### MEMORANDUM

TO: Ron Jordan, EPA

FROM: Kurt Blohm, ERG Sarah Holman, ERG

DATE: 6 January 2010

SUBJECT: Notes from EPA Conference Call with United Conveyor Corporation

On December 10, 2009, EPA’s Office of Water/E ngineering and Analysis Division (OW/EAD) held a conference call with United Conveyor Co rporation (UCC) to discuss the design and operation of dry ash handling systems at power plan ts. The following people participated in the

conference call:

EPA

Ron Jordan

United Conveyor Corporation Kevin McDonough, Director of Marketing Dan Charhut, Vice President of Sales and Technology

ERG

Deb Bartram

Kurt Blohm

Sarah Holman

This memorandum details the topics th at were discussed during the call.

EPA’s Introduction

 EPA went over the main objectives of the conference call for the call participants

and introduced the Steam Electric Effluent Guidelines (ELGs).

 EPA stated that the Steam Electric ELGs are expected to be proposed in mid-2012 and finalized in early 2014. EPA explai ned that the Steam Electric Information Collection Request (ICR) is currently in the 1 st Federal Register Notice (FRN) public comment period and encouraged U CC to review the draft questionnaire, particularly Part C (Ash Handling) , and provide EPA with feedback.

 EPA stated that it has visited power plan ts that have installed dry ash handling systems that were designed by UCC a nd noted the Karn/Weadock plant. UCC mentioned that the Monroe ash handling system is a mixture of UCC equipment and other vendors’ equipment. During the conference call, ERG emailed UCCMemorandum January 6, 2010 Page 2

the weblink for EPA’s Final Detailed Study Report (DSR), which lists the plants that EPA visited during the detailed study, as well as the weblink for EPA’s draft questionnaire.

Ash Handling Discussion

UCC’s Operations and Industry Trends

 ERG asked UCC to provide an overview of their involvement in the ash handling business. UCC stated that they are a global corporation with 500 employees worldwide. The majority of UCC’s busin ess is in North America. UCC stated that it has approximately 50 to 60 percen t of the market share for ash handling systems (wet and dry, bottom ash and fly as h) in North America, 10 to 15 percent of the market share in Europe, and five percent of the market share in India.

 ERG asked UCC to describe if and how the ash handling market is changing in the United States. UCC stated that, in the United States, dry fly ash handling systems have been around for several decades and are now installed on nearly every new generating unit. UCC estimated that two-thirds of all power plants handle their fly ash dry. UCC stated that between 60 and 90 percent of coal-fired power plants has some variation of wet bottom ash handling. UCC stated that they expect the number of plants installing dry fly and bottom ash handling systems to continue to increase, especially if regulations on ash ponds and ash sluice

wastewater conti nue to tighten.

 UCC stated that the most significant driv er for the industry to switch to fly ash handling systems was the increased use of Powder River Basin (PRB) coal in coal blends, which began in the early 1980s. UCC stated that fly ash from PRB coal combustion contains approximately 25 to 30 percent calcium oxide, which causes plugging in wet sluice piping. Because of the high maintenance costs of unplugging the sluice piping, it became more co st effective for pl ants to install dry fly ash handling systems.

 ERG asked why the steam electric industry did not also shift towards dry bottom ash handling in the 1980s. UCC stated that switching to dry bottom ash handling has been a lower priority for plants. UCC stated that PRB coal produces less bottom ash than bituminous coals, and that PRB bottom ash systems have fewer operational issues. [QUESTI ON FOR UCC: What “operati onal issues” are meant by this?]

Bottom Ash Handling

 UCC stated that it sells two bottom ash handling 1 options that eliminate the need to store ash in ponds or impoundments: dewatering bins and the mechanical

1 “Wet” and “dry” are not well-defined terms when used to describe bottom ash handling. Often, the term “wet bottom ash handling” is used to refer to a system that sluices the bottom ash away from the boiler to a settling pond or a dewatering bin. “Dry bottom ash handling” is often used to describe a system that does not sluice the bottomMemorandum January 6, 2010 Page 3

submerged flight conveyor (SFC) system . UCC has been selling SFC systems

since 1990.

 UCC stated that dewatering bins can be operated such that all sluice water is recycled. EPA inquired about the pu rging necessary from dewatering bin/recirculation systems. UCC stated that often due to the evaporation that occurs and the fresh makeup water added to the system, plants only rarely need to purge these recirculation systems (e.g., dur ing outages once every three years). UCC also stated that in their experience, pH control systems are only very rarely

necessary.

 UCC stated that SFCs use less water a nd energy than hydraulic systems (ash ponds and dewatering bins) and can achieve zero discharge of wastewater. EPA asked UCC to describe how SFC system s can be operated as zero discharge systems. UCC stated that some water leaves the system with the bottom ash, which is typically 18 to 20 percent moisture . UCC stated that the water added to SFC systems is used to keep the temper ature of the water-filled chamber below the boiler (i.e., the water bath) below 140 °F. UCC stated that SFC systems may use several hundred gpm of water to cool the bottom ash; however, this water may be recirculated completely so th at the system achieves zero discharge.

 UCC stated that they sell two bottom as h handling systems that are considered completely dry systems: the Pneumatic Ash Extractor (PAX), and the Vibrating Ash Extractor (VAX) systems. The PAX system collects and crushes the bottom ash that falls from the boiler in a dry hoppe r where it is fed into a vacuum system that pneumatically transports the crushe d ash to storage. The VAX system uses a vibratory conveyor to carry the bottom as h away from the boiler. Both the PAX and VAX systems return heat to the boile r to improve thermodynamic efficiency.

 UCC stated that dry bottom ash handling sy stems are very prevalent in Asia and Europe. UCC stated as of about five to six years ago, China handles all of its bottom ash dry. UCC stated that Europ ean countries handle approximately 50 percent of their bottom ash dry, India ha ndles about 10 percent of its bottom ash dry. Literature on the UCC website estim ates that only 10 percent of bottom ash systems in the United State are dry handling systems. UCC stated that nearly all (98+ percent) of plants should be able to convert a sluicing bottom ash system to a SFC, PAX, or VAX system. Those plants unable to make the conversion would be able to convert a pond-based system to a recirculating system that employs dewatering bins.

 UCC stated that SFC systems have been the most popular because they have the lowest capital cost. UCC stated that in China, power plants often have an extra SFC system on site so that they can replace a non-functioning SFC system

ash with water, instead using conveyor or other systems to carry the ash away from the boiler. As used in this memorandum, the term “dry” includes completely-dry system s that use no water at all, as well as systems that employ water-filled hoppers to capture and cool the botto m ash before carrying it away from the boiler in a nonsluicing process.Memorandum January 6, 2010 Page 4

without any downtime; however, in the Unite d States, that is not done due to the safety hazard of operating with an open boiler. Additionally, many boilers in the United States are several decades older than boilers in Europe and China, and may be more likely to cause the flight chains of SFC systems to break due to slag falls. UCC stated that in the United States, slag falls are often a result of burning poor quality coal in older, less efficient boilers . Many power plants in the United States choose not to install new bottom ash handling systems because they are resistant to trying new technologies out of concern they may cause significant downtime.

 ERG asked if parasitic electricity consump tion is a main factor that power plants consider when deciding which bottom ash t echnology to install. UCC stated that parasitic electricity consumption is a factor for many plants, but that it is considered more in Europe and Asia th an in the United States. In the United States, the main factor is whether or not the bottom ash handling system will cause reliability issues that result in boiler downtime.

Fly Ash Handling

 ERG asked UCC to identify the main factors that either motivate a plant to install or negatively affect a plant’s ability to install/convert to a dry fly ash handling system. UCC identified the following as the main factors:

o The type of coal burned (conversion to subbituminous coal spurs installation of dry fly ash handling);

o Space available/distance required from particulate collection (ESPs or baghouses) to silos; and

o Cost of disposing the fly ash (if landf illing fly ash) and transporting the ash from the silos, and revenues gained (if marketing fly ash).

 UCC estimated that two-thirds of powe r plants operate dry fly ash handling systems, and that 30 percent of power plan ts that handle their fly ash dry are able

to market the ash.

 UCC stated that as the distance required to transport fly ash from the ESP hoppers to the silos increases, so does the cost of the transfer system due to the extra piping and the blower horsepower required to transport the ash; however, the cost increase is not linear. The most significant cost of the ash handling system is the silo. UCC stated that it is installing a dry fly ash handling system at TVA’s Kingston plant, and that this system re quired a vacuum/pressure transfer station and high capacity blowers.

 ERG asked if there is a limit to the distance the fly ash can be transported pneumatically. UCC stated that when the distance to storage is more than two miles, there may be more cost-effective ways than pneumatic conveying to transfer the fly ash. UCC discussed a nother fly ash handling technology called dense slurry conveying, which can transpor t ash over a distance of several miles. In dense slurry conveying, ash is mixed with water to form a 70 percent ash, 30 percent water mixture, which has the consis tency of wet paint. This dense slurry ash is pumped at high pressure (1000 ps i) to storage. UCC noted that no freeMemorandum January 6, 2010 Page 5

water is emitted from the dense slurry conveying process. UCC stated that dense slurry conveying is popular ove rseas, and is beginning to be used in the United States, for example, at the JEA Northside Generating Station in Jacksonville, FL, which successfully transports ash six m iles using dense slurry conveying (from

fluidized bed boilers that burn coal and petroleum coke). UCC stated that the Florida DEP approved the dense phase slur ry conveying at Northside in 2001.

UCC also noted that AEP considered dens e slurry conveying, and UCC offered to provide EPA with the contact informa tion for Kevin Munson, the best contact person for the AEP project. UCC stated th at at Northside, the ash is landfilled until it hardens, at which point Northside trucks the dried fly ash off site to be

used as roadbed material. UCC stated th at Northside evaluated several options and determined that dense slurry conveying was the most economical option. UCC noted that with dense slurry convey ing, plants do not need to build roads, operate trucks, or obtain air permits, as th ey do with dry ash handling systems.

 UCC stated that plants that operate old boilers will typically have two silos, one for unmarketable (“waste”) fly ash and one for marketable fly ash. Plants may have “in-line” control equipment that monitors the quality of the ash and automatically fills one silo or the other, depending on the level of quality. UCC stated that plants typicall y monitor the carbon content a nd size distribution of the

ash. UCC stated that unmarketable ash is conditioned with water (typically to 15 percent moisture), loaded in trucks, a nd landfilled. UCC stated that most silos have the capability to load fly ash dry and also the capability to condition fly ash. UCC stated that most plants will ch oose to install two silos for redundancy, regardless of whether they separate the ash based on quality. UCC also mentioned the Separation Technology, Inc. (STI) fly ash beneficiation technology that electrostatically separates carbon from fly ash, and that the separation equipment can be located underneath fly ash storage silos.

 UCC stated that injecting activated carbon for mercury control affects the quality

of the ash due to the increase in the car bon content of the ash. UCC stated that injecting the activated carbon downstream of the ESPs will prevent this problem.

 ERG asked UCC to describe its experience with ash beneficiation technologies. UCC stated that they are aware of ash be neficiation technologie s, but they haven’t been directly involved with them. U CC noted that cement manufacturers only accept fly ash with a carbon cont ent of less than six percen t. UCC stated that they

do not believe carbon burn out is a feasib le option for most power plants. UCC stated that carbon burn out is only feasible for plants that produce ash with a very high carbon content, in which case the carbon burn out facility can recycle

sufficient heat back into the steam electri c plant to improve the overall efficiency of the power plant.

Cost Information and Concluding Discussion

 ERG asked if UCC would be willing to pr ovide any information that might help EPA develop a cost model for predicting th e cost of converting to dry fly/bottom ash handling, including any system com ponent costs UCC would be willing toMemorandum January 6, 2010 Page 6

share. UCC stated that a cost model base d on system components has the potential to be overly complicated and risks being inac curate due to site-specific variations. UCC mentioned the following major site-spe cific factors: 1) if the plant can market ash, 2) headroom available for e quipment installation, 3) silos required, and 4) storage requirements in the silos. UCC suggested that EPA use a simpler model, such as one that correlates electr ic generation capacity at the plant (MW) to dry ash handling system cost (e.g., for a 200 to 300 MW plant, and a 500 to 600 MW plant).

 ERG stated that EPA’s cost models must be of sufficient detail for a rulemaking

and noted that the Steam Elect ric questionnaire is set up to obtain this detail. EPA stated that UCC’s input on EPA’s questi onnaire would be helpful to ensure that

EPA obtains information on the crit ical cost elements/factors.

 ERG asked if UCC has any cost curves th at it would be willin g to share and UCC stated that they could supply some budget information. UCC provided the following system costs estimates for EPA and ERG based on a 600 MW electric generating unit:

o Dry fly ash handling system conve rsion (including silo costs):

 Equipment costs: $7-10 million

 Installed costs: $14-20 million

o Dry bottom ash handling system

 Equipment costs: $3-5 million

 Installed costs: $10 million

 UCC stated that any successf ul cost model would need to take into account the appropriate economies of scale. For exam ple, power plants converting multiple generating units to dry fly ash handling sy stems would not necessarily need more silos than that for one generating unit. UCC noted that a plant will likely have two ash storage silos if it is operating four generating units. UCC stated that similarly, power plants installing dewatering bins for multiple generating units could install one large dewatering bin rather than multiple ones. As an example, UCC mentioned that the Kings ton plant installed a dewatering bin system for its nine generating units because it was more cost effective than installing individual dry bottom ash handling systems on each of the nine generating units.

 EPA asked UCC how the costs of all bottom ash handling options (including dewatering bins and ash ponds) compare in terms of their life cycle costs (i.e. capital and operation and maintenance co sts). UCC stated that pond systems are almost never installed at new power plants because ponds have become expensive due to tighter regulations on liners and ma nagement practices. Therefore, the most cost-effective bottom ash handling options for new plants are SFC systems and completely dry bottom ash handling syst ems (VAX and PAX). UCC stated that

VAX and PAX can increase the theoretical thermodynamic efficiency of the boiler by 0.25-0.50 percent due to the recovery of heat back into the boiler and the resulting increase in plant efficiency. This added efficiency makes completely dryMemorandum January 6, 2010 Page 7

technologies generally more cost-effectiv e than SFC systems in the long-term, although the pay back period may be several years.

 EPA asked UCC to compare the costs of all bottom ash handling options in terms of life cycle costs for plants that ha ve pond systems. UCC stated that they performed a cost analysis ten years ag o comparing the capital and operation and maintenance costs of wet pond systems to SFC systems. UCC stated that the analysis showed that, even if the plan t has a pond system, SFC systems are still more cost-effective than wet ash handling from a life cycle perspective, in part because SFC systems do not require high pressure pumps.

 UCC invited EPA to visit UCC’s Hea dquarters and technology laboratory in Waukegan, IL. UCC stated that they could put together presentations that would help EPA to better understand the techni cal detail of their dry ash handling systems. Additionally, UCC offered to meet EPA at some of the power plants at which they have designed dry ash handli ng systems. EPA stated that they are interested in meeting with UCC and w ill follow up with UCC. UCC stated that they would compile a list of all of the power plant sites at which they have intalled dry systems and would send this list to EPA.

 EPA requested that UCC indicate if any information discussed during the conference call or provided in the future is considered confidential business information (CBI). EPA explained that UCC can claim certain pieces of

information as CBI and that EPA would handle any CBI according to EPA’s strict CBI handling procedures.