Document ID: EPA-HQ-OAR-2005-0155-0296
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2006-01-05T05:00Z

K:\
0154­
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co­
res
cost
memo
1
MEMORANDUM
TO:
Rhea
Jones,
U.
S.
Environmental
Protection
Agency,
OAQPS
(
C539­
03)

FROM:
Mike
Heaney,
Eastern
Research
Group
(
ERG),
Morrisville
DATE:
August
16,
2005
SUBJECT:
Estimating
the
Cost
of
NESHAP
Revisions
for
Co­
residential
Perchloroethylene
Dry
Cleaning
Facilities
1.0
INTRODUCTION
This
memorandum
documents
how
costs
and
emission
impacts
were
estimated
for
perchloroethylene
(
PCE)
dry
cleaners
located
in
the
same
building
as
a
residence
(
i.
e.

coresidential
facilities).
This
cost
analysis
supports
a
review
and
residual
risk
analysis
of
the
National
Emission
Standards
for
Hazardous
Air
Pollutants
(
NESHAP)
for
PCE
Dry
Cleaners.

The
option
evaluated
in
this
memorandum
is
a
prohibition
on
any
new
PCE
dry
cleaning
machines
in
a
co­
residential
facility.
Existing
PCE
dry
cleaning
machines
in
co­
residential
facilities
could
continue
to
operate
but
could
be
replaced
only
by
a
machine
using
another
solvent.
Because
most
PCE
dry
cleaning
machines
have
a
useful
life
of
10
to
15
years,
this
requirement
would
amount
to
a
gradual
phase­
out
of
PCE
dry
cleaning
in
buildings
with
residences.

We
have
estimated
that
approximately
1,300
co­
residential
dry
cleaning
facilities
with
machines
using
PCE
are
currently
operating
(
ERG,
2005).
Of
these
co­
residential
sources,
900
(
70%)
are
in
New
York
City,
100
(
8%)
are
in
the
rest
of
New
York
State,
and
57
(
4%)
are
in
the
[
San
Francisco]
Bay
Area
Air
Quality
Management
District
(
BAAQMD).
For
the
remaining
State
and
Local
jurisdictions
in
the
country,
we
assumed
that
1%
of
all
dry
cleaners
are
coresidential
This
percentage
is
based
on
the
composite
average
from
the
following
seven
States
for
which
data
on
the
number
of
co­
residential
facilities
are
available:

 
California
(
excluding
BAAQMD)
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co­
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Delaware
 
Maine
 
Michigan
 
North
Carolina
 
Rhode
Island
 
Washington
2.0
COST
ESTIMATION
METHOD
2.1
Cost
Per
Facility
This
cost
estimate
is
based
on
the
assumption
that
co­
residential
facilities
would
replace
their
PCE
machine,
at
the
end
of
its
useful
life,
with
an
alternative
solvent
machine.
The
primary
cost
of
this
option
is
the
additional
cost
of
alternative
solvent
machines
compared
to
PCE
machines.
Among
the
alternative
solvent
technologies,
synthetic
hydrocarbons,
such
as
DF­

2000TM
and
EcoSolv
®
,
have
the
lowest
capital
and
operating
costs
(
CARB,
2005).
The
net
operating
cost
for
hydrocarbon
machines
is
less
than
3%
higher
than
that
of
PCE
machines
(
CARB,
2005),
so
operating
costs
were
assumed
to
be
equal.
The
additional
capital
cost
of
a
hydrocarbon
machine
compared
to
a
new
PCE
machine
is
based
on
the
estimates
summarized
in
Table
1.

Table
1.

Incremental
Capital
Cost
of
a
New
Hydrocarbon
Machine
Relative
to
a
PCE
Machine
Installed
cost
of
hydrocarbon
machine
(
50­
lb
capacity)
$
60,500
Installed
cost
of
PCE
machine
with
secondary
controls
(
40­
lb
capacity)
 
$
35,600
Cost
difference:
$
24,900
Improvements
to
fire
protection
and
sprinkler
systems
+$
8,000
Additional
cost
per
facility:
$
32,900
Capital
costs
were
based
on
machine
capacities
of
40
pounds
for
PCE
and
50
pounds
for
hydrocarbons,
because
the
longer
cycle
times
of
hydrocarbon
machines
require
a
larger
capacity
per
load
to
attain
the
same
overall
throughput.
The
median
capacity
for
area
source
PCE
machines
is
40
pounds
(
CARB,
2005).
Typically,
owners
replacing
a
PCE
machine
with
a
hydrocarbon
machine
will
purchase
one
with
a
slightly
larger
capacity
(
Lawson,
2005).
The
frame
of
reference
for
the
cost
comparison
was
a
new
PCE
machine
with
secondary
controls
(
i.
e.

a
carbon
adsorber
and
refrigerated
condenser)
because
secondary
controls
are
part
of
the
option
proposed
for
all
area
sources.

Installing
a
hydrocarbon
machine
often
requires
improvements
to
fire
protection
and
sprinkler
systems
because
synthetic
hydrocarbons
have
a
flash
point
of
approximately
147
°
F,
K:\
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co­
res
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3
which
makes
them
a
National
Fire
Protection
Association
Class
IIIA
solvent.
Several
other
common
alternative
solvents,
including
GreenEarth,
are
also
Class
IIIA
solvents.
Nonflammable
alternatives
such
as
wetcleaning
and
carbon
dioxide
are
more
costly
and
have
a
steep
learning
curve.
The
extent
of
fire
protection
required
for
Class
IIIA
solvents
varies
widely
depending
on
local
fire
codes
and
the
extent
of
the
sprinkler
system
in
place.
New
York
City,
home
to
70%
of
all
co­
residential
cleaners,
imposes
particularly
demanding
fire
protection
requirements.
Less
than
0.5%
of
the
dry
cleaning
machines
in
New
York
City
use
hydrocarbons
because
of
the
difficulty
of
getting
approval
from
the
City
(
Nealis,
2005).
In
some
cases,
the
estimated
cost
of
expanding
the
sprinkler
system
can
be
more
than
the
hydrocarbon
machine
itself.

The
additional
capital
cost
of
a
hydrocarbon
machine
relative
to
a
PCE
machine
with
secondary
controls
was
converted
to
an
annualized
cost
using
the
following
factor:

Capital
Recovery
Factor
=
i(
1
+
i)
n
(
1
+
i)
n
­
1
i
=
interest
rate
(
7%)
n
=
dry
cleaning
machine
life
of
15
years
Price
quotations
for
nine
PCE
machines
and
nine
hydrocarbon
machines
were
obtained
from
equipment
vendors.
The
quotes
were
for
machines
ranging
in
capacity
from
35
to
75
pounds
and
were
normalized
to
40
pounds
for
PCE
machines
and
50
pounds
for
hydrocarbon
machines.

Installation
costs
were
included
in
the
vendor
quotations
for
about
half
the
machines.
For
the
remainder,
installation
costs
were
estimated
to
be
$
2,800.

3.0
REPLACEMENT
RATE
Based
on
an
expected
useful
life
of
fifteen
years,
we
estimated
that
one
fifteenth
(
6.7%)

of
existing
co­
residential
PCE
machines
are
retired
each
year
(
i.
e.
87
machines
per
year).

Consistent
with
EPA
Emission
Standards
Division
guidance,
we
considered
only
costs
incurred
by
facilities
affected
within
the
first
five
years
after
the
rule
takes
effect.
Therefore,
about
33%

(
6.7%
per
year
for
five
years)
of
existing
machines
were
estimated
to
be
affected
by
this
proposed
new
source
requirement.

New
dry
cleaning
facilities
and
dry
cleaning
facilities
that
relocate
will
also
be
affected
by
this
option.
The
fraction
of
new
and
relocated
dry
cleaning
facilities
opening
in
co­
residential
K:\
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co­
res
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memo
4
facilities
is
believed
to
be
lower
than
the
fraction
of
existing
dry
cleaning
facilities
that
are
coresidential
We
estimated
that
the
rate
of
new
and
relocated
dry
cleaning
facilities
opening
in
coresidential
facilities
is
equal
to
the
rate
of
closure
of
existing
co­
residential.
Accordingly,
the
estimated
number
of
affected
co­
residential
sources
(
435
over
five
years)
was
not
adjusted
to
account
for
new,
relocated,
or
closed
facilities.

4.0
PCE
EMISSION
REDUCTIONS
PCE
emission
reduction
was
estimated
in
the
same
manner
as
for
all
area
sources
 
on
the
basis
of
mileage
estimates
(
ERG,
2005b).
The
frame
of
reference
for
emission
reductions
is
a
PCE
machine
with
enhanced
LDAR
and
secondary
controls
because
enhanced
LDAR
and
secondary
controls
are
part
of
the
option
proposed
for
all
new
area
sources.
PCE
emissions
in
co­
residential
sources
were
estimated
to
be
the
same
as
in
an
average
size
area
source:
0.22
tons
per
year.
Replacing
a
PCE
machine
with
a
hydrocarbon
machine
would
eliminate
PCE
emissions
from
a
source.
The
total
national
emissions
reduction
would
be
97
tons
per
year
by
the
fifth
year
after
implementation
of
this
option.

5.0
NATIONAL
COST
IMPACTS
Table
2
shows
the
costs,
emissions
reductions,
and
the
incremental
cost
effectiveness
for
the
option
of
no
new
co­
residential
sources.
Cost
effectiveness
is
expressed
as
cost
per
ton
of
PCE
reduced.
The
cost
effectiveness
remains
constant
independent
of
the
rate
or
number
of
machines
replaced.
Because
this
estimate
considers
only
facilities
affected
within
the
first
five
years
after
implementation,
only
435
facilities
(
33%
of
the
total
number
of
co­
residential
sources)
would
be
affected.

Table
2.
Fifth­
Year
National
Cost
Impacts
for
Phase­
out
of
Co­
Residential
Dry
Cleaners
Option
Number
of
Affected
Facilities
Capital
Cost
($
MM)
Net
Annualized
Cost
($
MM)
Incremental
Emission
Reduction
(
tons/
year)
Incremental
Cost
Effectiveness
($/
ton)
No
new
co­
residential
sources
435
14
1.6
97
16,200
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5
REFERENCES
California
Air
Resources
Board.
"
California
Dry
Cleaning
Industry
Technical
Assessment
Report".
August
2005.

Eastern
Research
Group,
Inc.
Memorandum
to
Rhea
Jones:
"
Number
of
Co­
residential
Area
Source
Dry
Cleaners".
May
16,
2005a.

Eastern
Research
Group,
Inc.
Memorandum
to
Rhea
Jones:
"
Estimating
the
Cost
of
Regulatory
Options
for
Area
Source
Perchloroethylene
Dry
Cleaning
Facilities".
August
%%%,
2005b.

Lawson,
Kevin,
Tri­
State
Laundry
Equipment
Co.
Personal
Communication
with
Mike
Heaney.
Subject:
Dry
Cleaning
Machine
Sales
Trends.
May
19,
2005.

Nealis,
Nora,
National
Cleaners
Association.
Personal
Communication
with
Mike
Heaney.
Subject:
Hydrocarbon
Machines
in
New
York
City.
June
21,
2005.