1 

### Medina, Dayana

From: Stephen Cain <Stephen.Cain@aecc.com>

Sent: Monday, March 17, 2014 10:38 AM

To: McCorkle, Mark

Cc: Medina, Dayana; Curtis Warner; Jeremy Jewell (JJewell@trinityconsultants.com); Kasi Dubbs

(KDubbs@trinityconsultants.com)

Subject: RE: AECC Bailey and McCellan

Attachments: AECC BART Analysis v4 Submittal 03 17 14.pdf; AECC BART Analysis v4 Submittal REDLINE 03 17

14.pdf

Mark,

Please find attached two versions of the updated five

‐ factor analysis for Bailey and McClellan

– a final version and a

redline version showing changes from the previous version.

As per EPA’s email dated February 26, 2014 (below), AECC understands that EPA proposes approval of the

recommended SO2 BART decision for Bailey and McClellan. Nonetheless, AECC believes it has addressed EPA’s one

outstanding minor concern regarding fuel costs in the attached version.

Please contact me if you have any questions or comments.

Regards,

Stephen Cain

Manager

– Environmental Compliance

Arkansas Electric Cooperative Corporation

501.570.2420

From: McCorkle, Mark [mailto:MAC@adeq.state.ar.us]

Sent: Wednesday, March 05, 2014 10:31 AM

To: Stephen Cain

Subject: FW: AECC Bailey and McCellan

Stephen,

For your consideration. Please respond to me as you see fit.

– Mark

Mark McCorkle

Environmental Program Coordinator

Planning and Air Quality Analysis. Air Division

Arkansas Department of Environmental Quality

5301 Northshore Drive

North Little Rock, AR 72118

Tel: (501) 682

‐ 0736

From: Medina, Dayana [ mailto:Medina.Dayana@epa.gov ]

Sent: Wednesday, February 26, 2014 4:02 PM

To: McCorkle, Mark

Subject: AECC Bailey and McCellan2 Hi Mark,

Thank you for working with us and with AECC to address our concerns regarding the BART analysis for the two units at

Bailey and McClellan. We appreciate the December 23, 2013 response from AECC that was forwarded to us.

EPA believes we can propose approval of the recommended SO2 BART decision for the AECC Bailey and McClellan units.

However, footnote 7 explains that the cost estimate provided by the vendor for the base case fuel oil (i.e., No. 6 fuel oil

with sulfur content between 1.0

– 2.0%) is between $16.00/MMBtu

‐ $16.50/MMBtu, but tables 5

‐ 9 and 5

‐ 10 list the

estimated cost of the base case fuel as $4.68/MMBtu for Bailey and $5.70/MMBtu for McClellan. The $4.68/MMBtu and

$5.70/MMBtu estimates are what was used to calculate the cost of switching from the base case fuel to fuel oil with a

lower sulfur content. AECC has clarified that $4.68/MMBtu and $5.70/MMBtu were used in the calculations because this

was the actual price paid for the fuel oil currently stored at the two plants when it was purchased several years ago.

However, since AECC used these old cost numbers for the base case fuel oil and current cost estimates of lower sulfur

fuel oil to calculate the cost of switching from the base case fuel to lower sulfur fuel, the cost of fuel switching has been

overestimated. Because the BART limit won’t apply until the current supplies of fuel oil are depleted, new purchases will

be subject to today’s higher price. ADEQ should ensure that the cost analysis reflects updated costs of the base case

fuel, as was done for the other fuel scenarios evaluated.

We have no further comments regarding the PM and NOx BART analyses for the Bailey and McClellan units.

Thank you,

Dayana Medina

U.S. Environmental Protection Agency, Region 6

Multimedia Planning and Permitting Division

Air Planning Section (6PD

‐ L)

214

‐ 665

‐ 7241