February 9, 2012 

Mr. James M. Parker 

PPL Montana, LLC 

303 North Broadway 

Suite 400 

Billings, MT 59101-1255 

VIA E-Mail

RE: Updated SCR NOx Control Cost for Colstrip 1 & 2 

Dear Mr. Parker: 

This letter is to update our September 2011 BART* analysis addressing the cost-effectiveness of the 

installation of selective catalytic reduction (SCR) technology at Colstrip Units 1 and 2 for controlling 

nitrogen oxide (NOx) emissions on dollar/ton basis, to take into account a new site-specific assessment of 

the cost of SCR prepared by Burns & McDonnell. 

TRC’s September 2011 report, entitled “NOx Control Update to PPL Montana’s Colstrip Generating 

Station BART Report,”* contained a detailed breakdown of the capital and operating costs associated 

with the installation of SCR controls on Colstrip Units 1 and 2. See Table 2-3b (attached). The 2011 

report updated the cost of SCR from a 2008 BART control cost study, relying on a 2010 Sargent & Lundy 

analysis (which was in 2009 dollars). The 2008 TRC study relied on the 2002 “EPA Control Cost 

Manual” which was based on 1998 costs escalated to 2008. 

Burns & McDonnell recently completed a site-specific cost analysis for SCR at Colstrip Units 1 and 2. 

That analysis estimated a total capital cost for SCR of $203 million per unit (in 2015 dollars) or $190 

million in 2011 dollars, as compared to $152 million per unit using the Sargent & Lundy method in 2011 

dollars. This site-specific cost estimate corresponds to a cost-effectiveness of $8,884 per ton of NOx

controlled, as compared to $7,300/ton of NOx controlled using the Sargent & Lundy method. See table 2-

3b-revised February 9, 2012 (attached). 

To summarize, the cost effectiveness associated with the installation and operation of SCR NOx controls 

at Colstrip Units 1 and 2 are: 

September 2011 BART Update (Revised October 2011) $7,300 (2011 dollars) 

February 2012 Burns & McDonnell Site Specific Study $8,884 (2011 dollars) 

If you have any questions or comments regarding this update, please contact me at (860) 298-6245. 

Sincerely, 

TRC 

Mark M. Hultman, P.E. 

Principal Consulting Chemical Engineer 

*Revisions were added in October 2011 
Table 2-3b

PPL BART Cost Effectiveness Analysis

SCR NOx Control

Colstrip Units 1&2

 Two 333 MW Coal Fired Boilers (Each)

30dayaverageemissionNOxrate

Maximum Gross Heat Input MM Btu/hr 3,982

Design Percent Load % 92

Uncontrolled Emissions lbs/MMBtu 0.200

ExhaustTemperature, (o

F) T 314

Steam Turbine Power Output (TMW) MW 333

Capacity Factor (92%) hrs 8,059

Controlled NOx Emissions lbs/MMBtu 0.06

Overall NOx Reduction Efficiency, (%) % 70.00

Uncontrolled NOx Emissions, (lb/hr) 796.4

Uncontrolled NOx Emissions, (tons/yr) 3209.2

Controlled NOx Emissions, (ton/yr) 962.8

Annual Interest Rate, (%) 7

Equipment Life, (yrs) yr 20

Capital Recovery Factor, CRF CRF 0.0944

Unit Item

Cost Item Suggested Factor Cost Cost

IPM Model, August 20, 2010(1) Capital Cost ($/KW) 443 $147,593,135

Equipment Cost Total, (EC) EC (Adjusted by Cost Index Calcs) (2011 dollars)(2,3) $152,306,678

 Total Capital Costs, TCC --- $152,306,678

 Direct Annual Costs, DAC

Catalyst Cost(4) VOMW $939,300

Urea Cost VOMR $706,224

Steam Cost VOMM $14,187

Maintenance Labor FOMO $62,400

Maintenance Materials FOMM $300,000

 Total Direct Annual Costs, DAC $2,022,111

Indirect Annual Costs

 Capital Recovery CRF*TCC --- $14,376,673

 Total Indirect Annual Costs, IAC $14,376,673

 Total Annual Costs, TAC = DAC + IAC $16,398,784

Cost Effectiveness ($/ton pollutant Removed) $7,300

 Cost data references:

1)Costanalysisequationsfrom"IPMModelRevisionstoCostAndPerformanceforAPC

TechnologiesSCRCostDevelopmentMethodologyFINAL",August2010

Project12301007,PerrinQuarlesAssociates,Inc.,preparedbySargent&Lundy,LLC

2) Cost indices used to adjust 2009 costs to 2011 costs (2009 CI= 109.594, 2011 CI= 113.094)

3) This includes a dry sorbent system for control of SO3

4) Cost is for replacement and disposal based on S&L cost estimate in $/MW-hr for PRB coal 

Page 13 Revised
Table 2-3b (Revised February 9, 2012)

PPL BART Cost Effectiveness Analysis

SCR NOx Control

Colstrip Units 1&2

 Two 333 MW Coal Fired Boilers (Each)

30­day average emission NOx rate

Maximum Gross Heat Input MM Btu/hr 3,982

Design Percent Load % 92

Uncontrolled Emissions lbs/MMBtu 0.200

ExhaustTemperature, (o

F) T 314

Steam Turbine Power Output (TMW) MW 333

Capacity Factor (92%) hrs 8,059

Controlled NOx Emissions lbs/MMBtu 0.06

Overall NOx Reduction Efficiency, (%) % 70.00

Uncontrolled NOx Emissions, (lb/hr) 796.4

Uncontrolled NOx Emissions, (tons/yr) 3209.2

Controlled NOx Emissions, (ton/yr) 962.8

Annual Interest Rate, (%) 7

Equipment Life, (yrs) yr 20

Capital Recovery Factor, CRF CRF 0.0944

Unit Item

Cost Item Suggested Factor Cost Cost

 Total Capital Costs, TCC Note 1 $190,000,000

 Direct Annual Costs, DAC

Catalyst Cost(2) VOMW $939,300

Urea Cost VOMR $706,224

Steam Cost VOMM $14,187

Maintenance Labor FOMO $62,400

Maintenance Materials FOMM $300,000

 Total Direct Annual Costs, DAC $2,022,111

Indirect Annual Costs

 Capital Recovery CRF*TCC --- $17,934,656

 Total Indirect Annual Costs, IAC $17,934,656

 Total Annual Costs, TAC = DAC + IAC $19,956,767

Cost Effectiveness ($/ton pollutant Removed) $8,884

 Cost data references:

1) Revised capital cost based on PPL/Burns & McDonnell February 2012 costing study

2) Cost is for replacement and disposal based on S&L cost estimate in $/MW-hr for PRB coal 

Page 13 Revised