PacifiCorp needs to fight through haze to firm up its coal plans

Saying the impact of new regional haze rules in two states on some of its coal-fired generation are still unclear, PacifiCorp on Jan. 8 asked the Utah Public Service Commission for a delay in the deadline for it to file its latest integrated resource plan.

The U.S. Environmental Protection Agency’s proposed action on the Arizona Regional Haze State Implementation Plan (SIP) was published in the Federal Register on July 20, 2012. While that SIP concluded that the low-NOx burners at PacifiCorp’s Cholla Unit 4 would meet the Best Available Retrofit Technology (BART) requirements, EPA’s proposal required the installation of selective catalytic reduction (SCR) at an emission rate of 0.05 lbs/mmBtu for Cholla Unit 4.

On Dec. 5, 2012, the EPA approved in part and disapproved in part Arizona’s Regional Haze SIP, revising the proposed emission limits for Cholla Unit 4 to include emissions averaging at a rate of 0.055 lbs/mmBtu with Cholla Units 2 and 3, which are owned and operated by Arizona Public Service. The Cholla Unit 4 emissions control requirements and associated assumptions will now be included in PacifiCorp’s 2013 IRP base case modeling runs, the utility told the Utah commission.

In Wyoming, under a consent decree entered by the U.S. District Court for the District of Colorado in September 2011, the EPA was required to take final action on the Wyoming Regional Haze SIP by Oct. 15, 2012. That consent decree deadline was moved to Dec. 14, 2012, by EPA with agreement of WildEarth Guardians, a party to the decree. On Dec. 10, 2012, the EPA filed an unopposed motion to again modify the consent decree deadlines for taking action on the Wyoming Regional Haze SIP. EPA’s motion sought to modify the consent decree to allow it to re-propose, on or before March 29, 2013, a rule to govern compliance with Regional Haze implementation plan requirements for the state of Wyoming.

On Dec. 13, 2012, the court granted EPA’s request for an extension. EPA now has until March 29, 2013, to re-propose a Regional Haze implementation plan rule and until Sept. 27, 2013, to take final action on the rule. EPA will be evaluating new cost and visibility analyses for several of PacifiCorp’s units and will take public comment on the new information.

After revision of the Oct. 15, 2012, deadline for EPA’s action and in anticipation of the EPA’s revised deadline of Dec. 14, 2012, to take final action on the Wyoming Regional Haze SIP, PacifiCorp said it suspended the modeling work it was doing in preparation of the 2013 IRP, intending to re-start the modeling once EPA’s final action was available and could be assessed. PacifiCorp was concerned that it would not be efficient to continue to perform its modeling based on a set of assumptions that could almost immediately change as a result of EPA’s final action. PacifiCorp’s intention was to incorporate the latest information from EPA’s final action into the IRP modeling.

“Given that EPA has now requested and received additional time to re-propose action on the Wyoming Regional Haze SIP and that the re-proposed action will not be undertaken in sufficient time to allow PacifiCorp to incorporate those results into its modeling, no modifications to the base case Regional Haze compliance assumptions for Wyoming are necessary, and PacifiCorp will re-initiate its modeling efforts for the 2013 IRP,” PacifiCorp added. “The Company will include the EPA’s previously proposed action on the Wyoming SIP in the 2013 IRP stringent case modeling runs.”

PacifiCorp said it will modify its base case Regional Haze compliance assumptions for the 2013 IRP to incorporate EPA’s final actions on the Arizona Regional Haze SIP, to include the addition, by the end of 2017, of SCR on Unit 4 of the Cholla plant.

In addition, PacifiCorp said it will update its forward price curve information so that base case assumptions align with the September 2012 official forward price curve, rather than the June 2012 official price curve, as well as with the most current projections of high and low natural gas and coal prices.

PacifiCorp is requesting from the Utah commission a one-month extension of the filing of its 2013 IRP, for a new filing date of April 30, 2013.

EPA lays out NOx and SO2 needs for Cholla

In its Dec. 5 notice about the Arizona haze rule, EPA said that at Cholla Unit 2, 3 and 4 that 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, EPA said. 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 said it 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.

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 APS, PacifiCorp and the National Park Service.

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.”

The four units at Cholla have a combined generating capability of 995 MW. PacifiCorp owns 37% of the plant’s common facilities and all of Unit 4. That’s the largest unit and was commissioned in 1981 with a generating capability of 395 MW. Arizona Public Service owns Units 1, 2 and 3 and operates the entire facility. In 2008, PacifiCorp said on its website that it significantly upgraded Unit 4’s emissions control equipment by installing a state-of-the-art cloth filter baghouse and high-efficiency SO2 scrubber.

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.