p. 1



# OAR Box 1828 Prepped byOllie Stewart



### Document

Number: 

# 5 ) ll-K-(A)-1 8 Docket Number: 

# A-83-2 7

Printed 11/12/200811:12:48AM Sheet 5of 325

### ENERG YAN D ENVIRONMENTA L ANALYSIS , INC . 1655 Nort h For

t Mye rDriv e Arlington , Virgini a 2220 9 (703) 528-190 0P. 3

PROJECTE DIMPACT S O F ALTERNATIV E SULFURDIOXID E NE

W SOURC E PERFORMANC E STANDARD S FORINDUSTRIA L FOSSI L FUEL-FIRE DBOILER S

Prepare dfor : U.S . ENVIRONMENTA L PROTECTIO N AGENC Y Offic e o f Ai r Qualit y Plannin g an

dStandard s Researc hTriangl e Park , Nort hCarolin a 2771 1

Prepare dby : ENERGYANDENVIRONMENTA L ANALYSIS , INC . 165 5 Nort hFor t Mye r Driv e Arlington , Virgini a 2220 9

Marc h198 5-££
_

Thi s repor t wa s furnishe dt o th e U.S . Environmenta l Protectio nAgenc y b y Energ y an dEnvironmenta l Analysis , Inc. , Arlington , Virginia , in fulfillmen t o f Contrac t Numbe r 68-02-4202 . Th e content s o f thi s repor t ar e reproduce dherei na s receive dfro m th e contractor . Th e opinions , findings , an dconclusion s expresse dar e thos e o f the autho r an

dno t necessaril y

thos e o f th e U.S . Environmenta l Protectio n Agency .TABL E OF CONTENT S P. 5



### £i2 £ 1 . INTRODUCTIO N1- 1
2 . METHODOLOG Y 2- 1 2. 1 Analytica l Approac h2- 1 2. 2 Ke yModelin g Assumption s 2- 2 2. 3 Evaluatio n Criteri a 2-1 1 Reference s 2-1 3
3 . PROJECTE D IMPACT S O F ALTERNATIV E SO 2 EMISSION S STANDARD S 3- 1 3. 1 Regulator yBaselin e an d Alternativ e SO 2 Emission s Standard s 3- 1 3. 2 Projecte d Nationa l Impact s o f th e Alternativ e SO 2 Emission s Standard s 3- 4 3. 3 Projecte d Regiona l SO g Emission s Forecast s 3-1 2
4 . ECONOMI C IMPACT S : 4- 1 4. 1 Introductio n 4- 1 4. 2 Industr yEconomi c Profile s 4- 2 4. 3 Economi c Impac t Analysi s 4- 9
APPENDI X A : OVERVIE WO F IFCA MA- l
APPENDI X B : PROJECTE D FUE L PRICES : REFERENC E PRIC E SCENARI O B- l
APPENDI X C : PROJECTE D FUE L PRICES : HIGHE R OI L AND GA S

PRICE S SCENARI O C- 1
APPENDI X D : CHARACTERISTIC S O F INDUSTRIA L COA L TYPE S INIFCA MD- 1
APPENDI X E : DELIVERE D INDUSTRIAL COA L PRIC E FORECAS T E- 1
APPENDI X F : IFCA

MPROJECTION S FO R 199 0 B Y BOILE R SIZ E CLAS S F- lP. 6

LIS T O F TABLE S

Pag e 2- 1 Industria l Boile r Pollutio nContro l Equipmen t Option s inIFCA

M 2- 3 2- 2 Projecte dIndustria l Fossi l Fue l Demand2- 5 2- 3 Worl dOi l Pric e Forecast s 2- 9 3- 1 Regulator y

Baselin e NSP S Assumption s 3- 2 3- 2 Alternativ e SO 2 NSP S Emission s Standard s fo r Ne w Industria l Fossi l Fuel-Fire dBoiler s 3- 3 3- 3 Projecte dFue l Demandi n199 0 Fro

m Larg e Ne

w Industria l Fossi l Fuel-Fire dBoiler s 3- 6 3- 4 Compariso no f Tota l Projecte dSO 2 Emission s i n199 0 Fro m New Larg e Industria l Fossi l Fuel-Fire dBoiler s 3- 8 3- 5 Compariso no f Projecte dCost s 3-1 1 3- 6 Projecte dSoli dan dLiqui dWast e Disposa l Requirement s 3-1 3 3- 7 Projecte dRegiona l SO 2 Emission s in199 0 3-1 4 3- 8 Projecte dRegiona l SO 2 Emission s i n199 0 3-1 5 3- 9 Projecte dRegiona l SO 2 Emission s i n199 0 ••• » 3-1 6 3-1 0 Projecte dRegiona l SO 2 Emission s i n199 0 3-1 7 3-1 1 Projecte dRegiona l SO 2 Emission s in199 0 3-1 8 3-1 2 Projecte dRegiona l SO 2 Emission s i n199 0 3-1 9 4- 1 Fossi l Fue l Consumptio nCharacteristic s o f th e Majo r Steam

User s ' 4- 4 4- 2 Majo r Stea

m User s Economi c Impact s 4-1 2 4- 3 Summary

o f Ke y Economi c Impact s o f SO 2 Contro l Leve l V I onSelecte dIndustrie s 4-1 7 4- 4 Mode l Fir

m an dPlanConfiguration : Bee t Suga r Industr y Alternativ e 4-1 8 4- 5 Economi c Impact s o f Alternativ e Contro l Leve l VI fo r Bee t Suga r Refining • 4-2 0 4- 6 Mode l Fir

m an dPlan t Configuration : Rubbe r Reclaimin g Industry

4-2 2 4- 7 Economi c Impact s o f Alternativ e Contro l Leve l VI fo r Rubbe r Reclaimin g 4-2 4P. 7

LIS T O F TABLE S (continued )

Pag e 4- 8 Mode l Fir mand Plan t Configurations : Automobil e Manufacturin g 4-2 6 4- 9 Economi c Impact s o f Alternativ e Contro l Leve l V I fo r Automobil e Manufacturin g 4-2 8 4-1 0 Mode l Fir man

d Plan t Configuration : Petroleum Refinin g Industr y4-2 9 4-1 1 Economi c Impact s o f Alternativ e Contro l Leve l V I fo r Petroleu mRefinin g 4-3 1 4-1 2 Mode l Fir man

d Plan t Configuration : Iro n and Stee l Industr y4-3 3 4-1 3 Economi c Impact s o f Alternativ e Contro l Leve l V I fo r Iro n and Stee l 4-3 4 4-1 4 Mode l Fir mand Plan t Configuration : Liquo r Distillin g Industr y4-3 6 4-1 5 Economi c Impact s o f Alternativ e Contro l Leve l V I fo r Liquo r Distillin g 4-3 7 4-1 6 Smal l Plant s i n Selecte d Industrie s 4-3 9 4-1 7 Industria l Boile r NSPS : Smal l Busines s Impac t Analysi s t o StudyNee d fo r Regulator yFlexibilit yAnalysi s 4-4 0 A- l Industria l Boile r Pollutio n Contro l Technologie s i n IFCA MA- 7 A- 2 IFCA

MIndustria l Boile r Size/Typ e Assumption s A-1 1 A- 3 FG D Technolog yConstraint s i n IFCA MA-1 2 A- 4 P MEmission s Pollutio n Contro l Technolog y Constraint s i n IFCA

MA-1 3
B- l Worl d Oi l Pric e Forecast : Referenc e Pric e Scenari o B- 2 B- 2 Projection s o f Industria l 3. 0 Percen t Sulfu r Residua l Fue l Oi l Price s B- 3 B- 3 Projection s o f Industria l 1. 6 Percen t Sulfu r Residua l Fue l Oi l Price s B- 4 B- 4 Projection s o f Industria l 0. 8 Percen t Sulfu r Residua l Fue l Oi l Price s B- 5 B- 5 Projection s o f Industria l 0. 3 Percen t Sulfu r Residua l Fue l Oi l Price s B- 6 B- 6 Projection s o f Industria l Natura l Ga s Price s B- 7LIS T O F TABLE S (continued )

Page .

C- 1 Worl dOi l Pric e Forecast : Highe r Oi l an dGa s Price s Scenari o • C- 2 C- 2 Projection s o f Industria l 3. 0 Percen t Sulfu r Residua l Fue l Oi l Price s C- 3 C- 3 Projection s o f Industria l 1. 6 Percen t Sulfu r Residua l Fue l Oi l Price s C- 4 C- 4 Projection s o f Industria l 0. 8 Percen t Sulfu r Residua l Fue l Oi l Price s C- 5 C- 5 Projection s o f Industria l 0. 3 Percen t Sulfu r Residua l Fue l Oi l Price s C- 6 C- 6 Projection s o f Industria l Natura l Ga s Price s C- 7
D- 1 Sulfu r Dioxid e Emissio nRate s b y Coa l Typ e D- 2 D- 2 Averag e As hConten t b y Regio n(Bituminou s Coa l Types ) D- 3 D- 3 Averag e As hConten t b y Regio n(Subbituminou s Coa l Types ) D- 4 D- 4 Averag e Hea t Conten t b y Regio n(Bituminou s Coa l Types ) D- 5 D- 5 Averag e Hea t Conten t b y Regio n(Subbituminou s Coa l Types ) D- 6
Delivere dIndustria l Coa l Pric e Forecas t E- 1
F- l Compariso no f IFCA M Projections fo r 199 0 F- 2 F- 2 Regulator y

Baselin e Projection s fo r 199 0 b y Boile r Siz e Clas s F- 3 F- 3 Alternativ e Contro l Leve l I Projection s fo r 199 0 b y Boile r Siz e Clas s F- 4 F- 4 Alternativ e Contro l Leve l I I Projection s fo r 199 0 b y Boile r Siz e Clas s F- 5 F- 5 Alternativ e Contro l Leve l II I Projection s fo r 199 0 by Boile r Siz e Clas s F- 6 F- 6 Alternativ e Contro l Leve l I V Projection s fo r 199 0 b y Boile r Siz e Clas s F- 7 F- 7 Alternativ e Contro l Leve l V Projection s fo r 199 0 by Boile r Siz e Clas s F- 8 F- 8 Alternativ e Contro l Leve l VI Projection s fo r 199 0 b y Boile r Siz e Clas s • F- 9P. 9



### LIS T O F FIGURE S

Pag e 1 Federa l Region s o f th e Unite dState s 2- 6
2 Chang e inProduc t Pric e Du e t o Regulator y Optio n4-1 1
A- l IFCA

M Mode l Structur e A- 51 . INTRODUCTION

Thi s repor t present s projecte denvironmental , cost , an denerg y

impact s o f alternativ e sulfu r dioxid e (SO2 ) ai r emissio nstandard s fo r ne w industria l fossi l fuel-fire dboilers . Thes e draf t standard s woul dsupersed e th e emis sionregulation s tha t currentl y exis t i

nSubpar t Do f 4 0 CFRPar t 60 . Th e effect s o f th e alternativ e SO 2 emissio nstandard s ar e assesse dinthi s report . Th e methodolog y use dt o examin e environmental , cost , an dfossi l fue l result s projecte dunde r curren t an dalternativ e emissio nregulation s als o i s discussed . Fo r individua l boilers , ai r emissio nregulation s canpla y a signifi can t rol e i

ndeterminin g boile r fue l choic e an dth e level s o f ai r emissions . Ai r emissio nregulation s canresul t i nmeasureabl e nationa l an dregiona l environmental , cost , an denerg y

impacts , includin g change s i nth e type s o f fossi l fuel s combuste dan dchange s i

nth e leve l o f ai r pollutan t emission s generate db

y new industria l fossi l fuel-fire dboilers . Th e analysi s o f alternativ e regulation s i s designe dt o highligh t poten tia l environmental , cost , an denerg y

impacts . Thes e impact s ar e measure d i nterm s o f th e projecte dchang e unde r curren t versu s alternativ e ai r emis sionregulations . Th e analysi s o f environmenta l impact s focuse s onchange s inlevel s o f ai r emissions . Cos t impact s ar e evaluate di nterm s o f incre menta l change s i

nth e tota l annualize dcost s fo r boile r an dpollutio n contro l equipmen t capital , operating , an dfue l costs . Energ y impact s ar e evaluate dinterm s o f shift s inth e demandbetwee nfue l type s (e.g. , coa l o r residua l fue l oi l versu s natura l gas) . Curren t SO 2 emissio nregulation s serv e a s th e bas e case , fro m whic h al l impact s ar e measured . Briefly , SO 2 emissio ncontro l regulation s i nth e bas e cas e fo r ne

w industria l boiler s ar e th e curren t Ne w Sourc e Performanc e Standard s (NSPS ) fo r boiler s wit hhea t inpu t capacit y greate r than7 3 M

W (25 0 MMBtu/hr) . Curren t SO 2 emissio nregulation s fo r al l smalle r boiler s

— an dfo r boiler s large r tha n7 3 M W (25 0 MMBtu/hr ) hea t inpu t i f mor e stringen t tha nNSP S - - ar e Stat e Implementatio nPla nregulation s (SIP's) .


### 1- 1P.1 1

Thi s analysi s examine s projecte dimpact s i nth e fift hyea r followin g proposa l o f standards . I t wa s assume dtha t th e recommende dstandard s woul d b e propose din198 5 an dtha t th e impac t analysi s should , therefore , focu s onprojecte dresult s fo r new industria l fossi l fuel-fire dboiler s installe d i nth e five-yea r perio dbetwee n198 5 an d1990 . Th e emission s an denerg y demandprojection s fro m ne w industria l fossi l fuel-fire dboiler s presente d i nthi s repor t represen t annua l estimate s fo r calenda r yea r 1990 . Thi s repor t addresse s onl y fossi l fue l (coal , oi l an dnatura l gas ) consumptio ni

nlarg e new

industria l boilers . I t doe s no t analyz e commercial institutiona l boiler s o r nonfossi l fuel-fire dsteam-generatin g unit s (i.e. , woo do r municipa l soli dwast e combustion) . Th e balanc e o f thi s repor t i s presente di nfou r parts . Sectio n2 present s th e modelin g approac hemploye dt o analyz e th e alternativ e standard s an ddescribe s ke y

assumption s an

dinputs . Th e potentia l 199 0 nationa l an d regiona l impact s fo r th e alternativ e standard s ar e presente di nSectio n3 . Sectio n4 summarize s th e nationa l 199 0 economi c impac t result s fo r th e mos t stringen t regulator y

alternativ e examined .



### 1- 2P.1 2

2 . METHODOLOG Y

Th e methodolog y

fo r assessin g th e environmental , cost , an denerg y impact s o f th e alternativ e ai r emissio nstandard s i s describe dbriefl y i n thi s section . Th e firs t par t describe s th e mode l use dt o projec t th e mi x o f industria l boile r fossi l fue l demand , th e leve l o f ai r emissions , an d th e annualize dcos t o f generatin g steam . Th e secondpar t summarize s ke y modelin g assumption s an dmode l input s use dinthi s analysis . Th e thir d par t briefl y

describe s th e criteri a use dt o evaluat e emission , cost , an d energ y impact s o f alternativ e regulations . 2. 1 ANALYTICA L APPROAC H Thi s analysi s i s base dupo nresult s from th e Industria l Fue l Choic e Analysi s Mode l (IFCAM) , a nenerg y demandmode l develope dby Energ y an d Environmenta l Analysis , Inc . (EEA) . Inadditio nt o generatin g fue l mi x estimates , IFCA

M project s level s o f ai r emission s an dsteam generatin g costs . IFCA M i s a disaggregate dproces s engineerin g model ; model s o f thi s typ e simulat e th e effect s o f specifi c policie s onnew an dexistin g techni ca l alternatives , includin g innovativ e boile r design s an dnew pollutio n contro l equipment . IFCA M i s designe dt o asses s th e impac t o f severa l factor s onfue l choic e decision s i nth e industria l sector , includin g fue l prices , energ y

an denvironmenta l policies , an dcapita l an

dannua l operatin g an dmaintenanc e (O&M ) cost s o f firin g alternativ e fossi l fuels . Th e U.S . Departmen t o f Energ y (DOE ) i s th e primar y sourc e fo r projec tion s o f overal l industria l fossi l fue l demandb y region . IFCA

M disaggre gate s DO E industria l fossi l fue l demandforecast s int o nin e industria l sub sectors . Energ y

us e i neac ho f thes e industria l subsector s the ni s divide d int o boile r an

dproces s hea t applications . Industria l boile r fossi l fue l us e i s subdivide dfurthe r t o reflec t th e amoun t o f fue l tha t wil l b e use dinnew an dexistin g boiler s o f differen t size s an dcapacit y

utilizatio nrates . Existin g boiler s ar e classifie d accordin g t o th e typ e o f fue l the y ar e designe dt o fir e an dwhethe r the y 

### 2- 1ca nb e retrofitte dt o fir e alternativ e fuels . Eigh t siz e classe s an dfiv e capacit y utilizatio nrat e categorie s ar e delineate dfo r bot hnew an dexist ing boilers . Eac hne w boile r i s site di

na nAi r Qualit y

Contro l Regio n(AQCR) . Ne w boiler s ar e locate dwithi neac hAQC Raccordin g t o historica l sitin g patterns . Becaus e Stat e environmenta l regulation s fo r existin g an dnew boiler s ofte n vary b y AQCR , IFCA

M applie s curren t regulation s ona nAQC Rbasis . Thes e regulation s ar e base donStat e ai r law s fo r existin g fossi l fuel-fire d boilers . Th e boiler s represente dinIFCA M ar e fire db

y on e o f severa l type s o f fossi l fuels : coal , distillat e fue l oil , residua l fue l oil , o r natura l gas . IFCA

M provide s a choic e betwee nnin e coa l type s tha t var y b y sulfur , ash , an dBt ucontent . Additionally , fou r residua l fue l oi l type s tha t vary by sulfu r conten t ar e available . Th e pric e o f eac hfue l typ e canvary b y region . Th e pollutio ncontro l equipmen t option s availabl e inIFCA M ar e present edinTabl e 2-1 . Fo r eac hfue l typ e (i.e. , coal , oil , an dgas) , th e leas t cos t pollutio ncontro l strateg y tha t meet s th e alternativ e standar di s calculated . Th e leas t cos t strateg y include s findin g th e lowes t cos t optio ninterm s o f th e boiler , pollutio ncontro l equipment , an dannua l fue l costs . Base donth e characteristic s o f eac hcombusto r (e.g. , size , operatin g rate , pollutio ncontro l requirements) , capita l an doperatin g cost s ar e generatedfo r eac hfue l type . Th e fue l typ e associate dwit hth e lowes t after-ta xpresen t valu e (includin g expecte dfue l expense s an dboile r an

d pollutio ncontro l equipmen t capita l an dO& M costs ) o f th e tota l cos t o f generatin g steam

ove r th e boiler' s investmen t perio di s selected . Th e structur e o f IFCA M i s summarize dinAppendi xA o f thi s report . 2. 2 KE YMODELIN GASSUMPTION S Thi s sectio npresent s th e approac huse di nthi s analysi s t o mode l variable s tha t coul daffec t significantl y th e mi xo f fossi l fuel s demande d b y industria l boile r owners. * Thes e variable s are :

•Othe r assumption s ar e summarize dinAppendi xA .



### 2- 2P.1 4

TABL E 2-1 . INDUSTRIAL BOILE RPOLLUTIO N CONTRO L EQUIPMEN T OPTION S I

N IFCA M

Pollutan t Technolog y 

### S0 2 Flu e ga s desulfurizatio n dua l alkali 3 lim e spra y drying 0 sodiu m 

### P M

NO v Singl e mechanica l collecto r Dua l mechanica l collecto r Sid e stream

separato r Electrostati c precipitato r Fabri c filte r Combustio nmodificatio n lo w exces s ai r stage dcombustio nai r
*Tra y typ e scrubber . ^Combine dSO2/P M

contro l system ; include s a fabri c filter .



### 2- 3P.1 5

t Regiona l industria l fossi l fue l deman dprojection s • Energ y

policie s 0 Fue l pric e forecast s • Environmenta l policie s 2.2. 1 Regiona l Industria l Fossi l Fue l DemandProjection s DO E i s th e primar y

sourc e o f projection s o f tota l industria l fossi l fue l demand . Th e rat e o f projecte dgrowt hinindustria l fossi l fue l demand i s a significan t paramete r becaus e i t determines , t o a larg e extent , th e expecte ddemandfo r new industria l fossi l fuel-fire dboilers . DO E doe s no t projec t regiona l estimate s o f fue l consumptio ninindus tria l boilers . DO E doe s projec t regiona l estimate s o f tota l industria l fossi l fue l demandfo r hea t an dpowe r usin g th e Energ y Informatio nAdminis tration' s (EIA's ) Intermediat e Futur e Forecastin g System (IFFS) . IFF S include s a

neconometri c industria l energ y deman dmodel , th e Purchase dHea t an dPowe r System

(PURHAPS). 1 ' 2 Th e EI A regiona l industria l fossi l fue l demandforecast s ar e summarize d inTabl e 2-2 . Th e tenFedera l region s ar e illustrate dinFigur e 1 . Thes e projection s ar e assume dt o remai nth e same fo r regulator y baselin e an

dalter nativ e regulation s examine di nSection s 3 an d4 becaus e th e cos t impact s ar e no t expecte dt o be sufficientl y hight o alte r tota l projecte denerg y demand . Th e projection s show ninTabl e 2- 2 ar e a functio no f macroeconomi c variabl e projections . Fo r example , rea l growt hinth e Gros s Nationa l Produc t betwee n198 5 an

d199 0 i s assume dt o averag e 2. 9 percen t pe r yea r an drea l growt hinmanufacturin g outpu t betwee n198 5 an d199 0 i s assume dt o averag e 3. 3 percen t pe r year . Th e Federa l Reserv e Boar dindustria l productio ninde x i s expecte dt o increas e at a rat e o f 3. 7 percen t annuall y betwee n198 5 an

d 1990. 3 No t al l o f th e projecte dne t increas e inindustria l fossi l fue l demand show ninTabl e 2- 2 i s attributabl e t o new industria l boilers . A significan t portio no f thi s ne t increas e i s attributabl e t o new proces s hea t equipment . 2.2. 2 Enerqy

Policie s Energ y policie s containe di nth e Nationa l Energ y Ac t o f 197 8 an

dth e Omnibu s Reconciliatio nAc t o f 198 1 ar e ke y modelin g assumption s inthi s analysis . Thes e bill s contai nsection s relevan t t o industria l boile r fue l choice , including : 2- 4P.1 6

TABL E 2-2 . PROJECTE DINDUSTRIAL FOSSI L FUE L DEMAND *

PJ(101 2 Btu )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 .
U.S . Regio

n

Ne w Englan d

Ne w York/Ne

w Jerse y
Middl e Atlanti c
Sout hAtlanti c
Midwes t
Southwes t
Centra l

Nort hCentra l

Wes t
Northwes t

Tota l 198 5 Refiner y
0 (0 ) 4 8 (43 ) 6 2 (59 ) 4 6 (44 ) 10 7 (101 ) 50 9 (482 ) 2 6 (25 ) 3 4 (32 ) 12 7 (120 ) 3 3 (31 ) 99 2 (937 ) 199 0

Refiner y
0 (0 ) 4 3 (41 ) 5 7 (.54 ) 4 3 (41 ) 9 9 (94 ) 47 3 (448 ) 2 5 (24 ) 3 2 (30 ) 11 7 (111 )

. 3 0 (28 ) 91 9 (871 ) 198 5

Industry 0

20 7 (196 ) 51 2 (485 ) 94 6 (897 ) 1,61 5 (1,531 ) 2,33 9 (2,217 ) 2,91 5 (2,763 ) 62 8 (595 ) 55 7 (528 ) 73 3 (695 ) .44 2 (419 ) 10,89 4 (10,326 ) 199 0

Industry 0

22 4 (212 ) 54 1 (513 ) 1,01 7 (964 ) 1,72 8 (1,638 ) 2,49 9 (2,369 ) 3,18 0 (3,014 ) 66 8 (633 ) 62 7 (594 ) 81 7 (774 ) 51 0 (483 ) 11,81 1 (11,194 )

a U.S . Departmen t o f Energy , Energy Informatio nAdministration . 198 2 Annua l Energ y

Outlook , Middl e Worl dOi l Pric e (Cas e A) . Th e regiona l distributio ni s unofficia l an dha s no t bee nreviewe db y EIA . Su

m o f non metallurgica l coal , natura l gas , distillat e an dresidua l fue l oil . Exclude s petro-chemica l feedstock s an dnatura l ga s consume da s leas e an d plan t fuels . Include s tota l boile r an dproces s hea t fossi l fue l demand . Exclude s fue l consumptio ninpetroleu m refineries . Include s construction , mining , agriculture , fishing , forestry , an dothe r manufacturin g sectors .



### 2- 5r o i cn

REGIO N NAME S FIGUR E 1 

# Federa l Region s o

fth e Unite d States

1 . Ne wEnglan d 2 . Ne wYork/NewJerse

y 3 . Middl e Atlanti c 4 . South Atlanti c 5 . Midwes

t 6 . Southwes t 7 . Centra l 8 . Nort h Centra l 9 . Wes t 10 . Northwes

tP.1 8

• Th e Energ yTa xAc t o f 197 8 (ETA )

• Th e Economi c Recover yTa xAc t o f 198 1 (ERTA ) Th e ET A provide s severa l ta xincentive s fo r th e us e o f coa l and alter

nativ e fuels . Additiona l investmen t ta xcredit s (ITC's ) ar e grante d fo r coa l and alternativ e fue l commercia l investments . Unde r th e ETA , ITC' s and accelerate d depreciatio n alternative s ar e denie d fo r oi l and ga s investments . Th e ETAauthorize s a 1 0 percen t ta xcredi t (i n additio n t o th e standar d 1 0 percen t ITC ) fo r coa l an d alternativ e fue l investment s mad e betwee n Octobe r 1 , 197 8 and Decembe r 31 , 1982 , includin g investment s i n th e follow

ing :

• Boiler s and othe r combustor s tha t us e coa l o r a n alternativ e fue l

• Equipmen t t o produc e alternativ e fuel s

• Pollutio n contro l equipmen t

• Equipmen t fo r handlin g and storag e o f alternativ e fuel s Becaus e authorizatio n fo r th e additiona l IT C expire s i n 1982 , thi s provisio n ha s no t bee n modele d fo r thi s analysi s o f projecte d ne windustria l boile r installation s fro m198 6 t o 1990 . In IFCAM , thes e provision s ar e modele d fo r th e calculatio n o f after

ta xboile r and pollutio n contro l equipmen t capita l cos t cas hflows . Invest
ment s i n ne windustria l coal-fire d boiler s receiv e th e standar d 1 0 percen t IT C and qualif yfo r an accelerate d depreciatio n method , wherea s n o ITC' s and straigh t lin e depreciatio n ar e calculate d fo r ne windustria l oil-an d gas-fire d boile r investments . Th e ERTArevise s th e depreciatio n schedule s fo r captia l investmen t an d thu s improve s th e ta xincentive s fo r ne windustria l boilers . Th e deprecia

tio n perio d fo r ne wcoal- , oil- , and natura l gas-fire d industria l boiler s i s reduce d t o fiv e years . Th e Ta xEquit yand Fisca l Responsibilit yAc t (TEFRA ) o f 198 2 revise d th e Accelerate d Cos t Recover ySyste m (ACRS ) annua l recover ypercentage s fo r five-yea r perio d recover ypropert yacquire d afte r 1985 . TEFRAals o reduce d th e basi s fo r depreciatio n b y5 0 percen t o f th e IT C take n whe n th e regula r IT C (1 0 percen t fo r five-yea r recover yperio d propert yplace d in servic e afte r 1980 ) i s selected . Thes e TEFRAFedera l ta xcod e revision s ar e no t reflecte d i n thi s analysis . The yd o no t appl yt o ne windustria l oi l and



### 2-7P.1 9

ga s boile r investment s becaus e the y ar e no t permitte dt o be depreciate d usin g th e ACR S accelerate ddepreciatio nschedul e an dthe y do no t qualif y fo r th e ITC . Th e TEFR A Federa l taxcod e revision s d o appl y t o new indus tria l coa l boile r investments , bu t the y ar e no t expecte dt o significantl y alte r th e projecte dimpact s o f th e alternativ e NSP S whic har e presente din Section s 3 an

d4 o f thi s report . I naddition , provision s o f th e Powerplan t an dIndustria l Fue l Us e Ac t o f 1978 , whic hprohibi t th e us e o f oi l o r natura l ga s inlarg e new indus tria l boilers , ar e a navailabl e featur e inIFCA M bu t currentl y

ar e no t utilize di

nth e analysi s o f th e potentia l impact s o f th e recommende dNSPS . 2.2. 3 Fue l Pric e Forecast s Fue l choic e decision s i nIFCA M ar e base donselectin g th e alternativ e wit hth e lowes t tota l after-ta xne t presen t valu e o f capital , annua l O& M an dfue l expense s ove r a 15-yea r period . I nthi s analysis , th e fue l expense s ar e estimate dbase donprojecte dregiona l delivere dfue l price s fro m 198 7 t o th e yea r 2001 . Naturall y

ther e i s uncertaint y relate dt o energ y

marke t condition s ove r th e nex t fiftee nyears . Tw o regiona l forecast s o f industria l residua l fue l oi l an

dnatura l ga s price s wer e develope di norde r t o evaluat e th e sensitivit y

o f IFCA

M result s (projecte dimpact s o f alternativ e NSPS ) t o thi s ke y exogenou s assumption , industria l fue l pric e differences . Tabl e 2- 3 present s th e tw o worl doi l pric e forecasts . Bot hforecast s ar e base donDOE' s (Offic e o f Policy , Plannin g an dAnalysis ) WOI L forecast ing model . EEA

estimate dregiona l industria l residua l fue l oi l an dnatura l 4 ga s price s fo r bot hworl doi l pric e projections . Thes e forecast s ar e presente dinAppendice s B an dC . Distillat e fue l oi l pric e forecast s wer e no t prepare dbecaus e i t i s expecte dtha t natura l ga s price s wil l remai n lowe r tha ndistillat e fue l oi l price s and , therefore , natura l ga s (or residua l fue l oil ) wil l be a lowe r cos t new industria l boile r fue l type . Onl y on e se t o f projecte dindustria l coa l price s wer e use di nthi s analysis . Therefore , th e tw o fue l pric e scenario s hav e differen t projecte d industria l residua l fue l oi l an dnatura l ga s price s bu t identica l projecte d industria l coa l prices .



### 2-8P.2 0

TABL E 2-3 . WORL DOI L PRIC E FORECASTS *

(198 2 $/bbl )

Referenc e Highe r oi l an d pric e ga s price s Yea r scenario 0 scenario 0 

### 25.9 0 31.9 0 46.5 0 57.4 0

a Averag e refine r acquisitio ncos t o f importe dcrud e oil . Energy an dEnvironmenta l Analysis , Inc .
c Cas e B o f th e fourt hNationa l Energy Polic y Plan(NEPP-I V

o r NEPP-1983) . Energy Projection s t o the Yea r 2010 . U.S . Departmen t o f Energy , Offic e o f Policy , Plannin g an dAnalysis . DOE/PE-0029/2 . Octobe r 1983 . 198 5 199 0 199 5 200 0 25.0 0

28.0 0 32.0 0 37.0 0



### 2-

9P.2 1

Th e industria l coa l type s inIFCA M hav e bee ndefine dby ICF Incorporate d interm s o f coa l typ e (bituminou s o r subbituminous ) an dsulfur , ash , an

d Bt ucontent . Ther e ar e u pt o nin e distinc t coa l type s pe r regio ninIFCAM : 6 sulfu r classe s fo r bituminou s coal s an d3 sulfu r classe s fo r subbituminou s coals . Th e table s inAppendice s Dan dE summariz e th e ke y characteristic s an dprojecte dprice s fo r th e industria l coa l type s i nIFCAM . 2.2. 4 Environmenta l Policie s Environmenta l policie s embodie di nth e 197 0 Clea nAi r Ac t (CAA ) an d th e subsequen t 197 7 amendment s defin e th e regulator y contex t fo r thi s analy sis . Th e Ac t gav e th e EPA th e authorit y

t o establis hNationa l Ambien t Ai r Qualit y Standard s (NAAQS ) tha t woul dprotec t th e healt han dwelfar e o f th e population . Ther e ar e currentl y NAAQ S fo r si x"criteri a pollutants" : sulfu r oxides , PM , N0 X , lead , carbo nmonoxid e (CO) , an dozone . Industria l source s ar e subjec t t o two classe s o f environmenta l regulation s adopte dt o ensur e complianc e wit hambien t ai r standards : Stat e Implementatio nPla n(SIP's ) an dNonattainmen t (NA)/Preventio no f Significan t Deterioratio n(PSD) . Th e CA A gav e th e EPA

th e authorit y

t o promulgat e NSP S regulation s governin g th e emission s o f pollutant s fro m specifi c categorie s o f newl y constructe d sources . Eac hnew

sourc e mus t mee t requirement s o f al l o f thes e programs . Fo r purpose s o f thi s analysis , n o attemp t wa s mad e t o predic t th e impac t o f NA , PSD , o r loca l regulation s no t par t o f SIP's . Therefore , eac hnew boile r i s assume dt o be subjec t t o a SI P o r NSPS , whicheve r ma y b e mor e stringent . Th e SIP' s i nIFCA M ar e characteristi c o f thos e regulation s fo r existin g industria l fossi l fuel-fire dboilers . Th e CA A stipulate s tha t eac hStat e mus t prepar e a SI P tha t provide s fo r th e implementation , maintenance , an denforcemen t o f th e NAAQ S withi n it s geographi c area . SIP' s var y substantiall y

among States , bot hinth e severit y o f th e standard s an dth e wa y

the y ar e expressed . State s specif y standard s i

na variet y

o f form s includin g pound s o f pollutan t pe r energ y conten t o f th e fue l (lb/MMBtu) , pound s o f pollutan t emitte dpe r 1,00 0 pound s o f steam , o r pollutan t conten t o f th e fuel , b y weight , i

npercentag e terms . I nman y States , SI P requirement s als o var y b y fue l typ e an

dboile r size .

2-1 0P.2 2

A se t o f SI P regulation s reflectin g th e regiona l diversit y o f ai r emissio nlimit s ha s bee ncompile dfo r us e inIFCAM . Thes e SIP' s ar e identifie db

y pollutant , fue l type , boile r size , an dAQC Ran

dar e converte d t o pound s o f pollutan t pe r millio nBtu . Th e SI P fil e i s curren t a s o f Jul y 198 0 fo r particulat e matte r an d nitroge noxid e emissio nstandards . Th e SI P fil e ha s bee nupdate dt o Marc h 198 3 fo r SO 2 emissio nregulations . Th e CA A require s tha t SIP' s includ e provision s designe dt o upgrad e area s o f ai r qualit y

no t inattainmen t wit hNAAQS . T o th e exten t tha t N A provision s ar e reflecte di nth e SIP's , NA-relate dSI P revision s ar e incorporate dint o th e IFCA M SI P file . PS Drequire s tha t State s maintai nth e ai r qualit y o f thei r area s attainin g NAAQS . Eac hPS Dare a i s subjec t t o provision s o f on e o f thre e PS Dclasse s tha t specif y allowabl e incrementa l increase s inambien t ai r pollutan t concentrations . Constructio no f individua l stationar y source s i s reviewe dt o ensur e tha t expecte demission s from thes e new

facilitie s wil l no t increas e a

narea' s ambien t ai r pollutio nconcentratio ngreate r tha n allowe dincrement s suc htha t i t exceed s th e NAAQS . Becaus e PS Dprovision s ar e applie db

y State s t o individua l facilitie s o na case-by-cas e o r site specifi c basis , PS Dha s no t bee nmodeled . Becaus e onl y

a limite dnumbe r o f N A SI P revision s ar e modele din IFCAM , an

dPS Dregulation s hav e no t bee naddressed , th e stringenc y o f loca l regulation s ma y

b e understated . Consequently , th e impac t o f th e alternativ e emissio nregulation s ma y b e overstate dbecaus e a numbe r o f boiler s ma y

b e subjec t t o mor e stringen t loca l regulation s tha nar e reflecte di

nIFCAM . 2. 3 EVALUATION

CRITERI A Throughou t th e developmen t o f alternativ e emissio nregulation s fo r new industria l boilers , a se t o f ke y outpu t parameter s ha s bee nconsidere dt o b e particularl y

usefu l incomparin g projecte daggregat e impact s o f alterna tiv e regulations . Thi s se t o f criteri a include s th e followin g thre e para meters :

• Leve l o f emission s • Cos t o f generatin g stea m • Coa l an

dresidua l fue l oi l deman d

2-1 1P.2 3

Thes e criteri a ar e use d t o evaluat e impact s o f th e alternativ e standard s fo r distinc t boile r siz e classe s and ar e describe d i n thi s section . Th e leve l o f SO 2 emission s projecte d unde r alternativ e regulation s 1 s a primar ycriterio n b ywhic ht o evaluat e thes e regulations . Th e leve l o f emission s i s a functio n o f bot hth e regulator yscenari o an d th e mi xo f fuel s demanded . I n addition , th e effec t o f alternativ e regulation s o n th e tota l expect
e d cos t o f generatin g stea mi n ne windustria l boiler s i s evaluated . Stea m cost s includ e capita l and operatin g cost s fo r th e boiler , capita l and operat
in g cost s fo r anyrequire d pollutio n contro l equipment , and fue l costs . Th e cos t impac t o f th e alternativ e standard s i s th e chang e fro mth e bas e cas e i n th e tota l cos t o f generatin g steam . Fo r thi s analysis , aggregat e cost s fo r th e least-cos t fue l type s ar e presente d o n a before-ta xannualize d basi s usin g a 1 0 percen t discoun t rat e an d a 15-yea r investmen t period . Coa l penetratio n i s projecte d coa l deman d expresse d a s a percentag e o f tota l projecte d fossi l fue l deman d (coal , fue l oil , and natura l gas ) fo r ne windustria l boilers . Th e impac t o f alternativ e standard s o n coa l pene tratio n i s the n examined . Th e potentia l fo r increase d coa l us e i n th e industria l secto r i s partl ya functio n o f environmenta l regulation s applicabl e t o industria l facilities . I n particular , ai r emissio n regulation s ca n increas e significantl yth e cos t o f burnin g coa l compare d t o th e alternativ e o f burnin g a relativel yclea n typ e o f fossi l fue l suc ha s natura l gas . Th e potentia l fo r increase d residua l fue l oi l combustio n i n th e indus

tria l secto r i s als o partl ya functio n o f environmenta l regulations . Propose d ai r emissio n standard s ma yaffec t projecte d residua l fue l oi l deman d i n ne windustria l boilers .

2-1 2P.2 4

REFERENCE S

1 . 198 2 Annua l Energy Outlook . U.S . Departmen t o f Energy , Energy Informatio nAdministration . D0E/EIA-0383(82) . Apri l 1983 . 2 . Supplemen t t o th e 198 2 Annua l Energ y Outlook . U.S . Departmen t o f Energy , Energ y

Informatio nAdministration . D0E/EIA-0408(82) . Jul y 1983 . 3 . Referenc e 1 , p . 126 ; Referenc e 2 , p . 53 . 4 . Regiona l Forecast s o f Industria l Residua l Fue l Oi l an dNatura l Ga s Prices . Energy

an dEnvironmenta l Analysis , Inc . Arlington , Virginia . Prepare dfo r th e U.S . Environmenta l Protectio nAgency . Jul y 1984 .

2-1 3P.2 5

3 . PROJECTE DIMPACT S O F ALTERNATIV E SO 2 EMISSION S STANDARD S

Thi s sectio ndescribe s th e regulator y baselin e NSP S ai r emission s standard s an

dalternativ e SO 2 emission s regulation s fo r new industria l fossi l fuel-fire dboilers . Projecte demissions , cos t an denerg y demand effect s p f th e alternativ e standards , relativ e t o th e regulator y baseline , ar e summarized . 3. 1 REGULATOR YBASELIN E ANDALTERNATIV E SO 2 EMISSION S STANDARD S Th e regulator y

baselin e i s represente db y curren t an

dpropose dai r emission s standards : th e curren t SO 2 NSPS , th e propose dPM an dN0 XNSP S an dcurren t SIP's . Tabl e 3- 1 present s th e curren t SO 2 NSP S an dth e propose dPM

NSPS . New

industria l boiler s ar e assume dt o be subjec t t o a SI P i f th e SI P i s mor e stringen t tha nth e applicabl e NSP S show ninthi s table . Al l new industria l oil - an

dgas-fire dan

dspreade r stoke r coal-fire d boiler s large r tha n2 9 M W (10 0 MMBtu/hr ) ar e assume dt o emplo y lo w exces s ai r t o contro l N0 Xemissions . I f th e residua l fue l oi l burne dinth e new larg e industria l boile r ha s a nitroge nconten t greate r tha n0.3 5 percent , stage dcombustio nai r i s require dt o contro l N0 Xemissions . Al l new pulverize dcoal-fire dindustria l boiler s large r tha n2 9 M W (10 0 MMBtu/hr ) requir e stage dcombustio nai r t o contro l N0 Xemissions . Thes e assumption s fo r new larg e industria l residua l fue l oi l an dcoa l boiler s ar e consisten t wit hth e propose dN0 XNSP S (4 9 F R25103) . Th e propose dN0 XNSP S fo r new larg e industria l natura l ga s an ddistil lat e fue l oi l boiler s i s base donth e lo w N0 Xburne r technology , no t a cur ren t pollutio ncontro l optio ninIFCAM . Thi s differenc e inassumption s wil l no t significantl y affec t th e expecte dimpact s o f alternativ e SO 2 NSP S fo r ne w industria l coa l an

dresidua l fue l oi l boilers . Th e alternativ e SO 2 emission s standard s ar e presente dinTabl e 3-2 . Thes e alternative s ar e applicabl e fo r new industria l residua l fue l oi l an d coa l boiler s large r tha n2 9 M W (10 0 MMBtu/hr) . Th e applicabl e regulatio n



### 3- 1TABL E 3-1 . REGULATORYBASELIN E NSP S ASSUMPTION S ng/ J(lb/MMBtu )

Fue l typ e
Natura l ga s Distillat e fue l oi l Residua l fue l oi l
Coa l Boile r siz e categor y M W (MMBtu/hr )
<7 3 >7 3 <7 3 >7 3 <7 3 >7 3 <2 9 29-7 3 >7 3 (<250 ) (>250 ) (<250 ) (>250 ) (^250 ) (>250 ) (<100 ) (100-250 ) (>250 ) 

### 34

0 34 C
52 0 S0 2

_ _ (0.8) a SI P (0.8) * SI P SI P (1.2)a. d 

### P

M

4 3 (0.1) a
4 3 (0.1) a SI P 4 3 (0.1) * SI P 2 2 (0.05)°» c 2 2 (0.05) °

a Curren t NSP S (4 0 CFRPar t 60 , Subpar t Dfo r fossi l fuel-fire dstea m generators) . Propose dNSP S (4 9 F R25103) .
c 8 6 ng/ J(0.2 0 lb/MMBtu ) i f the annua l capacit y utilizatio nrat e i s les s than3 0 percent . 30-da y rollin g average .



### 3- 2TABL E 3-2 . ALTERNATIVE SO 2 NSP S EMISSION S STANDARD S FOR NE W INDUSTRIA

L FOSSI L FUEL-FIRE DBOILER S

t o I C O Alternativ

e contro l leve l Baseline


### I
II 

### II I I V 

### V V I Boile r siz e

categor y M W (MMBtu/hr )
29-7 3 >7 3 29-7 3 >7 3 

### >2 9 >2 9 >2 9 >2 9 >2 9 (100-250 ) (>250 ) (100-250 ) (>250 ) (>100 ) (>100 ) (>100 ) (>100 ) (>100 ) Residua l

Ceilin g ng/ J (lb/MMBtu )

34 0 (0.8 ) 69 0 (1.6 ) 34 0 (0.8 ) 34 0 (0.8 ) 34 0 (0.8 ) 13 0 (0.3 ) 34 0 (0.8 ) 13 0 (0.3 ) fue l oi l

Require d percentage reductio

n

_ _

—

—

—

— „c, d 

### 90 b Coa l

Ceiling 3 ng/ J (lb/MMBtu )



### 52 0 73 0 52 0 

### 52 0 39 0 26 0 52 0 26 0 

### U.2 ) (1.7 ) (1.2 ) (1.2 ) (0.9 ) (0.6 ) (1.2 ) (0.6 ) Require d percentag

e reductio

n

—

—

— >50 D >50 ° 70-90 M 

### 90 °
30-da yrollin g average . Scrubbin g i s required .
c Scrubbin g i s no t require d i f th e uncontrolle d emissio n rat e i s equa l t o o r les s tha n 13 0 n g SO2/ J (0. 3 l b SO2/MMBU1) . I f th e uncontrolle d emissio n rat e i s greate r tha n 13 0 n g SO2/ J (0. 3 l b S02/MMBtu) , 70-9 0 percen t SO 2 emission s reductio n i s required . j Th e floo r emission s rat e i s 26 0 ng SO2/ J (0. 6 l b S02/MMBtu) .P.2 8

i s eithe r a

nemission s ceilin g (i.e. , alternativ e contro l level s I throug h IV ) o r a fixe d(i.e. , alternativ e contro l leve l VI ) o r variabl e (i.e. , alternativ e contro l leve l V ) percentag e reduction . Complianc e wit hth e alternativ e SO 2 NSP S emission s standard s i s achieve db

y burnin g a lo

w sulfu r fue l typ e (wit ha nuncontrolle demissio n rat e equa l t o o r lowe r tha nemission s ceilin g inTabl e 3-2 ) o r scrubbin g a mediu m o r highsulfu r fue l type . Whe nscrubbing , th e controlle dSO 2 emissio nrat e mus t remai nlowe r tha nth e ceilin g presente dinTabl e 3-2 . Fo r alternativ e contro l level s II I throug hVI , al l coa l type s mus t be scrubbed . Fo r alternativ e contro l leve l V , al l coa l type s mus t b e scrubbe d wit ha 9 0 percen t SO 2 emission s remova l rate ; i f th e controlle demissio n rat e i s lowe r tha n26 0 n g SO2/ J(0. 6 lbS02/MMBtu) , th e percentag e reductio nrat e ma y

b e reduce dt o (bu t no lowe r than ) 7 0 percent . Alternativ e contro l leve l V represent s th e leve l o f contro l currentl y require dunde r Subpar t D a fo r new electri c utilit y

coal-fire dsteam generatin g units . 3. 2 PROJECTE DNATIONAL IMPACT S OF TH E ALTERNATIV E S0 2 EMISSION S STANDARD S Thi s sectio npresent s IFCA M projection s o f tota l SO 2 emission s an d fue l deman db

y fue l typ e i

n199 0 fro

m new industria l fossi l fuel-fire d boiler s large r tha n2 9 M W (10 0 MMBtu/hr ) an

dinstalle dbetwee n198 5 an d 1990 . Thi s sectio nals o present s IFCA M projection s o f tota l capita l an d annualize dcost s fo r thes e new industria l boile r investments . IFCA M projection s fo r th e regulator y baselin e NSP S assumption s ar e compare dwit h IFCA M forecast s fo r th e alternativ e SO 2 NSP S emission s standards . Result s b y boile r siz e clas s ar e presente dinAppendi xF . 3.2. 1 Fue l DemandImpact s IFCA M project s tha t 60 4 new industria l fossi l fuel-fire d(coal , fue l oil , o r natura l gas ) boilers , eac hlarge r tha n2 9 M W (10 0 MMBtu/hr) , wil l b e installe ddurin g thi s perio dinth e Unite dStates . The y ar e expecte dt o consume a tota l o f 52 5 P J(49 8 trillio nBtu ) i n1990 . Thi s projecte d "population " o f larg e ne w industria l boiler s i s base don :
• Th e assume drat e o f growt hintota l industria l fossi l fue l demand (se e Tabl e 2-2 )



### 3- 4• Estimate s o f how muc ho f thi s projecte dincreas e wil l b e consume d inindustria l boiler s versu s proces s heater s • Estimate s o f th e retirement s o f existin g industria l boiler s durin g th e 1985-199 0 perio d t Estimate s o f th e distributio no f fue l deman dinnew larg e versu s smal l industria l boiler s Thi s forecas t o f new

larg e industria l fossi l fuel-fire dboile r installa tion s i s hel dconstan t inthi s analysi s an di s no t altere da s a functio no f othe r inpu t assumption s (e.g. , projecte doi l an dga s price s o r alternativ e SO 2 NSP S assumptions) . Tabl e 3- 3 present s th e projecte dfossi l fue l mi xb y fue l pric e scenario , SO 2 NSP S assumption , an dfue l type . Th e fue l mi xi s no t fixed ; i t i s a functio no f th e fue l pric e scenario , th e SO 2 NSP S assumptions , an dman y othe r mode l parameter s (i.e. , boile r an dpollutio ncontro l equipmen t cos t estimates) . Th e projecte ddemandfo r coa l innew industria l boiler s i s \/ery lo w unde r th e referenc e pric e scenario . Coa l i s no t selecte dbecaus e th e projecte dindustria l natura l ga s an dresidua l fue l oi l price s ar e no t larg e enought o offse t th e relativel y highcoa l capita l an dannua l non-fue l O&M expenses . Th e projecte dcoa l marke t shar e i s significantl y highe r fo r th e highe r oi l an dga s price s scenario . Projecte dnatura l ga s an dresidua l fue l oi l price s ar e muc hhighe r unde r th e highe r oi l an dga s price s scenari o than the y ar e unde r th e referenc e pric e scenari o (referenc e Appendice s B an dC) . Th e fue l choic e decisio ncriteri a inIFCA M fo r ne w industria l boiler s i s base dona compariso no f projecte dafter-ta xcapital , O& M an dfue l expense s ove r a 15-yea r period . Therefore , highe r projecte doi l an dga s price s ar e expecte dt o increas e th e projecte ddemandfo r coal . I ngeneral , coa l ma y

b e a neconomica l fue l typ e whe nth e new industria l boile r size s and/o r expecte dannua l capacit y utilizatio nrate s ar e large . Coa l i s ne^er

selecte di

nIFCA M a s a new

industria l boile r fue l typ e i f th e expecte dannua l capacit y utilizatio nrat e i s lowe r tha n3 0 percent . There fore , th e expecte dannua l capacit y utilizatio nrat e fo r eac hnew uni t i s a

n importan t facto r inth e fue l choic e decisio nproces s i nIFCAM .



### 3- 5P.3 0



### TABL E 3-3 . PROJECTE DFUE L DEMANDIN 199 0 FORLARG E NE

W INDUSTRIAL FOSSI L FUEL-FIRE DBOILERS *

PJ(IO 1 2 

### Btu )

Fue l pric e scenari o
Referenc e

Highe r Oi l an

d Ga s Price s Alternative contro l leve l
Baseline 

### I I I II I I V V V I Baseline 

### I I I II I I V V V I Natura l



### ga s
16 0 (152 ) 16 1 (153 ) 23 7 (225 ) 24 5 (232 ) 28 2 (267 ) 28 2 (267 ) 31 0 (294 ) 21 8 (207 ) 25 0 (237 ) 26 4 (250 ) 36 4 (345 ) 36 4 (345 ) 36 4 (345 ) 37 0 (351 ) Residua l

fue l oi l
34 1 (323 ) 34 7 (329 ) 27 1 (257 ) 27 1 (257 ) 21 7 (206 ) 21 7 (206 ) 18 8 (178 ) 8 (7 ) 0 (0 ) 0 (0 ) 0 (0 ) 0 (0 ) 0 (0 ) 0 (0 ) Coa l

2 4 (23 ) 1 8 (17 ) 1 8 (17 ) 9 (9 ) 2 7 (26 ) 2 7 (26 ) 2 7 (26 ) 30 0 (284 ) 27 5 (261 ) 26 2 (248 ) 16 1 (153 ) 16 1 (153 ) 16 1 (153 ) 15 5 (147 )

l 

### Eac hlarge r tha n2 9 M W (10 0 MMBtu/hr ) an

dinstalle dbetwee n198 5 an d1990 . Tota l fossi l fue l demandi n199 0 i s 52 5 PJ(49 8 trillio nBtu) .

3- 6P.3 1

Anothe r ke y

facto r i s th e locatio no f th e new unit . SIP' s an

dproject e dfue l price s var y

b y region . Residua l fue l oi l demandi nnew industria l boiler s i s ^ery smal l unde r th e highe r oi l an

dga s pric e scenario . I ngeneral , th e projecte dnatura l ga s price s ar e lowe r tha nth e projecte dresidua l fue l oi l price s i nthi s scenari o (referenc e Appendi xC) . A s a result , natura l ga s i s a lowe r cos t alternativ e tha nresidua l fue l oil . Unde r th e referenc e pric e scenario , a significan t amoun t o f residua l fue l oi l i s projected . I nthi s case , th e projecte dnatura l ga s price s ar e no t lowe r tha nth e projecte dresidua l fue l oi l price s (referenc e Appendi x B ) . The y

ar e simila r t o th e projecte dmediu m o r lo w sulfu r residua l fue l oi l prices . Sinc e th e projecte dindustria l natura l ga s an dresidua l fue l oi l price s ar e somewha t "competitive " i nth e referenc e pric e scenario , ther e i s a significan t amoun t o f natura l ga s an dresidua l fue l oi l demand . Th e actua l projecte dnatura l gas/residua l fue l oi l mi xi s a functio no f SIP' s an dth e SO 2 NSP S assumption s fo r residua l fue l oil . Th e projecte ddemandfo r natura l ga s i s highe r unde r th e alternativ e standard s tha ni t i s unde r th e regulator y baselin e i

nTabl e 3-3 . Th e alternativ e SO 2 emission s standard s increas e th e cost s o f burnin g residua l fue l oi l an

dcoa l i

nlarg e ne

w industria l boilers . Som e ne w unit s (whic h selecte dcoa l o r residua l fue l oi l under th e regulator y baseline ) selec t natura l ga s unde r th e alternativ e standard s a s the least-cos t alternative . Unde r th e referenc e pric e scenario/regulator y baseline , th e new industria l boile r populatio nha s selecte dresidua l fue l oi l a s th e primar y fue l type . Unde r th e highe r coa l an dga s prices/regulator y baseline , th e new industria l boile r populatio nha s chose ncoa l a s th e primar y fue l type . 3.2. 2 Projecte dSO 2 Emission s Impact s Tabl e 3- 4 present s the projecte dSO 2 emission s fo r th e alternativ e standards . Th e tota l projecte dSO 2 emission s reductio ni n199 0 i s projecte d t o rang e fro

m 68-28 1 Gg (75-31 0 thousandshor t tons) . Th e tota l projecte d SO 2 emission s reduction s ar e relativel y larg e (u

pt o 9 5 percent) . Som e portio no f the tota l projecte dSO 2 emission s reduction s presente d i nTabl e 3- 4 i s du e t o th e fac t tha t th e fue l mi xi s no t hel dconstan t betwee nth e regulator y baselin e an

dth e alternativ e standards . A portio n



### 3- 7P.3 2

TABL E 3-4 . COMPARISON OF TOTA

L PROJECTE DSO 2 EMISSION S I N 199 0 FRO M NE W LARG E INDUSTRIAL FOSSI L FUEL-FIRE DBOILERS * Gg (IO 3 shor t tons )

Fue l pric e scenari o Alternativ e Highe r oi l an d contro l leve l Referenc e ga s price s Baselin e 25 3 (279 ) 29 6 (326 ) I 18 5 (204 ) 13 4 (148 ) I I 9 6 (106 ) 10 3 (114 ) II I 9 3 (102 ) 4 2 (46 ) I V 3 5 (39 ) 3 1 (34 ) V 4 3 (47 ) 2 7 (30 ) VI 1 5 (16 ) 1 5 (16 )

a Eac hlarge r than2 9 M W (10 0 MMBtu/hr ) an

dinstalle dbetwee n198 5 an d1990 .



### 3- 8P.3 3

o f th e new

industria l boilers , tha t selec t coa l o r residua l fue l oi l unde r th e regulator y

baseline , choos e natura l ga s unde r th e alternativ e standard s (se e Tabl e 3-3) . Complianc e fue l type s (a s oppose dt o scrubbin g non-complianc e fue l types ) ar e th e primar y contro l strateg y

selecte dfo r th e regulator y baselin e an dalternativ e contro l level s I an dII . Complianc e fue l type s ar e als o selecte da s th e primar y complianc e strateg y fo r new

larg e industria l residua l fue l oi l boiler s fo r alternativ e contro l leve l III . Industria l residua l fue l oil-fire dboiler s canbur na \/ery lo w sulfu r fue l typ e (les s tha n0. 3 percen t sulfur ) o r scrubemission s fro m th e combus tio no f a mediu

m o r highsulfu r fue l typ e unde r alternativ e contro l level s I V an dV . Unde r th e referenc e pric e scenario/alternativ e contro l level s I V an dV , 18 8 new

industria l residua l fue l oi l boiler s selec t scrubber s an d5 7 new industria l residua l fue l oi l boiler s selec t a very lo w sulfu r fue l type . Inmany cases , i t i s les s expensiv e t o scruba 1. 6 percen t sulfu r residua l fue l oi l tha ni t i s t o bur na very lo w sulfu r fue l type . Thi s occur s becaus e th e projecte dresidua l fue l oi l sulfu r premium s (0. 3 percen t sulfu r residua l fue l oi l pric e les s the 1. 6 percen t sulfu r residua l fue l oi l price ) ar e large r tha nth e annualize dscrubbe r capita l an dO& M costs . Scrubber s ar e no t selecte donal l new industria l residua l fue l oi l boiler s unde r th e alternativ e contro l level s I V an dV becaus e scrubber s ar e no t a neconomica l complianc e alternativ e fo r new unit s wit hlo

w annua l capacit y

utilizatio n rates . Sodiu m scrubber s ar e th e onl y FG Dtechnolog y

selecte di

nIFCAM . Lime spra y dryin g an

ddua l alkal i FG Dtechnologie s ar e option s inIFCA M whic h ar e no t selecte dbecaus e the y ar e mor e expensiv e tha nsodiu m scrubbin g systems . Th e projecte dSO 2 emission s reduction s presente di nTabl e 3- 4 ar e du e t o scrubbing , switchin g t o lowe r sulfu r coa l o r residua l fue l oi l types , an dt o switchin g fro

m coa l o r residua l fue l oi l combustio nunde r the regulator y

baselin e t o natura l ga s combustio nunde r th e alternativ e contro l level . Accordingly , th e averag e cost-effectivenes s o f SO 2 emission s



### 3- 9P.3 4

contro l o n larg e ne windustria l fossi l fuel-fire d boiler s (derive d fro m thes e aggregat e IFCA

Mprojections ) reflec t severa l type s o f pollutio n contro l strategie s and d o no t matc hestimate s o f th e averag e cost-effectivenes s o f anysingl e technology . 3.2. 3 Projecte d Cos t Impact s Th e projecte d increas e i n tota l annualize d cost s i s projecte d t o rang e fro m$ 8 millio n t o $13 3 millio n (referenc e Tabl e 3-5) . Th e tota l annualize d cos t increase s ar e large r fo r th e referenc e pric e scenari o tha n fo r th e highe r oi l and ga s price s scenari o fo r tw o reasons :

• Ther e i s mor e tota l deman d fo r residua l fue l oi l and coa l i n th e referenc e pric e scenario/regulator ybaselin e (36 5 trillio n Btu ) tha n unde r th e highe r oi l and ga s prices/regulator ybaselin e (30 7 trillio n Btu) .
• Asignifican t numbe r o f ne windustria l coal-fire d boiler s unde r th e highe r oi l and ga s prices/regulator ybaselin e choos e natura l ga s unde r th e alternativ e standard s (se e Tabl e 3-3) . Thi s typ e o f "switching " fro m

a capital

- and annua l non-fue l O&M-intensiv e investmen t (coal ) t o a fue l cost-intensiv e alternativ e (natura l gas ) ca n resul t i n smal l (o r sometime s negative ) increase s i n tota l before-ta xannualize d costs. * I f th e fue l mi xwa s hel d constan t (tha t is , i f th e fue l mi xunde r th e highe r oi l and ga s prices/alternativ e standard s wa s identica l t o th e fue l mi xunde r th e highe r oi l and ga s prices/regulator ybaseline) , the n th e rang e o f th e tota l projecte d annualize d cos t increas e unde r th e highe r oi l and ga s price s scenari o woul d b e significantl yhighe r tha n $10-3 3 million . Tabl e 3- 5 show s tha t th e tota l projecte d capita l cost s ar e muc hhighe r unde r th e highe r oi l an d ga s price s scenari o tha n unde r th e referenc e pric e scenario . Thi s i s becaus e coa l i s a capital-intensiv e investmen t and th e projecte d coa l deman d i s muc hhighe r unde r th e highe r oi l an d ga s

•Recal l tha t IFCA

Mmake s fue l choic e decision s base d o n a compariso n o f after-ta xcosts .

3-1 0P.3 5

TABL E 3-5 . COMPARISO N O F PROJECTE DCOSTS * (million s o f 198 2 dollars )

Alternativ e contro l leve l Fue l pric e scenari o
Referenc e Highe r oi l an d ga s price s
Tota l annualize dcosts°> c

Baselin e I I I II I I V V V I Increas e i

ntota l annualize d cost s ove r th e Baselin e

I I I II I I V V VI Tota l capita l costs 0 Baselin e I I I II I I V V VI 3,34 9 3,35 7 3,40 6 3,40 8 3,47 6 3,47 4 3,48 2

8 5 7 5 9 12 7 12 5 13 3
2,58 8 2,46 8 2,47 9 2,39 1 2,64 9 2,65 2 2,65 3 3,72 5 3,73 5 3,74 3 3,75 4 3,75 7 3,75 8 3,75 7

1 0 1 8 2 9 3 2 3 3 3 2 

### 5,92 5 5,56 2 5,35 0 4,07 7 4,06 6 4,07 8 3,98 6

a Ne w industria l fossi l fuel-fire dboiler s large r tha n2 9 M W (10 0 MMBtu/hr ) an dinstalle dbetwee n198 5 an d1990 . Capita l cost s x0.1314 7 ( a capita l recover y facto r base do

na 1 0 percen t interes t rat e an

da 15-yea r period ) plu s annua l non-fue l O&M cost s plu s levelize dfue l costs .
c Include s tota l boile r an dpollutio ncontro l equipmen t expenses .

3-1 1P.3 6

price s scenari o tha nunder th e referenc e pric e scenario . Tota l projecte d capita l cost s ar e lowe r unde r mos t o f th e alternativ e standard s tha nunde r th e regulator y

baselin e becaus e th e projecte dcoa l demandi nne w industria l boiler s i s lowe r unde r th e alternativ e standard s tha nunde r th e regulator y baselin e (se e Tabl e 3-3) . 3.2. 4 Othe r Impact s Sodiu m scrubbin g i s the onl y FG Dtechnolog y

selecte di

nIFCAM . I t generate s a liqui deffluent . Tabl e 3- 6 indicate s tha t th e projecte dincreas e i nliqui dwast e du e t o th e alternativ e standard s i s a s larg e a s 5. 4 millio n cubi c meters . Th e projecte dsoli dwast e disposa l requirement s ar e large r unde r th e highe r oi l an

dga s price s scenari o becaus e ther e i s a muc hlarge r demand fo r coa l i

nthi s cas e versu s the bas e cas e fue l prices . Unde r th e highe r oi l an dga s price s scenario , th e projecte dtota l soli dwast e disposa l requirement s dro pdu e t o th e alternativ e standard s becaus e tota l projecte d coa l demanddecline s (se e Tabl e 3-3) . 3. 3 PROJECTE DREGIONAL SO 2 EMISSION S FORECAST S IFCA M project s regiona l larg e ne w industria l fossi l fuel-fire dboile r SO 2 emissions . Figur e 1 present s the te nFedera l regions . Table s 3- 7 throug h3-1 2 presen t th e regiona l SO 2 emission s forecast s fo r th e regulator y

baselin e an

dth e si xalternativ e contro l levels . Mos t o f th e projecte dSO 2 emission s reduction s ar e locate di nFedera l region s 4 , 5 , an d6 .

3-1 2P.3 7

TABL E 3-6 . PROJECTE DSOLI DANDLIQUI DWAST E

DISPOSAL REQUIREMENT S

Coa l boile r Scrubbe r Alternativ e soli dwaste * liqui dwaste 0 contro l leve l Gg (IO 3 shor t tons ) IO 3 cubi c meter s
Referenc e fue l price s Baselin e 9 7 (107 ) 81 1 I 6 6 (73 ) 73 2 I I 6 9 (76 ) 1,15 4 II I 3 8 (42 ) 1,26 2 I V 11 5 (127 ) 4,40 9 V 11 5 (127 ) 4,20 5 VI 11 5 (127 ) 4,94 4 Highe r oi l an

dga s price s Baselin e 1,22 8 (1,345 ) 66 7 I 1,11 1 (1,225 ) 69 9 I I 1,04 6 (1,153 ) 82 6 II I 70 1 (773 ) 5,58 4 I V 68 1 (751 ) 5,71 9 V 70 1 (773 ) 6,08 0 VI 65 1 (718 ) 6,06 2

a Ne w industria l coal-fire dboiler s installe dbetwee n198 6 an d199 0 whic h ar e large r than2 9 M

W (10 0 MMBtu/hr) . Include s coa l boile r botto m as han d fl y as hcollecte db

y particulat e matte r emission s contro l equipment . Ne w industria l coa l an

dresidua l fue l oi l boiler s installe dbetwee n198 6 an d199 0 whic har e large r than2 9 M W (10 0 MMBtu/hr) . Include s sodiu m scrubbin g treate deffluent .

3-1 3P.3 8

TABL E 3-7 . PROJECTE DREGIONA L SO 2 EMISSION S I N 1990 * G g (IO 3 shor t tons )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Federa l regio

n

Ne w Englan d Ne w York/Ne

w Jerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t U.S . Referenc e pric e scenari o Regulator

y baselin e 

### 2. 8 4. 6 19. 1 48. 4 58. 2 77. 1 17. 1 

### 7. 4 6. 6 12. 1 253. 5 (3.1 )

(5.1 ) (21.0 ) (53.3 ) (64.1 ) (85.0 ) (18.9 ) (8.2 ) (7.3 )

. (13.3 ) (279.4 ) Alternativ e contro l I 

### 2. 8 4. 4 18. 1 37. 2 43. 7 44. 6 12. 0 

### 5. 4 6. 2 11. 6 186. 1 (3.1 )

(4.8 ) (20.0 ) (41.0 ) (48.2 ) (49.2 ) (13.2 ) (6.0 ) (6.8 ) (12.8 ) (205.1 ) 

### 2. 4

3. 7 12. 9 24. 9 29. 8 

### b 1. 7 3. 5 5. 4 11. 4 95. 9 

### leve l I I
(2.7 ) (4.1 ) (14.2 ) (27.4 ) (32.9 ) 

### b (1.9 ) (3.9 ) (6.0 ) (12.6 ) (105.8 )

a Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an dlarge r tha n2 9 M

W (10 0 MMBtu/hr) . Les s tha n5 0 Mg (5 5 shor t tons) . Th e projecte dSO 2 emissio nreductio n i s 9 9 percen t becaus e natura l ga s i s th e onl y fue l typ e selecte di nthi s regio nunde r alternativ e contro l leve l II .

3-1 4P.3 9

TABL E 3-8 . PROJECTE DREGIONAL SO 2 EMISSION S I N 1990 * Gg (IO 3 shor t tons )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Federa l regio n
Ne w England Ne w York/New

Jersey Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t U.S . Referenc e pric e scenari o Regulator y baselin e 

### 2. 8 4. 6 19. 1 48. 4 58. 2 77. 1 17. 1 

### 7. 4 6. 6 12. 1 253. 5 

## ( 3


## - D

(5.1 ) (21.0 ) (53.3 ) (64.1 ) (85.0 ) (18.9 ) (8.2 ) (7.3 ) (13.3 ) (279.4 ) Alternativ e contro l

II I 

### 2. 4 3. 7 12. 9 24. 9 29. 8 

### b b 1. 5 5. 4 11. 4 92. 2 (2.7 )

(4.1 ) (14.2 ) (27.4 ) (32.9 ) 

### b b (1.6 ) (6.0 ) (12.6 ) (101.7 ) 

### 0. 8

1. 6 5. 3 9. 9 9. 1 b b 0. 8 2. 6 5. 0 35. 1 leve l I V (0.9 ) (1.8 ) (5.8 ) (10.9 ) (10.0 ) 

### b b (0.9 ) (2.9 ) (5.5 ) (38.7 )

a Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an dlarge r than2 9 M

W (10 0 MMBtu/hr) . Les s tha n5 0 Mg (5 5 shor t tons) . Th e projecte dSO 2 emissio nreductio n i s 9 9 percen t becaus e natura l ga s i s the onl y fue l type selecte di nthi s regio nunde r alternativ e contro l level s II I an dIV .

3-1 5P.4 0

TABL E 3-9 . PROJECTE DREGIONAL SO 2 EMISSION S I N 1990 * G g (IO 3 shor t tons )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Federa l region
Ne w Englan d Ne w York/New

Jersey Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t U.S . Referenc e pr Regulator y baselin e 

### 2. 8 4. 6 19. 1 48. 4 58. 2 77. 1 17. 1 

### 7. 4 6. 6 12. 1 253. 5 (3.1 )

(5.1 ) (21.0 ) (53.3 ) (64.1 ) (85.0 ) (18.9 ) (8.2 ) (7.3 ) (13.3 ) (279.4 ) ic e scenari o

Alternativ e contro l V 

### 0. 9 1. 7 6. 7 10. 9 12. 1 

### b b 0. 8 3. 4 6. 1 42. 7 (1.0 )

(1.9 ) (7.4 ) (12.0 ) (13.3 ) 

### b b (0.9 ) (3.8 ) (6.7 ) (47.1 ) 

### 0. 2

0. 5 2. 6 3. 3 5. 3 b b 0. 3 0. 8 1. 7 14. 8 leve l VI (0.2 ) (0.6 ) (2.9 ) (3.6 ) (5.8 ) 

### b b (0.3 ) (0.9 ) (1.9 ) (16.3 )

a Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an dlarge r than2 9 M

W (10 0 MMBtu/hr) . Les s than5 0 Mg (5 5 shor t tons) . Th e projecte dSO 2 emissio nreductio n i s 9 9 percen t becaus e natura l ga s i s the onl y fue l type selecte di nthi s regio nunde r alternativ e contro l level s V an dVI .

3-1 6P.4 1

TABL E 3-10 . PROJECTE DREGIONAL SO 2 EMISSION S I N 1990 * G g (IO 3 shor t tons )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Federa l region
Ne w Englan d Ne w York/Ne

w Jersey Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t U.S . Highe r Regulatory baselin e 

### b 5. 2 25. 4 73. 5 74. 1 70. 7 22. 9 13. 3 

### 2. 8 7. 8 295. 7 

### b

(5.7 ) (28.0 ) (81.0 ) (81.7 ) (77.9 ) (25.2 ) (14.7 ) (3.1 ) (8.6 ) (325.9 ) oi l an

dga s price s Alternativ e contro l 1 I II 

### b 2. 0 15. 8 32. 4 32. 3 27. 9 

### 4. 1 10. 8 

### 2. 8 5. 8 133. 9 

### b

(2.2 ) (17.4 ) (35.7 ) (35.6 ) (30.8 ) (4.5 ) (11.9 ) (3.1 ) (6.4 ) (147.6 ) 

### b

1. 8 11. 2 23. 5 22. 8 25. 6 

### 3. 4 8. 7 2. 8 3. 8 103. 7 eve l



### b (2.0 ) (12.4 ) (25.9 ) (25.1 ) (28.2 ) (3.7 ) (9.6 ) (3.1 ) (4.2 ) (114.3 )
*Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an dlarge r tha n2 9 M

W (10 0 MMBtu/hr) . 'Les s than5 0 Mg (5 5 shor t tons) .

3-1 7P.4 2



### TABL E 3-11 . PROJECTE DREGIONAL SO 2 EMISSION S I N 1990 * G g (IO 3 

### shor t tons )

1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Federa l regio

n
Ne w Englan d Ne w York/Ne

w Jerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t U.S . Higher Regulator

y baselin e 

### b 5. 2 25. 4 73. 5 74. 1 70. 7 22. 9 13. 3 

### 2. 8 7. 8 295. 7 

### b

(5.7 ) (28.0 ) (81.0 ) (81.7 ) (77.9 ) (25.2 ) (14.7 ) (3.1 ) (8.6 ) (325.9 ) oi l an

dgas price s Alternativ

e contro l II I 

### b 1. 2 7. 3 7. 2 10. 8 

### 6. 9 1. 2 2. 4 0. 6 3. 7 41. 4 

### b

(1.3 ) (8.1 ) (7.9 ) (11.9 ) (7.6 ) (1.3 ) (2.7 ) (0.7 ) (4.1 ) (45.6 ) 

### b

0. 8 5. 1 6. 2 7. 3 6. 0 0. 7 1. 6 0. 5 2. 4 30. 6 level I V 

### b (0.9 ) (5.6 ) (6.8 ) (8.0 ) (6.6 ) (0.8 ) (1.8 ) (0.5 ) (2.7 ) (33.7 )

a 

### Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an dlarge r tha n2 9 M

W (10 0 MMBtu/hr) . Les s than5 0 M

g (5 5 shor t tons) .

3-1 8P.4 3

TABL E 3-12 . PROJECTE DREGIONAL SO 2 EMISSION S I N 1990 * G g (IO 3 shor t tons )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Federa l region
Ne w Englan d Ne w York/Ne w Jersey Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l NorthCentra l Wes t Northwes t U.S . Highe r Regulatory baselin e 

### b 5. 2 25. 4 73. 5 74. 1 70. 7 22. 9 13. 3 

### 2. 8 7. 8 295. 7 

### b

(5.7 ) (28.0 ) (81.0 ) (81.7 ) (77.9 ) (25.2 ) (14.7 ) (3.1 ) (8.6 ) (325.9 ) oi l an

dga s price s Alternativ e c V 

### b 0. 8 5. 1 4. 4 7. 3 4. 2 0. 8 1. 6 0. 5 2. 4 26. 9 

### b

(0.9 ) (5.6 ) (4.8 ) (8.0 ) (4.6 ) (0.9 ) (1.8 ) (0.5 ) (2.7 ) (29.7 ) :ontro l



### b 0. 5 3. 4 1. 5 6. 7 1. 0 0. 1 0. 5 0. 2 0. 5 14. 5 leve l V I 

### b (0.6 ) (3.8 ) (1.6 ) (7.4 ) (1.1 ) (0.1 ) (0.6 ) (0.2 ) (0.5 ) (16.0 )

a Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an dlarge r tha n2 9 M

W (10 0 MMBtu/hr) . Les s than5 0 Mg (5 5 shor t tons) .

3-1 9P.4 4

4 . ECONOMI C IMPACT S

4. 1 INTRODUCTIO N Thi s sectio npresent s economi c impact s fo r on e o f th e alternativ e SO 2 emissio nstandard s fo r new industria l fossi l fuel-fire dboilers . Th e alternativ e contro l leve l selecte dreflect s anuppe r boundonth e stringenc y

o f emissio nstandard s whic hhav e bee nstudie db y EPA . SO 2 alternativ e contro l leve l V I (referenc e Tabl e 3-2) require s scrubbin g o n al l ne w industria l residua l fue l oi l andcoa l boiler s wit ha hea t inpu t capacit y large r tha n2 9 M

W (10 0 MMBtu/hr) . I ndeterminin g i f potentiall y sever e economi c impact s coul doccu r t o industria l user s o f steam , th e impac t analysi s examine s bot hcost relate dimpact s andcapita l availabilit y issues . Cos t relate dimpact s includ e impact s onproduc t price , valu e added , andretur nonasset s fo r selecte dindustries . Capita l availabilit y issue s refe r t o th e abilit y o f a fir m t o obtai ncapita l t o financ e th e cost s o f contro l require db y analternativ e SO 2 standard . A detaile ddescriptio no f th e methodolog y andbackgroun dinforma tio nuse dinth e impac t analysi s i s containe dinth e draf t EI S Fossi l Fuel-Fire dIndustria l Boiler s - Backgroun dInformation , Volum e 1 , (EPA 450/3-82-006a ) publishe dinMarch , 1982 . Th e followin g discussio npre sent s a summar y

o f th e analytica l framewor kandindustr y profile s in clude dinth e draf t EI S document . Th e impac t result s hav e bee nrevise d t o reflec t th e curren t nationa l cos t impact s generate db y EEA' s Indus tria l Fue l Choic e Analysi s Mode l (IFCAM) . Becaus e th e numbe r o f industrie s tha t coul dbe affecte db y the pro pose dstandar di s large , a two-fol dapproac hha s bee nuse dt o asses s th e leve l andnatur e o f th e economi c impac t withou t undertakin g a detaile d analysi s o f e^/ery

industry . Th e firs t componen t i s performe donth e genera l industr y

leve l (i.e. , foodo r stee l industries ) fo r majo r steam usin g industries . Eigh t industr y groups , whic haccoun t fo r approxi matel y 7 0 percen t o f tota l industria l steam consumptio nar e examined . Th e secondcomponen t o f th e use r impac t analysi s focuse s onth e economi c impac t o f selecte dfour-digi t Standar dIndustria l Classifi catio n(SIC ) industries . Thi s focu s i s necessar y sinc e th e majo r


### 4- 1steam use r analysi s utilize s industr y average s t o asses s economi c impact . Becaus e eac htwo-digi t SI C industr y groupin g i s compose do f man y four-digi t SI C industries , th e industr y averag e ma y

no t captur e th e impac t o f regulator y

option s o nspecifi c four-digi t SI C industries . I n addition , four-digi t SI C industrie s tha t ar e no t par t o f th e eigh t industr y group s analyze dunde r majo r stea m user s ma y

be affecte d severely . T o remedy

th e situation , th e economi c impac t onselecte d four-digi t SI C industrie s i s examined . Th e industrie s chose nfo r thi s componen t o f th e analysi s wer e selecte db y a screenin g proces s designe d t o identif y

th e four-digi t SI C industrie s mos t likel y t o experienc e advers e economi c impacts . By evaluatin g th e economi c impac t on industrie s mos t likel y t o be affecte dadversely , th e impac t onothe r industrie s group s ca nb e inferre dt o be les s severe . Th e remainde r o f thi s sectio ni s divide dint o two parts . Sectio n 4. 2 present s anovervie w o f th e profile s fo r industrie s tha t wil l be covere dinth e economi c impac t analysis . Sectio n4. 3 cover s th e result s o f th e impac t analysis . 4. 2 INDUSTR YECONOMI C PROFILE S 4.2. 1 Majo r Steam

User s Profil e Th e majo r steam

user s consis t o f th e followin g eigh t industr y groups :

• t
§

•

•

•

•

• Food Textile s Pape r Chemical s Petroleum

refinin g Stone , clay , andglas s Stee l Aluminum . Thes e industrie s ar e examine dbecaus e togethe r the y wil l bea r mos t o f th e cos t burde no f analternativ e SO 2 standard . Excep t fo r stee l and aluminum , th e industrie s examine dar e identifie db y a two-digi t SI C code .


### 4- 2P.4 6

Thes e eigh t industrie s generall y us e approximatel y

5 0 percen t o r mor e o f thei r energ y consumptio nt o generat e steam and/o r hav e steam cost s tha t compris e a majo r percentag e o f productio ncosts . Tabl e 4- 1 show s 197 6 tota l fossi l fue l consumptio n(excludin g ra w materia l an d feedstoc kuses ) andth e percen t o f tota l consumptio naccounte dfo r b y boiler s ineac ho f th e majo r steam use r groups . Approximatel y 4 8 per cen t o f al l industria l non-feedstoc kfossi l fue l consumptio ni n197 6 wa s i nboilers . Th e paper , food , andtextile s industrie s consume dsignifi cantl y mor e o f thei r fossi l fue l i nboiler s tha ni nothe r uses ; th e pape r industr y

consume dapproximatel y 8 7 percen t o f it s fossi l fue l in boilers , th e foodindustr y 8 3 percent , whil e th e textil e industr y use d 8 0 percent . Th e chemical s andaluminum industrie s als o wer e wel l abov e th e averag e fo r industria l boile r fossi l fue l consumption . 4.2. 2 Selecte dIndustrie s Profil e Thi s sectio ncontain s profile s o f th e seve nfour-digi t SI C indus trie s selecte dfo r analysis . Du e t o th e larg e numbe r o f four-digi t SI C industries , screenin g criteri a wer e use dt o targe t thos e industrie s mos t likel y t o experienc e cost-relate dimpact s and/o r capita l availabilit y constraints . Industrie s mos t likel y t o experienc e cost-relate dimpact s ar e thos e wit ha hig hstea

m cos t t o productio ncos t ratio . A hig hrati o usuall y stem s fro

m on e o f two factors : 1 ) th e productio nproces s i s steam intensiv e o r 2 ) th e fir m o r industr y

ha s cycli c stea

m requirements , resultin g ina lo

w capacit y

utilizatio no f th e boile r equipment . Low capacit y utilizatio ncause s th e capita l cos t componen t o f stea m cost s t o rise , yieldin g highannualize dcost s pe r uni t o f steam . Therefore , capacit y utilizatio nandpercentag e o f stea m cost s t o tota l produc t cost s ar e use da s selectio ncriteria . Capita l availabilit y

constraint s occu r whe nth e cos t o f acquirin g fund s i s s o hig htha t a fir m consider s a projec t t o b e uneconomi c o r financiall y

unattractive . Capita l availabilit y i s mos t ofte na problem fo r relativel y

smal l firms . Althoug hsome larg e firm s ma y hav e exces siv e deb t burdens , lac ko f acces s t o organize dcapita l market s i s mor e ofte ncharacteristi c o f smal l firms . Thus , siz e i s use dt o identif y firm s wit hpotentia l capita l availabilit y problems .



### 4- 3TABL E 4-1 . FOSSI L FUE L CONSUMPTIO NCHARACTERISTIC S O F TH E MAJOR STEA M USER S

i SI C Cod e



### 2 0 2 2 2 6 2 8 2 9 3 2 331 2 3315-1 7 3334 , 3353-5 5 Industr y
Foo d Textile s Pape r Chemical s Petroleu

m Refinerie s Stone , cla

y an d glas s Stee l Aluminu m Other 0 Tota l Tota l fossi l fue l consumption*» D IO 1 2 k J 797. 8 224. 9 1,191. 9 2,537. 2 1,395. 3 1,128. 8 967. 4 275. 4 2,476. 1 10,994. 7 (IO* 2 Btu ) (756.3 ) (213.2 ) (1,129.9 ) (2,405.3 ) (1,322.7 ) (1,070.1 ) (917.1 ) (261.1 ) (2,347.3 ) (10,423.0 ) Industria l boiler *

fossi l fue l consumptio n a s a percen t o f tota l fossi l fue l consumptio n

8 3 8 1 8 7 6 6 2 6 4 3 0 6 4 3 2 4 8
aEnerg yan d Environmenta l analysis , Inc . Th e Industria l Secto r Energ yConsumptio n Dat a Bas e (ECDB ) fo r 197 5 an

d 1976 . Decembe r 15 , 1980 . D Exclude s ra

wmaterials , feedstock , an d us e in vehicles . Include s coal , distillat e an d residua l fue l oil , an

d natura l gas . c Include s agriculture , mining , miscellaneou s manufacturing , an d constructio n industries .P.4 8

Th e followin g si xfour-digi t SI C industrie s hav e bee n selecte d fo r the economi c impac t analysi s an d ar e briefl ydescribe d i n thi s section .
• Bee t suga r refinin g

• Rubbe r reclaimin g

• Automobil e manufacturin g

• Petroleu mrefinin g

• Iro n an d stee l manufacturin g

• Liquo r distillin g Th e frui t an d vegetabl e cannin g industry , initiall yprofile d fo r potentia l economi c impacts , ha s no t bee n include d i n thi s repor t becaus e i t i s anticipate d tha t it s ne wstea mgeneratin g equipmen t woul d bur n natura l ga s a s th e primar yfue l typ e and no t b e affecte d b ya n alterna

tiv e SO 2 NSP S standard . Bee t Suga r Refinin g Industry : Th e U.S . bee t suga r refinin g indus

tr y(SI C 2063 ) i s characterize d b yrelativel yfe wproducers . A s o f mid

1982 , 1 0 companie s operate d 4 0 plant s generall ylocate d i n th e mid

wester n and Pacifi c States . Refinin g operation s ar e highl yseasonal , usuall ycommencin g i n mid

Septembe r an d endin g b ymid

- t o lat e March . Th e lengt ho f th e refinin g seaso n varie s fro m12 0 t o 22 0 days , dependin g o n bee t cro p conditions . Durin g th e averag e refinin g seaso n o f 18 0 days , plant s operat e seve n day s a week , 2 4 hour s a day . Annua l capacit yutilizatio n o f boiler s a t a plan t i s typicall yi n th e rang e o f 3 0 t o 4 5 percent . In recen t years , th e annua l tota l outpu t o f th e bee t suga r industr y ha s bee n decreasing . Th e numbe r o f plant s i n th e industr yals o ha s de

creased ; firm s hav e close d les s profitabl e plants , run operation s a s a cooperativ e (i.e. , wher e th e firmi s owne d b yth e suga r bee t farmers ) or , a s a las t resort , entirel yterminate d operations . Th e majo r explanatio n fo r decrease d productio n i s th e increasin g leve l o f can e suga r import s and th e us e o f concentrate d fructos e a s a substitut e fo r sugar . Du e t o declinin g sales , mos t domesti c producer s ar e no t considerin g expansion . Instead , the yar e focusin g o n plan t (an d boiler ) maintenanc e



### 4-5P.4 9

and/o r replacement s a s wel l a s company consolidation s whe neconomicall y practical . Du e t o th e industry' s smal l profi t margin , onl y th e larger , mor e profitabl e firm s tha t benefi t fro m economie s o f scal e woul dcon side r investin g ina boile r replacement . Rubbe r Reclaimin g Industry : Th e rubbe r reclaimin g industr y (SI C 3031 ) consist s o f eigh t producer s operatin g eigh t manufacturin g establish ments . Althoug hth e bul ko f reclaimin g occur s inOhio , manufacturin g plant s ar e locate dthroughou t th e easter nStates . Rubbe r reclaimer s bu

y ol drubbe r tires , inne r tubes , andothe r scra prubbe r material s andrecycl e them int o a reusabl e for m o f rubber , notabl y tire s andfloo r mats . Approximatel y 6 0 percen t o f al l reclaime d rubbe r i s use dintir e manufacturing . Fo r severa l manufacturers , un molde dreclaime drubbe r i s th e sol e output , whil e fo r others , especiall y th e large r integrate dfirms , unmolde drecycle drubbe r i s no t a primar y produc t bu t par t o f aninterna l subproces s producin g variou s rubbe r goods . Fo r th e pas t decade , th e rubbe r reclaimin g industr y ha s suffere d fro m volatil e sales , productio nfall-offs , andplan t reductions . A serie s o f externa l factor s accoun t fo r thes e conditions . Mos t stringen t ceiling s onth e amount s o f reclaime drubbe r allowe di nca r tire s hav e bee nth e larges t obstacl e t o th e industry' s expansion . Wit hth e in creasin g popularit y

o f radia l tires , whic hcontai na muc hsmalle r per cen t o f reclaime drubbe r tha nstandar dpl y tires , reclaime drubbe r con sumptio nha s decreased . Wit hproductio ndropping , sellin g price s fluctuating , andproduc tio ncost s mounting , th e industr y i s no t considerin g expandin g produc tiv e capacity , bu t instea di s usin g availabl e fund s t o replac e existin g capita l assets . Automobil e Manufacturin g Industry : Th e U.S . automobil e manufac turin g industr y

(SIC s 3711 , 3713 , and3714 ) consist s o f fou r firm s en gage dinmanufacturin g andassemblin g "American-made " vehicles . Thes e vehicle s ar e produce di nmany State s (an

dsometime s inothe r countries) , wit hth e majorit y

o f productio noccurrin g inMichigan , Missouri , Ohio , California , New

Jersey , andWisconsin . I nadditio nt o producin g automobiles , th e fou r manufacturin g firm s produc e ligh t trucks , commercia l trucks , buses , an dothe r moto r vehicles .


### 4- 6P.5 0

Excep t fo r th e industr y leader , th e marke t share s o f domesti c manu facturer s decline dbetwee n197 8 and198 3 du e t o th e increase dmarke t shar e o f th e dominan t domesti c produce r a s wel l a s th e increase dsale s o f importe dautomobiles . Th e shar e o f tota l sale s accounte dfo r b y im port s increase db

y abou t one-thir dbetwee n197 7 and1984 , fro m 18. 3 per cen t t o 23. 5 percent . Petroleu m Refinin g Industry : Th e petroleu m refinin g industr y

(SI C 2911 ) consist s o f 15 3 companie s operatin g 28 9 domesti c refineries . O f thes e firms , 1 9 contro l ove r 7 0 percen t o f th e U.S . refinin g capacity . Althoug hrefinerie s operat e in4 1 States , approximatel y 2 7 percen t o f th e crud e distillatio ncapacit y i s concentrate di

nTexas . Californi a andLouisiana , th e secondandthir dlarges t petroleum refinin g States , respectively , jointl y accoun t fo r anothe r 2 7 percen t o f crud e distilla tio ncapacity . Th e U.S . petroleu

m refinin g industr y

ha s suffere dfro

m anoperatin g cost disadvantag e whe ncompare dt o foreig noi l companies . U.S . oi l companie s fac e highe r taxe s andlabo r cost s tha nthei r foreig ncounter parts . Thi s partiall y explain s why

th e Unite dState s import s a signifi can t shar e o f it s oi l requirement s inth e for m o f refine dproduct s (a s oppose dt o crude) . Consequently , th e Unite dState s account s fo r les s tha non e percen t o f th e worl drefiner y capacit y

additions . IronandStee l Manufacturin g Industry : Th e ironandstee l industr y (SI C 3312 ) consist s o f integrate destablishment s tha t produc e basi c stee l shape s inth e for m o f semi-finishe dproduct s suc ha s ingots , billets , blooms , andslab s o r finishe dproduct s suc ha s stee l strips , bars , shapes , heav

y structurals , andrails . Establishement s primaril y engage di nproducin g finishe dproduct s for m purchase dironandstee l (e.g. , non-integrated ) ar e considere dseparat e industrie s andar e classifie dunde r SI C code s 3315 , 3316 , and3317 . Typically , operation s a t integrate dstee l work s involv e manufac turin g ironfro

m ra w materials , refinin g th e ironint o steel , castin g andmillin g th e stee l int o semi-finishe dshapes , andeithe r sellin g th e shape s t o non-integrate dfinishin g facilitie s o r ho t rollin g int o



### 4- 7P.5 1

finishe dproduct s a t th e works . Integrate dstee l work s rang e i nsiz e fro m larg e plant s usin g severa l steel-makin g processe s an dfinishin g mill s t o smal l plant s usin g a singl e proces s an dsellin g a semi-finishe d product . Ove r th e las t decade , th e stee l industr y ha s suffere dfro

m reces sionar y trend s roote dinth e 1950's . Spiralin g cost s an drestraine d price s hav e reduce dindustr y profit s t o lo

w levels , leavin g majo r stee l producer s wit hlittl e capita l fo r maintenanc e o r expansion . A s a result , domesti c stee l producer s hav e bee npostponin g larg e capita l com mitments , closin g o r sellin g unprofitabl e operations , reducin g produc tio nlevels , andmergin g wit hothe r companies . Mos t o f th e capita l investment s mad e i nrecen t year s hav e bee n piece-mea l expansion s andreplacement s rathe r tha nlarge-scal e capacit y addition s o r ne w

plants . Project s hav e attempte dt o cu t cost s b y im provin g productivity , o r boostin g yield s throug hmodernization . I t i s likel y tha t futur e investment s wil l follo w th e same rout e o f piece-mea l expansion s an dreplacement s unles s presen t marke t condition s improve . Liquo r Distillin g Industry : Th e liquo r distillin g industr y (SI C 2085 ) i s mad e u po f thos e establishment s tha t manufactur e liquo r b y dis tillatio no r rectification . The y produc e cordia l andalcoholi c cocktail s b

y blendin g processe s o r b y mixin g liquor s andothe r in gredients . Al l liqudr s excep t brand y ar e include di nthi s category . Th e liquo r distillin g industr y i s comprise do f approximtel y 5 0 firm s tha t operat e 10 0 distilleries . Th e greates t concentration s o f distillin g plant s i s locate dinth e eas t sout hcentra l State s (Federa l Regio n4. ) Whil e distillerie s ar e locate di n2 5 States , Kentuck y ha s 2 7 percen t o f th e tota l numbe r o f domesti c plants . Californi a follow s secon dwit h1 1 percen t o f th e total . Th e numbe r o f plant s tha t thes e firm s operat e ha s decrease dinth e pas t decade . In1972 , 12 1 distillerie s wer e operating ; b y 1977 , thi s su m hadfalle nt o 104 , a los s o f 1 7 distillerie s i nfiv e years . Appar ently , no new

facilitie s hav e bee nconstructe di nrecen t years . Severa l factor s ma y

explai nth e decreasin g numbe r o f operatin g distilleries : some plant s ar e old , inefficient , andno t equippe dfo r th e majo r



### 4- 8oroductio nmodification s ofte nnecessar y t o satisf y

th e demand s o f a changin g market ; furthermore , larg e firm s ofte nfindoperatin g fewe r plant s mor e efficient . Th e majo r inter-industr y competitio nt o th e distille dspirit s industr y

arise s fro

m th e bee r andwin e industries . Bee r andwin e con sumptio nha s grow

na t th e expense , t o some degree , o f "hard " liquors . Intensiv e advertisin g campaign s an dbran dproliferatio nha s helpe dbee r consumptio ngrow . Wine , especiall y whit e wine , onc e jus t a dinne r beverage , ha s becom e a cocktai l beverag e a s well . 4. 3 ECONOMI C IMPAC T ANALYSI S Thi s sectio npresent s th e analysi s o f economi c impact s o f anSO 2 alternativ e contro l leve l V I onindustria l user s o f steam . Th e economi c impac t analysi s i s designe dt o determin e i f alternativ e SO 2 emissio n regulation s fo r new industria l boiler s wil l severel y affec t eithe r majo r steam user s o r selecte dindustries . 4.3. 1 Majo r Steam

User s Impact s Th e economi c analysi s o f th e majo r steam user s focuse s oncost relate dimpacts . Capita l availabilit y consideration s ar e bes t examine d ona fir

m leve l and , therefore , ar e covere donl y inth e analysi s o f th e si xselecte dindustries . Th e analysi s o f majo r steam user s consist s o f fou r steps : • Ste pOn e - - Evaluat e pric e impact s o f alternativ e regulator y option s ona genera l industr y leve l assumin g th e cost s o f th e regulator y

optio nar e passe dcompletel y t o th e consume r (i.e. , ful l cos t pass-through) .
• Ste pTwo - - I f pric e impact s ar e significant , evaluat e th e abilit y o f th e industr y

t o pas s throug hth e entir e costs .
• Ste pThre e - - I f industr y i s abl e t o pas s throug hcosts , asses s th e macroeconomi c impact s o f th e pric e increase . I f industr y

i s unabl e t o pas s onth e additiona l costs , asses s th e abilit y o f th e industr y

t o absor bth e additiona l costs .
• Ste pFou r - - I f cos t impact s ar e significan t andth e industr y i s unabl e t o absor bth e costs , furthe r analysi s i s warrante d fo r th e impac t onbot hth e othe r industrie s (non-majo r steam users ) andtwo-digi t SI C industries .



### 4-9P.5 3

Th e firs t ste p o f th e analysi s evaluate s th e pric e impact s o f alternativ e regulator yoption s o n majo r steamusers . Whe n pric e impact s ar e determine dt o b

e significant , the yar e evaluate d i n term s o f th e condition s containe di n Step s Tw o throug hFour . Th e effec t o f a regulator yoptio n o n produc t pric e i s calculate d b y findin g th e produc t o f th e chang e i n th e cos t o f ne wsteam , th e shar e o f stea maffecte d b

yth e regulator yoption , an d th e amoun t o f stea m consume d pe r dolla r o f output , a s illustrate d i n Figur e 2 . Th e cos t impact s ar e state d i n rea l terms . Th e onl yrea l cos t increas e i s assume d t o b e du e t o ne wboiler , pollutio n control , an d fue l costs . Al l othe r productio n cost s ar e hel d constan t i n rea l terms . Asummar yo f th e produc t pric e impac t fo r SO 2 alternativ e contro l leve l V I i s foun d i n Tabl e 4-2 . Fo r eac ho f th e majo r stea musers , th e tabl e shows :

• Th e industry' s rati o o f stea mconsumptio n t o dolla r o f produc t shipment s (i n MMBtu/ $ o f shipment )

• Amoun t o f tota l stea m affecte d b

yth e alternativ e SO 2 emissio n standar d

• Th e chang e i n th e cos t o f stea m fo r th e referenc e fue l pric e scenari o and highe r oi l and ga s price s scenari o

• Th e estimate d chang e i n th e produc t pric e unde r eac hfue l pric e scenario . Th e rati o o f annua l stea m consume d (pe r uni t output ) t o annua l dolla r valu e o f shipmen t (pe r uni t output ) i s compute d b yfindin g th e quotien t o f annua l stea m consumptio n an d th e valu e o f shipments . Th e rati o o f annua l steam consume d t o annua l dolla r valu e o f shipmen t b y industr yi s assume d t o remai n constan t ove r time . Th e estimate d percen t o f stea maffecte d b

yth e alternativ e SO 2 standar d i s base d o n th e amoun t o f ne wstea mdeman d projecte d fo r th e 1986-199 0 perio d a s a fractio n o f tota l stea mdeman d fo r eac hindustr ygroup . Thi s percentag e graduall y increase s ove r tim e a s mor e ne wboiler s becom e operational . Th e alternativ e SO 2 standar d examine d doe s no t affec t produc t pric e significantly . A s Tabl e 4- 2 shows , th e produc t pric e increas e i s les s tha n 0. 1 percen t fo r al l industries . Thi s resul t i s du e primaril yt o th e relativel ysmal l fractio n o f tota l produc t valu e accounte d fo r b y ne wsteam .
4-1 0

### FIGURE 2 . CHANG E IN PRODUC T PRIC E DUE T

OREGULATORYOPTION

Produc t k 

### Pric e

i 

### c . Stea m ~ J/G J(MMBtu ) Steam/\^/Affecte dBy\ l f / Cos t o f \ / Cos t o f \ \ 1 \ Produc t Pric e /W^Regulator y J f % 1 I New

Steam ) " I New Steaa ) \ Optio n' i I '

Regulatory

' Curren t J Optio nRegulatio n

• G J(MMBtu)/Stea

m Produc t Pric e Annua l G J(MMBtu ) Steam/Annua l Outpu t (Tota l Numbe r o f Units ) Annua l $ Valu e o f Shipments/Annua l Outpu t (Tota l Numbe r o f Units )

• Stea m Affecte db

y Regulatory

Optio n Stea m Consumptio nAffecte db y Regulatory

Optio n Tota l Stea

m Consumption
• Cos t o f New

Stea m Tota l Annualize dCos t o f Stea m G J(MMBtu )TABL E 4-2 . MAJORSTEA M USER S ECONOMI C IMPACTS 1 /

Industr y
Foo d Textile s Pape r Chemical s Petroleu

m Refinin

g Stone , Cla

y & Glas s Stee l Aluminu m Othe r Tota l Steam/Produc t Pric e (MMBtu/ $ o f Shipments )
.003 5 .004 7 .020 4 .015 2 .004 2 .001 4 .006 0 .014 7 .000 8 .003 3 % Stea m Affecte d 

### 9 3 5 1 0 0 1 1 6 8 Ne

w Stea m Cos t Impact (Alternativ

e SO 2 NSPS Bas e Case ) (198 2 $/MMBtu ) Referenc e fuel pric e scenari o
0.3 2 0.5 8 0.3 0 0.2 5

-

- 0.5 6 0.1 7 0.2 5 0.2 7 Highe r

oi l an d gas price s scenari o
0.1 0 0.2 9 0.0 7 0.0 6

-

- 

### 0 0 .0 6 .0 6 Change i

n Produc t Pric e (Percent ) Referenc e fuel pric e scenari o
0.0 1 0.0 1 0.0 3 0.0 1

-

- 0.0 1 0.0 1 0.0 1 0.0 1 Highe r

oi l an d gas price s scenari o
0.0 1 0.0 1 0.0 1 0.0 1

-

- 

### 0 0 0.0 1 0.0 1
1/The bas e cas e assume s th e alternativ e contro l leve l propose dP M an dN0 XNSP S V I (show

ninTabl e 3-2) . i s inforce . Th e alternativ e SO 2 standar di sP.5 6

Th e majo r steam

user s i naggregat e wil l no t experienc e a signifi can t impact . Thi s doe s no t mean , however , tha t a componen t o f th e majo r steam use r Industr y

grou pwil l no t be affecte dadversely . Th e selecte d industrie s study

focuse s bot honindustrie s fro m withi nth e majo r stea m user s andfro

m othe r manufacturin g group s t o asses s whethe r smalle r in dustr y group s ma y

b e affected . 4.3. 2 Selecte dIndustrie s Impact s Th e analysi s o f selecte dfour-digi t SI C industrie s form s th e secon d par t o f th e economi c impac t analysis . Th e majo r focu s i s th e effec t o f th e alternativ e NSP S onproduc t cost , profitability , andcapita l avail abilit y fo r th e firm . A

smal l busines s analysi s i s als o presente dt o evaluat e th e nee dfo r furthe r revie w o f th e impact s unde r th e Regulator y Flexibilit y

Act . 4.3.2. 1 Cos t andProfitabilit y Impact s Methodolog y Th e followin g thre e step s ar e use dt o estimat e th e cos t impac t o f regulator y

option s ona selecte dindustry : t Ste pOn e - - Defin e a mode l plan t fo r th e selecte dindustr y
• Ste pTwo - - Evaluat e th e cos t impact s fo r th e mode l plant , assumin g ful l cos t absorptio n
• Ste pThre e - - Evaluat e th e impact s o nth e profitabilit y o f th e mode l plan t Eac hste pi s describe dbelow . Mode l plant . Th e selecte dindustrie s analysi s focuse s onmode l plant s t o measur e th e economi c impac t o f SO 2 alternativ e contro l leve l VI oneac hindustry . Th e mode l plan t represent s a typica l plan t fo r th e segmen t o f eac hindustr y tha t migh t be considerin g a boile r investmen t eithe r a s boile r expansio no r replacement . A mode l plan t i s use dsinc e i t i s difficul t t o obtai nprecis e detail s abou t th e expansio nand replacemen t plan s o f actua l firms . Thi s analysi s present s economi c impact s fo r th e mode l plan t as sumin g th e decisio nha s alread y bee nmad e i nth e bas e cas e t o expan do r t o replac e it s existin g boilers . However , decision s regardin g plan t investments , includin g new stea m generatin g capacity , ultimatel y depen d onth e marke t condition s face db y eac hfirm . I f i t appear s tha t i t woul dbe to o costl y

fo r a fir

m wit hdeclinin g sale s o r a low profi t mar gi nt o inves t i na new boiler(s ) andth e necessar y pollutio ncontro l equipment , th e fir

m coul delec t t o defe r the investment . A decisio nt o 4-1 3defe r th e ne w boile r investmen t ma y b e mor e attractiv e t o th e fir m unti l th e poin t a t whic hi t become s to o expensiv e t o maintai nth e plant' s ex istin g boiler s compare dt o replacin g them wit hne w

units . Th e cos t o f installin g an doperatin g additiona l pollutio ncontro l equipmen t t o com pl y wit hth e SO 2 alternativ e contro l leve l migh t als o contribut e t o th e possibilit y

tha t th e fir

m woul ddefe r th e ne w boile r investment . How ever , th e decisio nconcernin g ne w steam generatin g unit s i s expecte dt o depen dmor e o nth e investmen t i nne w boile r equipmen t tha nth e pollutio n contro l equipmen t du e t o th e relativ e magnitud e o f thei r respectiv e costs . Th e fue l typ e burne dinth e existin g boiler(s ) o f th e mode l plan t i s determine db

y industr y

sources . Th e fue l typ e o f th e replacemen t o r expansio nboiler s i s base do nindustr y trend s an dprojection s fro m IFCA M base do nth e combustor' s size , location , an dapplicabl e energ y an d environmenta l regulations . Th e followin g productio ncharacteristic s fo r th e mode l plan t ar e supplied : t Plan t Output/Yea r - - averag e produc t outpu t pe r yea r i nthos e plant s mor e 1ikel y

t o inves t i nne w

boilers .
• Pric e (Cost)/Uni t o f Outpu t - - th e historic , averag e sellin g pric e pe r unit , inrea T 198 2 dollars .
• Plan t Sales/Yea r - - plan t outpu t pe r yea r multiplie dby pric e pe r uni t o f output .
• Plan t Earnings/Yea r - - plan t sale s pe r yea r multiplie db y a derive dprofi t margi n(percen t retur no nsales) . Thi s figur e estimate s th e profitabilit y o f th e mode l plant . Produc t Cos t Impacts : Th e effec t o f regulator y option s o nproduc t cos t i s calculate db y findin g th e produc t o f th e chang e inth e cos t o f ne w steam , th e shar e o f steam affecte db

y th e new

regulation , andth e amoun t o f steam

consume dpe r dolla r o f output . Th e cos t impact s ar e state dinrea l terms . Th e onl y rea l cos t increas e i s du e t o ne w boile r andfue l costs ; al l othe r rea l productio ncost s ar e hel dconstant . I t shoul db e note dtha t th e effec t o f th e cos t impac t o nproduc t pric e i s relate dt o th e marke t condition s fo r eac hfir m andt o wha t degre e th e fir

m behave s a s a price-take nvs . a price-setter . Th e pric e impac t i s thu s dependen t o nth e exten t tha t th e fir m i s abl e t o pas s o n th e increase dcos t throug hincrease s i nth e pric e o f it s product(s) . 4-1 4P.5 8

Th e impac t ona plant' s valu e adde di s als o determined . Valu e adde drepresent s th e portio no f the tota l produc t valu e tha t canb e at tribute dt o th e plant' s non-ra wmateria l cost s o f manufacturin g th e pro duct . I t cover s the remainin g produc t valu e afte r th e cos t o f al l materia l input s hav e bee n deducted . Th e valu e adde d pe r dolla r o f pro duc t fo r eac hselecte d industr yha s bee n calculate d nationall yusin g U.S . Censu s o f Manufacture' s dat a o n a four-digi t SI C basis . Profitabilit yImpacts . Th e additiona l cost s du e t o a regulator y optio n wil l affec t th e profitabilit yo f a n industry . Thi s impac t wil l b e assesse d b

yexaminin g th e followin g tw o financia l indicator s fo r th e mode l plant :

• Ne t Profi t Afte r Taxe s (Ne t Income) . Profi t afte r al l cost s an d taxe s hav e bee n deducted .

• Retur n o n Assets . Ne t incom e divide d b ytota l assets , converte d t o a percen t form . Th e chang e i n thes e indicator s du e t o regulator yoption s i s a measur e o f th e abilit yo f th e mode l plan t t o absorbth e additiona l cost s o f a regulator yoption . 4.3.2. 2 Capita l Availabilit y Capita l availabilit yconstraint s ma yresul t i f a regulator yoptio n create s a nee d fo r financin g additiona l pollutio n contro l investments . Th e fir mi s th e focu s o f th e capita l availabilit yanalysi s becaus e deci

sion s involvin g larg e capita l expenditure s ar e mad e a t th e corporat e level . Dependin g upo n th e stat e o f corporat e cas hreserve s and th e relativ e cost s o f variou s financin g tools , a firmwil l choos e a combinatio n o f interna l an d externa l financin g instrument s t o mee t th e additiona l investment s require d t o compl ywit hregulator yoption . Th e capita l availabilit yanalysi s focuse s o n th e followin g tw o financia l indicators , whic hensur e eac hindustry' s financin g ability :

• Coverag e Rati o - - th e numbe r o f time s operatin g incom e (earning s befor e taxe s and interes t expenses ) cover s fixe d obligation s (annua l interes t o n deb t instrument s and long-ter m leases )

• Debt/Equit yRati o - - a measur e o f th e relativ e proportion s o f tw o type s o f externa l financing . Thes e tw o indicator s ar e analyze d fo r bot hth e bas e cas e and th e regulator yoptions . Th e chang e i n indicator s du e t o th e regulator y
4-1 5P.5 9

optio ni s analyze dt o determin e how difficul t i t wil l b e fo r th e fir m t o mee t financia l requirement s fo r th e pollutio ncontro l equipmen t invest ment . Th e cas hflo

w coverag e rati o i s calculate db y dividin g operatin g income b y fixe dobligations , bot ho f whic hcoul dchang e a s a resul t o f alternativ e regulator y options . I f th e coverag e rati o remain s abov e th e 3. 0 standar dbenchmark , th e cos t o f capita l ca nbe assume dt o be abov e "acceptable " levels . However , a s th e coverag e rati o falls , th e cos t o f obtainin g capita l wil l rise . Th e debt/equit y

rati o i s calculate db y dividin g tota l deb t b y tota l equit y o f th e fir

m (bookvalues) . Th e incrementa l deb t incurre dfro m financin g th e pollutio ncontro l require db y th e regulator y

optio ni s adde dt o th e bas e cas e debt . A new debt/equit y

rati o the ni s calculate d andth e chang e i s analyze dt o asses s th e effec t o f th e regulator y optio n onth e firm' s capita l structure . 4.3.2. 3 Summar y

o f Selecte dIndustr y Economi c Impact s A summar y o f th e key

economi c impact s result s fo r selecte dindus trie s i s show

ni nTabl e 4-3 . Th e impac t onproduc t cos t andvalu e adde d i s les s tha n1. 0 percen t fo r al l industries , excep t fo r bee t suga r re fining . Th e large r impac t onth e bee t suga r refinin g mode l plan t reflect s th e relativel y larg e portio no f produc t cost s attributabl e t o generatin g steam

fo r th e refinin g process . However , a s discusse d furthe r below , thi s impac t i s no t expecte dt o hav e a significan t effec t onth e bee t suga r refinin g industry . Th e impac t onth e mode l firm s re turn-on-asset s fo r th e selecte dindustrie s i s a decreas e o f 0. 1 t o 2. 8 percentag e points . Th e larges t impac t onreturn-on-asse t occur s fo r th e mode l fir

m i nth e rubbe r reclaimin g industry . A summar y discussio no f th e impact s fo r eac hselecte dindustr y i s presente dbelow . 4.3.2. 4 Bee t Suga r Refinin g Industr y Mode l fir

m andplan t description . Th e majo r characteristic s o f th e mode l plan t andfir

m fo r th e bee t suga r refinin g industr y ar e liste di n Tabl e 4-4 . Th e mode l fir m i s mad e upo f fou r plants , whic har e locate d i nth e nort hcentra l Unite dState s (Federa l Regio n8) . Eac hplan t i s identica l i nit s steam us e andproduc t output .

4-1 6TABL E 4-3 . SUMMARYOF KE YECONOMI C IMPACT S O F SO 2 ALTERNATIV E CONTRO L LEVE L V I O N SELECTE DINDUSTRIE S

Selecte dIndustr y
Bee t Suga r Refinin g Increas e inth e mode l plant's : Produc t cos t (percent ) 1. 5 Valu e adde dcos t (percent ) 5. 0 Decreas e inth e mode l

Firm' s retur n o n asset s (percentag e points )
0. 8

1 Rubbe r Reclaimin g

Aut o Manufacturin g
Petroleum

Refinin g
Ironan dStee l Mfg . Liquo r Distillin g 0. 5
0.00 4
0.0 2
0.1 0
0.1 2 0. 9
0.1 2
0.1 4
0.2 5
0.2 4 2. 8
0. 1
0. 1
0. 1
0. 3TABL E 4-4 . MODE L FIR M AN DPLAN T CONFIGURATION : BEE T SUGARINDUSTR Y P.6 1

Mode l fir

m Financia l data * Averag e bondrating : Coverag e ratio : Debt/equit y

ratio : Mode l plan t

Productio ndata * Plan t output/year : Price/uni t output : Plan t sales/year : Plan t earnings/year : Boile r configuratio n Tota l firin g rate : No . o f boilers : Federa l region : Ba a 12. 3 0.2 5

74,00 0 megagram s (81,00 0 tons) b $68.60/hundre dkilogram wt. c ($31.20/hundre dpoundwt. ) $50. 5 millio nc 2.2 2 mi11ion c » d

11 4 M W (39 0 MMBtu/hr ) 3 8 Characteristic s o f individua l boiler s Boile r Capacity , M

W (MMBtu/hr ) Fue l typ e 

### 1 5 1 (175 )
coa l 

### 2

5 1 (175 )
coa l 

### 3

1 2 (40 ) residua l fue l oi l Annua l capacit y

utili zation , percen t Replacement , expansio n o r existin g 

### 4 5 4

5 replacemen t 

### 2

5
existin g

*Base dupo n198 1 values . D Base dupo nth e averag e productio no f th e portio no f th e industr y mos t likel y t o inves t ina new boiler . Expresse din198 2 dollars . d Base dupo nth e 198 1 averag e retur no nsale s rati o o f 4. 4 percent . 4-1 8P.6 2

Tota l annua l fir

m productio ni s 294,00 0 megagram s (324,00 0 tons ) o f sugar , wit hannua l suga r sale s a t $20 7 million , assumin g tha t bee t suga r sell s fo r $68.6 0 pe r hundre d kilogram s ($31.2 0 pe r hundre d pounds ) an d tha t non e o f thi s suga r i s adde d t o existin g inventories . Annua l pro fit s ar e 4. 4 percen t o f tota l sale s o r abou t $2. 2 million . Th e mode l plan t boile r hous e consist s o f thre e fossi l fuel-fire d boiler s wit ha tota l hea t inpu t capacit yo f 11 4 MW(39 0 MMBtu/hr) . Tabl e 4- 4 describe s th e individua l boilers . Th e tw o boiler s bein g re place d hav e a hea t inpu t capacit yo f 5 1 MW(17 5 MMBtu/hr ) an d a n annua l capacit yutilizatio n o f 4 5 percent . Approximatel y9 0 percen t o f tota l stea mgenerate d fo r th e plan t i s fro mthes e ne wboilers . Th e tw o ne w boiler s ar e primaril yuse d fo r proces s hea t an d electricit ygeneration . Regulator yImpacts . I n th e bas e case , al l th e plant' s boile r re placement s ar e subjec t t o a n SO 2 SI P emissio n regulatio n an d th e pro pose d PM/N0 xNSP S fo r industria l boilers . Industr yrepresentative s ex pec t tha t an yne wboiler s o f thi s siz e wil l fir e coal . IFCAM project s tha t coa l i s th e least-cos t fue l typ e an d tha t a lo wsulfu r wester n coa l i s th e least-cos t coa l type . Afabri c filte r wil l b e installe d t o en sur e tha t particulat e emission s d o no t excee d th e propose d PM standar d i n th e bas e case . Th e projecte d economi c impact s fo r th e bee t suga r mode l plan t an d firm ar e show n o n Tabl e 4-5 . A s a resul t o f installin g FG D equipmen t t o compl ywit hth e alternativ e SO 2 standard , bee t suga r productio n cost s fo r th e mode l plan t ar e estimate d t o increas e 1. 5 percent . Th e impac t o n th e plant' s valu e adde d portio n o f tota l productio n cost s i s 5. 0 per cen t (usin g a valu e added-to-valu e o f shipment s rati o o f 0.3) . Base d o n a threshol d standar d o f 5. 0 percen t fo r measurin g th e cos t impac t o f a regulator yoption , th e impac t o n tota l plan t productio n cost s i s withi n th e rang e wher e advers e impact s ar e no t expecte d t o becom e significant . Sinc e th e produc t cos t and valu e adde d impact s occu r a t onl yon e o f th e firm' s fou r plants , thes e cost s coul d actuall yb e factore d int o th e firm' s tota l bee t suga r productio n an d actuall yresul t i n a lowe r over al l pric e impact . Th e impac t o n th e firm' s ne t income , a s show n i n Tabl e 4-5 , reduce s it s annua l incom e fro m$1. 1 millio n t o $0. 7 million . Thi s decreas e i n ne t revenue s i s estimate d t o lowe r th e mode l firm' s return-on-asset s

4-1 9P.6 3

TABL E 4-5 . ECONOMI C IMPACT S O F SO 2 ALTERNATIV E CONTRO L LEVE L V I FO R BEE T SUGA

RREFINING

Percen t increas e i nplant' s produc t cost : 1. 5 Percen t increas e invalu e adde dcost : 5. 0 Mode l firm : Ne t income afte r taxe s (IO 6 198 2 $ ) Bas e Case : 1. 1 Alternativ e contro l leve l VI : 0. 7 Retur nonasset s fo r fir m (percent) : Bas e Case : 2. 3 Alternativ e contro l leve l VI : 1. 5 Capita l availabilit y

impacts :

Coverag e ratio : Percen t finance db y deb t 0 * 100 %

Bas e Case : 12.3 3 9.0 7 Alternativ e contro l leve l V I 12.3 3 8.9 5 Debt/equit y

ratio : Bas e Cas e 0.21 7 0.36 1 Alternativ e contro l leve l V I 0.21 7 0.36 6

4-2 0P.6 4

from 2. 3 percen t t o 1. 5 percent . Man y bee t suga r plant s hav e bee nabl e historicall y

t o operat e wit hlow profi t margins , sinc e bee t suga r grower s i nman y

case s cooperativel y ow nth e plan t andmaintai nit s operatio nt o proces s thei r suga r beets . Bee t suga r firm s hav e bee nin creasin g thei r us e o f coa l i nthei r plant s t o hel preduc e energ y cost s andhel pmaintai nthei r profi t margins . Eve nwit hth e FG Drequiremen t t o mee t th e alternativ e SO 2 standard , i t i s expecte dtha t th e cos t o f usin g oi l andga s ove r th e long-ru nwil l b e highe r tha ninstallin g coal fire dboiler s andth e necessar y pollutio ncontro l equipment . Thu s th e lowe r rat e o f profit s du e t o th e alternativ e SO 2 standar di s expecte dt o b e les s sever e tha ni f th e plan t continue s t o us e it s existin g oil - o r gas-fire dboilers . Th e effec t o f th e alternativ e SO 2 standar donth e mode l firm s coverag e rati o an ddebt/equit y rati o ar e als o presente dinTabl e 4-5 . Ther e i s a smal l decreas e i nth e coverag e rati o fro m 9.0 7 t o 8.9 5 whe n 10 0 percen t deb t financin g i s assumed . Th e ratio s ar e wel l abov e th e 3. 0 acceptabl e benchmark . Th e debt/equit y rati o increase s inth e bas e cas e fro m 0.21 7 t o 0.36 1 whe ncomparin g zer o percen t t o 10 0 percen t deb t financing . However , th e impac t o f increase ddeb t financin g du e t o th e SO 2 alternativ e standar dha s minima l effec t o nth e debt/equit y rati o an d wil l no t chang e thi s firm' s abilit y t o secur e financin g fo r th e addi tiona l capita l investmen t fo r SO 2 pollutio ncontro l equipment . I t shoul dbe note dtha t th e propose dstandar di s no t expecte dt o b e th e primar y

criterio ni nth e decisio nt o instal l a ne w steam plant . Th e fir m wil l nee dt o evaluat e th e investmen t a s bein g cost-effectiv e wit h o r withou t mor e stringen t emissio nregulations. 1 Give nth e low rat e o f retur ninthes e firms , th e majo r issu e i s whethe r any capita l investmen t i s justified , eve nwit hth e inten t o f reducin g energ y cost s b

y in stallin g a coal-fire dboiler . Unde r th e alternativ e SO 2 standard , th e firm stil l woul dsav e energ y cost s i nth e long-ter m b y installin g th e coal-fire dboiler , althoug hsaving s woul dbe les s tha ni nth e bas e case . 4.3.2. 5 Rubbe r Reclaimin g Industr y Mode l fir

m andplan t description . Tabl e 4- 6 present s th e mode l plan t andfir

m fo r th e rubbe r reclaimin g industry . Eac hplan t withi n th e industr y

i s assume dt o be identica l init s productio nprocess ; eac h produce s th e same amoun t o f outpu t wit hequa l amount s o f steam . Th e

4-2 1P.6 5

TABL E 4-6 . MODE L FIR M ANDPLAN T CONFIGURATION : RUBBE RRECLAIMINGINDUSTRY

Mode l

Mode l fir m Financia l data *

Averag e bon d rating : Coverag e ratio : Debt/equit yratio : plan t Productio n data * N . 9 0 . A. b 9 2 4

Plan t output/year : Price/uni t output : Plan t sales/year : Plan t earnings/year : Boile r configuratio n Tota l firin g rate : No . o f boilers : Federa l region : 18,10 0 megagram s (20,00 0 tons) c $0.53/kilogra m($0.24/pound) d $9. 3 millio n d $0.4 9 million d » e

66.8M W(22 4 MMBtu/hr ) 3 8 Characteristic s o f individua l boiler s Boile r Capacity , M

W (MMBtu/hr ) Fue l typ e Annua l capacit yutili

zation , percen t Replacement , expansio n o r existin g 

### re p 

### 1 2 9 (100 )
coa l 

### 45
lacemen t 

### 2

18. 2 (62 ) oil/ga s 

### 45
existin g 

### 3

18. 2 (62 ) oil/ga s 

### 45

a 197 8 values . b N.A . = No t available . c Averag e o f plan t output/yea r fo r 197 4 - 1978 . •^Expresse d i n 198 2 dollars . e Base d upo n th e 197 8 retur n o n sale s rati o o f 5. 2 percent . 4-2 2P.6 6

typica l plan t operate s i nth e midwester nUnite dState s an dha s a yearl y outpu t o f 18,10 0 megagram s (20,00 0 tons) . Th e typica l produce r sellin g pric e i s $0.5 3 pe r kilogram ($0.2 4 pe r pound) , yieldin g sale s o f $9. 3 million . Applyin g a nindustry-wid e profi t margi n o f 5. 2 percen t o f sales , th e mode l plan t earn s $480,00 0 i n profit . Th e typica l plant' s boile r hous e contain s thre e boiler s tha t hav e a combine d firin g capacit yo f 6 6 MW(22 4 MMBtu/hr) . Al l boiler s ar e assume d t o operat e a t 4 5 percen t o f annua l rate d capacity . Regulator yImpacts . Th e replacemen t boiler s unde r bot hth e bas e cas e and th e SO 2 alternativ e standar d i s assume d t o bur n coal . I n th e bas e case , i n orde r t o mee t th e propose d PM/N0 xemissio n regulation , th e plan t wil l instal l a fabri c filte r o n th e boiler . Asummar yo f th e economi c impact s i s presente d i n Tabl e 4- 7 fo r th e rubbe r reclaiming industr ymode l firm . Th e increas e i n th e mode l plant' s produc t cost s and valu e adde d cost s du e t o th e SO 2 contro l o n th e 10 0 MMBtu/h r boile r ar e bot hles s tha n 1. 0 percent . Tabl e 4- 7 include s th e chang e i n ne t incom e du e t o th e alternativ e SO 2 standard . Th e impac t o n profit s assume s tha t sale s ar e constan t i n rea l term s and tha t expense s ris e onl ydu e t o th e ne wboile r investmen t fo r th e 10 0 MMBtu/h r unit . Assumin g a 5 0 percen t corporat e incom e tax , ne t incom e decrease s fro m$210,00 0 i n th e bas e cas e t o $60,000
. Retur n o n asset s fo r th e mode l plan t decrease s fro m3. 8 percen t fo r th e bas e cas e t o 1. 0 percen t unde r th e alternativ e SO 2 standard . Tabl e 4- 7 als o list s th e rubbe r reclaiming industry' s coverag e rati o an d debt/equit yrati o fo r tw o financin g option s fo r th e additiona l capita l investment . Th e coverag e an d debt/equit yratio s d o no t chang e significantl ybetwee n th e bas e cas e an d th e SO 2 alternativ e standar d case . Thes e ratio s d o vary , however , dependin g o n th e financin g strategy . Fo r example , th e coverag e rati o decrease s fro m9. 9 t o 6. 7 i n th e bas e case . Whil e thi s represent s a 3 2 percen t decrease , th e averag e rati o i s stil l abov e th e 3. 0 standar d benchmark . Th e debt/equit yrati o fo r th e alternativ e SO 2 standar d varie s fro m0.2 4 t o 0.3 2 whic hi s wel l belo wth e 1. 0 threshol d level . Th e lo wlong-ter mdeb t proportio n sug gest s tha t th e industr yma yhav e unuse d deb t capacity . Assumin g tha t th e fir mwil l financ e externally , th e majorit yof^th e externa l fund s ma y com e fro mdeb t instruments . 4-2 3P.6 7

TABL E 4-7 . ECONOMI C IMPACT S O F SO 2 ALTERNATIV E CONTRO L LEVE L V I FOR RUBBE RRECLAIMIN G

Percen t increas e inplant' s produc t cost : 0. 5 Percen t increas e i nvalu e adde dcost : 0. 9 Mode l firm : Ne t income afte r taxe s (IO 6 198 2 $ ) Bas e Case : 0.2 1 Alternativ e contro l leve l VI : 0.0 6 Retur no nasset s fo r fir m (percent) : Bas e Case : 3. 8 Alternativ e contro l leve l VI : 1. 0 Capita l availabilit y

impacts :

Coverag e ratio : Percen t finance db y deb t 0 % 100 %

Bas e Case : 9. 9 6. 7 Alternativ e contro l leve l V I 9. 9 6. 6 Debt/equit y

ratio : Bas e Cas e .2 4 .3 1 Alternativ e contro l leve l V I .2 4 .3 2

4-2 4P.6 8

Th e result s o f th e analysi s indicat e tha t th e regulator yoptio n caus e percentag e increase s i n produc t cos t o f on e percen t o r less . Pro
fit s remai n positive , althoug hrelativel ylow , unde r th e alternativ e SO 2 standard . Dat a o n capita l availabilit ysugges t tha t th e firmwil l b e abl e t o financ e th e ne wboile r an d contro l equipmen t investmen t unde r th e alternativ e SO 2 standard . Th e firmma yelec t t o defe r it s investmen t i n ne wboile r an d pollu

tio n contro l equipmen t unti l it s profi t margi n improves . But , a s note d earlier , th e installatio n o f a ne wcoal-fire d boile r shoul d reduc e energ ycost s i n th e long-term , eve n thoug hthos e saving s woul d b e re duce d b yth e adde d cos t o f complyin g wit hth e alternativ e SO 2 standard . 4.3.2. 6 Automobil e Manufacturin g Industr y Mode l firman d plan t description . Th e mode l firman d plan t configuratio n fo r th e automobil e manufacturin g industr yi s presente d i n Tabl e 4-8 . Th e plan t tha t operate s i n Federa l Regio n 5 i s assume d t o b e par t o f a 26-plan t firm . Tota l firmproductio n i s 2,340,00 0 vehicles , wit hannua l ca r an d ligh t truc k sale s o f $20. 4 billion , assumin g a n averag e pric e (198 2 dollars ) o f $8,67 0 pe r vehicle . Thes e productio n statistic s d o no t includ e foreign-mad e car s (suc ha s th e Dodg e col t o r th e Chevrole t Sprint ) normall ypar t o f th e Unite d State s automobil e companies ' fleets . Becaus e thes e car s ar e no t produce d i n thi s country , thei r productio n cost s woul d no t b e affecte d b yalternativ e regulator y options . Ne t profi t fo r th e mode l firmi s assume d t o b e 4.2 8 percen t o f tota l sales , o r $87 3 million . Th e mode l plan t boile r hous e consist s o f fou r coal-fire d boiler s wit ha tota l hea t inpu t capacit yo f 10 6 M W(36 1 MMBtu/hr) . Th e boile r investmen t decisio n i s t o replac e on e o f thes e unit s wit ha similarl y size d ne wcoal-fire d boiler . Regulator yImpacts . I n th e bas e case , th e plant' s boile r replace

men t mus t compl ywit hSO 2 SI P ai r emissio n limit s an d th e propose d PM/N0 xNSPS . Base d o n historica l industr ytrends , th e fue l fo r th e ne w boile r i s projecte d t o b e coal . I n th e bas e case , th e plan t wil l instal l a fabri c filte r fo r PM control . Aonce-throug hsodium FG D wil l b e installe d t o compl ywit hth e alternativ e SO 2 standard .

4-2 5TABL E 4-8 . MODE L FIR M ANDPLAN T CONFIGURATION : AUTOMOBIL E MANUFACTURIN GINDUSTR Y P.6 9

Mode l fir

m Financia l data * Averag e bondrating : Coverag e ratio : Debt/equit y

ratio : Mode l plan t

Productio ndata * Plan t output/year : Price/uni t output : Assembl y plan t sales/yr : Assembl y plan t earnings / year : Aaa/B 20.1 7 0.1 1

Boile rconfiguratio n Tota l firin g rate : No

. o fboilers : Federa l region : 90,13 0 automobiles 0 $8,68 6 automobile c $782. 9 million 0 $33. 5 million c » d

10 6 M W (36 1 MMBtu/hr) 4 5 Characteristic s o findividua l boiler s

Capacity , M

W (MMBtu/hr ) Fue l typ e Annua l capacit y

utili zation , percen t Replacement , expansio n o r existin g Boile r 

### 1 25. 5 (87 )
coa l 

### 0 e 

### 2

25. 5 (87 )
coa l 

### 2 5
existin g 

### 3

25. 5 (87 )
coa l 

### 2 5 4

2 9 (100 )
coa l 

### 2 5 replacemen t

a 197 8 values . °Base dupo naverag e industr y estimates . Expresse di n198 2 dollars . d Base dupo nth e 197 8 retur nonsale s rati o o f 4.2 8 percent . e Boile r numbe r on e i s use da s a standby boiler . 4-2 6P.7 0

Th e estimate deconomi c impact s fo r th e aut o industr y mode l fir

m ar e summarize di nTabl e 4-9 . Productio ncos t andvalu e adde dimpact s ar e negligibl e (i.e. , les s tha n0. 1 percent) . Tabl e 4- 9 show s th e chang e i nprofi t margi nfo r th e automotiv e industry . Becaus e th e boile r investmen t i s suc ha smal l fractio no f tota l expenses , th e ne t income change s du e t o a regulator y optio nar e smal l compare dt o th e bas e case . Th e alternativ e SO 2 standar dresult s i na les s tha non e percen t declin e i nne t income compare dt o th e bas e case . Retur nonasset s remain s constan t a t 9.17 . Th e coverag e an ddebt/equit y ratio s fo r th e autombil e manufacturin g industr y

ar e als o show

ni nTabl e 4-9 . Th e coverag e rati o decline s slightl y

from 20.1 7 t o 20.10 . Th e debt/equit y rati o remain s a t 0.11 . Neithe r o f thes e ratio s suggest s problem s i nobtainin g capita l i neithe r o f th e regulator y

options . Sinc e thes e rate s show a low percentag e o f debt , futur e investment s coul dbe funde dlargel y fro m debt , dependin g upo nth e interes t rat e andth e industry' s inclinatio ntowar ddeb t financing . Th e result s o f th e analysi s indicat e tha t th e alternativ e SO 2 stan dar ddoe s no t significantl y affec t any

o f th e abov e financia l parameters . Th e impac t onproduc t cos t i s negligibl e du e t o th e lo w rati o o f new

steam cos t t o tota l dolla r output . Capita l availabilit y i s no t constraine db

y an y o f thes e cases , suggestin g tha t th e fir m wil l b e abl e t o financ e a new boile r replacement . 4.3.2. 7 Petroleum

Refinin g Industr y Mode l fir

m an dplan t description . Tabl e 4-1 0 present s th e mode l fir m andplan t fo r th e petroleum refinin g industry . Thi s plant , operatin g inth e Southwes t (Federa l Regio n6) , i s assume dt o b e par t o f a seven-plan t firm . Tota l productio nfo r th e mode l fir m i s 112.9 3 millio nbarrel s o f refine dproduc t pe r year . Assumin g a pric e o f $33.6 5 pe r barre l andanannua l ne t profi t margi no f 4.5 1 percent , th e fir m realize s annua l sale s o f $3. 8 billio nandannua l profit s o f $171. 4 million . Comparin g thes e figure s t o 197 8 U.S . refine dproduc t consumption , thi s fir m satisfie s approximatel y two percen t o f tota l deman dandaccount s fo r abou t fou r percen t o f th e domesticall y refine d petroleum

product s market .

4-2 7P.7 1

TABL E 4-9 . ECONOMI C IMPACT S O F S0 2 ALTERNATIV E CONTRO L LEVE L V I FOR AUTOMOBIL E MANUFACTURIN G

Percen t increas e inplant' s produc t cost : .00 4 Percen t increas e invalu e adde dcost : .01 2 Mode l firm : Ne t incom e afte rtaxe s (IO 6 198 2 $ ) Bas e Case : 37. 8 Alternativ e contro l leve l VI : 37. 6 Retur n o n asset s fo rfir m (percent) : Bas e Case : 9.1 7 Alternativ e contro l leve l VI : 9.1 4 Capita l availabilit yimpacts :

Coverag e ratio : Percen t finance d b ydeb t 0% 100 %

Bas e Case : 20.1 7 20.1 0 Alternativ e contro l leve l V I 20.1 7 20.1 0 

### Debt/equit y ratio : Bas e Case .1 1 .1 1 Alternativ e contro l leve l V I .1 1 .1 1

4-2 8P.7 2

TABL E 4-10 . MODE L FIR M AN DPLAN T CONFIGURATION : PETROLEUM

REFININ GINDUSTR Y

Mode l fir

m Financia l data * Averag e bon d rating : Aaa/ A Coverag e ratio : 14.1 2 Debt/equit yratio : 0.3 2 Mode l plan t

Productio ndata * Plan t output/year : 16,13 3 barrel s Price/uni t output : $33.6 5 pe rbarrel 0 ' 0 Plan t sales/year : $543. 9 million 0 Plan t earnings/year : $24. 5 million°» d Boile rconfiguratio n Tota l firin g rate : 381. 0 M W(130 0 MMBtu/hr ) No

. o fboilers : 4 Federa l region : 6 Characteristic s o findividua l boiler s Boile r Capacity , M

W (MMBtu/hr ) Fue l typ e 1 95. 2 (325 ) refiner y ga s
7 5 2

95. 2 (325 ) refiner y ga s
7 5 existin g 3

95. 2 (325 ) natura l ga s
7 5 4

95. 2 (325 ) coa l

7 5 replacemen t Annua l capacit y

utili zation , percen t Replacement , expansio n o r existin g

a 197 8 values . °Th e pric e pe r uni t outpu t i s base dupo nth e averag e pric e fo r al l v refine dproducts . °Expresse din197 8 dollars . d Base dupo nth e 197 8 retur nonsale s rati o o f 4.5 1 percent . 4-2 9P.7 3

Th e mode l plan t boile r hous e consist s o f fou r boilers , wit ha tota l hea t inpu t capacit y o f 38 1 M

W (1,30 0 MMBtu/hr) . Eac hboile r ha s a firin g capacit y

o f 9 5 M

W (32 5 MMBtu/hr ) an di s use da t 7 5 percen t o f hea t inpu t capacity . Thre e o f th e boiler s ar e existin g units , firin g refiner y

an dnatural gas . Th e fourt hunit , firin g a mixtur e o f petroleum

cok e andresidua l oil , wil l b e replace db y a ne w coal-firin g boile r in1990 . Approximatel y 2 5 percen t o f boile r steam generatio nfo r thi s plan t wil l b e provide db y th e ne w

coal-firin g boiler . Regulator y

Impacts . Historically , a significan t shar e o f th e boile r fossi l fue l deman di nth e petroleum refinin g industr y

ha s bee n me t wit hth e us e o f liquid , solid , an dgaseou s wast e by-product s o f refiner y

operations . Becaus e th e focu s o f thi s analysi s i s o nth e choic e betwee ncoal , oil , andgas , th e fue l typ e fo r th e new boile r i s limite dt o thes e fuels . Th e ne w boile r unde r bot hth e bas e cas e andth e alternativ e SO 2 standar di s assume dt o bur ncoal . Tabl e 4-1 1 present s th e chang e inproduc t cos t andvalu e adde dfo r th e refinin g plan t du e t o th e alternativ e SO 2 standard . Assumin g 10 0 percen t cos t pass-through , th e pric e impac t i s les s tha n0. 1 percent . Thi s smal l percentag e i s du e primaril y t o th e smal l fractio ntha t ne w steam cost s comprise s o f tota l produc t cost . Tabl e 4-1 1 als o show s tha t ne t income fo r th e refiner y compan y

decrease s abou t on e percen t t o $33. 3 million . Th e coverag e an ddebt/equit y ratio s fo r th e mode l petroleum refiner y

indicat e tha t neithe r th e regulator y optio nno r th e financin g strateg y

affec t thes e ratio s significantly . Th e coverag e rati o decrease s fro

m 14.1 2 t o 14.08 , o r les s tha n0. 3 percent . Th e debt/equit y

rati o remain s a t 0.3 2 unde r al l financin g options . Th e result s o f th e analysi s indicat e tha t th e alternativ e SO 2 stan dar ddoe s no t resul t i nsignifican t cos t impact s onth e petroleum refinin g industry . Profitabilit y i s affecte donl y

slightl y

b y th e incrementa l expense s du e t o new boile r investment . Retur nonassets , however , remain s a t 5. 9 percen t unde r th e bas e cas e andalternativ e SO 2 standard . Capita l availabilit y appear s t o be stabl e fo r th e petroleum refinin g industry . Th e coverag e rati o i s sufficientl y hig ht o assum e

4-3 0P.7 4

TABL E 4-11 . ECONOMI C IMPACT S O F SO 2 ALTERNATIV E CONTRO L LEVE L V I FOR PETROLEUM

REFINING

Percen t increas e inplant' s produc t cost : .0 2 Percen t increas e invalu e adde dcost : .1 4 Mode l firm : Ne t incom e afte rtaxe s (IO 6 198 2 $ ) Bas e Case : 33. 6 Alternativ e contro l leve l VI : 33. 3 Retur n o n asset s fo rfir m (percent) : Bas e Case : 5.9 8 Alternativ e contro l leve l VI : 5.9 3 Capita l availabilit yimpacts :

Coverag e ratio : Percen t finance d b ydeb t 0% 100 %

Bas e Case : 14.1 2 14.0 8 Alternativ e contro l leve l V I 14.1 2 14.0 8 Debt/equit y

ratio : Bas e Cas e .3 2 .3 2 Alternativ e contro l leve l V I .3 2 .3 2

4-3 1tha t th e refiner y wil l no t have problem s obtainin g externa l fund s fo r th e boile r investment . 4.3.2. 8 IronandStee l Manufacturin g Industr y Mode l fir man

dplan t description . Tabl e 4-1 2 depict s th e mode l firman d plan t fo r th e integrate d iro n an d stee l industry . Thi s plan t i s assume d t o b e par t o f a five-plant firm , locate d i n th e midwester n States . Tota l productio n fo r th e mode l firmi s 8. 2 millio n megagram s (9. 0 millio n tons ) o f ra wstee l pe r year . Assumin g a rea l pric e o f $53 4 pe r megagra m($48 0 pe r ton ) an d a n annua l ne t profi t margi n o f 2. 9 per cent , th e firmrealize s annua l sale s o f $4. 3 billio n an d annua l profit s o f $126. 4 million . Th e mode l plan t boile r hous e consist s o f fou r boiler s wit ha tota l hea t inpu t capacit yo f 21 6 M W(73 6 MMBtu/hr) . Thre e o f th e boiler s hav e a capacit yo f 4 0 M W(13 7 MMBtu/hr ) an d th e fourt hha s a capacit yo f 9 5 M W(32 5 MMBtu/hr) . Al l th e boiler s currentl yfir e blas t furnac e ga s an d hav e a n annua l capacit yutilizatio n o f 5 5 percent . Th e thre e 4 0 M W boiler s ar e retire d an d assume d t o b e replace d b ythre e similarl ysize d coal-fire d boilers . Approximatel y5 5 percen t o f boile r stea mgeneratio n fo r thi s plan t wil l b e provide d b yth e ne wcoal-fire d boilers . T o compl ywit hth e alternativ e SO 2 standard , a once-throug hsodium FG D syste mi s installed . Regulator yImpacts . Tabl e 4-1 3 indicate s tha t ther e i s n o signifi

can t change i n produc t cost , valu e added , o r profitabilit yfo r th e industr ya s a resul t o f th e change s i n cos t o f ne wsteam . Th e profitabilit yanalysi s fo r th e bas e cas e and alternativ e SO 2 standar d assume s tha t sale s ar e hel d constan t i n rea l term s an d tha t expense s increas e onl ya s a resul t o f ne wboile r investment . Thi s incrementa l expens e i s assume d t o b e absorbe d b yth e firm

an d i s no t passe d o n t o th e consumer . Give n thi s assumption , ne t incom e i s $24. 0 millio n i n th e bas e cas e an d $23. 4 millio n i n th e alternativ e SO 2 standar d case . Retur n o n asset s decrease s fro m3.3 6 percen t t o 3.2 8 percent . Becaus e o f th e relativel ylarg e sale s an d expens e bas e fo r th e industry , th e incrementa l expens e brough t abou t b yth e increas e i n ne wstea mcos t o f th e alternativ e SO 2 standar d doe s no t significantl yaffec t th e firm' s profitabi1ity .

4-3 2TABL E 4-12 . MODE L FIR M ANDPLAN T CONFIGURATION : IRONAN D STEE L MANUFACTURIN GINDUSTR Y

Mode l firm Financia l data *

Averag e bond rating : Coverag e ratio : Debt/equit yratio : Mode l plan t

Productio n data * Plan t output/year : Price/uni t output : Plan t sales/year : Plan t earnings/year : Boile r configuratio n Tota l firin g rate : No . o f boilers : Federa l region : N.A. ° 6.0 9 0.5 2

1,632,60 0 megagram s 1,800,00 0 tons ) $53 4 megagra m(48 4 pe r ton) 0 $870. 7 millio n ° $25. 3 million°» d

21 5 MW (73 6 MMBtu/hr ) 4 5 Characteristic s o f individua l boiler s Boile r Capacity , MW (MMBtu/hr ) Fue l typ e
Annua l capacit yutili

zation , percen t Replacement , expansio n o r existin g 

### 1 40. 1 (137 )
coa l



### 5 5 

### 2

40. 1 (137 )
coa l



### 5 5 replacemen t 

### 3

40. 1 (137 )
coa l



### 5 5 

### 4

95. 2 (325 ) blas t furnac e ga s 

### 5 5
existing

a 197 8 values . °N.A . = No t available . Expresse d i n 198 2 dollars . d Base d upo n th e 197 8 retur n o n sale s rati o o f 2. 9 percent .

4-3 3P.7 7

TABL E 4-13 . ECONOMI C IMPACT S O F SO 2 ALTERNATIV E CONTRO L LEVE L V I FOR IRONAN D STEE L

Percen t increas e i n plant' s produc t cost : 0. 1 Percen t increas e i n valu e adde d cost : 0.2 5 Mode l firm : Ne t incom e afte r taxe s (IO 6 198 2 $ ) Bas e Case : 24. 0 Alternativ e contro l leve l VI : 23. 4 Retur n o n asset s fo r firm(percent) : Bas e Case : 3.3 6 Alternativ e contro l leve l VI : 3.2 8 Capita l availabilit yimpacts :

Coverag e ratio : Percen t finance d bydeb t 0 % 100 %

Bas e Case : 6.0 9 5.8 2 Alternativ e contro l leve l V I 6.0 9 5.8 0 Debt/equit yratio : Bas e Cas e .5 2 .5 2 Alternativ e contro l leve l V I .5 4 .5 4

4-3 4P.7 8

Tabl e 4-1 3 als o show s tha t coverag e an d debt/equit yratio s d o no t vary significantl y

a s a functio n o f th e regulator yoption . Th e coverag e rati o decrease s fro mapproximatel y6.0 9 wit hzer o percen t deb t financin g t o approximatel y

5.8 2 wit h10 0 percen t deb t i n th e bas e case . Th e alternativ e SO 2 standar d wil l reduc e th e coverag e rati o t o 5.8 2 unde r th e 10 0 percen t deb t financin g case . Th e debt/equit yratio s var yfro m 0.5 2 t o 0.5 4 fo r th e variou s financin g strategies . Th e result s o f th e analysi s indicat e tha t th e regulator yoption s caus e lo wpercentag e increase s i n produc t cost . Ne wstea mcost s fo r th e regulator yoption s compris e a relativel ysmal l portio n o f averag e produc t cost . Profitabilit ylikewis e i s affecte d slightl yb yth e incrementa l expense s du e t o ne wboile r investment . Wit hregar d t o financin g capability , th e analysi s o f coverag e ratio s indicate s tha t ne wboile r investmen t ca n b e funde d wit hup t o 10 0 percen t debt . Th e 3. 0 coverag e benchmar k i s alway s exceede d eve n whe n tota l deb t financin g i s assumed . Thi s firm' s solvenc ypositio n remain s stabl e eve n whe n tota l deb t financin g i s undertaken . Du e t o th e industry' s larg e equit ybase , th e deb t ratio s d o no t exhibi t wid e variance s a s a resul t o f th e tw o financin g options . 4.3.2. 9 Liquo r Distillin g Industr y Mode l firman d plan t description . Th e mode l plan t an d boile r con figuratio n o f th e liquo r distillin g industr yi s shown i n Tabl e 4-14 . I t i s assume d tha t th e typica l firmoperate s thre e plants . Th e mode l plan t i s locate d i n a southeaster n Stat e an d produce s 1 7 millio n liter s (4. 5 millio n gallons ) o f distille d liquo r annually . Th e mode l plan t operate s tw o boilers , on e rate d a t 2 9 MW(10 0 MMBtu/hr) , th e othe r a t 1 8 M W(6 2 MMBtu/hr) , wit ha tota l firin g capacit yo f 4 7 MW(16 2 MMBtu/hr ) an d 4 5 percen t capacit yutilization . Th e mode l plan t elect s t o replac e th e large r natura l gas/oil-fire d boile r wit ha n identicall yconfigure d coal-fire d boiler . Regulator yImpacts . Th e mode l plan t replacemen t boiler s fo r th e liquo r distillin g industr yar e assume d t o b e coal-fired . T o mee t th e propose d PM/N0 xNSP S i n th e bas e case , a fabri c filte r i s installe d fo r P Mcontrol . Tabl e 4-1 5 illustrate s th e change s i n produc t cost , valu e added , an d profitabilit ydu e t o th e SO 2 alternativ e standard . Sale s ar e
4-3 5P.7 9 ^rgg g \ty

TABL E 4-14 . MODE L FIR M ANDPLAN T CONFIGURATION : LIQUO RDISTILLIN GINDUSTRY

Mode l fir m Financia l data *

Averag e bon d rating : N.A. ° Coverag e ratio : 5.4 4 Debt/equit yratio : 0.29 2 Mode l plan t

Productio n data * Plan t output/year : 17. 0 millio n liter s (4. 5 millio n gallons ) Price/uni t output : $2.3 1 lite r($8.27/gallon) ° Plan t sales/year : $39. 2 millio n ° Plan t earnings/year : $1.6 8 million°» d Boile rconfiguratio n Tota l firin g rate : 47. 3 M W(16 2 MMBtu/hr ) No

. o fboilers : 2 Federa l region : 4 Characteristic s o findividua l boiler s Boile r Capacity , MW (MMBtu/hr ) Fue l typ e Annua l capacit yutili

zation , percen t Replacement , expansio n o r existin g 

## 1 2 9 (100 )
coa l 

### 4 5 replacemen t 

### 2 18. 2 (62 ) oil/ga s 

### 4 5
existing

a 197 8 values . b N.A . = No t available . cExpresse d i n 198 2 dollars . d Base d upo n th e 197 8 retur n o n sale s rati o o f 2. 9 percent .

4-3 6P.8 0

TABL E 4-15 . ECONOMI C IMPACT S O F SO 2 ALTERNATIV E CONTRO L LEVE L V I FO R LIQUO R DISTILLIN G

Percen t increas e i n plant' s produc t cost : 0.1 2 Percen t increas e i n valu e adde d cost : 0.2 4 Mode l firm : Ne t incom e afte r taxe s (IO 6 198 2 $ ) Bas e Case : 0.2 9 Alternativ e contro l leve l VI : 0.1 7 Retur n o n asset s fo r firm(percent) : Bas e Case : .6 8 Alternativ e contro l leve l VI : .3 7 Capita l availabilit yimpacts :

Coverag e ratio : Percen t finance d bydeb t 0 % 100 %

Bas e Case : 5.4 4 4.3 2 Alternativ e contro l leve l V I 5.4 4 4.2 6 Debt/equit yratio : Bas e Cas e .2 9 .3 6 Alternativ e contro l leve l V I .2 9 .3 7

4-3 7P.8 1

assume dt o b e constan t i nbot hregulator y options , an dexpense s increas e onl y a s a resul t o f th e new boile r investment . Ne t income leve l decrease s fro

m $290,00 0 i nth e bas e cas e t o $170,00 0 unde r th e SO 2 alternativ e standard . Retur nonasset s i s 0.6 8 percen t inth e bas e cas e an d0.3 7 percen t unde r th e alternativ e SO 2 standard . Tabl e 4-1 5 als o present s comparativ e coverag e an ddebt/equit y ratio s fo r th e alternativ e SO 2 standard . Thes e result s show th e coverag e rati o i nth e bas e cas e decreasin g fro m 5.4 4 wit hzero percen t new deb t t o 4.3 2 wit h10 0 percen t debt . Th e coverag e rati o decrease s fro m 5.4 4 t o 4.2 6 fo r zer o and10 0 percen t financin g unde r th e alternativ e SO 2 standard . However , bot hcoverag e ratio s ar e stil l abov e th e 3. 0 coverag e benchmark . Th e result s o f th e analysi s indicat e tha t produc t cos t i s expecte d t o increas e b

y slightl y

ove r one-hal f o f a percent . Ne w steam cost s fo r th e alternativ e SO 2 standar dcompris e a relativel y smal l portio no f averag e produc t cost . Profitabilit y show s a declin e a s a resul t o f th e SO 2 regulator y

optio nwhe ncompare dt o th e bas e case . Retur no nasset s decrease s fro

m 0.6 8 percen t inth e bas e cas e t o 0.3 7 percent . Th e fir m ma y elec t t o defe r it s investmen t innew boile r andpollu tio ncontro l equipmen t unti l it s profi t margi nimproves . But , a s note d earlier , th e installatio no f a new coal-fire dboile r shoul dreduc e energ y cost s i nth e long-term , eve nthoug hthos e saving s woul db e reduce db

y th e adde dcos t o f complyin g wit hth e alternativ e SO 2 standard . Wit hregar dt o financin g capability , th e analysi s o f coverag e ratio s indicate s tha t new boile r investmen t ca nbe funde dtotall y b y deb t whil e stil l meetin g th e 3. 0 coverag e benchmark . Th e industr y maintain s a relativel y stablize dsolvenc y positio neve nwhe n10 0 percen t deb t financin g i s assumed . 4.3. 3 Smal l Busines s Analysi s Th e effect s o f SO 2 standard s o nsmal l businesse s ar e considere di n thi s section . Fo r si xo f th e seve nindustries , smal l plant s ar e char acterize dinTabl e 4-16 . Fo r bee t sugar , iro nan dsteel , distille dliquor , an dpetroleum refining , average-siz e smal l plant s ar e examined . Usin g 197 7 Censu s dat a onplan t sale s andth e Smal l Busines s Administration' s definitio n

4-3 8P.8 2

TABL E 4-16 . SMAL L PLANT S I N SELECTE D INDUSTRIE S

Smal l plan t characteristic s Averag e sales 0 SIC ) Max . employees 3 (IO 6 ) (MMBtu/hr )

23. 1 17 5 14. 2 12 5 22. 7 12 5 224. 1 10 0 Bee t suga r (1063 ) Iro n an d stee l (3312 ) Distille d liquo r (2085 ) Petroleumrefinin g (2911 ) Aut o manufacturin g (3711 ) Reclaime d rubbe r (3031 ) Frui t an d vegetabl e cannin g (2033 ) 

### 75 0 1,00 0 

### 75 0 1,50 0 1,00 0 

### 75 0 50 0 252 . l d100 d 9.3 e 224 e NA f NA f

a Smal l Busines s Siz e Standards , SBARule s and Regulations . Jul y15 , 198 0 45FR47415 . Schedul e A . Definitio n o f Smal l Busines s fo r th e Purpos e o f Pollutio n Contro l Guarante e Assistanc e unde r PL94-305 . Sectio n 121.3-16 . °Excep t a s noted , smal l plan t sale s represen t th e averag e sale s o f smal l plant s i n th e 197 7 Censu s o f Manufacturers , converte d t o 198 2 dollar s usin g th e GN P pric e deflator . °Boile r size s fo r smal l plant s ar e estimate d usin g th e sam e hea t intensitie s a s a t th e larg e plant s i n eac hindustry . d Th e smal l plan t shown i s tha t whic hwoul d nee d a 10 0 MMBtu/h r boiler .

e Th e averag e plan t i n thi s industr yi s a smal l plant . ^No t applicable . Plant s ar e fire d b ynatura l ga s and ar e consequentl yno t likel yt o b e affecte d b yth e SO 2 standards .

4-3 9-JEJL
-

- <.£_-^^" , —•-• - -^

o f smal l plant s i neac hindustr y ( a maximu

m o f 75 0 t o 1,50 0 employees) , th e averag^saTe s pe r plan t wa s calculate damon g al l plant s classifie d a s smalfc-WfceachIndustry . Inturn , sale s wer e converte d t o 198 2 dollar s usin g th e GN P pric e deflator . Correspondin g boile r capacitie s wer e estimate d fo r suc hsmal l plant s b

yusin g th e boile r hea t intensitie s pe r dolla r o f produc t describe d earlie r fo r larg e plant s i n th e sam e industries . Th e sam e procedur e wa s followe d t o estimat e th e siz e o f a smal l automobil e manufacturin g plant ; however , th e averag e smal l plan t woul d hav e onlya thre e MMBtu/h r boiler . Th e smal l plan t use d instea d i n thi s analysi s i s scale d up t o th e siz e tha t use s a 10 0 MMBtu/hou r boiler ; thi s i s stil l withi n SBA' s definitio n o f smal l fo r tha t industry . I n th e cas e o f reclaime d rubber , i t wa s foun d tha t th e averag e plan t analyze d i n Sectio n 4.3.2. 5 wa s alread ya smal l plant , an d tha t furthe r analysi s o f thi s industr yi s no t neede d i n thi s section . Frui t an d vegetabl e cannin g plant s als o ar e no t analyze d i n thi s section , becaus e the ybur n natura l ga s i n thei r boiler s an d therefor e woul d no t b e affecte d b ystandard s fo r SO 2 emissions . Potentia l impact s fo r smal l plant s i n th e firs t fiv e industrie s ar e summarize d i n Tabl e 4-17 . Th e result s sho who wsmal l plant s woul d b e affecte d an d addres s EPA' s fou r guidelin e criteri a fo r determinin g whethe r a Regulator yFlexibilit yAnalysi s i s needed :

• Annua l compliance cost s ar e compare d t o bas e cas e productio n cost s (sales , les s ne t incom e an d taxes) ;

• Annua l compliance cost s a s a percentag e o f sale s are compare d fo r smal l versu s larg e plant s (mode l plant s fro mth e BIDs) ;

• Th e debt-to-equit yrati o wit hcontro l equipmen t outlay s finance d entirel yfromdeb t i s compare d wit hth e bas e cas e rati o t o asses s capita l adequacy ;

• Ne t incom e a s a percen t o f sale s i s measure d t o determin e plan t profitabilit y(o r closure ) wit hful l absorptio n o f th e annualize d compliance costs . Result s fo r smal l plant s i n eac ho f th e fiv e industrie s showe d tha t n o industr ywoul d nee d a forma l Regulator yFlexibilit yAnalysis . Annualize d compliance cost s rang e from 0. 1 t o 2. 9 percen t o f productio n

4-4 0TABL E 4-17 . INDUSTRIAL BOILER S NSP S SMAL L BUSINES S IMPAC T ANALYSI S T O STUDYNEE DFO RA REGULATOR YFLEXIBILIT YANALYSI S

Selectedindustrie s Produc t cos t impac t fo r averag e smal l plant 3

(percent ) Tota l annualize dcos t a s

percen t o f sale s fo r smal l andlarg e mode l plants : Smal l Plan t Larg e Plant 0 Debt/equit y ratio s fo r smal l fir

m unde r bas e cas e andalternativ e standar d Alternativ e Bas e Cas e Standard s Ne t income a s percen t o f sale s t o gaug e th e Potentia l fo r plan t closure c

i Bee t sugar . SI C 206 3 1. 7

Ironandsteel , SI C 331 2 2. 9 Distille dliquor , SI C 204 5 1. 4 Petroleum

refining , SI C 291 1 0. 1 Aut o manufacturing , SI C 371 1 0. 1 1. 7 2. 8 1. 3 0. 1 0. 1 1. 5

0. 1 0. 1 0. 0 0. 0 0.2 2

0.5 2 0.2 9 0.3 2 0.1 1 0.4 8

0.6 9 0.3 6 0.3 3 0.1 2 0. 5 1. 2 1. 9 4. 4 4. 2
^Produc t cos t impac t i s calculate db y dividin g th e increas e intota l annualize dcost s du e t o additiona l pollutio ncontro l equipmen t b

y th e annua l productio ncost s fo r th e averag e smal l plant .
D Larg e plan t dat a i s base donTabl e 4-3 .

c Assumin g ful l cos t absorptio nafte r controls .

W I 

# u o

ocost s a t th e fiv e industries , belo w EPA' s guidelin e threshol do f fiv e percent . Annualize dcomplianc e cost s a s a percentag e o f sale s a t smal l versu s larg e plant s similarl y d o no t excee dEPA' s guidelines . Th e differentia l fo r smal l plant s range s fro m 0. 1 t o 2. 7 percentag e points , below EPA' s guidelin e leve l o f 1 0 percentag e points . Th e debt-to-equit y

rati o remain s belo w 1.0 , th e benchmar kuse di n th e BID . Assumin g tha t capita l investment s fo r SO 2 emission s contro l ar e finance d10 0 percen t b y debt , th e deb t ratio s o f th e control s rang e fro m 0.1 2 t o 0.69 . Thi s show s residua l capita l availabilit y fo r smal l plant s eve nafte r complianc e wit hth e standards . Finally , no smal l plant s woul dlikel y clos e du e t o th e recommende d standards . Ne t income wit hful l absorptio no f complianc e cost s woul d remai npositive . Ne w income a s a percen t o f sale s range s fro m 0. 5 t o 4. 4 percen t o f sales . Insum , non e o f EPA' s guideline s fo r a forma l Regulator y Flexibilit y

Ac t Analysi s i s triggere dinth e analysi s o f smal l plan t impacts .

4-4 2P.8 6

APPENDI XA OVERVIEW O F IFCA

M

A. l PURPOS E Th e Industria l Fue l Choic e Analysi s Mode l (IFCAM ) i s a nenerg y demand mode l develope db

y Energ y an dEnvironmenta l Analysis , Inc . (EEA ) t o evaluat e fue l choic e decision s inth e industria l secto r ove r a fiv e t o 15-yea r fore castin g horizon . IFCA M i s a highl y

disaggregate dproces s engineerin g model * designe dt o analyz e factor s affectin g fue l choic e decision s i nindustria l boile r energ y

applications . IFCA M assesse s th e impact s o f fou r set s o f factor s affectin g industria l fue l choice : fue l prices , Stat e an dFedera l energ y

an denvironmenta l polic y proposals , th e cost s associate dwit hfirin g alternat e fuels , an dothe r ke y mode l parameter s suc ha s th e expecte dsiz e distributio no f ne w industria l boilers . Th e mode l i s capabl e o f estimatin g th e energy , environmental , an d cos t impact s o f alternativ e ai r emissio nregulation s fo r new industria l boilers . A. 2 ANALYTICAL FRAMEWORK A.2. 1 Summar y

o f Approac h IFCA M focuse s onboile r fue l choic e decision s betwee ncoal , oil , an d natura l gas . Th e mode l determine s fue l choice s fo r boiler s i neac ho f th e 1 0 Federa l region s using projecte dindustria l fue l price s an dtota l fossi l

•Proces s engineerin g model s simulat e th e effect s o f specifi c policie s o n new an dexistin g technica l alternative s throug hth e applicatio no f direc t engineerin g information . Othe r type s o f model s are : econometri c (mathematica l equation s solve dsimultaneousl y wit hcoefficient s estimate d statisticall y

from historica l data) ; optimizatio n(derivatio no f "best " solution s by

mean s o f algebrai c procedure s suc ha s linea r programming) ; simulatio no r system s dynamic s (mathematica l equation s solve drecursivel y wit hcoefficient s estimate dfro m modeler' s experienc e an dintuition) .



### A- lfue l demandtha t primaril y hav e bee ngenerate db y th e U.S . Departmen t o f Energ y (DOE) . IFCA

M doe s no t conside r feedstoc kenerg y use s suc ha s metallurgica l coa l o r raw material s derive dfrom petroleum

o r natura l ga s i nth e chemica l industry . A ver y disaggregat e representatio no f industria l energ y use s i s incor porate di

nIFCAM . Energy

us e i s disaggregate dint o nin e industria l subsec tor s havin g differen t growt hrate s an dregiona l dispersions . Eac ho f thes e industria l subsector s i s furthe r divide dint o boile r an dproces s hea t appli cations . Industria l boile r energ y us e i s disaggregate db y new an dexistin g boiler s o f differen t size s an dcapacit y

utilization s rates . New and existin g boiler s ar e classifie donth e basi s o f th e typ e o f fue l the y wer e designe dt o fir e an

dwhethe r the y

canb e retrofitte dt o fir e alternativ e fuels . Eigh t siz e classe s ar e delineate dfo r boilers . Ther e ar e fiv e capacit y utilizatio nrat e categorie s fo r boilers . Th e fina l leve l o f disaggregatio nincorporate s regiona l detail . Indus tria l boile r fue l us e i s divide damon g Ai r Qualit y Contro l Region s (AQCR's) . Sinc e a larg e numbe r o f region s ar e considere db y IFCAM , th e mode l ca npor tra y th e variabilit y

i nth e environmenta l contro l cost s o f usin g th e variou s fuel s t o fir e boiler s locate dthroughou t th e country . Curren t modelin g capabilitie s fo r pollutio ncontro l system s includ e onl y conventiona l technologies . Th e mid-ter m time horizo no f IFCA M pre clude s significan t marke t penetratio no f many o f th e advance dtechnologie s stil l i nth e developmen t stage . Base donth e characteristic s o f eac hcombusto r (size , operatin g rate , pollutio ncontro l requirements , etc.) , capita l an dnonfue l operatin g costs , ar e generate dfo r th e option s o f choosin g oil , gas , o r coal . Th e fue l typ e associate dwit hth e lowes t after-ta xpresen t valu e (includin g expecte dfue l expenses ) o f th e tota l cos t o f generatin g energ y ove r th e investmen t perio d i s selected . Th e mode l generate s energy , environmental , an dcos t impacts . Output s includ e regiona l industria l boile r fossi l energ y demand s b

y fue l type , ai r emissions , soli dwast e disposa l requirements , energ y penaltie s associate d



### A- 2P.8 8

wit hth e operatio no f pollutio ncontro l equipment , demandfo r ne w pollutio n contro l equipmen t an

dboiler s b

y siz e an

dtype , and tota l cost s (capital , annua l operating , maintenanc e and fue l expenses ) o f usin g fossi l energ yt o generat e steam . A.2. 2 Capabilitie s Fou r classe s o f energ ypolic ymeasure s ca n b e analyze d wit hIFCAM : fue l taxes , investmen t incentives , energ yregulator ypolicies , and environ

menta l regulator ypolicies . Avariet yo f ta xcredit s and change s i n th e ta xtreatmen t o f capita l propose d t o provid e incentive s t o inves t i n coal

relate d equipmen t ca n b e analyze d usin g th e model . Energ yregulator ypolicie s tha t targe t specifi c type s o f industria l energ yuse s t o bur n coa l includin g ne wboiler s and existin g boiler s designe d t o fir e coa l ar e modeled . Economi c feasibilit yo f complyin g wit hth e Power
plan t and Industria l Fue l Us e Ac t (FUA ) i s a n optio n i n IFCA Mtha t deter

mine s whethe r o r no t th e cos t o f usin g coa l substantiall yexceed s th e cos t o f burnin g importe d oil . Th e provision s o f FU Aar e no t applie d i n thi s impac t analysi s o f Ne wSourc e Performanc e Standard s (NSPS ) fo r industria l boilers . Environmenta l regulator ypolicie s tha t coul d affec t fue l choic e deci

sion s als o ca n b e considere d i n IFCAM . Thes e regulation s ca n affec t fue l choic e b yalterin g th e relativ e cost s o f burnin g alternativ e fuels . Regu
lation s relatin g t o particulat e matte r (PM) , sulfu r dioxid e (SO2) , and nitroge n oxid e (N0 X ) emission s fro mfuel-burnin g source s includ e Stat e and loca l regulation s and Federa l NSPS . IFCA Mi s capabl e o f modelin g alternativ e industria l boile r NSPS . IFCA Mca n simulat e th e us e o f variou s type s o f flu e ga s desulfurizatio n (FGD ) system s (som e wit hcombine d S02/particulat e matte r emission s control) , variou s type s o f post-combustio n particulat e matte r emission s control , an d tw o type s o f combustio n modification s t o contro l N0 Xemissions . IFCAM' s scrubbe r cos t estimate s ar e uniqu e fo r eac hcoa l typ e and SO 2 emissio n regulation . Severa l type s o f alternativ e NSP S specification s o f SO 2 emission s contro l fo r industria l residua l fue l oi l and coal-fire d boiler s ca n b e analyzed . Fo r example , th e regulatio n ca n var ybyboile r siz e and ca n b e specifie d as :



### A- 3P.8 9

0 A ceilin g emissio nrat e (n g o f pollutant/Joul e (l bo f pollutant / MMBtu ) o f fue l burned ) t A recommende dpercentag e remova l (e.g. , 9 0 percen t remova l o f uncontrolle dSO 2 emissions )
• A recommende dpercentag e remova l an da "floor " emission s rat e (e.g. , 9 0 percen t remova l bu t no lowe r tha n25 8 ng/ J(0. 6 lb/MMBtu) )
• A minimu m percentag e remova l t o b e applie di f th e recommende d percentag e remova l result s incontrolle demissio nrate s lowe r tha nth e "floor " IFCA M cansimulat e th e impac t o f alternativ e fue l pric e scenario s on industria l fue l mix . Regiona l fue l price s fo r distillat e fue l oil , residua l fue l oi l (four sulfu r classes) , natura l gas , an dcoa l ( 9 types ) ar e considere dinth e model . Th e fue l choic e decisio ni s sensitiv e t o non-fue l cost s o f burnin g alternat e fuels . Whil e th e bes t availabl e cos t dat a ar e used , th e mode l canevaluat e th e impac t o f an y alternativ e cos t estimates . Inadditio nt o thes e thre e set s o f factors , man y othe r ke y

variable s affec t fue l use . Th e mode l i s designed , fo r example , t o evaluat e th e effect s o f varyin g industria l productio ngrowt hrates , an dt o alte r th e distributio no f siz e an doperatin g characteristic s o f new boilers . A.2. 3 Mode l Logi c Figur e A- l outline s th e mode l structur e an didentifie s ke y

inputs , outputs , an

dmajo r analytica l steps . Input s 1 , 2 , an

d3 - Enerqy

Demandan

dIndustria l Production : Th e leve l o f industria l fossi l fue l demandan dnin e industria l productio ngrowt h rate s b y regio nar e critica l input s t o IFCAM . Althoug hsuc hinput s ca nb e derive dfrom

man y sources , inth e pas t the y hav e bee ntake nfro m th e Energy Consumptio nDat a Bas e (ECDB) , DO E projecte dindustria l energ y use , an

dth e macroeconomi c mode l tha t drive s th e DO E modelin g framework . Mode l Ste p# 1 - Characteriz e Industria l Enerqy Use : Thi s initia l ste p break s dow

nth e projecte dfossi l fue l us e by industria l sector , new an d existin g facilities , typ e o f combusto r (e.g. , boile r versu s proces s heater) , siz e o f boiler , an

da variet y

o f othe r classifications . Thes e factors , discusse dbelow , ar e significan t becaus e they :



### A- 4I Inpu t 2 Industria l Production " Growt h Rates Inpu t 1 Industria l Fossi l Fue l Use i n 1974

CHARACTERIZ E FUE L CONSUMPTIO N

Inpu t 3 Projecte d Industrial ^ Jossi l Fue l Demand / Inpu t 6 Environmenta l Regulation s Inpu t 8 Energ yPolicy Inpu t 4 Geographi c Distributio n ofBoiler

s



### £ CREATE AN D SIT E INDIVIDUA L COMBUSTORS Inpu t 7 Regiona l Fue l Price s

IDENTIF Y ENVIRONMENTA L REQUIREMENTS EVALUAT E ECONOMIC S O F FUEL CHOIC E AGGREGATE MODE L RESULT S

Inpu t 5 Inpu t 9
Boile rSize/Capacity Utilizatio n Distributio n Financia l Parameter s 

# t Inpu t 1 0

Capita l an d O& M Cost Dat a

FIGUR E A- 1 

## IFCA M MODE L STRUCTUR E

T J PP.9 1

• Alte r th e cost s o f usin g alternat e fuel s (e.g. , fue l cost s var y accordin g t o industria l location )
• Determin e th e economic s o f fue l choic e (considerin g suc hfactor s a s th e boiler' s capacit y utilizatio nrate )
• Distinguis helement s o f energ y us e specificall y

targete dby energ y polic y measure s (e.g. , new boiler s abov e a cutof f size) . Input s 4 an

d5 - Geographi c an

dBoile r Size/Capacit y Utilizatio n Distributions : Th e geographi c an dboile r size/capacit y utilizatio ndistri bution s ar e base donhistorica l data . Mode l Ste p# 2 - Creat e an dSit e Individua l Combustors : Energy use s from Ste p# 1 ar e disaggregate dint o classe s o f individua l boiler s prio r t o furthe r analysis . Boiler s the nar e site dinAQCR' s accordin g t o historica l pattern s o f industria l location . Inpu t 6 - Environmenta l Regulations : A fil e o f Stat e an

dFedera l ai r emission s regulation s applicabl e t o boiler s i s a nimportan t inpu t t o deter min e baselin e cost s an demissions . Th e fil e contain s curren t regulation s tha t var y

b y boile r siz e an

dfue l typ e ona

nAQC Rbasis . Mode l Ste p# 3 - Identif y Environmenta l Requlation s an dPollutio n Contro l Strategies : Emissio nlimit s fo r SO2 , PM , an dN0 Xapplicabl e t o individua l boiler s ar e assigne dbase do nStat e an

dFedera l regulations . Environmenta l regulation s ma y increas e th e capital , operating , an dfue l cost s o f a boile r by increasin g th e environmenta l contro l require do r qualit y o f fue l burned . Availabl e pollutio ncontro l technologie s ar e identifie din Tabl e A-l . Complianc e option s ar e identifie dfo r eac hfue l type . Input s 7 , 8 , an

d9 - Fue l Prices , Enerqy Policy , an

dFinancia l Parameters : Specification s fo r a particula r mode l ru nan dprojectio nyea r ar e incorporate da t thi s step . Specification s includ e th e fue l pric e scenario , financia l parameters , an denerg y

regulator y

policies . Fue l pric e variation s ar e usedi nIFCA M t o mode l fue l taxes , natura l ga s pric e deregulation , o r variation s inpric e trajectories . Fue l price s canbe varie dfo r distillat e fue l oil , residua l fue l oi l (four sulfu r classes) , coa l ( 9 coa l types) , an dnatura l gas . Th e pric e o f eac hfue l typ e candiffe r by

region . Investmen t incentive s considere dhav e focuse dprimaril y o ndifferen tia l depreciatio nmethod s fo r coal- , oil- , o r gas-fire dunit s an don



### A- 6P.9 2

TABL E A-l . INDUSTRIA L BOILE RPOLLUTIO N CONTRO L TECHNOLOGIE S IN IFCA M

Pollutan t Technolog y option s 

### SO 2 Flu e ga s desulfurizatio n

- dua l alkali 9

- lim e spra y drying 0

- so di u m 

### P M Singl e mechanica l collecto r Dua l mechanica l collecto r Sid e stream

separato r Electrostati c precipitato r Fabri c filte r 

### NO v Combustio nmodification s

- lo w exces s ai r

- stage dcombustio nai r
Tra y typ e scrubber . 'Combine dSO2/P M

emission s contro l system ; include s a fabri c filter .



### A- 7P.9 3

increase dinvestment taxcredit s (ITC's ) fo r coal-derive dfue l firing . Th e impact s o f differen t depreciatio nmethod s andinvestmen t incentive s ar e handle dwithi nth e scop e o f th e mai nmode l logic . Th e coa l conversio nregulator y program

establishe dunde r th e FU A target s boiler s whos e rate dcapacit y i s greate r tha n2 9 M W (10 0 MMBtu/hr ) hea t input . A neconomi c tes t compare s th e tota l cos t (capital , annua l O&M an dfuel ) o f burnin g coa l t o th e tota l cos t o f burnin g importe doi l t o simulat e legisla tiv e provision s relate dt o economi c exemptions . Thi s procedur e project s th e leve l o f increase dcoa l us e unde r th e program , excludin g an y implementa tio nproblems . A s note dearlier , th e coa l conversio neconomi c tes t optio n inIFCA M i s no t currentl y

utilize dinevaluatin g alternativ e NSPS' s fo r industria l boilers . Inpu t 1 0 - Capita l an dO&M Cos t Data : Capita l an dO& M cos t dat a rela tiv e t o th e rang e o f boile r an dpollutio ncontro l equipmen t modele dinIFCA M ar e derive dfrom

numerou s sources . Engineerin g cos t dat a i s revise dona n as-neede dbasi s whe ncurren t estimate s ar e refine do r new estimate s become available . Mode l Ste p# 4 - Evaluat e Economic s o f Fue l Choice : Base donth e charac teristic s o f eac hboile r (size , operatin g rate , pollutio ncontro l require ments , etc.) , capita l an dnon-fue l operatin g cost s ar e estimate dfo r th e option s o f choosin g oil , gas , o r coal . Th e fue l typ e associate dwit hth e lowes t after-ta xpresen t valu e (includin g capita l an dannua l O&M

an dfue l expenses ) o f th e cos t o f generatin g energ y ove r th e investmen t perio dthe n i s selected . Th e component s o f Ne t Present Valu e (NPV ) ca nbe divide dint o thre e majo r subsets : polic y inputs , standar dmode l assumptions , an dke y mode l variables . Polic y

input s ar e depreciatio nlif e an dmethod , ITC , an

dfue l prices . Standar dmode l assumption s ar e constructio nperio dan dcorporat e taxrate . Thes e element s do no t var y by boile r characteristic s an drepre sen t standar dinvestmen t assumptions . Ke y mode l variable s - - capita l costs , investmen t period , discoun t rate , annua l fue l consumptio nb y capacit y

utili zatio nrat e an

dsize , an

doperatio nan

dmaintenanc e (O&M ) cost s - - al l var y wit hfactor s considere di nth e mode l (e.g. , new o r existin g classificatio n o r environmenta l regulation) .



### A- 8P.9 4

A. 3 KE YDATA

INPUT S Thi s sectio nsummarize s ke y assumption s use dinthi s analysis . Thes e estimate s ma y

be revise dinfutur e mode l runs . A.3. 1 Cos t Algorithm s Th e capita l an

doperatin g cost s o f ne w boiler s an

dassociate dpollu tio ncontro l equipmen t hav e bee ndevelope db y severa l contractors . Thes e cost s wer e generalize dt o be expresse da s algorithms . Th e algorithm s ar e function s o f a numbe r o f significan t parameters . Th e capita l cos t estimate s includ e al l installatio ncost s (whic har e assume dno t t o var y

b y region ) an

dindirec t charge s suc ha s contingencies , land , an dworkin g capital . Th e boile r cost s includ e auxiliar y equipmen t suc ha s th e powerhous e an dfue l an

das hhandlin g facilities . Th e annua l non-fue l O& M

cos t estimate s includ e labor , materials , parts , soli dwast e disposa l an

dutilit y

an dcommodit y

costs . Th e capita l an dannua l non-fue l O& M cos t estimate s ar e assume dno t t o increas e inrea l term s ove r time . A.3. 2 Financia l Parameter s Th e fue l choic e decisio nframewor kinIFCA M i s base donth e premis e tha t industr y

wil l try

t o minimiz e th e tota l cost s o f generatin g energ y ove r th e usefu l lif e o f th e facility . Specifically , industria l manager s wil l selec t th e fue l typ e wit hth e lowes t after-ta xNP V o f cas houtflow s fo r operating , fuel , an dcapita l costs . IFCA M model s th e ke y

element s o f th e Energ y Ta xAc t o f 197 8 (ETA ) an d th e Economi c Recover y Ta xAc t o f 198 1 (ERTA) . Th e ETA influence s after-ta x NP V calculation s b

y permittin g investment s incoa l facilitie s t o b e depre ciate dusin g accelerate dmethod s whil e requirin g investment s innew ga s o r oi l boiler s t o b e depreciate dusin g a straigh t lin e method . Bot hnew coa l an doil/ga s boiler s ar e depreciate dove r 5 years . New coal-fire dboiler s qualif y fo r th e regula r 1 0 percent investmen t taxcredi t (ITC) , bu t new oil/ga s boiler s ar e exclude dfro m th e regula r ITC . Specia l energ y tax credit s ar e no t incorporate dbecaus e the y expire do

nDecembe r 31 , 198 2 fo r conventiona l coa l systems . IFCA M assume s a

ninvestmen t perio do f 1 5 year s fo r new boilers . Th e corporat e income taxrat e i s assume dt o b e 5 0 percent an dinclude s Federa l an dloca l taxliabilities .



### A- 9P.9 5

Th e discoun t rat e inIFCA M represent s th e averag e rea l (no t nominal ) after-ta xcos t o f capital . Th e real , after-ta xdiscoun t rat e i s eigh t per cen t fo r ne w

units . A.3. 3 Boile r Characteristic s IFCA M use s eigh t standar dboile r sizes . Tabl e A- 2 summarize s ke y assumption s ineac hboile r siz e class . Cost s an demissio nrate s var y significantl y

wit hth e boile r typ e an dfirin g method . Al l ne w firetub e boiler s ar e single-fue l fired . Al l ne w watertub e oi l an

dga s boiler s ar e dual-fue l fired . A.3. 4 Technolog y

Limit s Ther e ar e limit s onth e capabilit y o f contro l technolog y t o remov e ai r pollutants . Th e estimate s use dinthi s analysi s fo r ne w coal-fire dindus tria l boiler s ar e liste di nTable s A- 3 an

dA-4 . A.3. 5 Ai r Emission s Calculation s IFCA M project s ai r emission s fo r thre e pollutants : SO2 , PM , N0 X . Th e leve l o f ai r emission s i s a functio no f fue l type , boile r type , an dth e emissio nregulation . I f th e applicabl e regulatio nrequire s n o emissio n reductions , th e uncontrolle demissio nrate s ar e th e leve l o f ai r emissions . I f th e applicabl e regulatio nrequire s emissio nreduction s incoal fire dboiler s fo r SO2 , the nth e leve l o f emission s i s th e following :

Controlle dSO 2 emission s = ( RxS x(1-Sc) ) + ((1-R ) xA )
where : S = uncontrolle dannua l averag e SO 2 emission s fro m coa l combustion , ng/ J(lb/MMBtu ) S c = reductio nrequire dt o mee t standar d(fraction ) R= 0.9 0 fo r lim

e spra y dryin g FG D

= 0.9 5 fo r dua l alkal i an dsodiu m FG D A = uncontrolle dSO 2 emission s from natura l ga s combustio n(backu pfuel )
Thi s calculatio nassume s a reliabilit y facto r (R ) fo r scrubber s an da lo w sulfu r fue l standby

optio ni

nth e even t o f pollutio ncontro l equipmen t malfunction .

A-1 0P.9 6

TABL E A-2 . IFCA

M INDUSTRIAL BOILE RSIZE/TYP E ASSUMPTION S

Boile r s M U(MMBtu Rang e
3- 9 (10-30 )
9-1 5 (30-50 )
15-2 2 (50-75 )
22-2 9 (75-100 )
29-4 4 (100-150 )

44-5 8 (150-200 )

58-7 3 (200-250 ) iz e category ,

/hr ) hea t inpu t Representativ e siz e

Greate r tha n 7 3 (greate r tha n 250 ) 6

(20 )
1 2 (40 )
1 8 (62 )
2 6 (87 )
3 7 (125 )

5 1 (175 )

6 6 (225 )

9 5 (325 ) Coa l

Package, water
tube , underfee d stoke r Package , water
tube , underfee d stoke r Field-erected , watertube , spreade r stoke r Field-erected , watertube , spreade r stoke r Field-erected , watertube , spreade r stoke r o r pulverize d coal b Field-erected , watertube , spreade r stoke r o r pulverize d coal 0 Field-erected , watertube , spreade r stoke r o r pulverize d coal 0 Field-erected , watertube , pulverize d coa l Typ e

Residua l oil / natura l gas a Package , firetub e Package, watertub e Package , watertub e Package , watertub e Package , watertub e

Package , watertub e

Tw o package , watertube 0

Tw o package , watertube 0 Distillat e oil /

natura l gas a Package, firetub e Package, watertub e Package , watertub e Package , watertub e Package, watertub e

Package , watertub e

Tw o package , watertube 0

Tw o package , watertube 0

Firetube s ar e single-fue l fired . Watertube s ar e dual-fue l fired . A mi xi s assume di

nthi s siz e class .
c Eac hone-hal f o f th e "representativ e size " inth e secondcolumn .
A-1 1P.9 7

TABL E A-3 . FG DTECHNOLOG YCONSTRAINT S I N IFCAM *
Technolog y Limit s
Dua l alkal i
Lime spra y

dryin g

Sodi u m 9 0 percent 0 remova l o f uncontrolle d SO 2 emission s fo r al l coa l type s 9 0 percent 0 remova l o f uncontrolle d SO 2 emission s fo r lo

w sulfu r coa l type s (les s than1.6 7 lbS02/MMBt u annua l average) ; no t applicabl e t o highe r sulfu r coa l type s regardles s o f th e require dsulfu r remova l rat e 9 0 percent 0 remova l o f uncontrolle d SO 2 emission s fo r al l coa l type s
U.S . Environmenta l Protectio nAgency . } 30-day , rollin g averag e basis .

A-1 2TABL E A-4 . PM EMISSION S POLLUTION CONTRO L TECHNOLOGYCONSTRAINT S I N IFCAM *

Technolog y Minimu m P M emissio nstandar d Singl e mechanica l collecto r stoker/bituminou s stoker/subbi tumi nou s pulverized/al l Dua l mechanica l collecto r stoker/bituminou s stoker/subbituminou s pulverized/al l Sid e strea

m separato r stoker/bituminou s stoker/subbituminou s pulverized/al l Electrostati c precipitato r Fabri c filte r Lime spra y

dryin g FGD* 5 Dua l alkal i FGD/singl e mechanica l collecto r highsulfu r coa l (greate r than3. 5 lbS02/MMBtu ) othe r coa l type s (les s tha n3. 5 l

bS02/MMBtu ) 17 2 ng/ J(0.4 0 lb/MMBtu ) 34 4 ng/ J(0.8 0 lb/MMBtu ) 43 0 ng/ J(1.0 0 lb/MMBtu )

12 9 ng/ J(0.3 0 lb/MMBtu ) 25 8 ng/ J(0.6 0 lb/MMBtu ) 34 4 ng/ J(0.8 0 lb/MMBtu )

6 4 ng/ J(0.1 5 lb/MMBtu ) 12 9 ng/ J(0.3 0 lb/MMBtu ) 17 2 ng/ J(0.4 0 lb/MMBtu ) 2 1 ng/ J(0.0 5 lb/MMBtu ) 2 1 ng/ J(0.0 5 lb/MMBtu ) 2 1 ng/ J(0.0 5 lb/MMBtu )

12 9 ng/ J(0.3 0 lb/MMBtu )
4 2 ng/ J(0.1 0 lb/MMBtu )

U.S . Environmenta l Protectio nAgency . Include s a fabri c filter .

A-1 3P.9 9



### APPENDI XB . PROJECTE DFUE L PRICES : REFERENC E PRIC E SCENARI O

B- lp. 1



### TABL E B-l . WORL D OI L PRIC E FORECAST : REFERENC E PRIC E SCENARIO * (198 2 $/bbl )

Averag e refine r acquisitio n Yea r cos t o f importe d crud e oi l

198 5 2 5 199 0 2 8 199 5 3 2 200 0 3 7
'Energ yand Environmenta l Analysis , Inc .

B- 2P. 2



### TABL E B-2 . PROJECTION S O F INDUSTRIAL 3. 0 PERCEN T SULFURRESIDUAL FUE L OI L PRICES 8



### (198 2 $/MMBtu )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio n
Ne w England Ne w York/New

Jersey Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
3.9 4 3.9 3 3.9 3 3.9 1 4.0 8 3.9 3 4.0 5 3.7 4 3.5 5 3.5 0 199 0

4.4 3 4.4 2 4.4 2 4.4 0 4.5 7 4.4 2 4.5 4 4.2 3 4.0 3 3.9 9 199 5

4.9 9 4.9 8 4.9 8 4.9 6 5.1 2 4.9 8 5.0 9 4.7 9 4.5 7 4.5 3 200 0

5.6 6 5.6 5 5.6 5 5.6 2 5.7 9 5.6 5 5.7 5 5.4 7 5.2 3 5.1 9


### Energy an dEnvironmenta l Analysis , Inc . Referenc e pric e scenario ,

B- 3P. 3



### TABL E B-3 . PROJECTION S O F INDUSTRIAL 1. 6 PERCEN T SULFU

RRESIDUAL FUE L OI L PRICES * (198 2 $/MMBtu )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio n
Ne w Englan d Ne w York/New

Jerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
4.2 1 4.2 0 4.2 0 4.1 7 4.3 4 4.1 9 4.3 1 4.0 0 3.8 2 3.7 7 199 0

4.7 3 4.7 2 4.7 2 4.7 0 4.8 6 4.7 2 4.8 3 4.5 3 4.3 3 4.2 9 199 5

5.3 2 5.3 1 5.3 1 5.2 9 5.4 5 5.3 1 5.4 2 5.1 3 4.9 1 4.8 7 200 0

6.0 4 6.0 3 6.0 3 6.0 1 6.1 7 6.0 3 6.1 4 5.8 5 5.6 1 5.5 7


### 'Energ y andEnvironmenta l Analysis , Inc . Referenc e pric e scenario .

B- 4P. 4



### TABL E B-4 . PROJECTION S O F INDUSTRIAL 0. 8 PERCEN T SULFURRESIDUAL FUE L OI L PRICES 3



### (198 2 $/MMBtu )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 

### 10 . Regio n
Ne w England Ne wYork/Ne wJerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
4.5 1 4.5 0 4.5 0 4.4 8 4.6 5 4.5 0 4.6 1 4.3 1 4.1 5 4.1 1 199 0

5.0 7 5.0 6 5.0 6 5.0 3 5.2 0 5.0 6 5.1 7 4.8 7 4.7 0 4.6 5 199 5

5.7 1 5.7 0 5.7 0 5.6 8 5.8 4 5.7 0 ^ 5.8 1 5.5 1 5.3 3 5.2 9 200 0

6.4 9 6.4 8 6.4 8 6.4 6 6.6 3 6.4 8 6.5 9 6.3 0 6.0 9 6.0 5


### 'Energ y andEnvironmenta l Analysis , Inc . Referenc e pric e scenario .

B- 5P. 5



### TABL E B-5 . PROJECTION S O F INDUSTRIA L 0. 3 PERCEN T SULFU R RESIDUA L FUE L OI L PRICES *

(198 2 $/MMBtu )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio n
Ne w Englan d Ne w York/New

Jersey Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
4.8 1 4.8 0 4.8 0 4.7 8 4.9 5 4.8 0 4.9 2 4.6 1 4.4 3 4.3 8 199 0

5.4 1 5.4 0 5.4 0 5.3 7 5.5 5 5.4 0 5.5 1 5.2 1 5.0 0 4.9 6 199 5

6.1 0 6.0 9 6.0 9 6.0 7 6.2 4 6.0 9 6.2 0 5.9 0 5.6 8 5.6 4 200 0

6.9 4 6.9 3 6.9 3 6.9 1 7.0 8 6.9 3 7.0 4 6.7 5 6.5 0 6.4 5


### 'Energ yan d Environmenta l Analysis , Inc . Referenc e pric e scenario .

B- 6

### TABL E B-6 . PROJECTION S OF INDUSTRIA L NATURA L GA S PRICES * (198 2 $/MMBtu ) P. 6



### Region 198 5 199 0 199 5 200 0 1 . New England 2 . Ne w York/New

Jerse y 3 . Middl e Atlanti c 4 . Sout hAtlanti c 5 . Midwes t 6 . Southwes t 7 . Centra l 8 . Nort hCentra l 9 . Wes t 10 . Northwes t 4.3 8 4.2 9 4.1 6 4.5 7 4.3 2 4.0 2 3.8 6 3.6 8 4.0 2 4.4 4 5.2 1

5.2 1 5.1 7 5.4 6 5.3 4 4.9 5 4.9 1 4.4 7 4.9 4 5.2 3 6.2 5 .

6.2 7 6.2 2 6.4 7 6.3 8 5.7 5 5.9 2 5.2 7 5.9 6 5.8 5 7.4 9

7.3 0 7.2 5 7.4 0 7.2 7 6.7 5 6.8 1 6.1 2 6.5 6 6.6 3 

### Energ y an dEnvironmenta l Analysis , Inc . Referenc e pric e scenario .

B- 7P. 7



### APPENDI XC . PROJECTE DFUE L PRICES : HIGHE ROI L ANDGA S PRICE S SCENARI O

C- lP. 8

TABL E C-l . WORL DOI L PRIC E FORECAS T

ANDGA S PRI C (198 2 $/bbl ) HIGHE ROI L ANDGA S PRICE S SCENARIO *

Averag e refine r acquisitio n Yea r cos t o f importe dcrud e oi l
198 5 25.9 0 199 0 31.9 0 199 5 46.5 0 200 0 57.4 0

a Cas e B . Energy

Projection s t o the Yea r 2010 . U.S . Departmen t o f Energy , Offic e o f Policy , Plannin g an dAnalysis . DOE/PE-0029/2 . Octobe r 1983 .



### C-2P. 9



### TABL E C-2 . PROJECTION S O F INDUSTRIAL 3. 0 PERCEN T SULFURRESIDUAL FUE L OI L PRICES 3



### (198 2 $/MMBtu )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio n
Ne w Englan d Ne w York/New

Jerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
4.0 7 4.0 5 4.0 5 4.0 3 4.1 8 4.0 5 4.1 5 3.8 9 3.7 2 3.6 8 199 0

5.0 5 5.0 4 5.0 4 5.0 2 5.1 7 5.0 4 5.1 4 4.8 7 4.6 8 4.6 4 199 5

6.9 3 6.9 1 6.9 1 6.9 0 7.0 5 6.9 1 7.0 2 6.7 5 6.4 7 6.4 4 200 0

8.4 0 8.3 8 8.3 8 8.3 7 8.5 1 8.3 9 8.5 2 8.2 4 7.9 0 7.8 7


### Energy andEnvironmenta l Analysis , Inc . Highe r oi l an dga s price s scenario .

C- 3P.1 0



### TABL E C-3 . PROJECTION S O F INDUSTRIAL 1. 6 PERCEN T SULFURRESIDUAL FUE L OI L PRICES *

(198 2 $/MMBtu )

1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio

n

Ne w Englan d Ne w York/Ne

w Jerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
4.3 4 4.3 3 4.3 3 4.3 0 4.4 6 4.3 3 4.4 2 4.1 6 3.9 9 3.9 6 199 0

5.4 0 5.3 9 5.3 9 5.3 7 5.5 2 5.3 9 5.4 8 5.2 2 5.0 3 5.0 0 199 5

7.4 1 7.4 0 7.4 0 7.3 9 7.5 3 7.4 0 7.5 0 7.2 4 6.9 6 6.9 3 200 0

9.0 0 8.9 9 8.9 9 8.9 8 9.1 4 8.9 9 9.1 0 8.8 3 8.5 1 8.4 8


### Energy andEnvironmenta l Analysis , Inc . Highe r oi l andga s price s scenario .

C- 4P.1 1



### TABL E C-4 . PROJECTION S O F INDUSTRIAL 0. 8 PERCEN T SULFURRESIDUAL FUE L OI L PRICES 8



### (198 2 $/MMBtu )

1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio

n

Ne w Englan d Ne w York/Ne

w Jerse y Middl e Atlanti c SouthAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
4.6 5 4.6 4 4.6 4 4.6 3 4.7 7 4.6 4 4.7 4 4.4 7 4.3 3 4.2 9 199 0

5.7 9 5.7 9 5.7 9 5.7 7 5.9 1 5.7 9 5.8 9 5.6 3 5.4 5 5.4 2 199 5

7.9 8 7.9 8 7.9 8 7.9 6 8.0 9 7.9 8 8.0 7 7.8 0 7.5 8 7.5 4 200 0

9.7 0 9.6 9 9.6 9 9.6 7 9.8 2 9.6 9 9.8 0 9.5 2 9.2 9 9.2 5


### Energy andEnvironmenta l Analysis , Inc . Highe r oi l andga s price s scenario .

C- 5P.1 2



### TABL E C-5 . PROJECTION S O F INDUSTRIAL 0. 3 PERCEN T SULFURRESIDUAL FUE L OI L PRICES 3



### (198 2 $/MMBtu )

1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio

n

Ne w Englan d Ne w York/Ne

w Jerse y Middl e Atlanti c SouthAtlanti c Midwes t Southwes t Centra l NorthCentra l Wes t Northwes t 198 5
4.9 6 4.9 6 4.9 6 4.9 4 5.0 9 4.9 6 5.0 5 4.7 9 4.6 3 4.5 8 199 0

6.1 9 6.1 8 6.1 8 6.1 7 6.3 1 6.1 8 6.2 8 6.0 1 5.8 1 5.7 7 199 5

8.5 5 8.5 4 8.5 4 8.5 2 8.6 7 8.5 4 8.6 3 8.3 7 8.0 9 8.0 6 200 0

10.4 1 10.4 0 10.4 0 10.3 8 10.5 4 10.4 0 10.5 0 10.2 4 9.9 1 9.8 7


### Energy an dEnvironmenta l Analysis , Inc . Highe r oi l an dga s price s scenario .

C- 6P.1 3

TABL E C-6 . PROJECTION S OF INDUSTRIAL

NATURA L GA S PRICES * (198 2 $/MMBtu )



### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 10 . Regio n
New England Ne w York/New

Jerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t 198 5
4.4 3 4.3 5 4.2 9 4.6 3 4.4 2 4.0 8 3.9 2 3.7 2 4.0 5 4.4 5 199 0

5.5 6 5.5 4 5.5 2 5.8 5 5.6 9 5.4 1 5.2 7 4.7 3 5.2 3 5.4 5 199 5

7.3 7 7.3 6 7.3 6 7.6 9 7.5 5 6.9 6 7.0 8 6.1 9 6.9 1 7.0 3 200 0

9.2 9 9.0 1 9.0 0 9.1 9 8.9 5 8.5 7 8.5 4 7.5 2 8.1 9 8.1 5

a Energ y andEnvironmenta l Analysis , Inc . Highe r oi l an dga s price s scenario .



### C-7P.1 4



### APPENDI XD . CHARACTERISTIC S O F INDUSTRIAL COAL TYPE S I N IFCA M

D- lP.1 5

TABL E D-l . SULFURDIOXID E EMISSIO N RATE S BYCOAL TYPE *

Coa l Typ e Bituminou s

Subbituminou s Rang e

ng/ J
<46 4 464-71 8 718-1,07 5 1,075-1,43 2 1,432-2,15 0 >2,15 0 <46 4 464-71 8 718-1,07 5 (lb/MMBtu )

(<1.08 ) (1.08-1.67 ) (1.67-2.50 ) (2.50-3.33 ) (3.33-5.00 ) (>5.00 ) (<1.08 ) (1.08-1.67 ) (1.67-2.50 ) ng/ J
40 8 59 3 89 4 1,22 5 1,78 4 .2,38 2 40 8 59 3 89 4 Averag e

(lb/MMBtu ) (0.95 ) (1.38 ) (2.08 ) (2.85 ) (4.15 ) (5.54 ) (0.95 ) (1.38. ) (2.08 )

a ICF Incorporated . Averag e annua l (no t 30-day , rolling-average ) values .

D- 2TABL E D-2 . AVERAG E AS H CONTEN T B Y REGIO N(BITUMINOU S COA L TYPES) 3 (percentage , moist )

1 C J Reg

i


### 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 

### 10 . o n
Ne wEnglan d Ne wYork/Ne

wJerse y Middl e Atlanti c Sout hAtlanti c Midwes t Southwes t Centra l Nort hCentra l Wes t Northwes t <1.0 8
11. 9 11. 9 11. 8 11. 7 11. 0 12. 1 10. 0 10. 0 11. 3 10. 0 1.08-1.6 7

11. 9 11. 9 12. 4 12. 3 11. 0 11. 8 12. 4 10. 0 11. 3 10. 0 l

b S0 2 /MMBt u 1.67-2 . 13. 0 11. 4 12. 6 12. 3 10. 5 15. 0 12. 4 10. 0 16. 3 10. 0 

### 5 0 2.50-3.3 3

13. 0 13. 0 12. 2 11. 9 10. 9 11. 8 11. 1

-

-

- 3.33-5.0 0

13. 0 13. 0 13. 0 11. 9 12. 2 12. 2 11. 1

-

-

- 

### >5.0 0

13. 0 13. 0 13. 0 11. 8 12. 0 12. 3 11. 1

-

-

-
IC F Incorporated .P.1 7



### TABL E D-3 . AVERAG E AS HCONTEN T B YREGIO N (SUBBITUMINOU S COAL TYPES) 3 

### (percentage , moist )


### l b$0 o 

### /MMBt u Region7TJ5E 1.08-1.6 7 1.67-2.5 0
1 . New England- - 2 . New York/New

Jerse y - - 3 . Middl e Atlanti c - - 4 . Sout hAtlanti c - - 5 . Midwes t 6 . Southwes t 7 . Centra l 8 . Nort hCentra l 9 . Wes t 10 . Northwes t

a 

### IC F Incorporated . 6. 9 7. 3 6. 0 8. 4 7. 3 

### 10. 0 6. 9

7. 3 6. 0 6. 9 7. 3 

### 10. 0 6. 9

7. 3 6. 0 6. 9 7. 3 

### 10. 0

D- 4

### 9-0

»_ t c o

o o

- 5

- _ O

- 5 O J r r f D O . V O 0 0 c n t o
z o

-J r t

_ r X f D Vt c- t s : f D in r t z. o

- 5 r t

_ r O f D 3 c- tral r > f D 3 r +

- s O J

— H c o o c c t 3 " £ f D l/ l r t 2

-J . O
s. f D If ) r r t o O c c t

_ r 3 » r t

— J O Jntic _ :

_J . C L O .

_ J f D > r t

_ nantic z f D £

- < o "" " i 7T **v . Z.ewJersey z

f D 

### s . m 3 U
_ .—J C u 3 O .

r o r o H H t n C O 4

- c o t n r o r o

r—4

- O 4

- H
- C J r o r o

t—s t n

- o r o o 4* > r o r o C J ~ o C O ^ J c n t n r o r o

J i C O 0 0 0 0 C O C O r o r o t n v o o H
- t n c o r o r o t n v o .* » t n 4

- V O r o r o t n v o r o 4

- V O H H r o r o t n v o O O O 0 0 r o r o t n v o t n c n o c n

r o r o H
- t n 0 0 4

- C o t n r o r o o t o ro 4

- O v o ro ro O 4

- cn o c n t o r o r o

4

- C O C J t o C J O r o r o O 4

- cn o

- O 4 * r o r o t n v o t
—r o t-' o r o r o t n v o 4

- c n

~ o r o r o r o t n v o 4= » t n o -fc . r O r o t n v o r o t o O r - r o r o t n v o t n c n o c n.08--1.67

r o r o C O 4

- c o c n l1 IS> v o r o eno o t n t n r o r o

O C J t n v o

- o r o r o r o 4s . - o o v o cn c o ro ro

O C J t n v o tn o r o r o

t o -»J c n 4

- VO 4

- r o r o t n v o 4s » t n 4= » V D r o r o t n v o 4

- t n r o c n r o r o t n v o t n c n o cn r o r o t n v o c n *v i O -v l

r o r o r o c n r o r o 4 * c o r o r o r o c n r o r o

4 - C O ro ro t nv o ro t o c nO ro C J c no C o c n v o r o r o r o

~ J C J VO -v

l v j H
- C O v o

C M H- » C J -fc

> H H C J c o t n j

_-v i o t n o v o

r o r o r o c n c o t n r o - ^ r o r o -fc » 0 0 r o r o c nt—> rsc

r o r o c n v o c n C J - o r o r o

C O ~ J c n -e » 4

- v o r o r o t n v o o o o 0 0 r o r o t n v o

- O C O O V O r o r o t n v o •vj C O o v o

r o r o c o c n o > o o t n r o r o c o ^ o o o > o v o 0 0 r o r o

C J - 0 C O r — r o r o r o r o r o c n o o r o r o

4

- C O C O V O c n •— > r o r o t n v o r o c o o r r o r o

4 * 0 0 c no o zo

f D U D

O 0 0

c n •> o i r o • t n o

r o t n o i t o C J c o

C J C J i t n 

### o o

V t n 

### o o c o o r o
o o c- t C

D 

### o I -p .

za > C O m

c_. — i I O o 

### o c n z r t — I ^ c n vt -<

_ r O 70

- 5 m rt G O »- H rt O O ZZ 3 C O



### o c r c o o 

### o

-< -a C O O J

8l d

### TABL E D-5 . AVERAG E HEA T CONTEN T BYREGION (SUBBITUMINOU S COAL TYPES) 3 

### J/ g (MMBtu/shor t ton ) P.1 9



### Regio n 

# ros " l bS0 2 

### /MMBt u 1.08-1.6 7 1.67-2.5 0
1 . New England
2 . New York/Ne w Jerse y 3 . Middl e Atlanti c 4 . Sout hAtlanti c 5 . 6 . 7 . 8 . 9 . 10 . Midwes t
Southwes t
Centra l

Nort hCentra l

Wes t
Northwes t 20.5 3 (17.65 ) 19.9 3 (17.14 ) 19.7 7 (17. . 00 ) 20.4 0 (17.54 ) 21.5 2 (18.50 ) 22.1 0 (19.00 ) 20.5 3

(17.65 ) 19.9 3 (17.14 ) 19.7 7 (17.00 ) 20.0 5 (17.24 ) 21.5 2 (18.50 ) 22.1 0 (19.00 ) 20.5 3

(17.65 ) 19.9 3 (17.14 ) 19.7 7 (17.00 ) 20.0 5 (17.24 ) 21.5 2 (18.50 ) 22.1 0 (19.00 )


### ICF Incorporated .

D- 6P.2 0



### APPENDI XE . DELIVERE DINDUSTRIAL COAL PRIC E FORECAS T

• Reference : Memorandu m fro m C . Eber t (IC F Incorporated ) t o J . Greenwal d(EPA) . Revise dIndustria l Coa l Price s fo r Industria l NSP S Analyses . Ma y 31 , 1984 . Attach men t A . • Converte dfro

m Januar y 198 3 dollar s t o 198 2 dollar s using th e averag e annua l 198 2 an

dfourt hquarte r 198 2 GN P implici t pric e deflators .

E- lm c — </ > < C c_ > U l

t j cc o_ . < £ C O o _ : c- > s c __«/ * H H C M pc ao I — o > t O r- l2000995 rv . v o i n v fv o o o c o o o r vi n « * —|

- c o c o c o r o c o c o

uiHin^oif ) rv . rv . v o « * C M C M

o c n c n

i n c o c n

c o cn c o cc c o r o c o c o c o c o

C M 0 0 C M C O V O - H vo i ni nc o c nr- 1 c o c o r o c o C M

c o ifiHCftcftrv^ t C O C M r- l C DV O 0 0 C O C O C O C O C M

C M

C 3 C O +- > +-> 0 Q c _ : o s : t> \ CM 1 - o 3 C O <4 - i —_a 3 i — c o —
C O Q . > > + J r - - < u o C_ ) CONOIOO O

C D v o i n r o o O

. .... .rl rH C

M c o i n t n V

«/ > 3 O

_LUI 3 4- » •— • C O A Ill l o o r vo c o o v o i n c o

... .rH rH C

M C O O rv . rH rH O L O lOlflrJNH O C O C O C O C O C O C O

o o i no o C M

r- H c n v>-»tCMHO10 0 c o c o r o co C M

C M

e nr i r-

» i- » c o c n c o r o r-

i o vo v

o r o c o r o co C M

C M

0 0 r o O r

v v * c o i— i o c nrv

, c o « * C O CO C

M C M C M C M

c o r v o c o o O O v o i nr o o o r- 1 I- H C M c o i ni n v A III I V O O C O V

O C O C M C M r- i cnc o v

o v o CO CO C

M C M C M C M

« * vo 0 0 rv . i nr o »- H c n0 0 !•

— vt « * CO C M C M C M C M C M

r- H C M "v t v o rv . i n o o o rv . v

o C M C M C O C M C M C M C M C M

i ne nC M

r v c nc n r- » v r «a - c o cncn C M C M C M C M r- H r H

0 0 rv . O C O O O o v o i nc o o C D I- Hr H C M c o i ni n V A Ill l i nt- nrv . c o c o c n C O C MIHo c nrv . C O C O C O C O C M

C M

c o i nc o c o •—

i C M C M o o c no o v o C O C O C O C M C M C M

r- » c o C M c o rv . c o o oo oo r-

vv o >v t C O C M C M C M C M C M

v o rv . i n o » * C M v o «d - «=l - v r vi - c o C M C M C M C M C M C M

c o r vo c o C

D o o vo i n c o o o r- H i— i C M c o i n i n V A

• o c c n

C O vt 3 O E 3 4- > C Q

> > fj j Vt ->v. t -

__ : c o i- - D O 

## ^l
c u
C M o o rv . o c o o v o i n c o

... . r H r H C M C OBituminous C O lvO C

O o v o m c o • i— l •• i- H C M • c o c o r- vo c o O v o i n c o

... . r H iH C

M C O

l/ l 3 O c •f — E 3 4- > ca C M I U J

• M C ro

— — 4 J c o T J T J t )

•— • -H >

_ 4 J

3 O c o T J < U • M C O

_ . O O L i. O U c
c_ > t-^<I — C O c_ > U l oc o

oc a.'~9 3-- -

_ i +J X I c C C Q C U O 2

_3 _>_:_ :

_ l «r > +• > « t c H H C M O acco u » — c n— t O r H

o U l oc CD C D O C M

i n c n c n

o c n c n

i n o o c n

c 3 c o +-> •«- » O Q c _ ; o _ : U^v . C M i - o 3 t O < * - r —J D 3 r— t o vl " r-

vC O v f O C O vl

- C O i—

I C D C O V O c o C M

r v C O C O C M vo C M i nc o c o i n i nvi - c o c o I—

I o c o r o c o c o C

M C M

r o r- i c o * * cnO c o C M o cni o i n C M

rv . vo c o C M C M C O C O C O C O C O C O

o o v o i nc no c o c o C M C M I- Hr— c n C O C O C O C M

C M C M

0 0 «* • l- v C M v o c n r Ho c nc o i nc o C O C O C O

v o C M c n C M C M r H C O C O C M

C M C M C M

r- Hc nrv . c o o c n c nv o v o i nr o i — C M C M C M C M C M C M c o c o c o

c ni nc o i—11—11— i r o c o c o

o o o rv . O r o O O v o i nr o O O 0 0 r-

» o o vo i n

C O o . >» 4- » r — ra O c_ > vt

3 O c •— *

. E 3 +- > « — > C Q r H I— I C M c o i ni nr

— I— C M
0 0 r v o ro o v o i nr o r H r H C M C O 0 0 r v

o i o
vt 3 O c

JD JD Z3 C O

c o •— • c n c u oc 4- >

Vt Qi _t T J • 1 —

_ : r o r o c o c o c o C M

c o i ni ni nv

o viI- HC Do o eno o c o c o c o c o C

M C M
i ni ni ni nrv . o o 0 0 rv . rv. 0 0 rv. v

o C M C M C M C M C M C M

o o rv . o c o o o O v o i nr o O o

CONO " O v o i nr o r —r—C M C O

vt 3 o c

C Q r v v o c n t nvi - r o C M

i ni ntv . c o r v C M r- i o o v o i n c o C M rv . rv . r- v v o

v o vi - c n vl " c o C M C O C O C O r o C M C M

< * « t r H ( O C O v f •— • o o c

ni nvirH V O c o rv. v o v o c o c o c o
i nv o o c o C M C M C O C O C O C M C M C M

I-Hi nvi - o o C M

i n o c nc nr v

i nr o C M C M C M

C M C O C M v o i nv o c o r o c o
r-ic nvl " C M O O C O C M C M C M C M C M

•— i r- vc o m vi - i n C O r vr- . i nvi - C

M C M C M C M

c nc o c o i ni nv o c o r o c o

00S O o v o i n C M C M C M C M C M C M C M C M C M

r —i

— C M r o i ni n—-I

—C M

oo r O V O o

o r vo c

o o o o v o t n c o o C D i —t —C M c o i n i n V A Ill l C O l- vO C

O C D v o i n c o c

o r - o o v o m

— - — - C M V 1 1 c o r v o so

• —— - C M C O
o c

JD JD 3 t o Vt

3 o E 3 4-> C

_ O

c

C O

- M Vt Qi

- C 4- > 3 O I O
V O CO t - 4- > C CO C J c o I

T J C O • M r o

— . O o .

_ o u c
C J r- H r oP.2 3



### DELIVERE DINDUSTRIAL COA L PRIC E FORECAST* 1 

### (198 2 $/MMBtu ) (Continued )

Regio n
8 . Nort

hCentra l

9 . Wes t

10 . Northwes t Coal typ e
Bituminou s

Subbituminou s

Bituminou s

Subbituminou s

Bituminou s

Subbituminou s Sulfu

r content (l bS0 2 /MMBtu )

1.0 8 1.6 7
1.0 8 1.6 7

1.0 8 1.6 7
1.0 8 1.6 7

1.0 8 1.6 7
1.0 8 1.6 7 <1.0 8

- 1.6 7

- 2.5 0 <1.0 8

- 1.6 7

- 2.5 0
<1.0 8

- 1.6 7

- 2.5 0 <1.0 8

- 1.6 7

- 2.5 0
<1.0 8

- 1.6 7

- 2.5 0 <1.0 8

- 1.6 7

- 2.5 0 198 5

1.7 6 1.6 1 1.7 0 1.2 2 1.1 7 1.1 9
2.5 4 2.3 9 2.4 0 2.6 2 2.5 2 2.4 8
2.9 2 2.6 3 2.5 9 2.3 8 2.4 0 1.9 3 199 0

1.9 0 1.7 4 1.8 1 1.3 2 1.3 2 1.2 1
2.6 9 2.6 4 2.6 4 2.7 1 2.6 1 2.5 6
3.0 6 2.8 0 2.7 2 2.5 9 2.4 8 1.9 9 199 5

1.9 8 1.9 0 1.8 8 1.4 1 1.4 2 1.2 8
2.7 5 2.9 0 2.8 1 2.8 3 2.7 2 2.6 0
3.1 3 2.9 9 2.8 3 2.6 2 2.5 9 2.0 8 200 0

2.0 7 2.0 1 1.8 6 1.5 2 1.4 5 1.3 3
2.9 1 3.0 5 2.9 2 2.9 2 2.8 4 2.6 9
3.2 7 3.1 8 2.8 8 2.7 1 2.6 7 2.1 9


### ICF Incorporated .

E- 4P.2 4



### APPENDI XF IFCA M PROJECTION S FOR199 0 BYBOILE RSIZ E CLAS S

Thi s appendi xsummarize s IFCA M forecast s o f tota l SO 2 emissions , annualize dcosts , an

dfossi l fue l demandi n199 0 fro

m ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an

deac hlarge r tha n2 9 M W (10 0 MMBtu/hr ) hea t inpu t capacity . Result s ar e presente dfo r bot hfue l price scenario s (referenc e Sectio n2.2.3 ) an dfo r eac halternativ e SO 2 NSP S emission s standar d(referenc e Sectio n3.1) . Inthes e tables , "gas " i s natura l ga s an d"oil " i s residua l fue l oil .

F- lTABL E F-l . COMPARISO N O F IFCA

M PROJECTION S FO

R1990 * P.2 5

Fue l pric e scenari o Baselin e Alternativ e contro l leve l 

### I I II I I V V

I
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts D (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l 

### oi l ga s Highe r oi l an

d ga s price s SOg emission s (IO 3 shor t tons ) Annualize dcosts b (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l 

### oi l ga s 279

3,34 9



### 2 3 32 3 15 2

32 6 3,72 5


### 28 4 7 207 20

4 3,35 7



### 1 7 32 9 15 3

14 8 3,73 5


### 26 1 0 237 10

6 3,40 6



### 1 7 257 22 5

11 4 3,74 3



### 24 8 0 25 0 10 2 3 9 47 1

6

9 2 6 2 6 2 6 25 7 20 6 20 5 17 8 23 2 26 7 26 7 29 4



### 4 6 3 4 3 0 1 6

15 3 15 3 15 3 14 7 0 0 0 0 34 5 34 5 34 5 35 1

a Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d199 0 an deac hlarge r than2 9 M W (10 0 MMBtu/hr ) hea t inpu t capacity . Include s capital , operating , maintenanc e an dfue l cost s fo r the boile r an dpollutio ncontro l equipment .



### F- 2P.2 6



### TABL E F-2 . REGULATORYBASELIN E PROJECTION S FO R199 0 BYBOILE RSIZ E CLASS *

Fue l pric e scenari o
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts b (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s Highe r oi l an

dga s p r SO ? emission s (IO 3 shor t tons ) Annualize dcosts' 3 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### B o 29-4 4 (100-150 )



### 10 5 90 1

4 9 9 2 6 ice s 

### 7 4 1,00 8

4 0 7 8 2 ile

r siz e c 44-5 8 (150-200 )



### 8 2 72 9

1 8 6 2 4


### 10 8 838

7 0 0 4 1 lass , M

W (MMBtu/hr ) 58-7 3 (200-250 )



### 5 2 44 5

6 4 6 1 5


### 8 6 49 3

4 8 0 1 9 >7 3

(>250 )



### 4 1 1,27 5

1 3 9 2 8 7


### 5 9 1,38 6

12 6 0 6 5 Tota l



### 279 3,34 9

2 3 32 3 15 2


### 32 6 3,72 5

28 4 7 20 7

a 

### Ne windustria l fossi l fuel-fire d boiler s installe d betwee n 198 6 and 1990 . Include s capital , operating , maintenanc e and fue l cost s fo r th e boile r and pollutio n contro l equipment .

F- 3P.2 7



### TABL E F-3 . ALTERNATIV E CONTRO L LEVE L I PROJECTION S

FOR199 0 B

YBOILE RSIZ E CLASS *

Fue l pric e scenari o
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### B o 29-4 4 (100-150 )



### 6 9 90 6

3 10 0 2 6 Highe r oi l an

dga s price s SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### 2 4 1,01 3

3 7 0 9 2 iler siz e c

44-5 8 (150-200 )



### 5 9 73 3

1 8 6 2 4


### 37 83 6

5 5 0 5 6 lass , M

W (MMBtu/hr ) 58-7 3 (200-250 )



### 3 5 44 4

0 5 1 1 6


### 2 9 500

4 3 0 2 4 >7 3

(>250 )



### 4 0 1,27 5

1 3 9 2 8 7


### 58 1,38 7

12 6 0 6 5 Tota l



### 20 4 3,35 7

1 7 32 9 15 3


### 14 8 3,73 5

26 1 0 23 7

3 

### Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d1990 . Include s capital , operating , maintenanc e an dfue l cost s fo r th e boile r an dpollutio ncontro l equipment .

F- 4

### TABL E F-4 . ALTERNATIV E CONTRO L LEVE L I I PROJECTION S FOR199 0 BYBOILE RSIZ E CLASS 9

•
Fue l pric e scenari o
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO* 2 Btu ) coa l oi l ga s 

### Bo 29-4 4 (100-150 )



### 2 8 92 6

3 7 0 5 6 Highe r oi l an

dga s price s SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### 1 1 1,00 9

2 3 0 10 5 iler siz e cl

44-5 8 (150-200 )



### 2 4 74 9

1 6 0 5 0


### 2 5 84 4

5 5 0 5 6 ass , M

W (MMBtu/hr ) 58-7 3 (200-250 )



### 1 4 45 6

0 3 4 3 3


### 2 0 50 4

4 3 0 2 4 > 7 3

(>250 )



### 4 0 1,27 5

1 3 9 2 8 7


### 5 8 1,38 7

12 6 0 6 5 Tota l



### 10 6 3,40 6

1 7 25 7 22 5


### 11 4 3,74 3

24 8 0 25 0


### *Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d1990 . ^Include s capital , operating , maintenanc e an dfue l cost s fo r th e boile r an dpollutio ncontro l equipment .

F- 5P.2 9



### TABL E F-5 . ALTERNATIV E CONTRO L LEVE L II I PROJECTION S

FOR199 0 BYBOILE RSIZ E CLASS *

Fue l pric e scenari o
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (10 ° 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### B o 29-4 4 (100-150 )



### 2 7 927

1 7 0 5 8 Highe r oi l an

dga s price s S0?,emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### 4 1,01 1

1 2 0 11 7 iler siz e c

44-5 8 (150-200 )



### 2 3 74 9

0 6 0 5 1


### 7 83 2

2 3 0 8 8 lass , M

W (MMBtu/hr ) 58-7 3 (200-250 )



### 1 4 45 6

0 3 4 3 3


### 5 50 0

1 7 0 5 0 >7 3

(>250 )



### 3 8 1,27 6

9 9 2 9 1


### 30 1,41 1

10 1 0 9 0 Tota l



### 10 2 3,40 8

9 25 7 23 2


### 4 6 3,75 4

15 3 0 34 5

a 

### Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d1990 . Include s capital , operating , maintenanc e an dfue l cost s fo r th e boile r an dpollutio ncontro l equipment .

F- 6P.3 0



### TABL E F-6 . ALTERNATIV E CONTRO L LEVE L I V PROJECTION S FOR199 0 BYBOILE RSIZ E CLASS *

Fue l pric e scenari o
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s Highe r oi l an

dga s p r SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (101 2 Btu ) coa l oi l ga s 

### B o 29-4 4 (100-150 )



### 9 94 3

0 5 7 7 2 ice s 

### 3 1,01 1

1 2 0 11 7 iler siz e c

44-5 8 (150-200 )



### 9 76 2

0 5 7 5 4


### 5 83 3

2 3 0 8 8 :lass , M

W (MMBtu/hr ) 58-7 3 (200-250 )



### 5 46 1

0 3 3 3 4


### 4 50 1

1 7 0 5 0 >7 3

(>250 )



### 1 5 1,31 0

2 6 5 9 10 7


### 2 2 1,41 2

10 1 0 9 0 Tota l



### 3 9 3,47 6

2 6 20 6 26 7


### 3 4 3,75 7

15 3 0 34 5

3 

### Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d1990 . Include s capital , operating , maintenanc e an dfue l cost s fo r th e boile r an dpollutio ncontro l equipment .

F- 7P.3 1



### TABL E F-7 . ALTERNATIVE CONTRO L LEVE L V PROJECTION S FO R 199 0 BYBOILE RSIZ E CLASS *

Fue l pric e scenari o
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### B o 29-4 4 (100-150 )



### 1 3 94 2

0 5 7 7 2 Highe r oi l an

dga s price s SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### 3 1,01 1

1 2 0 11 7 iler siz e c

44-5 8 (150-200 )



### 1 3 76 1

0 5 7 5 4


### 5 83 3

2 3 0 8 8 lass , M

W (MMBtu/hr ) 58-7 3 (200-250 )



### 8 460

0 3 3 3 4


### 3 50 1

1 7 0 5 0 >7 3

(>250 )



### 1 3 1,31 1

2 6 5 9 10 7


### 1 9 1,41 4

10 1 0 9 0 Tota l



### 4 7 3,47 4

2 6 20 6 26 7


### 3 0 3,75 8

15 3 0 34 5

a 

### Ne windustria l fossi l fuel-fire d boiler s installe d betwee n 198 5 and 1990 . Include s capital , operating , maintenanc e and fue l cost s fo r th e boile r and pollutio n contro l equipment .

F- 8

### TABL E F-8 . ALTERNATIV E CONTRO L LEVE L V I PROJECTION S FOR199 0 B

YBOILE RSIZ E CLASS *

Fue l pric e scenari o
Referenc e SO 2 emission s (IO 3 shor t tons ) Annualize dcosts 0 (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### B o 29-4 4 (100-150 )



### 4 94 5

0 4 4 8 5 Highe r oi l an

dga s price s SO ? emission s (IO 3 shor t tons ) Annualize dcosts' ? (IO 6 198 2 $ ) Fue l (IO 1 2 Btu ) coa l oi l ga s 

### 2 1,01 1

1 2 0 11 7 iler siz e c

44-5 8 (150-200 )



### 4 76 3

0 5 1 6 0


### 2 82 9

1 7 0 9 4 lass , M

W (MMBtu/hr ) 58-7 3 (200-250 )



### 3 46 1

0 3 2 3 5


### 2 50 1

1 7 0 5 0 >7 3

(>250 )



### 6 1,31 3

2 6 5 2 11 3


### 1 0 1,41 5

10 1 0 9 0 Tota l



### 1 6 3,48 2

2 6 17 8 29 4


### 1 6 3,75 7

14 7 0 35 1

3 

### Ne w industria l fossi l fuel-fire dboiler s installe dbetwee n198 5 an d1990 . Include s capital , operating , maintenanc e an dfue l cost s fo r th e boile r an dpollutio ncontro l equipment .

F- 9