1. MATS 2015: Are Your Units Ready? Outage Management for Power Plants July 15, 2014 Stephanie Sebor

2. © 2014 Winston & Strawn2 Emission Limits Monitoring and Testing Requirements Startup and Shutdown Work Practice Standards Tune-up Work Practice Standards Electronic Reporting Compliance Extensions MATS Litigation Topics

3. © 2014 Winston & Strawn3 MATS sets emission limits for three categories of pollutants: –Hg All EGUs must comply with the Hg emission limit. –Acid gases (HCl or SO2) Default: HCl May comply with SO2 emission limit if equipped with a wet or dry FGD or DSI and an SO2 CEMS. –Non-Hg HAP metals Filterable PM, Total non-Hg HAP metals, or Individual non-Hg HAP metals MATS emission limits must be met at all times, except during periods of startup and shutdown, during which work practice standards apply. MATS Emission Limits

4. © 2014 Winston & Strawn4 MATS Emission Limits Non-Mercury Metallic HAPAcid Gas HAP Mercury Regulatory Option Filterable PM Total HAP Metals Individual HAP Metals HCl Surrogate SO 2 Surrogate Existing Non- Lignite Units 0.030 lb/MMBtu 0.30 lb/MWh 0.000050 lb/MMBtu 0. 50 lb/GWh See Table 2 to Subpart UUUUU 0.0020 lb/MMBtu 0.020 lb/MWh 0.20 lb/MMBtu 1.5 lb/MWh 1.2 lb/TBtu 0.013 lb/GWh Existing Lignite Units 0.030 lb/MMBtu 0.30 lb/MWh 0.000050 lb/MMBtu 0.50 lb/GWh 0.0020 lb/MMBtu 0.020 lb/MWh 0.20 lb/MMBtu 1.5 lb/MWh 4.0 lb/TBtu 0.040 lb/GWh New Units (Revised Limits) 0.090 lb/MWh 0.060 lb/GWh See Table 1 to Subpart UUUUU 0.010 lb/MWh 1.0 lb/MWh 0.0030 lb/GWh 0.040 lb/GWh

5. © 2014 Winston & Strawn5 Depending on the pollutant or surrogate selected, compliance may be demonstrated using either a CMS or stack testing –Hg – Use either Hg CEMS or Hg sorbent trap –SO2 – Must use SO2 CEMS –HCl, PM and non-Hg HAP metals – Use either CEMS or quarterly stack testing All continuous monitoring systems must be operated during startup and shutdown. Each quarterly stack test must be completed within 80 to 100 calendar days after the previous test –Can skip stack testing in quarters during which less than 168 boiler operating hours occur, but at least one test must be conducted per calendar year. Monitoring and Testing Requirements

6. © 2014 Winston & Strawn6 EPA assumed that “EGUs should be considered to be operating normally at all times electricity is generated.” Variable emissions that occur after startup ends but before an EGU has reached a stable operating load will be counted by CEMS and sorbent trap monitoring systems. –Sorbent trap monitoring systems cannot differentiate between startup/shutdown emissions and normal operation. Default diluent capping –Without diluent cap values at low CO 2 or high O 2 concentrations, emission rates calculated using EPA’s F- factor methodology will be inaccurately high, approaching infinity. –MATS currently allows default diluent caps to be used to calculate Hg emission rates, but not for other pollutants. Should I elect to demonstrate compliance using CEMS?

7. © 2014 Winston & Strawn7 EGUs must comply with work practice standards, rather than the MATS emission limits, during startup and shutdown. Startup ends when any of the steam from the boiler is used to generate electricity for sale over the grid or for any other purpose (including onsite use). –Under the current definition, startup ends at 1 MW. Shutdown begins either when none of the steam from the boiler is used to generate electricity for sale over the grid or for any other purpose (including onsite use), or at the point of no fuel being fired in the boiler, whichever is earlier. Startup and Shutdown Work Practice Standards

8. © 2014 Winston & Strawn8 Once a unit converts to firing coal during startup, all applicable control technologies must be engaged, except dry scrubber and SCR, which may be started “appropriately to comply with relevant standards applicable during normal operation.” –SNCRs, WFGDs, ESPs, and limestone injection systems in CFBs must be engaged upon firing coal, regardless of temperature restrictions or manufacturers’ specifications. EGUs must operate all applicable control technologies while firing coal during shutdown. –No exception for SCRs, DFGDs, or any other air pollution control devices. Operation of Air Pollution Control Devices

9. © 2014 Winston & Strawn9 EPA announced reconsideration of the startup and shutdown work practice standards on November 16, 2012 –Proposed to allow SNCRs and limestone injection at CFBs to be engaged “as expeditiously as possible” after an EGU begins firing coal during startup. Still no exception for ESPs. –Proposed to no longer require engagement of SCR, dry scrubber, SNCR, and limestone injection at CFBs while firing coal during shutdown. EPA did not finalize these changes when it finalized the new source MATS reconsideration. Reconsideration of the SUSD Work Practice Standards

10. © 2014 Winston & Strawn10 EPA re-opened the public comment on the startup and shutdown work practice standards reconsideration on June 25, 2013. EPA’s analysis “could support defining the end of startup at coal-fired EGUs as occurring at 25 percent of nameplate capacity plus 3 hours or the start of electricity generation plus 6 hours, whichever comes first.” –Some EGUs cannot meet the MATS emission limits at EPA’s suggested end of startup, particularly CFBs, which have longer startup times. Over a year later, EPA has not yet finalized the proposed changes to the work practice standards. Reconsideration of the SUSD Work Practice Standards

11. © 2014 Winston & Strawn11 MATS does not address how the startup and shutdown work practice standards should apply to EGUs venting to a common stack. –Commenters have suggested that the startup and shutdown work practice standards apply to all units venting to a common stack when any one of the units is starting up or shutting down while any other unit is in operation. Reconsideration of the SUSD Work Practice Standards

12. © 2014 Winston & Strawn12 Two parts to a MATS tune-up: –Preventative maintenance work performed during outage –Boiler tuning work performed while the unit is operating MATS does not specify how soon the boiler tuning must be completed after the preventative maintenance work is completed. –It may be preferable to allow time between when the unit comes out of outage before conducting the boiler tuning work to allow the unit to become seasoned and normalized after the outage. Keep this timing in mind when scheduling initial compliance tune- up before MATS initial compliance deadline. EPA drafted the tune-up work practice standards with PC units in mind. –The tune-up work practice standards contain a number of requirements that do not apply to CFB units. Tune-Up Work Practice Standards

13. © 2014 Winston & Strawn13 MATS requires three types of reporting: semiannual compliance reports, quarterly stack test reports, and quarterly CMS reports. The first semiannual compliance report will cover the period from April 16, 2015 through December 31, 2015 and must be submitted to EPA by January 31, 2016 using the Compliance and Emissions Data Reporting Interface (“CEDRI”). Quarterly stack test results must be submitted to EPA within 60 days after the date of completing each performance test using EPA’s Electronic Reporting Tool (“ERT”). Quarterly Hg CEMS and sorbent trap monitoring reports must be submitted 30 days after each calendar quarter using EPA’s Emissions Collection and Monitoring Plan System (“ECMPS”) client tool. PM and SO2 CEMS data must be submitted to EPA 60 days following the end of each calendar quarter using CEDRI. Electronic Reporting

14. © 2014 Winston & Strawn14 CEDRI does not appear to have any specific reporting format for MATS reporting at this time. ECMPS does not yet support submission of Hg sorbent trap or SO2 CEMS data. –EPA is conducting beta testing of a MATS-friendly version of ECMPS Reporting stack test results, PM CEMS data, RCA/RRA data, and RATA data will be cumbersome and time-consuming due to limitations of the CEDRI and ERT systems. EPA is aware of these electronic reporting issues but has not yet revised the rule to streamline electronic reporting. Electronic Reporting

15. © 2014 Winston & Strawn15 One year extensions from state permitting authorities are available under § 112(i)(3)(B) where additional time is necessary for installation of controls. –EPA stated that these one-year extensions should be broadly available. EPA interprets installation of controls broadly –Installation of onsite replacement power, such as a simple cycle gas turbine. –Running a retiring unit for reliability reasons while related units are installing pollution control upgrades EPA recently reported that less than ¼ of utilities have requested compliance extensions. –Approximately 80 extensions have been granted to date. Deadline to submit an extension request is December 17, 2014. MATS Compliance Extensions

16. © 2014 Winston & Strawn16 OECA memo outlines limited circumstances under which a one- year extension for reliability purposes may be granted in an administrative order: –Where an EGU that otherwise would have been deactivated is required to operate in noncompliance with the MATS for an additional year, or –Where an EGU has a delay in installation of controls due to factors beyond the control of the owner/operator and is required to run for reliability purposes, or needs to operate because another unit has had such a delay. Timeline for obtaining an AO has already started. OECA cannot issue an AO until April 16, 2015. OECA memo is not legally enforceable and can be withdrawn at any time. MATS Compliance Extensions

17. © 2014 Winston & Strawn17 D.C. Circuit upheld MATS on April 15, 2014 –Court upheld EPA’s “reasonable and necessary” determination. –Court upheld process by which EPA established Hg emission limits. –Court held that a separate subcategory was not required to be established for circulating fluidized bed units. –Court held that EPA was not required to set separate standards for major sources and area sources of HAPs. MATS Litigation

18. 18© 2014 Winston & Strawn Stephanie Sebor 35 W. Wacker Drive Chicago, IL 60601 (312) 558-7341 ssebor@winston.com Questions?