Assessment of Anticipated Visibility Improvements at Surrounding Class I Areas and Cost Effectiveness of Best Available Retrofit Technology for Four Corners Power Plant and Navajo Generating Station: Advanced Notice of Proposed Rulemaking, 44313-44334 [E9-20826]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 74, Number 166 (Friday, August 28, 2009)]
[Proposed Rules]
[Pages 44313-44334]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20826]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 49

[EPA-R09-OAR-2009-0598; FRL-8950-6]


Assessment of Anticipated Visibility Improvements at Surrounding 
Class I Areas and Cost Effectiveness of Best Available Retrofit 
Technology for Four Corners Power Plant and Navajo Generating Station: 
Advanced Notice of Proposed Rulemaking

AGENCY: Environmental Protection Agency (EPA).

ACTION: Advanced Notice of Proposed Rulemaking.

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SUMMARY: The Environmental Protection Agency is providing an Advanced 
Notice of Proposed Rulemaking (ANPR)

[[Page 44314]]

concerning the anticipated visibility improvements and the cost 
effectiveness for different levels of air pollution controls as Best 
Available Retrofit Technology (BART) for two coal-fired power plants, 
Four Corners Power Plant (FCPP) and Navajo Generating Station (NGS), 
located on the Navajo Nation. This ANPR briefly describes the 
provisions in Part C, Subpart II of the Clean Air Act (CAA or Act), 
EPA's implementing regulations, and the Tribal Authority Rule (TAR) for 
promulgating Federal Implementation Plans (FIPs) to protect visibility 
in national parks and wilderness areas known as Class I Federal areas.
    The specific purpose of this ANPR is for EPA to collect additional 
information that we may consider in modeling the degree of anticipated 
visibility improvements in the Class I areas surrounding FCPP and NGS 
and for determining whether BART controls are cost effective at this 
time. EPA is also requesting any additional information that any person 
believes the agency should consider in promulgating a FIP establishing 
BART for FCPP and NGS.
    EPA intends to publish separate FIPs proposing our BART 
determinations for FCPP and NGS approximately 60 days after receiving 
information from this ANPR. EPA will not respond to comments or 
information submitted in response to this ANPR. The information 
submitted in response to this ANPR will be used in developing the 
subsequent proposed FIPs containing our detailed BART determinations 
for FCPP and NGS.
    The FCPP and NGS FIP proposals following this ANPR will request 
further public comment. During the public comment period for the 
proposed FIPs containing the FCPP and NGS BART determinations, EPA 
intends to hold separate public hearings at locations to be determined 
near each facility.
    EPA will not hold a public hearing for this ANPR. This ANPR also 
serves to begin EPA's 60-day consultation period with the Federal Land 
Managers (FLMs) within the Departments of Interior and Agriculture. 
Information necessary to initiate consultation is contained in this 
ANPR and supporting documentation included in the docket for this ANPR. 
EPA will address any matters raised by the FLMs in this 60-day 
consultation period when we propose the BART FIPs for FCPP and NGS.

DATES: Comments on this ANPR must be submitted no later than September 
28, 2009.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2009-0598, by one of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the on-
line instructions.
    2. E-mail: lee.anita@epa.gov.
    3. Mail or delivery: Anita Lee (Air-3), U.S. Environmental 
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 
94105-3901.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at www.regulations.gov, 
including any personal information provided, unless the comment 
includes Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Information that you 
consider CBI or otherwise protected should be clearly identified as 
such and should not be submitted through www.regulations.gov or e-mail. 
www.regulations.gov is an ``anonymous access'' system, and EPA will not 
know your identity or contact information unless you provide it in the 
body of your comment. If you send e-mail directly to EPA, your e-mail 
address will be automatically captured and included as part of the 
public comment. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment.
    Docket: The index to the docket for this action is available 
electronically at www.regulations.gov and in hard copy at EPA Region 
IX, 75 Hawthorne Street, San Francisco, California. While all documents 
in the docket are listed in the index, some information may be publicly 
available only at the hard copy location (e.g., copyrighted material), 
and some may not be publicly available in either location (e.g., CBI). 
To inspect the hard copy materials, please schedule an appointment 
during normal business hours with the contact listed in the FOR FURTHER 
INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Anita Lee, EPA Region IX, (415) 972-
3958, lee.anita@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'', 
and ``our'' refer to EPA.

Table of Contents

I. Background
    A. Statutory and Regulatory Framework for Addressing Visibility
    B. Statutory and Regulatory Framework for Addressing Sources 
Located on Tribal Lands
    C. Statutory and Regulatory Framework for BART Determinations
    D. EPA's Intended Action Subsequent to ANPRM
    E. Factual Background
    1. Four Corners Power Plant
    2. Navajo Generating Station
    3. Relationship of NOX and PM to Visibility 
Impairment
II. Request for Public Comment
    A. Factor 1: Cost of Compliance
    1. FCPP
    a. Estimated Cost of Controls
    b. Cost Effectiveness of Controls
    2. NGS
    a. Estimated Cost of Controls
    b. Cost Effectiveness of Controls
    B. Factor 5: Degree of Visibility Improvement
    1. FCPP
    a. Visibility Modeling Scenarios
    b. EPA Modifications to Emission Rate Inputs
    c. Ammonia Background
    d. Natural Background
    e. Visibility Modeling Results
    2. NGS
    a. Visibility Modeling Scenarios
    b. EPA Modifications to Emission Rate Inputs
    c. Ammonia Background and Natural Background
    d. Visibility Modeling Results
    C. Factor 2: Energy and Non-Air Quality Impacts
    1. FCPP
    2. NGS
    D. Factor 3: Existing Controls at the Facility
    1. FCPP
    2. NGS
    E. Factor 4: Remaining Useful Life of Facility
    1. FCPP
    2. NGS
III. Statutory and Executive Order Reviews

I. Background

A. Statutory and Regulatory Framework for Addressing Visibility

    Part C, Subsection II, of the Act, establishes a visibility 
protection program that sets forth ``as a national goal the prevention 
of any future, and the remedying of any existing, impairment of 
visibility in mandatory class I Federal areas which impairment results 
from man-made air pollution.'' 42 U.S.C. 7491A(a)(1). The terms 
``impairment of visibility'' and ``visibility impairment'' are defined 
in the Act to include a reduction in visual range and atmospheric 
discoloration. Id. 7491A(g)(6). A fundamental requirement of the 
program is for EPA, in consultation with the Secretary of the Interior, 
to promulgate a list of ``mandatory Class I Federal areas'' where 
visibility is an important value. Id. 7491A(a)(2). These areas include 
national wilderness areas and national parks greater than six thousand 
acres in size. Id. 7472(a).
    On November 30, 1979, EPA identified 156 mandatory Class I Federal 
areas, including for example: Grand Canyon National Park in Arizona (40

[[Page 44315]]

CFR 81.403); Mesa Verde National Park and La Garita Wilderness Area in 
Colorado (Id. 81.406); Bandolier Wilderness Area in New Mexico (Id. 
81.421); and Arches, Bryce Canyon, Canyonlands and Capitol Reef 
National Parks in Utah (Id. 81.430). All of these mandatory Class I 
Federal areas and many others are within a 300-km radius of either FCPP 
or NGS.
    On December 2, 1980, EPA promulgated what it described as the first 
phase of the required visibility regulations, codified at 40 CFR 
51.300-51.307 (45 FR 80084). The 1980 regulations deferred regulating 
regional haze from multiple sources finding that the scientific data 
was inadequate at that time. Id. at 80086.
    Congress added Section 169B to the Act in the 1990 Amendments, 
requiring EPA to take further action to reduce visibility impairment in 
broad geographic regions. 42 U.S.C. 7492. In 1993, the National Academy 
of Sciences released a comprehensive study \1\ required by the 1990 
Amendments concluding that ``current scientific knowledge is adequate 
and control technologies are available for taking regulatory action to 
improve and protect visibility.''
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    \1\ ``Protecting Visibility in National Parks and Wilderness 
Areas'', Committee on Haze in National Parks and Wilderness Areas, 
National Research Council, National Academy Press (1993).
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    EPA first promulgated regulations to address regional haze on April 
22, 1999. 64 FR 35765 (April 22, 1999). EPA's 1999 regional haze 
regulations included a provision requiring States to review BART-
eligible sources for potentially mandating further air pollution 
controls. Congress defined BART-eligible sources as ``each major 
station stationary source which is in existence on August 7, 1977, but 
which has not been in operation for more than fifteen years as of such 
date'' which emits pollutants that are reasonably anticipated to cause 
or contribute to visibility impairment. 42 U.S.C. 7479(b)(2)(A).
    EPA's 1999 regulations followed the five factor approach set forth 
in the statutory definition of BART. However, the regulations treated 
the fifth factor, the degree of visibility improvement, on an area-wide 
rather than source specific basis. 64 FR 35741. The Court remanded the 
1999 regulations to EPA on that issue. American Corn Growers Assoc. v. 
EPA, 291 F.3d 1 (DC Cir. 2002). EPA promulgated revisions to the 
regulations in June 2003, which were remanded on narrow grounds not 
relevant to this action. Center for Energy and Economic Development v. 
EPA, 398 F.3d 653 (DC Cir. 2005). Finally, EPA revised regional haze 
regulations in March 2005, which were upheld by the Court of Appeals 
for the District of Columbia Circuit. Utility Air Regulatory Group v. 
EPA, 471 F.3d 1333 (DC Cir. 2006).

B. Statutory and Regulatory Framework for Addressing Sources Located on 
Tribal Lands

    The 1990 Amendments included Section 301(d)(4) of the Act directing 
EPA to promulgate regulations for controlling air pollution on Tribal 
lands. EPA promulgated regulations to implement this Congressional 
directive, known as the Tribal Authority Rule (TAR), in 1998. 63 FR 
7264 (1998) codifed at 40 CFR 49.1-49.11. See generally Arizona Public 
Service v. EPA, 211 F.3d 1280 (DC Cir. 2000).
    Section 49.11 of the TAR authorizes EPA to promulgate a FIP when 
EPA determines such regulations are ``necessary or appropriate'' to 
protect air quality. 40 CFR 49.11(a). Pursuant to the authority in the 
TAR, EPA promulgated a source specific FIP for FCPP 2006. The Court of 
Appeals for the Tenth Circuit considered the regulatory language in 40 
CFR 49.11(a) and concluded that ``[i]t provides the EPA discretion to 
determine what rulemaking is necessary or appropriate to protect air 
quality and requires the EPA to promulgate such rulemaking.'' Arizona 
Public Service v. EPA, 562 F.3d 1116 (10th Cir. 2009).

C. Statutory and Regulatory Framework for BART Determinations

    FCPP and NGS are the only BART eligible sources located on the 
Navajo Nation. EPA's guidelines for evaluating BART are set forth in 
Appendix Y to 40 CFR Part 51. The Guidelines include a ``five factor'' 
analysis for BART determinations. Id. at IV.A. Those factors, from the 
definition of BART, are: (1) Costs of compliance, (2) the energy and 
non-air quality environmental impacts of compliance, (3) any pollution 
control equipment in use or in existence at the source, (4) the 
remaining useful life of the source, and (5) the degree of improvement 
in visibility which may reasonably be anticipated to result from the 
use of such technology. 40 CFR 51.308(e)(1)(ii)(A).

D. EPA's Intended Action Subsequent to the ANPR

    After receiving information from this ANPR, EPA intends to propose 
separate FIPs for FCPP and NGS containing our determination of what 
level of control technology is BART for each power plant. EPA has 
determined it has authority to promulgate these FIPs under CAA Section 
301(d)(4), 40 CFR Part 49.11, and 40 CFR 51.308(e). Any person may 
submit information concerning EPA's authority during the 30 day comment 
period for this ANPR.
    As discussed more fully below, EPA is specifically seeking 
information in this ANPR on two of the listed considerations in the 
five factor test: (1) The data inputs to model the degree of 
improvement in visibility which may reasonably be anticipated from 
different levels of air pollution controls as BART and (2) the costs of 
compliance of those potential BART controls. We anticipate that those 
two factors will generate the most comments on our subsequent proposed 
BART FIPs for FCPP and NGS. Information on the other three factors in 
the five factor test may also be submitted in response to this ANPR.

E. Factual Background

1. Four Corners Power Plant
    FCPP is a privately owned and operated coal-fired power plant 
located on the Navajo Nation Indian Reservation near Farmington, New 
Mexico. Based on lease agreements signed in 1960, FCPP was constructed 
and has been operating on real property held in trust by the Federal 
government for the Navajo Nation. The facility consists of five coal-
fired electric utility steam generating units with a total capacity of 
2060 megawatts (MW). Units 1, 2, and 3 at FCPP are owned entirely by 
Arizona Public Service (APS), which serves as the facility operator, 
and are rated to 170 MW (Units 1 and 2) and 220 MW (Unit 3). Units 4 
and 5 are each rated to a capacity of 750 MW, and are co-owned by six 
entities: Southern California Edison (48%), APS (15%), Public Service 
Company of New Mexico (13%), Salt River Project (SRP) (10%), El Paso 
Electric Company (7%), and Tucson Electric Power (7%).
    Based on 2006 emissions data from the EPA Clean Air Markets 
Division,\2\ FCPP is the largest source of NOX emissions in 
the United States (nearly 45,000 tons per year (tpy) of 
NOX).
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    \2\ ``Clean Air Markets--Data and Maps'' at  https://camddataandmaps.epa.gov/gdm/.
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    FCPP, located near the Four Corners region of Arizona, New Mexico, 
Utah, and Colorado, is within 300 kilometers (km) of sixteen mandatory 
Class I areas: Arches National Park (NP), Bandolier National Monument 
(NM), Black Canyon of the Gunnison Wilderness Area (WA), Canyonlands 
NP, Capitol Reef NP, Grand Canyon NP, Great Sand Dunes NP, La Garita 
WA, Maroon Bells-Snowmass WA, Mesa Verde NP, Pecos WA, Petrified Forest 
NP, San Pedro Parks WA, West Elk WA, Weminuche WA, and Wheeler Park WA. 
APS

[[Page 44316]]

provided information relevant to a BART analysis to EPA on January 29, 
2008. The information consisted of a BART engineering and cost analysis 
conducted by Black and Veatch (B&V) dated December 4, 2007 (Revision 
3), a BART visibility modeling protocol prepared by ENSR Corporation 
(now called AECOM and will be referred to as AECOM throughout this 
document) dated January 2008, a BART visibility modeling report 
prepared by AECOM dated January 2008, and APS BART Analysis 
conclusions, dated January 29, 2008. APS provided supplemental 
information on cost and visibility modeling in correspondence dated May 
28, 2008, June 10, 2008, November 2008, and March 16, 2009.
2. Navajo Generating Station
    NGS is a coal-fired power plant located on the Navajo Nation Indian 
Reservation, just east of Page, Arizona, approximately 135 miles north 
of Flagstaff, Arizona. The facility is co-owned by six different 
entities: U.S. Bureau of Reclamation (24.3%), SRP, which also acts as 
the facility operator (21.7%), Los Angeles Department of Water and 
Power (21.2%), APS (14%), Nevada Power Company (11.3%), and Tucson 
Electric Power (7.5%).
    Based on 2006 emissions data from the EPA Clean Air Markets 
Division, NGS is the fourth largest source of NOX emissions 
in the United States (nearly 35,000 tpy). NGS, in northern Arizona, is 
located within 300 km of eleven Class I areas: Arches NP, Bryce Canyon 
NP, Canyonlands NP, Capitol Reef NP, Grand Canyon NP, Mazatzal WA, Mesa 
Verde NP, Petrified Forest NP, Pine Mountain WA, Sycamore Canyon WA, 
and Zion NP.
    SRP submitted to EPA a BART modeling protocol prepared by AECOM 
dated September 2007, and a BART Analysis, conducted by AECOM, dated 
November 2007. SRP provided supplemental information regarding cost on 
July 29, 2008, a revised BART Analysis, dated December 2008, and 
additional information regarding modeling and emission control rates on 
June 3, 2009.
3. Relationship of NOX and PM to Visibility Impairment
    Particulate matter (PM) less than 10 microns (millionths of a 
meter) in size interacts with light. The smallest particles in the 0.1 
to 1 micron range interact most strongly as they are about the same 
size as the wavelengths of visible light. The effect of the interaction 
is to scatter light from its original path. Conversely, for a given 
line of sight, such as between a mountain scene and an observer, light 
from many different original paths is scattered into that line. The 
scattered light appears as whitish haze in the line of sight, obscuring 
the view.
    PM emitted directly into the atmosphere, also called primary PM, 
for example from materials handling, tends to be coarse, i.e. around 10 
microns, since it is created from the breakup of larger particles of 
soil and rock. PM that is formed in the atmosphere from the 
condensation of gaseous chemical pollutants, also called secondary PM, 
tends to be fine, i.e. smaller than 1 micron, since they are formed 
from the buildup of individual molecules. Thus, secondary PM tends to 
contribute more to visibility impairment than primary PM because it is 
in the size range where it most effectively interacts with visible 
light. NOX and ammonia are two examples of precursors to 
secondary PM.
    NOX is a gaseous pollutant that can be oxidized to form 
nitric acid. In the atmosphere, nitric acid in the presence of ammonia 
can form particulate ammonium nitrate. The formation of ammonium 
nitrate is also dependent on temperature and relative humidity. 
Particulate ammonium nitrate can grow into the size range that 
effectively interacts with light by coagulating together and by taking 
on additional pollutants and water. The same principle applies to 
SO2 and the formation of particulate ammonium sulfate.
    In air quality models, secondary PM is tracked separately from 
primary PM because the amount of secondary PM formed depends on weather 
conditions and because it can be six times more effective at impairing 
visibility. This is reflected in the equation used to calculate 
visibility impact from concentrations measured by the Interagency 
Monitoring of Protected Visual Environments (IMPROVE) monitoring 
network covering Class I areas.\3\
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    \3\ Guidance for Estimating Natural Visibility Conditions Under 
the Regional Haze Rule, U.S. Environmental Protection Agency'', EPA-
454/B-03-005, September 2003; https://www.epa.gov/ttn/oarpg/t1pgm.html.
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II. Request for Public Comment

A. Factor 1: Cost of Compliance

1. FCPP
a. Estimated Cost of Controls
    APS, through its contractor B&V, evaluated the BART cost of 
compliance analysis using the EPA Coal Utility Environmental Cost 
(CUECost) program, information supplied by equipment vendors, estimates 
from previous projects, and projected costs from FCPP. The cost 
estimates provided by APS (updated in the March 16, 2009 submission to 
EPA) are included in Table 1 for four different levels of control 
technology to reduce NOX and in Table 2 for four different 
levels of control options to reduce PM on Units 1-3. The NOX 
control technology options in Table 1 are: (1) Low NOX 
Burners (LNB) on Units 1 and 2 and LNB plus overfire air (OFA) on Units 
3-5; (2) selective catalytic reduction (SCR) on all units (units 1-5); 
(3) SCR plus LNB on all units (Units 1-5); and (4) SCR plus LNB + OFA 
on all units (units 1-5). The PM control options for Units 1-3 \4\ are: 
(1) Electrostatic precipitators (ESP) upstream of current air quality 
control equipment, i.e., venturi scrubbers; (2) pulse jet fabric filter 
(baghouse) upstream of current air quality control equipment; (3) wet 
metal ESP downstream of venturi scrubber, and (4) wet membrane ESP 
downstream of venturi scrubber.
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    \4\ PM emissions from Units 4 and 5 at FCPP are already 
controlled by baghouses.

                        Table 1--FCPP Costs of Compliance for NOX Based on APS's Analysis
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                                      LNB/LNB + OFA \5\         SCR             SCR + LNB       SCR + LNB + OFA
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                                            Total Capital Investment
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Unit 1..............................         $4,109,000       $110,664,000       $111,609,000       $112,058,000
Unit 2..............................          4,109,000        119,010,000        121,066,000        121,496,000
Unit 3..............................          4,701,000        113,084,000        115,420,000        114,851,000
Unit 4..............................         15,260,000        265,406,000        273,892,000        279,444,000

[[Page 44317]]

 
Unit 5..............................         15,260,000        265,406,000        273,892,000        279,444,000
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                                               Total Annual Costs
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Unit 1..............................           $922,000        $22,297,000        $21,764,000        $21,685,000
Unit 2..............................            922,000         23,634,000         23,468,000         23,385,000
Unit 3..............................          1,055,000         23,173,000         23,010,000         22,729,000
Unit 4..............................          3,447,000         55,755,000         56,883,000         57,237,000
Unit 5..............................          3,447,000         55,755,000         56,883,000         57,237,000
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    \5\ Capital and annual cost values are for LNB on Units 1 and 2, 
and LNB + OFA on Units 3-5.

                        Table 2--FCPP Costs of Compliance for PM Based on APS's Analysis
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                                       Upstream \6\ ESP  Upstream baghouse    Wet metal ESP     Wet membrane ESP
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                                            Total Capital Investment
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Unit 1..............................        $37,236,000        $50,515,000        $32,136,000        $23,360,000
Unit 2..............................         45,702,000         60,992,000         32,879,000         23,901,000
Unit 3..............................         40,135,000         59,594,000     59,594,000 \7\         26,988,000
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                                               Total Annual Costs
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Unit 1..............................        $10,169,000        $13,950,000         $8,781,000         $5,652,000
Unit 2..............................         11,011,000         14,481,000          8,972,000          6,658,000
Unit 3..............................         10,925,000         16,559,000         10,309,000          7,557,000
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b. Cost Effectiveness of Controls
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    \6\ Upstream refers to a location before the existing venturi 
scrubbers.
    \7\ This estimate was reported by APS in their December 2007 
analysis. EPA believes this value was reported by APS in error 
because it is unlikely a wet ESP would equal the cost of a baghouse 
for Unit 3, but not Units 1 and 2.
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    To determine the cost effectiveness of controls, typically 
expressed in cost per ton of pollutant reduced ($/ton), estimating the 
amount of NOX and PM that will be reduced from the various 
control options is necessary. The estimated reduction of the pollutant 
is determined by establishing the baseline emissions and the degree of 
emissions reduction from the control technology. 40 CFR Part 51, App. 
Y, Step 4, c.
    APS estimated NOX emissions reductions by starting with 
baseline emission rates of NOX of: 0.78 pounds of 
NOX per million BTU heat input (lb/MMBtu) for Unit 1; 0.64 
lb/MMBtu for Unit 2; 0.59 lb/MMBtu for Unit 3; and 0.49 lb/MMBtu from 
Units 4 and 5 each. For the four control technology options, APS 
estimated FCPP could achieve the following emissions reductions: (1) 
LNB on Units 1 and 2 would reduce NOX 45% and 33%, 
respectively and LNB + OFA on Units 3, and 4-5 would reduce 
NOX 44% and 29%, respectively; (2) SCR on Units 1-5 would 
reduce NOX approximately 88-91%; (3) SCR + LNB on Units 1-5 
would reduce NOX by 88-93%; and (4) SCR + LNB + OFA on Units 
1-5 would reduce NOX by approximately 88--93%.
    APS estimated PM emissions reductions using baseline emission rates 
of PM of: 0.025 lb/MMBtu for Unit 1; 0.029 lb/MMBtu for Unit 2; and 
0.029 lb/MMBtu for Unit 3. APS estimated that the four different PM 
control options would all achieve 52% control on Unit 1 and 59% control 
on Units 2 and 3.
    Table 3 lists the reduction in NOX emissions and cost 
effectiveness estimated by APS for the four control technology options 
listed in Table 1. Table 4 provides the corresponding estimates for PM.

                        Table 3--FCPP Emissions Reductions and Cost Effectiveness for NOX
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                                      LNB/LNB + OFA \8\         SCR             SCR + LNB       SCR + LNB + OFA
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                                       Tons of NOX Reduced per Year (tpy)
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Unit 1..............................              2,569              5,138              5,285              5,285
Unit 2..............................              1,573              4,344              4,344              4,344
Unit 3..............................              2,465              5,025              5,025              5,023
Unit 4..............................              3,798             11,665             11,665             11,665
Unit 5..............................              3,798             11,665             11,665             11,665
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                                     Cost Effectiveness of Controls ($/ton)
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Unit 1..............................                359              4,343              4,118              4,103
Unit 2..............................                586              5,484              5,403              5,384
Unit 3..............................                428              4,582              4,579              4,523

[[Page 44318]]

 
Unit 4..............................                908              4,872              4,780              4,907
Unit 5..............................                908              4,872              4,780              4,907
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    \8\ Capital and annual cost values are for LNB on Units 1 and 2, 
and LNB + OFA on Units 3-5.

                        Table 4--FCPP Emissions Reductions and Cost Effectiveness for PM
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                                         Upstream ESP    Upstream baghouse    Wet metal  ESP    Wet membrane ESP
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                                        Tons of PM Reduced per Year (tpy)
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Unit 1..............................                 95                 95                 95                 95
Unit 2..............................                127                127                127                127
Unit 3..............................                161                161                161                161
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                                     Cost Effectiveness of Controls ($/ton)
----------------------------------------------------------------------------------------------------------------
Unit 1..............................            106,571            146,195             92,024             59,233
Unit 2..............................             86,485            113,739             70,470             52,294
Unit 3..............................             67,785            102,741             63,963             46,888
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    EPA's regulations recommend using the EPA's Office of Air Quality 
Planning and Standards' Air Pollution Cost Control Manual (Sixth 
Edition, January 2002) for estimating costs of compliance. 40 CFR Part 
51, App. Y, Step 4.a.4. The Air Pollution Cost Control Manual provides 
guidance and methodologies for developing accurate and consistent 
estimates of cost for air pollution control devices. The costs that may 
be estimated include capital costs, operation and maintenance expenses, 
and other annual costs. Chapter 2 (Cost Estimation: Concepts and 
Methodology) states that total capital costs may include equipment 
costs, freight, sales tax, and installation costs. For existing 
facilities, retrofit costs should also be considered, and may include 
auxiliary equipment, handling and erection, piping, insulation, 
painting, site preparation, off-site facilities, engineering, and lost 
production revenue. Finally, annual costs are estimated from costs of 
raw materials, maintenance labor and materials, utilities, waste 
treatment and disposal, replacement materials, overhead, property 
taxes, insurance, and administrative charges.
    For the estimated costs that FCPP submitted, in Tables 1 & 2 above, 
APS provided line-item estimates for the direct and indirect capital 
costs, as well as direct and indirect annual costs. APS's estimate, 
however, included several costs that are not included in the EPA Air 
Pollution Cost Control Manual, including costs of unintended 
consequences, such as new Continuous Emission Monitors (CEMs) and costs 
of Relative Accuracy Test Audits (RATA) for the CEMs. Additionally, 
FCPP included costs of performance tests and ``owner's costs'' in the 
indirect capital investment, such as financing, project management, and 
construction support costs, as well as legal assistance, permits and 
offsets, and public relations costs.
    In reviewing APS's estimate, EPA found that the ratio of annual 
costs to the total capital costs for all control technologies projected 
by APS are considerably higher than those projected by other facilities 
that were amortized over the same 20 year time frame. For example, the 
total capital investment of SCR for Units 4 and 5 at FCPP is comparable 
to the most costly SCR retrofit (Unit 2) at NGS. However, total annual 
costs for FCPP are approximately 20% of the total capital costs for 
NOX control, and approximately 17-28% of total capital costs 
for PM control. In contrast, the total annual cost estimates by NGS for 
LNB and SCR are approximately 12-14% of the total capital costs. Other 
facilities in Arizona, New Mexico, and Oregon presented annual costs 
that ranged from 12-15% of total capital investments.
    In Tables 5 and 6, EPA re-calculated the total annual cost of the 
NOX and PM control technologies based on an annual to 
capital cost ratio of 15% to be consistent with annual costs estimated 
by other facilities. EPA did not adjust APS's estimates for capital 
costs.

                        Table 5--FCPP Costs of Compliance for NOX Based on EPA Revisions
----------------------------------------------------------------------------------------------------------------
                                        LNB/LNB + OFA           SCR             SCR + LNB       SCR + LNB + OFA
----------------------------------------------------------------------------------------------------------------
                                               Total Annual Costs
----------------------------------------------------------------------------------------------------------------
Unit 1..............................           $616,350        $16,599,600        $16,741,350        $16,808,700
Unit 2..............................            616,350         17,851,500         18,159,900         18,224,400
Unit 3..............................            705,150         16,962,600         17,313,000         17,227,650
Unit 4..............................          2,289,000         39,810,900         39,810,900         41,916,600
Unit 5..............................          2,289,000         39,810,900         39,810,900         41,916,600
----------------------------------------------------------------------------------------------------------------


[[Page 44319]]


                         Table 6--FCPP Costs of Compliance for PM Based on EPA Revisions
----------------------------------------------------------------------------------------------------------------
                                         Upstream ESP    Upstream baghouse    Wet metal  ESP    Wet membrane ESP
----------------------------------------------------------------------------------------------------------------
                                               Total Annual Costs
----------------------------------------------------------------------------------------------------------------
Unit 1..............................         $5,585,400         $7,577,250         $4,820,400         $3,504,000
Unit 2..............................          6,855,300          9,148,800          4,931,850          3,585,150
Unit 3..............................          6,020,250          8,939,100          8,939,100          4,048,200
----------------------------------------------------------------------------------------------------------------

    In addition to the total annual cost, other factors, such as 
estimated control efficiency and how the emissions reductions are 
calculated influence the cost effectiveness of controls. See 40 CFR 
Part 51, App. Y, Step 4.a.4. APS estimated that SCR could achieve 
NOX control of approximately 90% or greater from the 
baseline emissions. For new facilities, 90% or greater reduction in 
NOX from SCR can be reasonably expected. See May 2009 White 
Paper on SCR from Institute of Clean Air Companies.\9\ For SCR 
retrofits on an existing coal-fired power plant, Arizona Department of 
Environmental Quality (ADEQ) determined that 75% control from SCR 
(following upstream reductions by LNB) was appropriate for the Coronado 
Generating Station in Arizona.\10\ Based on this data, EPA has 
determined that an 80% control efficiency for SCR alone, rather than 
the 90+% control assumed by APS, is appropriate. Accordingly, EPA 
calculated post-SCR control NOX emissions from FCPP to be 
higher than the values of 0.06 and 0.08 lb/MMBtu used by APS, ranging 
from 0.10 lb/MMBtu from Units 4 or 5 to a maximum of 0.16 lb/MMBtu from 
Unit 1.
---------------------------------------------------------------------------

    \9\ White Paper: Selective Catalytic Reduction (SCR) Control of 
NOX Emissions from Fossil Fuel-Fired Electric Power 
Plants, Prepared by Institute of Clean Air Companies Inc., May 2009.
    \10\ See https://www.azdeq.gov/environ/air/permits/download/pastmonth.pdf.
---------------------------------------------------------------------------

    APS reported baseline PM emissions from Unit 3 to be 0.029 lb/
MMBtu, however, EPA has determined that 0.05 lb/MMBtu for Unit 3 is the 
appropriate emission rate to use based on source test information 
collected in October 2007. PM emissions determined from three one-hour 
test runs on October 19, 2007 were 0.041 lb/MMbtu, 0.372 lb/MMbtu, and 
0.121 lb/MMbtu. APS shut down Unit 3 for repairs after receiving the 
test results. Subsequent testing when the unit was brought back on line 
showed the unit barely met its 0.05 lb/MMbtu emission limit. Prior year 
test results for Unit 3 have also shown emissions at or near the 0.05 
lb/MMBtu limit.
    Tables 7 and 8 contain EPA's re-calculated emissions reductions and 
cost effectiveness for NOX and PM based on adjusting the 
annual costs, the NOX control efficiency for SCR and the 
baseline PM emissions as discussed above.

                         Table 7--FCPP Cost Effectiveness for NOX Based on EPA Revisions
----------------------------------------------------------------------------------------------------------------
                                        LNB/LNB + OFA           SCR             SCR + LNB       SCR + LNB + OFA
----------------------------------------------------------------------------------------------------------------
                                       Tons of NOX Reduced per Year (tpy)
----------------------------------------------------------------------------------------------------------------
Unit 1..............................              2,478              4,417              5,097              5,097
Unit 2..............................              1,524              3,716              4,210              4,210
Unit 3..............................              2,563              4,652              5,224              5,224
Unit 4..............................              3,275              9,171             10,060             10,060
Unit 5..............................              3,284              9,195             10,086             10,086
----------------------------------------------------------------------------------------------------------------
                                     Cost Effectiveness of Controls ($/ton)
----------------------------------------------------------------------------------------------------------------
Unit 1..............................                249              3,758              3,284              3,298
Unit 2..............................                404              4,803              4,314              4,329
Unit 3..............................                275              3,646              3,314              3,298
Unit 4..............................                699              4,341              3,957              4,167
Unit 5..............................                697              4,330              3,947              4,156
----------------------------------------------------------------------------------------------------------------


                         Table 8--FCPP Cost Effectiveness for PM Based on EPA Revisions
----------------------------------------------------------------------------------------------------------------
                                         Upstream ESP    Upstream baghouse    Wet metal ESP     Wet membrane ESP
----------------------------------------------------------------------------------------------------------------
                                        Tons of PM Reduced per Year (tpy)
----------------------------------------------------------------------------------------------------------------
Unit 1..............................                 92                 92                 92                 92
Unit 2..............................                123                123                123                123
Unit 3..............................                375                375                375                375
----------------------------------------------------------------------------------------------------------------
                                     Cost Effectiveness of Controls ($/ton)
----------------------------------------------------------------------------------------------------------------
Unit 1..............................             60,691             82,334             52,378             38,074
Unit 2..............................             55,556             74,143             39,968             29,054
Unit 3..............................             16,074             23,867             23,867             10,808
----------------------------------------------------------------------------------------------------------------


[[Page 44320]]

    The National Park Service (NPS) calculated the cost effectiveness 
of SCR using only the estimates and allowed categories of costs from 
EPA's Air Pollution Control Costs Manual. The NPS costs of compliance 
and cost effectiveness are shown in Table 9. NPS assumed post-SCR 
NOX emissions of 0.06 lb/MMBtu. The capital and annual costs 
of SCR the NPS estimated using the EPA Control Cost Manual are 
considerably lower than those estimated by APS.

                            Table 9--NPS's Estimated SCR Costs of Compliance for FCPP
----------------------------------------------------------------------------------------------------------------
                                                                                                      Cost
                                                           Total capital    Total annual cost    effectiveness
                                                                cost                                 (ton)
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................        $18,508,764         $2,983,004             $1,558
Unit 2.................................................         18,508,764          3,052,010              1,469
Unit 3.................................................         22,187,577          3,497,117              1,684
Unit 4.................................................         52,788,968          9,838,997              1,185
Unit 5.................................................         52,788,968          9,213,942              1,357
----------------------------------------------------------------------------------------------------------------

    In Tables 10 and 11, EPA has calculated the expected increase in 
electricity generation costs to be borne by consumers in terms of 
dollars per kilowatt hour ($/kWh), assuming 85% capacity. The 
calculation is based on EPA's annual cost estimates in Tables 5 and 6. 
DOE provides information on the average cost of electricity by state in 
a given year.\11\ In 2009, the average cost of electricity in Arizona 
for residential consumers was $0.0994/kWh, which was below the U.S. 
average ($0.1128/kWh) and the continental U.S. maximum of $0.1993/kWh 
in Connecticut.
---------------------------------------------------------------------------

    \11\ https://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html

                        Table 10--Increase in Electricity Costs From NOX Controls at FCPP
----------------------------------------------------------------------------------------------------------------
                                                                                                SCR + LNB + OFA
                                      LNB/LNB + OFA kWh       SCR kWh         SCR + LNB kWh           kWh
----------------------------------------------------------------------------------------------------------------
Unit 1..............................             $0.001             $0.015             $0.015             $0.015
Unit 2..............................              0.001              0.016              0.016              0.016
Unit 3..............................              0.001              0.011              0.012              0.012
Unit 4..............................              0.001              0.009              0.009              0.009
Unit 5..............................              0.001              0.009              0.009              0.009
----------------------------------------------------------------------------------------------------------------


                        Table 11--Increase in Electricity Costs From PM Controls at FCPP
----------------------------------------------------------------------------------------------------------------
                                                         Upstream baghouse                      Wet membrane ESP
                                       Upstream ESP kWh         kWh         Wet metal ESP kWh         kWh
----------------------------------------------------------------------------------------------------------------
Unit 1..............................             $0.005             $0.007             $0.004             $0.003
Unit 2..............................              0.006              0.008              0.004              0.003
Unit 3..............................              0.004              0.006              0.006              0.003
----------------------------------------------------------------------------------------------------------------

    EPA requests comments on the data used to estimate the cost of 
compliance for the different levels of control for NOX and 
PM for FCPP.
2. NGS
a. Cost of Compliance
    The cost estimates provided by SRP (updated in the 2008 submissions 
to EPA) are included in Table 12 for different control options for 
NOX. The NOX control options included in Table 12 
are (1) LNB plus Separated Overfire Air (SOFA) on all three units, (2) 
SCR on Units 1 and 3, LNB + SOFA on Unit 2, and (3) SCR + LNB + SOFA on 
all three units.

                         Table 12--NGS Costs of Compliance for NOX Based on SRP Analysis
----------------------------------------------------------------------------------------------------------------
                                                                             SCR + LNB + SOFA
                                                          LNB + SOFA  (All    (Units 1 & 3);    SCR + LNB + SOFA
                                                               units)       LNB + SOFA  (Unit     (All units)
                                                                                    2)
----------------------------------------------------------------------------------------------------------------
                                            Total Capital Investment
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................        $14,000,000       $212,000,000       $212,000,000
Unit 2.................................................         14,000,000         14,000,000        281,000,000
Unit 3.................................................         14,000,000        212,000,000        212,000,000
----------------------------------------------------------------------------------------------------------------

[[Page 44321]]

 
                                                Total Annual Cost
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................          1,622,000         28,951,500         28,951,500
Unit 2.................................................          1,622,000         36,945,000         36,945,000
Unit 3.................................................          1,622,000         28,951,500         28,951,500
----------------------------------------------------------------------------------------------------------------

    The higher retrofit cost of SCR on Unit 2 compared to Units 1 and 3 
is a result of the physical layout of the coal conveyor and its 
supports in relation to Unit 2. Because of limited access for 
construction cranes and equipment, and to make room for the SCR and 
fans by demolishing the remainder of the old Unit 2 chimney, costs for 
the Unit 2 retrofit are anticipated to be higher than for Units 1 and 
3.\12\
---------------------------------------------------------------------------

    \12\ See July 29, 2008 Letter from Kevin Wanttaja (SRP) to 
Deborah Jordan (EPA) and its attachment: July 25, 2008 Final Report 
for SCR and SNCR Cost Study, prepared by Sargent and Lundy.
---------------------------------------------------------------------------

b. Cost Effectiveness
    In determining the cost effectiveness of controls, SRP estimated 
NOX emissions reductions using baseline emission rates of: 
0.49 lb/MMBtu for Unit 1; 0.45 lb/MMBtu for Unit 2; 0.46 lb/MMBtu for 
Unit 3. For the various control options, SRP estimated emissions 
reductions from: LNB + SOFA of 47-51% to achieve 0.24 lb/MMBtu; and 
from SCR of 82-84% to achieve 0.08 lb/MMBtu.
    Table 13 lists the reduction in NOX emissions and cost 
effectiveness estimated by SRP for the three control scenarios listed 
in Table 12.

                        Table 13--SRP Emissions Reductions and Cost Effectiveness for NOX
----------------------------------------------------------------------------------------------------------------
                                                                             SCR + LNB + SOFA
                                                          LNB + SOFA  (All    (Units 1 & 3);    SCR + LNB + SOFA
                                                               units)       LNB + SOFA  (Unit     (All units)
                                                                                    2)
----------------------------------------------------------------------------------------------------------------
                                         NOX Emissions Reductions (tpy)
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................              9,631             15,794             15,794
Unit 2.................................................              8,667              8,667             15,271
Unit 3.................................................              8,824             15,241             15,241
----------------------------------------------------------------------------------------------------------------
                                           Cost Effectiveness ($/ton)
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................                168              1,833              1,833
Unit 2.................................................                187                187              2,419
Unit 3.................................................                184              1,900              1,900
----------------------------------------------------------------------------------------------------------------

    Appendix Y of the BART Guidelines states that average cost 
effectiveness should be based on the annualized cost and the difference 
between baseline annual emissions and annual emissions with the control 
technology. In calculating the cost effectiveness, it appears SRP used 
the same 24-hour average actual emission rate from the highest emitting 
day used for its modeling inputs, rather than an annual average rate. 
Therefore, EPA has revised SRP's estimated NOX emissions 
reductions by starting with baseline emission rates for NOX 
averaged over 2004-2006 of: 0.35 lb/MMBtu for Unit 1; 0.37 lb/MMBtu for 
Unit 2; 0.31 lb/MMBtu for Unit 3. The revised emission reductions and 
cost effectiveness estimates are provided in Table 14.

                        Table 14--EPA Emissions Reductions and Cost Effectiveness for NOX
----------------------------------------------------------------------------------------------------------------
                                                                             SCR + LNB + SOFA
                                                          LNB + SOFA  (All    (Units 1 & 3);    SCR + LNB + SOFA
                                                               units)       LNB + SOFA  (Unit     (All units)
                                                                                    2)
----------------------------------------------------------------------------------------------------------------
                                         NOX Emissions Reductions (tpy)
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................              3,658              9,643              9,643
Unit 2.................................................              4,208              4,208              9,888
Unit 3.................................................              2,284              8,158              8,158
----------------------------------------------------------------------------------------------------------------
                                           Cost Effectiveness ($/ton)
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................                443              3,002              3,002
Unit 2.................................................                385                385              3,736

[[Page 44322]]

 
Unit 3.................................................                710              3,549              3,549
----------------------------------------------------------------------------------------------------------------

    The NPS calculated the cost effectiveness of SCR + LNB + SOFA using 
only the estimates and allowed categories of costs from EPA's Air 
Pollution Control Costs Manual. The NPS costs of compliance and cost 
effectiveness are shown in Table 15. NPS assumed post-SCR 
NOX emissions of 0.05 lb/MMBtu. NPS accounts for the higher 
retrofit costs associated with Unit 2 by applying a larger retrofit 
factor associated with physically difficult retrofits on Unit 2 
compared to Units 1 and 3. Note that the capital and annual costs of 
SCR estimated using the EPA Control Cost Manual are considerably lower 
than those estimated by SRP.

                         Table 15--NPS Costs of Controls and Cost Effectiveness for SCR
----------------------------------------------------------------------------------------------------------------
                                                                                                      Cost
                                                           Total capital    Total annual cost    effectiveness
                                                                cost                                 (ton)
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................        $71,983,100        $12,065,299             $1,059
Unit 2.................................................         66,138,162         14,589,766              1,528
Unit 3.................................................         68,642,323         11,870,003              1,317
----------------------------------------------------------------------------------------------------------------

    EPA calculated the expected increase in electricity generation 
costs to consumers in $/kWh, assuming 85% capacity in Table 16.

                        Table 16--Increase in Electricity Costs From NOX Controls at NGS
----------------------------------------------------------------------------------------------------------------
                                                                             SCR + LNB + SOFA
                                                          LNB + SOFA (All    (Units 1&3); LNB   SCR + LNB + SOFA
                                                             Units) kWh      + SOFA (Unit 2)    (All Units) kWh
                                                                                   kWh
----------------------------------------------------------------------------------------------------------------
Unit 1.................................................            $0.0003             $0.006             $0.006
Unit 2.................................................             0.0003             0.0003              0.007
Unit 3.................................................             0.0003              0.006              0.006
----------------------------------------------------------------------------------------------------------------

    In addition to the three NOX control scenarios, EPA 
considered another SCR control option that was not addressed by SRP. 
Based on EPA's understanding of the location of the coal-feed line and 
the physical layout of Unit 2, EPA is requesting comment on the 
application of half an SCR to Unit 2. As configured, the flue gas from 
Unit 2 is split in half with each half containing its own separate hot-
side ESP and FGD. Because the flue gas is already split, and because 
the coal-feed line impedes only one side of the Unit 2 split, SCR may 
be applied to half of Unit 2 so that the difficult retrofit associated 
with the relocation of the coal-feed line can be avoided. EPA estimates 
that the application of half-SCR on Unit 2 would require a total 
capital investment of $106 million, a total annual cost of $14.5 
million, result in NOX reductions of over 7000 tpy (based on 
control to 0.14 lb/MMBtu) with a cost effectiveness of $2000/ton and an 
increased electricity generation cost of $0.003/kWh.
    In the November 2007 BART Analysis, SRP states that PM emissions 
controlled by hot-side ESPs in combination with wet scrubbers 
effectively limited PM emissions to less than 0.03 lb/MMBtu and did not 
include a BART analysis for further retrofit controls for 
PM10. In a letter dated December 12, 2008, NGS proposed a 
BART emission limit for PM of 0.05 lb/MMBtu. No additional discussions 
of modeling or other analyses for PM control at NGS are included in 
this ANPR.
    EPA requests comment on the data provided above to estimate the 
costs of compliance for BART controls at NGS.

B. Factor 5: Degree of Visibility Improvement

1. FCPP
a. Visibility Modeling Scenarios
    APS's contractor, AECOM, conducted visibility modeling using 
CALPUFF \13\ based on a number of selected inputs. APS used its 
modeling results to estimate anticipated visibility improvement from 
the four different control technology options at the mandatory Class I 
Federal areas within a 300 km radius.
    EPA disagrees with and is requesting comment on a number of the 
inputs APS used for modeling. EPA has selected alternative inputs that 
we have determined are more representative. We have also modeled the 
resulting visibility improvement at the Class I areas based on our 
revised inputs. EPA is specifically requesting comment on EPA's and 
APS's selection of inputs. EPA's modeled results, also using CALPUFF, 
are presented below in Tables 17-21. The modeling scenarios are:
---------------------------------------------------------------------------

    \13\ CALPUFF is the model that is recommended for use in 
predicting visibility impact under the Regional Haze Guidelines. 40 
CFR Part 51, App. Y, III.A.3 (``CALPUFF is the best regulatory 
modeling application currently available for predicting a single 
source's contribution to visibility impairment and is currently the 
only EPA-approved model for use in estimating single source 
pollutant concentrations resulting from the long range transport of 
primary pollutants. [note omitted]'').


[[Page 44323]]


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

A. Baseline Visibility Impact (modeled by APS and EPA)
B. Wet ESP for PM Control on Units 1-3 (modeled by APS and EPA)
C1. LNB + OFA for NOX on Units 1-5 (modeled by APS)
C2. LNB for NOX on Units 1 and 2 and LNB + OFA on Units 
3-5 (modeled by EPA)
D. SCR for NOX on Units 3-5 (modeled by EPA)
E1. SCR + LNB + OFA for NOX on Units 1-5 (modeled by APS)
E2. SCR for NOX on Units 1-5 (modeled by EPA)

    APS and EPA modeled baseline and control scenarios using 
meteorological data from 2001-2003. The baseline scenario uses heat 
input and pollutant emission rates based on the 24-hour average actual 
emission rate from the highest emitting day of the meteorological 
period. The modeling scenarios listed above in C1/C2 and E1/E2 are 
based on the application of the same, or similar, control technologies 
but are listed as distinct modeling scenarios because EPA used 
different emission inputs than APS.
b. EPA Modifications to Emission Rate Inputs
    The Appendix Y BART Guidelines state that baseline heat input and 
pollutant emission rates should be based on the 24-hour average actual 
emission rate from the highest emitting day of the