1 

### Medina, Dayana

From: Medina, Dayana Sent: Monday, February 25, 2013 3:32 PM To: pettyjohn@adeq.state.ar.us Cc: Donaldson, Guy; Feldman, Michael Subject: Region 6 Comments on AEP Flint Creek cost evaluation

Hi Mary,

We appreciate the opportunity to review the cost evaluation for AEP Flint Creek. In reviewing the AEP Flint Creek costs, we have noted a number of issues and questions. Arkansas sh ould consider revising the cost evaluation as necessary to insure that the appropriate BART decisi on is being made. The comments in the first section apply to both the wet scrubber and NIDS. The comments in the other two sections are specific to each control option. We’d be happy to set up a conference call if you would like to discuss further.

Wet Scrubber and NIDS

 AFUDC costs are disallowed under the OAQPS Control Cost Manual and therefore should not be included in the cost analysis and the calculation of co st-effectiveness of BART controls.

 It is not clear why the estimated costs of the CEMS, CEMS building (included in the NIDS cost analysis only), and warehouse are included in the total capital costs.

 The expenses accounted for under line items 901 (“Outsid e Professional Services”), 970 (“AEP Services”), 010 (“Existing Conditions”), and 770 (“Controls Modernization”) should be explained.

 Please explain what expenses are accounted for under “Allocations.”

 The estimated cost of electricity should be specified in terms of $/kWh instead of only a dollar amount.

 The cost evaluation should explain what boiler modificat ions are necessary and the associated costs under each control option. We note that these costs are more than 5 times greater for WFGD than NID.

 The evaluation should be clear as to whether all costs ar e in present day dollars or any have been escalated to future-year dollars.

 The cost evaluation should explain what is included under the process island building cost and the large difference in these costs between the NID and WFGD options.

NIDS

 The estimate should clarify why the estimated cost of rail improvements are included in the total capital cost of the NIDS equipment.

 The estimate should explain why the estimated cost of site development under the NIDS option ($19,026,474) seems high when compared to AEP’s estimated cost of site development under the wet scrubber option ($5,883,128).

 The estimate should explain why the estimated cost of the CEMS for the NIDS equipment is three times greater than that for the wet scrubber option.

 The estimated cost of the Fabric Filter under line item 456 ($60.6 million) seems high compared to the cost at similar coal fired units. For example, in the Oklahoma FIP we estimated the cost of a Fabric Filter to be approximately $46 million at the two Sooner units and the two Muskogee units.

 The estimate should explain what expenses are accoun ted for under line item 770 (“DFGD- NID controls”) to ensure that no expenses are being double counted in the cost analysis.

 Line item 780 (“Plant Security and Communications”) is not a cost that should be included in the cost analysis and calculation of cost-effectiveness of BART controls.

 The estimate should explain the need for costs under line item 980, which seem high ($32,606,902) when compared to these costs at other co mparable units. For example, in the Oklahoma FIP we estimated that contingency costs would be approximately $2.1 million for the installation of dry scrubbers at the two Muskogee and the two Sooner units.

Wet Scrubber2  The cost analysis shows that the total capital cost s for the wet scrubber only (excluding FF and ACI) is $359,144,840. However, as shown in Table 5-3 of the BART analysis, AEP estimates the cost effectiveness of the wet scrubber option based on a capital cost of $533,249, 627 for the wet scrubber. It appears that the capital cost of $533,249,627 accounts for the capital costs of both the wet scrubber and a fabric filter. In estimatin g the cost effectiveness of the wet scrubber option, AEP should base its calculations on the capital cost of the wet scrubber only (excluding the capital cost of the fabr ic filter) or explain why this cost was included.

 The estimate should explain boiler modification costs included under WFGD and BMOD.

 The estimate should explain JBR Repair costs.

 The estimate should address whether contingency costs were included in the WFGD cost estimate.



### Thank you,
Dayana Medina U.S. Environmental Protection Agency, Region 6 Multimedia Planning and Permitting Division Air Planning Section (6PD-L) 1445 Ross Avenue Dallas, TX 75202 214-665-7241 

### medina.dayana@epa.gov