### MEMORANDUM

**Date:** December 16, 2011 **Subject:** Emission Reduction Costs for B eyond-the - floor Mercury Rate for Existing Units Designed to Burn Low Rank Virgin Coal **From:** Kevin Culligan, SPPD/OAQPS **To:** EPA-HQ - OAR-2009 - 0234 For the final rule, EPA has recalculated the beyond the floor control costs for existing units designed to burn low rank virgin coal using a methodology similar to that used in the IPM analysis done for the MATS proposal. In the final rule, we have not re calculated control costs based on the other methodology used in the proposal which used ACI capital and operating costs provided in the ICR. We have not used that approach because it was based upon an assumption that all units would need to have a baghouse (also known as a fabric filter

– FF

– either existing or newly installed) in order to meet the MACT PM standard and that the ACI would be used with the baghouse. EPA has considered and used additional information demonstrating that high levels of mercury

removal can be achieved with injection of brominated activated carbon and the addition of a FF is not necessary. Furthermore, based on additional analysis related to the PM standard, EPA believe s that most lignite units will not need to install new FF, therefore, EPA believes a costing methodology based on this assumption would be inappropriate. For this analysis, EPA calculated beyond-the - floor costs for mercury controls by assuming injection of brominated activated carbon at a rate of 3.0 lb/MACF for units with ESP s and injection rates of 2.0 lb/MACF for units with baghouses (also known as fabric filters). The rate of 2.0 lb/MACF for fabric filters is consistent with the rate assumed in all other IPM analys e s for this rule. The rate of 3. 0 lb/MACF for units with ESPs is lower than the rate of 5.0 lb/MACF assumed in the IPM analysis. EPA believes that this rate is appropriate, because a higher rate would likely

result in reductions beyond those needed to meet the BTF standard of 4.0 lb/TBtu . Figure 1 in " Activated Carbon Injection for Mercury : Overview " 1 

### suggests that > 90% control can be achieved at lignite- fired units at a < 2.0 lb/MACF injection rate for units with installed FF and using treated (i.e., brominated) AC. The figure also suggests that > 90% Hg control can be achieved at lignite- fired units at < 3.0 lb/MACF injection rate for units with installed ESPs and using treated AC. As T able 1 below shows, based on the IPM analysis, all units would need to achieve reductions of less than 90%, therefore lower assumed injection rates are appropriate.

1 Fuel Processing Technology 89 (2010) 1310

### Table 1 **– Emiss** **ion Reduction Rates Required to Meet Standard of 4 lb/T** **B tu.** 

EPA also assumed a disposal cost of $25/ton for ash comingled with activated carbon. This cost is consistent with a range of studies. DOE/NETL, in a recent study examining the costs of ACI, assumed total disposal costs of $17/ton for non-hazardous fly ash . They

assumed $35/ton for fly

ash that would have otherwise been sold for benefi cial reuse (lost revenue of $18/ton plus disposal costs of $17/ton for non-hazardous fly ash). 2 

### In an EPA study, $25 - $30 per ton were assumed as total disposal costs. 3 

### EPA recently modeled site- specific disposal costs for the RIA4 

### for the proposed rule regulating coal combustion residuals (CCRs), including fly ash. Those costs were examined for units burning low rank virgin coal. The disposal costs varied by state/region. For Texas the incremental costs attributable to Hg control were $18.13/ton, while f or North Dakota and Montana, the incremental costs attributable to Hg control were $32.31/ton.

2 Environmental Sci. Technol. 2007 , 41, 1365]. 3 Environmental Sci. Technol. 2006 , 1385 4 Regulatory Impact Analysis For EPA’s Proposed RCRA Regulation Of Coal Combustion Residues (CCR) Generated by the Electric Utility Industry. Prepared by US Environmental Protection Agency Office of Resource Conservation & Recovery (ORCR) (formerly Office of Solid Waste) 1200 Pennsylvania Avenue NW (Mailstop 5305P) Washington DC, 20460 USA. Available at http://www.regulations.gov/ docket number EPA-HQ -RCRA2009 - 0640 - 0003 , Appendix H. **Bas e**  **Re duction**  **Policy Pla**  **nt Name Unit**  **ID Hg Controls**  **Ex is** **ting Controls Hg l**  **bs/Tbtu Re**  **quire d,**  **% Hg l**  **bs/ Tbtu**  Bi g Brown 1 ACI Col d-side ESP + F abri c Fi lter + SN CR 9. 09 55. 98 1. 01 Bi g Brown 2 ACI Col d-side ESP + F abri c Fi lter + SN CR 9. 09 55. 98 1. 01 Le wis & Cl ark B1 ACI We t Sc rubbe r 7. 68 47. 92 0. 75 Marti n Lake 1 ACI Col d-side ESP + We t Scrubbe r 5. 41 26. 09 0. 56 Marti n Lake 2 ACI Col d-side ESP + We t Scrubbe r 5. 41 26. 09 0. 56 Marti n Lake 3 ACI Col d-side ESP + We t Scrubbe r 5. 41 26. 09 0. 56 Mo ntice llo 3 ACI Col d-side ESP + S NCR + We t Scrubbe r 6. 30 36. 53 0. 96 R MHe skett B1 Col d-side ESP 7. 81 48. 77 0. 45 R MHe skett B2 Col d-side ESP + Cy cl one 4. 76 16. 00 0. 75 Le la nd Ol ds 1 Col d-side ESP 7. 68 47. 93 0. 77 Le la nd Ol ds 2 Col d-side ESP 7. 81 48. 77 0. 78 Mi lt on R Young B1 Col d-side ESP + S CR + We t Scrubbe r 4. 21 4. 93 0. 75 Mi lt on R Young B2 Col d-side ESP + S CR + We t Scrubbe r 4. 21 4. 93 0. 75 Sta nton 1 Col d-side ESP 7. 81 48. 77 0. 78 Sta nton 10 Fabri c F ilt er+ Dry Scrubbe r 7. 51 46. 76 0. 75 Li mestone LIM 1 Col d-side ESP + We t Scrubbe r 6. 75 40. 76 1. 13 Li mestone LIM 2 Col d-side ESP + We t Scrubbe r 6. 75 40. 76 1. 13 Dol et Hi lls 1 Col d-side ESP + We t Scrubbe r 8. 33 51. 98 1. 35 Coal Cre ek 1 Col d-side ESP + We t Scrubbe r 4. 21 5. 07 0. 76 Coal Cre ek 2 Col d-side ESP + We t Scrubbe r 4. 21 5. 07 0. 76 Larami e Ri ver

Stati on 1 Col d-side ESP + We t Scrubbe r 5. 31 24. 71 0. 56 Larami e Ri ver

Stati on 2 Col d-side ESP + We t Scrubbe r 5. 31 24. 71 0. 56 Antelope Va lley B1 Fabri c F ilt er+ Dry Scrubbe r 7. 51 46. 76 0. 75 Antelope Va lley B2 Fabri c F ilt er+ Dry Scrubbe r 7. 51 46. 76 0. 75 Twi n Oaks Powe r One U1 Fabri c F ilt er 5. 82 31. 33 1. 35 Twi n Oaks Powe r One U2 Fabri c F ilt er 5. 82 31. 33 1. 35 Pir key 1 Col d-side ESP + We t Scrubbe r 7. 59 47. 27 1. 35 Coyote B1 Fabri c F ilt er+ Dry Scrubbe r 7. 64 47. 66 0. 75 Gre at Ri ve r Ene rgy Spi ri twood Stati on 1 Col d-side ESP + F abri c Fi lter + SN CR + DryS crubbe r 7. 68 47. 92 0. 75

### Based on these key assumptions, EPA projects an average reduction cost of $27,017 per pound of Hg removed. Unit by unit costs are provided in Table 2. **Table 2**  **– Unit by unit cost estimates for achieving an emission rate of 4 lb/T** **B tu Hg** 

**Plant Name Unit ID**  **Capacity (MW)**  **Heat Rate**

**(Btu/kWh) Existing PM** 

**Controls (Base to** 

**Policy) Hg remv'd (lbm)**  **(2007$) unit**

**S/lbm Hg Total** 

**Cost** Big Brown 1 575 11001 Cold - side ESP + Fabric Filter + SNCR - 396 3954 1565723 Big Brown 2 575 10931 Cold - side ESP + Fabric Filter + SNCR - 393 39 80 1565723 Lewis & Clark B1 52.3 13787 Wet Scrubber - 31 229 20 704682 Martin Lake 1 750 11512 Cold - side ESP + Wet Scrubber - 332 32175 10671737 Martin Lake 2 750 11202 Cold - side ESP + Wet Scrubber - 323 32174 10383770 Martin Lake 3 750 10784 Cold - side ESP + Wet Scrubber - 311 3230 9 10038209 Monticello 3 750 11246 Cold - side ESP + SNCR + Wet Scrubber - 359 29249 10487787 R M Heskett B1 29.37 11985 Cold - side ESP - 17 38871 652353 R M Heskett B2 75.5 11386 Cold - side ESP + Cyclone - 22 5399 2 1206545 Leland Olds 1 221 11404 Cold - side ESP - 109 2579 2 2812406 Leland Olds 2 448 11021 Cold - side ESP - 217 23822 5176973 Milton R Young B1 250 10661 Cold - side ESP + SCR + Wet Scrubber - 64 5154 2 3272935 Milton R Young B2 455 10661 Cold - side ESP + SCR + Wet Scrubber - 116 4901 8 5665257 Stanton 1 130.3472 10990 Cold - side ESP - 77 2660 1 2050240 Stanton 10 57.35278 10320 Fabric Filter + Dry Scrubber - 31 3053 8 935770.1 Limestone LIM1 831 10102 Cold - side ESP + Wet Scrubber - 372 29034 10797351 Limestone LIM2 858 10108 Cold - side ESP + - 384 2898 2 11134608Wet Scrubber Coal Creek 1 554 11219 Cold - side ESP + Wet Scrubber - 162 48056 7781365 Coal Creek 2 560.3 10818 Cold - side ESP + Wet Scrubber - 158 4798 2 7576786 Laramie River Station 1 565 11312 Cold - side ESP + Wet Scrubber - 235 34742 8170580 Laramie River Station 2 570 10953 Cold - side ESP + Wet Scrubber - 230 34737 7980115 Antelope Valley B1 450 10988 Fabric Filter + Dry Scrubber - 264 2231 5 5888636 Antelope Valley B2 450 11206 Fabric Filter + Dry Scrubber - 269 2226 9 5993120 Twin Oaks Power One U1 152 9497 Fabric Filter - 50 3821 5 1900963 Twin Oaks Power One U2 153 10364 Fabric Filter - 55 3777 8 2064287 Coyote B1 427 11639 Fabric Filter + Dry Scrubber - 228 2212 2 5043515 Pirkey 1 675 10693 Cold - side ESP + Wet Scrubber - 349 2618 5 9140141 Great River Energy Spiritwood Station 1 99 8937 Cold - side ESP + Fabric Filter + SNCR + Dry Scrubber -46 1169 4 535381.6

Dolet Hills 1 650 10674 Cold - side ESP + Wet Scrubber - 351 27064 9500464 Total - 5948 1.61E+08 Average 27016