MEMORANDUM


DATE:	December 18, 2017

SUBJECT:	Costs/Impacts of the Proposed 40 CFR Part 63 Subparts NNNN, OOOO and RRRR Monitoring Review Revisions

FROM:	Eastern Research Group, Inc.

TO:		Paula Hirtz, OAQPS/SPPD/MMG


As part of an ongoing effort to improve compliance with various federal air emission regulations, the EPA reviewed the testing and monitoring requirements of the National Emission Standards for Hazardous Air Pollutants for the Surface Coating of Metal Furniture (40 CFR part 63, Subpart RRRR), the Surface Coating of Large Appliances (Subpart NNNN), and the Printing, Coating and Dyeing of Fabrics and Other Textiles (Subpart OOOO) and is proposing the following changes for each subpart. The EPA is proposing to require facilities that comply with the standards by using emission capture systems and add-on controls to conduct periodic air emissions performance testing, with the first of the periodic performance tests to be conducted within 3 years of the effective date of the revised standards and thereafter no longer than 5 years following the previous performance test. The 5-year period would correspond to the renewal period for the facility's 40 CFR part 70 operating permits. Each subpart already requires an initial performance test during which control device efficiency is measured and operating limits for the emission capture system and add-on control device are established. Periodic performance tests are already required by some state and local permitting authorities for facilities subject to these regulations. The addition of periodic performance testing to these federal regulations will require all facilities to conduct periodic testing, reestablish operating limits, and ensure that control systems are properly maintained over time, thereby reducing the potential for acute emissions episodes or non-compliance. 
This proposal would require periodic air emissions testing to measure organic HAP destruction efficiency or organic HAP removal efficiency at the inlet and outlet of the add-on control device, or control device outlet concentration of organic HAP, once every 5 years for existing and new surface coating affected sources using the emission rate with add-on controls compliance option. Emissions would be measured as total gaseous organic mass emissions as carbon using either Method 25 or 25A of appendix A to 40 CFR part 60. 
Note that these subparts specify some emissions limits in terms of organic HAP concentrations or organic HAP destruction efficiencies measured using EPA test methods 25 or 25A. These test methods measure unspeciated total organic compounds. However, most surface coating operations emit volatile organic compounds that are not HAP as well as HAP. We are also aware of situations where the measured gas stream from a coating operation may contain measurable amounts of methane, which is also not a HAP, from natural gas combustion. Using Method 25 or 25A alone in that situation could result in a facility not demonstrating compliance due to the non-HAP organic compound or methane emissions, although we expect this to be unlikely based on available compliance data from facilities using add-on controls. (These compliance data show facilities using add-on controls with a sufficient margin between the emission limit and their actual emission rates that they should be able to rely on just VOC destruction to demonstrate compliance.) To avoid this potential problem, several NESHAP that cover coating operations contain a provision to use EPA Test Method 18 to measure organic HAP emissions (40 CFR Part 63 subparts EE (Magnetic Tape Manufacturing), GG (Aerospace), JJ (Wood Furniture Manufacturing), and VVVV (Boat Manufacturing)), or to simultaneously measure methane emissions along with the total organic compound emissions, and allow the methane emissions to be subtracted from the total organic compound emissions measured using Methods 25 or 25A (40 CFR Part 63 subpart KKKK (Metal Can Coating)). We are proposing to add the option of conducting EPA Method 18 of appendix A to 40 CFR part 60 to Subparts NNNN, OOOO and RRRR to either specifically measure organic HAP emissions, or to subtract methane emissions from measured total gaseous organic mass emissions as carbon. We think the decision to use the method will be made on a site-specific basis, and based on our knowledge of the industries affected by the three subparts, that the decision to use Method 18 will rarely be necessary. Because it is being proposed as an optional method, we did not include the costs associated with the method in this analysis. Facilities performing testing using EPA Methods 25 or 25A also have to use EPA Methods 1, 2, 3, and 4 to measure gas flow rate, molecular weight, and moisture content. These methods are included in the cost estimates.
The estimated costs associated with the monitoring review revisions for subparts NNNN, OOOO and RRRR are incremental costs (i.e., the additional cost associated with complying with an additional requirement beyond that required under the current subpart MACT).
We identified the facilities that will likely need to perform testing by reviewing the most current operating permits for the known major source facilities in each source category and identifying those with add-on controls and using the emission rate with add-on controls compliance option in each subpart. We also used the permits to determine how many add-on controls each facility was using. Some facilities had multiple add-on controls, e.g., one for each coating line.
Emissions compliance testing costs were treated as capital costs because facilities routinely contract with a testing company to perform the testing. Consistent with the latest OMB guidance (OMB 2017), the capital costs were annualized at 3 percent and 7 percent interest over the 5-year testing period. Appendix A presents estimated emissions testing costs as facility-specific and nationwide equivalent annualized costs for each of the NESHAP. The basis for the testing costs is presented in Appendix B. The one-time estimated cost per add-on control range from $18,500 to $18,750 for Method 25 and 25A, and assumes that emissions are measured simultaneously at the inlet and outlet of the device to measure destruction efficiency. (We assumed that facilities would not use EPA Method 18 of appendix A to 40 CFR part 60 and not subtract methane emissions from measured total gaseous organic mass emissions as carbon. EPA Method 18 is not currently listed in these three subparts.) These costs were annualized with a discount rate of 3 percent and 7 percent resulting in an equivalent annualized cost of $4,100 to $4,600 per add-on control per facility. These costs also assume that emission capture systems meet the design criteria for a permanent total enclosure in EPA Method 204, so that capture efficiency does not need to be measured. (See subpart NNNN; § 63.4165(a); subpart OOOO, § 63.4361(a); and subpart RRRR, § 63.4964(a).) 
There were no Surface Coating of Metal Furniture facilities (subpart RRRR) with add-on controls, according to our review of the operating permits for this source category. Therefore, we do not anticipate any facilities in this industry to have performance testing costs, so none are included in the total estimated annual costs. If a facility did have an add-on control, we estimate the annualized cost for initial and periodic testing would be an annual cost of about $4,100 to $4,600 per add-on control per facility. 
These testing cost estimates for subparts NNNN and OOOO account for facilities that are already required by their states to perform periodic emissions testing to measure control device efficiency as part of renewing their operating permits. If a facility had more than one control device (e.g., for two separate coating lines) we assumed that each device would be tested independently.
The original total estimated equivalent annualized cost for the Surface Coating of Large Appliances industry (subpart NNNN) was $8,100 to $9,100 for one facility with surface coating lines and separate thermal oxidizers. Review of the 40 CFR part 70 operating permit for this one facility showed that it is required to perform testing as part of renewing their permit. Therefore, the proposed periodic testing would not add any new testing requirements for this facility and the cost estimated for this facility would not be likely to occur, so the cost is not included in the total estimated annual costs.
The original total estimated equivalent annualized cost for the Printing, Coating and Dying of Fabrics and other Textiles industry (subpart OOOO) was $78,000 to $87,000. Eight facilities in this source category had two control devices per facility. Several facilities are already required to perform periodic testing of the VOC destruction efficiency of their add-on controls as a condition of renewing their 40 CFR part 70 operating permits or by state regulations. For these facilities, the proposed periodic testing would not add any new testing requirements and the costs estimated for these facilities would not be likely to occur, so they are not included in the total estimated annual costs. 

Appendix A: Equivalent Annualized Costs (EAC) with Discount Rates by Facility and Industry Sector
(No metal furniture surface coating facilities are known to use add-on controls for compliance with subpart RRRR)
                                     Rule
                               Facility (State)
                               Process/Equipment
                                    Control
                         Do we have operating permit?
                        Is Testing Required by Permit?
                            Estimated Testing Costs
                          EAC w/ 7% Discount (5-year)
                          EAC w/ 3% Discount (5-year)
                        Large Appliance Surface Coating
NNNN
Whirlpool Findlay Division (OH)
Dishrack Adhesion Promoter Coating - 2 lines
2 Thermal Oxidizers 
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
           Coating Printing and Dyeing of fabric and Other Textiles
OOOO
Industrial Laminates Norplex (IA)
Treater 207 and 208 Compounded Resin Coat of Web Material 
Thermal Oxidizer 
                                      Yes
                                      No
                                    $18,750
                                   $9,145.90
                                   $8,188.30


Treater 201 Compounded Resin Coat of Web Material 
Thermal Oxidizer 
                                       
                                       
                                    $18,750
                                       
                                       
OOOO
HBD Thermoid Inc. (KS)
Departments 10 and 20
Thermal Oxidizer 
                                      No
                                       -
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Pioneer Plastics Corp. (ME)
Multiple lines (Coater, impregnator, coater, resin blender, reactors) 
2 Thermal Oxidizers 
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
Duro Textiles LLC (MA)
Coating lines #1,2,3 
Thermal Oxidizer 
                                      Yes
                                      No
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Hood Coatings (MA)
Coating and Printing
Thermal Oxidizer 
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
Day International (MI)
Coating and Curing
Carbon Adsorber
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
Worthen Coated Fabrics (MI)
Fabric Coating Line
Thermal Oxidizer 
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
Veyance Technologies (NE)
Spreader
Thermal Oxidizer 
                                      Yes
                                      No
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Avery Dennison RIS (NY)
Reactor room
Thermal Oxidizer 
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
Endicott Interconnect Technologies (NY)
Theater Towers
2 Thermal Oxidizers
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
American & Efird LLC Dyeing and Finishing (NC)
Thread bonding lines
Thermal Oxidizer 
                                      Yes
                                      No
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Coats American (NC)
Thread bonding lines
2 Catalytic Oxidizers
                                      Yes
                                      No
                                    $37,500
                                   $9,145.90
                                   $8,188.30
OOOO
Coveris Advance Coatings (NC)
Multiple roll-type coaters
Thermal Oxidizer 
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
Flint Group (NC)
Unknown
Thermal Oxidizer 
                                      No
                                       -
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Highland Industries (NC)
Finishing Range
Thermal Oxidizer 
                                      Yes
                                      No
                                    $18,750
                                   $9,145.90
                                   $8,188.30
OOOO

Unknown
Carbon Adsorber
                                       
                                       
                                    $18,750
                                       
                                       
OOOO
Synthetic Finishing Longview (NC)
Stain Repellant Coater
Chilled water condenser and two dual bed regenerative carbon adsorbers in parallel
                                      Yes
                                      No
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Trelleborg Coated Systems (NC)
Mixers and spreaders
Carbon Adsorber
                                      Yes
                                      No
                                    $18,750
                                   $9,145.90
                                   $8,188.30


Fabric Coaters
Thermal Oxidizer 
                                       
                                       
                                    $18,750
                                       
                                       
OOOO
Sioux Manufacturing Corporation Kevlar Coating Facility (ND)
Fabric coaters
Catalytic Oxidizer
                                      Yes
                                      No
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Cooley Incorporated (RI)
drying ovens/rotary screen printer
Thermal Oxidizer 
                                      Yes
                                      No
                                    $18,750
                                   $4,572.95
                                   $4,094.15
OOOO
Kenyon Industries (RI)
2 Solvent-based Fabric Coating Lines (2)
2 Thermal Oxidizers
                                      Yes
                                      No
                                    $37,500
                                   $9,145.90
                                   $8,188.30
OOOO
Graniteville Specialty Fabrics (SC)
Multiple coating lines
2 Thermal Oxidizers 
                                      Yes
                                      Yes
                                       -
                                       -
                                       -
OOOO
Kinyo Virginia, Inc. (VA)
Coating
Carbon Adsorber
                                      Yes
                                      No
                                    $18,750
                                   $4,572.95
                                   $4,094.15


Appendix B: Detailed Information for Testing Methodology Costs
          Testing to Accomplish Destruction Efficiency Determinations
Required: Control device inlet and outlet testing simultaneously, EPA Method 1, 2, 3, 4, and 25 (Total Gaseous Non-Methane Organics reported as Carbon (TGNMOC) manual sample collection and analysis) conducted simultaneously, three complete test sets at one hour each.
                                    Element
                                     Cost
                                  Assumptions
Labor  -  Preparation and Staging
   P4 = 8 hours 
   P2 = 16 hours
   P1 = 4 hours
$2,168
Test plan/QAPP preparation, equipment preparation, calibrations (pitots, thermocouples, dry gas meters, etc.), packing
Labor  -  Travel to and Set-up
   P4 = 20 hours
   P2  -  20 hours
$3,860
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Set-up of equipment in preparation for first test completed.
Labor  -  Testing 
   P4 = 16 hours
   P2  -  16 hours
$3,088
All three test runs at inlet and outlet conducted in one day.
Labor  -  Travel from and Break-down
   P4 = 20 hours
   P2  -  20 hours
$3,860
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Break-down of equipment after last test run completed.
Labor  -  Recovery
   P2  -  12 hours
$660
Equipment unloading, repair, and post-test calibration checks.
Labor  -  Reporting
   P4 = 6 hours
   P1 = 4 hours
$1,012
Test report preparation including all field data and destruction efficiency determinations.
M25 Equipment
   6 samples ($75/sample)
$450
Trap and tank including pre-cleaning, blanking, and evacuation.
M25 Sample Analysis
   6 samples ($250/sample)
$1500
TGNMOC from trap and tank
Miscellaneous Expendable Supplies
$500
Fuel, Ice, Dry Ice, Fittings, Hardware, etc.
Shipping: 6 samples ($30/ sample)
$180
Samples to M25 specialty lab for analysis
Lodging: 4 people, 2 nights each ($109/night)
$872
Lodging at site
Meals: 4 people, 3 days each ($51/day)
$612
Meals at site
                                                                          TOTAL
$18,762

   P4 - $138/hour, P2 - $55/hour, P1 - $46/hour
          Testing to Accomplish Destruction Efficiency Determinations
Required: Control device inlet and outlet testing simultaneously, EPA Method 1, 2, 3, 4, and 25A (TGNMOC direct measurement) conducted simultaneously, three complete test sets at one hour each.
                                    Element
                                     Cost
                                  Assumptions
Labor  -  Preparation and Staging
   P4 = 8 hours 
   P2 = 18 hours
   P1 = 4 hours
$2,278
Test plan/QAPP preparation, equipment preparation, calibrations (pitots, thermocouples, dry gas meters, field VOC analyzer, etc.), packing
Labor  -  Travel to and Set-up
   P4 = 22 hours
   P2  -  22 hours
$4,246
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Set-up of equipment in preparation for first test completed.
Labor  -  Testing 
   P4 = 16 hours
   P2  -  16 hours
$3,088
All three test runs at inlet and outlet conducted in one day.
Labor  -  Travel from and Break-down
   P4 = 20 hours
   P2  -  20 hours
$3,860
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Break-down of equipment after last test run completed.
Labor  -  Recovery
   P2  -  16 hours
$880
Equipment unloading, repair, and post-test calibration checks.
Labor  -  Reporting
   P4 = 6 hours
   P1 = 4 hours
$1,012
Test report preparation including all field data and destruction efficiency determinations.
M25A Equipment
   2 field VOC analyzers ($300/unit)
$600
Rental
Miscellaneous Expendable Supplies
$900
Fuel, Ice, Support gases, Calibration gas, Fittings, Hardware, etc.
Shipping
   2 parcels ($75/parcel)
$150
Field VOC rental units returned
Lodging
   4 people, 2 nights each ($109/night)
$872
Lodging at site
Meals
   4 people, 3 days each ($51/day)
$612
Meals at site
                                                                          TOTAL
$18,498

   P4 - $138/hour, P2 - $55/hour, P1 - $46/hour
                                       
          Testing to Accomplish Destruction Efficiency Determinations
Optional: Control device inlet and outlet testing simultaneously, EPA Method 18 (Methane manual sample collection and analysis) conducted simultaneously, three complete test sets at one hour each.
                                    Element
                                     Cost
                                  Assumptions
Labor  -  Preparation and Staging
   P4 = 2 hours 
   P2 = 8 hours
   P1 = 1 hours
$762
Test plan/QAPP preparation (addition), equipment preparation, calibrations, packing
Labor  -  Travel to and Set-up
   P2  -  20 hours
$1,100
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Set-up of equipment in preparation for first test completed.
Labor  -  Testing 
   P2  -  16 hours
$880
All three test runs at inlet and outlet conducted in one day.
Labor  -  Travel from and Break-down
   P2  -  20 hours
$1,100
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Break-down of equipment after last test run completed.
Labor  -  Recovery
   P2  -  8 hours
$440
Equipment unloading, repair, and post-test calibration checks.
Labor  -  Reporting
   P4 = 1 hours
   P1 = 1 hours
$184
Methane data added to test report prepared for the required testing.
M18 Equipment
   6 samples ($50/sample)
$300
Train and Tedlar bag or canister including pre-cleaning, blanking, and evacuation (as needed).
M18 Sample Analysis
   6 samples ($50/sample)
$300
Methane from Tedlar bag or canister
Miscellaneous Expendable Supplies
$400
Fuel, Fittings, Hardware, etc.
Shipping
   6 samples ($30/ sample)
$180
Samples to M18 specialty lab for analysis
Lodging
   2 people, 2 nights each ($109/night)
$436

Lodging at site
Meals
   2 people, 3 days each ($51/day)
$306

Meals at site
                                                                          TOTAL
$6,388

   P4 - $138/hour, P2 - $55/hour, P1 - $46/hour
          Testing to Accomplish Destruction Efficiency Determinations
Optional: Control device inlet and outlet testing simultaneously, EPA Method 18 (Methane direct measurement) conducted simultaneously, three complete test sets at one hour each.
                                    Element
                                     Cost
                                  Assumptions
Labor  -  Preparation and Staging
   P4 = 2 hours 
   P2 = 8 hours
   P1 = 1 hours
$762
Test plan/QAPP preparation (addition), equipment preparation, calibrations, packing
Labor  -  Travel to and Set-up
   P2  -  20 hours
$1,100
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Set-up of equipment in preparation for first test completed.
Labor  -  Testing 
   P2  -  16 hours
$880
All three test runs at inlet and outlet conducted in one day.
Labor  -  Travel from and Break-down
   P2  -  20 hours
$1,100
Use of local testing company so travel is minimized. Travel by truck/company vehicle. Break-down of equipment after last test run completed.
Labor  -  Recovery
   P2  -  8 hours
$440
Equipment unloading, repair, and post-test calibration checks.
Labor  -  Reporting
   P4 = 1 hours
   P1 = 1 hours
$184
Methane data added to test report prepared for the required testing.
M18 Equipment
   2 field Methane analyzers ($300/unit)
$600
Rental
Miscellaneous Expendable Supplies
$500
Fuel, Support gases, Calibration standard, Fittings, Hardware, etc.
Shipping
   2 parcels ($75/parcel)
$150
Field Methane rental units returned
Lodging
   2 people, 2 nights each ($109/night)
$436

Lodging at site
Meals
   2 people, 3 days each ($51/day)
$306

Meals at site
                                                                          TOTAL
$6,458

   P4 - $138/hour, P2 - $55/hour, P1 - $46/hour
