1 Final Transport Rule Response t o Comment (RTC) Document

Docket ID No. EPA

- HQ

- OAR

- 2009

- 0491



## Transport Rule IPM Assumptions Response to Comments

U.S. Environmental Protection Agency

Office of Air and Radiation July 20112

Background

IPM is a multi

- regional, dynamic, deterministic linear programming model of the U.S. electric power sector. It provides forecasts of least cost capacity expansion, electricity dispatch, and emission control strategies while meeting energy d emand and environmental, transmission, dispatch, and reliability constraints. IPM can be used to evaluate the cost and emissions impacts of proposed policies to limit emissions of sulfur dioxide (SO 2 ), nitrogen oxides (NO X ), carbon dioxide (CO 2 ), and merc ury (Hg) from the electric power sector. The IPM base case serve s as the starting point against which policy scenarios such as the Transport Rule are analyzed a n d compared. The model has over 1 million constraints and 13 million variables. EPA used the

I PM model in both its proposed and final Transport Rule analysis, providing the public with the opportunity to review and provide input on the model at several points leading up to final rule promulgation. Specifically, the public had the opportunity to re view the universal IPM

assum ptions (e.g., demand, fuel costs) and source

- specific assumptions where the commenter may have superior knowledge (e.g., retrofit status at a particular source). EPA reviewed these

comments received on model parameters, and mad e significant model updates before conducting final Transport Rule analysis.

EPA’s July 6, 2010 proposed Transport Rule was based on the EPA IPM v3.02 modeling platform. EPA had a sixty day comment period from the time which the rule was published in

the Federal Register (closing October 1, 2010 ) in which it accepted feedback on this modeling platform . EPA noted at the time that it would be updating its modeling platform, and would release the updated platform for further review before f i n a l r u l e p r o m u l g a t i o n . Subs equently,

EPA issued a Notice of Data Availability (NODA) on September 1, 2010 with the updated IPM v4.10 modeling platform. EPA had a 45 day comment period on this NODA which closed October 15, 2010.

During each of these comment periods, sources submitt ed data intensive comments with corrections and suggested updates to the IPM modeling platform to be used for the final Transport Rule. EPA reviewed these comments, and where technically substantiated , made updates to the IPM modeling platform used for th e analysis in the Final Transport Rule. These updates included both universal comments affecting broad categories of generating units (e.g., change to modeling of removal efficiencies for projected FGD retrofits ), and source specific comments (e.g., chang e to the FGD retrofit status at a particular plant). EPA focused specifically on incorporating comments that met four criteria : 1) had sufficient documentation and argumentation supporting them, 2) would have a significant impact on the model, 3) could be reasonably incorporated into the model , and 4) EPA did not have significant data contradicting the commenter suggested value. This document and the accompanying spreadsheet file

“ NEEDS 1 Source

- Specific Adjustments in EP A Base Case v.4.10_FTransport .xlsx ” serve as a response to IPM source

- specific comments 2

. It summarizes below the type of source specific

1 NEEDS (National Electric Energy Data System), is a modeling input that contains data on all existing and planned electric generating units (EGUs) that factor into EPA’s IPM modeling.

2 EPA’s response to the universal comments on IPM can be found in the separate report Documentation Supplement for EPA Base Case v.4.10_FTransport

– Updates for Final Transport Rule ( EPA 430

- K

- 11

- 004 , June 2011) . T hese responses to universal comments include updates to modeling of cogeneration units, NO

x Rates, SO 2 removal rates, coal switching

– bituminous to subbituminous, restrictions on coal choice in 2012, and waste coal cost.3

modeling comments received during the comment period and subsequent modeling updates made in response to the se comments. 3 It describes in general, the source

- specific updates EPA made to its model regarding each parameter. However, it should be noted that comments varied in quality, specificity, context, and support, and the “general” response outlined below may not apply to all comments submitted in t hat parameter field. Each comment was evaluated against

the four criteria outlined above.

The spreadsheet file that accompanies this document catalogues in detail the sou rce

specific model adjustments that were made . T he spreadsheet lists each unit, its NEEDs unique
ID, plant name, plant type, the parameter on which a commenter submitted a correction

, the original value of that parameter in the IPM version reviewed by commenter, the corrected value submitted by commenter, and the final value in EPA IPMv. 4.10 used in EPA’s final Transport Rule analysis. See example in Table 1 below:

Table 1: Example IPM Comment as listed in

Source

- Specific Adjustment Table

Unique

ID Plant

Name Plant Type Parameter

Commented NEEDS

Value in the

Commented

Version Value

P roposed by the

Commenter Final

NEEDS

Value

2094_B_1 Sibley Coal

Steam NO

x PostCombControl No SNCR SNCR SNCR

“NEEDS Source

- Specific Adjustments in EPA Base Case v.4.10_FTransport” is available in Excel format in the Transport Rule Docket.

Useful Links

Th e documentation for the v4.10 model (including the Documentation Supplement for EPA Base Case v.4.10_FTransport

– Updates for Final Transport Rule, EPA 430

- K

- 11

- 004, June 2011) is available at http://www.epa.gov/airmarkets/progsregs/epa

- ipm/transport.htm l.

1) Source

- Specific Comment descriptions and EPA General Response

EPA received significant source

- specific comment. These comments could typically be

divided into two classes; 1) comment s on the source at t he model input stage (e.g., NEEDS), 2)

comments on the source at the model output stage ( e.g., parsed files). In regards to the later,

EP A generally did not make source

- specific adjustments to its modeling output based on comment. For example, if a cogeneration source commented that it disagreed with IPM’s 2014 projected dispatch for its unit because they felt the heat input should be value x whereas IPM projected value y, EPA did not adjust the value from y to x. Rather, EPA examined the model

3 The table also includes some source

- specific adjustments included in the v.4.10 F_Transport IPM modeling made in response to additional input received from sources through non

- Transport Rule relat ed channels (e.g., “Utility MACT ICR (ICR No. 2362.01: OMB Control Number 2060

- 0631)).4

output for this technolog y class as a whole for a system

- wide bias, and, if identified, made adjustments to its modeling approach for the technology. These types of changes are reflected in

the universal adjustments noted above and discussed in the Documentation Supplement for EPA Base Case v.4.10_FTransport

– Updates for Final Transport Rule

. These universal adjustments

were EPA ’s general approach to addressing so urce

- specific comments on EPA’s projections

. Again, EPA notes that it rarely made source

- specific adjustments to projected values in response

to co mment. EPA also notes that in certain cases, EPA did not identify or find reasons to adjust its modeling approach. IPM is a least cost model with perfect foresight. As commenters noted, projections from this approach may vary from actual future values a t particular sources as the model may not capture non

- economic variables. Furthermore, IPM does not purport to be 100% accurate when projecting future operations at the source

- level. The projections are reasonable approximations of what sources can be e xpected to do under typical economic constraints. However, there are inherent differences between predicted value and actual future value s in any predictive model

. 4

In regards to source specific comments at the model input stage (i.e., NEEDS), EPA did

make ex tensive source

- specific updates to its IPM model. These comments were generally pointing out a discrepancy between a commenters understanding of a unit’s current configuration, and how the units configuration is depicted in EPA ’s National Electric Energy Data System ( NEEDS ) database. NEEDS is meant to reflect the current configuration (or configuration as of December 31, 2011) of the U.S. Power Sector and is the primary input for unit level data in the IPM v.4.10 modeling. Since NEEDS is an appro ximate snap shot of the

power sector , EPA was sensitive to comments that suggested this depiction was not consistent with the current configuration as observed by the commenter . EPA reviewed NEEDS in light of these comments and made updates accordingly.

For the reasons stated above, EPA adjustments to source

- specific assumptions in the IPM model generally occurred in the NEEDs database. By focusing on changes to model inputs, as opposed to outputs, EPA made changes to existing data instead of projected data. EPA believes these types of changes which focus on model inputs are more appropriate as they are generally

fact based. EPA also notes th at by making these source

- specific adjustments to the modeling inputs and then re

- running the IPM model, their impact on model projections is captured in the final Transport Rule analysis.

Below, EPA highlights some of the key unit level parameters in N EEDS to which EPA made changes in response to comments received. The actual source

- specific changes themselves

can be seen in the accompanying table titled “NEEDS Source

- Specific Adjustments in EPA Base Case v.4.10_FTransport” available in the Transport R ule Docket.

“BCGI” adjustments

4 Commenter’s noted that the residual, while typically minimized at regional and state levels as source

- specific data is aggregated, could be significant at the source l evel. Therefore, in addition to making model updates, EPA revised its allocation methodology in the final Transport Rule to be based purely on historic data (as opposed to projected,

source

- specific model data used in proposal). By basing the allocation methodology in historic data in the final rule, EPA limits the degree to which source

- specific modeling projections (and potential discrepancies between source projected and actual future data) impact a source’s allocation.5

NEEDS has a column indicating whether a unit is a boiler (B), generator (G), or committed unit (C). Some commenters submitted a correction to a unit’s classification in

this data field. EPA reviewed and generally accepted these comments. The attached table indicates for which units these types of changes were made.

CAMD ID

NEEDS contains a field with a unit

- level identifier assigned by EPA’s Clean Air Markets Division (CAMD) business system. Unlike other identification c odes (e.g., ORIS codes), which are subject to change, once assigned to a unit, the CAMD database ID does not change. It is used primarily for internal tracking and data analysis purposes at EPA.

EPA made several source

- specific changes to this field that reflected assigning a number where one had not previously been assigned.

Capacity Shows the net summertime dependable capacity (in MW) of the unit available for generation for sale to the grid. Net summer dependable capacity is the maximum capacity that the unit can sustain over the summer peak demand period reduced by the capacity required for station services or auxiliary equipment. To the extent that EPA received comment correcting these values, it generally accepted them and the source specific chan ges are reflected in the attached table as well as the final IPM modeling . In cases where the comment was unclear or data was provided without definitively suggesting a change, EPA exercised discretion in incorporating the comment

.

Cogen

This field ind icates whether a unit is a cogenerator. A unit is considered a cogenerator for IPM purposes if it produces electricity and another form of useful thermal energy (such as heat or steam), used for industrial, commercial, heating, or cooling purposes.

Some commenters suggested corrections to this field in NEEDS for a particular unit. EPA reviewed, and generally accepted these comments.

Dispatchable SCR

NEEDS contains a field that indicates a one

- time option that allows certain generating

units in the model to install a SCR retrofit at zero capital cost (see IPM documentation for more details). The “dispatchable” status of a retrofit in IPM modeling reflects that the control would only run if provided with appropriate economic incentive. Some

commenters su ggested a change to the “dispatchable” status of their retrofit . For example, a source may have pointed out that its retrofit has to run regardless of economic incentive because of its permit limit or consent decree, and therefore should be

considered “no n

- dispatchable”. In these cases, EPA reviewed the unit in question in concert with existing, non Transport Rule state or Federal requirements that may influence its dispatchable status. Upon review, EPA updated its “ dispatchable ” status to
be consisten t with the explanation as described in the IPM documentation.

Dispatchable FGD

NEEDS contains a field that indicates a one

- time option that allows certain generating units in the model to install a FGD retrofit at zero capital cost (see IPM documentation6

for more details). Some commenters suggested a change to the “dispatchable” status of their retrofit. For example, a source may have pointed out that its retrofit has to run regardless of economic incentive because of its permit limit or consent decree, and

therefore should be considered “non

- dispatchable”. In these cases, EP A reviewed the unit in question in concert with existing, non Transport Rule state or Federal requirements that may influence its dispatchable status. Upon review, EPA updated its “dispatchable” status to be consistent with the explanation as described in the IPM

documentation.

Firing NEEDs contains a field, which applies only to boilers, which indicates the burner type and configuration. Some commenters suggested a correction to the burner status of their boiler. EPA generally accepted these comments

.

Heat Rate NEEDS contains a field that indicates the net heat input (in BTU) required to generate 1 kilowatt hour of electricity. It is a measure of a generating unit’s efficiency . Some commenters submitted corrected heat rate values which EPA generally accepted

. Note

- some heat rate values were flagged as accepted, but the final NEEDS value still remains different from that noted by commenter. This indicates that EPA accepted the comment, but still made necessary adjustments to translate it from the form in which it was presented by commenter to the form in which it is presented in NEEDS. One example would be making adjustments to account for net or gross heat rate, depending on how the value was presented in the comment.

Mercury Controls NEEDS contains a field that indicates the mercury emissions control in existence at the unit. This field generally is blank, or has an “ACI” indicator to suggest that activated

carbon inject ion is present at the unit. Some commenters submitted a correction to the status of a mercury control at their plant. EPA generally accepted these comments and adjusted the value in NEEDS accordingly.

Mercury Control Efficiency

NEEDS has an indicator fo r the removal efficiency of the mercury control device. Some commenters submitted a correction to this efficiency. EPA generally accepted these comments and updated the efficiency in the final version of NEEDS

. Modeled Fuels

NEEDS has an indicator that l ist the fuels that are reported to be combusted by the unit. Some commenters submitted a correction to the fuels listed. In some cases, they submitted an additional fuel, and in other cases noted that a fuel should be removed. EPA generally accepted the se comments and updated the final NEEDS to reflect the type of fuels combusted by the unit according to the commenter.

New Unit Comment NEEDS attempts to capture new units committed to come online in the near future. These are units that are typically al ready under construction. Some commenters noted7

that certain new unit s were incorrectly left out of NEEDS. EPA reviewed and updated NEEDS where appropriate to reflect these new units.

NO X Control NEEDS has an indicator for the combustion controls emplo yed by a generating unit.

Some commenters corrected the initial combustion control status listed in NEEDS. EPA generally accepted these comments, and updated NEEDs to reflect the comment.

NO X Rate Comments

NEEDS contains four indicators that relate to a unit ’ s NO X emission rate under various conditions. Many commenters submitted corrected data. However, EPA was already updating the NO X rates to reflect the most recent 2009 data (most recent at time of update), and therefore used the 2009 reported data in most cases instead of commenter specific data. These updates generally brought the rates closer to those values suggested by the commenter. EPA felt that using 2009 ETS data to update NOX rates as expressed in NEEDS was superior to relying on commente r data. It had the advantages of promoting consistency and accuracy among all sources, and the data is high quality as it is reported by the sources designated representative who testified to its accuracy and completeness. In instances where EPA did not have ETS data for particular units in NEEDS, it did accept commenter data on NO X emission rates if provided as it represented the best available data.

NOx Post Combustion Control NEEDs contains an indicator for the post combustion NOx control status at a unit ( e.g.
, SCR, SNCR). Some comments submitted corrections to this status as initially proposed in NEEDS. EPA generally accepted these comments, and updated the final NEEDS to

reflect the NO X post combustion status of the unit as recommended by the co mmenter

. EPA notes in instances where commenter pointed out that the control was not present/complete at time of comment (e.g., October, 2010), but was expected to be completed by 2012, it was still reflected in NEEDS.

Online Year

NEEDS has an indicator that list the year in which the unit was commissioned. Some commenters submitted corrected dates. EPA generally accepted these comments. EPA notes that changes to the online year do not impact the projections, so the changes were primarily illustrat ive from a modeling standpoint. Even though these changes did not meet EPA criteria of “having a significant impact on the model” they were still generally included in the model due to their ease of implementation and their ability to improve the accuracy of certain analyses of model outputs.

ORIS NEEDS contains a unique identifier for each power plant. Some commenters corrected the ORIS code for particular units. EPA generally accepted these comments.

Plant Name8

NEEDS identifies each plant with a plant na me. Some commenters noted a correction to the name. EPA generally accepted and made these changes. However, EPA notes this

does not impact modeling projections and is f or identification and data analyses purposes only.

PM Control

NEEDS contains a field that indicates the presence of particular matter (PM) controls (e.g., baghouse, electrostic precipitator, etc). Some commenters provided a correction to the status of its PM controls has identified in NEEDS. EPA generally accepted these

comments.

Retir e ment Year

NEEDs has an indicator for the year in which a unit is to be decommissioned (“9999” indicated no know retiring data). Some sources provided a corrected retirement date

w hich EPA generally accepted and incorporated into its modeling. If the source reported the unit had already been retired at the time of comment, then EPA removed the unit from its NEEDS inventory of units. If the retirement was planned or announced for a future date according to the commenter, then EPA incorporated that date into its “retirement year” indicator in NEEDS, and the unit still appears in the NEEDS inventory.

H o w e v e r
, t h e u n i t w o u l d n o t b e a v a i l a b l e f o r d i s p a t c h i n m o d e l p r o

j e c t i o n s f o r y e a r s o n

o r a f t e r t h e u p d a t e d r e t i r e m e n t y e a r

.

Scru bber Online Year NEEDS provides the year in which a scrubber was installed at a unit. Some sources submitted corrected online years. EPA accepted this data and adjusted the final NEEDS to reflect the comment. However, EPA notes that an adjustment of the online year of an FGD in NEEDs does not impact the modeling projections provid ed the pre and post adjustment values are both dates earlier than 2012.

Scrubber Efficiency NEEDS provides the scrubber efficiency for each existing FGD. EPA received many comments that suggested corrected values for these efficiencies. EPA made univers al adjustments to its IPM assumed FGD removal efficiencies for existing FGDs in NEEDS by basing the values on historic removal efficiencies for the control as reported in EIA

form 860 (2008) as described in the Documentation Supplement for EPA Base Case

v. 4.10_FTransport

– Updates for Final Transport Rule of this document . This change was made in response to the comments on removal efficiency, and brought the efficiency used in NEEDS to, or closer to, levels suggested by the commenter. However, EPA

notes that where EIA 860 reported values conflicted with those provided in comments, EPA generally relied on the EIA 860 reported values to promote consistent treatment of removal efficiencies among scrubbed units.

SO2 Permit Rate

NEEDS has an indicator for the SO2 emission rate limit that applies to the unit due to federal, state, or local emission regulations. Some commenters submitted corrections to permit limits listed in earlier versions of IPM. EPA reviewed and generally accepted9

these corrections. The values in the final NEEDS file were updated to reflect the

comments. The permit rates listed in the NEEDS file reflect data obtained from EIA form 757, reviews of state regulations, and/or comments/corrections submitted by

stakeholders.

Unit ID

NEEDS con tains a unit identifier assigned to each unit boiler at a given plant. Some

commenters submitted the correction to this unit ID so it would be more consistent with how the unit was reporting or recognized at that facility. EPA generally accepted these

co mments. However, EPA notes that such changes have no impact on the model projections.

Wet Dry Scrubber NEEDS has an indicator that suggest whether a scrubber is a wet scrubber or a dry scrubber. Some commenters suggested corrections to the wet/dry class ification of a particular scrubber. EPA reviewed and generally accepted these comments.

Other Key IPM Source

- specific & Non

- NEEDS Parameters on Which EPA Accepted Comment

New Unit Some sources noted that a particular unit had not been included in the in ventory of EGUs listed in NEEDS. EPA reviewed, and where appropriate added unit level records to

reflect these units. These adjustments are noted in the third table of this documents companion file. The file is titled “ NEEDS Source

- Specific Adjustments in EP A Base Case v.4.10_FTransport .xlsx ”, and the third worksheet in the file is titled “New Unit

Comments”

Dry Sorbent Injection (DSI) Many commenters noted the presence of dry sorbent injection at a particular facility that was not correctly captured in NEEDS. The EPA IPMv.4.10_FTransport used for the final rule modeling does account for DSI in NEEDS and allow for DSI retrofit in the IPM outputs. DSI retrofit is labeled as such in the IPM output files. The IPM NEEDS file reflects the presence of DSI o perationally, but not nominally. That is the DSI presence at a unit is indicated by the unit having a removal efficiency, but not having a “scrubber efficiency value”

- typically 70% or less

– but not having a scrubber reflected in the

“wet/ dry scrubber ” field or in the “ dispatchable scrubber ” field. There is no field in this final Transport Rule NEEDS file that flags DSI at a unit, but it can be identified through the approach described above.

Primary Fuel and Prime Mover

EPA received comments on these two parameters that are factored into the IPM modeling, and generally made adjustments to its model in instances where sufficient evidence was provided.

State Rules and Consent Decrees10

EPA updated the State Rules and Consent Decrees that are reflected in the final Transport Rule IPM modeling based on comments received. These updates often involve source

specific rate and /or co ntrol requirements that influence facility behavior in IPM modeling outputs. See IPM documentation referenced above for a complete list of such State Rules

and Consent Decrees that are captured in the updated IPM modeling.

2) Table s of Source Specific IPM adjustments in NEEDS

Spreadsheet file “ NEEDS Source

- Specific Adjustments in EP A Base Case
v.4.10_FTransport .xlsx ” contains three tables in different worksheets. The first,
labeled “Comments” is presented in the format described above and contains the bulk

of the source

- specific adjustments reflected in the final Transport Rule IPM
modeling. The second, titled “NO X Rate Comments”, reflects those comments that
did result in adjustments to NO X rates. As noted above, such adjustments were
typically only made when 2009 ETS data was not available. The third, titled “New
Unit Comments”, reflects units that were added to the NEEDS invent ory of EGUs
based on comments. The second and third tables are presented in a format similar to
the first, but with slight modifications based on the nature of the comment and
subsequent adjustments.