Technical Support Document (TSD) for the Cross State Air Pollution Rule Supplemental Rulemaking
                      Docket ID No. EPA-HQ-OAR-2009-0491
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
Determination of State Budgets for the Final Ozone Supplemental of the Transport Rule
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                      U.S Environmental Protection Agency
                          Office of Air and Radiation
                                 December 2011

	EPA finalized the Transport Rule in July of 2011.  At the same time, EPA also issued a Supplemental Notice of Proposed Rulemaking (SNPR) proposing to bring six states into the Transport Rule ozone-season NOX program.  In this final rulemaking, EPA is finalizing FIPs to address significant contribution to nonattainment and interference with maintenance in Iowa, Michigan, Missouri, Oklahoma, and Wisconsin.  For two of these states (Iowa and Missouri), the state budgets in this final rule are unchanged from those budgets as quantified at proposal.  For three of these states (Michigan, Oklahoma, and Wisconsin), EPA is finalizing state budgets that reflect adjustments in certain unit-level assumptions that result in changes from the budgets presented for these states in the proposal.  See Section III.E of the preamble for an explanation of these adjustments.  This technical support document (TSD) shows the underlying data and calculations used to determine the amount by which each of these three states have their budget adjusted from proposal.  The first section below summarizes final budgets for all of the states for which EPA is finalizing a FIP under this rule.  The second section identifies each specific unit-level adjustment and quantifies its impact on the relevant state budget and the number of allowances put into the relevant new unit set-aside (NUSA), as well as the impact to the relevant assurance level for that state, using the methodologies described in the final Transport Rule.
Section A: Summary of State Emission Budgets
	EPA is finalizing FIPs to control ozone-season NOX emissions from five states.  The state budgets determined for these states maintain a consistent application of the methodology described in the final Transport Rule to quantify and eliminate emissions that significantly contribute to nonattainment and interfere with maintenance of the NAAQS assessed in that rulemaking.  
                Final Ozone-Season NOX Budgets (thousand tons)
 
 
                                 Final Budget
 State
 
                                     2012
                                     2014
Michigan
 
                                                                         28.041
                                                                         27.016
Oklahoma
 
                                                                         36.567
                                                                         21.835
Wisconsin
 
                                                                         14.784
                                                                         14.296
Iowa
 
                                                                         16.532
                                                                         16.207
Missouri
 
                                                                         22.762
                                                                         21.073
		
Section B:  Quantification of  State Emission Budgets, Assurance Levels, and NUSAs Affected by Unit-Level Adjustments
   1)    Michigan
      As described in the preamble, EPA is finalizing Michigan's 2012 and 2014 ozone-season (OS) NOX budget with an adjustment to account for no SCR being installed at Monroe Unit 2.  This results in a 2,289 ton increase to the state's ozone-season NOX budgets in 2012 and 2014.  
      
Table 1.a: Calculation to Determine Michigan Ozone Season Budget Increase Assuming No SCR at Monroe Unit # 2
 
 
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
Plant
Unit
Emissions from TR_Remedy Final_2012 (1000 tons)
HI from TR_Remedy_Final_2012 (Tbtu)
Remedy Emission Rate from from TR_Remedy_Final_2012 (lbs/mmBtu)
Adjusted Emission Rate (lbs/mmBtu)
Adjusted Emissions
Budget Adjustment (1000 tons)
Calculation
 
 
 
                                      A/B
                                       
                                     D x B
                                     E - A
Monroe
                                                                              2
                                                                          0.675
                                                                    19.46356305
                                                                           0.07
                                                                         0.3046
                                                                    2.964300653
                                                                          2.289
      
      Columns A, B, and C show the OS NOX emissions, heat input, and emission rate from the TR_Remedy_Final_2012 modeling when an SCR is assumed to be present at Monroe Unit 2.  Because no SCR is present, EPA modified the emission rate to reflect the "controlled NOX policy rate" in the NEEDS version from the September 1, 2010 TR Notice of Data Availability (NODA) (column D).  This value reflects the NOX emission rate assumed in EPA's modeling of the Transport Rule as originally proposed, when EPA did not assume an SCR to be present at the unit.  This value approximates the emission rate expected at the unit at a cost threshold of $500/ton when no SCR is present at the unit.  EPA multiplied this NOX rate (shown in column D) by the remedy heat input shown in column B to obtain a revised emission projection for the unit (column E).  The difference between this revised emission projection (no SCR assumed) and the final Transport Rule remedy analysis emission projection (SCR assumed) determines the amount of the adjustment to the state's ozone-season NOX budget as compared to the budget presented at proposal (column F).
   The final values for the state's ozone-season NOX budget, assurance level, and new unit set-asides are given in the preamble.

   2)    Oklahoma
      As explained in the preamble section III of the final supplemental rule, EPA has recalculated Oklahoma's state budget for the 2012 ozone season such that it does not reflect the installation or upgrade of any new combustion controls (see Appendix).  This recalculation demonstrates that ozone-season NOX emissions would be 9,522 tons higher in the 2012 ozone season without the new and upgraded combustion controls previously assumed; EPA has adjusted the final state budget for the 2012 ozone season only to reflect these emissions.  The table below shows the values and calculations used to derive the 9,522 figure.
Table 2a. Oklahoma Ozone Season NOX Budget Adjustment for the 2012 Ozone Season Reflecting No Combustion Control Upgrade or Installation 
                                  (1000 tons)
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H
                                       I
Plant Name
ORIS Plant Code
Unit ID
2012 OS NOX Remedy Emissions (1000 tons)
2012 Heat Input (Tbtu)
Emission Rate with LNB Upgrade
Base Emission Rate (lbs/mmBtu)
Adjusted Emissions (1,000 tons)  
Adjustment Amount (1,000 tons)
Muskogee
                                                                           2952
6
                                     1.036
                                    14.216
                                     0.146
                                     0.347
                                  2.466710049
                                     1.430
Muskogee
                                                                           2952
4
                                     1.045
                                    14.613
                                     0.143
                                     0.321
                                  2.343145371
                                     1.298
Sooner
                                                                           6095
1
                                     1.071
                                    14.939
                                     0.143
                                     0.319
                                  2.386135045
                                     1.315
Muskogee
                                                                           2952
5
                                     1.042
                                    14.647
                                     0.142
                                     0.314
                                  2.301435722
                                     1.260
Sooner
                                                                           6095
2
                                     1.111
                                    15.580
                                     0.143
                                     0.314
                                  2.445420837
                                     1.334
GRDA
                                                                            165
1
                                     1.465
                                    14.507
                                     0.202
                                     0.349
                                  2.528559526
                                     1.063
Northeastern
                                                                           2963
3314
                                     1.704
                                    13.160
                                     0.259
                                     0.394
                                  2.594200981
                                     0.890
Northeastern
                                                                           2963
3313
                                     1.649
                                    13.137
                                     0.251
                                     0.382
                                  2.511937905
                                     0.863
Hugo
                                                                           6772
1
                                     1.269
                                    14.103
                                     0.180
                                     0.190
                                  1.336456463
                                     0.067
Total
 
 
                                       
                                       
                                       
                                       
                                       
                                     9.522

Columns A, B, and C provide unit level information about the facility.  Columns D, E, and F provide projected emissions, heat input and ozone season NOX emission rates from EPA's 2012 TR_Remedy_Final modeling.  The emission rate in column F, which formed the basis for the column D expected emissions, was based on the assumption that the facilities would make certain upgrades or installations with respect to combustion controls.  Column G reflects the ozone-season NOX emission rate at these facilities assuming no combustion control upgrades or installation.  That is, column G reflects emission rates that are typical to that unit's historic operations.  This value is obtained from "controlled NOX Base rate" in the NEEDS v.410 used for the Final Transport Rule .  Column H reflects the emission values expected for each unit when the projected heat input (column E) is multiplied by the historic emission rate (column G).  The difference between column H and column D (when summed) reflects the total amount by which the Oklahoma ozone-season NOx budget is adjusted as compared to the budget presented at proposal.  
      Also, as explained in preamble section III, EPA is finalizing an Oklahoma state budget specifically for the 2012 ozone season that reflects revised projected emissions at oil/gas steam generators consistent with an immediate-term dispatch pattern that maintains the firm power supply arrangements already in place to serve local electricity demand.  The table below illustrates the calculations used to derive the adjustment to the Oklahoma state budget for the 2012 ozone season assuming a dispatch pattern of oil/gas steam generation in 2012 consistent with recently observed operational data at those units.
Table 2b. Oklahoma Ozone Season NOX Budget Adjustment Reflecting No Major Curtailment of O/G Steam Generating Units
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H
                                       I
                                       J
Plant Name
Plant Type
ORIS Code
Unit ID
2012 OS NOX Remedy Heat Input (mmBtu)
2012 OS NOX Remedy Emissions (1,000 tons)
2010 Heat Input (mmBtu)
NEEDS Controlled NOX Base Rate (lbs/mmBtu)
Emissions Assuming 2010 Heat Input 
(1,000 tons)
Emission Adjustment for 2012 
(1,000 tons)
Anadarko Plant
O/G Steam
3006
3
                                                                              0
                                                                              0
              1,917 
                                                                           0.22
              0.000 
              0.000 
Horseshoe Lake
O/G Steam
2951
6
                                                                              0
                                                                              0
        3,022,970 
                                                                           0.28
              0.427 
              0.427 
Horseshoe Lake
O/G Steam
2951
8
                                                                              0
                                                                              0
        5,904,903 
                                                                           0.14
              0.405 
              0.405 
Mooreland
O/G Steam
3008
1
                                                                              0
                                                                              0
            52,018 
                                                                           0.34
              0.009 
              0.009 
Mustang
O/G Steam
2953
1
                                                                              0
                                                                              0
          648,384 
                                                                           0.20
              0.066 
              0.066 
Mustang
O/G Steam
2953
2
                                                                              0
                                                                              0
          636,546 
                                                                           0.15
              0.048 
              0.048 
Mustang
O/G Steam
2953
3
                                                                              0
                                                                              0
        1,700,657 
                                                                           0.24
              0.200 
              0.200 
Mustang
O/G Steam
2953
4
                                                                              0
                                                                              0
        1,884,097 
                                                                           0.35
              0.325 
              0.325 
Northeastern
O/G Steam
2963
3302
                                                                              0
                                                                              0
        8,298,493 
                                                                           0.40
              1.644 
              1.644 
Ponca
O/G Steam
762
2
                                                                              0
                                                                              0
              1,895 
                                                                           0.19
              0.000 
              0.000 
Riverside
O/G Steam
4940
1502
                                                                              0
                                                                              0
        6,559,178 
                                                                           0.23
              0.742 
              0.742 
Southwestern
O/G Steam
2964
8002
                                                                              0
                                                                              0
          457,715 
                                                                           0.33
              0.075 
              0.075 
Southwestern
O/G Steam
2964
8003
                                                                              0
                                                                              0
        4,603,800 
                                                                           0.44
              1.005 
              1.005 
Southwestern
O/G Steam
2964
801N
                                                                              0
                                                                              0
          244,030 
                                                                           0.25
              0.031 
              0.031 
Southwestern
O/G Steam
2964
801S
                                                                              0
                                                                              0
          244,058 
                                                                           0.21
              0.025 
              0.025 
Tulsa
O/G Steam
2965
1402
                                                                              0
                                                                              0
        1,029,085 
                                                                           0.18
              0.094 
              0.094 
Tulsa
O/G Steam
2965
1403
                                                                              0
                                                                              0
          112,296 
                                                                           0.28
              0.015 
              0.015 
Tulsa
O/G Steam
2965
1404
                                                                              0
                                                                              0
        1,058,014 
                                                                           0.19
              0.099 
              0.099 
Total
 
 
 
                                                                              0
                                       0
                                  36,460,055
                                       
                                     5.210
                                     5.210




                                                                               
                                       
                                       
                                       
                                       
                                       

Columns A, B, C and D provide unit level information about the facility.  Columns E, and F provide projected ozone season heat input and emissions from EPA's 2012 TR_Remedy_Final modeling.  The heat input in column E, which formed the basis for the column E expected emissions, was based on the assumption that the facilities would reduce uneconomic generation from these less efficient sources under the Transport Rule market incentives.  Column G reflects the 2010 ozone-season NOX heat input at these facilities.  Column H reflects emission rates that are typical to that unit's historic operations and assumed as the "controlled NOX Base rate" in the NEEDS IPM version 4.10 used for the final Transport Rule.  Column I reflects the emission values expected for each unit when the 2010 heat input (column E) is multiplied by the emission rate (column H).  The difference between column I and column F (when summed) reflects the total amount by which the Oklahoma ozone-season NOX budget is adjusted as compared to the budget presented at proposal.
      The final values for the state's ozone-season NOX budget, assurance level, and new unit set-asides are given in the preamble.

  

   3) Wisconsin
      As explained in the preamble section III.E of the final supplemental rule, EPA has recalculated Wisconsin's 2012 and 2014 ozone-season budget such that it does not reflect the installation of SCR control technology at J P Madgett.  This results in a 1,080 ton increase to the state's ozone-season NOX budget relative to what was proposed in the SNPR.  The table below details the values and calculations used to arrive at that amount.
Table 3.a: Calculation to Determine Wisconsin Ozone Season NOX Budget Adjustment Assuming No SCR at J P Madgett 
 
 
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                  Plant Name
                                    Unit ID
                Emissions from TR_Remedy Final_2012 (1000 tons)
                  Heat Input from TR_Remedy_Final_2012 (Tbtu)
           Remedy Emission Rate fromTR_Remedy_Final_2012 (lbs/mmbtu)
                       Revised Emission Rate (lbs/mmbtu)
                         Revised Emissions (1000 tons)
                       Net Budget Adjustment (1000 tons)
                                  Calculation
                                       
                                       
                                       
                                      A/B
                                       
                                    D x B/2
                                     E - A
                                  J P Madgett
                                      B1
                                  .257068143
                                  10.28272555
                                      .05
                                      .26
                                     1.337
                                     1.080
   
   Columns A, B, and C show the emissions, heat input, and emission rate from the 2012 remedy modeling for the J P Madgett unit.  However, the emission rate in column C reflects the existence of a SCR.  Because no SCR is present, EPA calculates the source's expected emissions using the emission rate shown for this unit in the EPA's analysis of the base case for the final Transport Rule, as found in the TR_Base_Case_Final for 2012 (column D) of 0.26 lbs/mmBtu.  This ozone-season NOX emission rate reflects generation at this unit without the operation of the assumed SCR, which did not operate in the final Transport Rule base case because it was modeled as a "dispatchable" control that was not found to be economic to operate in that scenario.  Moreover, this emission rate reflects one typically observed at past operation of the facility when no SCR was present.  The J P Madgett emission rate without operating an SCR (column D) multiplied by the remedy heat input (column B) yields the projected emissions from the unit if no SCR were assumed to be in place.  The difference between the projected emissions when no SCR is in place (column E) and the projected emissions when an SCR is assumed (column A) determines the amount of the adjustment to the state's 2012 and 2014 ozone-season NOX budgets as compared to the budget presented at proposal (column F).
   The final values for the state's ozone-season NOX budget, assurance level, and new unit set-asides are given in the preamble.

                                     APPENDIX
Assessment of Resource Adequacy for the 2012 Ozone Season in Oklahoma
EPA is setting the Oklahoma state budget for the 2012 ozone season at a level that does not necessitate the installation of new low-NOX burners.  See preamble section III for further discussion.  At proposal, EPA quantified Oklahoma's 2012 ozone-season NOX state budget assuming that a number of units representing 4,452 MW of capacity would install new low-NOX burners (LNB) before the 2012 ozone season.  See Table 1 for a list of those units showing each unit's net summer dependable capacity.
Table 1.  Oklahoma Units Projected to Install Low NOX Burners under the Transport Rule

Plant Name
Unit ID
County
Capacity (MW)
GRDA
1
Mayes
                                                                            490
Muskogee
4
Muskogee
                                                                            511
Muskogee
5
Muskogee
                                                                            522
Muskogee
6
Muskogee
                                                                            515
Northeastern
3313
Rogers
                                                                            450
Northeastern
3314
Rogers
                                                                            450
Sooner
1
Noble
                                                                            535
Sooner
2
Noble
                                                                            540
Hugo
1
Choctaw
                                                                            440
Total


                                                                           4452

As explained in preamble section III, EPA assessed the relationship of the capacity identified in Table 1 to the relevant region's total available capacity that is taken into account in resource adequacy determinations.  This assessment shows that if the capacity identified in Table 1 were to be unavailable due to the installation of low-NOX burners during the 2012 ozone season, the ozone-season planning reserve margin in the IPM region containing Oklahoma (SPPS) would fall below the target planning reserve margin of 13.6% (see Table 2).

Table 2.  IPM 2012 Ozone-Season Reserve Margin Projections for SPPS

                          Including All Plants in IPM
                         With Table 1 Capacity Removed
Capacity (MW)
                                    39,093
                                    34,641
Ozone-Season Peak Load (MW)
                                    31,785
                                    31,785
Margin (MW)
                                     7,308
                                     2,856
Reserve Margin†
                                     23.0%
                                     9.0%
Target Planning Reserve Margin
                                     13.6%
                                     13.6%

† The reserve margin is calculated as the margin (third row) divided by the available peak load (second row)
   
The potential unavailability of this capacity would only frustrate the region's target planning reserve margin during the ozone season, because the ozone season period represents the highest projected load (electricity demand).  Even without this capacity available, the regional reserve margin would remain higher than the target planning reserve margin during the remainder of the year, as shown in Table 3.  Because these units would be able to complete LNB installation without impairing the region's ability to meet its target planning reserve margin after the 2012 ozone season, EPA is not adjusting Oklahoma's state budgets for years subsequent to 2012 from the budget as quantified at proposal.
Table 3.  IPM 2012 Non-Ozone-Season Reserve Margin Projections for SPPS

                          Including All Plants in IPM
                         With Table 1 Capacity Removed
Capacity (MW)
                                    39,093
                                    34,641
Non-Ozone-Season Peak Load (MW)
                                    24,025
                                    24,025
Margin (MW)
                                    15,068
                                    10,616
Reserve Margin†
                                      62%
                                      44%
Target Planning Reserve Margin
                                     13.6%
                                     13.6%

† The reserve margin is calculated as the margin (third row) divided by the peak load (second row)

