E [C]/R Incorporated
                  Providing Environmental Technical Support Since 1989




MEMORANDUM   

DATE:		June 8, 2011

TO:		Melanie King, EPA OAQPS/SPPD/ESG

FROM:	Tanya Parise, EC/R, Inc.

SUBJECT:	Summary of the May 9, 2011 Teleconference with AEA Regarding Issues Related to Remote Areas of Alaska Subject to the CI NSPS

--------------------------------------------------------------------------------


INTRODUCTION

      A follow-up meeting was held between EPA and the Alaska Energy Authority (AEA) to further discuss AEA concerns related to stationary compression ignition (CI) engines located in remote areas of Alaska that are subject to new source performance standards (NSPS) in 40 CFR part 60, subpart IIII.  EPA proposed amendments to the NSPS on June 8, 2010 (75 FR 32612) and has to finalize amendments by June 8, 2011.  
      
ATTENDEES

Michael Horowitz, EPA
Kris Noonan, Alaska Industrial Development and Export Authority 
Bob Wayland, EPA 
Chris Mello, Alaska Industrial Development and Export Authority
Melanie King, EPA 
Steve Stassel, Alaska Energy and Engineering
Tanya Parise, EC/R


SUMMARY OF TELECONFERENCE 

	EPA had a prior discussion with representatives from AEA on March 23, 2011 (see summary of that meeting available from the docket EPA-HQ-OAR-2010-0295).  During that meeting, EPA and AEA discussed the unique issues facing stationary diesel engines located in remote areas of Alaska in terms of complying with the requirements under the CI NSPS.  Specifically, the cost of purchasing, installing and maintaining diesel particulate filters (DPF) is a concern according to AEA.  

	EPA asked if additional information had been obtained from DPF vendors since the previous meeting.  AEA indicated that it had talked with DPF vendors since the last meeting with EPA and was quoted a price between $5,000 and $30,000 depending on the size and manufacturer of the DPF.  AEA explained that DPF installation would be unlike pre-engineered solutions such as Tier 4i original engine manufacturer (OEM) options, for instance from manufacturer John Deere, which has been tested in a research and development environment.  According to AEA, installing DPF in remote Alaska is not cost effective, and opposed to the compact solutions offered directly from the OEM, DPF would not be favorable because each power plant would require a unique installation and design.  AEA noted that it does not know what the installation costs would be because it would have to be assessed on a case-by-case basis and would depend on the number of engines at the plant.  According to AEA each power plant has three to four engines.  AEA estimated, however, that the installation would cost at least $15,000 for a $5,000 DPF and perhaps up to $40,000 or $50,000 for other sites.  AEA emphasized that the installation cost is much higher than the capital cost of the DPF unit and the cost would be multiplied by the number of engines at the power plant so the cost would be three to four times higher per plant.  In addition, modifications to the plant may also be necessary to accommodate the installation and maintenance of the DPF, according to AEA.  Plus, the majority of power plants in remote Alaska have size concerns due to space issues.  
	
	AEA expressed concern regarding the blended oil issue and said that none of the vendors it contacted could speak to that.  In California, AEA said that the material from the DPF is considered hazardous waste.  In remote Alaska, there are no permitted waste facilities.  Also, none of the 140 power plants have air compressors on site to vacuum the waste.

	AEA stressed the point that the inventory of stationary diesel engines is much higher in the continental United States and questioned how it is determined that a single engine should be treated the same as thousands of engines in urban areas.
	
	AEA questioned the definition of rural areas in Alaska and expressed that it did not believe the current criteria of basing it upon accessibility to the Federal Aid Highway System (FAHS) was appropriate.  

	Finally, AEA inquired about the definition of reconstruction in the proposal, which was a departure from how the term has previously been defined.  According to AEA, rebuilds and overhauls are performed in order to achieve 60,000 or more hours from the engine.    
