SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 1 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

APPENDIX C

Cost Effectiveness Analysis for 

Rule 4694 (Wine Fermentation and Storage Tanks)

December 15, 2005
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 2 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

I. SUMMARY

Draft Rule 4694 (Wine Fermentation and Storage Tanks) would require operators of 

wineries to reduce VOC emissions from red wine fermentation. As presented in 

Appendix B of this Draft Staff Report, annual VOC emissions from wine fermentation 

are estimated to range from 673 to 788 tons. Proposed exemptions in Draft Rule 4694 

would result in 639 to 748 tons of VOC being subject to control requirements. Draft 

VOC control requirements would require operators to reduce their uncontrolled 

emissions by 35 percent annually. Annual achievable VOC emission reductions from 

wine fermentation are estimated to range from 224 to 262 tons, for a daily reduction in 

VOC emissions of 0.61 to 0.72 tons (Appendix B).

This report presents cost effectiveness estimates in terms of dollars spent per ton of 

VOC controlled. Three cost effectiveness scenarios are presented: 

• Scenario-1 is a cost effectiveness analysis prepared by District staff, consistent with 

District procedures for determining cost effectiveness. Scenario-1 estimates 

average cost effectiveness for controlling VOC emissions from red wine at 

$27,000/ton-VOC reduced and average cost effectiveness for controlling VOC 

emissions from white wine at $82,000/ton-VOC reduced. 

• Scenario-2 is a cost effectiveness analysis presented by the Wine Institute1. 

Scenario-2 estimates cost effectiveness for controlling VOC emissions from red wine 

fermentation at $120,479/ton-VOC reduced. 

• Scenario-3 is a cost effectiveness analysis prepared by District staff after adjusting 

the Wine Institute’s estimate making specific assumptions about design optimization 

and eliminating site-specific costs. Scenario-3 estimates average cost effectiveness 

for controlling VOC emissions from red wine fermentation ranges from $42,200/tonVOC to $52,900/ton-VOC reduced. 

There are no known examples of the application of VOC emission controls to wine 

fermentation, making accurate determination of cost effectiveness difficult. Scenario-1 

likely understates the cost of control because it assumes that tanks process the 

maximum number of batches possible, which is seldom achieved in practice. Senario-2 

likely overstates the cost of control because the estimate includes significant sitespecific costs, and the control system design is not optimized. Scenario-3 corrects for 

Scenario-II assumptions. Staff considers Scenario-III to represent the likely cost of 

controlling fermentation emissions.

 

1 Robert P. Koch, Wine Institute, Letter to the District, July 19, 2005
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 3 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

II. REQUIREMENTS OF ANALYSIS

The California Health and Safety Code 40920.6(a) requires the San Joaquin Valley 

Unified Air Pollution Control District to conduct both an absolute cost effectiveness 

analysis and an incremental cost effectiveness analysis of available emission control 

options before adopting each Best Available Retrofit Control Technology (BARCT) rule. 

The purpose of conducting a cost effectiveness analysis is to evaluate the economic 

reasonableness of the pollution control measure or rule. The analysis also serves as a 

guideline in developing the control requirements of a rule. Absolute cost effectiveness 

of a control option is the added annual compliance cost in dollars per year divided by 

the emission reduction achieved in tons VOC reduced per year. This report presents 

District staff’s analysis of the absolute cost effectiveness of Draft Rule 4694.

Incremental cost effectiveness is intended to measure the change in costs, in dollars 

per year, and emissions reductions in tons VOC reduced per year between two 

progressively more effective control options or technologies. Incremental cost 

effectiveness compares the differences in costs and the differences in emissions 

reductions of candidate control options. Incremental cost effectiveness does not reveal 

the emission reduction potential of the control options. Unlike the absolute cost 

effectiveness analysis that identifies the control option with the greatest emission 

reduction, incremental cost effectiveness does not present any correlation between 

emissions reductions and cost effectiveness. Therefore, the relative values produced in 

the incremental cost effectiveness analysis and the absolute cost effectiveness values 

are not comparable and cannot be evaluated similarly.

An incremental cost effectiveness analysis would serve no useful purpose because 

District staff believes that the proposed provisions of Rule 4694 represents all feasible 

control measures and BACM that the District is mandated to adopt pursuant to the 

federal and state clean air acts.

III. BACKGROUND

The need to reduce emissions from wine fermentation in the SJVAB was identified over 

20 years ago. During 1988 to 1991, research specific to evaluating methods of 

controlling ethanol emissions during wine fermentation was conducted by California Air 

Resources Board (ARB), with cooperation from the Wine Institute. Three possible 

emission control technologies were evaluated: adsorption vapor recovery (activated 

carbon adsorption), catalytic thermal oxidation, and wet (water) scrubbers. All three 

technologies demonstrated at least 90% ethanol emission reduction. Subsequently, 

estimates of ethanol emission reductions associated with two control technologies, 

vapor condensation and fermentation temperature control were prepared in 1993. 

Theoretical control efficiencies for these two control methods were estimated to be 90% 

and 30% respectively.
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 4 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

In 1990, a demonstration program evaluating control of ethanol emissions from wine 

fermenters was conducted at the E. & J. Gallo Winery in Fresno, California 2. The study 

used a prototype emissions capture system. The design of the VOC capture system 

allowed fermentation emissions to vent naturally through a manway located at the top of 

the tank. The VOC capture system consisted of an emissions collection hood, located 

above the manway, connected by ductwork to a VOC control device. The collection 

hood was larger than the manway and was suspended above the opening, creating an 

air gap between the tank and the hood. The design included a fan with a flow-rate 

sufficient to pull emissions into the collection hood and force the emissions through the 

ductwork to the emissions control device. Based on results reported in the Gallo study, 

District staff considers it reasonable to expect similar emissions collection systems to 

have a capture efficiency of at least 90%. Achieving an emissions capture efficiency of 

90% and an emissions destruction efficiency of 95% would result in an overall 

emissions reduction efficiency of 86%. The Wine Institute’s report includes a 

conceptual design for collection system that eliminates the air gap, achieving a closed 

capture system. A closed capture system is expected to have a capture efficiency of 

100% and would result in an overall emissions reduction efficiency of 95%.

General information on available control technologies is presented in the Draft Staff 

Report for Rule 4694, Section IV. Ethanol is the primary VOC produced during wine 

fermentation. Many different types of established technologies can be used to control 

ethanol emissions. Five types of VOC controls are:

1. Oxidation (conversion of the VOC to CO2);

2. Absorption (“scrubbers”, which transfer the VOC in air emissions to a liquid waste 

stream);

3. Adsorption (often using activated carbon, which transfers the VOC in the air onto 

a solid substrate);

4. Condensation (conversion of the VOC gases into liquids); and 

5. Biological control systems (e.g., bio-filters or bio-scrubbers)

During 1988 to 1991, research specific to evaluating methods of controlling ethanol 

emissions during wine fermentation was conducted by ARB, with cooperation from the 

Wine Institute. Three possible emission control technologies were evaluated: 

adsorption vapor recovery (activated carbon adsorption), catalytic thermal oxidation, 

and wet (water) scrubbers. All three technologies demonstrated at least 90% ethanol 

emission reduction. Subsequently, estimates of ethanol emission reductions associated 

with two control technologies, vapor condensation and fermentation temperature control 

were prepared in 1993. Theoretical control efficiencies for these two control methods 

were estimated to be 90% and 30% respectively.

 

2 Akton Associates, A Demonstration Program, Ethanol Emissions Control from Wine Fermentation Tanks Utilizing 

Carbon Adsorption Technology, 1990
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

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For Revised Proposed Rule 4694

IV. STORAGE TANK EMISSIONS CONTROL TECHNOLOGY

After fermentation, wine is transferred a number of times between storage tanks to 

perform various finishing operations such as “racking” (decantation for separation of 

sediment), filtration, malolactic fermentation (breakdown of malic acid to lactic acid and 

carbon dioxide), and bottling operations. Since the bottling process is a year-round 

operation, each batch of wine will have a definite residence time in storage, before 

bottling, which includes the time spent in performing the various post-fermentation 

finishing processes. The post-fermentation operations result in “working losses” from 

the storage tanks since they require draining and filling the tanks several times. 

Storage before bottling generates “breathing losses” from the tanks.

Since ethanol in water constitutes an organic liquid, the US EPA “TANKS” program can 

be utilized to determine the estimated VOC (ethanol) emissions. However, obtaining 

accurate results from the TANKS program requires that the organic liquid be accurately 

characterized in terms of vapor pressure of the liquid and the composition of the 

equilibrium vapor phase. Since ethanol and water are highly polar compounds, they 

form a non-ideal mixture, i.e., the mixture does not follow Raoult’s law. As a result, 

direct estimation of vapor pressure and equilibrium vapor phase concentration, based 

on pure component properties, is not practical and experimental data are required.

To effectively utilize TANKS to estimate VOC emissions from wine storage, 

experimental data supplied by the Wine Institute for the vapor pressure of ethanol over 

wine were used, along with the assumption that water will behave ideally (a good 

assumption since the liquid phase is over 95% water on a molar basis). District staff 

calculates an emission factor for wine storage of 0.372 lb EtOH/1000 gal wine 

processed, based on a “typical” San Joaquin Valley wine storage scenario.

In 2002, 337,968,011 gallons of wine was fermented in the District. Storing all of the 

2002 wine fermentation in the District until bottled, would result in annual storage 

emissions of 62 tons of VOC. Not all wine fermented in the District is bottled in the 

District, thus actual storage emissions are likely lower than estimated. According to 

District Permit To Operate application data, there are over 4,000 tanks potentially used 

for storing bulk wine in the District. Thus, potential emissions from a single bulk wine 

storage tank should be negligible.

Two operational practices currently in place on bulk wine storage tanks in use at large 

wineries in the District are use of pressure-vacuum relief valves and temperature 

control3. District staff considers use of pressure-relief valves, and temperature control 

to constitute reasonable available control technology (RACT) for bulk wine storage 

tanks. Thus, there should be no significant additional costs associated with controlling 

VOC emissions from bulk wine storage tanks.

 

3 Art Caputi, The Wine Institute; Bob Calvin, Canandaigua Winery, Telephone Conversations with Daniel Barber, 

San Joaquin Valley Air Pollution Control District, 2004.
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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For Revised Proposed Rule 4694

V. WINE FERMENTAION EMISSIONS CONTROL AND COST OF REDUCTIONS

The previous Draft Rule 4694 (Wine Fermentation and Storage Tanks) would require 

operators of wineries to reduce VOC emissions from red wine fermentation. Operators 

would achieve compliance by equipping and operating their red wine fermenters with 

VOC control systems achieving at least 86% VOC capture and control efficiency. 

District staff prepared a cost of control analysis consistent with the proposed 

requirements and presented the information during the second workshop. That analysis 

shows average cost effectiveness of controlling VOC emissions from red wine is 

estimated at $27,000 per ton. Average cost effectiveness of controlling VOC emissions 

from white wine was estimated at $82,000 per ton. The analysis is presented here as 

Scenario 1.

The Wine Institute, believing that the District’s analysis understates the cost of control, 

engaged Eichleay Engineering to prepare a cost estimate for installing VOC controls at 

Gallo’s Livingston winery. The Wine Institute submitted the Eichleay report as part of 

their public comments to the second workshop4. The Eichleay report concludes that the 

estimated cost of controlling VOC emissions from wine fermentation is $120,479 per ton 

of ethanol controlled. A brief synopsis of the Eichleay report is presented here as 

Scenario-2.

District staff believes that the Eichleay report significantly overstates the cost of 

controlling fermentation emissions. The District’s analysis of the Eichleay report is 

presented as Scenario-3. After adjusting the costs presented in the Eichleay report, 

District staff estimates cost effectiveness ranging from $42,200/ton-VOC to $52,900/tonVOC reduced for an optimized, non-site specific installation of this size.

Scenario-1 

In 2003, the District contracted with Sonoma Technology, Inc. (STI) to prepare a control 

measure assessment for wine fermentation processes5. STI’s report presented cost 

estimates for a design based on use of an RTO to control fermenter emissions. This 

analysis incorporates many of the cost estimates and assumptions presented in STI’s 

report. A significant departure from STI’s cost analysis is that the District’s analysis is 

based on the concept of connecting multiple fermenters to a single RTO. STI’s 

assessment assumed a design of one fermentation tank per each RTO. The District’s 

analysis also includes additional project costs not considered in the STI report.

 

4 Robert P. Koch, Wine Institute, Letter to the District, July 19, 2005

5 Control Technology Evaluation: Wineries – Fermentation Processes, Sonoma Technology, Inc, October 21, 2003
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 7 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

The following assumptions were made in this analysis:

1. This cost analysis considers red and white wine fermentations separately, because 

of the different emissions characteristics of the two wine types and differences in

the design and operation of their respective fermenters.

2. While red wine fermenters can be used to ferment white wines, white wine 

fermenters are not equipped to handle the additional solids associated with 

producing a red wine. Thus, the analysis assumes that a fermenter will only be 

used to ferment either red or white wines. 

3. Control technology is regenerative thermal oxidation (RTO). Control system 

design capacity with a peak fermenter exhaust flow of 9.75 acfm/1000 gallons 

fermented6.

4. In general, it will be more cost effective to vent multiple tanks to a single RTO.

5. All tanks manifolded together have the same capacity and will operate at peak flow 

simultaneously.

6. Only four fermenters are connected to a single RTO.

7. Connecting more than four tanks per RTO is technically feasible and should 

improve cost effectiveness.

The following assumptions were made about capital costs:

1. RTO purchase cost is based on interpolation or extrapolation of the RTO pricing 

data presented in the control technology assessment prepared by STI for system 

capacities under 8,000 cfm.

2. RTO pricing for capacities above 8,000 cfm is based on quotations obtained from 

Air-Clear LLC by Eichleay Engineering for the Wine Institute, and provided to the 

District, March 1, 2005.

3. Allowances were included for a separator tank and pump and the allowances were 

adjusted for system capacity based on a capacity exponent factor.

4. Ductwork purchase cost is based on interpolation or extrapolation of the ductwork 

pricing data presented in the control technology assessment prepared by STI, 

using calculated capacity exponent factors.

5. Structural steel supports for the new ductwork and associated foundations were 

estimated by including an allowance of 40 tons of medium weight steel and four 

drilled pier foundations for each pair of tanks (regardless of tank size), estimated at 

$4,500/ton for steel and $3,000/pier for foundations.

6. No costs were included for infrastructure improvements, such as electrical supply 

or natural gas.

 

6 120% of flow reported in “Characterization of Ethanol Emissions From Wineries”, Fielder, D. and Bumala, P., July 

19, 1982 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

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For Revised Proposed Rule 4694

7. Factors were applied as follows to the bare equipment and ductwork costs to arrive 

at an installed direct cost:

• RTO: 1.3

• Separator/Pump: 3

• Ductwork: 6

In the case of the RTO and separator/pump, these factors are intended to cover 

the material and labor costs for site preparation, concrete, structural steel, 

equipment installation, electrical instrumentation, and all other bulk materials as 

required to physically complete and pre-commission the facility. The factor applied 

to the ductwork covers installation of the ductwork, supply and installation of tank 

nozzles, valves, connected instrumentation, and miscellaneous minor supports.

8. Sales tax was estimated at 8.25% of equipment and material costs (it was 

assumed that 1/3 of the installed direct cost, less equipment cost, covered bulk 

materials). 

9. Freight was included at 1.5% of the equipment and material cost.

10. Total direct cost was estimated as the sum of the installed direct costs, sales tax, 

and freight.

11. Indirect construction costs were estimated at 20% of total direct cost.

12. Indirect cost includes contractor’s fee, field staff, construction equipment, 

temporary facilities, and indirect craft labor.

13. Engineering was estimated at 25% of the total direct cost.

14. Cost of building permits was estimated at 2% of total direct cost.

15. Owner’s cost was included at 10% of total direct cost to cover owner’s project 

management, training, and commissioning costs.

16. Contingency was included at 15% of total cost to arrive at Total Installed Costs.

The following assumptions were made about annual costs:

1. Operating labor was estimated at 0.5 hour per shift at $30/hour, assuming 24 hour 

operation for 60 or 90 days.

2. Maintenance was estimated at 3% of the bare equipment costs.

3. Utilities were estimated using the utility costs presented in the STI control 

assessment document.

4. Overhead, insurance, and other administrative costs were included at 2% of total 

installed costs.

5. Capital recovery was estimated as 0.163 x Total Installed Cost (10 year) per 

District practice.
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 9 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

The following assumptions were made about emissions estimates:

1. Emissions were calculated using emission factors of 6.2 lbs/1000 gallons and 2.5 

lbs/1000 gallons for red and white wine respectively7.

2. Emission estimates were calculated for working volumes of 70% and 80% of 

nominal tank capacity.

3. The number of batches processed per red and white wine fermenters were 

estimated assuming fermentation periods of 5 and 10 days, respectively, for red 

and white wines.

4. Calculations were based on total annual fermentation periods of 60 and 90 days.

5. An 86% capture and control efficiency of the VOC control system was assumed.

Cost Effectiveness Estimates

Two cost effectiveness scenarios were calculated for both red and white wines; one 

scenario is based on a 60-day fermentation period, the other is based on a 90-day 

fermentation period. For both red and white wines, tank volumes ranged from 50,000 to 

300,000 gallons. 

Base assumptions for the analysis are summarized in Table-1. Cost effectiveness for 

red wine fermentation is presented in Table-2. As illustrated in Table-2, scenario-1 (60-

day fermentation season), cost effectiveness ranges $59,000 to $16,000 per ton, 

depending on tank size. Table-2, scenario-2 (90-day fermentation season) illustrates 

that cost effectiveness is sensitive to tank throughput. The greater the throughput, the 

lower the cost effectiveness. Cost effectiveness for scenario-2 ranges from $39,000 to 

$11,000 per ton. Average cost effectiveness for the two red wine fermenter scenarios is 

$27,000 per ton.

A similar analysis for white wine fermentation is presented in Table-3. The analysis 

differs from the red wine fermenter analysis in that it uses an emissions factor of 2.5 

lbs/1000 gallons, assumes tanks are filled to 80% of capacity and a fermentation batch 

period of 10 days. Cost effectiveness for a 60-day fermentation season ranged from 

$192,000 to $40,000 per ton. Cost effectiveness for a 90-day fermentation ranged from 

$128,000 to $27,000 per ton. Average cost effectiveness for all white wine fermenter 

sizes and fermentation periods is $82,000/ton.

 

7 Emissions Inventory Procedural Manual, Section 5.1, Air Resources Board, 2005
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 10 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

Table-1. Base Assumptions for Wine Fermentation Estimates, Scenario-1

Activity Assumed Value

System Capacity 9.75 acfm/1000 gallons

RTO Base Cost $108,500 @ 500 cfm

Duct Work Base Cost $3,500 @ 500 cfm

Base Utility Cost $1,100 @ 500 cfm

Base Separator Cost $5,000 @ 500 cfm

Base Pump Cost $5,000 @ 500 cfm

Direct Cost FactorRTO 1.3

Direct Cost FactorDuct 6

Direct Cost Fact.Sep/Pump 3

Capital Recovery Factor 0.163

Maintenance 3.0% Of Equipment Cost

Insurance, O.H., Administration 2.0% Of Total Installed Cost

Labor/Bulk Material Ratio 2

Ductwork Support Steel Cost $90,000/tank

Ductwork Support Foundation $6,000/tank

Construction Indirect Costs 20% Of Direct Costs

Engineering 25% Of Direct Costs

Building Permits 2.0% Of Direct Costs

Owner's Cost 10% Of Direct Costs

Contingency 15%

Operating Parameters

Red & White Wine EF 6.2 lb/1000 gal and 2.5 lbs/1000 gal

Control Efficiency 86.0%
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 11 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

Table-2. Cost Effectiveness8 For Red Wine Fermentation, Scenario-1

Nominal Tank Capacity (x 1000 gal) System Parameters

50 100 200 300

Design Flowrate/Tank cfm 450 899 1,799 2,698

System Flowrate cfm 1,799 3,598 7,196 10,793

Costs (x $1000)

RTO Cost $147 $173 $204 $326

Duct Cost $24 $33 $45 $53

Separator $8 $11 $15 $17

Pump $5 $5 $5 $5

Fixed Steel Cost $360 $360 $360 $360

Fixed Concrete $24 $24 $24 $24

Labor & Bulk Materials $178 $234 $308 $393

Sales Tax $19 $23 $29 $42

Freight $3 $4 $5 $8

Total Direct Cost $769 $867 $994 $1,228

Construction Indirect Costs $154 $173 $199 $246

Direct + Indirect Cost $922 $1,041 $1,192 $1,473

Engineering $192 $217 $248 $307

Building Permits $15 $17 $20 $25

Owner's Cost $77 $87 $99 $123

Installed Cost W/O Contingency $1,207 $1,362 $1,560 $1,927

Contingency @ 15% $181 $204 $234 $289

Total Installed Cost (TIC) $1,388 $1,566 $1,794 $2,217

Annualized TIC $226 $255 $292 $361

Operating Cost $4 $4 $4 $4

Maintenance $6 $7 $8 $12

Utilities $4 $8 $16 $24

Total Direct Annual Cost $13 $19 $28 $40

O.H./Insurance/Admin. $28 $31 $36 $44

Capital Recovery $226 $255 $292 $361

Total Indirect Annual Cost $254 $287 $328 $406

Total Annualized Cost $267 $305 $356 $445

Emission Reduction Tons/year

Scenario-1 (60 days & 12 batches) 4.8 9.6 19.2 28.8

Scenario-2 (90 days & 18 batches) 7.2 14.4 28.8 43.2

Cost Effectiveness $/ton

Scenario-1 (60 days & 12 batches) $56,000 $32,000 $19,000 $15,000

Scenario-2 (90 days & 18 batches) $38,000 $21,000 $12,000 $10,000

 

8 Table values developed from spreadsheets. Displayed values have been rounded.
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Appendix C: Cost Effectiveness Analysis for Rule 4694 December 15, 2005

C – 12 Final Staff Report with Appendices 

For Revised Proposed Rule 4694

Table-3. Cost Effectiveness9 For White Wine Fermentation Scenario-1

Nominal Tank Capacity (x 1000 gal) System Parameters

50 100 200 300

Design Flowrate/Tank cfm 50 100 201 301

System Flowrate cfm 201 401 803 1,204

Costs (x $1000)

RTO Cost $87 $103 $121 $134

Duct Cost $9 $13 $17 $21

Separator $3 $5 $6 $7

Pump $5 $5 $5 $5

Fixed Steel Cost $360 $360 $360 $360

Fixed Concrete $24 $24 $24 $24

Labor & Bulk Materials $75 $99 $129 $152

Sales Tax $10 $12 $15 $17

Freight $2 $2 $3 $3

Total Direct Cost $577 $623 $681 $722

Construction Indirect Costs $115 $125 $136 $144

Direct + Indirect Cost $692 $747 $817 $866

Engineering $144 $156 $170 $180

Building Permits $12 $12 $14 $14

Owner's Cost $58 $62 $68 $72

Installed Cost W/O Contingency $905 $977 $1,069 $1,133

Contingency @ 15% $136 $147 $160 $170

Total Installed Cost (TIC) $1,041 $1,124 $1,229 $1,303

Annualized TIC $170 $183 $200 $212

Operating Cost $4 $4 $4 $4

Maintenance $3 $4 $4 $5

Utilities $0 $1 $2 $3

Total Direct Annual Cost $8 $9 $10 $12

O.H./Insurance/Admin. $21 $22 $25 $26

Capital Recovery $170 $183 $200 $212

Total Indirect Annual Cost $190 $206 $225 $239

Total Annualized Cost $198 $214 $235 $250

Emission Reduction Tons/year

Scenario-1 (60 days & 6 batches) 1.03 2.06 4.13 6.19

Scenario-2 (90 days & 9 batches) 7.2 14.4 28.8 43.2

Cost Effectiveness $/ton

Scenario-1 (60 days & 6 batches) $192,000 $104,000 $57,000 $40,000

Scenario-2 (90 days & 9 batches) $128,000 $69,000 $38,000 $27,000

 

9 Table values developed from spreadsheets. Displayed values have been rounded.
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For Revised Proposed Rule 4694

SCENARIO-2

The Wine Institute contracted with Eichleay Engineering to developed total capital 

investment and annual operating costs associated with installation of regenerative 

thermal oxidizer (RTO)-based VOC control technology on the west side red 

fermentation tanks at Gallo’s Livingston facility. This area has 60 red wine fermenters 

with capacities of 50,000, 100,000, and 200,000 gallons. The cost estimate is for 

installation and operation of four RTO systems. The Eichleay report estimates a cost of 

$31,325,000 for the proposed installation and estimates cost effectiveness at 

$120,479/ton-VOC on that basis. The Wine Institute submitted the Eichleay report as 

part of their public comments to the second workshop.

SCENARIO-3

District staff’s review of the Eichleay report concludes that because of site-specific costs 

and lack of design optimization, the report likely over estimates the cost of control. In 

brief;

· The estimate includes significant costs, which are specific to the Gallo-Livingston 

facility or to Gallo facilities in particular. (Estimated Impact $6,817,000)

· The design is based on a worst–case approach for all potential operating scenarios. 

No design optimization or simplification has been carried out nor have operations 

improvements been considered. (Estimated Impact $7,853,000)

· Capacities of the estimated capture and control systems are unnecessarily large. 

The District estimates that the size of the control systems could be reduced by at 

least 37%. (Estimated impact $1,817,000)

· Estimated operating costs have not taken full advantage of the efficiencies of the 

proposed equipment and have over estimated operational labor requirements. 

(Estimated impact $280,000/year)

After adjusting the Wine Institute’s estimate per the considerations above, the District 

estimates that an optimized, non-site specific VOC capture & control system for a facility 

of this size could be potentially installed for approximately $14,838,000. Based on the 

adjusted estimate, the capacity of the 60 tanks included in the Eichleay report, and the 

industry’s reported 4 to 5 turns per tank per season, the District estimates cost 

effectiveness ranging from $42,200/ton-VOC to $52,900/ton-VOC for an optimized, nonsite specific installation of this size. Details of how each adjustment to the Eichleay

report affects cost effectiveness is presented in Table 4.
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For Revised Proposed Rule 4694

Table-4. District Adjustments to the Eichleay Report for an Optimized Generic Winery Without Site Specific Costs

Industry Average Production

Cost Item Capital 

Investment

Annual Cost 

Impact 

Cost 

Effectiveness 

Impact Based 

on GalloLivingston 

Production in 

2004

Cost 

Effectiveness 

Impact at 4 

Tank Turns Per 

Season

Cost 

Effectiveness 

Impact at 5 Tank 

Turns Per 

Season

 Eichleay Estimate $31,325,000 $5,858,975 $120,481 $107,111 $85,532 

 District Adjustments

 Site-Specific Costs ($6,817,000) ($1,111,171) ($22,849) ($20,314) ($16,221)

 Optimize and Simplify the CIP System ($7,319,000) ($1,192,997) ($24,532) ($21,810) ($17,416)

 Other Design Optimization ($2,351,000) ($383,213) ($7,880) ($7,006) ($5,594)

 Optimize Annual Operating Costs ---- ($280,000) ($5,758) ($5,119) ($4,088)

 Subtotal District Adjustments ($16,487,000) ($2,967,381) ($61,020) ($54,248) ($43,319)

 District Analysis Result for 

Optimized Generic Facility w/o Site 

Specific Costs 

$14,838,000 $2,891,594 $59,461 $52,863 $42,213