EPA issues haze rule that requires SCR on three Arizona coal plants

The U.S. Environmental Protection Agency is taking final action to approve in part and disapprove in part a portion of Arizona’s State Implementation Plan (SIP) for regional haze and to promulgate a Federal Implementation Plan (FIP) for the disapproved elements of the SIP related to three coal-fired power plants.

The state and federal plans are to implement the regional haze program in Arizona for the first planning period through 2018. This final rule, published in the Dec. 5 Federal Register, addresses only the portion of the SIP related to Arizona’s determination of Best Available Retrofit Technology (BART) to control emissions from eight units at three coal-fired plants: Apache, Cholla and Coronado.

EPA approves in this final rule the state’s determination that the three sources are subject to BART, and approves the state’s emissions limits for SO2 and particulate matter less than or equal to 10 micrometers (PM10) at all the units, but disapproves Arizona’s BART emissions limits for NOX at the coal-fired units of the three power plants. The FIP contains new emissions limits for NOX at these coal-fired units and compliance schedules for implementation of BART as well as requirements for equipment maintenance, monitoring, recordkeeping and reporting for all units and all pollutants at the three sources.

This rule is effective Jan. 4, 2013. EPA’s notice of proposed rulemaking (NPRM) was signed on July 2 and was published in the Federal Register on July 20.

The affected plants are: Arizona Electric Power’s (AEPCO) Apache Units 1, 2 and 3; Arizona Public Service’s (APS) Cholla Units 2, 3 and 4; and Salt River Project’s (SRP) Coronado Units 1 and 2. EPA had proposed to disapprove Arizona’s BART emissions limits for NOX at all of the coal-fired BART units (i.e., all of the BART units except for Apache Unit 1). The proposed FIP contained BART emissions limits for NOX at all of the coal-fired BART units.

Most notably, and with the exception of Apache Unit 1, the FIP includes NOX emission limits for all the units that are achievable with selective catalytic reduction (SCR), EPA said. EPA said it encourages the state of Arizona to submit a revised SIP to replace all portions of the FIP, and that it is ready to work with the state to develop a revised plan.

“Based on our evaluation described in the proposal and in this document, we are disapproving the State’s BART emissions limits for NOX at all the BART units except for Apache Unit 1, for which the SIP’s BART determination consists of fuel switching to pipeline natural gas (PNG),” the agency wrote. “We also are disapproving the compliance schedules and requirements for equipment maintenance and operation, including monitoring, recordkeeping and reporting requirements for BART at all the BART units since these were not included in the Arizona Regional Haze SIP.”

The FIP includes a removal efficiency requirement for SO2 on Cholla Units 2, 3 and 4, which will ensure that the scrubbers on these units are properly operated and maintained.

FIP requirements by plant are:

Apache Units 2 and 3: The final emissions limit for NOX is 0.07 lbs/MMBtu, determined as an average of the two units, based on a rolling 30-boiler-operating- day average. Compared to the proposed emissions limit of 0.05 lb/ MMBtu on each unit, this higher limit and the addition of a two-unit average provides an extra margin of compliance to account for periods of startup and shutdown as well as additional operational flexibility for Apache given AEPCO’s status as a small entity. The final compliance date for this NOX limit remains five years from the date of publication of this final rule. For SO2 and PM10, EPA is extending the compliance deadline to four years from publication of this final rule in order to provide AEPCO with sufficient time to implement upgrades to the existing scrubbers and electrostatic precipitators (ESPs) at these units.

Cholla Units 2, 3 and 4: The final emissions limit for NOX is 0.055 lb/MMBtu determined as an average of the three units, based on a rolling 30-boiler-operating-day average. Compared to the proposed emissions limit of 0.050 lb/MMBtu on each unit, the higher limit and three-unit average provide an extra margin of compliance to account for periods of startup and shutdown. As proposed, the final compliance date to install and operate controls is five years from the date of publication of this final rule. For SO2, EPA is adding a removal efficiency requirement of 95% for the scrubbers on Cholla Units 2, 3 and 4, in order to ensure that these scrubbers are properly operated and maintained. EPA is retaining the other compliance deadlines as proposed, except for Cholla Unit 2, where it is extending the compliance deadline to April 1, 2016, for both SO2 and PM10 in order to provide APS with sufficient time to install a new wet flue gas desulfurization (FGD) system and fabric filter on this unit.

Coronado Units 1 and 2: The final emissions limit for NOX is 0.065 lb/MMBtu determined as an average of the two units, based on a rolling 30-boiler-operating- day average. Compared to the proposed emissions limits of 0.050 on Unit 1 and 0.080 on Unit 2, this new limit based on a two-unit average provides an extra margin of compliance to account for startup and shutdown. The final compliance date for the two units is five years from the date of publication of this final rule.

EPA makes allowances for sulfur content in Cholla’s coal

The Dec. 5 Federal Register notice from EPA also included dozens of pages of responses to comments made on its proposed findings from parties like AEPCO, APS, SRP, PacifiCorp, Arizona Utilities Group (AUG) and the National Park Service (NPS).

For example, APS noted that the SO2 content of the coal source for the Cholla plant is up to 3.0 lbs/MMBtu, and the maximum rate of removal that will be continuously achievable after the plant upgrades its scrubbers is 95%. Therefore, it asserted that 0.15 lb/MMBtu is the limit.

“A number of commenters indicated that lower emission levels are being achieved at other sources with wet FGDs and western coal,” EPA responded. “However, none of these examples are based on coal with as high a potential SO2 level as the coal that is currently burned at Cholla. APS historically burned coal from the McKinley mine located on the Navajo Reservation at the Cholla units. Following the closure of this mine, APS obtained coal from various sources until the company signed a long-term contract for coal from the El Segundo and Lee Ranch mines in New Mexico [of Peabody Energy (NYSE: BTU)]. The sulfur content of coal from these two mines is substantially higher than Powder River Basin (PRB) coal and also much higher than coal from the former source, the McKinley mine.”

EPA continued: “The current coal contract for these units indicates that the typical sulfur content of this coal is equivalent to 2.4 lb/ MMBtu SO2 and can be as high as 3.0 lb/MMBtu. Given that the transition to this coal has already occurred and that company has entered into a contract to continue purchasing this coal until 2024, we consider emissions based on this coal supply to ‘represent a realistic depiction of anticipated annual emissions for the source.’ The [regional haze] and the BART Guidelines do not require states to restrict or alter a facility’s selection of the coal supply in order to meet a specific limit. APS’s comments on the proposal indicate that the company intends to upgrade the existing SO2 controls at Unit 2 to a new wet flue gas desulfurization (FGD) system, identical to those already installed on Units 3 and 4.”

In another example, the National Park Service concurred with EPA’s reliance on an SCR level of performance of 0.05 lb/MMBtu. NPS noted that this level is consistent with EPA’s determination for the coal-fired San Juan plant in New Mexico and EPA’s assumptions for the Colstrip and Corette coal plants in Montana.

EPA responded to NPS by saying that information received in comments on its proposal continues to support the use of an SCR level of performance of 0.05 lb/MMBtu on an annual average basis. “Accordingly, we have retained the use of 0.05 lb/MMBtu in our cost calculations (which are based on annual emissions). However, in setting emission limits on a 30-day rolling average basis, it is necessary to account for startup and shutdown events, which raise the average emission rates over this shorter period of time. Therefore, we have revised our proposed emission limits for SCR at each of the sources.”

  • In the case of Apache Units 2 and 3, EPA performed a supplemental analysis using AEPCO’s cost estimates that are allowed by the CCM (capital costs for the installation of SCR with LNB and OFA of $164.9m). EPA also considered comments, the size of the Apache facility, AEPCO’s classification as a small entity, the economic effects of requiring the use of SCR on Apache Units 2 and 3, and AEPCO’s arguments regarding an SCR emissions limit of 0.07 lb/MMBtu. EPA concluded that in this case it is appropriate to revise the 30-day rolling average SCR limit to 0.070 lb/MMBtu, with a ‘‘bubble’’ across Apache Units 2 and 3.
  • In the case of Cholla, EPA said it has taken into account the need to accommodate startup and shutdown events in the 30-day rolling average and has revised the limit to 0.055 lb/ MMBtu, with a bubble across Units 2, 3 and 4.
  • Finally, in the case of Coronado, EPA has taken into account both the need to accommodate startup and shutdown events, as well as an existing consent decree, which sets an emission limit of 0.080 lb/MMBtu for Unit 2. Based on these considerations, EPA has set a two-unit 30-day rolling average limit of 0.065 lb/MMbtu.

In its Nov. 2 quarterly Form 10-Q filing, APS parent Pinnacle West Capital Corp. (NYSE: PNW) said this about haze impacts at Cholla: “On December 2, 2011, the EPA provided notice of a proposed consent decree to address a lawsuit filed by a number of environmental organizations, which alleged that the EPA failed to promulgate Federal Implementation Plans (‘FIPs’) for states that have not yet submitted all or part of the required regional haze SIPs. In accordance with the consent decree, on July 2, 2012, EPA issued a proposed BART rule applicable to Cholla proposing to approve [state-imposed] BART emissions limits for sulfur dioxide and particulate emissions, but proposing to disapprove ADEQ’s BART emissions limits for oxides of nitrogen (‘NOx’), for which EPA is proposing to promulgate a FIP. If finalized as proposed, EPA’s FIP would establish a new, more stringent NOx emissions rate for the two BART-eligible Cholla units owned by APS. In order to comply with this new rate, APS would be required to install selective catalytic reduction technology on both units. APS’s total costs for these post-combustion controls would be approximately $182 million…. Under the proposed rule, APS would have five years to complete installation of the equipment and achieve the BART emissions limits.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.