This spreadsheet provides a summary of capital and annual cost for the retrofit of Selective 

Catalytic Reduction (SCR) at the Navajo Generating Station. The spreadsheet includes a revised 

cost sheet for each of the Navajo electric generating units (3 total), and an other SCR sheet that 

summarizes and compares the capital and annual costs for other BART analyses in the U.S. with the 

Navajo units. A more detailed decription of each of the sheets is presented in the following 

sections.

Revised Costs (Unit 1, Unit 2, Unit 3) - These sheets list a summary of the Navajo BART capital and 

annual costs for the specified unit that was presented in the Salt River Project, Navajo Generating 

Station - Units 1, 2, 3, SCR and Baghouse Capital Cost Estimate Report, August 17, 2010 (SL-010214, 

Revision D). Each of the sheets provides a summary of the line item desciptions and calculated 

capital and annual costs that were provided in the BART analysis. The sheets also contain a revised 

cost column and line-by-line analysis of each of the cost items. In some cases, the line item costs 

were revised or removed based on EPA Control Cost Manual or other cost estimation 

methodologies for the retrofit of SCR. The revised cost will be used to determine the cost 

effectiveness of applying SCR to the unit.
Navajo Generating Station Cost Analysis submitted by Salt River Project (SRP), generated by Sargent and Lundy

Unit 1

Bituminous Coal, 750 MW, Pulverized Coal. Tangential-Fired

Hot Side ESP, Wet FGD

2010 Cost estimates from the Salt River Project, Navajo Generating Station - Units 1, 2, 3, SCR and Baghouse Capital Cost Estimate Report, Revision D, August 17, 2010.

2013 Cost estimates from the Salt River Project, Navajo Generating Station - Units 1, 2, 3, SCR and Baghouse Capital Cost Estimate Report - 2013 Update, Revision 0, January 2, 2014.

Capital Cost

2010 S&L/SRP 

Calculated Cost

EPA Revised 

Cost for 2010 $ EPA Comments from 2010

2013 S&L/SRP 

Calculated Cost

Percent Change 

from 2010

EPA Revised Cost 

for 2013 Comments

SCR

Demolition $386,503 $386,503

Demolition is not listed as a separate line item in the EPA control Cost Manual for SCR, however the cost is 

generally included in the retrofit factor for the SCR capital cost. Demolition for the Navajo facility involves the 

demolition of the existing flue and the installation of the new flues and blanking plates. Therefore this cost was 

included in the revised cost. $417,424 8.0% $417,424 S&L escalated labor costs from 2010 to 2013 by 8% (or 3% per year).

Civil Work (Earthwork & Caissons) $1,232,247 $1,232,247

The cost for civil work is included in the EPA Control Cost Manual in the calculation of the direct capital cost of the 

SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $1,320,352 7.1% $1,320,352 S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% respectively.

Concrete $3,011,247 $3,011,247

The cost for concrete work is included in the EPA Control Cost Manual in the calculation of the direct capital cost 

of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $3,227,240 7.2% $3,227,240 S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% respectively.

Steel, Ductwork & SCR Box $29,495,996 $29,495,996

The cost for the steel, ductwork, and SCR box are included in the EPA Control Cost Manual in the calculation of 

the direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $29,665,211 0.6% $29,665,211 As estimated by S&L.

Architectural (Elevators, Painting) $23,209 $23,209

The cost for architectural services are included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $24,780 6.8% $24,780 S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% respectively.

Mechanical and other Equipment (Fan 

rotating assembly for SCR alone cases, 

catalyst) $10,780,458 $10,780,458

The cost of the mechanical equipment is included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $24,526,209 127.5% $24,526,209

The increase is a result of the replacement of baskets on 2 preheaters ($3,022,178), the 

replacement of 8 sonic horn with 6 sootblowers ($244,695), the addition of a hot water 

recirculation system ($7,994,602) and the increase of the catalyst size due to the lower NOx 

design target ($2,481,250 difference from 2010).

Anhydrous Ammonia System $416,576 $416,576

The cost of the anhydrous ammonia system is included in the EPA Control Cost Manual in the calculation of the 

direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $444,703 6.8% $444,703 S&L escalated material costs from 2010 to 2013 by 6.7% respectively.

Piping $527,082 $527,082

The cost of piping included in the EPA Control Cost Manual in the calculation of the direct capital cost of the SCR 

(Eq. 2.36). Therefore, this cost was included in the revised cost. $992,049 88.2% $992,049

The increase in piping is assumed to be a result of the addition of the hot water 

recirculation system and the sootblowers.

Insulation $4,512,662 $4,512,662

The cost of insulation is included in the EPA Control Cost Manual in the calculation of the direct capital cost of the 

SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $4,694,323 4.0% $4,694,323

S&L escalated material costs from 2010 to 2013 by 6.7% respectively. S&L did not provide 

sufficient explanation to understand the 4% increase.

Subtotal SCR System $50,385,980 $50,385,980 $65,312,291 29.6% $65,312,291

Electrical and Instrumentation & Control

Electrical Equipment $825,442 $825,442 $882,418 6.9% $882,418

Raceways $363,452 $363,452 $408,974 12.5% $408,974

Cable $471,568 $471,568 $531,207 12.6% $531,207

Grounding $20,847 $20,847 $22,451 7.7% $22,451

Lighting $299,231 $299,231 $321,088 7.3% $321,088

Communication $54,808 $54,808 $58,932 7.5% $58,932

Construction Power Allowance $189,230 $189,230 $203,718 7.7% $203,718

Control & Instrumentation $1,207,334 $1,207,334 $1,289,555 6.8% $1,289,555

Relocation & Modification of Existing 

Electrical Equipment $46,106 $46,106 $49,534 7.4% $49,534

Subtotal Electrical and Instrumentation & Control $3,478,018 $3,478,018 $3,767,877 8.3% $3,767,877

Sitework

Civil Work (Roads, Surfacing, Erosion $0 $0 $0 NA $0

Concrete $0 $0 $0 NA $0

Piping for Sitework (Drainage) $0 $0 $0 NA $0

Subtotal Sitework $0 $0 $0 NA $0

Other Direct Capital Costs

Construction Equipment $6,769,119 $6,769,119

The cost of construction equipment is included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $7,623,533 12.6% $7,623,533

Scaffolding $4,701,733 $4,701,733

The cost of scaffolding is not specifically included in the EPA Control Cost Manual for the calculation of the direct 

capital cost of the SCR (Eq. 2.36). However, scaffolding is required to ensure the safety of the workers and to 

allow access to the retrofit site. Therefore, this cost was included in the revised cost. $5,501,149 17.0% $5,501,149

Freight $1,974,160 $1,974,160 This cost is included in the EPA Control Cost Manual, and EPA used S&L's estimate for freight. $2,612,693 32.3% $2,612,693

Sales Taxes $308,300 $308,300

Sales tax is in the EPA Control Cost Manual in the calculation of the direct capital cost of the SCR (Eq. 2.36). 

Therefore, this cost was included in the revised cost. $308,300 0.0% $308,300 No change in sales tax.

Subtotal Other Direct Capital Costs $13,753,312 $13,753,312 $16,045,675 16.7% $16,045,675

Total Direct Capital Costs $67,617,310 $67,617,310 $85,125,843 25.9% $85,125,843

Indirect Costs

Engineering, Procurement & Project 

Services $9,506,574 $9,506,574

EPA considers S&L's estimate for "Engineering, procurement & project services" to represent analagous costs in 

the EPA Control Cost Manual as "Engineering and Home Office Fees" that are estimated as 10% of the direct 

capital cost (Table 2.5, Engineering & Home Office Fees). EPA is using the S&L estimate for this line item, however, 

if EPA estimated this cost based on 10% of the direct capital cost, including labor costs, the total cost would be 

$6,761,731. $11,668,465 22.7% $11,668,465

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Construction Management/Field 

Engineering $10,538,367 $10,538,367

EPA considers S&L's estimate of Construction Management/Field Engineering to represent the "General 

Facilities" costs that are included in the EPA Control Cost Manual as 5% of the direct capital cost (Table 2.5, 

General Facilities). The EPA Control Cost Manual also includes a 5% Process Contingency (Table 2.5) under 

indirect installation costs. The facility estimated this cost as 65% of the direct labor cost (including per diem). EPA 

is using the S&L cost estimate, however, if EPA estimated this cost as the sum of construction management/field 

engineering as 10%, to include 5% for general facilities, and 5% for process contingencies, of the direct capital 

cost, the total would be $6,761,731. $12,330,161 17.0% $12,330,161

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

S-U Commissioning $648,515 $648,515

Start-up/commissioning costs are included in the EPA Control Cost Manual as 2% of the total plant cost (Table 2.5, 

Preproduction Cost). The facility estimated this cost as 4% of the direct labor cost. EPA used S&L's estimate for 

SU commissioning. $758,779 17.0% $758,779

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Owners Construction Management, O&M 

Support & Contract Services $6,244,287 $0

The S&L/SRP cost analysis included owners costs as typical expenditures that an owner will experience during an 

air quality control retrofit project. These expenditures include costs for: project development, financing, project 

management, plant startup/construction support, and taxes/advisory fees/legal. These costs are not included in 

the EPA Control Cost Manual and are not included in the revised cost estimate. $7,406,233 18.6% $0

These costs are not included in the EPA Control Cost Manual and are not included in the 

revised cost estimate. 

Spare Parts & Special Tooling $565,000 $565,000

The cost of spare parts and special tooling are not specifically included in the EPA Control Cost Manual. Although 

it is unclear why spare parts and special tooling are necessary, for conservativism, this cost was included in the 

revised cost. $1,209,000 114.0% $1,209,000

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Owner's Legal Support & Insurance $5,000,000 $0

The S&L/SRP cost analysis included the owner's legal support and insurance. The EPA Control Cost Manual does 

not include legal fees, and states that insurance on an SCR system is a minimal cost and is included in the capital 

recovery. Therefore, this cost is not included in the revised cost estimate. $5,000,000 0.0% $0

These costs are not included in the EPA Control Cost Manual and are not included in the 

revised cost estimate. 

Lost Generation During Short Outages $5,670,000 $5,670,000

The facility assumed that the SCR installation would exceed the scheduled outage by a total of 7 days at a rate of 

$45/MWh @ 750 MW in lost power generation. EPA included this cost in the revised cost estimate. $6,930,000 22.2% $6,930,000

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Ammonia Unloading Facility at Railhead $0 $0 Ammonia unloadling costs for Units 1 and 2 are covered under Unit 3 as a common cost. $0 NA $0

Subtotal Indirect Costs $38,172,743 $26,928,456 $45,302,638 18.7% $32,896,405

Other Construction Indirect Costs

Indirect Labor & Materials Cost $8,597,356 $8,597,356 $10,059,304 17.0% $10,059,304

Overtime $1,832,068 $1,832,068 $2,143,168 17.0% $2,143,168

Per Diem $7,325,012 $7,325,012 $8,669,999 18.4% $8,669,999

Contractor's G&A $5,754,981 $5,754,981 $6,264,553 8.9% $6,264,553

Contractor's Profit $4,247,315 $4,247,315 $4,730,087 11.4% $4,730,087

Subtotal Other Construction Indirect Costs $27,756,732 $27,756,732 $31,867,111 14.8% $31,867,111

Total Indirect Costs $65,929,475 $54,685,188 $77,169,749 17.0% $64,763,516

Contingency $15,224,333 $15,224,333

The EPA Control Cost Manual includes project contingency costs as 15% of total direct capital costs and total 

indirect installation costs in the calculation of total capital investment. 15% of direct and indirect costs would be 

$17,367,153. EPA used S&L's estimate of contingency. $18,501,697 21.5% $18,501,697

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Escalation $0 $0

The facility did not include any costs for escalation in the BART submittal. Therefore this cost was not included in 

the revised cost. $0 NA $0

Allowance for Funds Used During Construction (AFUDC) $3,053,632 $0

The EPA Control Cost Manual assumes the allowance for funds used during construction (AFUDC) are zero for the 

retrofit of a SCR. $3,053,632 0.0% $0

The EPA Control Cost Manual assumes the allowance for funds used during construction 

(AFUDC) are zero for the retrofit of a SCR. 

Total Capital Cost $151,825,000 $137,527,000 $183,851,000 21.1% $168,391,000 -11%

Annual Cost

2010 S&L/SRP 

Calculated Cost

EPA Revised 

Cost in 2010 $

S&L did not 

provide 2013 

annual costs

Percent Change 

from 2010

EPA Revised Cost 

for 2013 Comments

Fixed Annual Costs (FAC)

Operating labor $0 $0

The facility did not present any costs associated with operating labor. Therefore no operating labor cost was 

included in the revised annual costs. $0 NA $0

Maintenance labor & materials $395,000 $395,000

Maintenance labor & materials costs are included in the EPA Control Cost Manual. Therefore, the facility's 

estimate was included in the revised annual cost. $395,000 NA $395,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Subtotal FAC $395,000 $395,000 $395,000 NA $395,000

Variable Annual Costs (VAC)

Anhydrous Ammonia Reagent $1,035,000 $1,035,000

The EPA Control Cost Manual includes costs for raw materials, such as reagent costs. Therefore, the facility's 

estimate was included in the revised annual cost. $1,035,000 NA $1,035,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Auxiliary and ID fan power $1,809,000 $1,809,000

The EPA Control Cost Manual includes costs for utilities used by the SCR process. Therefore, the facility's 

estimate was included in the revised annual cost. $1,809,000 NA $1,809,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Steam $71,000 $71,000

The EPA Control Cost Manual does not include costs for steam, however the low pressure steam is used to 

produce the ammonia reagent used for injection into the SCR. Therefore, the cost provided by the facility was 

used in the revised cost. $71,000 NA $71,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Catalyst replacement $672,000 $672,000

It is unclear from the S&L/SRP cost submittal how the annual catalyst replacement cost was estimated. However, 

the facility's annual replacement cost is comparable to the calculated annual catalyst replacement cost using 

Section 4.2, Chapter 2 of the EPA Control Cost Manual. Therefore, the annual catalyst replacement cost 

submitted by the facility was used in the revised cost. $672,000 NA $672,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Subtotal VAC $3,587,000 $3,587,000 $3,587,000 NA $3,587,000

Total Direct Annual Cost (DAC) $3,982,000 $3,982,000 FAC + VAC $3,982,000 NA $3,982,000 FAC + VAC

Indirect Annual Costs (IAC)

The cost of electrical equipment which includes the raceways, grounding, lighting, communication, construction 

power allowance, control & instrumentation, and electrical equipment relocation is included in the EPA Control 

Cost Manual in the calculation of the direct capital cost of the SCR (Eq. 2.36). Therefore, all of these costs were 

included in the revised cost.

Site work costs for Units 1 and 2 are covered under the site work costs for Unit 3.

The cost of indirect labor & materials, overtime, per diem, contractor's G&A, and contractor's profit are not 

explicit line items costs included in the EPA Control Cost Manual. However, EPA included these costs as additional 

indirect costs associated with installation of SCR.

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% respectively.

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.
Capital recovery $17,597,000 $12,981,576

The facility calculated capital recovery assuming a 9.8% interest rate and 20 year equipment life. However, the 

design basis for the SCR capital cost estimate states that the SCR is designed for a 30-year life (See SCR and 

Baghouse Capital Cost Estimate Design Basis, Section 1.7(a), April 16,2010). The EPA Control Cost Manual states 

the interest rate to use in the CRF computation should be a "pre-tax, marginal (real rate of return" that is 

appropriate for the investor. However, for those cost analyses related to government regulations, an 

appropriate "social" interest (discount) rate should be used. For these types of analyses, the Office of 

Management and Budget (OMB) directs that a real interest rate of 7% be used (October 1992). The latest real 

interest rate for cost effectiveness analyses published by OMB is 2.8% for a 20 year period (Revised January 

2008). EPA calculated capital recoveries using 3% and 7% interest rates in determining cost effectiveness for the 

Regulatory Impact Analysis for the Final Clean Air Visibility rule and the Guidelines for BART Determinations under 

the Regional Haze regulations. Therefore, a conservative approach was used to calculate the capital recovery in 

the revised cost using an interest rate of 7% and an equipment life of 20 years. $21,308,000 21.1% $15,894,919

The facility calculated capital recovery assuming a 9.8% interest rate and 20 year equipment 

life. The EPA Revised Cost was calculated using an interest rate of 7% and an equipment life 

of 20 years.

Subtotal IAC $17,597,000 $12,981,576 $21,308,000 21.1% $15,894,919

Total Annual Cost $21,579,000 $16,963,576 DAC + IAC $25,290,000 17.2% $19,876,919 DAC + IAC 0.079

Note: The capital recovery factor used to calculate the capital recovery is calculated using the following equation: CRF=[i(1+i)n]/[(1+i)n-1], where i=interest rate and n=number of years.
Navajo Generating Station Cost Analysis submitted by Salt River Project (SRP), generated by Sargent and Lundy

Unit 2

Bituminous Coal, 750 MW, Pulverized Coal. Tangential-Fired

Hot Side ESP, Wet FGD

2010 Cost estimates from the Salt River Project, Navajo Generating Station - Units 1, 2, 3, SCR and Baghouse Capital Cost Estimate Report, Revision D, August 17, 2010.

2013 Cost estimates from the Salt River Project, Navajo Generating Station - Units 1, 2, 3, SCR and Baghouse Capital Cost Estimate Report - 2013 Update, Revision 0, January 2, 2014.

Capital Cost

Calculated 

Cost

EPA Revised 

Cost in 2010 Comments

2013 S&L/SRP 

Calculated Cost

Percent Change 

from 2010 EPA Revised Cost Comments

SCR

Demolition $736,198 $736,198

Demolition is not listed as a separate line item in the EPA control Cost Manual for SCR, however 

the cost is generally included in the retrofit factor for the SCR capital cost. Demolition for the 

Navajo facility involves the demolition of the existing flue and the installation of the new flues 

and blanking plates. Therefore this cost was included in the revised cost. $795,092 8.0% $795,092 S&L escalated labor costs from 2010 to 2013 by 8% (or 3% per year).

Civil Work (Earthwork & Caissons) $1,917,885 $1,917,885

The cost for civil work is included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$2,056,090 7.2% $2,056,090

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Concrete $4,782,725 $4,782,725

The cost for concrete work is included in the EPA Control Cost Manual in the calculation of the 

direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $5,129,134 7.2% $5,129,134

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Steel, Ductwork & SCR Box $37,845,393 $37,845,393

The cost for the steel, ductwork, and SCR box are included in the EPA Control Cost Manual in 

the calculation of the direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was 

included in the revised cost. $38,590,824 2.0% $38,590,824 As estimated by S&L.

Architectural (Elevators, Painting) $23,511 $23,511

The cost for architectural services are included in the EPA Control Cost Manual in the 

calculation of the direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in 

the revised cost. $25,106 6.8% $25,106

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Mechanical Equipment (Fan rotating 

assembly for SCR alone cases) $11,515,809 $11,515,809

The cost of the mechanical equipment is included in the EPA Control Cost Manual in the 

calculation of the direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in 

the revised cost. $25,524,593 121.6% $25,524,593

The increase is a result of the replacement of baskets on 2 preheaters ($3,022,178), the 

replacement of 8 sonic horn with 6 sootblowers ($244,695), the addition of a hot water 

recirculation system ($7,994,602) and the increase of the catalyst size due to the lower 

NOx design target ($2,481,250 difference from 2010).

Anhydrous Ammonia System $420,721 $420,721

The cost of the anhydrous ammonia system is included in the EPA Control Cost Manual in the 

calculation of the direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in 

the revised cost. $449,178 6.8% $449,178 S&L escalated material costs from 2010 to 2013 by 6.7% respectively.

Piping $545,564 $545,564

The cost of piping included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $1,397,244 156.1% $1,397,244

The increase in piping is assumed to be a result of the addition of the hot water 

recirculation system and the sootblowers.

Insulation $6,072,318 $6,072,318

The cost of insulation is included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $6,467,678 6.5% $6,467,678

S&L escalated material costs from 2010 to 2013 by 6.7% respectively. S&L did not 

provide sufficient explanation to understand the 4% increase.

Subtotal SCR System $63,860,124 $63,860,124 $80,434,939 26.0% $80,434,939

Electrical and Instrumentation & Control

Electrical Equipment $673,840 $673,840 $721,027 7.0% $721,027

Raceways $433,785 $433,785 $486,845 12.2% $486,845

Cable $433,171 $433,171 $495,696 14.4% $495,696

Grounding $31,799 $31,799 $34,256 7.7% $34,256

Lighting $369,037 $369,037 $396,025 7.3% $396,025

Communication $63,509 $63,509 $68,330 7.6% $68,330

Construction Power Allowance $224,038 $224,038 $241,311 7.7% $241,311

Control & Instrumentation $1,245,971 $1,245,971 $1,331,283 6.8% $1,331,283

Relocation & Modification of Existing 

Electrical Equipment $413,338 $413,338 $444,792 7.6% $444,792

Subtotal Electrical and Instrumentation & Control $3,888,488 $3,888,488 $4,219,565 8.5% $4,219,565

Sitework

Civil Work (Roads, Surfacing, Erosion $0 $0 $0 NA $0

Concrete $0 $0 $0 NA $0

Piping for Sitework (Drainage) $0 $0 $0 NA $0

Subtotal Sitework $0 $0 $0 NA $0

Other Direct Capital Costs

Construction Equipment $12,156,041 $12,156,041

The cost of construction equipment is included in the EPA Control Cost Manual in the 

calculation of the direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in 

the revised cost. $13,551,835 11.5% $13,551,835

Scaffolding $6,777,893 $6,777,893

The cost of scaffolding is not specifically included in the EPA Control Cost Manual for the 

calculation of the direct capital cost of the SCR (Eq. 2.36). However, scaffolding is required to 

ensure the safety of the workers and to allow access to the retrofit site. Therefore, this cost 

was included in the revised cost. $7,934,464 17.1% $7,934,464

Freight $2,347,280 $2,347,280 This cost is included in the EPA Control Cost Manual, and EPA used S&L's estimate for freight. $3,019,296 28.6% $3,019,296

Sales Taxes $478,700 $478,700

Sales tax is in the EPA Control Cost Manual in the calculation of the direct capital cost of the 

SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $478,700 0.0% $478,700 No change in sales tax.

Subtotal Other Direct Capital Costs $21,759,914 $21,759,914 $24,984,295 14.8% $24,984,295

Total Direct Capital Cost $89,508,526 $89,508,526 $109,638,799 22.5% $109,638,799

Indirect Costs

Engineering, Procurement & Project 

Services $14,141,710 $14,141,710

EPA considers S&L's estimate for Engineering, procurement & project services to represent the 

"Engineering and Home Office Fees" that are included in the EPA Control Cost Manual as 10% 

of the direct capital cost (Table 2.5, Engineering & Home Office Fees). EPA is using the S&L cost 

estimate, however, if EPA estimated this cost based on 10% of the direct capital cost, including 

labor costs, the total would be $8,950,853. $17,019,516 20.3% $17,019,516

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Construction Management/Field 

Engineering $15,191,829 $15,191,829

EPA considers S&L's estimate of Construction Management/Field Engineering to represent the 

"General Facilities" costs that are included in the EPA Control Cost Manual as 5% of the direct 

capital cost (Table 2.5, General Facilities). The EPA Control Cost Manual also includes a 5% 

Process Contingency (Table 2.5) under indirect installation costs. The facility estimated this 

cost as 65% of the direct labor cost (including per diem). EPA is using the S&L cost estimate for 

this line item, however, if EPA estimated this cost as the sum of construction 

management/field engineering as 10%, to include 5% for general facilities, and 5% for process 

contingencies, of the direct capital cost, the total would be $8,950,853. $17,784,143 17.1% $17,784,143

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

S-U Commissioning $934,882 $934,882

Start-up/commissioning costs are included in the EPA Control Cost Manual as 2% of the total 

plant cost (Table 2.5, Preproduction Cost). The facility estimated this cost as 4% of the direct 

labor cost. The facility methodology was used in the revised cost. $1,094,409 17.1% $1,094,409

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Owners Construction Management, O&M 

Support & Contract Services $8,163,050 $0

The S&L/SRP cost analysis included owners costs as typical expenditures that an owner will 

experience during an air quality control retrofit project. These expenditures include costs for: 

project development, financing, project management, plant startup/construction support, and 

taxes/advisory fees/legal. These costs are not included in the EPA Control Cost Manual and are 

not included in the revised cost estimate. $9,590,143 17.5% $0

These costs are not included in the EPA Control Cost Manual and are not included in the 

revised cost estimate. 

Spare Parts & Special Tooling $555,000 $555,000

The cost of spare parts and special tooling are not specifically included in the EPA Control Cost 

Manual. Although it is unclear why spare parts and special tooling are necessary, for 

conservativism, this cost was included in the revised cost. $1,199,000 116.0% $1,199,000

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Owner's Legal Support & Insurance $5,000,000 $0

The S&L/SRP cost analysis included the owner's legal support and insurance. The EPA Control 

Cost Manual does not include legal fees, and states that insurance on an SCR system is a 

minimal cost and is included in the capital recovery. Therefore, this cost is not included in the 

revised cost estimate. $5,000,000 0.0% $0

These costs are not included in the EPA Control Cost Manual and are not included in the 

revised cost estimate. 

Lost Generation During Short Outages $5,670,000 $5,670,000

The facility assumed that the SCR installation would exceed the scheduled outage by a total of 

7 days at a rate of $45/MWh @ 750 MW in lost power generation. EPA included this cost in 

the revised cost estimate. $6,930,000 22.2% $6,930,000

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Ammonia Unloading Facility at Railhead $0 $0 Ammonia unloadling costs for Units 1 and 2 are covered under Unit 3 as a common cost. $0 NA $0

Subtotal Indirect Costs $49,656,471 $36,493,421 $58,617,211 18.0% $44,027,068

Other Construction Indirect Costs

Indirect Labor & Materials Cost $12,425,416 $12,425,416 $14,508,608 16.8% $14,508,608

Overtime $2,569,023 $2,569,023 $3,091,636 20.3% $3,091,636

Per Diem $10,656,693 $10,656,693 $12,568,948 17.9% $12,568,948

Contractor's G&A $7,894,783 $7,894,783 $8,682,341 10.0% $8,682,341

Contractor's Profit $5,985,262 $5,985,262 $6,711,236 12.1% $6,711,236

Subtotal Other Construction Indirect Costs $39,531,177 $39,531,177 $45,562,769 15.3% $45,562,769

Total Indirect Costs $89,187,648 $76,024,598 $104,179,980 16.8% $89,589,837

Contingency $23,051,807 $23,051,807

The EPA Control Cost Manual includes project contingency costs as 15% of total direct capital 

costs and total indirect installation costs in the calculation of total capital investment. 15% of 

direct and indirect costs would be $23,115,193. EPA used S&L's estimate of contingency. $27,582,622 19.7% $27,582,622

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Escalation $0 $0

The facility did not include any costs for escalation in the BART submittal. Therefore this cost 

was not included in the revised cost. $0 NA $0

Allowance for Funds Used During Construction (AFUDC) $4,059,926 $0

The EPA Control Cost Manual assumes the allowance for funds used during construction 

(AFUDC) are zero for the retrofit of a SCR. $4,059,926 0.0% $0

The EPA Control Cost Manual assumes the allowance for funds used during construction 

(AFUDC) are zero for the retrofit of a SCR. 

Total Capital Cost $205,808,000 $188,585,000 $245,461,000 19.3% $226,811,000 -10%

Annual Cost

2010 S&L/SRP 

Calculated 

Cost

S&L did not 

provide 2013 

annual costs

Percent Change 

from 2010

EPA Revised Cost 

for 2013 Comments

Fixed Annual Costs (FAC)

Operating labor $0 $0

The facility did not present any costs associated with operating labor. Therefore no operating 

labor cost was included in the revised annual costs. $0 NA $0 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Maintenance labor & materials $395,000 $395,000

Maintenance labor & materials costs are included in the EPA Control Cost Manual. Therefore, 

the facility's estimate was included in the revised annual cost. $395,000 NA $395,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Subtotal FAC $395,000 $395,000 $395,000 NA $395,000

Variable Annual Costs (VAC)

Anhydrous Ammonia Reagent $1,035,000 $1,035,000

The EPA Control Cost Manual includes costs for raw materials, such as reagent costs. 

Therefore, the facility's estimate was included in the revised annual cost. $1,809,000 NA $1,809,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Auxiliary and ID fan power $1,809,000 $1,809,000

The EPA Control Cost Manual includes costs for utilities used by the SCR process. Therefore, 

the facility's estimate was included in the revised annual cost. $1,809,000 NA $1,809,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Steam $71,000 $71,000

The EPA Control Cost Manual does not include costs for steam, however the low pressure 

steam is used to produce the ammonia reagent used for injection into the SCR. Therefore, the 

cost provided by the facility was used in the revised cost. $71,000 NA $71,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Catalyst replacement $672,000 $672,000

It is unclear from the S&L/SRP cost submittal how the annual catalyst replacement cost was 

estimated. However, the facility's annual replacement cost is comparable to the calculated 

annual catalyst replacement cost using Section 4.2, Chapter 2 of the EPA Control Cost Manual. 

Therefore, the annual catalyst replacement cost submitted by the facility was used in the 

revised cost. $672,000 NA $672,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Subtotal VAC $3,587,000 $3,587,000 $4,361,000 NA $4,361,000

Total Direct Annual Cost (DAC) $3,982,000 $3,982,000 FAC + VAC $4,756,000 NA $4,756,000 FAC + VAC

Indirect Annual Costs (IAC)

Capital recovery $23,853,000 $17,801,090

The facility calculated capital recovery assuming a 9.8% interest rate and 20 year equipment 

life. However, the design basis for the SCR capital cost estimate states that the SCR is designed 

for a 30-year life (See SCR and Baghouse Capital Cost Estimate Design Basis, Section 1.7(a), 

April 16,2010). The EPA Control Cost Manual states the interest rate to use in the CRF 

computation should be a "pre-tax, marginal (real rate of return" that is appropriate for the 

investor. However, for those cost analyses related to government regulations, an appropriate 

"social" interest (discount) rate should be used. For these types of analyses, the Office of 

Management and Budget (OMB) directs that a real interest rate of 7% be used (October 1992). 

The latest real interest rate for cost effectiveness analyses published by OMB is 2.8% for a 20 

year period (Revised January 2008). EPA calculated capital recoveries using 3% and 7% interest 

rates in determining cost effectiveness for the Regulatory Impact Analysis for the Final Clean 

Air Visibility rule and the Guidelines for BART Determinations under the Regional Haze 

regulations. Therefore, a conservative approach was used to calculate the capital recovery in 

the revised cost using an interest rate of 7% and an equipment life of 20 years. $28,449,000 19.3% $21,409,354

The facility calculated capital recovery assuming a 9.8% interest rate and 20 year 

equipment life. The EPA Revised Cost was calculated using an interest rate of 7% and an 

equipment life of 20 years.

Subtotal IAC $23,853,000 $17,801,090 $28,449,000 19.3% $21,409,354

Total Annual Cost $27,835,000 $21,783,090 DAC + IAC $33,205,000 19.3% $26,165,354 DAC + IAC 0.059983694

Note: The capital recovery factor used to calculate the capital recovery is calculated using the following equation: CRF=[i(1+i)n]/[(1+i)n-1], where i=interest rate and n=number of years.

The cost of electrical equipment which includes the raceways, grounding, lighting, 

communication, construction power allowance, control & instrumentation, and electrical 

equipment relocation is included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, all of these costs were included in the revised 

cost.

Site work costs for Units 1 and 2 are covered under the site work costs for Unit 3.

The cost of indirect labor & materials, overtime, per diem, contractor's G&A, and contractor's 

profit are not explicit line items costs included in the EPA Control Cost Manual. However, EPA 

included these costs as additional indirect costs associated with installation of SCR.

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.

Although these percentages are outside the noted escalation of labor and material costs 

that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's revised cost as 

provided.
Navajo Generating Station Cost Analysis submitted by Salt River Project (SRP), generated by Sargent and Lundy

Unit 3

Bituminous Coal, 750 MW, Pulverized Coal. Tangential-Fired

Hot Side ESP, Wet FGD

2010 Cost estimates from the Salt River Project, Navajo Generating Station - Units 1, 2, 3, SCR and Baghouse Capital Cost Estimate Report, Revision D, August 17, 2010.

2013 Cost estimates from the Salt River Project, Navajo Generating Station - Units 1, 2, 3, SCR and Baghouse Capital Cost Estimate Report - 2013 Update, Revision 0, January 2, 2014.

Capital Cost

2010 S&L/SRP 

Calculated Cost

EPA Revised 

Cost in 2010 Comments

2013 S&L/SRP 

Calculated Cost

Percent 

Change from 

2010

EPA Revised 

Cost Comments

SCR

Demolition $735,830 $735,830

Demolition is not listed as a separate line item in the EPA control Cost Manual for SCR, however the cost is generally 

included in the retrofit factor for the SCR capital cost. Demolition for the Navajo facility involves the demolition of $794,698 8.0% $794,698 S&L escalated labor costs from 2010 to 2013 by 8% (or 3% per year).

Civil Work (Earthwork & Caissons) $1,427,672 $1,427,672

The cost for civil work is included in the EPA Control Cost Manual in the calculation of the direct capital cost of the 

SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$1,529,947 7.2% $1,529,947

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Concrete $3,714,517 $3,714,517

The cost for concrete work is included in the EPA Control Cost Manual in the calculation of the direct capital cost of 

the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$3,980,599 7.2% $3,980,599

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Steel, Ductwork & SCR Box $30,333,690 $30,333,690

The cost for the steel, ductwork, and SCR box are included in the EPA Control Cost Manual in the calculation of the 

direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$30,561,651 0.8% $30,561,651 As estimated by S&L.

Architectural (Elevators, Painting) $4,055,395 $4,055,395

The cost for architectural services are included in the EPA Control Cost Manual in the calculation of the direct capital 

cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$4,343,466 7.1% $4,343,466

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Mechanical Equipment (Fan rotating 

assembly for SCR alone cases) $10,869,742 $10,869,742

The cost of the mechanical equipment is included in the EPA Control Cost Manual in the calculation of the direct 

capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$24,622,163 126.5% $24,622,163

The increase is a result of the replacement of baskets on 2 preheaters 

($3,022,178), the replacement of 8 sonic horn with 6 sootblowers ($244,695), the 

addition of a hot water recirculation system ($7,994,602) and the increase of the 

catalyst size due to the lower NOx design target ($2,481,250 difference from 

Anhydrous Ammonia System $2,263,603 $2,263,603

The cost of the anhydrous ammonia system is included in the EPA Control Cost Manual in the calculation of the 

direct capital cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$2,416,612 6.8% $2,416,612 S&L escalated material costs from 2010 to 2013 by 6.7% respectively.

Piping $1,426,427 $1,426,427

The cost of piping included in the EPA Control Cost Manual in the calculation of the direct capital cost of the SCR (Eq. 

2.36). Therefore, this cost was included in the revised cost.

$1,947,685 36.5% $1,947,685

The increase in piping is assumed to be a result of the addition of the hot water 

recirculation system and the sootblowers.

Insulation $4,567,888 $4,567,888

The cost of insulation is included in the EPA Control Cost Manual in the calculation of the direct capital cost of the 

SCR (Eq. 2.36). Therefore, this cost was included in the revised cost.

$4,750,261 4.0% $4,750,261

S&L escalated material costs from 2010 to 2013 by 6.7% respectively. S&L did not 

provide sufficient explanation to understand the 4% increase.

Subtotal SCR System $59,394,764 $59,394,764 $74,947,082 26.2% $74,947,082

Electrical and Instrumentation & Control

Electrical Equipment $1,248,620 $1,248,620 $1,335,820 7.0% $1,335,820

Raceways $590,614 $590,614 $652,709 10.5% $652,709

Cable $707,185 $707,185 $783,414 10.8% $783,414

Grounding $67,123 $67,123 $72,289 7.7% $72,289

Lighting $633,462 $633,462 $679,521 7.3% $679,521

Communication $109,616 $109,616 $117,864 7.5% $117,864

Construction Power Allowance $378,460 $378,460 $407,436 7.7% $407,436

Control & Instrumentation $1,519,938 $1,519,938 $1,623,799 6.8% $1,623,799

Relocation & Modification of Existing 

Electrical Equipment $42,106 $42,106 $45,266 7.5% $45,266

Subtotal Electrical and Instrumentation & Control $5,297,124 $5,297,124 $5,718,118 7.9% $5,718,118

Sitework

Civil Work (Roads, Surfacing, Erosion $320,326 $320,326 $343,964 7.4% $343,964

Concrete $12,736 $12,736 $13,626 7.0% $13,626

Piping for Sitework (Drainage) $933,463 $933,463 $941,763 0.9% $941,763

Subtotal Sitework $1,266,525 $1,266,525 $1,299,353 2.6% $1,299,353

Other Direct Capital Costs

Construction Equipment $7,955,564 $7,955,564

The cost of construction equipment is included in the EPA Control Cost Manual in the calculation of the direct capital 

cost of the SCR (Eq. 2.36). Therefore, this cost was included in the revised cost. $8,909,700 12.0% $8,909,700

Scaffolding $6,135,353 $6,135,353

The cost of scaffolding is not specifically included in the EPA Control Cost Manual for the calculation of the direct 

capital cost of the SCR (Eq. 2.36). However, scaffolding is required to ensure the safety of the workers and to allow 

access to the retrofit site. Therefore, this cost was included in the revised cost. $7,055,268 15.0% $7,055,268

Freight $2,355,184 $2,355,184 $3,019,076 28.2% $3,019,076

Sales Taxes $663,500 $663,500

Sales tax is included in the EPA Control Cost Manual in the calculation of the direct capital cost of the SCR (Eq. 2.36). 

Therefore, this cost was included in the revised cost. $663,600 0.0% $663,500 No change in sales tax.

Subtotal Other Direct Capital Costs $17,109,601 $17,109,601 $19,647,644 14.8% $19,647,544

Total Direct Capital Costs $83,068,014 $83,068,014 $101,612,197 22.3% $101,612,097

Indirect Costs

Engineering, Procurement & Project 

Services $10,578,622 $10,578,622

EPA considers S&L's estimate for Engineering, procurement & project services to represent the "Engineering and 

Home Office Fees" that are included in the EPA Control Cost Manual as 10% of the direct capital cost (Table 2.5, 

Engineering & Home Office Fees). EPA is using the S&L cost estimate, however, if EPA estimated this cost based on 

10% of the direct capital cost, including labor costs, the total would be $8,306,801. $12,677,803 19.8% $12,677,803

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.

Construction Management/Field 

Engineering $13,751,653 $13,751,653

EPA considers S&L's estimate of Construction Management/Field Engineering to represent the "General Facilities" 

costs that are included in the EPA Control Cost Manual as 5% of the direct capital cost (Table 2.5, General Facilities). 

The EPA Control Cost Manual also includes a 5% Process Contingency (Table 2.5) under indirect installation costs. 

The facility estimated this cost as 65% of the direct labor cost (including per diem). EPA is using the S&L cost 

estimate for this line item, however, if EPA estimated this cost as the sum of construction management/field 

engineering as 10%, to include 5% for general facilities, and 5% for process contingencies, of the direct capital cost, 

the total would be $8,306,801. $15,813,531 15.0% $15,813,531

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.

S-U Commissioning $846,256 $846,256

Start-up/commissioning costs are included in the EPA Control Cost Manual as 2% of the total plant cost (Table 2.5, 

Preproduction Cost). The facility estimated this cost as 4% of the direct labor cost. The facility methodology was 

used in the revised cost. $973,140 15.0% $973,140

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.

Owners Construction Management, O&M 

Support & Contract Services $7,504,012 $0

The S&L/SRP cost analysis included owners costs as typical expenditures that an owner will experience during an air 

quality control retrofit project. These expenditures include costs for: project development, financing, project 

management, plant startup/construction support, and taxes/advisory fees/legal. These costs are not included in the 

EPA Control Cost Manual and are not included in the revised cost estimate. $8,763,224 16.8% $0

These costs are not included in the EPA Control Cost Manual and are not included 

in the revised cost estimate. 

Spare Parts & Special Tooling $685,000 $685,000

The cost of spare parts and special tooling are not specifically included in the EPA Control Cost Manual. Although it 

is unclear why spare parts and special tooling are necessary, for conservativism, this cost was included in the revised 

cost. $1,337,000 95.2% $1,337,000

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.

Owner's Legal Support & Insurance $5,000,000 $0

The BART analysis included the owner's legal support and insurance. The EPA Control Cost Manual does not include 

legal fees, and states that insurance on an SCR system is a minimal cost and is included in the capital recovery. 

Therefore, this cost is not included in the revised cost estimate. $5,000,000 0.0% $0

These costs are not included in the EPA Control Cost Manual and are not included 

in the revised cost estimate. 

Lost Generation During Short Outages $5,670,000 $5,670,000

The facility assumed that the SCR installation would exceed the scheduled outage by a total of 7 days at a rate of 

$45/MWh @ 750 MW in lost power generation. EPA included this cost in the revised cost estimate

$6,930,000 22.2% $6,930,000

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.

Ammonia Unloading Facility at Railhead $2,000,000 $2,000,000

The EPA Control Cost Manual includes costs for storage and production of the ammonia reagent. The manual does 

not include the cost for an ammonia unloading facility at the railhead in the calculation of total capital investment. 

However, it is believed that this cost is necessary to provide the needed infrastructure to provide a consistent and 

safe supply of ammonia to the facility. Therefore this cost was included in the revised cost. $2,000,000 0.0% $2,000,000

Subtotal Indirect Costs $46,035,543 $33,531,531 $53,494,698 16.2% $39,731,474

Other Construction Indirect Costs

Indirect Labor & Materials Cost $11,257,983 $11,257,983 $12,902,528 14.6% $12,902,528

Overtime $2,301,644 $2,301,644 $2,745,470 19.3% $2,745,470

Per Diem $9,184,758 $9,184,758 $10,700,866 16.5% $10,700,866

Contractor's G&A $7,089,429 $7,089,429 $7,699,954 8.6% $7,699,954

Contractor's Profit $5,301,914 $5,301,914 $5,867,065 10.7% $5,867,065

Subtotal Other Construction Indirect Costs $35,135,728 $35,135,728 $39,915,883 13.6% $39,915,883

Total Indirect Capital Costs $81,171,271 $68,667,259 $93,410,581 15.1% $79,647,357

Contingency $18,559,039 $18,559,039

The EPA Control Cost Manual includes project contingency costs as 15% of total direct capital costs and total indirect 

installation costs in the calculation of total capital investment. 15% of direct and indirect costs would be 

$21,602,790. EPA used S&L's estimate of contingency. $22,037,563 18.7% $22,037,563

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.

Escalation $0 $0

The facility did not include any costs for escalation in the BART submittal. Therefore this cost was not included in 

the revised cost. $0 NA $0

Allowance for Funds Used During Construction (AFUDC) $3,729,453 $0

The EPA Control Cost Manual assumes the allowance for funds used during construction (AFUDC) are zero for the 

retrofit of a SCR. $3,729,453 0.0% $0

The EPA Control Cost Manual assumes the allowance for funds used during 

construction (AFUDC) are zero for the retrofit of a SCR. 

Total Capital Cost $186,528,000 $170,294,000 $220,790,000 18.4% $203,297,000 -9%

Annual Cost

2010 S&L/SRP 

Calculated Cost

S&L did not 

provide 2013 

annual costs

Percent 

Change from 

2010

EPA Revised 

Cost for 2013 Comments

Fixed Annual Costs (FAC)

Operating labor $0 $0

The facility did not present any costs associated with operating labor. Therefore no operating labor cost was 

included in the revised annual costs. $0 NA $0 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Maintenance labor & materials $395,000 $395,000

Maintenance labor & materials costs are included in the EPA Control Cost Manual. Therefore, the facility's estimate 

was included in the revised annual cost. $395,000 NA $395,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Subtotal FAC $395,000 $395,000 $395,000 NA $395,000

Variable Annual Costs (VAC)

Anhydrous Ammonia Reagent $1,035,000 $1,035,000

The EPA Control Cost Manual includes costs for raw materials, such as reagent costs. Therefore, the facility's 

estimate was included in the revised annual cost. $1,035,000 NA $1,035,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Auxiliary and ID fan power $1,809,000 $1,809,000

The EPA Control Cost Manual includes costs for utilities used by the SCR process. Therefore, the facility's estimate 

was included in the revised annual cost. $1,809,000 NA $1,809,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Steam $71,000 $71,000

The EPA Control Cost Manual does not include costs for steam, however the low pressure steam is used to produce 

the ammonia reagent used for injection into the SCR. Therefore, the cost provided by the facility was used in the 

revised cost. $71,000 NA $71,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Catalyst replacement $672,000 $672,000

It is unclear from the BART submittal how the annual catalyst replacement cost was estimated. However, the 

facility's annual replacement cost is comparable to the calculated annual catalyst replacement cost using Section 

4.2, Chapter 2 of the EPA Control Cost Manual. Therefore, the annual catalyst replacement cost submitted by the 

facility was used in the revised cost. $672,000 NA $672,000 S&L did not provide updated annual costs for 2013. EPA is using the 2010 values

Subtotal VAC $3,587,000 $3,587,000 $3,587,000 NA $3,587,000

Total Direct Annual Cost (DAC) $3,982,000 $3,982,000 FAC + VAC $3,982,000 NA $3,982,000 FAC + VAC

Indirect Annual Costs (IAC)

Capital recovery $21,619,000 $16,074,549

The facility calculated capital recovery assuming a 9.8% interest rate and 20 year equipment life. However, the 

design basis for the SCR capital cost estimate states that the SCR is designed for a 30-year life (See SCR and 

Baghouse Capital Cost Estimate Design Basis, Section 1.7(a), April 16,2010). The EPA Control Cost Manual states the 

interest rate to use in the CRF computation should be a "pre-tax, marginal (real rate of return" that is appropriate for 

the investor. However, for those cost analyses related to government regulations, an appropriate "social" interest 

(discount) rate should be used. For these types of analyses, the Office of Management and Budget (OMB) directs 

that a real interest rate of 7% be used (October 1992). The latest real interest rate for cost effectiveness analyses 

published by OMB is 2.8% for a 20 year period (Revised January 2008). EPA calculated capital recoveries using 3% 

and 7% interest rates in determining cost effectiveness for the Regulatory Impact Analysis for the Final Clean Air 

Visibility rule and the Guidelines for BART Determinations under the Regional Haze regulations. Therefore, a 

conservative approach was used to calculate the capital recovery in the revised cost using an interest rate of 7% and 

an equipment life of 20 years. $25,590,000 18.4% $19,189,799

The facility calculated capital recovery assuming a 9.8% interest rate and 20 year 

equipment life. The EPA Revised Cost was calculated using an interest rate of 7% 

and an equipment life of 20 years.

Subtotal IAC $21,619,000 $16,074,549 $25,590,000 18.4% $19,189,799

Total Annual Cost $25,601,000 $20,056,549 DAC + IAC $29,572,000 15.5% $23,171,799 DAC + IAC 0.094886972

Note: The capital recovery factor used to calculate the capital recovery is calculated using the following equation: CRF=[i(1+i)n]/[(1+i)n-1], where i=interest rate and n=number of years.

The cost of electrical equipment which includes the raceways, grounding, lighting, communication, construction 

power allowance, control & instrumentation, and electrical equipment relocation is included in the EPA Control Cost 

Manual in the calculation of the direct capital cost of the SCR (Eq. 2.36). Therefore, all of these costs were included 

in the revised cost.

The EPA Control Cost Manual does not include the costs for sitework in the calculation of total capital investment. 

However, the manual notes that these costs may be necessary to provide the needed infrastructure to service the 

facility. Therefore these costs were included in the revised cost. 

The cost of indirect labor & materials, overtime, per diem, contractor's G&A, and contractor's profit are not explicit 

line items costs included in the EPA Control Cost Manual. However, EPA included these costs as additional indirect 

costs associated with installation of SCR.

S&L escalated labor and material costs from 2010 to 2013 by 8.0% and 6.7% 

respectively.

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.

Although these percentages are outside the noted escalation of labor and material 

costs that S&L assumed to be 8.0% and 6.7% respectively, EPA includes S&L's 

revised cost as provided.
Total Capital Cost (EPA's revisions_2013 costs)

SCR 3+1 reactor 2012 SRP cost for SNCR

Unit 1 $168,391,000 $13,066,667

Unit 2 $226,811,000 $13,066,667

Unit 3 $203,297,000 $13,066,667

TOTAL $598,499,000 $39,200,000

Total Annual Cost (EPA's revisions_2013 costs)

3+1 reactor

Unit 1 $19,876,919

Unit 2 $26,165,354

Unit 3 $23,171,799

TOTAL $69,214,072

Total Annual O&M Costs

3+1 reactor

Unit 1 $3,982,000

Unit 2 $4,756,000

Unit 3 $3,982,000

TOTAL $12,720,000

Unit 1 Unit 2 Unit 3

Total Capital 

Cost in 2010 $ $137,527,000 $188,585,000 $170,294,000 

Total Capital 

Cost in 2013 $ $168,391,000 $226,811,000 $203,297,000 

Percent 

Change 22% 20% 19%

Costs 

Estimate

d by 

EPA
Total Annual 

Cost in 2010 $ $16,963,576 $21,783,090 $20,056,549 

Total Annual 

Cost in 2013 $ $19,876,919 $26,165,354 $23,171,799 

Percent 

Change 17% 20% 16%

Total Capital 

Cost in 2010 $ $151,825,000 $205,808,000 $186,528,000 

Total Capital 

Cost in 2013 $ $183,851,000 $245,461,000 $220,790,000 

Percent 

Change 21% 19% 18%

Total Annual 

Cost in 2010 $ $21,579,000 $27,835,000 $25,601,000 

Total Annual 

Cost in 2013 $ $25,290,000 $33,205,000 $29,572,000 

Percent 

Change 17% 19% 16%

Costs 

Estimate

d by SRP
For Economic Modeling - 2013 SCR Costs SRP and S&L 2013 Costs

Total Capital Cost Annual O&M Cost Total Capital Cost

Unit 1 $168,391,000 $3,982,000 Unit 1 $183,851,000

Unit 2 $226,811,000 $4,756,000 Unit 2 $245,461,000

Unit 3 $203,297,000 $3,982,000 Unit 3 $220,790,000

For Economic Modeling - SNCR Costs SRP $650,102,000

Total Capital Cost Annual O&M Cost EPA $598,499,000

Unit 1 $13,066,667 $6,333,333 8%

Unit 2 $13,066,667 $6,333,333

Unit 3 $13,066,667 $6,333,333

From January 20, 2012 letter from Kelly Barr, SRP to Deborah Jordan, EPA

$39,200,001 $18,999,999

Total

$496,406,000

$598,499,000

21%
$58,803,215

$69,214,072

18%

$544,161,000

$650,102,000

19%

$75,015,000

$88,067,000

17%
Annual O&M Cost Total Annual Cost

$3,982,000 $25,290,000 8.41% 9%

$4,756,000 $33,205,000 7.60%

$3,982,000 $29,572,000 7.92%

$12,720,000 $88,067,000

$12,720,000 $69,214,072

21%