1

 

Date: March 14, 2011 

Subject: National Emission Standards for Hazardous Air Pollutants (NESHAP) 

Beyond the Maximum Achievable Control Technology (MACT) Floor 

Analysis for Coal- and Oil-fired Electric Utility Steam Generating 

EGUs 

From: Shelly Johnson, Stephen Boone 

To: Bill Maxwell 

OAQPS/SPPD/ESG (D243-01) 

U.S. Environmental Protection Agency 

Research Triangle Park, NC 27711 

Introduction 

The purpose of this memorandum is to present the data and methodology used and the 

results of a beyond-the-floor (BTF) option analysis for the NESHAP source category “Coal- and 

Oil-fired Electric Utility Steam Generating Units” (referred to in this memorandum as “EGUs”). 

For the MACT floor analysis, the EPA defined five EGU subcategories. This memorandum 

presents the estimates of the incremental pollutant emission reduction and cost that would be 

achieved by implementing a BTF option to control mercury (Hg) emissions from existing 

sources in the MACT Analysis Subcategory 2. Subcategory 2 is defined to include new and 

existing EGUs designed to burn a virgin nonagglomerating coal having a calorific value 

(determined on moisture and mineral matter-free basis) of less than 8,300 Btu/lb in an EGU with 

a furnace height-to-depth ratio of 3.82 or greater. The Hg emissions limit established as the 

MACT Floor for Subcategory 2 is 11.0 pounds Hg per trillion British thermal EGUs (lbs/TBtu). 

The MACT floor analysis uses data collected in a nationwide survey of EGU owners and 

operators conducted by EPA in 2010 under the Information Collection Request For National 

Emission Standards For Hazardous Air Pollutants (NESHAP) for Coal- And Oil-Fired Electric 

Utility Steam Generating Units (OMB Control No. 2060‐0631). Individual EGU operating and 

air emissions data reported by respondents to the Information Collection Request (ICR) were 

compiled into a Microsoft Access software data base that serves as the data set used for this BTF 

option analysis (referred to in this memorandum as the “ICR data set”). 

BTF Option Emission Limit Selection 

The EPA selected a limit of 4.0 lbs Hg/TBtu for the BTF option. This Hg limit is 

equivalent to the level of emissions required under CAAA Section 112(d)(3) for new or 

reconstructed Subcategory 2 units. Hg emissions data compiled from the ICR data set indicates 

that this BTF option limit is equivalent to the emission level achieved in practice (including 

emissions variability) by the best controlled similar source. The best controlled unit in 

Subcategory 2 is equipped with activated carbon injection (ACI) and a fabric filter (FF). This 

cost analysis assumes that all units within this subcategory will require capital investments in 

fabric filters that are attributable to the proposed MACT standard for PM (as a surrogate for nonHg metallic HAP). This analysis determines the marginal capital costs attributable to the BTF 
2

option requiring installation of ACI systems to reduce Hg emissions to 4.0 lbs per trillion Btu. 

BTF Option Analysis Methodology 

All data used to estimate the costs that would be incurred by the thirty EGUs within 

Subcategory 2 came from the data obtained from the ICR data set. The data were analyzed in the 

following steps: 

Step 1 – Estimated current actual annual Hg emission rates for each existing EGU in 

Subcategory 2. Subsequently, the annual emissions reductions necessary to 

achieve the MACT floor Hg emissions limit and the BTF option Hg emissions 

limit were calculated for each of these EGUs. 

Step 2 – Identified the Hg emissions control technologies already in place for each EGU 

using the ICR data set. 

Step 3 – Determined annualized capital and operating costs for ACI controls from the 

ICR data set. 

Step 4 – Evaluated the ACI control components that would need to be added to each 

EGU to meet the MACT floor Hg emission limit. 

Step 5 – Evaluated the additional ACI control components that would need to be added to 

each EGU to meet the BTF option Hg emission limit. 

Step 6 – Calculated the incremental difference between the total Hg emissions reduction 

and control cost for all existing EGUs in the subcategory to achieve the BTF 

option Hg emissions limit compared to the MACT floor Hg emissions limit. 

BTF Option Hg Emissions Estimates 

In order to determine the emissions reductions from the EGUs in Subcategory 2, each 

EGU’s current annual Hg emissions were compared to the EGU’s emissions at the MACT floor 

level and at the BTF option level. For each EGU, an emission factor (lb Hg/TBtu) was assigned 

based on EGU-specific stack test data from the ICR or from stack test data from the most similar 

EGU(s). The emission factor assigned to each EGU was either the EGU’s provided emission 

factor or an estimate of the EGU’s emission factor based on the fuel fired, the boiler type and the 

boiler’s control scheme. This emission factor was used to calculate the EGU’s actual annual 

pounds of Hg emissions. The calculation also included the EGU’s heat input capacity 

(MMBtu/hr) and the EGU’s average capacity factor for the last 3 years. 

Once each EGU’s current annual Hg emissions were calculated, the annual Hg emission 

levels at the MACT floor and BTF option were calculated for each EGU based on the same EGU 

specific data. Subsequently, the annual Hg reductions between current rates and MACT floor 

were calculated and those between the MACT floor and the BTF option were calculated. 

For this analysis it is assumed that an ACI control system consists of the use of the 

activated carbon injectors and delivery system in conjunction with a fabric filter (FF). The 

analysis assumed that if the EGU has other particulate matter (PM) controls in place (i.e. a coldside electrostatic precipitator) a new FF would need to be installed at the facility to comply with 

the non-Hg metallic HAP standard for PM. Therefore, each EGU was evaluated to determine if 

the EGU had ACI or FF controls. The Hg emissions control scenarios of importance for this 
3

analysis were as follows: 

1. EGU with ACI and FF (ACI + FF) 

2. EGU with ACI (ACI) 

3. EGU with FF (FF) 

4. EGU with neither control (none) 

Each EGU within Subcategory 2 was classified into one of the four Hg emissions control 

scenarios. The necessary installation of additional controls for an EGU was dependent on the 

EGU’s current Hg emissions and the current controls. For EGUs already equipped with ACI + 

FF, no additional capital costs for controls were included in the cost estimate, and the cost of any 

additional Hg removal necessary to meet the Hg MACT floor or the BTF option was calculated 

based on additional ACI operating costs. For the EGUs currently with only ACI, FF installation 

and operating costs were attributed to the MACT floor for non-Hg metallic HAP and the BTF 

option costs were also calculated based on additional ACI operating costs. For EGUs currently 

equipped only with FF, ACI capital and operating costs were included in the cost estimate for 

each MACT emissions level. Similarly, the cost BTF option cost estimate for EGUs currently 

with neither control included ACI capital and operating costs with the cost of the FF attributed to 

the non-Hg metallic HAP MACT standard. 

BTF Option Control Cost Estimates 

The ACI control cost values were calculated from cost information (provided by facilities 

currently operating ACI systems) in the EGU ICR data set. In order to calculate the cost of the 

BTF option, an operating cost was determined based on the amount of Hg removed, and a capital 

cost based on EGU size was determined. Overall, the ICR data set contains 122 EGUs for which 

any cost data on ACI controls were reported. These EGUs were filtered to include a total of 16 

EGUs that provided capital and operating costs and sufficient Hg emissions data to determine the 

Hg removal attributable to the project. Of these 16 EGUs, only one EGU was within the 

Subcategory 2. 

For this analysis, all 16 EGUs were used to determine capital costs. It was assumed that 

the capital cost for each control system was independent of the amount of Hg removed. Each of 

these capital costs was determined on a heat-input-capacity basis to take into account the 

equipment for larger EGUs and controls being more costly. Each EGU’s control system capital 

cost was converted from the reported base year dollars to July 2010 dollars using the applicable 

Chemical Engineering Plant Cost Index (CEPCI) factors. Then, each cost was annualized by 

applying the capital recovery factor (CRF). The assumed interest rate was 7% and the assumed 

period was 20 years. The CRF value used for the analysis is presented in 
4

Table 1. The remaining capital cost value applied was annualized dollars per heat-inputcapacity in million British thermal units per hour ($/MMBtu/hr). The values for each EGU’s 

cost were averaged for the control scenario. Since no EGU provided capital cost data for a FF 

only, the capital cost for an ACI was subtracted from the capital cost for an ACI and FF. 

The operating cost was determined solely from the lignite facility. Since the initial Hg 

content differs greatly between lignite and subbituminous fuels and the operating cost is based on 

Hg removed, it was not assumed that the data from the two fuel types could be integrated. The 

operating cost was calculated on a basis of pounds of Hg removed. This was calculated using the 

final emission factor achieved and the percent reduction. The amount of Hg removed was 

calculated taking into account the EGU’s capacity factor and heat input. Then, the operating 

cost, which was provided on an annual basis, was converted to July 2010 dollar values using the 

CEPCI factors. To calculate cost per pound of Hg removed, the annual operating cost was 

divided by the pounds of Hg removed ($/lb Hg removed) reflecting the differences between the 

current Hg emission rate and the MACT floor. 

BTF Option Analysis 

In order to determine the marginal costs and impacts for the BTF option Hg emissions 

limit, a cost was first calculated for the subcategory to achieve the MACT floor level. Then, an 

incremental cost was calculated for the subcategory to reduce emissions from the MACT floor 

level to the BTF option limit. If any EGU did not meet the MACT floor, the capital cost for the 

installation of any control equipment the EGU did not already have was associated with reaching 

MACT floor. In addition, the operating costs to get the EGU from the current emission rate to 

the MACT floor was multiplied by the additional pounds of Hg to be removed. 

For the marginal cost to get to the BTF limit, the EGU was assumed to have all controls 

necessary for the EGU to achieve the MACT. For example, if an EGU was above the MACT 

floor and had to install ACI to meet the Hg MACT floor, then for the BTF Hg option, only ACI 

operating costs (to reduce emissions from the Hg MACT floor to the BTF limit) would be 

considered. However, if an EGU with just a FF met the MACT floor, but not the BTF option 

limit, the methodology assumed that the EGU would have to incur costs to install ACI and the 

operating costs to reach the BTF option limit. The current controls and additional controls for 

MACT and BTF are displayed on Table 5. 

Using this methodology, the unit-specific analyses were completed to determine 

additional controls and operating measures, Hg emission reductions, and the associated capital 

and operating costs. The estimated cost for each EGU was determined, and then the Hg 

reductions and total costs were summed for MACT and the increment to the BTF limit. 

The capital costs are summarized in 

Table 2. The annualized capital cost for an ACI system was $108 per MMBtu/hr of heat 

input capacity. The annualized operating cost was determined to be $14,867 per pound of Hg 

removed, as shown in Table 3. 

The specific EGU costs for MACT floor and the BTF option are shown in Table 5. Of 

the 30 EGUs, all units met the MACT floor emission level. Of the 30 EGUs, two EGUs would 

meet the BTF option limit without any additional controls. Taking into account the controls to 

be added to the EGUs for MACT compliance, 18 EGUs are expected to add FF to comply with 

the non-Hg metallic HAP standard, 20 EGUs are expected to add ACI, and 3 EGUs are expected 
5

to incur increased operating costs associated with the additional activated carbon usage required 

to achieve the BTF limit. 

Energy impacts on Subcategory 2 due to increased auxiliary loads on induced draft (ID) 

fans and other electrical loads associated with installation of the fabric filter are attributed to the 

non-Hg metallic HAP standard. The total energy costs for Subcategory 2 were estimated based 

solely on the relatively low auxiliary loads from activated carbon injection systems and the 

associated cost data for nominally rated 500 MW units using EPA’s Coal Utility Environmental 

Cost (CUECost) Model for sorbent injection. The total annual costs of energy usage for 

operation of ACI were estimated as $2,300 per year. 

Non-air quality environmental impacts were estimated based on the requirement to 

dispose of spent activated carbon in landfills. The analysis assumed that this material could be 

disposed of with the combustion by products as non-hazardous waste. The cost per ton of carbon 

disposed was estimated at $2/ton based on information in the CueCost Model, and the carbon 

usage per mass of Hg removed was estimated based on information published by the Center for 

Air Toxic Metals at the University of North Dakota Energy & Environmental Research Center 

(EERC). The total costs of the non-air environmental impacts for Subcategory 2 were estimated 

as $12,000. Non-air quality health impacts were evaluated, but no incremental health impacts 

were attributable to installation of fabric filters and ACI, because these technologies do not 

expose electric utility employees or the public to any additional health risks above the risks 

attributable to current utility operations involving compressed air systems, confined spaces, and 

exposure to fly ash. 

The overall additional costs for the BTF option for Subcategory 2 are shown in Table 6. 

For the subcategory to reach MACT, no additional costs are incurred as the data displays that 

each unit currently meets the MACT floor. For the existing EGUs in Subcategory 2 to 

implement the BTF option, the additional annual cost was estimated at an additional $70,186,000 

and an additional 4,040 lb/year of Hg is removed or $17,375 per lb of Hg removed. 
6

Table 1: Capital Recovery Factor 

Equation 1: Capital Recovery Factor 

ൌ ۴܀۱

ܖሻܑ૚൅ሺ כ ܑ

ሺ૚൅ܑሻܖ െ ૚ ൌ ૙. ૙ૢ૝૝

Table 2: Annualized Capital Cost 

Table 3: Annualized Operating Cost 

Table 4: Itemized Operating Costs 

i 0.07 interest rate

n 20 year period

CRF= 0.0944

$/(MMBtu/hr) per year

ACI 108                                             

ACI + FF 3,771                                          

FF 3,663                                          

$/lb Hg removed per year

Operating cost                                         14,867

Energy costs 27         $/(MMBtu/hr) per year

Non‐air environmental and health costs 4,000 $/ton Hg removed
7

Table 5: Subcategory 2 EGUs BTF Option Impacts Estimates 
8

Table 6: Subcategory 2 Incremental Hg Emissions Reduction and 

 Cost Estimates for BTF Option 

Beyond‐the‐Floor Total Annualized Costs (Capital + Operating)

Additional mercury reductions for BTF limit, lb/yr                        4,040

Energy costs included in total cost, $/yr                $2,300

Non‐air environmental and health costs included in total, $/yr                      $12,310

Total capital and operating costs for BTF limit, $/yr        $70,185,739

Total annualized capital and operating cost per lb of Hg removed   $   17,375