SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 1 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

 

APPENDIX C 

Cost Effectiveness Analysis 

For Revised Proposed Amendments to Rule 4702 

August 18, 2011 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 2 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

This page intentionally blank. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 3 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

COST EFFECTIVENESS ANALYSIS 

FOR REVISED PROPOSED RULE 4702 

I. SUMMARY 

The California Health and Safety Code (CH&SC) Section 40920.6(a) requires the 

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 to 

meet the proposed rule’s requirements, in dollars per year, divided by the emission 

reduction achieved in tons of pollutant reduced per year. 

Table 1 shows the costs and the results of the cost effectiveness analysis for engines 

greater than 50 brake horsepower (bhp). District staff estimates that operators will need 

to retrofit a total of 222 engines at an annual cost between $12.3 million and $27.1 

million. For rich-burn engines, the estimated cost effectiveness is $29,600 per ton NOx 

removed. For lean-burn engines, the absolute cost effectiveness for this rule project is 

between $28,200 and $59,300. Taking the rule amendments as a whole, the cost 

effectiveness is between $23,600 and $51,800 per ton NOx removed. If all operators 

choose the fee payment option, cost effectiveness for all engines is $17,500 per ton 

NOx removed. 

Table 1 – Summary of Compliance Costs and Cost Effectiveness 

All Operators Retrofit Their Engines 

 Rich-Burn Lean-Burn Overall 

Number Affected Engines 160 62 222

Total Cost ($/yr) a lower cost

higher cost

--- 

$3,900,000

$8,400,000 - 

$23,200,000 

$12,300,000 - 

$27,100,000

Cost Effectiveness b ($/ton NOx) --- 

$29,600

$28,200 - 

$59,300 

$23,600 - 

$51,800

All Operators Elect Alternative Compliance Fee 

Rich-Burn Lean-Burn Overall 

Number Affected Engines 160 62 222

Total Cost ($/yr) a $1,700,000 $7,500,000 $9,100,000

Cost Effectiveness b ($/ton NOx) $12,600 $19,100 $17,500 a

 Rounded to nearest $100,000; Total may be off due to rounding 

b Rounded to nearest $100 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 4 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

The incremental cost effectiveness is the difference in cost between successively more 

effective controls divided by the additional emission reductions achieved. For engines 

operating at least 6,750 hours annually, the NOx emission concentration limits are the 

most stringent available. For this reason, no incremental cost effectiveness analysis 

can be done because there is no more stringent option available for these engines. 

Proposed rule language would not lower emission limits for waste-gas fueled and cyclicloaded field gas-fueled engines. As explained in Appendix B, there are no 

technologically feasible controls that can be added which would produce a lower 

emission level for these categories of engines. Because there are no feasible control 

options, it is not possible to conduct a cost effectiveness analysis for these engine 

types. 

The proposed rule would create a category called limited-use engines. These engines 

are operated less than 4,000 hours annually. District staff has identified 11 engines that 

could meet this condition. Since the NOx emission control system would be identical to 

systems used on full-time engines, the cost per engine would be the same, but the 

emission reductions derived from the limited-use engines would be less than for a fulltime engine. The incremental cost effectiveness would be about $184,000 per 

additional ton of NOx removed. Details of this analysis are outlined in Section IV.B. 

II. BACKGROUND 

Amendments to Rule 4702 would include requirements for non-AO engines rated 

between 25 bhp and 50 bhp; however, these requirements are a “point of sale” basis 

therefore no costs are associated with the newly-added group. 

Revised Proposed Rule 4702 would implement more stringent NOx limits for non-AO 

spark-ignited engines greater than 50 bhp. The majority of these engines are operated 

on natural gas. It is the District’s experience that, when an emission limit is reduced, a 

small percentage of operators will choose to replace their IC engines with electric 

motors rather than retrofit with an emission control system. Based on past experience 

with engine rule amendments, it is expected that two or three of the 222 affected 

engines would be replaced by electric motors. It would be speculative, at best, to 

determine which engines would become electrified; therefore the following compliance 

costs and cost effectiveness analysis do not include any cost-of-electrification 

scenarios. 

For rich-burn engines, non-selective catalytic reduction (NSCR) is the most likely retrofit 

control technology. Most rich-burn engines already have NSCR and the majority of 

those can already achieve the proposed NOx limit. The engines that currently do not 

meet the proposed NOx limit would have to install a new NSCR system or both upgrade 

their existing NSCR systems and add more catalyst. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 5 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

For lean-burn engines that would be required to limit their emissions to 11 ppmvd, the 

most likely control technology is selective catalytic reduction (SCR). Existing engines 

with SCR controls are either meeting the proposed 11 ppmv limit or should be able to 

do so with minor adjustments. The costs used for this analysis assume that the 

operator currently has no SCR system, and the operator will install new one in order to 

meet the proposed NOx limit. For lean-burn engines that are used in gas compression, 

the operator would incur costs associated with upgrading the air-fuel controller, ignition 

system and engine timing in order to reduce engine emissions by 93%. 

III. ESTIMATED COMPLIANCE COSTS 

A. Non-AO Engines Between 25 bhp and 50 bhp 

Revised Proposed Rule 4702 includes requirements for engines between 25 bhp and 

50 bhp for the first time. There are federal requirements in 40 CFR 63 Subpart IIII and 

40 CFR 63 Subpart JJJJ which place certain requirements on engines manufactured or 

rebuilt after a certain date. These requirements can be as simple as a specific 

frequency of oil change or can be specific emission limits. As proposed, Rule 4702 

would not alter what is already in place for new/rebuilt engines subject to these federal 

regulations. Rather, the rule would require that, at the point of sale, the federal 

requirements for the cleanest engines be applied to the engine when the new owner 

places the engine into service. Only at the point of sale does the rule require that the 

replacement engine meet limits which are already required by federal regulation. Any 

change in emission limits or maintenance frequency is imposed by the federal rule and 

are not attributed to changes in Rule 4702; therefore, there is no cost associated with 

adding engines between 25 bhp and 50 bhp. 

B. Retrofit of Non-AO Spark-Ignited Engines Greater than 50 bhp 

For engines greater than 50 bhp, District staff queried the Permit Services Permits 

Database for non-AO spark-ignited engines. The returned records were then manually 

sorted into one of three groups: emergency standby/dormant engines; rich-burn 

engines; and lean-burn engines. The emergency standby engines and dormant 

engines were removed from the analysis. The information about the remaining engines’ 

facility and the permit information were scrutinized to estimate which engines would fit 

the waste-gas fueled definition and the cyclic-loaded field gas fueled definition. These 

engines were removed from the cost calculations because the NOx emission limits were 

not changed. Limited-use engines were identified for the incremental cost effectiveness 

calculations that would use the costs derived from this section of the appendix. 

Compliance costs include both one-time costs and on-going annual costs. Examples of 

one-time costs are the purchase of equipment and installation costs. On-going costs 

are items like maintenance costs, reagent purchases, and the additional fuel burned 

because of the control technology (fuel penalty). In order to determine a single figure 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 6 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

for costs, District staff use a capital recovery factor to allocate the one-time costs over 

the life of the equipment. For all cost analyses in this report, District staff used a 10 

percent rate of return and a 10-year equipment life to covert the capital costs to 

equivalent annual cost. 

1. Rich-Burn Engines 

An operator shared costs with the District that included the costs to install new NSCR 

units and to modify a NSCR system to hold more catalyst. An engine distributor also 

submitted costs to the District. The dealer and operator costs received were relatively 

close, so District staff averaged the three costs sources for the cost categories. The 

averaged costs represent a mixed situation where some facilities are already using 

NSCR systems to control emissions and will need to upgrade to meet the draft emission 

limit as well as some operators installing new NSCR systems. Table 2 outlines the 

basis for estimating compliance costs. 

Table 2 – Compliance Cost Basis for Rich-Burn Engines 

Engine Size (bhp) 800

Total Direct Capital Cost ($) $57,747

Total Indirect Capital Costs ($) $0

Project Contingency ($) $2,962

Total Capital Cost ($) $59,721

Annualized Capital Cost ($/yr) $9,717

Total Annual O&M costs ($/yr) $25,276

TOTAL ANNUALIZED COST ($/yr) $34,993

Costs were submitted to the District for a certain size of engine. In order to determine 

costs for engines with output different than the submitted costs, District staff used the 

following equation: 

Costengine2 =   basis

basis

engine Cost

horsepower

horsepower

 



 



 0.6

2

Where 

Costengine2 = cost of the desired engine (unknown) 

Costbasis = cost of the engine used as the basis of the calculation (known) 

horsepowerengine2 = the rated output of the desired engine (known) 

horsepowerbasis = the rated output of the engine used as the basis of the 

calculation (known) 

Using the costs submitted by stakeholders and using the above equation to adjust for 

different sized engines, the total annual cost to retrofit all 160 rich-burn engines to meet 

the draft rule’s emission limits is about $3.9 million annually. Costs for individual 

engines are shown in Table 5 near the end of this appendix. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 7 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

2. Lean-Burn Engines 

The compliance costs for lean-burn engines were based on two different scenarios. 

District staff assumed that the engines that are subject to the 11 ppmv NOx limit would 

currently have no SCR to control NOx emissions and that the operator would incur costs 

for the installation of a SCR emission control system to meet the proposed NOx limit. 

Engines that would be subject to the lean-burn engines used in gas compression with 

the percent-reduction limit would be modified to meet the proposed NOx limit through 

engine upgrades only. Since the gas compression engines do not maintain a steady 

state during operations, utilizing an add-on control technology is problematic. 

a) Lean-Burn Engines Subject to Proposed 11 ppmvd NOx Limit 

Each facility is unique and has its own challenges in adding new equipment. With this 

in mind, District staff reviewed several sources of cost data. The cost data are outlined 

in Table 6 near the end of this appendix. From this information, District staff has chosen 

cost data from Western States Petroleum Association, (WSPA) as well as from the 

control technology vendor EF&EE to represent the range of costs that an operator might 

reasonably be expected to incur. The lower cost may be more likely for smaller engines 

that need relatively simple modifications and the higher cost may reflect larger engines 

involving more extensive modifications. 

The control technology vendor’s capital costs are based on a linear equation relating the 

installed cost to the engines size. District staff then used standard ratios to fill in other 

portions of a capital equipment project. The ratios were taken from the EPA’s 

Alternative Control Techniques (ACT) for Internal Combustion Engines. Once the total 

capital cost was evaluated, a capital recovery factor was applied to convert this onetime expense into the equivalent annual costs. Annual operating costs were given by 

the vendor. The annualized capital cost and the annual operating costs were then 

added together for the total annual compliance cost. 

WSPA used EPA’s ACT document to estimate the equipment costs as well as the 

annual costs. Additionally, WSPA’s members stated that an existing engine would also 

need some upgrades to the air/fuel controller, the ignition system, and for larger 

engines, a turbocharger or supercharger. District staff used costs for engine upgrades 

(without the turbo/supercharger upgrade) for engines less than 2,000 bhp. For engines 

2,000 hp and larger, the costs included the turbo/supercharger upgrade. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 8 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

Table 3 outlines the cost multipliers used to calculate the total annual cost for each 

engine. 

Table 3 – Cost Multipliers Used for Compliance Cost Evaluation 

 Engine Size (bhp) 

Direct Capital Cost ($) 

A. SCR cost - 

B. engine upgrade - 

C. Aux equip - 

D. Total Purchased Equip Cost (PEC) A+B+C 

E. Freight 5% PEC 

F. Sales tax 8.25% PEC 

G. Direct installation Cost 25% PEC 

H. Total Direct Capital Cost D+E+F+G

Indirect Capital Cost ($) 

I. Facilities 5% PEC 

J. Engineering 10% PEC 

K. 

Miscellaneous Costs 

(System start-up/calibration, piping, stack 

modifications) 

- 

L. Process Contingency 5% PEC 

M. Total Indirect Capital Costs I+J+K+L

N. Project Contingency 20% PEC 

O. Total Capital Costs (TCC) ($) H+M+N 

P. Annualized Capital Cost ($/yr) 

(10 years @ 10%) 0.1627* TCC 

Annual O&M Costs ($/yr) 

Q. Annual maintenance labor 16% PEC 

R. Annual reagent cost $1.50/gal 

8.5 gal/bhp 

S. Annual electricity cost - 

T. 

Fuel penalty (0.5% increase) * assume $7.19/Mcf 

fuel & 30.28 Mcf fuel/hp (back calculated from 

WSPA #'s) 

0.5% 

30.28 

$7.19 

U. Power Loss (2% engine hp) * assumptions same 

as fuel penalty calcs 2% 

V. Catalyst cleaning/replacement ($3.83/bhp *1.8) 

W. Total Annual O&M costs ($/yr) Q+R+S+T+U+V

TOTAL ANNUALIZED COST ($/yr) P+W 

b) Lean-Burn Engines Used for Natural Gas Compression 

WSPA’s engine upgrade costs were used as the compliance costs for lean-burn 

engines used for natural gas compression. It is expected that engine upgrades alone 

will suffice for these particular engines to meet the proposed 93% percent reduction. 

District staff used the engine upgrade costs as the purchased equipment costs (PEC) 

for these engines. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 9 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

c) Cost Scaling to Engine Size 

Costs were submitted to the District for a certain size of engine. In order to determine 

costs for engines with output different than the submitted costs, District staff used the 

following equation: 

Costengine2 =   basis

basis

engine Cost

horsepower

horsepower

 



 



 0.6

2

Where 

Costengine2 = cost of the desired engine (unknown) 

Costbasis = cost of the engine used as the basis of the calculation (known) 

horsepowerengine2 = the rated output of the desired engine (known) 

horsepowerbasis = the rated output of the engine used as the basis of the 

calculation (known) 

d) Overall Lean Burn Engine Retrofit Compliance Costs

District staff estimates that a total of 62 lean-burn engines would be affected by the 

proposed rule amendments. Using the cost-scaling formula to adjust compliance costs 

to engine size, the compliance cost for the draft rule changes would range between $7.6 

million and $37.6 million annually, depending on the amount of work needed to modify 

the specific engine control system or facility modifications needed for the new SCR 

system. Costs used for individual engines are shown as part of Table 7 near the end of 

this appendix. 

C. Fee Payment in Lieu of Retrofit Calculations 

Operators also have the option to pay a fee in lieu of complying with the proposed NOx 

emission limits. District staff used the emission limits on each affected engines PermitTo-Operate to estimate each engines total annual emissions. The emissions 

assumptions were the same as used in the Appendix B calculations, namely, engines 

that operate 6,570 hours per year, engines are 30% efficient at converting fuel to power, 

and engines generally operate at 65 percent of its maximum output. The total annual 

emissions for each engine was then multiplied by $9,350 per ton pollutant, the current 

District Rule 9510 (Indirect Source Review) cost to yield the estimated annual fee for 

each engine. The relevant information about this calculation is in Table 8 near the end 

of this appendix. 

IV. ABSOLUTE AND INCREMENTAL COST EFFECTIVENESS ANALYSIS 

Absolute cost effectiveness of a control option is the added annual cost, in dollars per 

year, of a control technology or technique divided by the emission reductions achieved, 

in tons reduced per year. The costs can include, but are not limited to, capital 

equipment costs, engineering design costs, and additional labor or fuel costs. The 

costs also can include any monetary savings realized by implementation of the pollution 

controls. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 10 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

Incremental cost effectiveness is intended to measure the change in costs and the 

potential additional emission reductions between to progressively more effective control 

options or technologies. Incremental cost effectiveness does not reveal the emission 

reduction potential of the control options, but merely indicates the additional cost of 

adding the next most effective control to a given control measure. Although absolute 

cost effectiveness and incremental cost effectiveness are in the same units, the relative 

values produced in the incremental cost effectiveness analysis and the absolute cost 

effectiveness values are not comparable and cannot be evaluated using similar 

standards. 

A. Absolute Cost Effectiveness Analysis 

The absolute cost effectiveness is the cost in dollars per year of the expected control 

technology divided by the estimated annual emission reductions achieved in tons of 

pollutant reduced per year. Details of the expected emission reductions are in Appendix 

B of this staff report. 

1. Rich-Burn Engines 

Using the costs calculated above and the estimated emission reductions from Appendix 

B, the cost effectiveness for rich-burn engines due to the change in NOx limit is $29,600 

per ton NOx removed. The cost effectiveness is shown in Table 5 near the end of this 

appendix. 

2. Lean Burn Engines 

Using the costs calculated as described in the previous section and the estimated 

emission reductions from Appendix B, the cost effectiveness for lean-burn engines due 

to the change in proposed NOx limits is between $21,600 and $59,300 per ton NOx 

removed. The wide range in cost effectiveness can be directly attributed to the 

difference in the costs submitted by stakeholders during the rule development process. 

Table 7 shows the cost effectiveness on an engine-by-engine basis for lean-burn 

engines. 

3. Fee Payment Option 

The estimated fee for each engine was determined in Section III.C. District staff then 

used the estimated emission reductions from Appendix B to estimate the cost 

effectiveness of the fee payment option. In a sense, the cost effectiveness calculated 

this way overstates the dollar per ton basis since the fee is applied to the totality of NOx 

emissions but the cost effectiveness only looks at the difference in emissions between 

the current emission limit and the proposed emission limit. Even with the smaller 

number in the denominator, the cost effectiveness for the fee payment option is less 

than $20,000 per ton NOx removed. Table 8 at the end of this appendix outlines the fee 

calculations and the cost effectiveness for this option. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 11 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

B. Incremental Cost Effectiveness Analysis 

1. High Use Engines (Engines Operating at Least 6,570 Hours Annually) 

The incremental cost effectiveness is the difference in cost between successively more 

effective controls. For engines operating at least 6,750 hours annually, the NOx 

emission limits are the most stringent available. For this reason, no incremental cost 

effectiveness analysis can be done because there is no more stringent option available 

for these engines. 

2. Limited-Use Engines (Engines Operating Less than 4,000 Hours 

Annually) 

Limited-use engines would incur the same costs to retrofit as full-time engines, yet the 

emission reductions would be less since the limited-use engines operate for fewer hours 

than full time engines. Leaving the engines at the current level, operators would incur 

no cost because the engines already comply with the current rule’s emission limits. The 

difference between the installed cost of an add-on emission control system and the cost 

of leaving things as they are is the incremental cost for the limited-use engines. 

District staff calculated the additional emission reductions associated with including the 

limited-use engines in the 11 ppmvd NOx emission limit by assuming that the limiteduse engines operate, on average, 3,500 hours each year. District staff has identified 10 

rich-burn engines and no lean-burn engines that would meet the limited-use definition. 

Using the costs developed in Section III.B.1 for rich-burn engines, it is estimated that 

the incremental cost effectiveness for all limited use rich-burn engines is about 

$184,000 per ton of additional NOx removed. Because no lean-burn engines are limited 

use engines, the incremental cost effectiveness was not evaluated for limited use leanburn engines. The results of the analysis are in Table 4. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 12 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

Table 4 – Incremental Cost Effectiveness Analysis for Limited Use Rich-Burn Engines 

Bhp 

Total Annual Cost 

($/yr) 

Estimated NOx 

Reductions (tpy) 

Cost Effectiveness 

($/ton) 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

100 $10,049 0.05 $191,946 

197 $15,094 0.10 $146,350 

TOTALS $105,536 0.574 $183,758 

3. Lean-Burn Engines Used for Gas Compression 

Incremental cost effectiveness was not evaluated for lean-burn engines used for gas 

compression. Stakeholders have stated that add-on controls, which would be 

considered more stringent than engine upgrades alone, are difficult to utilize for these 

engines. District staff believes that SCR is not a viable retrofit control technology and 

that there is no other retrofit control for these engines. For this reason, the proposed 93 

percent reduction is the most stringent limit for these engines and no incremental cost 

effectiveness analysis was performed. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 13 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

ATTACHMENT A – DETAIL TABLES 

Table 5 – Compliance Costs and Cost Effectiveness Analysis for 

Retrofit of Rich-Burn Engines 

Power Rating 

(bhp) SIC Total Annual Cost 

($/yr) 

Estimated ER 

(tpy) 

Cost Effectiveness 

($/ton) 

80 1311 $8,790 0.08 $111,801 

95 1311 $9,745 0.09 $104,374 

95 1311 $9,745 0.26 $37,468 

104 1311 $10,288 0.10 $100,663 

115 1311 $10,928 0.07 $150,414 

120 2911 $11,211 0.12 $95,062 

120 2911 $11,211 0.12 $95,062 

150 2911 $12,817 0.15 $86,945 

151 1311 $12,868 0.15 $86,714 

157 1311 $13,172 0.15 $85,373 

157 1311 $13,172 0.15 $85,373 

157 1311 $13,172 0.15 $85,373 

157 1311 $13,172 0.15 $85,373 

162 1311 $13,423 0.44 $30,265 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

Continues on next page 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 14 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

Table 5 – Compliance Costs and Cost Effectiveness Analysis for 

Retrofit of Rich-Burn Engines (continued) 

Power Rating 

(bhp) SIC Total Annual Cost 

($/yr) 

Estimated ER 

(tpy) 

Cost Effectiveness 

($/ton) 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

162 1311 $13,423 0.16 $84,309 

163 1311 $13,472 0.09 $147,178 

165 2911 $13,571 0.16 $83,693 

165 2911 $13,571 0.16 $83,693 

165 2911 $13,571 0.16 $83,693 

180 2911 $14,299 0.18 $80,830 

180 2911 $14,299 0.18 $80,830 

180 2911 $14,299 0.18 $80,830 

180 1311 $14,299 0.18 $80,830 

193 1389 $14,909 1.40 $10,684 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.53 $28,102 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.19 $78,283 

195 1311 $15,002 0.03 $547,981 

195 1311 $15,002 0.19 $78,283 

197 2099 $15,094 0.19 $77,964 

199 1311 $15,186 0.20 $77,650 

200 1311 $15,232 0.20 $77,494 

208 1311 $15,594 0.57 $27,385 

208 1311 $15,594 0.20 $76,288 

208 1311 $15,594 0.20 $76,288 

208 1311 $15,594 1.15 $13,519 

208 1311 $15,594 0.20 $76,288 

208 1311 $15,594 0.20 $76,288 

Continues on next page 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 15 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

Table 5 – Compliance Costs and Cost Effectiveness Analysis for 

Retrofit of Rich-Burn Engines (continued) 

Power Rating 

(bhp) SIC Total Annual Cost 

($/yr) 

Estimated ER 

(tpy) 

Cost Effectiveness 

($/ton) 

220 1311 $16,128 0.60 $26,778 

316 1311 $20,042 0.31 $64,537 

316 1311 $20,042 0.31 $64,537 

316 1311 $20,042 0.31 $64,537 

316 1311 $20,042 0.31 $64,537 

316 1311 $20,042 0.31 $64,537 

325 1311 $20,382 0.32 $63,816 

330 1311 $20,570 0.32 $63,427 

365 1311 $21,853 0.36 $60,921 

370 1311 $22,032 0.36 $60,590 

370 1311 $22,032 0.36 $60,590 

400 1311 $23,087 0.39 $58,730 

400 1311 $23,087 0.39 $58,730 

490 1311 $26,076 1.65 $15,794 

490 1311 $26,076 1.65 $15,794 

490 1311 $26,076 1.65 $15,794 

490 1311 $26,076 1.65 $15,794 

498 1311 $26,331 0.49 $53,801 

498 1311 $26,331 0.49 $53,801 

500 1311 $26,394 0.49 $53,715 

500 1311 $26,394 0.49 $53,715 

525 1311 $27,178 0.52 $52,677 

525 1311 $27,178 0.52 $52,677 

525 1311 $27,178 0.52 $52,677 

525 1311 $27,178 0.52 $52,677 

525 1311 $27,178 0.52 $52,677 

525 1311 $27,178 0.52 $52,677 

600 1311 $29,445 0.59 $49,937 

615 1311 $29,885 0.60 $49,446 

625 1311 $30,176 0.61 $49,128 

640 1311 $30,608 0.63 $48,664 

650 1311 $30,894 2.19 $14,106 

650 1311 $30,894 2.19 $14,106 

650 1311 $30,894 2.19 $14,106 

650 1311 $30,894 2.19 $14,106 

660 1311 $31,178 2.22 $14,020 

765 1311 $34,066 0.75 $45,312 

765 1311 $34,066 0.75 $45,312 

765 1311 $34,066 0.75 $45,312 

767 1311 $34,120 0.75 $45,265 

767 1311 $34,120 0.75 $45,265 

Continues on next page 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

C - 16 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

Table 5 – Compliance Costs and Cost Effectiveness Analysis for 

Retrofit of Rich-Burn Engines (continued) 

Power Rating 

(bhp) SIC Total Annual Cost 

($/yr) 

Estimated ER 

(tpy) 

Cost Effectiveness 

($/ton) 

767 1311 $34,120 0.75 $45,265 

800 1311 $34,993 0.79 $44,509 

800 1311 $34,993 0.79 $44,509 

880 1311 $37,052 0.86 $42,844 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1000 1311 $40,006 3.37 $11,873 

1024 1311 $40,580 1.01 $40,324 

1024 1311 $40,580 1.01 $40,324 

1215 1311 $44,965 1.19 $37,657 

1478 1311 $50,575 1.45 $34,819 

1478 1311 $50,575 1.45 $34,819 

1478 1311 $50,575 1.45 $34,819 

1478 1311 $50,575 1.45 $34,819 

1478 1311 $50,575 1.45 $34,819 

1493 2037 $50,882 1.47 $34,678 

1585 4931 $52,741 0.45 $118,505 

1585 4931 $52,741 0.45 $118,505 

1585 4931 $52,741 0.45 $118,505 

1585 4931 $52,741 0.45 $118,505 

1585 4931 $52,741 0.45 $118,505 

1585 4931 $52,741 0.45 $118,505 

1680 1311 $54,615 1.65 $33,079 

1680 1311 $54,615 1.65 $33,079 

TOTALS $3,898,230 131.5 $29,641
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

C - 17 Final Staff R

For Revised Proposed Ame

Table 6 – Cost Comparisons for Lean Burn Engines 

Cost Category West Kern WD WSPA Valley Power SCAQM D 2008 Rule Fiscalini Dairy CARB RACT BARCT Foothill Landfill  Engine Size (bhp) 615 2,000 1,000 2,000 1,075 1,500 3,012 Direct Capital Cost ($)A. SCR cost - $325,000 $473,040 $172,040 $176,000 $52,154 $185,000 $222,648 B. engine upgrade - $0 $935,000 $0 $0 $0 $0 $0 C. Aux equip - $0 $0 $0 $41,076 $0 $0 D. 

Total Purchased Equip Cost (PEC) A+B+C $325,000 $1,408,040 $172,040 $176,000 $93,230 $185,000 $222,648 

E. Freight 5% PEC $16,250 $70,402 $8,602 $8,800 $4,662 $9,250 $11,132 F. Sales tax 8.25% PEC $26,813 $116,163 $14,193 $14,520 $7,691 $15,263 $18,368 G. Direct installation Cost 25% PEC $215,380 $352,010 $43,010 $44,000 $23,308 $46,250 $55,662 H. Total Direct Capital Cost D+E+F+G $583,443 $1,946,615 $237,845 $243,320 $128,890 $255,763 $307,81Indirect Capital Cost ($)I. Facilities 5% PEC $16,250 $70,402 $8,602 $8,800 $4,662 $9,250 $11,132 J. Engineering 10% PEC $32,500 $140,804 $17,204 $17,600 $9,323 $18,500 $22,265 K. 

Miscellaneous Costs (System start-up/calibration, piping, stack modifications) 

- $14,325 $0 $0 $10,549 $105,800 $0 $50,000 

L. Process Contingency 5% PEC $16,250 $70,402 $8,602 $8,800 $4,662 $9,250 $11,132 M. Total Indirect Capital Costs I+J+K+L $79,325 $281,608 $34,408 $45,749 $124,446 $37,000 $94,530 N. Project Contingency (20% PEC) 20% PEC $65,000 $281,608 $34,408 $35,200 $18,646 $37,000 $44,530 O. Total Capital Costs ($) H+M+N $727,768 $2,509,831 $306,661 $324,269 $271,982 $329,763 $446,870 P. 

Annualized Capital Cost ($/yr) (10 years @ 10%) 0.1627* TCC $118,408 $408,350 $49,894 $52,759 $44,252 $53,652 $72,706 
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

C - 18 Final Staff R

For Revised Proposed Ame

Table 6 – Cost Comparisons for Lean Burn Engines (continued)

Annual O&M Costs ($/yr)Q. Annual maintenance labor 16% PEC $52,000 $225,286 $27,526 $28,160 $14,917 $29,600 $35,624 R. Annual reagent cost $1.50/gal $23,360 $25,500 $12,750 $25,500 $13,706 $19,125 $38,403 

8.5 gal/bhp 

S. Annual electricity cost - $427 $0 $0 $0 $0 $50,000 $46,000 T. 

Fuel penalty (0.5% increase) *assume $7.19/Mcf fuel & 30.28 Mcf fuel/hp 

0.5% 

30.28 $669 $2,177 $1,089 $2,177 $1,170 $1,633 $3,279 $7.19 

U. 

Power Loss (2% engine hp) *assumptions same as fuel penalty calcs 

2% $2,678 $8,709 $4,354 $8,709 $4,681 $6,531 $13,115 

V. Catalyst cleaning/replacement $3.83/bhp *1.8 $4,240 $13,788 $6,894 $13,788 $7,411 $10,341 $20,765 W. Total Annual O&M costs ($/yr) Q+R+S+T+U+V $83,374 $275,460 $52,613 $78,334 $41,885 $117,230 $157,185 

TOTAL ANNUALIZED COST ($/yr) P+W $201,782 $201,782 $102,507 $131,092 $86,137 $170,883 $229,891 
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

C - 19 Final Staff R

For Revised Proposed Ame

Table 7 – Compliance Costs and Cost Effectiveness Analysis for Retrofit of Lean-Burn Engines 

Power Output 

(bhp) SIC 

Low Install 

Engine 

Upgrades 

Install SCR + 

upgrades 

(low) 

Total Annual 

Cost low 

($/yr) 

High Install 

Engine 

Upgrades 

only ($/yr) 

High Install 

SCR + 

upgrades 

($/yr) 

Total Annual 

Cost high 

($/yr) 

Estimated 

ER (ton/yr) 

Low Pengine Effecti($/ton) 

220 4952 $0 $32,098 $32,098 $0 $124,849 $124,849 0.91 $220 4952 $0 $32,098 $32,098 $0 $124,849 $124,849 0.91 $220 4952 $0 $32,098 $32,098 $0 $124,849 $124,849 0.91 $330 2911 $0 $37,055 $37,055 $0 $159,235 $159,235 1.36 $330 2911 $0 $37,055 $37,055 $0 $159,235 $159,235 1.36 $450 1311 $0 $42,461 $42,461 $0 $191,804 $191,804 1.57 $450 1311 $0 $42,461 $42,461 $0 $191,804 $191,804 1.57 $455 1311 $0 $42,687 $42,687 $0 $193,080 $193,080 1.58 $577 4952 $0 $48,184 $48,184 $0 $222,657 $222,657 1.97 $615 4941 $0 $49,896 $49,896 $0 $231,343 $231,343 2.14 $615 4941 $0 $49,896 $49,896 $0 $231,343 $231,343 2.14 $620 4952 $0 $50,121 $50,121 $0 $232,470 $232,470 1.56 $620 4952 $0 $50,121 $50,121 $0 $232,470 $232,470 2.16 $670 4952 $0 $52,374 $52,374 $0 $243,543 $243,543 2.33 $892 4952 $0 $62,376 $62,376 $0 $289,168 $289,168 2.24 $930 4953 $0 $64,089 $64,089 $0 $296,497 $296,497 3.24 $

1,000 1311 $105,753 $0 $52,876 $105,753 $0 $105,753 2.85 $1,000 1311 $105,753 $0 $52,876 $105,753 $0 $105,753 2.85 $1,000 1311 $105,753 $0 $52,876 $105,753 $0 $105,753 2.85 $1,000 1311 $105,753 $0 $52,876 $105,753 $0 $105,753 4.46 $1,000 1311 $105,753 $0 $52,876 $105,753 $0 $105,753 4.46 $1,070 4941 $0 $70,397 $70,397 $0 $322,524 $322,524 3.72 $1,070 4941 $0 $70,397 $70,397 $0 $322,524 $322,524 3.72 $1,070 4941 $0 $70,397 $70,397 $0 $322,524 $322,524 3.72 $1,150 4922 $0 $74,001 $74,001 $0 $336,783 $336,783 4.00 $1,150 4911 $0 $74,001 $74,001 $0 $336,783 $336,783 4.00 $
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

C - 20 Final Staff R

For Revised Proposed Ame

Table 7 – Compliance Costs and Cost Effectiveness Analysis for Retrofit of Lean-Burn Engines (continued) 

Power Output 

(bhp) SIC 

Low Install 

Engine 

Upgrades 

Install SCR + 

upgrades 

(low) 

Total Annual 

Cost low 

($/yr) 

High Install 

Engine 

Upgrades 

only ($/yr) 

High Install 

SCR + 

upgrades 

($/yr) 

Total Annual 

Cost high 

($/yr) 

Estimated 

ER (ton/yr) 

Low Pengine Effecti($/ton) 

1,150 4911 $0 $74,001 $74,001 $0 $336,783 $336,783 4.00 $1,200 1311 $0 $76,254 $76,254 $0 $345,494 $345,494 4.17 $1,200 1311 $0 $76,254 $76,254 $0 $345,494 $345,494 4.17 $1,200 4941 $0 $76,254 $76,254 $0 $345,494 $345,494 4.17 $1,408 4922 $0 $85,626 $85,626 $0 $380,271 $380,271 4.90 $1,408 4952 $0 $85,626 $85,626 $0 $380,271 $380,271 3.88 $1,408 4952 $0 $85,626 $85,626 $0 $380,271 $380,271 4.66 $1,408 4952 $0 $85,626 $85,626 $0 $380,271 $380,271 4.66 $1,500 4922 $0 $112,298 $112,298 $0 $394,990 $394,990 5.22 $1,500 4922 $0 $112,298 $112,298 $0 $394,990 $394,990 5.22 $1,500 1311 $134,880 $0 $67,440 $134,880 $0 $134,880 6.69 $1,500 1311 $134,880 $0 $67,440 $134,880 $0 $134,880 6.69 $2,000 1311 $0 $70,397 $70,397 $0 $683,810 $683,810 6.96 $2,000 1311 $0 $70,397 $70,397 $0 $683,810 $683,810 6.96 $2,000 1311 $0 $70,397 $70,397 $0 $683,810 $683,810 6.96 $2,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 8.41 $2,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 8.41 $2,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 8.41 $2,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 8.41 $2,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 8.41 $2,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 8.41 $4,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 14.75 $4,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 14.75 $4,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 14.75 $4,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 14.75 $4,000 1311 $420,762 $0 $210,381 $420,762 $0 $420,762 14.75 $
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis 

C - 21 Final Staff R

For Revised Proposed Ame

Table 7 – Compliance Costs and Cost Effectiveness Analysis for Retrofit of Lean-Burn Engines (continued) 

Power Output 

(bhp) SIC 

Low Install 

Engine 

Upgrades 

Install SCR + 

upgrades 

(low) 

Total Annual 

Cost low 

($/yr) 

High Install 

Engine 

Upgrades 

only ($/yr) 

High Install 

SCR + 

upgrades 

($/yr) 

Total Annual 

Cost high 

($/yr) 

Estimated 

ER (ton/yr) 

Low Pengine Effecti($/ton) 

4,445 4922 $0 $222,457 $222,457 $0 $1,104,181 $1,104,181 0.26 $84,445 4922 $0 $222,457 $222,457 $0 $1,104,181 $1,104,181 0.26 $84,445 4922 $0 $222,457 $222,457 $0 $1,104,181 $1,104,181 0.26 $84,445 4922 $0 $222,457 $222,457 $0 $1,104,181 $1,104,181 0.26 $85,500 1311 $420,762 $0 $420,762 $420,762 $0 $420,762 20.29 $5,500 1311 $420,762 $0 $420,762 $420,762 $0 $420,762 20.29 $5,500 1311 $420,762 $0 $420,762 $420,762 $0 $420,762 20.29 $5,500 1311 $420,762 $0 $420,762 $420,762 $0 $420,762 20.29 $5,500 1311 $420,762 $0 $420,762 $420,762 $0 $420,762 20.29 $5,500 1311 $420,762 $0 $420,762 $420,762 $0 $420,762 20.29 $

TOTALS $7,951,478 $3,055,145 $11,006,622 $7,951,478 $15,042,813 $22,994,291 390.9 $

Table 8 – Compliance Cost and Cost Effectiveness Analysis for Fee Payment Option (Rich-Burn and Lean

 Total 1311;1389 2037;2099 2911 4911 4922 4931 494

Rich-Burn 

Number Affected Engines 160 143 2 9 0 0 6 Alt Compliance Fee $1,663,596 $1,530,752 $25,451 $21,460 $0 $0 $85,932 Cost Effectiveness ($/ton) $12,649 $12,170 $15,324 $15,324 none none $32,181 n

Lean-Burn 

Number Affected Engines 62 32 0 2 2 8 0 Alt Compliance Fee $7,454,812 $6,491,759 $0 $29,819 $90,058 $345,083 $0 $220Cost Effectiveness ($/ton) $19,073 $20,892 none $10,957 $11,255 $16,943 none $11

Total 

Number Affected Engines 160 143 2 9 0 0 6 Alt Compliance Fee $9,118,408 $8,022,511 $25,451 $51,279 $90,058 $345,083 $85,932 $220Cost Effectiveness ($/ton) $17,455 $18,378 $15,324 $12,441 $11,255 $16,943 $32,181 $11
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis August 18, 2011 

 

C - 22 Final Staff Report with Appendices 

For Revised Proposed Amendments to Rule 4702

This page intentionally blank.