**www.AndoverTechnology.com** 1 

### February 7 , 2013 To: Doug Grano Fm: Jim Staudt **Re: Review of estimated BART compliance Costs for Wyoming**  **Electricity Generating Units ( EGUs** **) Attachment: Microsoft Excel Workbook**  **WY EGU BART_RP Costs_** **2013 0201**  **.xlsx** On June 4, 2012 (77 FR 33022) , EPA proposed the Wyoming Regional Haze Federal implementation plan. Andover Technology Partners (ATP) has evaluated the cost of NOx controls for a number of power plants in Wyoming that are subject to EPA’s proposed rulemaking
. 1 This memo documents a similar analysis for Jim Bridger Units 1
-4 . For each unit, estimates were made for the following technologies, where applicable:
 Combustion Controls, includ ing Low NOx Burners (LNBs) with Separated Overfire Air ( S OFA)  Selective Non
- Catalytic Reduction (SNCR)  Selective Catalytic Reduction (SCR) Estimates were based upon an initial average annual NOx level equal to 2001
- 2003 historical rates (average of annual average for each of the three years ) when advanced combustion controls were not in use at these units. Emission rates with combustion controls were estimated from more recent data: the lower of 2011 or 2012 annual emission rate s . 2001
- 2003 historical data w ere also used to estimate annual heat input and the associated capacity factor for each unit ; these estimates are used in all calculations. In estimating the cost of controls, the following were considered:  IPM Cost models 2  US EPA Air Pollution Control Cost Manual 3  Data provided by the facilities  Other data that ha ve been published and are described in more detail The BART guidelines recommend use of the EPA Air Pollution Control Cost Manual, and the methodology use d for estimating cost is consistent with the recommendations in t he manual, such as inclusion of taxes, insurance and administrative costs, 4 and the use of overnight cost 5 for capital cost.

1 Memo, J. Staudt to D. Grano, Re: Review of Estimated Compliance Costs for Wyoming Electricity Generating Units (EGUs) , October 23, 2012 and an updated revision February 7, 2013 2 Documentation for EPA Base Case v.4.10 Using the Integrated Planning Model, August 2010, EPA #430R10010. 3 EPA. 2002. EPA Air Pollution Control Cost Manual (Sixth Edition). EPA/452/B
-02
-001 4 Integrated Planning Model ver 4.10 documentation page 8
- 11 5 “overnight” costs mean exclusion of Allowance for Funds Used During Construction (AFUDC)**www.AndoverTechnology.com** 2

**Combustion Controls** For combustion controls, the capital and operating cost estimates by the owners were used . These are in the Wyoming Department of Environmental Quality May 28, 2009 BART Analysis
. These were adjusted to “overnight” costs by removal of AFUDC and owner’s costs using factors developed from the December 2007 BART Analysis by CH2MHill which included details of the c apital cost components in its appendices. Note that the combustion controls have already been installed on the Jim Bridger units, with installation dates between 2005 and 2010. **SNCR** Consistent with previous work, 1 for SNCR, capital cost is assumed to be $20/kW. According to the 2008 Institute of Clean Air Companies’ SNCR White Paper, 6 “Typical SNCR capital costs for utility applications are $5

- $15/kW, vendor scope, which corresponds to a maximum of $20/kW if balance
- of
- plant capital requirements are included.” This is also consistent with my personal experience, having worked with the following electric utilities and power plants on their SNCR i nstallations as a consultant or as a past employee of Research
- Cottrell and Fuel Tech – suppliers of SNCR systems.
 Constellation Energy – C P Crane units 1&2 and Wagner Unit 2 7  Conectiv – Edge Moor unit 3 and Indian River 8  New England Power – Salem Harbor Station 9  Montaup Electric – Somerset Unit 8 10 And, I have also published reports that describe the cost and application of technologies used for control of NOx, including SNCR
. 11, 12 Therefore, $20/kW provides a reasonable estimate for the capital cost of SNCR. Furthermore, due to the low capital cost of SNCR, the operating cost – especially reagent cost – is the much mo re important component of cost. SNCR reagent consumption and the level of NOx reduction vary based upon a number of factors – such a s initial NOx level and furnace temperature s . It was not possible to evaluate all of the relevant factors because detailed furnace characteristics were not available. Figure 1 is an example of test data from an SNCR optimization program on a pul verized coal fired boiler that shows NOx reduction and chemical
6 Institute of Clean Air Companies, “White Paper – Selective Non
- Catalytic Reduction (SNCR) for Controlling NOx Emissions”,

February 2008, p 7. 7 Staudt, J, Hoover, B., Trautner, P., McCool, S., Frey, J., “Optimization of Constellation Energy’s SNCR System at Crane Units 1

and 2 Using Continuous Ammonia Measurement”, The MEGA Symposium, Baltimore, MD, August 31
-September 2, 2010 8 Staudt, J.E., Kehrer, K., Poczynek, J., Cote, R., Pierce, R., Afonso, R., Miles, D., and Sload, A., "Optimizing Selective Non
- Catalytic

Reduction Systems for Cost
- Effective Operation on Coal
- Fired Electric Utility Boilers", presented at ICAC Forum '98, Du rham, NC, March 19
- 20, 1998. 9 Staudt, J.E., Casill, R.P., Tsai, T., and Arigiano, L., "Commercial Application of Urea SNCR for NOx RACT Compliance on a 112

MWe Electric Utility Pulverized Coal Boiler" presented at the 1995 EPRI/EPA Joint Symposium on Stat ionary Combustion NOx Control, Kansas City, May 16
- 19, 1995 10 Ibid 11 Staudt. J. and M J Bradley & Associates, for the Northeast States for Coordinated Air Use Management, “Control Technologies to Reduce Conventional and Hazardous Air Pollutants from Coal
- F ired Power Plants”, March 31, 2011 12 "Status Report on NOx: Control Technologies and Cost Effectiveness for Utility Boilers", report for Northeast States for Coordinated Air Use Management and Mid Atlantic Regional Air Management Association, June 1998.**www.AndoverTechnology.com** 3

utilization versus Normalized Stoichiometric Ratio (NSR
– a measure of chemical treatment rate)
. Chemical utilization equals p er cent reduction divided by NSR and is a measure of the efficien cy of reagent use. The data include data from optimized as well as unoptimized configurations , whi ch is why some of the data points fall below the curves . The curves that would be developed for any given unit will vary from one unit to another and, while having similar shapes as those in Figure 1, may have somewhat different values. For the purpose of making an estimate of reagent consumption for the Wyoming pulverized coal units it was assumed that the chemical utilization was 25% and that NOx reductio n diminished with lower NOx concentrations – 30% for NOx greater than 0.25 lb/MMBtu, 25% for NOx between 0.20 and 0.25 lb/MMBtu, and 20% for NOx under 0.20 lb/MMBtu. This is expected to provide a reasonable estimate of NOx reduction and reagent consumptio n. Other elements of SNCR variable operating cost and fixed operating cost are estimated using IPM algorithms. 13 **Figure 1.** NOx Reduction and Reagent Utilization versus reagent treatment rate in NSR for a Pulverized Coal Fired Boiler during an SNCR optimization program 14 (D ata points plotted below the curve s are at unoptimized conditions)

**SCR** Selective Catalytic NOx Reduction (SCR) capital cost is estimated using the IPM algorithms 15 with retrofit factors adjusted on a unit by unit basis. The retrofit factor is a subjective factor used to account for the estimated difficulty of the retrofit that is unique to the facility. Because site visits were not possible, the retrofit factor wa s estimated from satellite images that provide some insight to the configuration of the units and degree of congestion around the site and in the vicinity of where the SCR would be installed. These factors impact the ability to locate large cranes on the site – that impact how the SCR is assembled (are large sections lifted into place or is the SCR “stick built”), how much ductwork is needed, if the SCR must be built on to a large , elevated steel structure or can be built near the ground , and if other equipment must be relocated to accommodate the space of the SCR. When using the IPM capital

13 IPM Documentation, Appendix 5
- 2B . 14 Staudt, J.E., Kehrer, K., Poczynek, J., Cote, R., Pierce, R., Afonso, R., Miles, D., and Sload, A., "Optimizing Selective Non -Catalytic Reduction Systems for Cost
- Effective Operation on Coal
- Fired Electric Utility Boil ers", presented at ICAC Forum '98, Durham, NC, March 19
- 20, 1998. 15 IPM Documentation, Appendix 5
- 2A .**www.AndoverTechnology.com** 4

cost model , retrofit difficulties associated with an SCR may result in capital cost increases of 30 to 50% over the base model. 16 In addition, historical indust ry cost data were considered to determine if the costs were reasonable in t he context of what has been reported at other facilities
. 12 , 17, 18 The owners estimated capital cost of SCR to be $166,500,000 per unit, 19 including AFUDC. On an overnight basis, that is $154,760,000 ($292/kW), 20 or about 15% greater than estimated by the IPM algorithm using a retrofit factor of 1.5 (roughly $134 million, or $ 253/kW)
. These are both in the same range and within the range of costs found in industry. **A ssumptions**  In estimating cost of control, it is assumed that a full complement of combustion controls are implemented prior to installation of post
- combustion controls (SNCR and SCR). Emissions rates for the 2001
- 2003 period were used to estimate the emission rate p rior to installation of combustion controls. The average reported emi ssion rates for 2001
- 2003, 2011, and 2012 as well as the Wyoming recommended BART limit are shown in Table 2 . 21 For all Jim Bridger units there has been some significant NOx reduction si nce 2003 at these facilities through implementati on of additional combustion controls
. **Table 2.** Reported emission rates and Wyoming proposed BART limits for affected EGUs
**Facility Name Facility ID** 

**(ORISPL) Unit ID**  **Annual**

**Heat Input, MMBtu**  **2001 -** **03 avg.**  **Avg. NOx Rate (lb/MMBtu)**

**2001 -**  **2003 2011**  **2012**

**YTD Wyoming**  **BART recommendation**  ***** Jim Bridger 8066 BW71 4.298E+07 0.3921 0.1929 0.1800 0.26 Jim Bridger 8066 BW72 4.090E+07 0.3705 0.1853 0.1868 0.26 Jim Bridger 8066 BW73 4.217E+07 0.3725 0.1977 0.1965 0.26 Jim Bridger 8066 BW74 4.103E+07 0.3964 0.1981 0.1936 0.26 All historical emissions and heat input data developed from Air Markets Program Data * 30 day rolling average

16 Sargent & Lundy, “IPM Model – Revisions to Cost and Performance for APC Technologies SCR Cost Development Methodology FINAL”, August 2010, Project 1230 1
-007, Perrin Quarles Associates, Inc. p 1. 17 Fox, Phyllis, “Revised BART Cost Effectiveness Analysis for Tail
- End Selective Catalytic Reduction at the Basin Electric Power Cooperative Leland Olds Station Unit 2 Final Report”, RTI Project Number 0209897.004.095 , March 2011 18 Cichanowicz, J. E., “CURRENT CAPITAL COST AND COST
- EFFECTIVENESS OF POWER PLANT EMISSIONS CONTROL TECHNOLOGIES”, Prepared for Utility Air Regulatory Group, January 2010 19 Subtract cost of LNB with separated OFA from cost of LNB with separated OFA and SCR on page 13 of May 28, 2009 report by Wyoming Department of Environmental Quality on Jim Bridger Power Plant AP
- 6040 BART Application Analysis 20 Using the same percent of t otal SCR cost for AFUDC as shown in appendices of CH2MHill Final Report, “BART Analysis for Jim Bridger Unit ,”, December 2007 21 WY Regional Haze SIP, January 7, 2011, Attachment A**www.AndoverTechnology.com** 5

**Cost E stimating**  The cost estimates summarized in the following sections of this memo are detailed in a Microsoft Excel workbook WY_EGU_BART_RP_Costs_2013 0201 .xlsx that is an attachment to this memo. The details of the estimating methods are described in the workbook. Consistent with the EPA Control Cost Manual, 22 capital cost estima tes do not i nclude AFUDC or Owner’s Costs. For combustion controls, capital and operating costs were based upon what was in the Wyoming proposed SIP supportin g attachments, when available. For SNCR, the capital cost was assumed to be $20/kW
. Re a gent con sumption was determined using a chemical utilization factor of 0.25. After combustion controls, SNCR can typically achieve NOx reductions of 20% to 30%. 23 NOx reduction with SNCR is known to be greater at higher NOx emission rates than lower rates. 24 NOx reduction was estimated as 30% for initial NOx greater than 0.25 lb/MMBtu, 25% for NOx from 0.20 to 0.25 lb/MMBtu and 20% for NOx less than 0.20 lb/MMBtu. For consumables, notably urea, there has been significant variability in cost, and current cost estimates were used (delivered price of about $450/ton of 50% by weight urea solution )
. 25

22 EPA. 2002. EPA Air Pollution Control Cost Manual (Sixth Edition). EPA/45 2/B
-02
-001, p 2
- 5 - 2
- 7 23 Institute of Clean Air Companies, February 2008, p. 9 24 Hofmann, J., Sun, W., “Process for Nitrogen Oxides Reduction to Lowest Achievable Level”, US Patent 5,229,090, July 20, 1993 , Figure 6 25 Email from Doug Kirk, Fuel Tech, 10/12/2012**www.AndoverTechnology.com** 6



### Jim Bridger**, U**  **nits 1 -** **4** An overhead view of Jim Bridger plant is shown in Figure 2 . All four units are tangentially fired and are currently equipped with combustion controls to reduce NOx emissions . Annual emission rates with combustion controls are assumed to be the lesser of the 2011 or 2012 annual average emission rate. Retrofit costs Retrofit costs for combustion controls are based upon company estimates. Retrofit costs for SNCR are expected to be consistent with other similar units and a presumed capital cost of $20/kW is assumed
. 26 It was previously determined that post
-combustion NOx controls, including SCR, are feasible, but they were not selected in Wyoming’s proposal as BART due to cost
. 27 T he estimates of SCR capital cost made here are a djusted for retrofit difficulty using subjective factors that are integrated into the IPM cost estimating algorithms . Based upon the satellite photo, the SCR reactors would likely be installed above the ESPs and ductwork routed to the boiler. The boilers do not appear to be unusually constrained, except possibly the middle two which will be somew hat more difficult to achieve access for equipment. For this reason a retrofit difficulty factor of 1.5 is assumed for the middle units and 1.25 for the units on either end
. Table 3 shows the estimated costs of control for each of the Jim Bridger units. Costs are shown for:
 Combustion Controls alone
 SNCR alone but after installation of combustion controls
 SCR alone but after installation of combustion controls
 Combustion controls in combination with SNCR
 Combustion controls in combination with SCR

26 Based upon input from technology suppliers it was determined that $20/kW is a reasonable and conservative estimate of capital cost, and therefore this is used in lieu of the estimates used for IPM that are rel ied on by Wyoming in their SIP evaluation. See discussion on page 2 of this memo. 27 Wyoming Department of Environmental Quality on Jim Bridger Power Plant AP
- 6040 BART Application Analysis, May 28, 2009**www.AndoverTechnology.com** 7 **Figure 2**  **.** Jim Bridger Power Plant**www.AndoverTechnology.com** 8 **Table 3**  **.** Jim Bridger Estimated Control Costs **JB 1 Cost from 2003**  **emission levels**  **Comb ustion**  **Control (CC)**  **SNCR SCR**  **CC and SNCR**  **CC and SCR**  Capital Cost, $/kW $19 $20 $211 $39 $231 Control Efficiency 54% 20% 72% 63% 87% **Uncontrolled Rate** NOx Rate (lb/hr) 2175 998 998 2175 2175 NOx Rate (lb/MMBtu) 0.39 0.18 0.18 0.39 0.39 NOx (TPY) 8426 3868 3868 8426 8426 **Controlled Rate** NOx Rate (lb/hr) 998 799 277 798.61 277.29 NOx Rate (lb/MMBtu) 0.18 0.14 0.05 0.14 0.05 NOx (TPY) 3868 3094 1074 3094.39 1074.44 Tons/Year Removed 4558 774 2794 5332.02 7351.97 Total Cost/year $1,167,297 $3,235,461 $16,425,339 $4,402,757 $17,592,636 $/Ton $256 $4,182 $5,880 $826 $2,393 $/ton Incremental $6,530 $4,182 $6,530 **JB 2 Cost from 2003**  **emission levels**  **Comb ustion**  **Control (CC)**  **SNCR SCR**  **CC and SNCR**  **CC and SCR**  Capital Cost, $/kW $19 $20 $251 $39 $270 Control Efficiency 50% 20% 73% 60% 87% **Uncontrolled Rate** NOx Rate (lb/hr) 2035 1018 1018 2035 2035 NOx Rate (lb/MMBtu) 0.37 0.19 0.19 0.37 0.37 NOx (TPY) 7577 3789 3789 7,577 7,577 **Controlled Rate** NOx Rate (lb/hr) 1018 814 275 814 275 NOx Rate (lb/MMBtu) 0.19 0.15 0.05 0.15 0.05 NOx (TPY) 3789 3031 1022 3,031 1,022 Tons/Year Removed 3787 758 2767 4,545 6,554 Total Cost/year $1,167,297 $3,193,662 $18,590,683 $4,360,958 $19,757,979 $/Ton $308 $4,214 $6,719 $959 $3,015 $/ton Incremental $7,664 $4,214 $7,664**www.AndoverTechnology.com** 9 **Table 3**  **.** Jim Bridger Estimated Control Costs **JB 3 Cost from 2003**  **emission levels**  **Comb ustion**  **Control (CC)**  **SNCR SCR**  **CC and SNCR**  **CC and SCR**  Capital Cost, $/kW $19 $20 $253 $39 $273 Control Efficiency 47% 20% 75% 58% 87% **Uncontrolled Rate**  NOx Rate (lb/hr) 2056 1085 1085 2056 2056 NOx Rate (lb/MMBtu) 0.37 0.20 0.20 0.37 0.37 NOx (TPY) 7853 4143 4143 7,853 7,853 **Controlled Rate** NOx Rate (lb/hr) 1085 868 276 868 276 NOx Rate (lb/MMBtu) 0.20 0.16 0.05 0.16 0.05 NOx (TPY) 4143 3314 1054 3,314 1,054 Tons/Year Removed 3710 829 3089 4,539 6,799 Total Cost/year $1,167,297 $3,362,773 $18,968,124 $4,530,069 $20,135,420 $/Ton $315 $4,058 $6,141 $998 $2,961 $/ton Incremental $6,905 $4,058 $6,905 **JB 4 Cost from 2003**  **emission levels**  **Comb ustion**  **Control (CC)**  **SNCR SCR**  **CC and SNCR**  **CC and SCR**  Capital Cost, $/kW $19 $20 $213 $39 $232 Control Efficiency 51% 20% 74% 61% 87% **Uncontrolled Rate** NOx Rate (lb/hr) 2200 1074 1074 2200 2200 NOx Rate (lb/MMBtu) 0.40 0.19 0.19 0.40 0.40 NOx (TPY) 8133 3972 3972 8,133 8,133 **Controlled Rate** NOx Rate (lb/hr) 1074 859 277 859 277 NOx Rate (lb/MMBtu) 0.19 0.15 0.05 0.15 0.05 NOx (TPY) 3972 3178 1026 3,178 1,026 Tons/Year Removed 4161 794 2946 4,956 7,108 Total Cost/year $1,167,297 $3,278,694 $16,545,040 $4,445,990 $17,712,336 $/Ton $281 $4,127 $5,616 $897 $2,492 $/ton Incremental $6,165 $4,127 $6,165