MEMORANDUM

Date:	December 16, 2011
Subject:	Evaluation of Area Source EGUs 
From:	Nick Hutson, ESG/SPPD/OAQPS
To:  	EPA-HQ-OAR-2009-0234

      As explained at proposal, the Agency examined whether it would be appropriate to regulate area source EGUs differently by issuing GACT standards for such units, as opposed to MACT standards.  In response to comments received, we reviewed the "Nationwide Emission Estimates" spreadsheet prepared at proposal and updated that spreadsheet based on comments to confirm the number of area source facilities.  The spreadsheet associated with the proposed rule is posted to the Agency's project website (http://www.epa.gov/ttn/atw/utility/utilitypg.html) and to the docket (EPA-HQ-OAR-2009-0234-2986). The updated spreadsheet may be found in the docket for this rulemaking. 
      Specifically, we examined the available data to identify the number of units that may be considered area sources and the level of emissions and control configuration of such facilities. This information is provided in the attached spreadsheet (`potential area sources 121511.xlsx').  
      We have identified 79 facilities (with 141 units) that are potential area sources.   See Response to Comments for a fuller discussion of the area source issue.  The units identified as area sources, based on their potential to emit less than 10 tons per year of a single HAP or less than 25 tons per year of a combination of HAP, include:  112 coal-fired units and 29 oil-fired units.  Our analysis shows that many of the EGUs at these facilities are already meeting at least some of the MACT standards.  
      With regard to coal-fired units, many of the units appear to already meet the HCl limit (about 67%) either through existing controls or use of low chlorine coal.  Most of the remaining units have existing controls and should be able to meet the HCl limit with a small increase in the performance of the existing equipment or through the implementation of a small amount of dry sorbent injection (DSI).  Nearly half of the units already have fabric filters installed for PM control.  Several of the potential area sources are also already using activated carbon injection for Hg control.  Other potential area sources have wet scrubbers, and there are likely low cost options to achieve additional Hg control.
      We have, however, identified four units that do not have existing acid gas controls and would require installation of additional controls to meet the final HCl emission limit.  We have calculated the annual costs associated with installation and operation of a DSI system sufficient to allow the units to meet the HCl MACT emission limit, and we have calculated the associated benefits for the co-benefit SO2 reductions.  The annual costs for the four units were estimated to be approximately $2,980,000, while the annual benefits were estimated to be $15,120,000.  
      
      With regard to oil-fired sources, some of the oil-fired units are likely to qualify for the limited-use subcategory and thus would need to employ work practices, which would be neither difficult nor costly.  Some other units are covered by the non-continental emissions standards, which are less stringent than the remaining numerical limits.   As to the remaining units that are neither limited-use nor non-continental units, such units are very similar to the major source oil-fired units both in HAP emissions and control configuration. 
