Economic Impact Assessment
for the
Proposed Revisions to the
EPA Stack Height Regulation
Draft.
November 1984
rev.
li/1/84
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Table of Contents
Subject page
List of Table and Figures ii
Executive Summary iii
Introduction 1
Plume Impaction 7
Definitions of "Excessive Concentrations" and "Nearby" 11
Reliance' on the 2.5 H Formula 16
Limitations on the Use of the Formula 19
Definition of "Dispersion Techniques" 21
Prohibition on Credit for Tying New Facilities into
Grandfathered Stacks Above GEP Height 26
Two-Stage Implementation Process 28
Automatic Credit for Formula Height 30
Estimate of Emissions and Economic Impacts 32
Append! x - Li st of References 41
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List of Tables and Figures
page
Table 1 - Summary of Estimated Impacts in 1995 of Proposed Revisions
to the Stack Heights Regulation 6
Table 2 - Estimated Changes in Ambient Concentrations and Emissions
Due to Prohibition of Credit for Combining of Stacks 24
Table 3 - Emissions Impacts in 1995 of Proposed Revisions to the
Stack Height Regulation 35
Table 4 - Cost Impacts in 1995 of Proposed Revisions to the Stack
Height Regulation 36
Table 5 - Number of Power Plant Units Affected by Proposed Revisions
to the Stack Height Regulation - Low Impact Scenario 37
Table 6 - Number of Power Plant Units Affected by Proposed Revisions
to the Stack Height Regulation - High Impact Scenario 38
Table 7 - Coal Production and Shipment Impacts in Year 1995 of
Proposed Provisions to the Stack Height Regulation 39
Figure 1 - Map of United States Showing CEUM Demand Regions 40
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Executive Summary
As required by Section 123 of the Clean Air Act, the Environmental
Protection Agency (EPA) promulgated a regulation in 1982 that governed the
extent to which tall stacks and other dispersion techniques could be relied
on by emission source owners in lieu of constant emission controls. This
regulation was challenged by the Sierra Club Legal Defense Fund, Inc.; the
Natural Resources Defense Council, Inc; and the Commonwealth of Pennsylvania,
On October 11, 1983, the U.S. Court of Appeals for the D.C. Circuit issued
its opinion, overturning certain provisions of the regulation, upholding
others, and remanding certain other portions to the Agency for reconsidera-
tion. The mandate, formally issued on July 18, 1984, requires EPA to
promulgate a revised regulation within 6 months, or by January 18, 1985.
In terms of their impacts on emission sources, the most significant
changes to the regulation concern EPA's redefinition of several key
terms, "excessive concentrations," "nearby," and "dispersion techniques,"
and the court-ordered deletion of credit for plume impaction. Other changes
are also being made, but either have no significant impact or have impacts
that cannot be quantified. Both major and minor revisions to the regulation
are discussed in the following report.
The report considers two estimates of emissions and economic impacts,
a "high impact," or worst-case scenario, and a "low impact" scenario that
presumes that many potentially affected sources will, in actuality, be
able to justify their stack heights, configurations and existing emission
limitations. Rather than absolute impacts, this report presents findings
in terms of the changes that will occur relative to the 1982 regulation
that was overturned by the court.
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Under the "high impact" scenario, the analysis predicts that the
revisions to the regulation will impose annualized costs of up to $1.4
billion and total capital costs of as much as $4.6 billion. The additional
control requirements will yield reductions in S02 emissions of approximately
2.88 million tons per year.
The "low impact" scenario predicts that annualized costs will run
approximately $300 million, with total capital costs of $900 million.
S02 reductions under this case are predicted to be approximately 790,000
tons per year.
To a great extent, industries will be able to respond to these
changes in the regulation through conversion to lower sulfur fuel.
However, some sources will have to install additional control equipment,
i.e., scrubbers, and there is likely to be some increase in reliance on
those sources with scrubbers already in place.
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Introduction
Section 123 of the Clean Air Act requires that EPA promulgate
regulations to define the extent to which dispersion techniques may be
used in lieu of constant emission controls. Specifically, these regulations
are intended to ensure that the degree of emission limitation required
for the control of any air pollutant under an applicable implementation
plan is not affected by tall stacks--!'.e., those in excess of good
engineering practice—or by any other dispersion technique. Regulations
governing credit for stack heights and other dispersion techniques were
promulgated on February 8, 1982.
Portions of these regulations were subsequently overturned or remanded
to EPA for reconsideration and revision as the result of a suit filed in
the U.S. Court of Appeals for the D.C. Circuit by the Sierra Club Legal
Defense Fund, Inc., the Natural Resources Defense Council, Inc., and the
Commonwealth of Pennsylvania [Sierra Club v. EPA, 719 F.2d 436 (D.C.
dr., 1983), cert, denied, 52 U.S.L.W. 3929 (U.S. July 2, 1984)].
The Agency is presently proposing a number of revisions to the stack
height regulation to comply with the court decision. These revisions
address a number of important concepts, including definitions of terms
such as "excessive concentrations," "dispersion techniques," and "nearby,"
and the basis for determining good engineering practice (GEP) stack height
for all sources to which the regulation applies.
The following report presents an assessment of the potential impacts
of the proposed revisions to the stack height regulation in terms of
emissions and estimated costs of compliance. The analysis was designed
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to focus primarily on sources affected by the changes in the definitions
of excessive concentrations, the allowable use of terrain in fluid modeling,
plume impaction, and the definition of dispersion techniques (discussions
of the expected impacts of other aspects of the regulation are also
included in this assessment, however). Furthermore, to make the scope of
the analysis reasonable, environmental and economic impacts were analyzed
only for power plants. However, The Agency also attempted to identify
potentially affected smelters and pulp and paper mills.
Using several data bases, EPA identified those sources potentially
affected by revisions to the regulation. For purposes of this assessment,
the Agency presumed that sources with stacks in excess of the 65 meter de
minimis height and constructed after December 31, 1970, are subject to the
regulation and thus, are potentially affected. However, since many of
these sources will, in actuality, not be affected by the revised regula-
tion--i.e., they will be able to justify their existing stack heights,
configurations and emission limitations—the impacts stated in this report
are generally expected to be greater than the actual impacts of the revised
regulation.
Wherever possible, the Agency has produced high and low estimates of
emission changes and economic impacts likely to result from the combina-
tion of the specific changes in the regulation that were analyzed. In
both cases, the estimates tend to err on the side of greater impact, as
noted above, in that more source owners are likely to be able to justify
their present stack configurations and emission limitations than EPA is
assuming in this assessment.
Rough estimates of the individual impacts of each of the changes
were derived from the compound estimates; however, the compound estimates
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should be viewed as more accurate than these estimates of individual impacts
for several reasons. First, it was impossible, given the scope of the
analysis, to disaggregate the effects of individual changes on sources
affected by more than one change. Second, the industry's response to
each change will affect coal markets, and will therefore influence the
cost of responding to other changes. Finally, the limitations of the
analysis do not enable cost and emission impacts at specific plants to be
evaluated separately; thus, the impacts on sources affected by any one
change cannot be perfectly disaggregated from impacts on other sources.
The assessment also considered the impacts of the proposed revisions
in the absence of other regulatory requirements. The actual impacts of
the proposed regulation could be greater or less, to the extent that
other regulations impose more stringent requirements or affect the degree
of emission limitation required for individual sources. Examples include
cases where the new source performance standards (NSPS) impose an emission
limitation on a source that is more stringent than any revisions mandated
by the revised stack heights regulation, and where a revised ambient air
quality standard requires a greater level of emissions control than
presently exists. In the first example, the revised stack height regula-
tion would have no practical impact on a source; in the second, the
revised regulation could impose additional costs by restricting the extent
to which sources may comply with stricter air quality standards through
the use of dispersion techniques.
The assessment used the 1982 regulation as a baseline; i.e., rather
than evaluating the total emissions impacts and compliance costs, it
considered only the changes to source emission limitations that will be
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needed as a result of imposing the requirements of the proposed revisions
rather than the requirements of the 1982 regulation.
This assessment was constrained by a lack of data necessary for more
detailed evaluation and by the severe time constraint imposed by the court-
ordered 6-month proposal and promulgation deadline. Lack of the following
information imposed the most significant constraints:
1. source-specific information on building dimensions needed to more
accurately estimate GEP stack height where sources must reduce their stack
height credits;
2. site-specific background air quality and meteorological data needed
to adequately model changes in emission limitations for each source
affected by the regulation; and
3. more detailed terrain data than was possible to collect in the time
available.
Even if the Agency had sufficient resources to collect and adequately
analyze all of the data needed for a more thorough assessment, the 6-month
deadline imposed by the U.S. Court of Appeals would limit the scope and
level of detail for this assessment to that presented in the following
report.
This report will describe, individually, each aspect of the Court of
Appeals decision, how the Agency has responded to it in the proposed regulation,
the methodology used in conducting the assessment of impacts, and the
results of the analyses. Sources may be affected by several changes to the
regulation; in this event, the impacts on source emission limitations, and
resulting costs, are not necessarily cumulative, but rather may be functions
of the most limiting aspect of the revised regulation.
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It is important to note that the report provides an estimate of
the approximate costs to emission source owners of the changes to the
regulation; the assessment does not attempt to estimate the benefits that
would accrue from the reduction in $63 emissions as a result of the
revisions to the stack heights regulation. Such analyses would far
exceed the time and resources available to the Agency at this time.
Reductions in S02 emissions resulting from the revisions are expected
generally to yield benefits in terms of reduced atmospheric loadings, acid
deposition, and regional haze.
Table 1 provides a summary of the total estimated impacts of the
proposed changes to the regulation. More specific information about the
effects of specific changes to the regulation can be found in the following
sections. All impacts are projected for the year 1995 and assume total
compliance with the regulation by the year 1990.
A variety of information sources were used for this assessment and are
summarized in an appendix to this report.
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Table 1
Summary of Estimated Impacts in 1995 of
Proposed Revisions to the Stack Heights Regulation*
S02
Reductions
Annualized
Costs**
Capital
Costs***
Average Cost
per ton of
Sulfur removed
Retrofit
Scrubber
Capacity****
Low Impact
Scenario
790,000 Tons
$300 Million
$900 Million
$395/Ton
4.0 Giqawatts
High Impact
Scenario
2.88 million Tons
$1.4 Billion
$4.6 Billion
$493/Ton
17.4 Gigawatts
* All costs are given in 1984 dollars.
** Includes amortized capital costs, operation and maintenance, and fuel costs,
*** Cumulative through 1995.
**** Refers to the quantity of electrical power produced by units whose
emissions are reduced through the use of scrubbers.
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Plume Impaction
Description of Change
The 1982 regulation allowed sources to take credit for building their
stacks above GEP height to avoid plume impaction, i.e., high pollutant
concentrations that occur when a plume contacts elevated terrain (e.g., a
hillside) before it can disperse sufficiently. In its ruling, the Court of
Appeals held that the Agency exceeded its statutory authority in allowing
credit for the additional height, and reversed this portion of the
regulation.
In developing the proposed regulation, EPA has deleted credit for
plume impaction. The effect of this deletion will be to require sources
that could previously have received such credit--i.e., sources with plume
impaction problems—to address the problem by reducing their emissions
instead.
Review of Potentially Affected Sources
To estimate the number of sources that may be affected by this change,
the Agency drew, from its inventory of sources with stacks exceeding the
65 meter de minimi's height and constructed after December 31, 1970, those
sources with terrain features greater than GEP stack height within 25 km
(15 miles) of the stack.1 These sources are identified in the draft report,
conduct this analysis, the Agency relied on regional estimates of
GEP stack height that were developed in 1980 to evaluate the 1981 proposed
stack height regulation. These estimates were obtained from actual plant
data collected from an inventory of 102 plants. The calculation of actual
GEP formula heights would have required information on the dimensions of
buildings near each of a large number of sources; such information is not
readily available and could not have been obtained within the time available
to the Agency for this proposal. It is important to note that this informa-
tion was collected and analyzed solely for the purpose of estimating the
range of probable impacts on changes to the regulation; it should not be
construed as implying that any of the identified sources are, in fact,
affected by a specific change in the regulation.
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"Evaluation of Sources Affected by Revisions to the Stack Height Regulations,"
GCA/Technology Division, September 1984.
The rationale for focusing on this particular relationship to terrain
is that EPA believes that plume impaction may be significant--!.e., impaction
tion may affect the emission limitation for a source—when terrain features
exist within 25 km of the stack (plume impaction will not necessarily occur
whenever this condition is fulfilled).
Method for Evaluation
Plume impaction cannot be reliably predicted to occur based on the
simple existence of terrain features within 25 km of a stack. Plume impac-
tion is sensitive to a number of considerations, including wind direction,
wind speed, and atmospheric stability. Furthermore, even where the highest
concentrations are predicted to occur in elevated terrain, due to plume
impaction, such concentrations may not represent the controlling situation
for the source. For example, a lower concentration may be predicted to
occur elsewhere where it would violate a PSD increment. In this instance,
the source may be required to control its emissions to a greater degree to
eliminate the violation than it would be to eliminate the predicted plume
impaction problem. Actual plume impaction must therefore be evaluated on a
case-by-case basis by conducting field studies or appropriate modeling. In
this respect, the Agency has conducted a worst-case analysis by presuming
that all potentially affected sources would be required to reduce their
emissions.
To estimate the effect on source emission limitations of deleting
plume impaction credit, EPA presumed that potentially affected sources
would not be able to justify stack height credits above GEP formula height,
and calculated revised emission limitations accordingly. EPA then selected
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a representative source from each region, based on the relationship between
the source and surrounding terrain. These sources were modeled at the
estimated GEP stack height, using the VALLEY model, to determine the appro-
priate revised emission limitation (see footnote 1 regarding estimated
GEP height). The results of these analyses were then extrapolated to other
potentially affected sources within each region.
The results of this stage of the analysis are described in the draft
report, "Evaluations of Sources Affected by Revised Stack Height Regulations,"
GCA/Technology Division, September 1984, and indicate that no change in
allowable emissions would result if the surrounding terrain were greater
than 500 to 750 feet above the actual stack height. The Agency determined
that this result was reasonable.2 Based on the results obtained from
modeling the representative sources at which the height difference was less
than 500 to 750 feet, the Agency developed a formula for predicting the
expected reduction in allowable emissions as a function of the net defference
in height between the top of the actual stack and the surrounding terrain.3
The formula predicts that allowable emissions will decrease by about 54 per-
cent for sources where there is no net difference in height, and that there
would be no decrease for sources where the net difference is greater than
600 feet.
For the "high impact" scenario, the Agency assumed that allowable
emissions at all of the 60 sources identified as potentially affected were
reduced in accordance with the formula. For the "low impact" scenario, the
2Memorandum to the Files from David Stonefield regarding plume
impaction estimates; October 25, 1984.
3Memorandum to the Files from Stephen Greene regarding derivation of
the formula predicting reductions in emissions as a function of the
difference between actual stack height and surrounding terrain height;
October 31, 1984.
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Agency assumed that only those 32 sources identified as potentially affected
and having terrain within 0.8 km (1/2 mile) below 40 percent of GEP height
would be required to reduce their allowable emissions. Under this scenario,
other sources potentially affected by the plume impaction provisions were
presumed to be able to justify their actual stacks through fluid modeling,
and would therefore not incur plume impaction effects.
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Definitions of
"Excessive Concentrations" and "Nearby"
Two changes to the regulation are being made that may significantly
affect requirements for field studies and fluid modeling demonstrations:
revisions to the definition of "excessive concentrations" and to the
definition of "nearby." In both cases, estimates of affected sources
include those that have conducted, or may in the future conduct fluid
modeling and field studies to justify credit for stack heights in excess of
those established through the use of the GEP formulae. The effects of
these changes to the regulation are closely interrelated. Consequently,
while it is possible to make some estimate of the numbers of sources affected
by each change, calculating their effects on source emission limitations
and resulting costs cannot readily be disaggregated. For this reason, the
assessment considered the revisions to the definitions of "excessive
concentrations" and "nearby" in combination for the purpose af analyzing
their economic impacts. The following is a description of the changes
proposed, and the sources potentially affected by each change.
Description of Change - "Excessive Concentrations"
Section 123 of the Clean Air Act allows sources sufficient credit for
stack height to avoid excessive concentrations of an air pollutant due to
downwash. In the 1982 rule, EPA defined "excessive concentrations" as a
40 percent increase in ground-level concentrations over what is predicted
to occur in the absence of downwash. This definition was rejected by the
court as not responding adequately to public health and welfare concerns.
Consequently, the Agency is proposing a revised definition that requires,
in addition to the 40 percent increase, that downwash result in an exceedance
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of the applicable NAAQS or PSD increment before sources may gain credit for
greater stack height.
Review of Affected Sources
The "high impact" analysis presumes that none of the 190 sources with
stacks greater than GEP formula height will be able to show that such stacks
are needed to avoid excessive concentrations, as that term is redefined,
and will therefore be required to reduce their credits to those allowed by
the formula. EPA believes it is more likely that many sources conducting
fluid modeling to determine the effects of elevated terrain within 1/2 mile
of the source will be able to show that such terrain produces downwash,
wakes, and eddy effects resulting in excessive concentrations. However, it
is not possible to refine significantly the Agency's estimate of sources
affected by this change in the regulation without actually conducting fluid
modeling for each of the potentially affected sources.
Description of Change - Definition of "Nearby"
The 1982 regulation allowed sources to base their GEP stack heights on
formulae that considered the dimensions of nearby structures. The Agency
defined "nearby" for this purpose to be 5 times the lesser of the height or
width of such structures, but not more than 1/2 mile. Sources who wished
could also demonstrate GEP stack height through fluid modeling to assess
the actual effects of structures and terrain features of downwash in the
vicinity of the source. For this latter demonstration, the Agency applied
no distance restriction. The Court of Appeals held that EPA had acted
improperly by not heeding Congressional intent to establish an arbitrary
limit on the extent to which sources could increase their stack heights to
account for terrain effects. In remanding this provision to EPA, the court
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directed the Agency to apply the same limitation to fluid modeling as to
formula calculations.
To respond to this directive, EPA is requesting comment on several
alternatives to the application of the distance limitation in fluid modeling
demonstrations. A 1/2 mile limitation forms the basis for each of these
alternatives.
Review of Affected Sources
Eighty-one existing sources are potentially affected by this revision
in that they do not have terrain features greater than 40 percent of the GEP
formula stack height within 0.8 km (1/2 mile) of the stack. (See footnote
1 for a discussion of the GEP height used.) These sources are presumed to
be unable to demonstrate downwash sufficient to justify taller stacks.4
This is clearly a worst-case presumption, for many of these sources would
be unable to demonstrate downwash in a fluid model even under the current
regulation.
These sources represent a subset of the sources potentially affected
by the proposed change in the definition of "excessive concentration"
(under the "high-impact" scenario). Thus, the impacts on these sources
were not evaluated separately.
Method for Evaluation
Impacts were determined by assuming that each of the affected sources
had either considered terrain farther away than 0.8 km in its fluid modeling
or had demonstrated a 40 percent increase in concentrations that did not
exceed an ambient standard. Consequently, stack height credit for these
the revisions, these sources would be unable to include terrain
further from the source into a fluid model. Empirical observations show
that terrain features greater than 40 percent of stack height are necessary
to produce sufficient downwash to justify increasing stack height.
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sources was presumed to be restricted to the average GEP height for the
appropriate region. (See footnote 1 for a discussion of regional GEP
heights). Changes in emission limitations were calculated using the more
stringent of either the plume impaction derived estimate or a ratio developed
by H.E. Cramer & Company, Inc. that relates emissions from a stack at actual
height to emission from a source at GEP height (see Cramer study in
Docket A-79-01 Appendix C). The results of this analysis therefore presume
that all of the potentially affected sources would have been able to justify
their actual stack heights under the 1982 regulation, but will be unable to
justify these stacks under the proposed regulation because of the changes
in the definition of "excessive concentrations" and the allowable use of
terrain in fluid modeling (i.e., the definition of "nearby")..
Impacts resulting from these aspects of the proposed regulation were
applied only under the "high impact" scenario of the analysis. Very few
sources have actually used fluid modeling to justify their emission limits
even under the current regulations.5 Thus, the "low impact" scenario
assumes that sources found to have stacks above the regional GEP height
nonetheless would be unaffected by the revisions that apply to fluid
modeling demonstrations. This might be the case if these sources can
justify their stacks by applying the formulae to site-specific data, or if
these sources are already complying with the limits corresponding to GEP
height.
If a source was determined to be potentially affected by the deletion of
plume impaction from the regulation, as well as the provisions discussed
5The Agency is presently aware of nine fluid modeling studies that were
used to establish emission limitations; three in Region III and six in
Reqion V.
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here, then, as noted previously, only the greater of the emission reductions
resulting from the proposed regulation was applied to the source. Reductions
resulting from the changes in the definition of "dispersion techniques,"
however, were assumed to compound the effects of other changes.
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Reliance on the 2.5H Formula
Description of Change
EPA's regulation provides several bases for determining GEP stack
height. Among these are two equations that base stack height on the
dimensions of nearby structures; sources constructed before January 12,
1979, could take credit for 2.5 time the height of nearby structures, while
sources constructed after that date were required to use a somewhat more
conservative formula (H + 1.5L) that minimized the likelihood that struc-
tures with greater heights than widths might receive more credit than
needed to avoid excessive concentrations due to downwash.
In its ruling, the court held that EPA should not have automatically
allowed pre-1979 sources to take credit for the 2.5H formula in establishing
their emission limitations, but should require evidence that the sources
actually relied on this formula in the design of their stacks. This change
has been incorporated into the proposed rule, with a request for comment on
what the Agency should consider acceptable evidence of such reliance.
Review of Potentially Affected Sources
Any source constructed after December 31, 1970, and before January 12,
1979, and with a stack greater than or equal to the 2.5H formula height
could be affected by this change in the regulation. For reasons discussed
under "Results," below, an inventory of such sources was not prepared.
Method for Evaluation
To assess the worst-case impacts of this change in the regulation, i.e.,
presuming that no source could demonstrate reliance on the 2.5H formula, it
would be necessary to obtain the heights and projected widths of all
potentially affected sources, calculate their GEP stack heights using the
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H + 1.5L formula, and compare the resulting emission limtations to those
presently applicable to the sources. However, information about the
dimensions of those structures forming the basis for individual GEP stacks
is not readily available. Again, for reasons discussed below, this analysis
was not performed.
Results
As previously noted, the proposed rulemaking notice requests comment
on what the Agency should consider as acceptable evidence of reliance on
the 2.5H formula. Regardless of the approach selected in the final regula-
tion, however, the Agency believes that the impact of the change in the
rule will be minimal and largely procedural in nature.
EPA has issued a substantial amount of guidance in the past on source
permitting and the calculation of emission limitations to State and local
agencies, as well as to source owners and operators, much of which has
addressed approaches to determining GEP stack height, based on the
2.5H formula (e.g., the 1976 stack heights rule, 41 FR 7150). Consequently,
the Agency believes it unlikely that a significant number of sources will
be unable to demonstrate reliance on the 2.5H formula in an acceptable
fashion.
Furthermore, while the H + 1.5L formula is more conservative in its
assignment of stack height credit, the refinements to the formula arose out
of observations made during fluid modeling research concerning windflow
patterns around objects of differing shapes, and not out of any particular
concerns that the 2.5H formula significantly overpredicted GEP stack height--
i.e., that credit allowed under the 2.5H formula resulted in less stringent
emission limitations.
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The Agency believes that for the few sources that may be unable to
demonstrate reliance on the 2.5H formula, the change in emission limitation
resulting from the application of the H + 1.5L formula is not likely to be
significant. Consequently, EPA has not assigned any economic impact to
this provision of the regulation.
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Limitations on the Use of the Formula
Description of Change
EPA's 1982 regulation did not restrict credit for the use of the GEP
formula to any category of structures, but allowed emission limitations to
be set based on the formula for any structure. The court, in remanding the
definition of "excessive concentrations" to the Agency for reconsideration,
directed EPA to consider how well the formula protected against excessive
concentrations and whether the formula provided more credit than needed to
avoid excessive concentrations due to downwash.
The Agency has responded by reaffirming the use of the formula, but
prohibiting its use in two general cases where it is believed that the
formula may provide too much stack height credit: (1) where structures are
porous, so as to allow a portion of the wind contacting them to pass
through, rather than over and around, them; and (2) where structures are
aerodynamically smoother than the typical block-shaped structures on which
the formula was based, thereby potentially creating less disturbance of
windflow patterns.
Review of Affected Sources
While not addressed in the regulation or in the Agency's arguments in
Sierra Club v. EPA, the "Guideline for Determination of Good Engineering
Practice Stack Height," which served as technical support for the 1982
regulation, did not allow sources to base GEP credit on porous structures.
Consequently, no sources are affected by the more explicit restriction of
credit in the proposed regulation.
EPA is not presently aware of any sources that have based their stack
heights on the dimensions of aerodynamically smooth structures. Consequently,
the only impact of this additional restriction to the use of the formula
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would be a cost savings foregone by sources that might have attempted to
base their stack heights on such structures in the future. This effect
cannot be quantified, as the number of such sources cannot be predicted.
Finally, the proposed regulation allows agencies to require fluid
modeling or field studies to demonstrate GEP stack height. It is possible
that a State or local agency may wish to more narrowly restrict formula
stack height credits by requiring fluid modeling for a more extensive range
of sources. It is not possible to predict the number or type of situations
where this may arise, or the effects of increased fluid modeling beyond
noting that additional costs of approximately $50,000 to $100,000 will
result for each additional study performed. Because, as noted in the
preamble to the proposed regulation, the GEP formula is somewhat conservative
in estimating the stack height needed to avoid excessive concentrations, an
overwhelming majority of fluid modeling studies conducted in the past have
resulted in justifications of greater, rather than less, stack height. For
this reason, any increase in the number of fluid modeling studies performed
is not likely to impose additional emission control costs resulting from
more stringent emission limitations.
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Definition of Dispersion Techniques
Description of Change
In February 1982, EPA promulgated a relatively narrow definition of
"dispersion techniques." That definition covered:
1. Stack heights above their GEP height.
2. Varying the rate of emissions with atmospheric conditions or
ambient concentrations.
3. Addition of fans or reheaters in order to obtain a less stringent
emission limitation.
Specifically excluded from coverage were:
1. Reheating the gas stream following use of a pollution control
system.
2. The use of smoke management.
3. Combining of exhaust gas streams.
The U.S. Court of Appeals remanded that definition to EPA for reconsideration
on the grounds that it was too narrow.
The EPA has reviewed the 1982 definition and is proposing to make two
changes to the general part of the definition.
1. Clarify that varying the rate of emission with atmospheric conditions
or ambient concentration does not apply to episodic controls on resi-
dential wood burning or debris burning.
2. Expanding the definition to cover manipulating source process
parameters, exhaust gas parameters, stack parameters, or combining
exhaust gases from several existing stacks into one stack; or
other selective handling of exhaust gas streams so as to increase
the exhaust gas plume rise.
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In addition to excluding from coverage the reheating of exhaust gases
following use of a pollution control system, the proposal also excludes the
merging of exhaust gas streams following pollution controls.
Review of Affected Sources
The first change simply makes it clear that varying the rate of emission
with atmospheric conditions or ambient concentrations does not apply to
episodic controls on area sources. This change will not have any impacts,
since it is only a clarification of existing policy.
To determine the impacts of including combining stacks as a dispersion
technique, the E. H. Pechan Associates' "SIP data file" was reviewed to
determine the number of stacks that served more than one boiler. That
review identified 294 multi-unit stacks in the nation. Some of the
294 stacks serve units which came on line as early as the 1920's; thus,
combining of stacks has been a traditional engineering practice. Only 54
of those stacks serviced units which came on line after 1970, and for these,
it was impossible to determine whether the stacks had been constructed
before 1971 (sources which combined stacks before 1971 would have a
dispersion technique implemented before passage of the Clean Air Act and
thus would be grandfathered). In addition, any facility with multiple
stacks could potentially combine those stacks in the future (although for a
number of engineering and economic reasons, doing so would not be possible
or advantageous at some facilities). Thus, it was not possible to identify
a list of sources that might potentially be affected by the revisions.
EPA therefore reviewed SIP revisions involving S02 emission limits and
identified those that involved combining of existing stacks. That review
identified 30 sources that might be expected to be affected by the revisions.
22
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Fifteen sources were power plants, six were pulp and paper mills, and nine
were other industrial sources.
Method for Calculating Impact
Calculating the effect of limiting the credit that sources may receive
for combining stacks requires an evaluation of the change in the ambient
concentration as a result of combining of the stacks. Mo general ratio can
be developed since the relationship depends upon site-specific conditions
such as the ratio of effective stack height to physical stack height and the
plume rise under the controlling meteorological conditions.
Therefore, to estimate the impact, EPA reviewed the change in ambient
concentrations as a result of combining stacks from a typical 900 MW power
plant and a typical 144 MW industrial source.6 The review looked at 3- and
24-hour averaging times and two different meteorological data sets. From
that review, one set of meteorological data and one averaging time were
selected as representative of the change in ambient concentrations for
these sources. Since most of the sources which were identified as combining
stacks are located east of the Mississippi River, the Atlanta/Athens,
Georgia meteorological data set was selected as the more representative.
The maximum change in ambient concentration is generally for the 24-hour
averaging time, thus that averaging time was also selected for this analysis.
Table 2 illustrates the estimated decrease in ambient concentrations that
result from combining stacks, and the decrease in emissions expected to be
required if credit for the stack combinations are disallowed. For power
plants, combining four stacks into two was found to reduce ambient concen-
trations by 41 percent, and combining four stacks into one was found to
^Memorandum from Johnnie Pearson to Dave Stonefield, "Investigation of
Potential Impacts of Combining Stacks," October 4, 1984.
23
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Table 2
Estimated Changes in Ambient Concentrations and
Emissions Due to Prohibition of Credit for Combining Stacks
Combining
Stacks
From To
3
2
3
4
5
6
2
1
1
1
1
1
Power
Ambient Red.*
28
4.^****
54
68****
81
95
Plants
Industrial Plants
Emission Red.** Ambient Red. Emission Red.
22
29
35
40
45
49
N/E***
41**** 29
50 33
59**** 37
77 44
N/E***
* Percent reduction in ambient concentrations achieved by combining
stacks.
** Percent reduction in emissions required to compensate if credit
for combining stacks is disallowed.
*** Not estimated; no source with this stack configuration identified.
**** Value from modeling typical plant. Other values were estimated
based upon these values.
24
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reduce ambient concentrations by 68 percent. For industrial plants, combining
four stacks into two was found to reduce ambient concentrations by 41 percent;
combining four stacks into one was found to reduce ambient concentrations
by 59 percent. A straight line interpolation between and extrapolation
beyond those points was assumed to estimate the change in ambient concentra-
tions resulting from other types of stack combinations.
New emission limits were calculated to compensate for the increased
ambient concentrations that would result if these sources were assumed to
have separate, rather than combined, stacks. These limits are based on
the conservative assumption that the existing emission limits are those
just necessary to meet the NAAQS or applicable PSD increments. In addition,
it was assumed that no power plant would have to reduce its emission below
1.2 pounds of sulfur per million Btu, the NSPS limit.
Results
The results indicate that 13 of the 15 power plants identified as
using combined stacks would have to reduce their emissions; the average
reduction would be 37 percent. (Two power plants have existing limits
equal to or less than 1.2 Ibs/MMBtu, and one is projected to have to reduce
its emissions to 1.2 Ibs/MMBtu.) Six pulp and paper mills would have to
reduce their emissions an average of 30 percent, and nine other industrial
sources would have to reduce their emissions an average of 31 percent.
25
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Prohibition on Credit for Tying
New Facilities to Grandfathered Stacks Above GEP Height
Description of Change
In the February 1982 promulgation, EPA grandfathered stacks "in
existence" on December 31, 1970, the date of passage of the Clean Air Act.
However, EPA did not prohibit new sources, which tie into the grandfathered
stacks from receiving credit for the stack heights which exceed GEP heights.
The U.S. Court of Appeals remanded "this issue to allow the Agency to explain
why it refused to prohibit tying new sources into pre-1971 stack heights."
After review of the issue, EPA could not adequately justify not
prohibiting such credit, and is now proposing such a prohibition on such
credit. Thus, new sources which tie into grandfathered stacks above GEP
will only receive credit for the GEP height.
Review of Affected Sources
The E. H. Pechan Associates' "SIP Data File" of power plants was
reviewed to determine the number of power plants which have combine exhaust
gas streams from pre- and post-1970 units. That list was compared with the
regional survey of stacks conducted in conjunction with the 1981 impact
analysis and information from other sources. EPA could not identify any
power plants which received credit above GEP for tying in a post-1970
unit to a pre-1971 stack.
Only one industrial source was identified as receiving credit above
GEP for tying new unit into a grandfathered stack, a aluminum smelter in the
State of Washington which received a PSD permit based upon use of an existing
stack.
26
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Method for Calculating Impact
Since only one source was identified as receiving credit above 6EP
for tying new units into a grandfathered stack, the technical analysis for
that source PSD permit (included in the docket) was reviewed.
As part of the BACT evaluation, the source stated that it could reduce
its S02 emission enough (approximately 800 tons per year) to be exempt from
the PSD regulations if it installed a S02 scrubber on part of its emissions.
The source estimated it could install that scrubber for $7.5 million.
Results
The maximum cost for the one source which received credit above GEP
for tying new units into a grandfathered stack will be $7.5 million. For a
twenty year useful life and a 4.2 percent lost opportunity cost, the
annualized cost would be $560,000. However, that is the cost of reducing
the emissions enough to exempt the source from the PSD regulations and it
may be possible for the source to meet the PSD requirements at a lower
cost.
27
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Two-Stage Implementation Process
Description of Change
In the preamble to the 1982 regulations EPA provided for a two-stage
process for State implementation of the regulation. This process allowed
9 months for the preparation and submittal of State rules complying with
the final stack height rules, 4 months for EPA review and approval, and
an additional 9-month period for the States to review and revise emission
limits to be consistent with the EPA approved state rules. The court found
that this 22-month period between final promulgation of EPA stack height
rules and the submission of State revised emission limits to be contrary to
Section 406(d)(2) of the Clean Air Act and reversed the Agency's two-stage
plan.
Under Section 406(d)(2) States are required to submit within 9 months
of the promulgation of final stack height regulations any necessary State
rule revisions as well as emission limitations modified to be consistent
with this regulation. Relative to the 1982 regulations, the major impact
of this change will be the shortened time allotted for the submittal of
SIP's. Within this period States would have to examine the SIP's for major
sources to determine if the new regulations would affect the manner in
which the existing SIP was calculated. If so, then a SIP revision would be
required to be submitted for such plant.
Review of Affected Sources
While this process will be taxing on limited staff and resources
at the source, local, State, and Federal levels, EPA does not believe that
this process would result in a different emission limit than that which
would be determined in a 22 month process. Thus, EPA does not believe
that this change will result in a significant economic impact.
28
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Admittedly, for a facility which may wish to conduct a fluid modeling
analysis, the lost time (13 months) could limit the opportunity for such an
analysis and could be valued in terms of lost opportunity costs. Relative
to a SIP emission limit change EPA believes that this cost would be
negligible.
29
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Automatic Credit for Formula Height
Description of Change
The 1982 regulations contained several bases for the determination of
GEP stack height. The first approach was to establish a de minimis stack
height of 65 meters. Stacks would be allowed credit up to de minimis height
without any additional demonstration required. The second approach was the
use of formulae which calculated GEP stack height based on the dimensions
of nearby structures. The third approach based GEP stack height on fluid
modeling analyses or field studies of downwash, wakes, and eddy effects due
to nearby structures or terrain obstacles.
In its decision, the court found that EPA had not sufficiently
established the adequacy of the formulae, holding that there was a reasonable
possibility that the formulae provided more stack height credit than neces-
sary in certain circumstances to prevent excessive concentrations due to
downwash, wakes or eddy effects. Furthermore, the court held that the
regulations allowed sources to increase the height of their existing stacks
up to that allowed by formula without a demonstration that such an increase
was necessary to avoid excessive concentrations due to downwash, wakes, or
eddy effects. For this reason, the court remanded the definition of GEP
stack height to EPA to consider how well the formulae protect against
excessive concentrations and whether they are sufficiently reliable to
preclude the need for demonstrations to justify increasing the height of
existing stacks.
Based on a reanalysis of the validity of the formulae and the conclusion
that the formulae are typically conservative in establishing GEP heights
relative to the use of fluid modeling, EPA generally intends to continue to
allow sources to raise existing stacks up to formula height without requiring
30
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demonstrations (the technical conclusions are fully discussed in the
"Guidelines for Determination of Good Engineering Practice Stack Height,"
September 1984, submitted to the docket of this proceeding). Consequently,
no sources are affected by this aspect of the revisions to the regulation.
31
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Estimate of Emissions and Economic Impacts
Based on the information developed as described in the preceding
sections, forecasts of emissions changes, utility cost and fuel consumption,
and coal production were conducted. The ICF Incorporated Coal and Utilities
Information System (GUIS) was used to relate the effects of the proposed
regulations to individual power plant units and calculate applicable reduc-
tions in sulfur dioxide emissions. ICF's Coal and Electric Utilities Model
(CEUM) was then used to perform the economic analysis of the emission
limitation changes that resulted.
Forecasts were developed for two scenarios—a "high impact" case and a
"low impact" case—from a base case that assumes continued enforcement of
present State implementation plans and emission limitations, new source
performance standards, and prevention of significant deterioration regula-
tions. Railroad rates were assumed to be held to 95 percent of the current
average rail rates in real terms, although a sensitivity analysis has
indicated that this is not a significant assumption for this study.
The "low impacts" scenario assumed that changes in the definitions of
"excessive concentrations" and "nearby" did not affect those sources with
greater than regional GEP stacks; this assumption results from considerations
discussed earlier in this report. Consequently, only those sources that
had combined stacks or were affected by the prohibition on plume impaction
credit were analysed in this scenario (other provisions previously discussed
in this report were not assessed for economic effects, for reasons discussed
in the preceding sections). Where units were presumed to be affected by
both the plume impaction and combined stacks restrictions, a combined
effect was determined by multiplying one adjustment factor by the other to
arrive at a total emission limitation adjustment factor.
32
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The "high impacts" scenario assumes that all sources with stack heights
greater than regional GEP height would be affected by at least one of the
four major changes in the regulation: plume impaction, the definitions of
"dispersion techniques," "nearby," or "excessive concentrations." This
scenario reflects the assumptions that stack credits obtainable for downwash
effects would not be sufficient to eliminate plume impaction problems, and
that sources conducting fluid modeling demonstrations had relied on terrain
beyond the 0.8 km limitation, or had demonstrated a 40 percent increase in
pollutant concentrations that would not also result in an exceedance of an
ambient air quality standard.
The results of the analysis are presented in the tables 3-7.
The major impacts were found to be:
1. Annual reduction in S02 emissions of 2.8 million tons in the eastern
portion of the U.S. and 100,000 tons in the western portion is forecast
under the "high impact" scenario. Under the "low impact" scenario reductions
are projected to be 790,000 tons and to occur only in the east.
2. Annualized costs (including capital recovery) are predicted to be
$1.4 billion per year under the "high impact" scenario, and approximately
$300 million per year under the "low impact" scenario.
3. Retrofit scrubber capacity is expected to increase by 13.2 gigawatts
in the eastern U.S. and 4.2 gigawatts in the West under the "high impact"
scenario, and by 3.4 gigawatts and 0.6 gigawatts, respectively, under the
"low impact" scenario.
4. An overall decrease in coal consumption of 1.2 million tons is
projected under the "high impact" scenario. Under the "low impact" scenario,
the total change is negligible.
33
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5. Under the "high impact" scenario, the greatest production increase
is projected for Central Appalachian coal (18.6 million tons), with the
greatest decrease forecast for midwestern coal (14.0 million tons). Under
the "low impact" scenario, the greatest impacts will be felt in the same
regions, with the changes in production projected to be 5.3 million tons
and 6.4 million tons, respectively.
6. Coal shipments from the West to East are expected to increase by
10.2 million tons under the "high impact" scenario and by 1.0 million tons
under the "low impact" scenario.
34
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Table 3
Emission Impacts in 1995 of
Proposed Revisions to the Stack Height Regulation
(Thousands of Tons)
Reductions from Base
Low Impact High Impact
Base Scenario Scenario
Existing plants
Coal
Oil/Gas
17,420
1,320
18,740
1,390
800
-
800
- 10*
2,880
50
2,930
- 50*
New
Total U.S. 20,130 790 2,880
* Additional emissions from new sources result from reallocation
of capacity utilization within utility systems.
35
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Table 4
Cost Impacts in 1995 of
Proposed Revisions to the Stack Height Regulation
(1984 dollars)
Utility Annual Costs
($ billion per year)
Capital recovery
O&M
Fuel
Total
Increase from Base
Low Impact High Impact
Scenario Scenario
0.1
0.1
0.1
0.3
0.5
0.3
0.7
1.4
Utility Capital Costs*
($ billion)
31 Eastern States
17 Western States
Total
0.8
0.1
0.9
3.4
1.2
4.6
Average Cost
($ / ton S02 removed)
Retrofit Scrubber Capacity (Gw)
31 Eastern States
17 Western States
Total
395
3.4
0.6
4.0
493
13.2
4.2
17.4
* Cumulative through 1995,
36
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Table 5
Number of Powerplant Units Affected by
Proposed Revisions to the Stack Height Regulation*
- Low Impact Scenario -
Plume
Impaction
Only
Both
Combined Plume Impaction
Stacks and
Only Combined Stacks
Total
Number of
Units Affected
24
50
78
Capacity
(Gigawatts)
14.3
8.3
,7
23.3
Number of Units
With Retrofit
Scrubbers
Capacity With
Retrofit Scrubbers
(Gigawatts)
3.7
0.3
4.0
Units refer to individual units; one powerplant may have several units.
Therefore, the number of powerplants affected will be less.
37
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Table 6
Number of Powerplant Units Affected by
Proposed Revisions to the Stack Height Regulations*
- High Impact Scenario -**
Plume
Impaction
Ex. Conc.+
Nearby
Combined
Stacks
Both
Plume
Impaction
and
Combined
Stacks
Combined
Stacks +
Ex. Conc.+
Nearby
Total
Number of
Units
28
108
22
28
190
Capacity
(Gigawatts)
15.4
69.4
2.3
0.7
6.1
93.9
Number of
Units
Scrubbed
10
11
18
39
Scrubbed
Capacity
(Gigawatts) 6.4
7.7
3.3
17.4
Units refer to individual generating units; one powerplant may have several units.
Therefore, the number of powerplants affected will be less.
These figures do not necessarily reflect the highest impacts of Plume Impaction
in the absence of other provisions of the proposed regulation. Where other
provisions impose greater effects, those effects were assigned to the other
provisions and not to Plume Impaction. Therefore, the actual range may be greater.
38
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Table 6
Number of Powerplant Units Affected by
Proposed Revisions to the Stack Height Regulations*
- High Impact Scenario -**
Plume Ex. Conc.+
Impaction Nearby
Combined
Stacks
Both
Plume
Impaction
and
Combined
Stacks
Combined
Stacks +
Ex. Conc.+
Nearby
Tota
Number of
Units 28 108 22 4 28 190
Capacity
(Gigawatts) 15.4 69.4 2.3 0.7 6.1 93.9
Number of
Units
Scrubbed 10 11 0 0 18 39
Scrubbed
Capacity
(Gigawatts) 6.4 7.7 0 0 3.3 17.4
*Units refer to individual generating units; one powerplant may have several units.
Therefore, the number of powerplants affected will be less.
**These figures do not necessarily reflect the highest impacts of Plume Impaction
in the absence of other provisions of the proposed regulation. Where other
provisions impose greater effects, those effects were assigned to the other
provisions and not to Plume Impaction. Therefore, the actual range may be greater.
38
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Table 7
Coal Production and Shipment Impacts in 1995 of
Proposed Revisions to the Stack Height Regulation
(Millions of Tons)
1980
185.1
232.8
26.4
134.4
251.0
Base
1995
222.5
286.7
28.8
160.1
538.7
Low Impact
Scenario
-1.0
+5.3
+0.3
-6.4
+0.8
High Impact
Scenario
-17.4
+18.6
+0.1
-14.0
+11.5
Coal Production
Northern Appalachia
Central Appalachia
Southern Appalachia
Midwest
West
Total U.S. 829.7 1236.8 -1.0 -1.2
Coal Transportation
Western Coal
Shipped East 36.7 73.2 +1.0 +10.2
39
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CEUM DEMAND REGIONS
Pacific
Mountain
West South Central
• v> iou no no
Middle
Atlantic
EASTERN STATES
REGION
New
England
South
Atlantic
Demand region
Alaska (AK) not shown
-------
Appendix - List of References
"Evaluation of Sources Affected by Revisions to the Stack Height Regulations,"
draft report; CCA/Technology Division, September 1984
"Summary of State Implementation Plan Revisions Involving Stack Heights,"
Sharon Reinders, Control Programs Operations Branch, CPDD, OAQPS,
January 1984
"Identifying and Assessing the Technical Bases for the Stack Height
Regulatory Analysis," final report; H.E. Cramer Company, Inc., December 1979
"SIP Data File," E.H. Pechan Associates
"Summary Utility Forecasts for EPA's Preliminary Stack Height Analysis,"
interim report; ICF Incorporated, October 1984
Memoranda: "Plume Impaction Estimates," David Stonefield to Files,
October 25, 1984
"Formula for Predicting Reductions in Emissions as a Function of the
Difference between Actual Stack Height and Surrounding Terrain,"
Stephen Greene to Files, October 31, 1984
"Investigation-of Potential Impacts of Combining Stacks," Johnnie Pearson
to David Stonefield, October 4, 1984
41
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