Executive Summary excerpt 

from: An Affordability Analysis of 

The Amalgamated Sugar Company LLC's 


Affordabi I ity Clai m with respect to the 


Best Available Retrofit Technology (BART) 


for the Riley Boiler at the Nampa, Idaho faci lity 


February 12, 2010 

prepared by: 

Elliot Rosenberg 

Senior Economist 

U.S. EPA - Region 10 

assisted by: 

Lloyd Oatis 

(SEE) Financial Analyst 

U.S. EPA - Region 10 

Steve Body 

Senior Planning Engineer 

U.S. EPA - Region 10 
EXECUTIVE SUMMARY 

NOTE: THIS SUMMARY IS WRITTEN FOR PUBLIC VIEWING AND DOES NOT 

INCLUDE CONFIDENTIAL BUSINESS INFORMATION (CBI). THE FULL REPORT 

DOES CONTAIN CBI AND IS SUBJECT TO DISCLOSURE REQUIREMENTS AT 

40 CFR PART 2. 

As a result of the Riley Boiler at The Amalgamated Sugar Company LLC (TASCO) 

Nampa, Idaho facility being identified as a Best Available Retrofit Technology (BART) 

source by the Idaho Department of Environmental Quality (DEQ), and DEQ's visibility 

impact modeling which indicated the Riley Boiler exceeded the BART exemption of 0.5 

deciview (dv) at anyone Federal Class I area, TASCO conducted a site specific BART 

Determination Analysis for the Riley Boiler (TASCO 2009b), according to EPA 

Guidelines (EPA Appendix Y). 

The BART determination derived from this Determination Analysis has an estimated 

capital cost of $17.8 million, and estimated annual operation and maintenance (O&M) 

costs of $3.4 million. TASCO and the State of Idaho have agreed on the BART control 

technology and specified emission limitations, and they concur on the BART related 

costs. This BART determination consists of a bag house for particulate matter (which is 

already in place and operating), a low NOx burner with overfire, and dry gas 

desulfurization for S02. In accordance with Federal BART requirements, the BART 

controls must be installed and operating by approximately April 30, 2016. 

In TASCO's cover letter to its BART Determination Analysis, the company mentions 

that the above cited BART related costs would affect the "ongoing economic viability of 

the Nampa facility and TASCO as a whole", and that "affordability is a critical element 

of the BART determination" (TASCO 2009a). In support of its claims of 'ongoing 

economic viability' and 'affordability', the company provided reasons and information in 

the BART Determination Analysis. Subsequently, TASCO provided additional reasons 

and substantial additional information supporting its claim directly to DEQ and EPA. 

In determining BART, the EPA Guidelines indicate the State may take into consideration 

the economic effects of requiring the use of a particular technology. In the selection 

process the State may also consider any of the economic effects that are determined to 

have a severe impact on the plant's or the company's operations. DEQ decided to 

consider T ASCO' s affordability claim, but does not have the technical capability to 

conduct a thorough 'affordability analysis.' The EPA does have this analytical capability, 

and conducted this affordability analysis. A copy was provided to DEQ. 

The purpose of the afford ability analysis was to determine the validity of TASCO's 

affordability claim, i.e., that the company cannot fund the control technology identified in 

the BART determination. The analysis took into consideration: 

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- The estimated capital and O&M costs of the BART determination; 

- compliance with BART emission limits required no later than approximately 

April 30, 2016; 

- TASCO's continuing viability, i.e., the company's ability to continue as a going 

concern; 

- The reasons provided by TASCO·to support its affordability claim; 

- The information provided by T ASCO and obtained from other sources; 

- BART related costs are considered to be a cost of doing business, and are not an 

investment with an expected financial return; 

- The TASCO/Snake River Sugar Company (SRSC) owner/operator, management 

and financial relationships; 

- TASCO's financial related commitments; and that 

- BART related regulatory events [i.e., DEQ issuing a permit, followed by EPA 

approval of Idaho's Regional Haze State Implementation Plan (SIP), or in lieu 

of a SIP the issuance of a Federal Implementation Plan (FIP) by EPA] will 

occur subsequent to the completion of the BART Determination Analysis. 

Throughout this BART determination process, it appears that without the issuance of a 

permit and/or an approved SIP, TASCO's approach to the BART costs has been that the 

company has no financial or legal obligation to actually address these costs, and that all 

available funds are already committed for contractual reasons or as part of internal 

business decisions. A consequence of this approach has been that since about mid-2007, 

when TASCO was first made aware of the forthcoming BART obligation, the company 

has made no attempt to actively fund the prospective BART costs. It appears that TASCO 

does not intend to address the prospect of actually funding the BART costs until a permit 

is issued, and even then BART funding could depend on certain subsequent events. At 

the time of issuing a permit there will then exist a legal (regulatory) requirement that has 

to be met by T ASCO and would require the company to make a financial related 

response. TASCO had to be aware that a decision not to proactively address BART costs 

prior to the issuance of a permit could make funding the BART related costs difficult. 

A review of the company's past and current financial condition through September 30, 

2009, which was supported by additional relevant information, indicates that overall the 

company is in relatively sound financial health. Its annual revenues have remained 

relatively consistent, the company has been able to meet all of its financial obligations 

including significant contractually obligated annual cash distributions to its owners, and 

has maintained regular repayments of its loans. 

Taking into consideration TASCO's recent and current operating and financial condition, 

including annual cash distributions; its known current and future financial obligations and 

restrictions; how the company has decided to address funding the BART costs until now; 

the company's most recent audit related issues; the TASCO-SRSC relationship issues; 

the stipulated time period - defined by when the company becomes obligated to comply 

with the forthcoming issuance of a permit by DEQ, estimated to be no later than 

approximately June 2010, and ends with the BART emissions limit compliance date of 

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approximately April 30, 2016 - it appears TASCO can afford to fund BART capital and 

annual O&M costs at a level of approximately $3.8 million dollars per year - an amount 

sufficient to cover the estimated BART capital costs by April 30, 2016, and subsequent 

annual O&M costs. The conclusion is that TASCO can afford to fund the BART. 

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