MEMORANDUM

Date:	December 16, 2011
Subject:	Emission Reduction Costs for Beyond-the-floor Mercury Rate for Existing Units Designed to Burn Low Rank Virgin Coal
From:	Kevin Culligan, SPPD/OAQPS
To:  	EPA-HQ-OAR-2009-0234

      For the final rule, EPA has recalculated the beyond the floor control costs for existing units designed to burn low rank virgin coal using a methodology similar to that used in the IPM analysis done for the MATS proposal.  In the final rule, we have not recalculated control costs based on the other methodology used in the proposal which used ACI capital and operating costs provided in the ICR.   We have not used that approach because it was based upon an assumption that all units would need to have a baghouse (also known as a fabric filter  -  FF  -  either existing or newly installed) in order to meet the MACT PM standard and that the ACI would be used with the baghouse.  EPA has considered and used additional information demonstrating that high levels of mercury removal can be achieved with injection of brominated activated carbon and the addition of a FF is not necessary.  Furthermore, based on additional analysis related to the PM standard, EPA believes that most lignite units will not need to install new FF, therefore, EPA believes a costing methodology based on this assumption would be inappropriate.
      For this analysis, EPA calculated beyond-the-floor costs for mercury controls by assuming injection of brominated activated carbon at a rate of 3.0 lb/MACF for units with ESPs and injection rates of 2.0 lb/MACF for units with baghouses (also known as fabric filters).    The rate of 2.0 lb/MACF for fabric filters is consistent with the rate assumed in all other IPM analyses for this rule.  The rate of 3.0 lb/MACF for units with ESPs is lower than the rate of 5.0 lb/MACF assumed in the IPM analysis.  EPA believes that this rate is appropriate, because a higher rate would likely result in reductions beyond those needed to meet the BTF standard of 4.0 lb/TBtu.  Figure 1 in "Activated Carbon Injection for Mercury: Overview" suggests that > 90% control can be achieved at lignite-fired units at a < 2.0 lb/MACF injection rate for units with installed FF and using treated (i.e., brominated) AC.  The figure also suggests that > 90% Hg control can be achieved at lignite-fired units at < 3.0 lb/MACF injection rate for units with installed ESPs and using treated AC.  As Table 1 below shows, based on the IPM analysis, all units would need to achieve reductions of less than 90%, therefore lower assumed injection rates are appropriate.
      
      




Table 1  -  Emission Reduction Rates Required to Meet Standard of 4 lb/TBtu.


      
      EPA also assumed a disposal cost of $25/ton for ash comingled with activated carbon.  This cost is consistent with a range of studies.  DOE/NETL, in a recent study examining the costs of ACI, assumed total disposal costs of $17/ton for non-hazardous fly ash. They assumed $35/ton for fly ash that would have otherwise been sold for beneficial reuse (lost revenue of $18/ton plus disposal costs of $17/ton for non-hazardous fly ash).  In an EPA study, $25 - $30 per ton were assumed as total disposal costs. 
      
      EPA recently modeled site-specific disposal costs for the RIA for the proposed rule regulating coal combustion residuals (CCRs), including fly ash.  Those costs were examined for units burning low rank virgin coal.  The disposal costs varied by state/region.  For Texas the incremental costs attributable to Hg control were $18.13/ton, while for North Dakota and Montana, the incremental costs attributable to Hg control were $32.31/ton.
      
      Based on these key assumptions, EPA projects an average reduction cost of $27,017 per pound of Hg removed.  Unit by unit costs are provided in Table 2.
      

Table 2  -  Unit by unit cost estimates for achieving an emission rate of 4 lb/TBtu Hg

Plant Name
Unit ID
Capacity (MW)
Heat Rate (Btu/kWh)
Existing PM Controls
(Base to Policy) Hg remv'd (lbm)
 (2007$) unit 
S/lbm Hg
Total Cost
Big Brown
1
575
11001
Cold-side ESP + Fabric Filter + SNCR
-396
3954
1565723
Big Brown
2
575
10931
Cold-side ESP + Fabric Filter + SNCR
-393
3980
1565723
Lewis & Clark
B1
52.3
13787
Wet Scrubber
-31
22920
704682
Martin Lake
1
750
11512
Cold-side ESP + Wet Scrubber
-332
32175
10671737
Martin Lake
2
750
11202
Cold-side ESP + Wet Scrubber
-323
32174
10383770
Martin Lake
3
750
10784
Cold-side ESP + Wet Scrubber
-311
32309
10038209
Monticello
3
750
11246
Cold-side ESP + SNCR + Wet Scrubber
-359
29249
10487787
R M Heskett
B1
29.37
11985
Cold-side ESP
-17
38871
652353
R M Heskett
B2
75.5
11386
Cold-side ESP + Cyclone
-22
53992
1206545
Leland Olds
1
221
11404
Cold-side ESP
-109
25792
2812406
Leland Olds
2
448
11021
Cold-side ESP
-217
23822
5176973
Milton R Young
B1
250
10661
Cold-side ESP + SCR + Wet Scrubber
-64
51542
3272935
Milton R Young
B2
455
10661
Cold-side ESP + SCR + Wet Scrubber
-116
49018
5665257
Stanton
1
130.3472
10990
Cold-side ESP
-77
26601
2050240
Stanton
10
57.35278
10320
Fabric Filter + Dry Scrubber
-31
30538
935770.1
Limestone
LIM1
831
10102
Cold-side ESP + Wet Scrubber
-372
29034
10797351
Limestone
LIM2
858
10108
Cold-side ESP + Wet Scrubber
-384
28982
11134608
Coal Creek
1
554
11219
Cold-side ESP + Wet Scrubber
-162
48056
7781365
Coal Creek
2
560.3
10818
Cold-side ESP + Wet Scrubber
-158
47982
7576786
Laramie River Station
1
565
11312
Cold-side ESP + Wet Scrubber
-235
34742
8170580
Laramie River Station
2
570
10953
Cold-side ESP + Wet Scrubber
-230
34737
7980115
Antelope Valley
B1
450
10988
Fabric Filter + Dry Scrubber
-264
22315
5888636
Antelope Valley
B2
450
11206
Fabric Filter + Dry Scrubber
-269
22269
5993120
Twin Oaks Power One
U1
152
9497
Fabric Filter
-50
38215
1900963
Twin Oaks Power One
U2
153
10364
Fabric Filter
-55
37778
2064287
Coyote
B1
427
11639
Fabric Filter + Dry Scrubber
-228
22122
5043515
Pirkey
1
675
10693
Cold-side ESP + Wet Scrubber
-349
26185
9140141
Great River Energy Spiritwood Station
1
99
8937
Cold-side ESP + Fabric Filter + SNCR + Dry Scrubber
-46
11694
535381.6
Dolet Hills
1
650
10674
Cold-side ESP + Wet Scrubber
-351
27064
9500464












Total
-5948

1.61E+08




Average

27016


