# Executive Summary excerpt from: An Affordability Analysis of The Amalgamated Sugar Company LLC's AffordabiIity Claim with respect to the Best Available Retrofit Technology (BART) for the Riley Boiler at the Nampa, Idaho facility February 12, 2010

preparedby: Elliot Rosenberg Senior Economist U.S. EPA
- Region 10


### assistedby: Lloyd Oatis (SEE) Financial Analyst U.S. EPA
- Region 10 Steve Body Senior Planning Engineer U.S. EPA
- Region 10EXECUTIVE SUMMARY

NOTE: THIS SUMMARY IS WRITTENFOR PUBLIC VIEWINGAND DOES NOT INCLUDE CONFIDENTIAL BUSINESS INFORMATION 

### (CBI). THE FULL REPORT DOES CONTAIN 

### CBI AND IS SUBJECT TODISCLOSURE REQUIREMENTS AT 

### 40 CFRPART

### 2.

As a result ofthe Riley Boiler at The Amalgamated Sugar Company LLC (TASCO) Nampa, Idaho facility being identified as a Best Available Retrofit Technology (BART) source bythe Idaho Department ofEnvironmental Quality (DEQ), and DEQ's visibility impact modeling which indicated the Riley Boilerexceeded the BARTexemption of0.5 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 ofIdaho have agreed on the BARTcontrol technology and specified emission limitations, and they concur on the BARTrelated costs. This BART determination consists ofa 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 BARTrequirements, the BART controls must be installed and operating byapproximately April 30, 2016. In TASCO's cover letter to its BARTDetermination Analysis, the company mentions that the above cited BARTrelated costs would affect the "ongoing economic viability of the Nampa facility and TASCO as a whole", and that "affordability is a critical element ofthe BART determination" (TASCO 2009a). In 

### support ofits claims of 'ongoing economic viability' and 'affordability', the companyprovided reasons and information in the BART Determination Analysis. Subsequently, TASCOprovided additional reasons and substantial additional information supporting its claim directly to DEQ and EPA. In

### determining BART, the EPA Guidelines indicate the State maytake into consideration the economic effects ofrequiring the use ofa particular technology. In

### the selection process the State may also consider any ofthe economic effects that are determined to have a severe impact on the plant's or the company's operations. DEQ decided to consider TASCO's affordability claim, but does not have the technical capability to conduct a thorough 'affordability analysis.' The EPAdoes have this analytical capability, and conducted this affordability analysis. A copy was provided to DEQ. Thepurpose ofthe affordability analysis was to determine the validity ofTASCO's affordability claim, i.e., that the company cannot fund the control technology identified in the BARTdetermination. The analysis took into consideration:

1- The estimated capital and O&M costs ofthe BART determination;

- compliance with BARTemission 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 providedbyTASCO and obtained from other sources;

- BARTrelated costs are considered to be a cost ofdoing business, and are not an

investment with an expected financial return;

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

and financial relationships;

- TASCO's financial related commitments; and that

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

approval ofIdaho's Regional Haze State Implementation Plan (SIP), or in lieu ofa SIP the issuance ofa Federal Implementation Plan (FIP) byEPA] will occur subsequent to the completion ofthe BART Determination Analysis. Throughout this BART determination process, it appears that without the issuance ofa permit and/or an approved SIP, TASCO's approach to the BART costs has been that the companyhas no financial orlegal obligation to actually address these costs, and that all available funds are already committed for contractual reasons or as part ofinternal business decisions. A consequence ofthis approach has been that since about mid-2007, when TASCO was first made aware ofthe forthcoming BART obligation, the company has made no attempt to actively fund the prospective BARTcosts. It appears that TASCO does not intend to address the prospect of actually funding the BARTcosts until a permit is issued, and even then BARTfunding could depend on certain subsequent events. At the time ofissuing a permitthere will then exist a legal (regulatory) requirement that has to be metbyTASCO and would require the company to make a financial related response. TASCO had to be aware that a decision not to proactively address BARTcosts prior to the issuance ofa permit couldmake funding the BARTrelated costs difficult. A review ofthe 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 ofits financial obligations including significant contractually obligated annual cash distributions to its owners, and has maintained regular repayments ofits 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 BARTcosts until now; the company's most recent audit related issues; the TASCO-SRSC relationship issues; the stipulated time period

- defined by when the companybecomes obligated to comply with the forthcoming issuance ofa permitby DEQ, estimated to be no later than approximately June 2010, and ends with the BARTemissions limit compliance date of

2approximately April 30, 2016

- it appears TASCO can afford to fund BARTcapital and annual O&M costs at a level ofapproximately $3.8 million dollars peryear - an amount sufficient to coverthe estimatedBARTcapital costs byApril 30, 2016, and subsequent annual O&M costs. The conclusion is that TASCO can afford to fund the BART.

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