# April 28, 2011

MEMORANDUM

From: William H. Maxwell

EPA/SPPD/ESG (D243-01)

To: Docket Number EPA-HQ-OAR-2009-0234

Subject: Meeting with Class of ’85 Regulatory Response Group

Attendees :

EPA:

Kevin Culligan, OAQPS/SPPD/IO

Robert J. Wayland, OAQPS/SPPD/ESG

William H. Maxwell, OAQPS/SPPD/ESG

Class of 85:

See attached.

Discussion :

The attached presentation was discussed.

# CLASS OF ’85 MEETING - April 28, 2011

List of Attendees

Name Company

Archer, Greg Great River Energy

Archer, Mary FPL Energy

Barlow, Chuck Entergy

Berge, Megan Baker Botts

Blair, Garfield Orlando Utilities Commission

Bumpers, Bill Baker Botts

Burrows, Byron Tampa Electric Company

Butcher, Gerald Western Farmers Elec. Coop.

Cain, Stephen Arkansas Elec. Coop. Corp.

Clemmer, Reid PPL Corporation



# Collins, Kevin Baker Botts

Cunningham, Daniel PSEG

Depaoli, Al AES



# Diamond, Matt PowerSouth Energy Coop.

Glass, Nancy Xcel Energy

Jezouit, Debra Baker Botts

Keys, Renee Entergy

Kimura, Karin Hawaiian Electric Company



# Miller, Mark AES

Oliger, Angelique AES



# Oppenheimer, Steve Hawaiian Electric Company

Reimann, Jon AES

Sills, Hillary Sills Associates

Stephens, Keith PowerSouth Energy Coop.

Waltman, Chris Integrys

Ward, Stephen Hawaiian Electric Company

Waxman, Cathy Keyspan



# Wong, Kerstan Hawaiian Electric CompanyReducingToxicPollutionfromPowerPlants’fEPAsProposedNationalEmissionsStandardsorHazardousAirPollutantsforCoal‐andOil‐FiredUtilitiesClassof85RegulatoryResponseGroupApril28,2011OverviewoftheRegulatoryAction•OnMarch16,theAdministratorsignedtheproposedNationalEmissionsStandardsforHazardousAirPollutantsforCoal‐andOil‐FiredUtilities,thefirstnationalstandardstoreducei it iill t tfdi tildfi dl tftemssonsofoxcarpouansromnewanexsngcoa‐anoil‐repowerpans–oenthebiggestcontributorstoairpollution•Standardswouldreduceemissionsof:Metalsincludingmercury(Hg)arsenic(As)chromium–,includingmercury,arsenic,chromium(Cr),andnickel(Ni)– Acidgases,includinghydrogenchloride(HCl)andhydrogenfluoride(HF)– Particulatematter•ThestandardswouldalsoresultinadditionalreductionsofSO2emissionswhichbyreducingstandardsadditionalreductions2emissions,which,byreducingambientSO2andparticlelevels,willpreventthousandsofdeathsandhundredsofthousandsofillnesseseachyear•Standardscreateuniformemissions‐controlrequirementsbasedonprovencurrentlyin‐use,technologiesandprocesses•CompliancetimelinesetbyCleanAirAct:upto4years(3yearsplusanadditionalyearifgrantedbythepermittingauthority)•EPAisalsoproposinganewsourceperformancestandard(NSPS)forparticulatematter,sulfurdioxide(SO2),andnitrogenoxide(NOX)emissionsfromnewsources2ToxicEmissionsfromPowerPlantsAreaSeriousPublicConcernHealthConcern•Powerplantsreleasemercury,arsenic,othermetals,acidgases,andparticlesthatallharmpeople’healths.– Uncontrolledreleasesofmercuryandmanyoftheothertoxicpollutantspoisonournation’slakes,streams,andfish– Whenpregnantwomeneatmercurycontaminatedfish,damagecanoccurtochildren’sdevelopingbrains,reducingtheirIQandabilitytolearn– Othermetalssuchasarsenic,chromium,andnickelcancausecancer– Acidgasescauselungdamageandcontributetoasthma,bronchitisandotherchronicrespiratorydisease,i lllespecayinchildrenandtheeldery– Particlescauseprematuredeathandawiderangeoflungandheartdiseases•Peoplewhoeatlargeamountsoffishfrommercury‐contaminatedfreshwaterlakesandriversintheU Sareatthegreatestriskofexposure..greatestexposure– ThisincludesNativeAmerican,Laotian,Vietnamese,African‐American,Hispanic,andCaucasiansubsistencefishersandtheirfamilies•ThestandardswouldalsoresultinadditionalreductionsofSO2,reventingthousandsofdeathsp gandhundredsofthousandsofillnesseseachyear3PowerSector:AMajorShareofU.S.AirEmissionsNitrogenOxides(NOx),200915.3MillionTons2.0MillionTons2 6BillionTonsSulfurDioxide(SO2),20099.5MillionTonsCarbonDioxide(CO2),20086.5BillionTonsjOtherSectorsOtherSectors13.3MillionTons87%13%ElectricPower2.6BillionTons40%3.8MillionTons40%ElectricPowerOtherSectorsElectricOtheremissionsinclude:Tracemetals(nickelarsenicParticulateMatter (PM10),2008Mercury(Hg),2005105TElectric5.7MillionTons60%3.9BillionTons60%PowerTracemetals(nickel,arsenic,seleniumandothers)HCl,HFDioxin/furansTraceorganicsOthers(e.g.,cyanide)14.8MillionTons105TonsElectricPowerElectricElectricPower53Tons50%0.5MillionTons4%RadionuclidesEmissionshavesubstantialpublichealth,environment,andotherwelfareimplications.PowerOtherSectors14.3MillionTons96%OtherSectors52Tons50%Sources:NEITrendsData(2009)andCAMDData&Maps(2010)(SO2,NOX)NEITrendsData(2009)(PM10)2005NATAInventoryModifiedfortheUtilityMACT2005BaseYear(2010)(Hg)InventoryofU.S.GreenhouseGasEmissionsandSinks:1990‐2008(2010)(CO2)“Other”sourcesincludetransportation,othermobilesources,andindustrialsources4IntheU.S.,PowerPlantsEmit:20%ofthechromium13%oftheNOx30%ofthenickel60%oftheSO250%ofthemercuryover50%ofmanyacidgases60%ofthearsenicorganics,dioxins/furans,andothersSources:NEITrendsData(2009)andIPM(2010)(SO2,NOX);P dild lil froposedtoxcsruemoengpatorm,basedoninventoryusedfor2005NATA(Hg);Inventoryusedfor2005NATA(othertoxics)5HistoryofCleanAirActPowerPlantControlsforAirToxics•1990CleanAirActAmendmentscreatedAcidRainprovisionsandrevisedprovisionstorequirecontrolstoreduceemissionsoftoxicairpollutantsfromindustrialsources•EPAwasrequiredtodoastudywithin3yearsandthenlistpowerplantsforregulationundertheairtoxicsrequired,regulationprovisionsiftheAdministratorfoundthatitwasappropriateandnecessary•1998:EPAreleasedUtilityToxicsStudyReporttoCongress•2000:EPAlistedpowerplantsforregulationundertheCleanAirActairtoxicsprovisions•Oncelisted,EPAhad2yearstoissueanairtoxicsstandard•Mercurycitedaspollutantofgreatestconcernbutothertoxicsincludearsenic,chromium,cadmium,nickel,hydrochloricacid,dioxin/furan•2005:EPAreversedfindingSection112(n)RevisionRulede‐listedpowerplantsreversed2000findinginSectionRevision,fromregulationunderairtoxicsprovisions,andfinalizedCleanAirMercuryRule(CAMR)– allowingtrading•2008:DCCircuitfoundthede‐listingtobeillegalandvacatedtheSection112(n)RevisionRuledCAMRan•2010:EPAentersaConsentDecreerequiringtheAgencytosignproposedsection112(d)standardsforutilitiesbyMarch16,2011,andsignfinalstandardsbyNovember16,2011.•Compliancebyexistingsourceswillberequired3‐4yearsafterthefinalstandardsarepublishedinlate6pygqyp2011orearly2012•Aquarterofacenturywillhavepassedsincethe1990CleanAirActbecamelawPowerPlantsAretheLargestRemainingSourceofMercuryEmissionsSMercuryEmissionsintheU.S.•In1990threeindustrycategoriesmade1990 2005 %gapproximatelytwo‐thirdsoftotalU.S.mercuryemissions–TwoofthethreearenowbjiiIndustrialCategoryEmissionstons peryear (tpy)Emissions(tpy)Reductionsubjecttoairtoxicsstandards–SoaremanyotherindustriessuchascementplantsandsteelPowerPlants59 53 10%MunicipalW t57296%pmanufacturers•Today,20yearsafterthe1990CAAAmendmentsdFd lli ifWasteCombustors57296%MedicalWaste 51 <1 >98%passed,noFederallimitfortoxicemissions– includingmercury– existsforcoal‐oroil‐firedpowerplantsIncinerators%Source: EPA’s 2005 NATA Inventory Modified for the Toxics Rule 2005 BaseYear (2010)7AffectedFacilities:1,350CoalandOil‐FiredatPowerPlantsUnits525•Approximately1,200coal‐firedunits– 45%percentofnationwideelectricitygeneration•Bituminouscoal~50%ofcoalgeneration•Subbituminous~45%ofcoalgeneration•Lignite~5%ofcoalgeneration– Includesunitsthatburncoal,coalrefuse,asyntheticgasderivedfromcoal,orsolidoil‐derivedfuel(e.g.,petroleumcoke)eitherexclusively,inanycombinationtogether,orinanycombinationwithothersupplementalfuelsthatarenotsolidwastes•Approximately150oil‐firedunits– 1%ofnationwideelectricitygeneration•Naturalgaspowerplantsarenotaffectedbythisrulef lldl•EPAexpectsmostaciitieswouinstalltechnoogiestocomplywiththisrule8LocationofCoal‐andOil‐FiredPowerPlantsSource:National Electric Energy Data System (NEEDS 4.10) (EPA, December 2010)9WhattheToxicsRuleProposes•Coal‐andoil‐firedpowerplantsarecoveredbythisrule•Allhazardousairpollutantsmusthavestandards•EPAmustsetemissionstandardsforexistingsourcesinthecategorythatareatleastasstringentastheemissionreductionsachievedbytheaverageofthetop12%bestcontrolledsourcesforsourcecategorieswith30ormoresources•Emissionsaveragingwithinacontiguousfacilityisallowedincertaincircumstances•MonitoringRequirements–State‐of‐the‐artemissionsquantificationthatprovideshighqualitydata•HgCEMSorsorbenttrapsformercury•HClCEMSorSO2CEMSforacidgases2•PMCEMSformetals•30‐dayaveragingperiodformonitoringaccommodatesprocessvariabilityand,coupledwithCEMS,facilitatescompliance•Recordsofworkpracticestandards(annualtuneups)areproposedfororganicHAPemissions10WhattheToxicsRuleProposes(cont.)•RequirementsforCoal‐firedUnits–Mercury:numericemissionlimitwouldprevent91%ofmercuryincoalfrombeingreleasedtotheair–AcidGases:HClnumericemissionlimitasasurrogate,withanalternatesurrogateofSO2–Non‐mercurymetallicpollutants(e.g.,arsenic,chromium):numericemissionlimitfortotalPMasasurrogate,withanalternatesurrogateoftotalmetalairtoxics–Organicairtoxics(includingdioxin/furans):workpracticestandards,insteadofnumericemissionlimits,duetolow‐detectedemissionlevelsintheICRdata.Wouldensureoptimalcombustionpreventingdioxin/furanemissions•RequirementsforOil‐firedUnits–AcidGases:HClandHFnumericalemissionlimitsMetalAirToxics:numericalemissionlimits(includingmercury)–Toxics:numericalemissionfortotalmetalairtoxics(includingmercury)withindividualmetalairtoxicnumericallimitsasanalternate–Organicairtoxics(includingdioxin/furans):workpracticestandards,insteadofnumericemissionlimitsduetolow‐detectedemissioninWouldensureemission,detectedemissionlevelstheICRdata.optimalcombustionpreventingdioxin/furanemissions11EmissionsfromCoveredSources5 87SO2Emissions52.960HgEmissions5.83.83.73.51.71.71.723456

M illion Tons52.929.129.429.620304050

TonsThbi ldhTR ld1.71.70122009 2015 2020 2030

M6.46.56.6010202005 2015 2020 2030►ThebasecaseincludestheTransportRuleasproposedandallotherexistingFederalcontrolsandFederallyenforceableagreements►EmissiontotalspresentedherereflectallcoveredcoalsteamandIGCCelectricgeneratingunits>25MW351.6250300350400

o nsHClEmissionssteamandIGCCelectricgeneratingunits>25MW►ThepolicycaseimposesmercuryandHClemissionratelimitationsontheseunits,andrequiresfabricfiltersonasubsetofthoseunits►Themercurycontentofthecoalconsumedinthebase74.470.864.86.66.97.2050100150200250

Thousand T oNote:HistoricHClemissionsbasedonsingleemissionfactor;projectedemissionsbasedonfuel‐specificClassumptionsandremovalefficiencies.ycasebyEGUs>25MWis75tonsin2015;emissionsfromthoseunitsundertheToxicsRulerepresentmorethana90%reductioninthatmercury1202005 2015 2020 2030SourcesCanAchieveTheseStandards•Provencontroltechnologiestoreducetheseemissionssuchasscrubbers,fabricfilters,andactivatedcarboninjectionarewidelyavailable•Manyunitsalreadyuseoneormoreofthesetechnologies•Asaresultofthisstandard,somepowerplantswillupgradeexistingcontrols(especiallyparticulatemattercontrolslikeelectrostaticprecipitators)•Powerplantsinstallcontrolsasfiltersdrysorbentinjectionmayalsoinstallnewcontrols(suchfabricfilters,sorbentinjection,oractivatedcarboninjection)300350BaseP dT iR lRetrofitpollutioncontrolinstallationsoncoal‐firedcapacity(bytechnology)withthebasecaseandwiththeproposedToxicsRule,2015(measured174141175146146243100150200250

5 Capacity (GW)ProposedToxicsRuleinGWcapacity). Source:IntegratedPlanningModelrunbyEPA,2011FGD:fluegasdesulfurization(scrubber)DSI:drysorbentinjection29953775465050100WetFGD DryFGD DSI SCR ACI FF

201 5SCR:selectivecatalyticreductionACI:activatedcarboninjectionFF:fabricfilterFGD – 96% SO2removal; 99% HCl removal DSI – 70% SO2removal; 90% HCl removalSCR – 80% NOx removal ACI – 90% Hg removalFF – PM control13CostandRetirementProjections►PrivatecompliancecoststoutilitiesaredistinctfromtheoverallsocialcostofthepolicyThe$15IncrementalComplianceCostforthePowerSectorfromtheoverallsocialcostofthepolicy.ThecompliancecostsdepictedareincreasedcostsofoperatingtheelectricgenerationsystemthroughouttheU.S.$10.9$10.1$10.0$5$10$15

B illions $2007►Incrementalretiredcoalcapacityin2015isabout10GW.Also,itisimportanttorecognize:$02015 2020 2030

B►EPAidentifiedabout11GWoffirmretirementsannouncedfor2010‐2015thatwereremovedfrommodeling►EPAmodelingsuggestsforecastednaturalgaspricesalonecloseabout4GWofcoalfired9.871015

W )IncrementalRetiredCapacityin20152015Capacity(beforeretirements)pricesalonecloseabout4GWofcoal‐firedcapacityin2015inthebasecase,andTransportRulemaycloseanadditional1GW►ToxicsRuleandTransportRule(asproposed)togetherclose11GWofcoalin2015‐0.18‐0.46‐0.7705

Capacity (G WTotal:1,028GWCoalSteam&IGCC:314GWg►ClosuresaredistributedthroughouttheU.S.14‐5CoalSteamCCCTNuclearAverageConsumerElectricityPriceProjections150

hAverageNationalRetailElectricityPriceBaseProposedToxicsRule1401602015RetailElectricityPriceBaseProposedToxicsRule9089102939210450100

0 7

‐ year mills/kW h406080100120140

2007 mills/KWhNationalaverageincreaseof3.7%in2015that02015 2020 2030

20 0020declinesovertime100120140160

K Wh2020RetailElectricityPriceBaseProposedToxicsRule020406080100

2007 mills/ K15GenerationandCapacityProjections10IncrementalNewCapacityNaturalGasCCWindBiomass0.290.290 250 250.29 0.290.330.3345GenerationMixOtherOil7.400.68468

C apacity (GW)NaturalGasCCWindBiomass2.001.962.021.982.062.010.830.830.830.840.810.820.690.730.830.871.161.210.290.290.29 0.290.250.251234

Million GWhNon‐HydroRenewablesHydroNaturalGasN l2.77022015 2020 2030

C1.961.9801Base ToxR Base ToxR Base ToxRNuclearCoal2015 2020 2030Marginal amounts of incremental wind (20 MW by 2015) andbiomass (80 MW by 2020) capacity are unlabeled in this graph►Coal‐firedgenerationisslightlyreducedasaresultoftheproposedrule►Increaseindemandismetlargelywithadditionalnaturalgas‐firedgenerationbiomass(80MWby2020)capacityareunlabeledinthisgraph.►IPMresultssuggestthatthesectorwillbeabletocomplywiththeToxicsRulewhilerelyingprimarilyonexistinggeneratingassets►Overcapacityatexistingcombinedcycleunitsrespondstodisplacedgenerationin2015►Anadditional8GWofnewcapacityisprojectedby2030relativetothebasecase,mostofwhichisnaturalgascombinedcycle16ImpactsonCoalConsumptionandNaturalGas•CoalusefrommajorregionsdecreasesslightlyfromtheproposedToxicsRule.Thereisaslightincreaseinuseofinteriorcoalsinsomeyears.•Thereissomeincreaseinbituminouscoaluseand1831741651541533030373738381,0001,200PowerSectorCoalUseImportsWasteCoalAppalachiaInteriorWest•Thereissomeincreaseinbituminouscoaluseanddeclineinothercoaltypesused942551543557553599567227233239228240252183168174165153200400600800

Million TonsC lUbR k0Base ToxR Base ToxR Base ToxR2007 2015 2020 2030•Naturalgasconsumptionisexpectedtoincrease3‐6percentbythepowersectorfrom201520307,7627,6687,9847,8858,599 8,0739046091,05965171865715,00020,00025,000

BtuCoalUsebyRankLigniteSubbituminousBituminous2015‐2030•Overthistime,“delivered”naturalgaspricestothepowersectorandatHenryHub(wellhead)willhaveanaverageincreaselessthan10centspermillionBtus,about1.3percent11,45011,62811,29711,54711,44011,70305,00010,000

Trillion,p•Overthistime,residentialconsumerswouldseeanaveragepriceincreaseoflessthan1percent1702015Base2015ToxR2020Base2020ToxR2030Base2030ToxRProposedToxicRuleHealthBenefits•Thevalueoftheimprovementstohealthalonetotal$59billionto$140billioneachyear•Thismeansthatforeverydollarspenttoreducethispollution,wewouldget$5 to$13inhealthbenefits•Eachyear,theproposedrulewouldpreventserioushealtheffectsincluding:–6,800‐17,000prematuredeaths–11,000heartattacks–120,000asthmaattacks–850,000missedworkor“sick”days•Avoiding“sickdays”savescompaniesandfamiliesmoney.ItisparticularlyimportantformillionsAmericanswhoseprovideleaveandwhoriskthemillionsofAmericansjobsdonotprovidepaidsicklosingtheirjobsiftheymissworktoooften•Theproposedrulewouldalsoprevent12,200hospitaladmissionsandemergencyroomvisits;4 500caseschronicbronchitis;5 100 000visits;,ofchronicbronchitis;and5,100,000dayswhenpeoplemustrestricttheiractivitieseachyearSource: EPA Regulatory Impact Analysis18TheToxicsRule:Implementation•Whenwecomparetheinvestmentsthatwillberequiredtocomplywiththesestandardswithinvestmentsthatthissameindustryhasmadeinthepasttheydol kflinotoooutone–Ineachof2007through2010,over20GWsofadvancedpollutioncontrolequipmentwasinstalled.Thisincludesapeakofover35GWsofscrubbersandSCRsin2009.•TheActcontainskeyflexibilitiessuchasprovidingpermittingagenciesthediscretiontoprovide1‐yearextensionstoinstallpollutioncontrols(beyondthegeneral3‐yeartime‐frameforcompliancerequiredbytheAct)thatwillbekeytoaddressinganyfacility‐specificconcerns.•Whileweprojectsomeretirementsofold/inefficientandlessfrequentlyusedcoal‐firedgeneration,thelargeamountsofextrageneratingcapacitythatcurrentlyexistwillabletoensurereliableelectricity(NERCdefaultreservemarginsbekeytobeingreliableelectricitydefaultreservemarginsare15%,absenttherule,averagecapacitymarginsareabout25%).19PublicHearingsandComment•ThepublicisencouragedtoprovideEPAwithcommentsonthisproposedToxicsRule– TentativepublicationdateisMay3,2011.ThAkll itiFd lR it–egencywillseecommentsfor60daysfoowngpublicaonintheeeraegser.– TheproposedruleiscurrentlyavailablethroughEPA’swebsites•http://www.epa.gov/ttn/atw/utility/utilitypg.html•http://www.epa.gov/airquality/powerplanttoxics/actions.html•PublicHearings– Locations•May24PhiladelphiaPA(WestinPhiladelphia):Philadelphia,(WestinPhiladelphia)•May24:Chicago,IL(Crowne PlazaChicagoMetro)•May26:Atlanta,GA(EPARegion4Headquarters)–Formoreinformationonhowtoattendthesepublichearinspleasevisit:g ,http://www.epa.gov/airquality/powerplanttoxics•TechnicalContact:–BillMaxwell(919‐541‐5430,maxwell.bill@epa.gov)20Summary– Bottom‐Line•Thisproposedrulewillresultintremendouspublichealthbenefits,worthmanytimesthecost•Therulewillrequirethepowersectortoinvestincommerciallyavailable,costeffective,proventechnologies‐thisinvestmentwillprovidejobsfortfth dfA id ii dfhi hl tensoousansomercansurngaperoogunempoymen,createdemandforproductslikecement,thatareexperiencinglowdemand,andcreateamoderncleanAmericanpowersector•Thisrulehasbeenlongdelayed.Itisimportantforpublichealth,andtheproposedruleisconsistentwiththerequirementsoftheCleanAirActThank you!William H MaxwellWilliamH.MaxwellEnergy Strategies Group(919) 541-5430maxwell.bill@epa.gov