1

March 14, 2012 

Memorandum to the North Dakota Regional Haze SIP File 

Docket ID # EPA-R08-OAR-2010-0406 

Subject: Basin Electric Power Cooperative’s (BEPC’s) Adverse Comments on 

Credibility and Credentials of EPA’s Consultant 

From: Gail Fallon, Environmental Engineer 

 Environmental Protection Agency, Region 8 

Background 

We are including this memorandum in the docket for our final action to address 

some of BEPC’s adverse comments pertaining to our cost analysis for tail-end selective 

catalytic reduction (SCR) at Leland Olds Unit 2 (LOS 2), particularly those comments 

related to the qualifications of EPA’s consultant and the quality of our cost analysis. This 

memorandum was included after the signature date of our final rule promulgation due to 

time constraints. This information did not factor into our final decisions in this action. 

EPA’s consultant, Dr. Phyllis Fox, is a well-known and highly regarded registered 

professional engineer with specific expertise in regulatory cost effectiveness analysis. 

She has been qualified in federal court and numerous administrative proceedings to 

render opinions on this subject matter and is a board-certified pollution control engineer. 

Her resume is in the record. BEPC’s characterization of her qualifications includes many 

errors and misstatements. We stand by our consultant’s review of Sargent & Lundy’s 

(S&L’s) May 2009 cost analysis for tail-end SCR. However, Dr. Fox’s review and 

analysis are not relevant to our final action on the North Dakota Regional Haze SIP 

because of our decision to approve the State’s best available retrofit technology (BART) 

determination for NOx for LOS 2 on grounds unrelated to the costs of compliance. Thus, 

we are not responding to most of BEPC’s and S&L’s comments on our analyses of costs 

for NOx controls for this unit. In this memorandum, we are responding to some of these 

comments due to the misleading nature of many of the comments which called into 

question the credibility and credentials of Dr. Fox. An excerpt below from BEPC’s 

comments highlights the general tone of its comments that led to our decision to respond: 

“Moreover, the 2011 S&L Evaluation highlights the fundamental 

inadequacies in EPA's cost estimates, which are so utterly lacking in any technical 

or engineering basis as to be laughable. But the stakes for Basin Electric are high. 

It has taken with utter seriousness EPA's attempt here to impose an untested 

control technology on it, based on a neophyte's control cost estimates, and in 

complete disregard for the State's role in making the BART determination. At 

significant expense, Basin Electric arranged for the 2011 S&L Evaluation, a level 
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of cost estimation that exceeds what the Cost Manual requires, but is the gold 

standard for estimating the costs of compliance for a control technology.”1 

Consultant’s Use of Sufficient Information

BEPC believes that our consultant lacked the information needed to estimate 

emission control costs at LOS 2, especially due to the technically complex and untested 

tail-end SCR configuration.2 BEPC states “[i]n contrast to the Sargent & Lundy

engineers, Fox has never visited the Leland Olds Station. Fox did not contact either 

Sargent & Lundy or BEPC while preparing her report. Fox has in the past relied on 

pictures from Google Earth to prepare her cost estimates, but her report gives no 

indication that she took even that rudimentary step in this case.”3

We disagree that Dr. Fox lacked the necessary information to conduct her 

analysis. First, our consultant used all of the site-specific information produced by BEPC 

and its contractors at the time of her work. We specifically sought all relevant sitespecific information through a Section 114 request and used all of the information that 

was produced in preparing our independent analysis. Dr. Fox was not authorized to 

independently contact BEPC or S&L. All information interface and acquisition was 

handled by EPA. We requested all vendor correspondence, calculations, formulas, and 

methodologies, including electronic spreadsheet files, used to generate the costs 

presented in the S&L cost analysis for tail-end SCR dated May 27, 2009. Essentially, 

none of the information provided in response to our request included any new 

information beyond the limited information already included in the SIP record related to 

BEPC’s development of costs pertaining to SCR technology. BEPC provided insufficient 

information to suggest that it relied on anything other than an unsupported lump-sum, 

dollar-per-kilowatt figure for its capital costs. 

Second, our consultant’s scope of work was to review and, as appropriate, revise 

the May 2009 S&L cost analysis. This analysis was a study-level estimate, accurate to 

within +/-30%. This is adequate for a regulatory analysis and does not require a site 

survey.

4

 The subject May 2009 S&L cost analysis contains no evidence that S&L’s 

personnel who prepared the analysis visited the site, consulted Google maps, or relied on 

any site-specific information.5

 S&L characterizes the May 2009 cost analysis that we 

 

1

 November 21, 2011 letter from Holland & Hart, Denise Kennedy to EPA Region 8, Callie Videtich, Re: 

Comments of Basin Electric Power Cooperative to the Proposed Rule on North Dakota’s Regional Haze 

State Implementation Plan, 76 Fed. Reg. 58570 (Sept. 21, 2011), Docket EPA-R08-OAR-2010-0406-0267 

(hereinafter, referred to as BEPC Comments), p. 59.

2

 BEPC Comments, p. 48. 

3

 BEPC Comments, p. 41. 

4

 Control Cost Manual, Section 1, p. 2-3. See, e.g., site survey only required for firm or detailed estimate. 

“Study-level estimates are acceptable for regulatory development because they represent a compromise 

between the less accurate order-of-magnitude and the more accurate estimate types.” 

5

 Letter from Cris Miller, BEPC, to Terry L. O’Clair, May 29, 2009, transmitting Letter from William 

DePriest, Sargent & Lundy, to Cris Miller, BEPC, Re: BART Evaluation Update – Tail End SCR, May 27, 

2009 (May 2009 S&L cost analysis). 
3

reviewed as a “study-level” estimate based on published equipment costs that did not take 

any site-specific design parameters or equipment layout into consideration.6 

A site visit is not required to prepare a study-level, regulatory cost analysis, 

particularly for a tail-end SCR, where space constraints are generally not an issue. A site 

visit is generally only required for space-constrained sites. Otherwise, site visits are very 

unusual for regulatory cost analyses, which need only be accurate to within +/- 30%. The 

Control Cost Manual, for example, notes site surveys only for a firm, detailed, 

contractor’s estimate, accurate to within +/-5%.7

 Space constraints are not an issue for a 

tail-end SCR at LOS 2. The SCR issues that resulted in the disagreements leading to the 

proposed FIP were all theoretical and hypothetical process-related issues related to the 

impact of fuel composition on flue gas characteristics and, hence, catalyst lifetime. 

Inspecting the plant site would not resolve any of these issues or have any impact on a 

study-level cost analysis. 

Third, the record documents that S&L first visited the site in July 2011 to prepare 

a more detailed cost analysis to rebut our work. BEPC characterizes this new analysis as 

a conceptual design “scoping level” cost estimate, based on a “site walkdown to assess 

physical constraints that could limit tail-end SCR implementation and to complete plant 

design data collection.”8

 The resulting revised cost analysis adopted many of the 

modifications that we made to S&L’s 2009 study-level analysis, supporting our 

consultant’s work. These modifications included: 

• The price of natural gas was lowered from $8/MMBtu - $12/MMBtu to 

$4.25/MMBtu; 

• The SCR catalyst life was increased from 6 to 12 months to 16,000 hours; 

• The SO2 to SO3 conversion rate of the SCR catalyst was lowered from 1% to 

0.5%; 

• The catalyst changeout time was lowered; 

• The cost of auxiliary power was lowered from $50/MWh to $30.1/MWh; 

• A future worth factor was used to estimate catalyst changeout costs. 

Consultant’s Qualifications and Objectivity

BEPC asserts that Dr. Fox is “unqualified and biased” and that “Fox’s relevant 

experience consists almost exclusively of...testifying against industry defendants...”9

 

We note at the outset that the fact that a consultant has testified “against industry 

defendants” has no bearing on the consultant’s qualifications or the validity of her or his 

analysis. Presumably, BEPC’s consultants have frequently worked for industry 

defendants. In any event, we disagree with BEPC’s assertions. The exhibits BEPC cites 

are consistently misquoted, inaccurately cited, taken out of context, mischaracterized, or 

 

6

 BEPC Comments, Exhibit 32, p. 5-2. 

7

 Cost Control Manual, Section 1, pp. 2-3 to 2-4. 

8

 BEPC Comments, Exhibit 32, pp. 1-5, 5-2. 

9

 BEPC Comments, pp. 48-49. 
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are irrelevant. BEPC’s claims are refuted by Dr. Fox’s resume and further review of the 

exhibits presented. 

BEPC narrowly focuses only on the first section of Dr. Fox’s resume, “Expert 

Witness/Litigation Support,” which catalogues her litigation experience encompassing a 

period of over 30 years, ignoring the balance of her resume. Litigation is and has 

historically been a very small part of Dr. Fox’s practice. 

Further, BEPC mischaracterizes the litigation section itself. Dr. Fox’s resume 

shows numerous cases in defense of industrial and other clients as well as other types of 

work.10 Dr. Fox, in response to the question: “Have you worked on industry side or 

government side or both?” testified in federal court: “The majority of my work has been 

on industry side.”11 BEPC includes this testimony in one of its exhibits, relating to trial 

testimony in federal court on behalf of the United States, but BEPC ignores this 

testimony when it criticizes Dr. Fox’s qualifications. In fact, Dr. Fox has variously 

represented industry; local, state, and federal governments; unions; and nongovernmental 

organizations.12

Dr. Fox modified a regulatory cost analysis under contract to EPA that was 

prepared by another (unidentified) consultant(s) to conform it to standard practice and 

correct numerous errors. Regulatory cost effectiveness analysis is a specialty within the 

air quality control field. It involves the application of cost analysis methods to pollution 

control equipment within a regulatory context, including the determinations of BACT, 

BART, and maximum achievable emission rate (MACT). Practitioners in this field 

develop cost estimates from secondary information, including vendor quotes and standard 

costing algorithms published by EPA and others, following a methodology prescribed in 

EPA guidance.13 Dr. Fox is a recognized authority in this practice and has been qualified 

as an expert in cost analysis based on her experience and training in numerous cases, 

including in federal court.14 BEPC’s criticisms of Dr. Fox’s qualifications are misleading 

and incorrect as listed below: 

1. BEPC quotes a passage written by a State administrative law judge in 2008 that 

summarizes Dr. Fox’s qualifications in another, unrelated case (Longleaf): “Dr Fox 

 

10 Fox Resume, Docket EPA-R08-OAR-2010-0406-0027. See, e.g., Fox defense experience at pp. 3 (A. 

Singh v. A. Assaedi), 9 (oil companies defending against citizen’s suit), 9 (oil companies, defending 

against property damage claims from oil spill), 11 (gas station), 11 (foundry), 12 (home builder), 11 (major 

manufacturer), 11 (oil company), 13 (oil company), 14 (urea manufacturer), 15 (numerous commercial and

industrial facilities). 

11 BEPC Comments, Exhibit 25, p. 90, lines 14-16. 

12 Fox Resume, Docket EPA-R08-OAR-2010-0406-0027. 

13 See Response to Technical Comments for Sections E. through H. of the Federal Register Notice for the 

Oklahoma Regional Haze and Visibility Transport Federal Implementation Plan, EPA Region 6, December 

13, 2011, Docket No. EPA-R06-OAR-2010-0190, included in the docket for this action. 

14 See, e.g., BEPC Comments, Exhibit 25, Transcript of Trial Proceedings, U.S. v. Cinergy Corp., No. 99-

1693 (S.D. Ind. Feb. 12, 2009), pp. 86:23 – 91:16 (qualified as an expert in air pollution controls, including 

cost analysis), pp. 89-90 (“My typical work is performing BACT and LAER analyses for coal-fired power 

plants for various parties who have an interest in the project. In that work, I do comprehensive reviews of 

the technology that’s available working with vendors and reviewing the literature from around the world.”) 
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is not a regulator, a design engineer, or an expert in the design of pollution control 

devices...”15 These are not qualifications for a regulatory cost effectiveness analysis. 

In fact, cost effectiveness was not an issue in the Longleaf case. However, Dr. Fox 

was admitted as an expert in the Longleaf case on other issues, e.g., BACT limits, 

additional impact analyses, etc. 16 

BEPC did not include the complete Longleaf decision in its exhibits; instead, it only 

included those pages that supported the quote that it took out of context. In a portion 

of the decision that BEPC did not include, the judge, after reviewing the evidence, 

concluded that Dr. Fox was “thorough and credible.”17 

2. BEPC claims “Fox’s relevant experience consists almost exclusively of...assisting 

with closure of industry plants or sites.”18 Dr. Fox has never assisted with the closure 

of a plant, but rather has defended and otherwise represented owners of properties 

contaminated from historic uses at sites slated for redevelopment, as a result of 

closure by others.19 This is an important distinction. 

3. BEPC claims “Fox’s only experience with coal plants is as an expert witness against 

them in at least 20 different cases, typically representing the Sierra Club or other 

environmental organizations with an avowed mission to kill coal-fired power 

plants.”20 This is an incorrect characterization of only the “Expert Witness/Litigation 

Support” section of Dr. Fox’s resume. In this section, she lists 76 separate items. Of 

these, Dr. Fox testified in only four cases involving coal-fired power plants on behalf 

of the Sierra Club21 and an additional four coal-fired power plant cases on behalf of 

other environmental organizations, all in state administrative proceedings. 22 Dr. Fox 

also testified on behalf of the United States in three major Clean Air Act enforcement 

cases involving 29 coal-fired power plants.23 

Dr. Fox also has advised both a Colorado and Montana coal-fired utility on pollution 

control retrofits in anticipation of future rulemakings; conducted bench- and pilotstudies of the partitioning of major, minor and trace elements during coal combustion; 

investigated environmental impacts of both coal slurry transport and coal mining for 

the Department of Energy; and worked for several owners and operators of coal-fired 

power plants during her six years at Bechtel, among others. Her federal court trial 

 

15 BEPC Comments, p. 48, Exhibit 26, p. 7. 

16 Transcript of Administrative Hearing Proceedings, Friends of the Chattahoochee v. Couch, OSAH-BNRAQ-0732139-HOWELLS, September 5, 2007, p. 137, line 24. 

17Final Decision, Friends of the Chattahoochee v. Couch, OSAH-BNR-AQ-0732139-60-HOWELLS, 

Office of Administrative Hearings, January 11, 2008, p. 107. 

18 BEPC Comments, p. 49. 

19 Fox Resume, Docket EPA-R08-OAR-2010-0406-0027. 

20 BEPC Comments, p. 49. 

21 Fox Resume, Docket EPA-R08-OAR-2010-0406-0, pp. 4 (Longleaf), 5 (Iatan, Springfield), 8 

(Thoroughbred). 

22 Fox Resume, Docket EPA-R08-OAR-2010-0406-0, pp. 4 (Oak Creek), 6 (Weston 4, Michigan), 7 

(Weston 4). 

23 Fox Resume, Docket EPA-R08-OAR-2010-0406-0, pp. 3 (Cinergy: Gallagher), 3-4 (Cinergy: Wabash), 

5 (AEP). 
6

testimony, as reflected in BEPC’s Exhibit 25, states; “I worked there [Bechtel] from 

roughly 1971 to 1976 as an engineer, and there I [had] experience with and 

responsibility for design and analysis of coal-fired and other types of power plants 

and refineries, as well as cost estimating.”24

BEPC also alleges “Fox has frequently been hired by environmental advocacy groups 

to testify in cases challenging industry compliance with air quality standards.”25

 

However, Dr. Fox’s resume reveals she also has frequently defended the other side 

against citizen suits and government enforcement actions.26

 

4. BEPC links Dr. Fox’s testimony on behalf of the Sierra Club (only 4 cases compared 

to the claimed 20) to material it found on the Sierra Club’s homepage on its “Beyond 

Coal” campaign.27 This comment conflates the goals of some of Dr. Fox’s clients 

with Dr. Fox’s testimony. This material makes no mention of Dr. Fox. Further, Dr. 

Fox’s opinions are rendered based on the facts of each individual case, not the 

policies and advocacy of her clients. 

5. BEPC alleges that Dr. Fox “testified for the Sierra Club that SCR should be applied to 

a proposed Texas coal-fired power plant.”28 Dr. Fox has never testified on any coalfired power plant in Texas on behalf of any party. The subject case cited in this claim 

apparently involved petroleum-coke fired circulating fluidized bed boilers. 

Regardless, this would only be further evidence of experience with SCR. 

6. BEPC alleges that Dr. Fox “testified for the Sierra Club in a challenge to the NOx

emission limits for a proposed coal-fired power plant in Illinois,”29 citing to a 2006 

Environmental Appeals Board order in the Prairie State case. However, there was no 

testimony involved in that case. The cited case opinion notes that Dr. Fox prepared 

comments on behalf of the Sierra Club in June 2004. This, again, is evidence of 

experience with SCR. 

7. BEPC alleges that “As recently as October 2009, Fox was retained by Alaskans for 

Energy Freedom, d/b/a Alaska Coal, a group whose motto is “North to the Future 

Beyond Coal,” to provide technical advice about the Healy Coal Plant Unit 2..,” 

citing Exhibits 20 and 21.30 This, again, is misinformation that conflates the goals of 

an environmental group with Dr. Fox’s opinions. Further, the cited exhibit 

erroneously claims that Dr. Fox was a technical expert for “Alaska Environmental 

 

24 BEPC Comments, Exhibit 25, p. 87, lines 9-13. 

25 BEPC Comments, p. 49. 

26 Fox Resume, Docket EPA-R08-OAR-2010-0406-0. See, e.g., pp. 3 (Singh v. Assaedi), 9 (gas plant, 

marine terminal), 11 (gas station, foundry, commercial business), 12 (home builder, property owners, oil 

company), 13 (oil company), 14 (commercial businesses, urea manufacturer), 15 (numerous industrial 

facilities). 

27 BEPC Comments, p. 49, Exhibits 22 and 23. 

28 BEPC Comments, p. 49. 

29 BEPC Comments, p. 49. 

30 BEPC Comments, p. 49. 
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Center” and would conduct a review of HCP#2 in October 2009. Dr. Fox has never 

heard of, been retained by, or represented any of these groups. 

8. BEPC claims “Fox’s lack of experience with air pollution control systems has led to 

mistakes in opinions in other cases.” Two examples are cited.31 Neither is evidence 

of error, but rather of BEPC mischaracterization. 

In the first example, BEPC alleges four errors in a BART cost evaluation for 

scrubbers, based on comments made by the utility opposing BART controls. 

Oklahoma Gas & Electric (OG&E) opposed the installation of scrubbers and retained 

S&L, the same consultant representing BEPC in this case, to oppose their installation 

based on cost effectiveness grounds.32 Adverse comments by a utility seeking to 

avoid installing a scrubber are not evidence of error. 

Dr. Fox prepared an independent cost analysis and concluded, consistent with S&L’s 

own advice to other clients, that scrubbers were cost effective. This is analogous to 

the current situation, in which BEPC was seeking to avoid installation of SCR and 

retained S&L to argue that SCR was not cost effective. EPA disagreed with the cited 

OG&E comments as to alleged errors and fully rebutted them in responses to 

comments on the Oklahoma FIP.33

In the second example, BEPC alleges two errors in testimony in an unidentified 

district court trial on the application of SCR to a coal-fired power plant, citing Exhibit 

27. However, the cited exhibit is the same as the first example, the OG&E comments 

based on an S&L report, and the cited pages were not produced. Further, the cited 

case has nothing to do with the application of SCR to a coal-fired power plant. Dr. 

Fox is not aware of her testimony in district court for any party on coal-fired power 

plants being characterized as erroneous. 

9. BEPC claims that “In contrast to an expert with real world experience with pollution 

control systems, Fox’s relevant experience consists almost exclusively of 

investigation and analysis of secondary information...” We disagree that such design 

experience is required to prepare regulatory cost analyses as they are based on studylevel costs, accurate to only +/-30%. The costs are typically obtained from vendor 

quotes or calculated using standard guidance documents, such as the EPA Control 

Cost Manual. Further, our experience is that design engineers may not always 

understand the requirements of regulatory cost analyses and sometimes misapply 

EPA guidance. 

 

31 BEPC Comments, p. 49, Exhibit 27. 

32 Sargent & Lundy, Sooner Units 1 & 2, Muskogee Units 4 & 5 Dry FGD BART Analysis Follow-Up 

Report, December 28, 2009, Report Prepared for Oklahoma Gas & Electric, Docket EPA-R06-OAR-2010-

0190-0014. 

33 See Response to Technical Comments for Sections E. through H. of the Federal Register Notice for the 

Oklahoma Regional Haze and Visibility Transport Federal Implementation Plan, EPA Region 6, December 

13, 2011, Docket No. EPA-R06-OAR-2010-0190. 
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Further, as explained below, even though “real world experience with pollution 

control systems” is not a prerequisite for regulatory cost analysis, Dr. Fox does have 

real-world design experience. Dr. Fox worked for six years as an engineer in 

Bechtel’s Power Division at a time when the existing fleet of coal fired power plants 

was being built and was frequently a member of design teams.34 She has also 

designed SCR and catalytic oxidation systems for standby generators, gas turbines 

and server farms, which provide backup power for the internet.35 Dr. Fox has been 

involved in the application of SCR to power generation facilities and other sources 

since the early 1980s, including participation in the initial introduction of SCR into 

the United States, based on Japanese experience. 

Dr. Fox is a licensed professional engineer in five states. She is also a Board 

Certified Environmental Engineer, certified in Air Pollution Control, by the American 

Academy of Environmental Engineers.36 In contrast, there is no evidence in the 

record that any of the parties who prepared BEPC’s various cost analyses has a 

comparable certification or has comparable qualifications to prepare a regulatory cost 

effectiveness analysis. In fact, the record contains no resumes for any of BEPC’s cost 

and emission estimating consultants. 

It is standard practice to rely on secondary information to prepare cost effectiveness 

analyses, including cost data and costing algorithms published in EPA documents, 

journal articles, reports, and information provided by vendors.37 The most common 

sources of cost information used in these analyses are the EPA Control Cost Manual, 

other published EPA reports, and vendor quotes from firms that design the 

equipment. 

The revised S&L cost analysis in Exhibit 32 to BEPC’s comments is not based on 

primary equipment design, but rather also relies on secondary information that S&L 

obtained from other vendors’ designs for similar facilities, adjusted for LOS 2’s 

dimensions.38 Reliance on secondary information is part of the practice of regulatory 

cost analysis, and S&L used it to prepare its own cost analyses. 

 

34 BEPC Comments, Exhibit 25, U.S. v. Cinergy Corp., No. 99-1693 (S.D. Ind. Feb. 12, 2009), p. 87, lines

9-12 (Discussing experience at Bechtel: “I worked there from roughly 1971 to 1976 as an engineer, and 

there I [had] experience with and responsibility for design and analysis of coal-fired and other types of 

power plants and refineries, as well as cost estimating.”). 

35 BEPC Comments, Exhibit 25, p. 89, Lines 6-10 (Q: Have you ever designed any air pollution controls 

yourself? A: Yes, I have. Q: Can you describe that? A: I have designed a number of SCRs for server 

farms.”). 

36 Fox Resume, Docket EPA-R08-OAR-2010-0406-0027, p. 1. 

37 See Control Cost Manual, Section 1, Chapter 2, Cost Estimation: Concepts and Methodology and NSR 

Manual, Chapter B, Sec. IV.D.2.a and Appendix B. 

38 BEPC Comments, Exhibit 32, p. 5-3 (“Purchased equipment costs for the major pieces of equipment 

(e.g., SC reaction vessel, fans, anhydrous ammonia storage and feed system, GGH, etc) were based on price 

quotes provided by equipment vendors for recent similarly sized SCR projects.”). 
9

Conclusion

 The primary disagreement in this situation stems from our consultant’s use of the 

EPA Control Cost Manual in contrast to financial practices used by the utility industry. 

As stated in our final rule for this action, the Control Cost Manual contains two types of 

information: (1) a generic costing methodology, known as the overnight method and (2) 

study level capital cost estimates for certain general types of pollution control equipment, 

such as SCR. The overnight method has been used for decades for regulatory control 

technology cost analyses.39 We maintain that following the overnight method ensures 

equitable BART determinations across states and across sources. Our consultant 

followed the Control Cost Manual and is well-qualified with regulatory cost analysis 

methodology. While BEPC asserts that the methodology used by S&L is the “gold 

standard” for estimating pollution control costs, S&L’s method is not better than the 

Control Cost Manual method; it is simply different. 

 We continue to stand by the analysis used in our proposal and the credentials of 

our consultant, Dr. Phyllis Fox. We are troubled by the nature of many of BEPC’s 

comments and have provided this memorandum to clarify the record. 

 

 

39 See, for example, the NSR Manual, Appendix B, which lays out the overnight method currently required 

in the Control Cost Manual.