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MEMORANDUM


TO:	Steam Electric Rulemaking Record

FROM:	TJ Finseth, ERG
	Danielle Lewis, ERG
	
DATE:	April 19, 2013

SUBJECT:	Additional Announced Retirements Not Accounted for in the Proposed ELGs


ERG is providing technical support to the U.S. Environmental Protection Agency's Office of Water, Engineering and Analysis Division (EAD) for development of effluent limitations guidelines and standards (ELGs) for the Steam Electric Power Generating Industry. EPA, with the support of ERG, distributed the Questionnaire for the Steam Electric Power Generating Effluent Guidelines (Steam Electric Survey) to 733 power plants in the summer of 2010 to gather plant-specific data on the steam electric industry. The Steam Electric Survey requested data on plant operations in 2009. EPA used the collected data to inform various analyses including, but not limited to, estimating the compliance costs and pollutant removals associated with the proposed ELGs, developing the profile of the industry, and obtaining characterization data for the wastestreams generated by the industry. 

EPA recognizes that plant operations and future plans regarding upgrades and modifications may have changed since the plants submitted responses to the Steam Electric Survey. Therefore, ERG gathers information on an ongoing basis from public sources, including company press releases and information from technology vendors to account for the following changes to the industry:

Plants retiring units;
Plants converting fuel types to eliminate fossil fuel combustion residuals, especially residuals from coal or petroleum coke;
Plants upgrading a flue gas desulfurization (FGD) or leachate wastewater treatment system; and
Plants converting one or more units to a dry fly or bottom ash handling system.
The memorandum entitled, "Changes to Industry Profile for Steam Electric Generating Units for the Steam Electric Effluent Guidelines Proposed Rule" (DCN SE02033), describes the process ERG used to identify and verify the retirements, fuel conversions, upgrades, and ash system conversions at plants. The memorandum also provides a listing of all the changes to the industry profile that ERG incorporated for the proposed ELGs. Specifically, as described in that memorandum, due to the need to complete certain analyses (e.g., compliance costs, pollutant loadings) to meet the deadline for proposing the revised ELGs, ERG incorporated unit retirements or fuel conversions announced through August 2012 in the costs and loadings analyses for the proposed ELGs.  ERG was not able to incorporate retirements announced after August 2012 into the costs and loadings analyses.

This memorandum lists those additional unit retirements or fuel conversions announced after August 2012 (through the date of this memorandum), and provides an estimate of the reductions in incremental compliance costs and pollutant reductions that would result from these retirements/conversions. For this analysis, ERG considered announced plans through 2022, which marks the end of the implementation period for the ELGs. Therefore, in addition to assessing the retirements and fuel conversions announced since August 2012, ERG also reevaluated the announcements identified prior to August 2012 because ERG only excluded plants/units from the costs and loadings analyses if the retirement/conversion was scheduled to occur on or prior to December 31, 2014.  ERG will consider all of these announcements, as well as any additional future announcements, when developing the industry profile and the compliance costs and loadings analyses for the final ELGs.

Table 1 lists the name and location of plants announcing the retirement or fuel conversion of at least one generating unit scheduled to occur by December 31, 2022, that were not already incorporated into EPA's industry profile and costs and loadings analyses for the proposed ELGs. Table 1 also identifies the company press release or other source documenting the announcement, which EPA has included in the rulemaking record. 

Table 1. Plants with at Least One Generating Unit Retiring or Converting Fuels by December 31, 2022, but Not Incorporated in the Proposed ELG
                                  Plant Name
                                     City
                                     State
                            Document Control Number
Avon Lake Power Plant
                                   Avon Lake
                                      OH
                                    SE01974
B.C. Cobb Power Plant
                                   Muskegon
                                      MI
                                    SE01970
Big Sandy Plant
                                    Louisa
                                      KY
                                    SE01739
Bremo Power Station
                                  Bremo Bluff
                                      VA
                                    SE02943
Buck Steam Station
                                   Salisbury
                                      NC
                                    SE03800
Canadys Plant
                                  Walterboro
                                      SC
                                    SE01811
Cane Run
                                  Louisville
                                      KY
                                    SE02938
Chesapeake Energy Center
                                  Chesapeake
                                      VA
                                    SE02943
Clinch River Plant
                                   Cleveland
                                      OH
                                    SE01739
Dolphus M. Grainger Generating Station
                                    Conway
                                      SC
                                    SE02937
Edgewater Generating Station
                                   Edgewater
                                      WI
                                    SE02941
Glen Lyn Plant
                                   Glen Lyn
                                      PA
                                    SE01739
J.C. Weadock Power Plant
                                  Essexville
                                      MI
                                    SE01970
J.E. Corette
                                   Billings
                                      MA
                                    SE02940
J.R. Whiting Power Plant
                                   Luna Pier
                                      MI
                                    SE01970
Jefferies Generating Station
                                 Moncks Corner
                                      SC
                                    SE02937
Kammer Plant
                                    Captina
                                      WV
                                    SE01739
Kanawha River Plant
                                    Glasgow
                                      WV
                                    SE01739
Muskingum River Plant
                                    Beverly
                                      OH
                                    SE01739
Nelson Dewey Generating Station
                                   Cassville
                                      WI
                                    SE02941
New Castle Power Plant
                                West Pittsburg
                                      PA
                                    SE01974
Phillip Sporn Plant
                                Graham Station
                                      WV
                                    SE01739
Picway Plant
                                  Lockbourne
                                      OH
                                    SE01739
Plant Branch
                                 Milledgeville
                                      GA
                                    SE03799
Plant Kraft
                                Port Wentworth
                                      GA
                                    SE03799
Plant McManus
                                   Brunswick
                                      GA
                                    SE03799
Plant Yates
                                    Newnan
                                      GA
                                    SE03799
Portland Generating Station
                                  Mt. Bethel
                                      PA
                                    SE01974
Riverbend Steam Station
                                  Mount Holly
                                      NC
                                    SE03800
Riverside Generating Station
                                  Bettendorf
                                      IA
                                    SE03801
San Juan Generating Station
                                   Waterflow
                                      NM
                                    SE03802
Shawville
                                   Shawville
                                      PA
                                    SE01974
Tanners Creek Plant
                                 Lawrenceberg
                                      IN
                                    SE01739
Titus Generation Station
                                   Birdsboro
                                      PA
                                    SE01974
Walter C Beckjord Station
                                 New Richmond
                                      OH
                                    SE01743
Walter Scott Jr Energy Center
                                Council Bluffs
                                      IA
                                    SE03801
Yorktown Power Station 
                                   Yorktown
                                      VA
                                    SE02943

Table 2 presents estimated incremental annualized costs and pollutant removals, by wastestream and regulatory option, for three groups of plants:

   * "Current Population" - the industry profile assumed for the proposed ELGs (incorporates changes (e.g., announced unit retirements and fuel conversions) identified through August 2012);
   * "Additional Retirements" - the plants listed in Table 1 above (e.g., unit retirements and fuel conversions announced after August 2012 or retirements/conversions announced prior to August 2012 that are scheduled to occur between January 1, 2015 and December 31, 2022);
   * "Current Population Excluding Additional Retirements"  -  the industry profile that would have been assumed for the proposed ELGs, if EPA had incorporated all changes that have been identified and scheduled to occur on or prior to December 31, 2022 (i.e., "Current Population" minus "Additional Retirements").

ERG considers the estimates presented in Table 2 for the "Additional Retirements" population, and by difference for the "Current Population Excluding Additional Retirements" population, to be estimates because they were calculated using an abbreviated methodology as compared to that used for the proposed ELGs. Specifically, for each plant listed in Table 1, ERG prorated the plant's ELG costs and pollutant removals for the proposed rule based on the percentage of the plant's units announced for retirement or fuel conversion that incur costs for each wastestream. For example, a plant has three units that incur FGD costs and two units that incur fly ash costs and one unit that incurs costs for both FGD and fly ash is announced to be retired prior to December 31, 2022. In this example, ERG estimated the "Additional Retirements" portion of this plant's estimated incremental annual compliance costs and pollutant removals as one-third of the plant's FGD costs and pollutant removals for the proposed rule and one-half of the plant's fly ash costs and pollutant removals.  




Table 2. Estimated Incremental Annualized Costs and Pollutant Removals, by Waste Stream and Regulatory Option, for Three Industry Profiles
                                 Waste Stream 
                              Current Population
Portion of Costs/Removals Associated With Additional Changes (e.g., Retirements)
     Current Population Excluding Additional Changes (e.g., Retirements)

          Annualized Pre-Tax Compliance Cost (in millions, $2010)[c]
                        Pollutant Removals[a] (TWPE/yr)
          Annualized Pre-Tax Compliance Cost (in millions, $2010)[c]
                        Pollutant Removals[a] (TWPE/yr)
          Annualized Pre-Tax Compliance Cost (in millions, $2010)[c]
                        Pollutant Removals[a] (TWPE/yr)
Technology Option
FGD (Chemical Precipitation)
$266
1,534,258
$7.5
34,865
$258
1,499,393
FGD (Chemical Precipitation + Biological Treatment)
$393
2,615,339
$10.6
58,713
$383
2,556,626
Fly Ash (Zero Discharge)
$168
2,488,469
$17.9
395,176
$150
2,093,293
Bottom Ash (Zero Discharge)
$719
2,705,159
$87.4
209,628
$631
2,495,531
Leachate Only (Chemical Precipitation)
Leachate with FGD (Chem Precip +         Biological Treatment)[b]
$93
37,863 
$4.4
741
$89
37,122
Regulatory Option
                                       1
$265.90 
1,534,258
$7.5
34,865
$258.36
1,499,393
                                       2
$393.30 
2,615,339
$10.6
58,713
$382.74
2,556,626
                                       3
$561.30 
5,103,808
$28.5
453,889
$532.83
4,649,919
                                       4
$1,373.20 
7,846,830
$120.3
664,259
$1,252.93
7,182,571
[a] Pollutant removals represent the removals for the plants based on oil-fired units and units with a capacity of 50 MW or less not needing to install the technology basis (i.e., oil-fired units and units with a capacity of 50 MW or less do not achieve any removals). The removals exclude the pollutant parameters BOD, COD, TDS, and TSS because they double count the loadings for specific pollutants already included.
[b] Costs and pollutant removals are based on plants that have both FGD wastewater and landfill leachate treating the two wastestreams in a combined treatment system with chemical precipitation and biological treatment. Plants that only have landfill leachate treat it in a separate treatment system with chemical precipitation. The costs represent the incremental increase in the biological treatment system to build a larger system to handle the leachate flow rate. The pollutant removals represent the removals associated with only the leachate stream. These costs and removals, in combination with the FGD biological treatment costs and removals, were used for Regulatory Option 4.  Plants treating both FGD wastewater and landfill leachate in a combined treatment system receive loadings for the biological treatment option. Plants treating landfill leachate in a separate treatment system receive loadings for chemical precipitation treatment option.
[c] Costs shown are pre-tax compliance costs, discounted using 7%; compare to RIA Table 3-2. For details on methodology, see Chapter 3 in RIA.

