Technical Support Document (TSD) for the Cross State Air Pollution Rule Supplemental Rulemaking
Docket ID No. EPA

- HQ

- OAR

- 2009

- 0491



# Determination of State Budgets for the Final Ozone Supplemental of the Transport Rule

U.S Environmental Protection Agency
Office of Air and Radiation2 December 20113

EPA finalized the Transport Rule in July of 2011 1

. At the same time, EPA also issued a Supplemental Notice of Proposed Rulemaking (SNPR) proposing to bring six states into the Transport Rule ozone - season NO X program. In this final rulemaking , EPA is finalizing FIPs to address significant contribution to nonattainment and interference with maintenance in Iowa, Michigan, Missouri, Oklahoma, and Wisconsin. For two of these states (Iowa and Missouri), the state budgets in this final rule are unchanged from those budgets as quantified at proposal. F or three of the se states (Michi gan, Oklahoma, and Wisconsin) , EPA is finalizing state budgets that reflect adjustments in certain unit

- level assumptions that result in changes from the budgets presented for these states in the proposal. S ee Section III. E of the preamble for an explanation of these adjustments . This technical support document (TSD) show s the underlying data and calculations used to determine the amount by which each of these three states have their budget adjusted from proposal

. The fir st section b elow summarizes final budgets for all of the states for which EPA is finalizing a FIP under this rule

. The second section identifies each specific unit

- level adjustment and quantifies its impact on the relevant state budget and the number of allowances pu t into the relevant new unit set

- aside (NUSA) , 2 as well as the impact to the relevant assurance level 3 for that state, using the methodologies described in the final Transport Rule.
**Section A**  **: Summary of State Emission Budgets**  EPA is finalizing FIPs to control ozone

- season NO X emissions from five state s. The state budgets determined for these states maintain a consistent application of the methodology described in the final Transport Rule to quantify and eliminate emissions that significantly contribute to nonattainment and interfere with maintenance of the NAAQS assessed in that rulemaking

. Final Ozone

- Season NO X Budgets (thousand tons) Final Budget

State 2012 2014 Michigan 28.041 27.016 Oklahoma 3 6.56 7 21.835 4 Wisconsin 14.784 14.296 Io wa 16.532 16.207 Missouri 22.762 21.073

1 Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals (76 FR 48208). 2 The “Total NUSAs” presented for each state in section B of this document include allowances under both the State NUS A and the Indian Country NUSA (where the latter exists in the given state). 3 EPA has also proposed in a separate action to amend the effective date of the assurance provisions in all states to start in 2014 instead of in 2012. Please see 76 FR 63860 for mo re information on that proposal. 4 Budget effective in 2013 and thereafter

.4

**Section B :**  **Quantification of State Emission Budgets**  **, Assurance Levels, and NUSAs**  **Affected by Unit**

**- Level Adjustments**  **1) Michigan**  As described in the preamble, EPA is finalizing Michigan’s 2012 and 2014 ozone - season (OS) NO X budget with an adjustment to account for no SCR being installed at Monroe Unit 2 . This results in a 2,28 9 t on increase to the state’s ozone

- season NO X budget s in 2012 and 2014

.

**Table 1.a: Calculation to Determine Michigan Ozone**  **S eason**  **Budget Increase Assuming N**  **o SCR at Monroe U**  **nit # 2**

A B C D E F

Plant Unit Emissions from

TR_Remedy Final_2012 (1000 tons) HI from

TR_Remedy

_Final_2012 (Tbtu) Remedy Emission Rate from from TR_Remedy

_Final_2012 (lbs/mmB tu) Adjusted Emission Rate (lbs/mmB tu) Adjusted

Emissions Budget

Adjustment (1000 tons) Calculation A/B D x B E

- A Monroe 2 0.675 19.46356305 0.07 0.3046 2.964300653 2.289

C olumn s A, B, and C show the OS NO X emissions, heat input, and emission rate from the TR _Remedy_Final_2012 modeling when an SCR is assumed to be present at Monroe Unit 2 . Because n o SCR is present, EPA modified the emission rate to reflect the “controlled NO X policy rate” in the NEEDS version from the September 1, 2010 TR Notice of Data Availability (NODA) (column D)

. 5 This value reflects the NO X emission rate assumed in EPA’s modeling of the Transport Rule as originally proposed , when EPA did not assume an SCR to be present at the unit. This value approximates the emission rate expecte d at the unit at a cost threshold of $500/ton when no SCR is present at the unit. EPA multiplied this NO X rate (shown in column D) by the remedy heat input shown in column B to obtain a revised emission projection for the unit (column E) . The difference between this revised emission projection (no SCR assumed) and the final Transport Rule remedy analysis emission projection (SCR assumed) determines the amount of the adjustment to the state’s ozone

- season NO X budget as compared to the budget presented at proposal (column F)

. The final values for the state ’s ozone

- season NO X budget, assurance level, and new unit set

- aside s are given in the preamble.

5 See National Electric Energy Data System (NEEDS) v4.10 available at http://www.epa.gov/airmarkets/progsregs/epa

- ipm/BaseCasev410.html5

**2) Oklahoma**  As explained in the preamble section I II of the final supplemental rule, EPA has recalculated Oklahoma’s state budget for the 2012 ozone season such that it does not reflect the installation or upgrade of any new combustion controls (see Appendix) . This recalculation demonstrates that ozone

- season NOX emissions would be 9,522 tons higher in the 2012 ozone season without the new and upgraded combustion controls previously assumed; EPA has adjusted the final state budget for the 2012 ozone season only to reflect these emissions. The table below show s the values and calculations used to derive the 9,522 figure.

**Table 2a. Oklahoma Ozone Season NO**  **X Budget Adjustment**  **fo r the 2012 Ozone Season**  **Reflecting N**  **o Combustion C**  **ontrol U** **pgrade or I**  **nstallation (1000 tons)**  A B C D E F G H I

Plant Name ORIS

Plant Code Unit ID 2012 OS

NO X Remedy Emissions (1000 tons) 2012 H eat

Input (Tbtu) Emission

Rate with LNB Upgrade Base

Emission Rate (lbs/mmB tu) Adjust ed

Emissions (1 , 000 tons) Adjustment

Amount (1 , 000 tons) Muskogee 2952 6 1.036 14.216 0.146 0.347 2.466710049 1.430 Muskogee 2952 4 1.045 14.613 0.143 0.321 2.343145371 1.298 Sooner 6095 1 1.071 14.939 0.143 0.319 2.386135045 1.315 Muskogee 2952 5 1.042 14.647 0.142 0.314 2.301435722 1.260 Sooner 6095 2 1.111 15.580 0.143 0.314 2.445420837 1.334 GRDA 165 1 1.465 14.507 0.202 0.349 2.528559526 1.063 Northeastern 2963 3314 1.704 13.160 0.259 0.394 2.594200981 0.890 Northeastern 2963 3313 1.649 13.137 0.251 0.382 2.511937905 0.863 Hugo 6772 1 1.269 14.103 0.180 0.190 1.336456463 0.067 **Total 9.522** 
Columns A, B, and C provide unit level information about the facility. Columns D, E, and F provide projected emissions, heat input and ozone season NO X emission rate s from EPA’s 2012 TR_Remedy_Final modeling. The emission rate in column F, which formed the basis for the column D expected emissions, was based on the assumption that the facilities would make certain upgrades or installations with respect to combustion c ontrols. Column G reflects the ozone

- season NO X emission rate at these facilities assuming no combustion control upgrades or installation. That is, column G reflects emissi on rates that are typical to that unit’s historic operations. This value is obtained from “controlled NO X Base rate” in the NEEDS v.410 used for the Final6

Transport Rule . Column H reflects the emission values expected for each unit when the projected heat input (column E) is multiplied by the hi storic emission rate (column G). The difference between column H and column D (when summed) reflects the total amount by which the Oklahoma ozone

- season NOx budget is adjusted as compared to the budget presented at proposal

. Also, as explained in preamble section III, EPA is finalizing an Oklahoma state budget specifically for the 2012 ozone season that reflects revised projected emissio ns at oil/gas steam generators consistent with an immediate

-term dispatch pattern that maintains the firm power supply arrangements already in place to serve local electricity demand

. The table below i llustrates the calculations used to derive the adjustment to the Oklahoma state budget for the 2012 ozone season assuming a dispatch pattern of oil/gas steam generation in 2012 consistent with recently observed operational data at those units

.

**Table 2b. Oklahoma Ozone Season NO**  **X Budget Adjustment Reflecting No Major Curtailment of O/G**  **S team Generating Units**  A B C D E F G H I J

Plant Name Plant Type ORIS Code Unit ID 2012 OS NO X Remedy Heat Input (mmBtu) 2012 OS NO X

Remedy Emissions (1 , 000 tons) 2010 Heat Input

(mmBtu) NEEDS

C ontrolled NO X Base Rate (lbs/mmBtu) Emissions

A ssuming 2010 Heat Input (1 , 000 tons) Emission

Adjustment for 2012 (1 , 000 tons) Anadarko Plant O/G Steam 3006 3 0 0 1,917 0.22 0.000 0.000 Horseshoe Lake O/G Steam 2951 6 0 0 3,022,970 0.28 0.427 0.427 Horseshoe Lake O/G Steam 2951 8 0 0 5,904,903 0.14 0.405 0.405 Mooreland O/G Steam 3008 1 0 0 52,018 0.34 0.009 0.009 Mustang O/G Steam 2953 1 0 0 648,384 0.20 0.066 0.066 Mustang O/G Steam 2953 2 0 0 636,546 0.15 0.048 0.048 Mustang O/G Steam 2953 3 0 0 1,700,657 0.24 0.200 0.200 Mustang O/G Steam 2953 4 0 0 1,884,097 0.35 0.325 0.325 Northeastern O/G Steam 2963 3302 0 0 8,298,493 0.40 1.644 1.644 Ponca O/G Steam 762 2 0 0 1,895 0.19 0.000 0.000 Riverside O/G Steam 4940 1502 0 0 6,559,178 0.23 0.742 0.742 Southwestern O/G Steam 2964 8002 0 0 457,715 0.33 0.075 0.075 Southwestern O/G Steam 2964 8003 0 0 4,603,800 0.44 1.005 1.005 Southwestern O/G Steam 2964 801N 0 0 244,030 0.25 0.031 0.031 Southwestern O/G Steam 2964 801S 0 0 244,058 0.21 0.025 0.025 Tulsa O/G Steam 2965 1402 0 0 1,029,085 0.18 0.094 0.0947

Tulsa O/G Steam 2965 1403 0 0 112,296 0.28 0.015 0.015 Tulsa O/G Steam 2965 1404 0 0 1,058,014 0.19 0.099 0.099 **Total 0**  **0 36,460,055**  **5.210 5.210** 

Columns A, B, C and D provide unit level information about the facility. Columns E, and F provide projected ozone season heat input and emissions from EPA’s 2012 TR_Remedy_Final modeling. The heat input in column E, which formed the basis for the column E expected emissions, was based on the assumption that the facilities would reduce uneconomic generation from these less efficient sources under the Transport Rule market incentives. Column G reflects the 2010 ozone

- season NO X heat input at these facilities. Column H reflects emission rates that are typical to that unit’s historic operations and assumed as the “controlled NO X Base rate” in the NEEDS IPM version 4.10 used for the final Transport Rule. Column I reflects the emission values expected for each unit when the 2010 heat input (co lumn E) is multiplied by the emission rate (column H). The difference between column I and column F (when summed) reflects the total amount by which the Oklahoma ozone

- season NO X budget is adjusted as compared to the budget presented at proposal

. The final values for the state ’s ozone

- season NO X budget, assurance level, and new unit set

- asides are given in the preamble.8

**3) Wisconsin**  As explained in the preamble section III.E of the final supplemental rule, EPA has recalculated Wisconsin’s 2012 and 2014 ozone

- season budget such that it does not reflect the installation of SCR control technology at J P Madgett. This results in a 1,080 ton increas e to the state’s ozone

- season N O X budget relative to what was proposed in the SNPR. The table below details the values and calculations used to arrive at that amount.

**Table 3.a: Calculation to Determine Wisconsin O**  **zone S**  **eason NO**  **X Budget**  **Adjustment Assuming**  **N o SCR at J P Madgett** 

A B C D E F

Plant Name Unit

ID Emissions from TR_Remedy Final_2012 (1000 tons) Heat Input from

TR_Remedy_Final_2012 (Tbtu) Remedy Emission Rate

fromTR_Remedy_Final_2012 (lbs/mmbtu) Revised Emission Rate (lbs/mmbtu) Revised

Emissions (1000 tons) Net Budget Adjustment

(1000 tons) Calculation A/B D x B/2 E

- A J P Madgett B1 .257068143 10.28272555 .05 .26 1.337 1.080

Columns A, B, and C show the emissions, heat input, and emission rate from the 2012 remedy modeling for the J P Madgett unit. However, the emission rate in column C reflects the existence of a SCR. Because no SCR is present, EPA calculates the source ’ s expected emissions using the emission rate shown for this unit in the EPA’s analysis of the base case for the final Transport Rule, as found in the TR_Base_Case_Final for 2012 (column D) of 0. 26 lbs/mmB tu

. This ozone - season NO X emission rate reflects generation at this unit without the operati on of the assumed SCR, which did not operate in the final Transport Rule base case because it was modeled as a “ dispatchable ” control that was not found to be economic to operate in that scenario. 6 Moreover, this emission rate reflects one typically observed at past operation of the facility when no SCR was present. The J P Madgett emissio n rate without operating an SCR (column D) multiplied by the remedy heat input (column B) yields the projected emissions from the unit if no SCR were assumed to be in place. The difference between the projected emissions when no SCR is in place (column E) and the projected emissions when an SCR is assumed (column A) determines the amount of the adjustment to the state’s 2 012 and 2014 ozone

- season NO X budget s as compared to the budget presented at proposal (column F)

. The final values for the state ’s ozone

- season NO X budget, assurance level, and new unit set

- asides are given in the preamble.

6 See **"WebReady_ParsedFile_TR_Base_Case_Fi nal_2012"**  in the Transport Rule docket or on EPA's CSAPR website9 **APPENDIX Assessment of Resource Adequacy for the 2012 Ozone Season in**  **Oklahoma** EPA is setting the Oklahoma state budget for the 2012 ozone season at a level that does not necessitate the installation of new low

-NO X burners

. S ee preamble section III for further discussion. At proposal, EPA quantified Oklahoma’s 2012 ozone

- season NO X state budget assuming that a number of units representing 4,452 MW of capacity would install new low

-NO X burners (LNB) before the 2012 ozone season. See Table 1 for a list of those units showing each unit’s net summer dependable capacity.
**Table 1. Oklahoma Units Projected to Install**  **Low N**  **O X**  **Burners under the Transport Rule** 

**Plant Name Unit ID**  **County Capacity**  **(MW)** GRDA 1 Mayes 490 Muskogee 4 Muskogee 511 Muskogee 5 Muskogee 522 Muskogee 6 Muskogee 515 Northeastern 3313 Rogers 450 Northeastern 3314 Rogers 450 Sooner 1 Noble 535 Sooner 2 Noble 540 Hugo 1 Choctaw 440 Total 4452
As explained in preamble section III , EPA assessed the relationship of the capacity identified in Table 1 to the relevant region’s total available capacity that is taken into account in resource adequacy determinations. This assessment shows that if the capacity identified in Table 1 were to be unavailable due to the installation of low

-NO X burners during the 2012 ozone season, the ozone - season planning reserve margin in the IPM region containing Oklahoma (SPPS) would fall below the target planning reserve margin of 13.6% (see Table 2).10 **Table 2. IPM 2012 Ozone** 

**- Season**  **Reserve Margin Projections for SPPS**  **Including All Plants in IPM**  **With Table 1**

**Capacity Removed**  Capacity (MW) 39,093 34,641 Ozone

- Season Peak Load (MW) 31,785 31,785 Margin (MW) 7,308 2,856 Reserve Margin † 23.0% 9.0% Target Planning Reserve Margin 13.6% 13.6% † The reserve margin is calculated as the margin (third row) divided by the available peak load ( second row)
The potential unavailability of this capacity would only frustrate the region’s target planning reserve margin during the ozone season, because the ozone season period represents the highest projected load (electricity demand). Even without this capacity available, the regional reserve margin would remain higher than the target planning reserve margin during the remainder of the year, as shown in Table 3. Because these units would be able to complete LNB installation without impairing the region’s ability to meet its target planning reserve margin after the 2012 ozone season, EPA is not adjusting Oklahoma’s state budgets for years subsequent to 2012 from the budget as quantified at proposal.
**Table 3. IPM 2012 Non**

**- Ozone** 

**- Season Reserve Margin Projections for**  **SPPS Including All**  **Plants in IPM With Table 1** 

**Capacity Removed**  Capacity (MW) 39,093 34,641 Non

- Ozone

- Season Peak Load (MW) 24,025 24,025 Margin (MW) 15,068 10,616 Reserve Margin† 62 % 44 % Target Planning Reserve Margin 13.6% 13.6% † The reserve margin is calculated as the margin (third row) divided by the peak load ( second row)