Document ID: EPA-R03-OAR-2009-0804-0003
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2010-01-05T05:00Z

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION III

	1650 Arch Street

	Philadelphia, Pennsylvania  19103

DATE:	December 1, 2009

SUBJECT:	Technical Support Document for Delaware’s Amendment to
Regulation No. 1146 – Electric Generating Unit Multi-Pollutant
Regulation

FROM:	Irene Shandruk, Environmental Scientist

Office of Air Program Planning 

TO:		File

			/s/

THRU: 	Cristina Fernandez, Associate Office Director

Office of Air Program Planning

A.  BACKGROUND:  

On November 16, 2006, the Delaware Department of Natural Resources and
Environmental Control (DNREC) submitted a revision to the Delaware State
Implementation Plan (SIP).  This SIP revision pertained to a new
regulation, Regulation No. 1146 – Electric Generating Unit (EGU)
Multi-Pollutant Regulation.  The regulation was adopted in order to
impose lower emissions limits of nitrogen oxides (NOx), sulfur dioxide
(SO2) and mercury in order to help Delaware attain and maintain the
national ambient air quality standards (NAAQS) for ozone and fine
particulate matter (PM2.5), as well as to assist Delaware in achieving
the emissions reductions needed to support the State’s 8-hour ozone
reasonable further progress plan (RFP) for NOx.  EPA approved the SIP
revision on August 28, 2008 (73 FR 50723).

On October 7, 2009, EPA received a SIP revision for this rule, dated
September 24, 2009.  The revision is an amendment to Regulation No. 1146
of Delaware’s Administrative Code, and it modifies the SO2 mass
emissions limit associated with Conectiv Edge Moor Unit 5 (as
constrained in Regulation 1146’s Table 5-1) from 2,427 tons per year
to 4,600 tons per year, beginning in calendar year 2009.  No other
changes were made to Regulation 1146.  The effective date of the state
level revision was October 10, 2009.

B.  EPA REQUIREMENTS:

In 1998, the Environmental Protection Agency (EPA) issued the NOx SIP
Call to reduce air emissions of NOx, which is a precursor to ozone that
is subject to the NAAQS.  The NOx SIP Call allowed NOx emissions
trading, which allowed sources of NOx emissions an alternative to
investing in pollution control equipment.  Instead of investing in
pollution control equipment, the sources could purchase emission
allowances.

In 2005, EPA issued the Clean Air Interstate Rule (CAIR) to further
regulate NOx and SO2 emissions.  CAIR also allowed emissions trading as
an alternative to actual emission reductions from a source.  EPA
believed that the state caps set in CAIR represented the appropriate
amount of cost-effective emissions reductions required to prevent
significant contribution to nonattainment through transport of emissions
to downwind ozone and PM2.5 nonattainment areas.  However, States had
flexibility in the design of NOx allocation schemes.  Delaware believed
that tighter caps on these sources were a necessary component of its
plan for attainment of the NAAQS.  Regulation 1146 supplemented the CAIR
program by setting “hard” NOx and SO2 emissions caps that could not
be exceeded for affected facilities.  These units, however, were still
subject to all of the EPA’s CAIR requirements, including its allowance
allocation and cap-and-trade provisions, independent of this regulation.
 Thus, the units subject to Regulation 1146 were required to meet the
cap set by this regulation independent of any compliance provisions of
the CAIR program.

C.  STATE SUBMITTAL:

Originally submitted to the EPA on November 16, 2006, Regulation No.
1146 established NOx and SO2 emission limits to achieve reductions from
Delaware’s large EGUs.  

This multi-pollutant regulation impacts any owner or operator of a coal
or residual oil fired power plant 25 megawatts (MW) and greater in size,
specifically the Conective Delmarva Generating, Inc.’s Edge Moor
Generating Station Units 3, 4 and 5; City of Dover’s McKee Run
Generating Station Unit 3; and NRG Energy, Inc.’s Indian River
Generating Station Units 1, 2, 3 and 4.  

The following table identifies the units affected by this regulation and
the annual SO2 mass emissions limits for each:

Facility	Unit	County	Primary Fuel	Annual SO2

Mass Emissions Limits (tons)

Edge Moor	3	New Castle	Coal	1391

Edge Moor	4	New Castle	Coal	2410

Edge Moor	5	New Castle	Residual Oil	2427

Indian River	1	Sussex	Coal	1082

Indian River	2	Sussex	Coal	1130

Indian River	3	Sussex	Coal	1759

Indian River	4	Sussex	Coal	3657

McKee Run	3	Kent	Residual Oil	439

On October 7, 2009, EPA received an amendment to this regulation
modifying the SO2 mass emissions limit associated with Conectiv Edge
Moor Unit 5, located in New Castle County, Delaware, from 2,427 to 4,600
tons per year.  Since this revision is only associated with the SO2
emissions limit, NOx will not be discussed here.  

This SIP revision was the result of a litigation settlement agreement
between Conectiv Delmarva Generating, Inc. and the Department of Natural
Resources and Environmental Control in December 2008.  Conectiv had
filed an appeal challenging the regulation for their Edge Moor 5
facility.  The argument was that the emissions limit of 2,427 tons per
year limited the facility from operating in extreme circumstances when
failure at other production units would require them to exceed that
limit in order to supply the needed electricity.  The limit of 4,600
tons per year was determined to be an adequate limit after an analysis
of the facility’s history of operation and the estimate of future
operations using the low sulfur (0.5%) residual fuel to generate
electricity at the 446 megawatt oil-fired steam generating unit. 
Currently, the facility operates at a 10% capacity factor.  If so
required, the new emissions limit would allow the facility to operate at
a 45% capacity factor.  

This higher operational capacity factor, however, was determined to not
be economically favorable for the facility to operate at such a level
continuously.  Analysis showed that because residual fuel oil prices
change with the cost of oil, the unit’s capacity factor over the last
several years has been dropping because of the cost of fuel.  Over the
last decade, there has been a fairly steady increase in residual fuel
oil costs.  This has reflected on the facility’s operating capacity,
decreasing over the course of a single year.  As the unit operates at a
very low capacity factor on an annual basis, the SO2 emissions from that
unit will be relatively low form a mass emissions perspective on an
annual basis.  Additionally, Regulation 1146 has required the facility
to reduce their use of a maximum 1 percent sulfur fuel oil to a maximum
half a percent sulfur fuel oil, reducing the emissions of the unit by
roughly 50 percent.  Given both of these factors, DNREC believes that
both the fuel oil sulfur requirement and the economics residual fuel
cost will generally keep the unit to operating at a low capacity factor.
 Therefore, DNREC believes that the actual SO2 emissions from this unit
will not change significantly from the original emission limit in the
regulation, nor will there be any significant impact on the air quality
that would affect the public.

This SIP revision changes Regulation 1146’s Table 5-1 to read as
follows:

Unit	Annual SO2

Mass Emissions Limits (tons)

Edge Moor 3	1391

Edge Moor 4	2410

Edge Moor 5	4600

Indian River 1	1082

Indian River 2	1130

Indian River 3	1759

Indian River 4	3657

McKee Run 3	439

Furthermore, no other aspects of the original regulation pertaining to
SO2 will change with this SIP revision.  The Edge Moor 5 facility will
still be subject to the following:

Coal fired unit shall not exceed a SO2 emission rate of 0.37 lb/MMBTU
heat input from May 1, 2009 through December 31, 2011.  Compliance with
this requirement shall be demonstrated on a rolling 24-hour average
basis.  Compliance can also be demonstrated with SO2 emissions from
multiple units at a common facility be averaged on a heat input basis. 

No coal-fired unit subject to this regulation shall emit SO2 at a rate
exceeding 0.26 lb/MMBTU heat input, demonstrated on a rolling 24-hour
average basis, on and after January 2012.

A coal-fired unit subject to this regulation shall not emit annual SO2
mass emissions that exceed the values shown in on or after January 1,
2009.

Compliance with these requirements from January 1, 2009 through December
31, 2011, may be achieved by demonstrating that the total number of tons
of SO2 emitted from a common facility does not exceed the sum of the
tonnage limitations for all of the units subject to this regulation at
that facility.  Compliance shall also be achieved by using, tendering,
or otherwise acquiring SO2 allowances under any State or Federal
emission trading program.  For the purpose of determining compliance
with these requirements, the total tons for a specified period shall be
calculated as the sum of all recorded hourly emissions, with any
remaining fraction of a ton equal to or greater than 0.50 ton deemed to
equal one ton and any remaining fraction of a ton less than 0.50 ton
deemed to zero tons.

Overall, compliance with the requirements of this regulation shall be
demonstrated with a continuous emissions monitoring system that is
installed, calibrated, operated, and certified in accordance with 40 CFR
Part 75 or other method approved by DNREC and EPA, and meeting the
monitoring and reporting requirements of 40 CFR Part 96, subpart HHH.

No residual oil with a sulfur content in excess of 0.5 percent by
weight, shall be received for any residual oil-fired unit subject to
this regulation, on and after January 1, 2009.  Compliance with these
requirements shall be demonstrated by fuel oil sampling and analysis. 
Samples shall be collected: (1) from the transport vessel for each
shipment of residual fuel oil received at the facility for combustion in
the subject residual oil-fired unit; or (2) from the supply pipeline
each day residual oil is delivered to the facility via pipeline for
combustion in a residual oil-fired unit subject to this regulation,
after sufficient fuel oil has been drained from the sampling line to
remove any fuel oil that may have been standing in the sampling line; or
(3) from the supply pipeline at the inlet to the residual oil-fired unit
subject to this regulation each day the unit fires any quantity of oil
fuel, after sufficient fuel oil has been drained from the sampling line
to remove any fuel that may have been standing in the sampling line.

D.  EPA EVALUATION:

This amendment to Regulation No. 1146 is a reasonable compromise between
Conectiv and DNREC, which prevented a potential overturning of the
regulation.  Analysis supports that the increase in the SO2 emissions
limit for the Edge Moor 5 facility will generally not lead to increased
SO2 emissions on an annual basis but will enable the facility to operate
at a higher capacity if in the unusual circumstance it should be needed.
 Given that an increase in SO2 emissions is not expected from what they
currently are at the facility, this revision will continue to help
Delaware attain and maintain NAAQS for ozone and PM2.5.  

E.  CONCLUSIONS AND RECOMMENDED AGENCY ACTION:

The amendment to the EGU multi-pollutant regulation on NOx and SO2
emission limitations adopted by Delaware will result in the reduction of
NOx and SO2 emissions from the affected sources.  The settlement between
Conectiv and DNREC removed the risk of an adverse result that could have
overturned this regulation entirely, a result that would not have been
good for the environment or public health.  Therefore, EPA approval of
the SIP revision is recommended.

 PAGE   

 PAGE  5