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 Company 
Reducing Toxic Pollution from Powe

EPA’s Proposed National Emissions Standar

Hazardous Air Pollutants for Coal‐ and Oil‐Fire

Class of 85 Regulatory Response Group

April 28, 2011
Overview of the Regulatory Action

• On March 16, the Administrator signed the proposed National Emissions Standa

Hazardous Air Pollutants for Coal‐ and Oil‐Fired Utilities, the first national standa

emi i ss ons of t i ox c air poll t t u an s from new and exi ti s ng coal‐ and oil‐fi d re power 

the biggest contributors to air pollution

• Standards would reduce emissions of:

– Metals, including including mercury mercury (Hg), arsenic arsenic (As), chromium chromium (Cr), and nickel (Ni)– Acid gases, including hydrogen chloride (HCl) and hydrogen fluoride (HF)

– Particulate matter

• The standards standards would also result in additional additional reductions reductions of SO2 emissions which 

2 emissions, which

ambient SO2 and particle levels, will prevent thousands of deaths and hundreds 

illnesses each year

• Standards create uniform emissions‐control requirements based on p , roven curr

technologies and processes

• Compliance time line set by Clean Air Act: up to 4 years (3 years plus an addition

granted by the permitting authority)

• EPA is also proposing a new source performance standard (NSPS) for particulate 

dioxide (SO2), and nitrogen oxide (NOX) emissions from new sources
Toxic Emissions from Power Plants Are a

Serious Public Health Concern Concern• Power plants release mercury, arsenic, other metals, acid gases, and particles tha

people s’ health.

– Uncontrolled releases of mercury and many of the other toxic pollutants poison our nat

streams, and fish

– When pregnant women eat mercury contaminated fish, damage can occur to children’s 

brains, reducing their IQ and ability to learn

– Other metals such as arsenic, chromium, and nickel can cause cancer

– Acid gases cause lung damage and contribute to asthma, bronchitis and other chronic re

especi ll a y in children and the eld l er y

– Particles cause premature death and a wide range of lung and heart diseases

• People who eat large amounts of fish from mercury‐contaminated freshwater la

the U S. . are at the greatest greatest risk of exposure exposure

– This includes Native American, Laotian, Vietnamese, African‐American, Hispanic, and C

subsistence fishers and their families

• The standards would also result in additional reductions of SO2, p g reventing thou

and hundreds of thousands of illnesses each year
Power Sector:

A Major Share of U.S. Air Emissions

Nitrogen Oxides (NOx), 2009

15.3 Million Tons

2.0 Million Tons 

Sulfur Dioxide (SO2), 2009

9.5 Million Tons

Carbon D

6.5 B

j

OtherSector

OtherSectors

13.3 Million Tons

87%

13%

3.8 Million Tons

40%

ElectricPower

OtherSectors

Electric

Other emissions inclu

 Trace metals 

Particulate Matter (PM10), 2008 Mercury (Hg), 2005 105 T Electric

5.7 Million Tons

60%

3.9 Billion Tons

60%

Power

 Trace metals 

selenium and o HCl, HF Dioxin/furan Trace organic Others (e.g., 

14.8 Million Tons 105 TonsElectric Power

Electric

ElectricPower

53 Tons

50% 0.5 Million Tons 4%

 Radionuclide

Emissions have substaenvironment, and othimplications.

Power

OtherSectors

14.3 Million Tons

96%

OtherSectors

52 Tons

50%

Sources:NEI Trends Data (2009) and CAMD Data & Maps (2010) (SO2, NOX)

NEI Trends Data (2009) (PM10)

2005 NATA Inventory Modified for the Utility MACT 2005 Base Year (2010) (Hg)

Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990‐2008 (2010) (CO2)

“Other” sources include transportation, other mobile sources, and industrial sources
In the U.S., Power Plants Emit:

20% of the c

13% of

the NOx

30% of

the nickel

60% of

the SO2 50% 

60% of 

the arsenic

organics,dioxins/furans,and others Sources:

NEI Trends Data (20NOX);P d roposed toxics rule 

based on inventory Inventory used for 2
History of Clean Air Act Power Plant

Controls for Air Toxics• 1990 Clean Air Act Amendments created Acid Rain provisions and revised provisi

to require controls to reduce emissions of toxic air pollutants from industrial sou

• EPA was required required to do a study within 3 years, and then list power plants for regulation regulation 

provisions if the Administrator found that it was appropriate and necessary

• 1998: EPA released Utility Toxics Study Report to Congress

• 2000: EPA listed power plants for regulation under the Clean Air Act air toxics pr

• Once listed, EPA had 2 years to issue an air toxics standard

• Mercury cited as pollutant of greatest concern but other toxics include arsenic, chromiu

nickel, hydrochloric acid, dioxin/furan

• 2005: EPA reversed reversed 2000 finding finding in Section Section 112(n) Revision Revision Rule, de‐listed power 

regulation under air toxics provisions, and finalized Clean Air Mercury Rule (CAM

trading

• 2008: DC Circuit found the de‐listing to be illegal and vacated the Section 112(n) 

and CAMR

• 2010: EPA enters a Consent Decree requiring the Agency to sign proposed sectio

standards for utilities by March 16, 2011, and sign final standards by November 1

• Compliance by existing sources will be required 3‐4 years after the final standards are p

p y g q y p

2011 or early 2012

• A quarter of a century will have passed since the 1990 Clean Air Act became law
Power Plants Are the Largest Remaining

Source of Mercury Mercury Emissions Emissions in the

U S.

S

.

• In 1990 three industry

cate

gories madeg 1990 2005 

approximately two‐thirds

of total U.S. mercury

emissions

– Two of the three are now

bj i i

Industrial Category

Emissions

tons per 

year (tpy)

Emissions

(tpy)

subject to

air toxics

standards

– So are many other

industries such as cement

plants and steel

Power Plants 59 53 Municipal W t 57

2 

pmanufacturers

• Today, 20 years after the

1990 CAA Amendments

d Fd l li i

f

Waste 

Combustors

57

2 

Medical Waste 51 <1 

passe

d, no

F

e

deral li

mit

for

toxic emissions – including

mercury – exists for coal‐

or oil‐fired power plants

IncineratorsSource: EPA’s 2005 NATA Inventory Modified for the ToxYear (2010) 
Affected Facilities: 1,350 Coal and

Oil‐Fired Units at 525 Power Plants• Approximately 1,200 coal‐fired units

– 45% percent of nationwide electricity generation

• Bituminous coal ~ 50% of coal generation• Subbituminous ~45% of coal generation

• Lignite ~ 5% of coal generation

– Includes units that burn coal, coal refuse, a synthetic gas derived

from coal, or solid oil‐derived fuel (e.g., petroleum coke) either

exclusively, in any combination together, or in any combination

with other supplemental fuels that are not solid wastes

• Approximately 150 oil‐fired units

– 1% of nationwide electricity generation

• Natural gas power plants are not affected by this rule• EPA expects most f l aci ities would install tech l no ogies to

comply with this rule
Location of Coal‐ and Oil‐Fired Power Plan

Source: National Electric Energy Data System (NEEDS 4.10) (EPA, December 2010) 
What the Toxics Rule Proposes

• Coal‐ and oil‐fired power plants are covered by this rule• All hazardous air pollutants must have standards• EPA must set emission standards for existing sources in the category tha

least as stringent as the emission reductions achieved by the average of 

12% best controlled sources for source categories with 30 or more sour

• Emissions averaging within a contiguous facility is allowed in certain cir

• Monitoring Requirements

– State‐of‐the‐art emissions quantification that provides high quality data

• Hg CEMS or sorbent traps for mercury

• HCl CEMS or SO2 CEMS for acid gases 2

• PM CEMS for metals

• 30‐day averaging period for monitoring accommodates process variability and, cou

CEMS, facilitates compliance

• Records of work practice standards (annual tune ups) are proposed for organic HAP 
What the Toxics Rule Proposes (cont.)

• Requirements for Coal‐fired Units

– Mercury: numeric emission limit would prevent 91% of mercury in coal from 

released to the air

– Acid Gases: HCl numeric emission limit as a surrogate, with an alternate surr– Non‐mercury metallic pollutants (e.g., arsenic, chromium): numeric emissio

total PM as a surrogate, with an alternate surrogate of total metal air toxics

– Organic air toxics (including dioxin/furans): work practice standards, instead 

emission limits, due to low‐detected emission levels in the ICR data. Would eoptimal combustion preventing dioxin/furan emissions

• Requirements for Oil‐fired Units

– Acid Gases: HCl and HF numerical emission limits– Metal Air Toxics: Toxics: numerical numerical emission emission limits for total metal air toxics (includin

(includin

with individual metal air toxic numerical limits as an alternate

– Organic air toxics (including dioxin/furans): work practice standards, instead 

emission emission limits, due to low‐detected detected emission emission levels in the ICR data. Would e

optimal combustion preventing dioxin/furan emissions
Emissions from Covered Sources

5 8

7

SO2 Emissions

52.9 60

Hg Emissions

5.8

3.8 3.7 3.5

1.7 1.7 1.7 2

3456

Million Tons

52.9

29.1 29.4 

20304050

Tons

Th b i ld h T 

1.7 1.7

012

2009 2015 2020 2030

M

6.4 

0

10

20

2005 2015 20

► The base case includes the Transpor

and all other existing Federal contro

enforceable agreements

► Emission totals presented here refle

steam and IGCC electric generating u

351.6

250300350400

ons

HCl Emissions

steam and IGCC electric generating u

► The policy case imposes mercury an

limitations on these units, and requ

a subset of those units

► The mercury content of the coal con

74.4 70.8 64.8

6.6 6.9 7.2

0

50

100150200

250

ThousandTo

Note: Historic HCl emissions based on single emission factor; projected

emissions based on fuel‐specific Cl assumptions and removal efficiencies.

y

case by EGUs > 25 MW is 75 tons in 

from those units under the Toxics Ru

than a 90% reduction in that mercur

0

2005 2015 2020 2030
Sources Can Achieve These Standards

• Proven control technologies to reduce these emissions such as scrubber

and activated carbon injection are widely available

• Many units already use one or more of these technologies

• As a result of this standard, some power plants will upgrade existing con

(especially particulate matter controls like electrostatic precipitators)

• Power plants may also install install new controls controls (such as fabric filters filters, dry sorb

sorb

or activated carbon injection)

300350

BaseP d T i R l

Retrofit pollution conon coal‐fired capacity with the base case anproposed Toxics Rule

174

141

175

146 146

243

100150200250

5 Capacity (GW)Proposed Toxics Rule in GW capacity). Sou

Planning Model run b

FGD: flue gas desulDSI: dry sorbent inj

29

9

53

77

54 65

0

50

100

Wet FGD Dry FGD DSI SCR ACI FF

2015

SCR: selective catalACI: activated carboFF: fabric filter

FGD – 96% SO2 removal; 99% HCl removal DSI – 70% SO2 removal; 90% HCl removal

SCR – 80% NOx removal ACI – 90% Hg removalFF – PM control 
Cost and Retirement Projections

► Private compliance costs to uti

$15 from the overall social cost of t

Incremental Compliance Cost for the

Power Sector

from the overall social cost of t

compliance costs depicted are of operating the electric gener

throughout the U.S.

$10.9 $10.1 $10.0

$5

$10

$15

Billions $2007

► Incremental retired coal capac

about 10 GW. Also, it is impor

recognize:

$0

2015 2020 2030

B

► EPA identified about 11 GW of 

announced for 2010‐2015 that 

from modeling

► EPA modeling suggests forecas

prices alone close about 4 GW 

9.87

1015

W)

Incremental Retired Capacity in 2015

2015 Capacity

(before retirements)

prices alone close about 4 GW 

capacity in 2015 in the base ca

Rule may close an additional 1 

► Toxics Rule and Transport Rule 

together close 11 GW of coal in 

‐0.18 ‐0.46 ‐0.77

05

Capacity (GW

Total: 1,028 GW

Coal Steam & IGCC: 314 GW

g

► Closures are distributed throug

‐5

Coal Steam CC CT Nuclear
Average Consumer Electricity Price

Projections

150

h

Average National Retail Electricity Price

Base Proposed Toxics Rule

140160

2015 Retail Elect

Base Proposed T

90 89

102 93 92 104

50

100

07‐year mills/kWh

406080

100120

140

2007 mills/KWh

National average increase of 3.7% in 2015 that

0

2015 2020 2030

200

0

20

declines over time

100120140160

KWh

2020 Retail Elect

Base Propose

0

20406080

100

2007 mills/K
Generation and Capacity Projections

10

IncrementalNew 

Natural Gas CC Wind 

0.29 0.29 0 25 0 25 0.29 0.29

0.33 0.33

45 Generation Mix Other

Oil

468

Capacity (GW)

Natural Gas CC Wind 

2.00 1.96 2.02 1.98 2.06 2.01

0.83 0.83 0.83 0.84 0.81 0.82

0.69 0.73 0.83 0.87 1.16 1.21 0.29 0.29 0.29 0.29 0.25 0.25

1234

Million GWhNon‐Hydro Renewables Hydro Natural Gas

N l

2.77

02

2015 2020 

C1.96 1.98

01

Base Tox R Base Tox R Base Tox R

NuclearCoal

2015 2020 2030

Marginal amounts of incremental wind (20 biomass (80 MW by 2020) capacity are un

► Coal‐fired generation is slightly reduced as a result of the proposed rule► Increase in demand is met largely with additional natural gas‐fired gen

biomass (80 MW by 2020) capacity are un

► IPM results suggest that the sector will be able to comply with the Toxi

relying primarily on existing generating assets

► Overcapacity at existing combined cycle units responds to displaced generat► An additional 8 GW of new capacity is projected by 2030 relative to the base 

which is natural gas combined cycle
Impacts on Coal Consumption and

Natural Gas

• Coal use from major regions d

from the proposed Toxics Rule. 

increase in use of interior coals 

183 174 165 • There is some increase in bitum

154 153

30 30 37 37 38 38 1,000

1,200

Power Sector Coal Use

Imports Waste Coal Appalachia Interior West

• There is some increase in bitum

decline in other coal types used

942

551 543 557 553 599 567

227 233 239 228 240 252

183 168 174 165 153

200400600800

Million Tons

C l U b R k

0

Base Tox R Base Tox R Base Tox R

2007 2015 2020 2030

• Natural gas consumption is 

increase 3‐6 percent by the pow

2015 2030 7,762 7,668 7,984 7,885 8,599 8,073

904 609 1,059 651 718 657

15,00020,00025,000

Btu

Coal Use by Rank

Lignite Subbituminous Bituminous

2015‐2030

• Over this time, “delivered” natu

the power sector and at Henry 

have an average increase less th

million Btus, about 1.3 percent

11,450 11,628 11,297 11,547 11,440 11,703

0

5,000

10,000

Trillion

, p

• Over this time, residential cons

an average price increase of les

0

2015 Base2015 Tox R2020 Base2020 Tox R2030 Base2030 Tox R
Proposed Toxic Rule Health Benefits

• The value of the improvements to health alone total $59 billion to $140 b

year

• This means that for every dollar spent to reduce this pollution, we would 

$13 in health benefits

• Each year, the proposed rule would prevent serious health effects includi

– 6,800 ‐ 17,000 premature deaths

– 11,000 heart attacks

– 120,000 asthma attacks– 850,000 missed work or “sick” days

• Avoiding “sick days” saves companies and families money. It is particularl

for the millions millions of Americans Americans whose jobs do not provide provide paid sick leave a

losing their jobs if they miss work too often

• The proposed rule would also prevent 12,200 hospital admissions and em

room visits; visits; 4 500 , cases of chronic chronic bronchitis; bronchitis; and 5 100 000 5,100,000 days when p

restrict their activities each year

Source: EPA Regulatory Impact Analysis 
The Toxics Rule: Implementation

• When we compare the investments that will be required to comply wi

standards with investments that this same industry has made in the pnot l k oo out of line

– In each of 2007 through 2010, over 20 GWs of advanced pollution control 

installed. This includes a peak of over 35 GWs of scrubbers and SCRs in 2

• The Act contains key flexibilities such as providing permitting agencies 

discretion to provide 1‐year extensions to install pollution controls (be

general 3‐year time‐frame for compliance required by the Act) that wi

addressing any facility‐specific concerns.

• While we project some retirements of old/inefficient and less frequen

fired generation, the large amounts of extra generating capacity that c

will be key to being able to ensure reliable reliable electricity electricity (NERC default default re

re

are 15%, absent the rule, average capacity margins are about 25%).
Public Hearings and Comment

• The public is encouraged to provide EPA with comments on this propos

– Tentative publication date is May 3, 2011.– The Agency will seek comments for 60 days f ll i o ow ng publi ti ca on in the Fd 

e e

– The proposed rule is currently available through EPA’s websites

• http://www.epa.gov/ttn/atw/utility/utilitypg.html• http://www.epa.gov/airquality/powerplanttoxics/actions.html

• Public Hearings

– Locations

• May 24: Philadelphia Philadelphia, PA (Westin (Westin Philadelphia) Philadelphia)• May 24: Chicago, IL (Crowne Plaza Chicago Metro)

• May 26: Atlanta, GA (EPA Region 4 Headquarters)

– For more information on how to attend these public hearing ,s please visit:

http://www.epa.gov/airquality/powerplanttoxics

• Technical Contact:

– Bill Maxwell (919‐541‐5430, maxwell.bill@epa.gov)
Summary – Bottom‐Line

• This proposed rule will result in tremendous public health benef

many times the cost

• The rule will require the power sector to invest in commercially a

cost effective, proven technologies ‐ this investment will provide 

tens of th d ousan s of A i mer cans d i ur ng a peri do of hi hg unempl 

o

create demand for products like cement, that are experiencing lo

and create a modern clean American power sector

• This rule has been long delayed. It is important for public health

proposed rule is consistent with the requirements of the Clean A

Thank youWilliam H MaWilliam H. MaEnergy Strate(919) 541-5430maxwell.bill@