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### Medina, Dayana

From: Medina, Dayana

Sent: Thursday, August 29, 2013 1:03 PM

To: Pettyjohn, Mary

Cc: Donaldson, Guy

Subject: Region 6 comments on Entergy Lake Catherine NOx BART analysis

Hi Mary,

Here are our comments on the Lake Catherine NOx BART analysis for the natural gas firing scenario. Please let me know

if you would like to discuss.

 Entergy explained that it selected 0.48 lb/MMBtu as the baseline emission rate because it represents the maximum

24

‐ hour emission rate during the baseline period and is in line with the emission rate that is observed when the unit

is operated near full load. Entergy believes that using 0.48 lb/MMBtu as the baseline will enable it to continue to

utilize Unit 4 across its full capacity range while still meeting the NOx BART emission limit. However, we remind

ADEQ that the maximum 30

‐ day rolling average emission rate recorded during the baseline period was 0.377

lb/MMBtu and that the NOx BART emission limit can be based on a 30

‐ day rolling average. Therefore, we believe

that using 0.377 lb/MMBtu as the baseline would still allow Entergy to operate Unit 4 across the full capacity range

while also meeting the NOx BART emission limit. Using 0.377 lb/MMBtu as the baseline may result in a lower

controlled emission rate for each control scenario, as S&L has indicated that the expected NOx reduction from

baseline levels is 70% using SNCR with LNB/SOFA, 60% using LNB/SOFA, and from 40% at low load to 50% at full load

using BOOS.

 Entergy has indicated that it assumed a 10% annual capacity factor in the BART analysis because this is consistent

with the unit’s recent operating history (2004

‐ 2011) and Entergy anticipates that future annual capacity factors for

this unit will be consistent with those observed from 2004

‐ 2011. However, as we stated in previous comments, the

unit’s annual average capacity factor during the 2001

‐ 2003 baseline was 21.2%. Since there is no way to ensure that

the unit’s annual average capacity factor will remain at levels observed from 2004

‐ 2011, it is appropriate to assume

in the BART analysis the capacity factor observed during the 2001

‐ 2003 baseline. Alternatively, Lake Catherine can

accept a limit on its annual capacity factor.

 Based on adjustments Entergy made to the expected equipment life and the cost calculations, the cost

‐ effectiveness

of LNB/SOFA is now estimated to be $1596/NOx ton reduced. We expect this control option to be slightly more cost

effective if the cost calculations are further adjusted to remove AFUDC, as this cost is not allowed by the Cost

Control Manual (see comment below regarding AFUDC). LNB/SOFA is also expected to result in 0.152 dv

improvement over BOOS at Caney Creek. We believe that $1596/NOx ton reduced is within the range of what we

generally consider cost

‐ effective for BART controls and this control option is also expected to result in some visibility

improvement in at least one Class I area. ADEQ should provide additional justification for not selecting LNB/SOFA for

NOx BART.

 EPA disagrees that the CCM allows for AFUDC to be included in the BART cost evaluation. AFUDC is the cost of

capital that is incurred to finance the project during the construction period. While AFUDC is a valid cost under the

all

‐ in cost estimating methodology, it is not a valid cost under the CCM methodology. The Regional Haze Rule states

the CCM should be followed where possible, and the CCM uses overnight costing methodology. The overnight cost

method is the cost of a construction project if no interest is incurred during construction, as if the project is

completed overnight. Thus, AFUDC is never valid under the CCM overnight cost approach. ADEQ should ensure that

the cost estimates for all NOx controls are revised to exclude AFUDC in order to reflect an accurate estimate of cost

‐

effectiveness of controls.

 Entergy indicated that the cost estimates for LNB/SOFA with SNCR and LNB/SOFA with SCR have been adjusted,

since in the previous version of the BART report the variable O&M costs had been erroneously estimated based on a

100% annual capacity factor. From the information provided, it is not clear if the same has been done for the2 LNB/SOFA control option. ADEQ should also ensure that the variable O&M cost for the LNB/SOFA control option

does not reflect a 100% capacity factor, and that it instead reflects the annual capacity factor that has been assumed

in the BART analysis.

Thank you,

Dayana Medina

U.S. Environmental Protection Agency, Region 6

Multimedia Planning and Permitting Division

Air Planning Section (6PD

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