May 10, 2010

Terry O'Clair, Director

Division of Air Quality

North Dakota Department of Health

918 East Divide Avenue, 2nd Floor

Bismarck, ND 58501-1947

RE: Comments on the April 2010 Preliminary Best Available Control Technology 

Determination for Control of Nitrogen Oxides for M.R. Young Station Units 1 and 2

Dear Mr. O’Clair:

On behalf of the National Parks Conservation Association, Dakota Resource Council, Friends of 

the Boundary Waters Canoe Area Wilderness, Minnesota Center for Environmental Advocacy, 

Plains Justice, Sierra Club, and Voyageurs National Park Association, we respectfully submit the 

following comments on the April 2010 Preliminary Best Available Control Technology (BACT) 

Determination for Control of Nitrogen Oxides (NOx) for Minnkota Power Cooperative’s Milton 

R. Young Station (MR Young) Units 1 and 2. We additionally attach and incorporate by 

reference comments on the June 2008 Preliminary BACT Determination and the draft Regional 

Haze Rule.1

The North Dakota Department of Health (NDDH)’s BACT determination incorrectly dismisses 

Selective Catalytic Reduction (SCR), the most cost effective, technically feasible control 

technology capable of reducing NOx emissions by 90% or better. By overestimating costs and 

misrepresenting technical capability, NDDH incorrectly dismisses SCR as BACT. Therefore, 

NDDH is proposing legally deficient NOx BACT emission limits for the two units at MR 

Young. In light of the flawed BACT determination and impacts of MR Young’s NOx emissions 

on air quality, visibility, public lands and public health, we urge NDDH to appropriately revise 

its BACT analysis and accordingly require SCR as BACT for both MR Young units.

MR Young, located near Center, North Dakota, consists of two cyclone boilers firing lignite 

from the adjacent Center Mine. Unit 1 is owned by Minnkota Power Cooperative (Minnkota) and 

 

1 Comments of Plains Justice and Sierra Club on the June 2008 Preliminary BACT Determination for Control of 

Nitrogen Oxides at the Milton R. Young Station, July 30, 2008 [hereinafter ― Plains Justice Comments]; Comments 

of National Parks Conservation Association et. al. on North Dakota’s Regional Haze State Implementation Plan, 

January 8, 2010.
Page 2 of 14

is 257 MW. Unit 2 is owned by Square Butte Electric Cooperative (Square Butte) and has a 

rating of 744 MW. Minnkota operates both units.2 

In April 2006, the United States and the State of North Dakota filed a complaint for injunctive 

relief and civil penalties pursuant to sections 113(b)(2) and 167 of the Clean Air Act (CAA). 42 

U.S.C. §§ 7413(b)(2) and 7477. The Complaint alleged Minnkota and Square Butte violated the 

Prevention of Significant Deterioration (PSD) provisions of CAA, as well as North Dakota’s 

State Implementation Plan by undertaking construction of a major emitting facility without 

undergoing PSD review. Because of the complaint, the U.S. District Court of North Dakota 

ordered a Consent Decree for Civil Action No. 1:06-CV-034. The Consent Decree required 

Minnkota to install and operate control technology for the emission of NOx.

3

 The Decree sets 

out a two-step process for limiting NOx emissions.

Phase 1 requires both units to ―install and commence continuous operation of Over-fire Air‖ or a 

technology equivalent that will achieve a NOx rate of no more than 0.36 lb/MMBtu based on a 

30-day rolling average. Minnkota had until December 31, 2009 to install Over-fire Air at both 

units. Phase 2 requires Minnkota and Square Butte to perform BACT analyses for their 

respective boilers. The analyses must follow the BACT Top-Down approach that is laid out in 

the ―New Source Review Workshop Manual—Prevention of Significant Deterioration and 

Nonattainment Area Permitting‖ (Draft October 1990) (NSR Manual), and must include any 

additional information requested by the Environmental Protection Agency (EPA) and NDDH. 

Additionally, the BACT analyses must ―include an evaluation of Selective Catalytic Reduction, 

Selective Non-Catalytic Reduction, Over-fire Air, and Rich Reagent Injection, as well as other 

NOx control technologies.‖ Under Phase 2, NDDH must review the BACT analyses and make a 

BACT determination, which must include specific control technologies to be installed and a 

specific 30-day rolling average NOx emission limitation for each unit.

4

In accordance with the Consent Decree, Minnkota and Square Butte submitted BACT analyses 

and NDDH made its draft BACT Determination. In June 2008, NDDH preliminarily determined 

the BACT limit for Unit 1 is 0.36 lb/MMBtu, except during startup or shutdown, when the limit 

shall not exceed 2070.2 lb/hr on a 24-hour rolling average basis. For Unit 2, the proposed limit 

is 0.35 lb/MMBtu, with startup/shutdown period not to exceed 3995.6 lb/hr on a 24-hour basis. 

The proposed control technology for both units is Selective Noncatalytic Reduction (SNCR) 

operated in conjunction with Advanced Separated Over-fire Air (ASOFA). The April 2010 

BACT Determination supplements and reaffirms the above conclusions of the June 2008 

Preliminary BACT Determination.

 

2

June 2008 Preliminary BACT Determination, p. 1. 

3 The Consent Decree also requires the installation and operation of control technology for the emission of sulfur 

dioxide and particulate matter.

4 Consent Decree, at 19, 20. 
Page 3 of 14

NDDH subsequently reexamined the technical feasibility of three versions of SCR: high-dust 

SCR (HDSCR), low-dust SCR (LDSCR), and tail-end SCR (TESCR). Upon reconsideration, 

NDDH found LDSCR and TESCR to be technically feasible, and requested additional 

information and a revised BACT analysis from Minnkota.5

While we agree that LDSCR and TESCR are technically feasible, we disagree with the 

determination that HDSCR is technically infeasible for MR Young. As described in previous 

comments, HDSCR is technically feasible, and should be considered in the BACT analysis along 

with several other controls which were not evaluated or incorrectly evaluated.

6

To the extent that 

other issues with the BACT Determination remain the same, we reiterate and specifically

incorporate the Plains Justice comments. 

Further, in reviewing this BACT Determination, we note that the proposed BACT limits of 0.35 

and 0.36 lb/MMBtu are over three times above the New Source Performance Standards of 0.11 

lb/MMBtu, as revised in 2008. The revised NSPS do not appear to have been considered in this 

BACT Determination, and we would like a response as to why the state considers the higher 

proposed limits acceptable. 

The NOx BACT analysis for MR Young must be considered in the context of the far-reaching 

impacts of the facility’s NOx emissions on air quality, visibility, public lands and public health

under step five of the top-down approach. 

North Dakota’s recently submitted regional haze state implementation plan (SIP) identified 

several Class I areas impacted by emissions from facilities in North Dakota, including MR 

Young. There are two Class I areas in North Dakota—Theodore Roosevelt National Park and 

Lostwood National Wildlife Refuge Wilderness Area – which are affected by NOx emissions 

from MR Young. Other Class I areas impacted by North Dakota sources of air pollution include: 

Badlands National Park and Wind Cave National Park in South Dakota, Medicine Lake National 

Wildlife Refuge Wilderness Area and U.L. Bend National Wildlife Refuge Wilderness Area in 

Montana, Boundary Waters Canoe Area Wilderness Area and Voyageurs National Park in 

Minnesota, and Isle Royale National Park and Seney National Wildlife Refuge Wilderness Area 

in Michigan. 

These Class I areas preserve the region’s inspiring landscapes, rare geologic formations, 

breathtaking water country, and diverse wildlife and vegetation. They also serve as living 

museums of our nation’s history. Visitors from across the nation and globe are drawn to these 

lands and their tourist dollars benefit state and local economies. 

 

5 April 2010 BACT Determination, at 3. 

6 Comments of Plains Justice and Sierra Club on the June 2008 Preliminary BACT Determination for Control of 

Nitrogen Oxides at the Milton R. Young Station, July 30, 2008; Comments of National Parks Conservation 

Association et. al. on North Dakota’s Regional Haze State Implementation Plan, January 8, 2010.
Page 4 of 14

National parks and wilderness areas are of great natural and cultural value and also engines for 

sustainable local capital. For example, in 2008, National Park Service units received over 274 

million visits accounting for over $2.5 billion in revenue.7 National parks support $13.3 billion 

of local private-sector economic activity and 267,000 private-sector jobs.8They also attract 

businesses and individuals to the local area, resulting in economic growth in areas near parks that 

is an average of 1 percent per year greater than statewide rates over the past three decades.9

National parks also generate more than four dollars in value to the public for every tax dollar 

invested.10 Of the number of annual park visitors in 2008, approximately 516,804 people 

journeyed to Theodore Roosevelt National Park spending nearly half a million dollars. The same 

year 845,734 people visited Badlands National Park; 573,433 visited Wind Cave National Park; 

221,585 visited Voyageurs National Park and 14,038 visited Isle Royale National Park.11

Excessive NOx emissions from MR Young and other North Dakota facilities not only obscure 

the region’s scenic vistas, but also contribute to a host of public health problems as well as 

adverse impacts to wildlife and vegetation. For example, NOx is a precursor to ground level 

ozone, or smog, which is associated with respiratory diseases, asthma attacks, and decreased 

lung function.12 Beyond these direct health impacts, associated hospital admissions, decreased 

productivity, and lost school and work days have significant economic costs. 

Maximizing reductions in NOx emissions from MR Young would not only help protect and 

restore treasured landscapes and the economies that rely on them, but also benefit public health. 

It is in this context that we offer the comments below for consideration by NDDH and encourage 

the Department to require SCR, the most efficient control technology, as BACT at MR Young.

With an estimated reduction efficiency of 93.8%, SCR is by far the top control technology for 

the MR Young facility and other like sources. The top control technology is assumed to be 

BACT unless significant adverse energy, environmental, or economic impacts will occur with its 

use. The analysis must provide a ―comprehensive demonstration, based on objective factors, that 

the technology is inappropriate in the specific circumstance,‖ if a technology is to be dismissed.13

Such a comprehensive demonstration has not been provided.

Here, the BACT Determination cites two main reasons for erroneously concluding that LDSCR 

and TESCR are not BACT: (1) outstanding technical questions and (2) high cost effectiveness

 

7

See http://www.census.gov/compendia/statab/2010/tables/10s1215.pdf.

8 Hardner and Gullison, ―The U.S. National Park System, An Economic Asset at Risk‖ (November 2006) [prepared 

for the National Parks Conservation Association].

9

Id. 

10 Id. 

11 See http://www.nature.nps.gov/stats/index.cfm. 

12 70 Fed. Reg. 25162, 25169 (May 12, 2005).

13 1990 NSR manual, p. 120. 
Page 5 of 14

and incremental cost. These issues are overstated, and none preclude the application of SCR as 

BACT at MR Young. Collectively they do not justify a decision that SCR is not BACT. Rather, 

in light of all factors considered in a full BACT analysis, SCR is the appropriate choice as BACT 

for the MR Young facility. 

1. NDDH’s Technical Feasibility Analysis is Legally and Technically Deficient

NDDH maintains concerns about the technical implementation of LDSCR and TESCR, mainly 

as a result of the refusal of two catalyst vendors to provide catalyst life guarantees without pilot 

scale testing. These concerns are not a sufficient basis upon which to reject SCR as BACT. 

SCR, including LDSCR and TESCR, is an available, established technology. It is in use at 

hundreds of coal-fired boilers, including cyclone furnaces, across the country and worldwide. It 

is used at facilities burning coals (including lignite), biomass, and wastes, as well as cement kilns 

and other sources with a variety of gas stream characteristics. While it has never been 

specifically applied to a facility using North Dakota lignite, no valid technical or other 

constraints make its installation technically infeasible. Rather, analysis reveals that its 

application is technically feasible and the most effective control option as detailed below.

Testing of the gas stream at MR Young has indicated high levels of sodium and potassium. In 

particular, one catalyst vendor, CERAM, stated that they were unaware of any SCR application 

with the level and form of sodium in the ash at MR Young. NDDH argues that this variation in 

the gas stream makes MR Young a ―totally new and dissimilar source type‖ as described by the 

NSR Manual. This logic is erroneous. As noted by US EPA in comments on the June 2008 

Preliminary BACT Determination, a difference in the gas stream characteristics does not by itself 

imply that that difference is significant enough to impact the successful operation of the control 

technology.14 The variation in gas stream characteristics at MR Young is well within the wide 

variability already found in the universe of sources which have successfully adapted SCR to their 

site-specific parameters, making it similar to these facilities and therefore not preclusive of 

successful application of SCR technology.

The remainder of the section of the NSR manual cited by NDDH belies the intention to prevent 

unreasonable research burdens, not to prevent reasonable application of a well known technology 

to a similar but not identical situation:

―A control technique is considered available, within the context presented above, if it has 

reached the licensing and commercial sales stage of development. A source would not be 

required to experience extended time delays or resource penalties to allow research to be 

conducted on a new technique. Neither is it expected that an applicant would be required 

to experience extended trials to learn how to apply a technology to a totally new and 

 

14 p. 6.
Page 6 of 14

dissimilar source type. Consequently, technologies in the pilot-scale testing states of 

development would not be considered available for BACT review.‖ [emphasis added]

In this instance, vendors have refused to offer guarantees of catalyst life without pilot testing at 

the MR Young facility. This does not mean, as posited by NDDH, that SCR is in the pilot-scale 

testing stage. Again, as addressed by US EPA in earlier comments, the question of pilot-scale 

testing pertains to the availability of a control technology, not its applicability, and SCR is 

plainly available.15 The pilot-scale testing here would not require ―extended time delays or 

resource penalties.‖ Pilot-scale testing in this case is a means to optimize SCR design to a 

specific situation prior to more expensive full-scale installation. 

The NSR manual elsewhere specifically addresses the lack of vendor guarantees, noting that 

―lack of a vendor guarantee by itself does not present sufficient justification that a control option 

or an emissions limit is technically infeasible.‖16

The principle of technology transfer, as outlined in the NSR manual, assumes some appropriate 

level of risk for transfer of a technology to a similar but not identical situation. With the 

extensive track record of successful adaptation of the various types of SCR to a wide variety of 

combustion sources and fuels, the risk inherent in applying SCR at MR Young is well within the 

bounds of that contemplated by the BACT process. To dismiss SCR on these grounds would, in 

fact, be contrary to the technology-forcing function of the BACT process that was intended by 

Congress.17

2. NDDH Fails to Accurately Calculate Cost Effectiveness of SCR

NDDH also argues that SCR is not BACT on the basis of cost, both total and incremental. This 

argument is flawed because the cost calculations are unclear, overestimated, and inappropriately 

compared only to regionally-limited BART determinations rather than generally accepted BACT 

cost effectiveness thresholds and prior BACT determinations. 

The site specific cost estimates developed for MR Young generally lack sufficient detail to 

determine whether the claimed costs are supported. The cost calculations do not rely on the 

standard EPA Control Cost Manual, instead relying primarily on vendor quotes that are not 

available. Even the most detailed breakdowns of these costs provided in the BACT 

Determination and related material do not provide critical information about how the values were 

obtained.18

 

15 p. 10 – 14.

16 B.20.

17 See discussion in comments by US EPA on the June 2008 Preliminary BACT Determination, p. 14. 

18 See April 2010 BACT Determination Appendix B, Enclosure A, Attachment 1; Minnkota Responses to NDDH 

Request, NOx BACT Analysis Study, Milton R. Young Station Unit 1 and Unit 2, Regarding SCR Feasibility, 

December 11, 2009 as revised February 2011, Attachment 1; NOx Best Available Control Technology Analysis 
Page 7 of 14

While we disagree with the aspects of the cost analysis that are discernable, as discussed below, 

should NDDH opt to move forward based on these estimates, we request comprehensive and 

detailed material upon which the cost estimates rely be made available for public review, and an 

additional 30-day public comment period from the date the additional material is made 

accessible.

Costs of SCR Are Overestimated

Despite the lack of clarity and documentation of cost estimates, it is clear that some of the relied 

on costs are overestimated. The capital costs for a retrofit of SCR at MR Young, as reported on a 

$/kW basis, are significantly higher than those found by several studies of SCR installations. 

Those reports found a range of installed costs between $83 – 300/kW, the highest of which were 

highly complex retrofits with severe space constraints.19 Of particular note is Wisconsin 

Electric’s estimated cost to retrofit a cold-side SCR on Oak Creek Units 5-8. The estimated cost 

of $168/kW20 was certified in July 2008 for construction by the Wisconsin Public Services 

Commission.21 These are all significantly lower than the estimated cost of $543 – 706/kW for 

SCR installation at MR Young.22 Even considering the slightly higher costs associated with the 

use of a cold-side SCR, the costs for MR Young are excessive and without basis. It is thus clear 

that costs have been overestimated, likely the result of numerous factors. Several of the issues 

contributing to excessive costs are documented below. 

Annual Capital Costs

Total capital investment or TCI includes all costs required to purchase equipment needed for a 

control system, the costs of labor and materials for installing the equipment, costs for site 

preparation and buildings, and certain other indirect installation costs.23 Cost effectiveness is 

determined by converting the total capital investment into an annual cash flow (annual capital 

costs), adding annual operating and maintenance costs, and dividing by the tons of pollution 

removed. This process results in an estimate of cost effectiveness expressed in dollars per ton. 

 

Study – Supplemental Report, as revised February 2010, prepared by Burns & McDonnell Engineering Company, 

Inc. for Minnkota Power.

19 See discussion on p. 16 – 18 of Comments on EPA’s Advanced Notice of Proposed Rulemaking regarding Best 

Available Retrofit Technology (BART) for the Navajo Generating Station and the Four Corners Power Plant [EPAR09-OAR-2009-0598] submitted by the Center for Biological Diversity et. al. October 28, 2009. 

20 Wisconsin Electric Power Company's Application to Install Wet Flue Gas Desulfurization and Selective Catalytic 

Reduction Facilities and Associated Equipment on Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions, Appendix C, Emission Reduction Study, Volume 1, Addendum August 20, 

2007. Unit cost = ($190,500,000/1,135,000 kW) = $168 kW, in 2006$

21 70 Certificate and Order, Application to Install Wet Flue Gas Desulfurization and Selective Catalytic Reduction 

Facilities and Associated Equipment on Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur Dioxide and 

Nitrogen Oxide Emissions, Case 6630-CE-299, July 10, 2008. 

22 NOx Best Available Control Technology Analysis Study – Supplemental Report, as revised February 2010, p. 4-

11, prepared by Burns & McDonnell Engineering Company, Inc. for Minnkota Power.

23 Control Cost Manual, pp. 2-5 to 2-10. 
Page 8 of 14

The total capital investment is converted into annual costs by multiplying by a capital recovery 

factor or CRF. The CRF is given by: 

CRF = [ i(1+i)n]/[(1+i)n-1 ] 

where i is the interest rate and n is the life of the pollution control equipment. In essence, 

annualization establishes an annual payment sufficient to finance the capital investment for its 

entire life.24

The CRF depends on two factors, the interest rate and lifetime of the control system. The lower 

the lifetime, the higher the CRF and the higher the ratio of annual to total capital costs. NDDH

underestimated the equipment lifetime, thus substantially overestimating the CRF and annual 

capital costs. 

Equipment Lifetime

A lifetime of 20 years was assumed for the SCR. The default lifetime for SCR used in EPA's 

CUE Cost Manual is 30 years. A 30+ year service life is consistent with actual experience with 

existing SCRs and with the nature of the equipment. 

An SCR system should last as long as the plant it is installed on. It is a stationary device whose 

major components have no moving parts and which uses few pieces of rotating equipment, e.g., 

pumps. It consists of ducting, a metal frame that is filled with blocks of catalyst, an ammonia 

delivery system (tank, pumps, piping), a control system, and instrumentation. The ducting and 

metal frame are similar to the balance of the plant and should last as long as the plant itself with 

proper maintenance. The ammonia injection system, accounting for a tiny fraction of the overall 

cost, should also last as long as the plant if wearable parts are replaced as part of routine 

maintenance. Thus, on a new facility, it would be expected to last 50+ years, or the life of the 

plant.

Vendor experience lists identify a number of SCR units that were installed more than 30 years 

ago in Japan that are still in service.25 In the United Stated, Mitsubishi, for example, installed 

three SCR systems on process heaters at the Chevron Richmond Refinery in California in 1984. 

These units are still in service. There have been no maintenance, operational or compliance 

problems, and the original catalyst has not been changed out. These SCRs currently have a 

demonstrated life of 25 years with expectation for many more. 

Further, the equipment life for an SCR based on a financial risk study conducted by Stephen 

Unwin, et al. for SCRs installed at the Monroe Power Plant outside of Detroit concluded a 30-

 

24 Control Cost Manual, January 2002, Section 1, p. 2-21. 

25 McIlvaine Company, Worldwide Utility Plans, NOx Installation and Component Suppliers (Ex. 12); Vendor 

Experience Lists for Hitachi and Mitsubishi. 
Page 9 of 14

year life was reasonable. This study was designed to examine the economic risks from operating 

SCR at this plant, including siting characteristics and operating/maintenance strategy and their 

effect on SCR system lifetime. The authors’ choice of a 30-year life for the SCR system is an 

important parameter in their study.26

On retrofits, such as these, SCR would be expected to last for the remaining useful life of the 

plant. Minnkota’s cost analysis assumes only 20 years as the service life of the SCR. However, 

clearly, it could be much longer. The record does not disclose the remaining useful life of the 

MR Young units or the basis for selecting only 20 years when expected SCR life is plainly

longer and SCRs in operation today have been in service for longer times. 

The capital recovery factor for the BACT Determination’s assumptions (i=6%, n = 20 yrs) is 

0.08718. The capital recovery factor assuming 30 years, is 0.07265 or 83% that relied upon by 

the BACT Determination. 

Maintenance Labor and Materials 

The underlying materials for the BACT Determination estimated costs for maintenance labor and 

materials as 3% of installed capital costs.27 The Control Cost Manual indicates these costs should 

be calculated as 1.5% of the total capital investment. Thus, these costs are overestimated by a 

factor of two.

Levelization Factor and Escalation

The annual operating and maintenance costs were increased by multiplying them by a 

"levelization factor" of 1.24873. Levelization escalates costs. The constant levelization factor is 

generally used to express the relationship between the value of an expenditure at the beginning 

of the first year and an equivalent annuity, or levelized value. It depends on both the annual cost 

of money or the discount rate and the nominal escalation rate. Escalation costs were also 

included in the estimates of indirect capital costs.

Cost effectiveness analyses do not include escalation. The total annual cost method used in cost 

effectiveness analysis, as laid out in the Control Cost Manual, expresses costs in real dollars. 

Thus, they are based on the "real" interest rate, which does not include inflation.28 Inflation is not 

included in BACT cost effectiveness analyses as they rely on the most accurate information 

 

26 Unwin, Stephen D., Johnston, Robert W., and Rudy, Steven W. and Delargey, James E. and Rogers, William. 

―Selective Catalytic Reduction (SCR) System Design and Operations: Quantitative Risk Analysis of Options,‖ 

presented at CCPS 17th Annual International Conference: Risk, Reliability, and Security. p. 3, available at 

http://www.unwin-co.com/files%5CSCR-Risk-Paper,CCPS-RRS2002.pdf (last visited 5/10/2010). 

27 NOx Best Available Control Technology Analysis Study – Supplemental Report, as revised February 2010, p. 4-

22, prepared by Burns & McDonnell Engineering Company, Inc. for Minnkota Power.

28 Control Cost Manual, 3rd Edition, February 1987, pp. 2-13 to 2-14. 
Page 10 of 14

available at current prices and do not try to extrapolate those prices into the future.29 Regardless, 

no basis is provided for the various escalation factors that were used.

Catalyst Replacement Costs

The cost estimates relied on in the BACT Determination used a catalyst replacement cost of 

$7,500/cubic meter in 2006 dollars. For new catalyst, this cost is more typically between $3,500 

and $6,500/cubic meter. Additionally, catalyst replacement cost did not consider catalyst 

regeneration, which has become an attractive alternative to purchasing new catalyst since the 

Cost Control Manual was last updated. Catalyst regeneration typically costs about 60% of the 

cost of new catalyst.30

Foundations and Supports

The direct capital costs associated with foundations and supports range from ~$15.1 –

39.6/kW.31 This is extremely high compared to upper bound costs reported for other retrofits, 

which range from $9/kW to $11/kW.32 These costs should be justified in the record. 

Indirect Costs

The indirect costs include owner's costs, which are not included in the Control Cost Manual. The 

Control Cost Manual does include "home office fees." All owners do not manage and implement 

capital projects, but rather retain engineering firms, called the owner's engineer, to perform these 

functions. Other owner activities would be part of its overhead. Cost factors used to estimate 

capital costs are ordinarily reported all in and would include these costs. Further, these costs, if

not directly part of the project, are outside of the battery limits of a control project and would be 

part of the owner's overhead. Thus, they are not usually separately included in cost effectiveness 

analyses.

In addition to the cost overestimation issues noted above, we raise concerns about the costs 

associated with electrical equipment and installation, with the claimed revenue lost from SCR 

installation and maintenance, contingency expenses, and other issues not apparent due to the lack 

of available information, especially with regard to the capital costs of the SCR system equipment 

and the auxiliaries/balance of plant. 

Cost Effectiveness Comparisons Are Inappropriate

In addition to artificially high cost estimates, NDDH incorrectly compares the cost effectiveness 

of installing SCR at MR Young to select regional BART analyses. In so doing, NDDH

inappropriately narrows the window of cost comparisons by failing to account for the full range 

of cost effectiveness determinations in a BACT context, and thereby arrives at the erroneous 

 

29 See, e.g., Control Cost Manual, 6th Edition, January 2002, Section 1, p. 2-36. 

30 Mike Cooper, New Life for Catalyst, Power Engineering, March 2006. 

31 Based on Minnkota Responses to NDDH Request, NOx BACT Analysis Study, Milton R. Young Station Unit 1 

and Unit 2, Regarding SCR Feasibility, December 11, 2009 as revised February 2011, Attachment 1, p. 1. 

32 PowerGen 2005, Selective Catalytic Reduction: From Planning to Operation, p. 25.
Page 11 of 14

conclusion that SCR is not cost effective. In fact, even if the overestimation of costs described 

above were correct, SCR’s cost effectiveness is well within the realm of those established by 

BACT cost effectiveness thresholds and other BACT determinations. 

Cost effectiveness is the economic criterion used to determine whether a given control option has 

adverse economic impacts compared to controls at similar facilities. Cost, estimated using the 

total annual cost method, is measured in terms of annualized control costs, and cost effectiveness 

is measured in annual dollars per ton of pollutant removed.33 Two cost metrics can be 

considered: (1) total cost effectiveness and (2) incremental cost effectiveness.

Total cost effectiveness, the metric most commonly used, is calculated by dividing annualized 

cost by the reduction in emissions, defined as baseline emissions minus controlled emissions.34 

Incremental cost effectiveness compares the costs and emission performance with those of the 

next most stringent option.35 Incremental cost effectiveness should not be used to eliminate a top 

control option as BACT if the total cost effectiveness is acceptable. 

BACT is an emission limit based on the maximum degree of reduction that does not cause 

adverse economic impacts. A technically feasible control option can be eliminated if it results in 

adverse economic impacts. A technically feasible control option cannot be eliminated simply 

because its costs are higher than another option. Said another way, BACT is not the control 

option that minimizes cost, but rather, the control option that maximizes emission reductions 

without causing adverse economic impacts.

Adverse impacts are defined in terms of "cost effectiveness," which is the annual cost of a 

control expressed in dollars per ton of pollutant removed. If cost effectiveness is on the same 

order as the costs deemed to be reasonable for other sources, the control option should initially 

be considered economically achievable and thus acceptable as BACT. The significance of a 

given cost effectiveness value is determined relative to the costs borne by sources across the 

country. Several states have established cost effectiveness thresholds based on pollutant 

controlled not bound by the emitting source category. Here, applicants rely on a narrow and 

distortive subset of geographically constricted BART sources where it is required to consider a

broader list of factors including relevant non-geographically constrained BACT determinations.

General thresholds for reasonable cost effectiveness have been set in several places. In 2001, 

U.S. EPA determined that a $10,000/ton control cost ceiling was reasonable for NOx and SO2 in 

attainment areas, equivalent to over $13,000/ton today.36 Several air quality districts in 

 

33 NSR Manual, Chapter B, Sec. IV.D.2.b.

34 NSR Manual, p. B.37.

35 NSR Manual, p. B.41.

36 See expert report of Matt Haber - EPA, Best Available Control Technologies for the Baldwin Generating Station, 

Baldwin, Illinois, prepared for the United States in connection with United States v. Illinois Power Company and 
Page 12 of 14

California have set cost effectiveness thresholds for NOx, including those set at $9,700/ton,37

$17,000/ton,38 and $17,500.39 The cost effectiveness for the application of SCR at MR Young is 

below any of these thresholds under any of the scenarios contemplated by the BACT 

Determination. 

BACT determinations have been made for SCR and other technologies well over the costs 

estimated by NDDH for installation of SCR at MR Young.40 As part of a BACT determination, 

the cost effectiveness for SCR at the MR Young facility should be compared to these BACT 

decisions and thresholds, not to limited select regional BART analyses. Even the high cost 

estimates in the BACT Determination are well within the range of a reasonable cost effectiveness 

for a BACT determination. 

The BACT Determination also asserts that high incremental cost effectiveness is a reason to 

dismiss SCR as BACT. As noted above, if the total cost effectiveness is reasonable, as it is here, 

incremental cost effectiveness should not then be used to discount a top control technology. As 

described in the NSR Manual, 

―undue focus on incremental cost effectiveness can give an impression that the cost of a 

control alternative is unreasonably high, when, in fact, the total cost effectiveness, in 

terms of dollars per total ton removed, is well within the normal range of acceptable 

BACT costs.‖41

In this instance, SCR is clearly cost effective, even with artificially inflated costs. Furthermore, 

incremental cost effectiveness would also decrease with more appropriate costing. 

Conclusion

The BACT selection process requires selection of the top control technology unless a 

comprehensive demonstration illustrates that it is inappropriate. For the reasons detailed above, 

the technical and economic concerns described in the BACT Determination are unfounded and

insufficient to constitute a comprehensive demonstration. Thus, as the most effective, feasible 

 

Dynegy Midwest Generation, Inc., Civil Action 99-883-MJR, in the U.S. District Court for the Southern District of 

Illinois, April 2002, p. 17; Memorandum of John S. Seitz to Air Division Directors, BACT and LAER for emissions 

of nitrogen oxides and volatile organic compounds at Tier 2/Gasoline Sulfur Refinery Projects (Jan. 19, 2001), at 3. 

Costs adjusted using the Chemical Engineering Plant Cost Index (CEPCI). 

37 San Joaquin Valley Unified Air Pollution Control District, Final Staff Report: Update to BACT Cost 

Effectiveness Thresholds, May 14, 2008. 

38 South Coast Air Quality Management District, Best Available Control Technology Guidelines, Part A: Policy and 

Procedures, May 21, 1999.

39 Bay Area Air Quality Management District, BACT/TBACT Workbook: Guidelines for Best Available Control 

Technology.

40 See attached examples of cost effectiveness determinations over $5,800/ton from the RBLC database. 

41 B.45 – 46. 
Page 13 of 14

control technology, SCR is BACT. We ask NDDH to revise its BACT analysis to require the use 

of SCR at MR Young accordingly. 

Thank you for the opportunity to comment on the Preliminary NOx BACT Determination for 

MR Young.

Sincerely,

Stephanie Kodish

National Parks Conservation Association

706 Walnut Street, Suite 200

Knoxville, TN 37902

865-329-2424

Mark Trechock, Staff Director

Dakota Resource Council

P.O. Box 1095

Dickinson, ND 58602-1095

701-483-2851

Betsy Daub

Policy Director

Friends of the Boundary Waters Wilderness

401 N. Third Street, Suite 290

Minneapolis, MN 55401

Mary Winston Marrow 

Staff Attorney

Minnesota Center for Environmental Advocacy

26 E Exchange Street, Suite 206

St. Paul, MN 55101
Page 14 of 14

Nicole Shalla, Staff Attorney

Plains Justice

100 First Street SW, Suite 201

Cedar Rapids, Iowa 52404

James P. Gignac

Midwest Director

Sierra Club, Beyond Coal Campaign

70 E. Lake St., Suite 1500

Chicago, IL 60601

(312) 251-1680 x147

Cory Counard MacNulty

Executive Director

Voyageurs National Park Association

126 N. Third St, Suite 400

Minneapolis, MN 55401