What the Clean Air Mercury Rule and Clean Air Interstate Rules Will Mean to You Jenna Glahn & Christine Heath ARIPPA Technical Symposium Gettysburg, PA – July 27, 2005 trinityconsultants.com

Clean Air Mercury Rule  Why Mercury and Why You?  Background on CAMR Rule  NSPS & Cap-and-Trade Program  Monitoring and Controlling Hg Emissions  Challenges and Lawsuits

Clean Air Mercury Rule (CAMR)

1.Why Mercury and Why You?

Mercury Contamination  Persistent toxic that accumulates in food chain  Linked to neurological and developmental problems  In 2000, more than 600,000 newborns exposed to elevated mercury levels  Currently 44 states have issued fish consumption advisories

Mercury Cycle Source: Mason et. al, 1994

Source Contribution  Coal-fired power plants – 48 tons of Hg emitted each year  Total U.S. emissions – 3% of global Hg

2. Background on CAMR Rule

Clean Air Rules  Clean Air Nonroad Diesel Rule  Clean Air Ozone Rules  8-hour ozone  Clean Air Fine Particulate Rules  8-hour PM 2.5  Clean Air Interstate Rule (CAIR)  Market-Based, Cap & Trade Program for SO 2 and NO x in Eastern U.S.

Rule Updates  Utility units delisted from Section 112(c) list  Not appropriate and necessary  No public health hazard  Standards of Performance for New and Existing Sources

3. NSPS & Cap-and-Trade Program

Applicable Sources  Hg Budget Units  Any fossil fuel-fired combustion unit of > 25 MWe that serves a generator that produces electricity for sale, including cogeneration utility units which supply > 1/3 electric output capacity to the power distribution system  Coal-fired  Definitions consistent with Acid Rain Program and CAIR

Hg New Source Provisions  Revision to 40 CFR 60, Subpart Da  Sources constructed after January 30, 2004  Meet performance standards  5 subcategories based on coal rank and process type  Inability to control Hg equally from all ranks

New Source Performance Standards SubcategoryHg (10 -6 lb/MWh) 1 Bituminous-fired21 Subbituminous-fired42 (Wet FGD) 78 (Dry FGD) Lignite-fired145 IGCC20 Coal refuse-fired1.4 1 – Based on a 12-month rolling average Note: Standards for new sources only.

Fuel Blending  Coal Blending  Unit classified by the predominate coal burned during the compliance period  Unit classified by a “weighted emission limit” based on the proportion of energy output (in Btu) contributed by each coal rank burned during the compliance period  If non-regulated fuels are used (e.g., pet coke,TDF), compliance calculation include:  Energy output (in Btu) of all fuels  Hg emissions considered would be all measured by the stack monitor  However, the blended emission limitation is based only on the regulated fuels

Cap-and-Trade Program  New and Existing Sources  Codified in 40 CFR 60, Subpart HHHH  Managed by EPA

National Hg Allowances  2010 – Phase I Cap of 38 tpy of Hg  Co-benefit reductions under CAIR  2018 – Phase II Cap of 15 tpy of Hg  Hg-specific controls commercially available

State Hg Allowances  Based on proportionate share of state’s baseline heat input to the total heat input from all affected sources  Adjustment factors to reflect coal rank  PA’s Phase I Allocation – 1.78 tpy (2010)  PA’s Phase II Allocation – tpy (2018)

Source Hg Allowances  State allocates Hg allowances to sources  Allocations set three years in advance  May set aside allowances for new sources  Banking of unused allowances

Cap-and-Trade Requirements  Each State must submit a plan that demonstrates it will meet its assigned statewide Hg budget by October, 31, 2006  States may join the trading program by adopting or referencing the model trading rule in state regulations; or, adopting regulations that mirror the necessary components of the model trading rule  States can choose not to join the federal trading program and meet their budget through intra-state trading or no trading  States can choose to implement more stringent Hg emissions requirements

4. Monitoring and Controlling Hg Emissions

Monitoring Hg Emissions (1 of 3)  Added Subpart I to 40 CFR 75 Options for Hg Monitoring  2 Monitoring Options:  Hg CEMS  Sorbent trap monitoring systems  Low Mass Emitters < 29 lb Hg per year  Periodic Hg emissions testing

Monitoring Hg Emissions (2 of 3)  All Continuous Monitoring Systems Must Be Certified  Submit unit specific monitoring plan 45 days before commencing certification tests  CEMS meet PS 12-A or 40 CFR 75  Sorbent trap meet 40 CFR and App. K  CEMS - Calibration Drift and Quarterly RATA and 3 Error Tests (App. F or B)  Sorbent Trap - Annual RATA and App. K

Monitoring Hg Emissions (3 of 3)  Resemble current monitoring of SO2 and NOx under the Acid Rain and NOx SIP Call programs  Comprehensive QA/QC program  Commensurate with CAIR cap-and- trade programs  Flexibility of using alternate monitoring  Accurate, certain, and consistent quantification of emissions

Controlling Hg Emissions (1 of 2)  Co-Benefits of Existing Controls and Controls Installed under CAIR  Dependent on Hg speciation  Dependent on control type and coal rank  FFs and ESPs – PM-Hg removed effectively  FGD scrubbers – Adsorb Hg +2  Spray dryer absorbers – Hg 0 and Hg +2 removal  NOx controls may enhance ability to capture Hg  Better capture for higher rank coals

Controlling Hg Emissions (2 of 2)  Hg-Specific Control Technologies Adequately Demonstrated for Sufficient Use by 2018  Required to meet Phase II cap  Sorbent injection (ACI or halogenated ACI) available for commercial application after 2010  ACI – Hg removal 60-90%  Optimized multipollutant controls –90-95%

Compliance Deadlines  January 1, Hg Budget Unit that Commences Commercial Operation Before 1/1/08  Later of January 1, 2009 or 90 unit operating days or 180 calendar days (whichever comes first) after start of operation – Hg Budget Unit that Commences Commercial Operation on or after 1/1/08

5. Challenges and Lawsuits

PA Opposition  PA included in at least 2 lawsuits  March 31 – Appropriate and necessary to regulate Hg  May 18 – Cap and trade not appropriate for Hg  Hot spots and downwind increases  90% reduction and earlier compliance date under MACT  Bias towards western coal

Congressional Opposition  EPA Inspector General - Hg limits pre- selected to conform w/ CAIR  Snowe(R)-Leahy(D) Bill – “Omnibus Hg Emissions Reduction Act”  Coal and oil fired power plants  MWCs, commercial and industrial boilers, chlor-alkali plants, and cement plants  Require labeling of Hg containing products  90% reduction in Hg emissions

What’s Next?  PA likely to regulate Hg!  Per PennFuture lawsuit:  Conduct residual risk assessment  Report results and basis for rulemaking in August  Program similar to NJ and include other sources?

CAIR Clean Air Interstate Rule Or Why should you CARE about CAIR?

CAIR  March 10, 2005, EPA issued CAIR (May 12, 2005 FR)  Previously known as Interstate Air Quality Rule (IAQR)  Addresses PM 2.5 and ozone non-attainment from upwind sources  “Cap and Trade” program for SO 2 and NO X from utilities  Alternative to Bush’s “Clear Skies” initiative

CAIR - Applicability

 28 States  NO X and SO 2 only  Aimed at electrical generating units (EGU), but states may choose to implement differently

CAIR - Applicability  Implementation options  EGU interstate cap and trade  EGU caps without emissions trading  Combination of caps on EGU and other sources to meet caps  EPA did not include non-EGU sources because  No cost effective controls for large emitters  Many sources already regulated by NO X SIP Call or ozone nonattainment  Given short timeline and limited options, states will likely follow EPA recommendations

CAIR - Applicability  Electric Generating Unit Definition  A stationary fossil fuel fired boiler or combustion turbine serving a generator with a nameplate capacity greater than 25 MWe, or  A cogeneration unit serving a generator with a nameplate capacity greater than 25 MWe and supplying in any calendar year more than 1/3 of the unit’s output capacity or 219,000 MWh, whichever is greater, to a utility power distribution system for sale

CAIR - Timeline  Affected states submit revised SIP within 18 months of rule (September 2006)  Rapid timeline  Allows for upwind controls to be used in downwind (Ozone/PM 2.5 NAAQS) compliance demonstrations  Addresses 3-year regulatory timeline (from 1997) and lawsuits

CAIR - Timeline  Reductions  Phase I: January 1, 2009 (NO X ) January 1, 2010 (SO 2 )  Phase II: January 1, 2015 (NO X & SO 2 )  Incentives for early reductions  Allows 2-3 years for installation of controls  Ozone attainment date June 2009  PM 2.5 attainment date April 2010

CAIR - Controls  NO X Reductions  0.15 lb/MMBtu system average by 2009  lb/MMBtu system average by 2015  Tonnage based on historical heat inputs  Allowances allocated by state  SO 2 reductions  50% reduction from Acid Rain allowances by 2010  65% reduction from Acid Rain allowances by 2015

CAIR - Controls  CAIR rule assumes  NO X controlled by SCR  SO 2 controlled by FGD  Projected controls for CAIR

CAIR - Impacts

Projected Nonattainment Areas in 2010 after Reductions from CAIR and Existing Clean Air Act Programs (Diesel Rules, Tier II Vehicle Rule, NO X SIP Call)

CAIR - Impacts Projected Nonattainment Areas in 2015 after Reductions from CAIR and Existing Clean Air Act Programs (Diesel Rules, Tier II Vehicle Rule, NO X SIP Call)

CAIR – Pennsylvania SO 2 Budget

CAIR – Pennsylvania NOx Budget

ARIPPA’s Comments on CAIR  Due to Congress’ exemption of certain IPPs from the Title IV Acid Rain Program, sources originally exempted under Title IV should not be subject to the SO 2 control requirements of CAIR  EPA Response: EPA has determined that emissions reductions from EGUs are highly cost effective. States can choose to implement the trading program or control sources

ARIPPA’s Comments on CAIR  If sources originally exempted under Title IV are subject to the SO 2 provisions CAIR, allocations of SO 2 allowances to such sources should reflect current SO 2 emission levels;  EPA Response: CAIR allocations will be based on existing Title IV program. Sources without allowances shall obtain them from the market or the Title IV Auction

ARIPPA’s Comments on CAIR  Waste coal-fired CFB boilers should not be required to comply with both NOx and SO 2 reduction requirements in CAIR, because of the interrelationship of NOx and SO 2 emission controls within boilers  EPA Response: The EPA does not agree that the SO 2 reduction capability of a CFB boiler already equipped with limestone injection cannot be improved further (e.g., increased limestone injection and spray dryer adsorber)

ARIPPA’s Comments on CAIR  If waste coal fired CFB units are subject to NOx reduction requirements in CAIR, complete and accurate baseline heat input data reflecting all regulated sources must be used in the allocation process  EPA Response: EPA revised its determination of State NOx budgets by supplementing Acid Rain Program data with annual heat input data from US Energy Information Administration

ARIPPA’s Comments on CAIR  Implementation of CAIR should not result in the imposition of any additional burden on waste coal fired CFB sources, in the form of additional monitoring, recordkeeping or reporting requirements for non-acid rain sources  EPA Response: Part 75 monitoring and reporting requirements entail the appropriate monitoring approach for a program that is relied upon by numerous States to ensure that interstate transport of pollutants is reduced

CAIR Current Status  ARIPPA filed an appeal on CAIR  Main concern – cost of SO 2 allowances  ARIPPA met with PADEP 7/25/05 to discuss a motion to intervene  EPA projects that PA sources will sell allowances

CAIR - Summary  NO X and SO 2 cap and trade program for EGU’s in 28 eastern states  SCR and FGD Controls  Implemented by 2009/2010 with further reductions by 2015  Will assist with ozone/PM 2.5 nonattainment in PA  Reduce PM 2.5 NAA Counties from 23 to 1  Reduce ozone NAA Counties from 37 to 5

Questions?