Integrated Planning Model (IPM) What It Is, Who Uses It, How It Works, What It Can Show You Presentation for For the Clean Air Act Advisory Committee Permits/New Source Review/Air Toxics Subcommittee Utility MACT Working Group April 3, 2002

IPM Is a Dynamic Linear Programming Model that Analyzes Many Power Company Issues Developed by ICF Consulting Objective: Constructs Most Economical Way for a Specified Set of Electric Generation Units to Operate to Meet Load Demand Subject to Constraints. IPM Can Analyze a Single Power Company’s Operations, or the Entire Grid. It Can Look at a Day of Operation, or Over 30 Years. IPM’s Uses Have Grown: Capacity Planning, Load Management, DSM, Environmental Compliance, Pollution Control and Grid Management Strategies. EPA Primarily Uses IPM to Analyze National and Regional Approaches to Pollution Control over a 15 to 20 Year Period. SPPN MANO LILC PNW CALI AZNM ERCT SPPS MAPP SOU WUMS MECS FRCC VACA MACS MACE NENG ECAO TVA ENTG DSNY NYC RMPA NWPE UPNY MACW

EPA Is One of Many Users of IPM EPA Has Used IPM to: Support Rules: Title IV NO x, NO x SIP Call, Revised NAAQS, Cooling Water Standards Evaluate Effects of 1990 Clean Air Act Amendments Analyze Environmental Impacts of Restructuring Investigate CO 2 Reduction Strategies Consider Multi-Pollutant Controls Other Users Include: Ozone Transport Commission (OTC) Ozone Transport Assessment Group (OTAG) Edison Electric Institute Clean Air Task Force Federal Energy Regulatory Commission Western Regional Air Partnership (WRAP) Clean Energy Group National Coal Association Electric Power Research Institute Southern CAL Edison, PacifiCorp, AES, Florida Power, and Many Other Private Power Companies Tennessee Valley Authority Multi-Client Study/Service Subscribers

Conceptual Overview of How IPM Works for EPA IPM’s Problem-Solving Software (“Engine”) Generation Unit Data -Aggregated into Model Plants Power System Requirements - Electric Demand, -Transmission Limits, -Operational Constraints Emission Control Technologies for NO x, SO 2, Mercury, CO 2 Fuel Assumptions -Coal, Gas and Biomass Supply Curves -Oil and Nuclear Prices -Fuel Dependent Emission Factors Set-up Rules and Parameters -Run Years -Retrofit Pattern -Financial Assumptions Run Specification - Area Covered - Pollutants Covered - Approach to Controls - Timing of Approach Outputs

EPA Set Up IPM to Focus on the Effects of Controlling Emissions from Coal-fired Generation EPA Groups Coal-fired Units with Relevant Similarities into “Model Plants” to “Run” in IPM. –Models Plants Have Many Compliance Options: Controls, Fuel Types, and Operations. –Already Model Plants Consider Boiler Type, Existing/Future Pollution Controls, and Coal Uses – Key Issues Related to Mercury Control IPM Examines Production, Transport, and Uses of Different Coal Types - Accounts for Emissions Characteristics. IPM Considers Fuel Switching Potential between Coal Types and with Natural Gas

IPM Provides “Information-Rich Results” Outputs Cover: –Emissions: NO x, SO 2, Mercury, CO 2 –Pollution Controls Equipment Installed Fuel Switching Operational Changes –Generation Capacity - “Existing” Units, Additions, Retirements, Adjustments –Fuel Mix Changes and Consumption –How the Power System Collectively Adjusts to Relevant Features of the Model Run Examined –Cost and Price Information Most Often a Policy Case Is Compared to a Base Case to See Changes You Can Examine Most of IPM’s Outputs at the National, Regional, State, Utility, and/or Generation Unit Level for One or More Run Years. IPM’s Problem-Solving Software (Engine)

EPA’s Clean Air Markets Division Has Produced Detailed Documentation of How EPA Uses IPM Can find documentation at: EPA Manager of IPM: Elliot Lieberman