization equipm ent (scrubbers) at both units, PSO estimates

that the cost-effectiveness in terms of dollars per ton of SO2 removed is $942/ton for the SIP

33 EPA Fact Sheet: Proposed Effluent Limitati on Guidelines & Standards for the Steam Electric Power Generating Industry, EPA - 821-F-13-002 (April 2013).

34 Oklahoma Corporation Commission, Cause No. 201200054, PSO Response to Sierra Club Data Request 5-9 (Dec. 20, 2012) (attached here to as Exhibit 3) (Controls pursuant to EPA settlement will consume approximately 11,250 gallo ns of water per day, compared with the DFGD option, which would consume approximately 737,000 - 805,000 gallons of water per day for two units).10 of 18 Revision compared with $1,544/ton under the FIP. 35 DEQ similarly estimates that the cost per ton reduction for DSI is $1,005/ton co mpared with $1,544/ton for scrubbers. EPA considered a revised cost-effectiveness analysis to account for a more realistic SO2 baseline and an operating life of the equipment of 10 years (2016-26). This revised analysis showed the cost-per-ton reduction to be $3,211/ton fo r scrubbers compared to $1,758/ton for DSI. Sierra Club has not evaluated these analyses in detail but agrees that the SIP Revision is more cost-effective – and, indeed, less costly overall. (Section VI below discusses costeffectiveness in more detail.)

Because ODEQ is charged only with revising the SIP as it pertains to BART for SO2, it was appropriate for EPA and ODEQ to consider the cost of control per removal of a ton of SO2. The scope of this cost analysis, focusing on the direct control costs for each type of emissions control (DSI or scrubbers) properly follows the mandatory federal guidelines for BART Determinations. These guidelines instruct ODEQ to “(1) Identify the emissions units being controlled, (2) Identify de sign parameters for emission controls, and (3) Develop cost estimates based upon those design parameters.” 70 Fed. Reg. at 39,166. The Guidelines further instruct ODEQ to consider estimate s of capital and annual costs for the “control equipment” or the “control technology.” Id.

As ODEQ complied with the above guide lines (discussed further below), the BART analysis is complete and legally sufficient. ODEQ correctly responde d to comments raising other cost issues during the state process t hat it would not be legally sound for ODEQ to consider the costs of replacement power or any other costs beyond those of emission controls in its BART analysis. However, because some interested parties may comment on overall cost of the SIP Revision and its impact on ele ctric rates, Sierra Club briefly addresses this issue as well to provide EPA, and the public, with a complete picture.

The SIP Revision not only permits PSO to avoid the high cost of installing and operating scrubbers; by providing for the retire ment of a unit in 2016, it also assures that PSO will avoid the costs of other upcoming re gulations that would require that unit to internalize the costs of its air, water, and coal ash pollution and other harm to the environment. Pursuant to the SIP Revision, PS O will avoid costs associated with an array of future regulations at one or both units, including: 36

 Coal Combustion Residuals

. The EPA proposed two alternative rules on June 21, 2010, but has not yet finalized either rule. The Northeastern facility’s coal ash landfill has only an “in-situ clay liner,” meaning that th e landfill currently does not have a synthetic liner to protect against toxics that may be leaching into groundwater or surface water and causing risks to human health. 37 Regardless of how the rule is finalized, it is reasonable to expect that to continue oper ating beyond 2016, Northeastern would have

35 Id . at 4-4.

36 Although PSO may have to implement changes at the unit that continues to operate until 2026, its costs will be lower than if both units continued to operate.

37 See supra note 30.11 of 18 to address this issue. To convert its landf ill to appropriately handle ash waste could cost $30 million or more. 38

 Effluent Limitations Guidelines. EPA issued proposed effluent limitations for coal-fired power plants in April 2013. The proposed ru le would establish new requirements for wastewater streams from FGD (scrubbers), fl y ash, bottom ash, and flue gas mercury control, all of which would be present at the Northeastern units if they continued to operate. EPA has proposed four options, with varying degrees of control for each waste stream, including specific limits for certain pollutants in the FGD waste stream, dryhandling (zero discharge) of fly ash or botto m ash, or both. This rule could pose significant costs for the Northeastern units were they to continue to operate, especially because scrubbers create enormous amounts of polluted wastewater.

 Revised NAAQS for Ozone . As noted above, EPA predicts that Tulsa will be out of attainment in 2020 if the ozone standard is revised to 65 ppb or lower. Oklahoma would need to further reduce regional NOx em issions, which could ultimately require installation of expensive Selective Catalyti c Reduction units at the Northeastern units. DEQ estimated in its original BART determ ination for Northeastern that the capital cost of installing SCR at the Northeaste rn units would be $290 million, with an annual cost of control (including both capita l and operational costs) amounting to approximately $48 million 39

 One-Hour SO2 Primary NAAQS . As noted above, the one-hour SO2 standard poses significant challenges for coal-fired powe r plants. A study by Burns & McDonnell
concluded that “both scrubbed and unscrubbe d boilers will have difficulty complying with the new one-hour SO2 NAAQS du ring short-term high emissions.” 40 Further reducing SO2 emissions, even after inst alling scrubbers, would require additional investments not necessary under the SIP Revision.

 Cross State Air Pollution Rule (CSAPR). The EPA has a statutory duty to require states to address emissions that “contribute signif icantly to nonattainment in, or interfere with maintenance by, any other Stat e with respect to [the NAAQS].” 41 As the NAAQS get tighter, there is grea ter likelihood that an upwind state will contribute to
nonattainment in a downwind state. As a re sult, although the 2010 version of CSAPR is

38 North American Reliability Council , 2010 Special Reliability Assessment Scenario: Resource Adequacy Impacts of Potent ial U.S. Environmental Regulations , October 2010, p.

56.

39 DEQ, Air Quality Division, Northeastern BA RT Application Analysis (Jan. 19, 2010),

Table 5.

40 Robynn Andracsek, et al, Burns & McDonnell, “Flue Gas Desulfurization-Equipped CoalFired Power Plants: Will They Comply with the 1-Hour National Ambient Air Quality Standard for Sulfur Dioxide?”, TECHBriefs 2011 No. 2, p. 2, available at http://www.burnsmcd.com/Resources/Article/ Flue-Gas-Desulfurization-Equipped-CoalFired-Power-Plants

. 41 See Clean Air Act Section 110(a)(2)(d)(i).12 of 18 still under legal review, future regulations on interstate air pollution implemented to could be even stricter. The regulations will have to address lower annual standards for fine particulate matter (PM2.5), which were finalized in January 2013, as well as updated ozone standards, which are expected to be finalized in 2014. 42 By agreeing to phase out its coal units, PSO likely avoids significant costs of this future rule.

 Greenhouse Gas New Source Performanc e Standards for Existing Units. The EPA has indicated that it plans to issue rules to address greenhouse gases from existing coalfired power plants. Although EPA has not dete rmined a specific timeline, its statutory duty to do so will be triggered when it fina lizes its proposed regulations for new units, now expected in September 2013. (See Cle an Air Act, Section 111(d), which requires EPA to prescribe regulations addressing any air pollutant “to which a standard of performance under this section would apply if such existing source were a new source”). The costs of compliance for old coal plants could be significant. A 2012 study by Synapse Energy Economics reports that, in 55 publicly available forecasts of allowance prices by electric utilities, the forecasted price for 2030 ranges from $10/ton (2012$) to $80/ton (2012$). 43

By transitioning to cleaner alternatives t han coal, PSO will avoid these and other future regulatory costs, all of which could have been passed on to ratepayers. These cost savings are in addition to the millions of dollars saved by installing DSI instead of scrubbers.

V. The SIP Revision is Consistent with the State Energy Plan.

Although not directly relev ant to ODEQ’s statutory ob ligations or EPA’s review, Sierra Club also supports the SIP Revision be cause it is consistent with the State of Oklahoma’s energy plan. The state energy plan pr ioritizes the increased use of Oklahoma’s energy resources such as wind and natural gas, and protection of public health and the

environment. 44 Oklahoma is an exporter of both natur al gas and wind, but a major importer of coal, including the coal burned by th e Northeastern units. In 2012, Northeastern imported more than 3.6 million tons of coal fr om mines in Wyoming and other out-of-state mines at a cost of more than $75 million. 45 Adding scrubbers would have continued those imports, requiring rail transport of large amount s of coal. The SIP Revision will instead

42 National Ambient Air Quality Standard s for Particulate Matter; Final Rule , 78 Fed. Reg. 3086 (Jan. 15, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-01-15/pdf/2012- 30946.pdf

. 43 Synapse Energy Economics, Inc., 2012 Carbon Dioxide Price Forecast , October 4, 2012, p. 22, available at http://www.synapse-energy.com/Downloads/SynapseReport.2012-10.0.2012- CO2-Forecast.A0035.pdf.

44 Governor Mary Fallin & Secretary of Ener gy Michael Ming, Oklahoma First Energy Plan (2011), at 3, 5, available at http://www.ok.gov/governor/documents/G overnor%20Fallin's% 20Energy%20Plan%20- %20Jan%202012.pdf

45 SNL Financial (based on Energy Informatio n Administration Form EIA-923 filings).13 of 18 encourage use of Oklahoma resources and the e limination of Northeastern’s coal imports by

2026.

Transitioning from coal to gas, wind, en ergy efficiency, and demand response also has significant benefits for the overall reliabi lity of the grid. As the amount of wind in Oklahoma and the Southwest Power Pool (SPP) rises, fossil generation will need to ramp production up and down more frequently, and to shut down for various periods of time during high wind production. Switching to nat ural gas, wind, energy efficiency and demand response, result in resources better suited to integrate with variable wind generation, both technically (since coal plants generally ramp more slowly than gas plants and often require longer periods between starts and stops) and economically (since the large investment in scrubbing and other environmental compliance w ill be partially stranded if coal units are often ramped down to accommodate wind ener gy, while gas plants would avoid their fuel costs).

American Electric Power (AEP), PSO’s parent company, has acknowledged that this transition to cleaner, local, more flexible fuel sources will impact its employees currently employed in the coal sector. Sierra Club shar es the concern that the transition occur in a way that is sensitive to the employees and co mmunities affected by plant retirements, not
least because Sierra Club members also live in these communities. As the largest power company in the country, AEP has extraordinary resources to help redeploy its coal sector employees, and has committed to doing so. 46 Oklahoma will be in need of workers in the power sector throughout the state’s transition aw ay from coal. New jobs will be created in transmission line construction, wind ener gy, solar power, and energy efficiency. The gradual nature of the PSO plan allows for PSO and the overall state economy to make the transition to a power fleet without coal in a way that allows for gradual placements of workers into new positions within the power industry. AEP notes that attrition across its company may create opportunities; the number of employees may increase at units where environmental controls are retrofit; and potent ial acquisition (purchase or construction) of replacement power may create openings. AEP plans to provide a variety of assistance programs, from advising its hiring managers when applicants are from impacted facilities to providing educatio n assistance programs. 47 While these issues are not factors that EPA may consider in its review of ODEQ’s BART analysis, Sierra Club believes they are important issues for the public to be aware of.

VI. The SIP Revision Satisfies EPA and ODE Q’s Obligations Under the Clean Air Act.

The Clean Air Act charges each state with the initial responsibility for preparing a

46 See AEP, Human Resources for Employees, http://www.aep.com/community/PlantRetire ments/HumanResourcesProgramsForEmployee s.aspx (“AEP will do everything it can to assi st employees whose jobs will be eliminated due to the premature retirements of generating units.”; listing wide variety of programs)

47 See AEP, Human Resources for Employees, http://www.aep.com/community/PlantRetire ments/HumanResourcesProgramsForEmployee

s.aspx.14 of 18 Regional Haze SIP, but grants EPA with over sight authority. This oversight ensures that
each State’s SIP considers each statutory factor in a way that is rational, supported by the evidence, and consistent with nationwide st andards. EPA approved the majority of the Regional Haze SIP submitted by Oklahoma in 2010, but disapproved of Oklahoma’s approach to SO2 BART. Oklahoma’s BART de termination did not require any coal-fired power plants to actively reduce SO2 emissions, requiring them only to continue using lowsulfur coal. Finding that Oklahoma had not properly evaluated the cost-effectiveness of scrubbers according to federal guidelines, EP A issued its own plan for SO2 emissions and required that six coal-fired units meet an emissions limit of .06 lbs/mmbtu, either by installing dry flue gas desulfurization units or switching to natural gas.

The SIP Revision is a practical and legally sufficient response to EPA’s disapproval
of Oklahoma’s BART determinations for SO2 for the Northeastern units. 48 The SIP
Revision will also contribute to the stat e’s “reasonable progress toward meeting the national goal” of eliminating human-caused visibility impairment by 2064. 42 U.S.C. § 7491(b)(2).

In making a BART determination, the Clean Air Act requires states to consider (1) the costs of compliance; (2) the energy and nonair quality environmental impacts of compliance; (3) any existing pollution contro l technology in use at the source; (4) the remaining useful life of the source; and (5) the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology. 42 U.S.C. § 7491(g)(2); 40 C.F.R. 51.308(e)(1)(ii).

Pursuant to the BART regulations issued by EPA, the first step before evaluating costs is identifying technically feasible control options. ODEQ evaluated two control options: installing Dry FGD with Spray Dry Abso rber on both units (the FIP scenario) and installing DSI on one unit only, accompanied by the company’s commitment to retire that unit by 2026 and the other by 2016 (the settlement scenario). In this scenario, EPA analyzed the additional scenario of insta lling DFGD/SDA on the unit that the company plans to continue operating until 2026. EPA co nsidered a 10-year operating life for the scrubber even though, as EPA noted, the company likely would choose to operate the

48 EPA has also concluded that, with respect to the Northeastern units, the SIP Revision addresses the state’s obligation to address the visibility impacts of pollution transported to other states. To ensure compliance with this obligation, the SIP Revision should require
that the additional SO2 reductions that Oklaho ma has committed to -- should the controls
at Northeastern not suffice -- come from so urces affecting the same Class I areas as

Northeastern. It is not clear that emission s from the “northeast quadrant” or elsewhere would do so. Moreover, ODEQ should work to identify such reductions over the next three years in advance of the monitoring report requ ired by the Settlement Agreement such that the reductions can be implemented immediately should the monitoring report reveal that they are needed. The timeframe set forth for ob taining the additional reductions (not later than “the end of the first full Oklahoma legisl ative session” occurring after the monitoring report) is untethered from the statutory require ments for interstate visibility protection.15 of 18 scrubber longer than ten years if it made that investment. See Technical Support Document for the AEP/PSO BART Revision (July 2013) at 21.

EPA and ODEQ properly took into account the company’s proposal to retire one unit by 2016 as part of the control scenario. The st atute instructs states to contemplate “the remaining useful life of the source,” 42 U.S.C. § 7491(g)(2), and EPA’s BART Guidelines acknowledge that a unit may “agree to shut do wn” prior to the statutory deadline for BART controls. 70 Fed. Reg. 39,104, 39,127 (July 6, 2005). It is well within ODEQ’s discretion, and makes good practical sense, to take into a ccount PSO’s enforceable commitment to retire one unit by 2016 in comparing costs. The BART Guidelines require that if the “date the facility permanently stops operations [. . .] affects the BART determination, this date should be assured by a federally- or Stat e-enforceable restriction preventing further operation.” 70 Fed. Reg. at 39,169. ODEQ has sa tisfied this requirement by entering into an
“enforceable administrative order” with AEP/PSO. See Revised Haze SIP at 6 & Appendix III. Although styled as an agreement between ODEQ and PSO, EPA should clarify in the final rule that the agreement is incorporated as part of the SIP and is therefore enforceable by citizens, the state, and EPA.

The next step is calculating the annual cost s for each scenario. Sierra Club did not
conduct a detailed evaluation of EPA or ODE Q’s cost assumptions, but supports the approach of using a methodology consistent with EPA’s Air Pollution Control Cost Manual and EPA’s analysis supporting the FIP. 49 EPA’s addition of a unit-by-unit analysis is also appropriate (although EPA acknowledges that the commitment to a 2026 retirement date would likely not be realistic we re PSO to invest in a scrubber on the remaining unit).

Next, the state must evaluate cost-effectiveness, or the cost per ton of SO2 reduced. Because the unit with controls will cease operating in 2026, DEQ annualized the DSI option’s costs over 10 years. Id. at 6. ODEQ compared this option to a scenario in which both units operate with DFGDs for 30 years. Pursuant to this approach, DEQ concluded that the DSI option, at $1005/ton reduced, is more cost-effective than DFGD, at $1,544/ton.

Id. at 7. ODEQ considered emissions reductions wi th the DSI option as if the controlled unit would consistently operate at 85% capacity through 2026. Revised BART Determination at 6-7. However, the Revised SIP includes an enforceable commitment by PSO to steadily ramp down capacity starting in 2021. Taking into account the capacity reductions, the gap in cost-effectiveness is larger. According to the company’s estimate, 26,558 tons of SO2 will
be removed under the DSI/shutdown sce nario through 2026, resulting in a costeffectiveness of $942/ton. Supplemental BART Dete rmination, Appendix A, at 2. While EPA’s unit-by-unit approach showed an even wider disparity in cost-effectiveness between the DSI and scrubber options ($1,758/ton compared to $3,211/ton), the conclusion is the same that the DSI option is more cost-effecti ve, taking into account the remaining useful life of the plant. Sierra Club agrees with this conclusion.

49 DSI may have greater than zero landfill cost s, contrary to ODEQ ’s analysis. However, even if landfill costs were included, the DSI/s hutdown scenario would be more cost-effective
than DFGDs.16 of 18 EPA also instructs states to evaluate “in cremental cost-effectiveness,” or the cost of each additional ton removed by the more expensive option that achieves greater
reductions. 50 In ODEQ’s analysis, the incremental cost -effectiveness of the DFGD option is $4,718/ton in the first year. Taking into acco unt additional reductions in SO2 as the unit decreases its capacity utilization, the increme ntal cost-effectiveness worsens to $7,794/ton.
See Supplemental BART Determination, Appendix A, at 2-3. EPA likewise found that the incremental cost-effectiveness of installing DF GD rather than DSI would be $7,362/ton. As noted in the BART regulations, “[o]f course, there may be other differences between these options, such as, energy or water use, or non-air environmental effects, which should also be considered in selecting a BART te chnology.” 70 Fed. Reg. at 39,167.

The state is next instructed evaluate thes e “other differences,” including whether each control option results in energy penal ties or benefits. Neither ODEQ nor EPA evaluated the differences in energy use betwee n the two options in detail, but ODEQ notes that energy consumption will be reduced by ha lf as a result of the shutdown of one unit under the SIP Revision. ODEQ and EPA also could have considered the greater energy requirements of DFGD technology as compared to DSI as a factor supporting its BART

selection.

Next, the state must consider “non-air quality environmental impacts.” This is a broad category, including “relative quantities of water used and water pollutants produced and discharged as result of the use of each al ternative emission contro l system,” and “where possible, . . . the effect on ground water and . . . local surface water quality parameters.” 70 Fed. Reg. at 39,169. The state may also consider the “quality and quantity of solid waste . . . that must be stored and disposed of or recy cled;” the “irretrievable commitment of resources (for example, use of scarce water resources, ” and other adverse environmental impact such as hazardous waste discharges. Id.

DFGD would use an enormous amount of wate r in comparison to DSI. As discussed above, PSO has estimated that the increase in water consumption at the Northeastern plant if it were to add dry scrubbers to both units would be at least 65 times greater than
with a retrofit of ACI and DSI at on e unit pursuant to the SIP Revision. 51 Another crucial disadvantage of adding a DFGD at each unit is that it would create a new source of highly polluted wastewater at the plant. EPA has rece ntly initiated a rulemaking to address, among other issues, the toxic-laden wastewater associated with SO2 scrubbers. In light of the clear disadvantages of scrubbers with re spect to water usage and water quality impacts, and taking into account the limited remaining lif e of the plan, this factor weighs in favor of ODEQ’s BART selection.

50 (Total Annualized Cost for Option 1 – To tal Annualized Cost for Option 2)÷ (Annual Emissions for Option 1 – Annual Emissions for Option 2). 70 Fed. Reg. at 39,167.

51 Oklahoma Corporation Commission, Cause No. 201200054, PSO Response to Sierra Club Data Request 5-9 (Dec. 20, 2012) (attached here to as Exhibit 3) (Controls pursuant to EPA settlement will consume approximately 11,250 gallo ns of water per day, compared with the DFGD option, which would consume approximately 737,000 - 805,000 gallons of water per day for two units).17 of 18 Finally, the state must determine the visi bility impacts of its BART determination. The deciview improvements are “weighed among the five factors, and [the state is] free to determine the weight and signficance to be assi gned to each factor.” 70 Fed. Reg. at 39,170. Sierra Club has not reviewed the modeling as sumptions and protocol in detail but supports ODEQ’s approach of following the modeling t hat EPA conducted in support of the FIP. EPA’s adjustments and unit-by-unit approach al so appear reasonable in this context, as
does EPA’s determination that “the relative re sults are similar and the differences are not such that it changes our overall conclusions.” 78 Fed. Reg. at 51,692.

ODEQ notes that visibility improvements would slightly greater if the company installs DFGD in 2016, but that these impr ovements would “trivi al.” Revised BART Determination at 11. Although we agree with DEQ’s overall conclusion that the proposed SIP Revision is preferable to the FIP, we agree with EPA that DEQ may not simply disregard a .1 deciview improvement without considering the full context. 52 See EPA Technical Support Document for the AEP/PSO BART Revision (July 2013) at 19. EPA correctly states: “In the preamble to the BAR T guidelines, ‘[e]ven though the visibility improvement from an individual source may not be perceptible, it should still be considered in setting BART because the contributions to haze may be significant relative to other
source contributions in the Class I areas.’ Ov erall, the Regional Haze process envisions reductions that are both ‘perce ptible’ and ‘not perceptible’ w ill be necessary as part of the overall path to obtain necessary reductions to meet Regional Haze goals.” In some cases, the improved visibility and environmental bene fits of the more expensive scenario might outweigh cost considerations. Here, considerin g all the factors together, the Revised SIP is an appropriate BART selection despite greater visibility improvements achievable in the
short-term with DFGD.

While Sierra Club does not necessarily ag ree with each and every rationale ODEQ and EPA have relied upon in their analysis , Sierra Club supports the proposed SIP Revision because it ultimately will achieve natural visibility on a faster timeline than would the FIP (as discussed in Section I above) , it complies with the BART guidelines, and it will provide a host of environmental and public health benefits that could not be achieved by a scrubber retrofit alone.

The state has the discretion to choose the “b est” option, so long as it has considered the above factors consistent with the BART gu idelines, and “provide[d] a justification.” 70 Fed. Reg. at 39,170-71. For all of the reasons above, and in light of PSO’s commitment to gradually phase-out the Northeastern coal uni ts, Sierra Club believes ODEQ correctly and justifiably selected the DSI option as BART. We enthusiastically support EPA’s approval of the SIP Revision and urge EPA to promptly move forward with finalizing the rule.

52 We disagree, however, with EPA’s apparent su ggestion that a .1 dv to .27 dv impact does not “contribute” to visibility impairments. Id. “Failing to consider less-than-perceptible contributions to visibility impairment wo uld ignore the CAA’s intent to have BART requirements apply to sources t hat contribute to, as well as cause, such impairment.” 70 Fed. Reg. at 39,129.