DOE
EPA
United States
Department of
Energy
United States
Environmental
Protection Agency
Coal Preparation and
Analysis Laboratory
Pittsburgh. PA 15213
Office of Energy, Minerals, and Industry
Office of Research and Development
Washington. D.C. 20460
EPA-600/7-78-002
January 1978
             ENGINEERING/ECONOMIC
             ANALYSES OF  COAL
             PREPARATION WITH  SO2
             CLEANUP PROCESSES
             Interagency
             Energy-Environment
             Research and Development
             Program Report

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                RESEARCH REPORTING SERIES

Research reports of the Office of Research and Development, U.S. Environmental
Protection Agency, have been grouped into nine series. These nine broad cate-
gories were established to facilitate further development and application of en-
vironmental technology. Elimination of traditional grouping was consciously
planned to foster technology transfer and a maximum interface in related fields.
The nine series are:

      1.  Environmental Health  Effects Research
      2.  Environmental Protection Technology
      3.  Ecological Research
      4.  Environmental Monitoring
      5.  Socioeconomic Environmental Studies
      6.  Scientific and Technical Assessment Reports (STAR)
      7.  Interagency Energy-Environment Research and Development
      8.  "Special" Reports
      9.  Miscellaneous Reports

This report  has  been assigned  to the ENVIRONMENTAL PROTECTION TECH-
NOLOGY series. This series describes research performed to develop and dem-
onstrate instrumentation, equipment, and methodology to repair or prevent en-
vironmental degradation from point and non-point sources of pollution. This work
provides the new or improved technology required for the control and treatment
of pollution sources to meet environmental quality standards.
This document is available to the public through the National Technical Informa-
tion Service, Springfield, Virginia 22161.

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ENGINEERING/ECONOMIC ANALYSES  OF COAL  PREPARATION
     WITH S02 CLEANUP PROCESSES FOR KEEPING
    HIGHER SULFUR COALS IN THE ENERGY  MARKET
                 Prepared for:

   Coal  Preparation and Analysis  Laboratory
          U.S.  Department of Energy
          Pittsburgh,  Pennsylvania
           Contract Number J0155171
    OFFICE OF ENERGY,  MINERALS,  AND INDUSTRY
      OFFICE OF RESEARCH AND DEVELOPMENT
     U.S.  ENVIRONMENTAL PROTECTION AGENCY
           WASHINGTON,  D.C.   20460

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                                  DISCLAIMER

     The views and conclusions contained in this document are those of the
authors and should not be interpreted as necessarily representing the official
policies or recommendations of the U.S.  Department of Energy or of the U.S.
Government.

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                                    PREFACE

     This report was prepared by the Hoffman-Muntner Corporation of Silver
Spring, Maryland, under United States Bureau of Mines Contract Number J0155171.
The contract was initiated under the Coal Preparation Research Program.  It was
administered under the technical direction of the Coal Preparation and Analysis
Laboratory, with the Chief of the Laboratory, Mr. Albert W. Deurbrouck, acting
as the Technical Project Officer.  Miss Elizabeth Rexroad was the contract
administrator for the Bureau of Mines.

     Although this study was performed under the above Bureau of Mines con-
tract, the actual funding was "passed through" from the Environmental Protec-
tion Agency to the Bureau of Mines as part of EPA's funding in the area of
Coal Preparation Research.
                                      11

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                                ACKNOWLEDGMENTS

     The Hoffman-Muntner Corporation has sincerely appreciated the opportunity
of working with Mr. Albert W. Deurbrouck of the U.S. Department of Energy (for-
merly with the Bureau of Mines) on this interesting and important program.   His
thoughtful guidance and participation were of utmost importance in framing  the
approach to the subject and executing the analyses.  In addition, all those
associated with the program wish to gratefully acknowledge the assistance and
consultation provided by Messrs. T. Kelly Janes and James Kilgroe of the
U.S. Environmental Protection Agency during the conduct of the program
covered by this final report.
                                      iii

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                                    CONTENTS

Disclaimer 	    i
Preface 	   ii
Acknowledgments	  iii

1.0  Introduction 	    1
2.0  General considerations and approach 	    3
     2.1  General considerations 	    3
          Selection of coal source areas 	    4
          Selection of coal use areas 	    4
     2.2  General approach 	    4
     2.3  Additional factors not included as part of this study 	    9
3.0  Evaluation of costs associated with the coal cleaning process 	   11
     3.1  Cleaning cost factors 	   11
     3.2  Cleaning plant amortization costs 	   12
          Data considerations 	   12
          Capital equipment costs 	   12
          Capital equipment amortization 	   15
     3.3  Operation and maintenance costs 	   19
          Operation and maintenance cost data considerations 	   19
     3.4  Cost of raw coal required per ton of cleaned coal 	   22
     3.5  State and local taxes and insurance allocated against each
            ton of cleaned coal 	   22
4.0  Evaluation of economic benefits associated with the use of cleaned
       coal 	   24
     4.1  Economic benefit factors 	   24
     4.2  Increased heat content 	   26
     4.3  Savings in coal transport costs 	   28
     4.4  Savings in ash disposal costs 	   30
     4.5  Savings in coal pulverizing costs 	   30
     4.6  Savings in payment to trust fund 	   31
     4.7  Maintenance savings 	   31
5.0  Evaluation of costs associated with flue gas desulfurization 	   33
     5.1  Flue gas desulfurization plant costs 	   33
     5.2  Annual capital charges for financing 	   38
     5.3  Flue gas desulfurization costs per ton of coal burned 	   39
6.0  Case studies 	   41
     6.1  Basis and economic approach behind case study analysis 	   41
     6.2  Case study analysis - an example 	   42
     6.3  Summarization of case results 	   52
7.0  Conclusions 	   66
References 	   68
Appendix A—SOX emission regulations for selected states 	   70
Appendix B—Detailed case analyses 	   84
Appendix C—Cost components and cost estimates for full-scale flue gas
  desulfurization systems 	  213
Appendix D—Amortization payment data 	  221
                                      IV

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Appendix E—Coal cleaning plant operation and maintenance cost
  estimates 	 224
Appendix F—Coal cleaning plant utilization and amortization functions  . 232
Appendix G—Transportation of coal 	 236

                                 ILLUSTRATIONS

  1.  Average ash content, ± 1 standard deviation at 3/8 inch top
        size, Northern Appalachian region coals 	   7
  2.  Average total sulfur content, ± 1 standard deviation at
        3/8 inch top size, Northern Appalachian region coals 	   8
  3.  Cleaning plant utilization 	  17
  4.  Amortization cost/ton cleaned coal for: plant cost—$18,000 per
        ton-hour input capacity, interest rate 8%, loan period
        15 years	  18
  5.  Operation and maintenance cost 	  21
  6.  Cost of raw coal required to produce a ton of cleaned coal 	  23
  7.  Tax and insurance burden/ton of cleaned coal, plant cost—
        $18,000 per ton-hour input capacity and tax and insurance
        rate of 2% 	  25
  8.  Added coal value due to increase in heat content 	  27
  9.  Effective savings in transport cost due to increase in coal heat
        content (equals shipping cost x K) 	  29
E-l.  Operation and maintenance cost 	 225
F-l.  Cleaning plant utilization 	 232
F-2.  Amortization cost/ton cleaned coal for plant cost—$18,000 per
        ton-hour input capacity, interest rate 8%, loan period
        15 years 	 233
F-3.  Amortization cost/ton cleaned coal for plant cost—$18,000 per
        ton-hour input capacity, interest rate 9%, loan period
        15 years 	 234
F-4.  Amortization cost/ton cleaned coal for plant cost—$18,000 per
        ton-hour input capacity, interest rate 10%, loan period
        15 years 	 235

                                      TABLES

  1.  Bureau of Labor statistics cost esclations for equipment
        associated with coal beneficiation 	  15
  2.  Coal loaded for shipment in the United States, in 1973, as
        reported by mine operators	  28
  3.  Average analyses of "as-burned" coals utilized in two identical
        steam electric plants 	  32
  4.  Comparison of 1968 maintenance costs in identical powerplants
        burning coals of different ash and sulfur content 	  32
  5.  Assumed maintenance savings as a function of ash and sulfur
        reduction 	  33
  6.  Limestone model plant capital costs 	  34
                                      v

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  7.  Flue gas desulfurization capital cost estimates 	  35
C-l.  Limestone model plants capital costs 	 216
C-2.  Typical capital cost variations for site specific conditions 	 218
C-3.  Summary of manufacturer estimates of limestone FGD system costs .. 220
D-l.  Self-liquidating mortgage payment (in dollars) per $1,000 of
        loan yearly cost—based on equal monthly payments 	 221
D-2.  Self-liquidating yearly mortgage payment (in dollars) per ton-
        hour plant input capacity.  Payments based on plant cost of
        $15,000 per ton-hour input capacity and equal monthly
        payments 	 222
D-3.  Self-liquidating yearly mortgage payment (in dollars) per ton-
        hour plant input capacity.  Payments based on plant cost of
        $16,000 per ton-hour input capacity and equal monthly
        payments 	 222
D-4.  Self-liquidating yearly mortgage payment (in dollars) per ton-
        hour plant input capacity.  Payments based on plant cost of
        $17,000 per ton-hour input capacity and equal monthly
        payments 	 223
D-5.  Self-liquidating yearly mortgage payment (in dollars) per ton-
        hour plant input capacity.  Payments based on plant cost of
        $18,000 per ton-hour input capacity and equal monthly
        payments	 223
G-l.  Price indexes for railroad coal transport 	 242
                                      VI

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1.0  INTRODUCTION

     Concern for preserving the quality of the environment resulted in the Air
Quality Act of 1963, which initiated a concerted effort by Federal, State, and
local governments for the preservation of the Nation's air quality.  This act
called for an expanded Federal research and development program and placed
special emphasis on the problem of sulfur oxides emissions from the combustion
of fossil fuels in stationary plants.

     Coal provides for 18 percent (calendar year 1974) of the total fossil
fuel energy consumed by all domestic sources (utility, industrial, commercial,
and residential).  In the utility industry, 55 percent (calendar year 1975) of
the fossil fuel energy requirement is supplied by coal.

     Electric power generation has been increasing at around 5 to 8 percent per
year.  This increasing demand for electrical energy, the sudden increase in the
cost of imported oil following the October 1973 oil embargo, the uncertainty of
the foreign oil supply, and the delays in constructing and licensing nuclear
powerplants have resulted and will continue to result in increasing use of
coal as a major source of energy for the utility industry.  Coal consumption
by utilities was 404 million tons for 1975, may be as high as 700 million tons
by 1985, and could be over 1,200 million tons in the year 2000.

     Because pollution from fuel combustion has long been recognized as a prob-
lem, major emphasis has been placed on the development of methods for control-
ling sulfur oxides emissions from fossil-fuel-fired combustors.  Currently
available methods for controlling sulfur oxides emissions from coal-fired
stationary combustion sources fall into the following categories:

     1.  The use of low-sulfur coal, either naturally occurring or
         physically cleaned;

     2.  Chemical treatment to extract sulfur from coal;

     3.  Removal of sulfur oxides from the combustion flue gas;

     4.  Conversion of coal to clean fuel by such processes as
         gasification and liquefaction.

     Of these methods, for amenable coals, physical removal of pyritic sulfur
is the lowest cost and has the most developed technology.  Another approach to
controlling S02 emissions could be the combined use of physical cleaning fol-
lowed by stack gas scrubbing.  Such a combined approach could make it possible
to utilize high-sulfur coal with minimal to moderate stack gas scrubbing while
continuing to realize the established benefits of coal cleaning such as
(1) the availability of a more uniform coal, (2) lower effective transportation

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costs, (.3) reduced maintenance costs, and (4) lower coal pulverizing and ash
disposal costs.

     Coal is a heterogeneous material containing organic combustible matter
and mineral matter.  The mineral matter or impurities may be broadly divided
into two categories—those that form ash, and those that contribute sulfur.
The ash-forming and the sulfur-containing impurities can be further subdivided
into two classes:  (1) Impurities that are structurally a part of the coal and
cannot be removed by physical means, and (2) impurities that can be liberated
by crushing and removed by physical means.

     Sulfur in coal exists in two principal .forms, organic and inorganic.  The
organic sulfur is bound chemically to the coal substance and cannot be physi-
cally removed.  However, inorganic sulfur (i.e., pyritic) is not bound chemi-
cally with the coal substance and may be removed to varying extents by crush-
ing and physical cleaning.  The degree of removal is dependent upon pyrite
size and distribution, coal size, and other physical characteristics.

     Physical .cleaning of coal has been used for many years.  Its principal
purpose has been to reduce the so-called ash-forming impurities.  If any of
the impurities are pyrites it would also reduce the total sulfur in the coal.
The process in common use for reducing such impurities is a combination of
stage crushing and specific gravity separation.  Shale and coal having dif-
ferent specific gravities may be separated.  Froth flotation, dependent on
differences in surface characteristics of coal and refuse, is used for re-
moving impurities from very fine size coal.  Existing cleaning processes,
while removing impurities from coal, also reduce the total Btu recovery
(i.e., a portion of the heat content of the feed will be lost with the re-
fuse).  However, the Btu content per unit weight of the processed product
increases owing to removal of low-heat-value impurities.  In practice, an
economic balance must be achieved between the Btu loss and the improvement in
coal quality.  This balance may be further influenced by environmental
considerations.

     In 1965, EPA sponsored a study to quantify the impact that coal cleaning,
optimized for pyrite removal, could have on the control of sulfur oxide emis-
sions.  This study found that it was impossible to quantify the impact of coal
cleaning on sulfur oxide emissions because of large gaps in available infor-
mation.  The study identified the following areas where required information
was either not available or was inadequate for appraising this impact:

     *  Knowledge of the distribution of sulfur forms in all major
        utility-coal-producing coalbeds in the United States;

     *  Effectiveness of available commercial coal preparation
        methods for pyrite separation, together with the de-
        velopment or modification of these techniques to
        maximize sulfur reduction;

     *  Identification and assessment of processes that could econom-
        ically utilize coal cleaning reject material for byproduct
        recovery,  thereby aiding the overall cleaning economics and
        reducing potential air, water, and solid pollution.

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     The findings of the 1965 study led EPA to proceed with implementation of
a comprehensive program designed to define the role of coal cleaning in con-
trolling sulfur oxide emissions from coal-fired sources.  An important part of
the program was to determine the extent to which the sulfur content of U.S.
coals could be reduced by coal cleaning processes based on differences in
physical properties.  While pyritic sulfur is amenable to removal by such
processes, the other major form of sulfur (organic sulfur compounds) is not.
A good indicator of the "cleanability" of pyrites from a coal is the specific
gravity analysis, or float-and-sink test, in which the crushed coal is tested
at various gravities to effect a separation between coal and impurities.  Such
float-and-sink tests form an important element of the total program by pro-
viding the basic data for determining the amount of sulfur removal achieved.

     Increased interest in the utilization of coal, together with the reali-
zation that substantial quantities of U.S. coals exhibit reasonable sulfur
reductions on physical cleaning, has led to consideration of coal preparation
as a total or partial step in meeting environmental standards.  One approach
would be to clean those coals that show significant sulfur reductions at
reasonable cost, and then use a minimal, economically attractive, flue gas
desulfurization system.

     This concept of physical coal cleaning combined with flue gas desulfuri-
zation is not new (e.g., Reference 17).  For some time there have been dis-
cussions, speculations, and some very preliminary assessments addressing the
possible benefits of physical coal desulfurization followed by flue gas de-
sulfurization.  Past opinions, based on a general appreciation of some of the
cost and benefit factors associated with such an approach, have been that
economic advantage in many instances could be attained.  However, the associ-
ated specific economics had not previously been fully addressed.

     The Bureau of Mines, therefore, decided to proceed with an analytical
assessment that would more fully define the potential economics of physical
coal desulfurization followed by flue gas desulfurization as a means for in-
creasing the attractiveness of some of our higher sulfur content coals.  The
study approach, based on reasonable and realistic study parameters, would for
a number of user situations examine the economics of physical cleaning fol-
lowed by flue gas desulfurization as a means of satisfying environmental-
sulfur-related emission standards.  Economic paramenters are based on current
and past conditions.  It should be noted that industry economic factors ex-
hibit considerable spread.  In this regard, study values chosen tended to
provide conservative (i.e., least attractive) economics of physical cleaning
followed by flue gas desulfurization.  The development of study factors, para-
meters, and findings is provided herein.

2.0  GENERAL CONSIDERATIONS AND APPROACH

2.1  General Considerations

     For the purpose of this study, reasonable coal source-user combinations
were established, and analyses were conducted to determine whether there was
any potential economic advantage associated with physical cleaning followed by
flue gas desulfurization (FGD) over using FGD alone to meet environmental
standards.

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Selection of Coal Source Areas

     To determine the coal source side of these combinations, it was necessary
to determine coal source areas possessing coals that display apparently at-
tractive cleaning potential.  Such coals are found in the Northern Appalachian
and Eastern Interior Regions.

Selection of Coal Use Areas

     Having established general coal source areas, States were identified that
have historically been served by these areas.  Prom these, 20 States were se-
lected which have emission regulations in a range compatible with the burning
of moderate- and low-sulfur coals (i.e., 1 to 3 percent and less than 1 percent
sulfur content, respectively).  The considered states were Alabama, Delaware,
Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan,
Minnesota, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Tennessee,
Virginia, West Virginia, and Wisconsin.  A summary of the sulfur emission reg-
ulations pertaining to utility coal burning facilities in each of these States
is presented in Appendix A hereto.  Within each of these States, a wide dis-
tribution of actual coal-burning utilities were identified from which a total
of 12 were selected for complete analysis.  Then, 12 specific coals from the
Northern Appalachian and Eastern Interior Regions were individually matched
with these 12 selected coal-burning utilities, thus constituting the practical
core of the study.

2.2  General Approach

     In some coal use areas, some coals can be physically cleaned to a total
sulfur content level consistent with governing environmental standards.  In
some cases this can be accomplished at reasonable cost and reasonable loss in
total heat content value (i.e., on a per-ton basis).  Even though many coals
can be cleaned to provide a substantial reduction in total sulfur, the bene-
ficiated coal product is often too high in sulfur to meet environmental re-
quirements.  In many cases, the beneficiated coal is not too far from meeting
standards and a small amount of S02 emission control would enable the coal to
be used in an environmentally acceptable fashion.  The required degree of S02
emission control can often be achieved by employing either a low removal effi-
ciency SOX flue gas desulfurization system or a highly efficient flue gas de-
sulfurization system treating only a portion of the total stack gas.

     This effort specifically addresses the applicability and the economics of
physical desulfurization followed by flue gas desulfurization as a means for
keeping our higher sulfur coals in the energy market.  The advantage of such
an approach would necessarily relate to economics (i.e., cost compared to other
options of sulfur removal).

     The relationship between flue gas desulfurization cleaning efficiency,
portion of the total gas cleaned, and normalized emission level is defined by
the following:

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                                  y = 1 - nx,

where   y = total S02 emitted with FGD/total S02 emitted without FDG,

        n = flue gas desulfurization efficiency of treated portion
            of flue gas (expressed as a decimal),

a,nd     x = decimal proportion of flue gas cleaned.


     Therefore, for a given cleaning efficiency, the relationship between por-
tion of gas cleaned and the normalized emitted SOX emission level (i.e., y) is
defined by a straight line.  In a similar manner, the relationship between
portion of gas cleaned and the normalized amount removed is also described by
a straight line.

     For a flue gas desulfurization system with a 90-percent removal effi-
ciency we have—

      Percent of              SC>2 Emitted                SC>2 Removal
     Gas Cleaned           (normalized value)          (normalized value)

          01                           0
          10                     0.91                        0.09
          20                     0.82                        0.18
          30                     0.73                        0.27
          40                     0.64                        0.36
          50                     0.55                        0.45
          60                     0.46                        0.54
          70                     0.37                        0.63
          80                     0.28                        0.72
          90                     0.19                        0.81
         100                     0.10                    .    0.90

     For a flue gas desulfurization system with an 85-percent removal effi-
ciency we have—

      Percent of              S02 Emitted                 S02 Removal
     Gas Cleaned           (normalized value)            (normalized value)

          01                            0
          10                     0.915                        0.085
          20                     0.83                         0.17
          30                     0.745                        0.255
          40                     0.66                         0.34
          50                     0.575                        0.425
          60                     0.49                         0.51
          70                     0.405                        0.595
          80                     0.32                         0.68
          90                     0.235                        0.765
         100                     0.15                         0.85

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     For a flue gas desulfurization system with an 80-percent removal effi-
     iv we have—
ciency we have
      Percent of              SC>2 Emitted                 S02 Removal
     Gas Cleaned          (normalized value)            (normalized value)

          01                            0
          10                     0.92                         0.08
          20                     0.84                         0.16
          30                     0.76                         0.24
          40                     0.68                         0.32
          50                     0.60                         0.40
          60                     0.52                         0.48
          70                     0.44                         0.56
          80                     0.36                         0.64
          90                     0.28                         0.72
         100                     0.20                         0.80


     Given the ash, Btu, and sulfur contents of a raw coal, related float-sink
test data, transportation economics, and S02 emission limitations, economic
assessments of coal cleaning (to remove sulfur and ash) followed by S02 clean-
up can be addressed.  The addressed economics would cover the various identi-
fied costs and benefits directly related to coal beneficiation.  These bene-
fits (other than those associated with environmental satisfaction) mainly
result from lower coal ash and sulfur content via cleaning.  The cleaning
costs and benefit assessments can then be modified to encompass the S02 clean-
up process.

     The overall economics will be sensitive to the achieved ash and sulfur
reductions, the resulting coal yield, and the cost of physical cleaning.  The
achievable sulfur reduction on physical cleaning will effectively define the
level of sulfur prior to combustion and will therefore define the required
degree of flue gas desulfurization to meet a specific standard.  In this re-
gard, it should be noted that in general for a given top size, coal exhibits
a reasonably sharp break point in attainable sulfur and ash reduction as a
function of yield.  If coal beneficiation combined with FGD has any attrac-
tiveness for a given use situation, the optimum coal beneficiation level would
be somewhere in the region where a sharp change in ash and sulfur reduction
potential versus yield occurs.

     In general, for most of the coals examined, this break point occurs
around a 90-percent weight yield.  This general condition  (for 3/8-inch top
size coal) is indicated for Northern Appalachian coals by Figures 1 and 2
(Reference 3).  For this effort the 90-percent yield was chosen.

     It should be noted that the sharp break indicated on Figures 1 and 2 is
exaggerated owing to the fact that the 90-percent point was the first data
point.  Even so, the maximum change in sulfur and ash reduction potential
versus yield occurs in the neighborhood of a 90-percent yield.

     Currently, electrostatic precipitators are required with or without an
FGD system.  Therefore, precipitator-related economics are not considered in
this study.  Early FGD systems combined particulate and S02 removal in the

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              70       80      90
              WEIGHT YIELD, percent
100
Figure  I-Average  ash content, ±  I standard deviation
        at | inch top size, Northern Appalachian
        region coals.

Source: United  States Bureau of Mines RI 7633,
       1972 (page 234).

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c
O)
u
IE
<  2
O
                                    I
     60
70        80       90
 WEIGHT  YIELD, percent
100
       Figure 2-Average  total sulfur content, ± I
                standard  deviation at | inch top
                size, Northern Appalachian region
                coals.
     Source'- United  States  Bureau of Mines
             RI 7633, 1972  (page  235).

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same scrubber to realize potential cost savings.  However, there are a number
of problems associated with this combined approach.  For example, the fan can
no longer be operated dry, which creates corrosion and imbalance potential.
Another area of difficulty is the fact that the chemistry of the S02 system is
affected by the addition of the particulate in the slurry.  Further, the S02
system cannot be bypassed without also bypassing the precipitator, thus losing
the entire particulate removal function.  Finally, if the fly ash is collected
dry and then mixed with the sludge, there is a higher percent total solids
content than if the fly ash is wetted along with the sulfate sludge.  As a
result of these numerous problems, virtually all new installations are using
precipitators followed by dry fans and then followed by S02 scrubbers.

2.3  Additional Factors Not Included As Part Of This .Study

     In addition to the many cost and benefit factors that were included as
part of this study, there were several others which were considered but omit-
ted owing to either their inability to be reasonably defined and/or quantified
or their inconsequential impact upon the overall findings of the effort.  The
following is a brief summary of those factors:

     1.  Crushing and Screening Cost Savings -

         When raw coal is not going to be physically cleaned, it is
         normal practice in the coal industry to crush and screen
         to a size of approximately 2x0 inches that coal which is
         to be sold to utility plants.  The overall cost of this
         process including coal loading has been estimated by in-
         dustry personnel to be as high as $0.60 per ton.  When
         coal is physically cleaned, it is not necessary to perform
         the crushing and screening separately since these functions
         are now integrated with  the overall cleaning process.  For
         purposes of this study,  coal cleaning costs were not reduced
         by the cost of crushing  and screening even though there is a
         definite savings to the  mine operator by  not having to per-
         form these separately.   If this savings had been considered
         a benefit by the study,  the net cost of physical cleaning
         would have been reduced, and thus the relative economics
         of using physically cleaned coal followed by FGD as compared
         to FGD alone would have  been improved.

     2.  Reduction in FGD Installation Time -

         By using physically cleaned coal, less of the flue gas needs
         to be processed by the FGD system and  therefore fewer or
         smaller FGD units are required to meet environmental stand-
         ards.  This has not only the benefit  (as  covered by the study)
         of reducing the FGD cost, but  it also  reduces the construction
         time.  Additionally, the total sludge  disposal at the plant
         site is reduced substantially  from what  it would be in  the
         absence of coal cleaning.  This will  in  some cases reduce  the
         time required for, and the difficulty with, obtaining legal
         permits and site acquisition for ponding  and/or landfill.

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3.  Stack Gas Reheat Cost Savings -

    When many coals are burned which, have not been physically
    cleaned,  it may be necessary to process all or nearly all
    of the flue gas through the FGD system in order to meet
    environmental standards.  In these situations, the stack
    gas must  be reheated following FGD.   When only a small
    portion of the total flue gas is cleaned, reheat would
    not be required.  The absence of reheat would save energy
    and consequently amount to a benefit for the combined
    physical  cleaning followed by FGD approach.

4.  Less Derating of Powerplant Output -

    FGD systems require power to operate.  The smaller FGD
    systems that could result from using physically desul-
    furized coal would require less operating power.  This
    would result in more marketable power for the same
    powerplant fuel input level.

5.  Cost of Working Capital and Land -

    When considering the cost of a coal cleaning plant as
    well as a flue gas desulfurization (FGD) system,
    neither the cost of the working capital necessary to
    handle the larger operation nor the cost of the land
    area to be occupied were included by this study.  The
    reasoning behind this exclusion relates to their very
    limited impact on a per million Btu basis.  Addition-
    ally, it  is not uncommon to have sufficient land area
    available at the mine site to handle a coal prepara-
    tion plant and very little land available at the
    powerplant for a retrofit FGD installation.  This
    situation would provide additional benefit to the
    physical cleaning followed by FGD approach.

6.  Possible Creation of a Market or the Establishment of a Long-Term
    Sales Contract -

    In many cases the physical cleaning of coal could create
    markets for coals which are relatively unattractive in
    their raw form.  The providing of beneficiated coals
    compatible with particular use situations could lead to
    the creation of long-term sales contracts matching
    specific cleaned coals with specific users.  This
    arrangement works to the advantage of all concerned by
    giving the mine operator a long-term source for his
    product and the utility a predictably uniform product
    over an extended period which has been efficiently
    matched to operating requirements.
                                 10

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3.o  EVALUATION OF COSTS ASSOCIATED WITH. THE COAL CLEANING PROCESS

     Physical cleaning involves the removal of waste products such, as shale,
pyrite, and roof slate from coal by utilizing differences in the physical
properties of the materials.  The practice of physically cleaning coal has
existed for many years; however, until the current concern with S02 emission,
the purpose has been to remove the so-called ash-forming impurities.  This
material is removed to reduce transportation charges and the operating prob-
lems and associated expenses that this ash-forming material causes in practi-
cally all major uses of coal.  About 41 percent of the bituminous coal and
lignite produced in 1975 was mechanically cleaned.  Cleaning equipment include
a variety of jigs, tables, launders, dense-medium and flotation washers, and
pneumatic devices, all of which depend upon the difference in specific gravity
and froth flotation that depends upon the surface chemistry of fine coal.  The
specific cleaning method chosen depends on the size of coal to be upgraded,
the composition of the raw product, and the chemical-quality specifications
imposed by the consumer (Reference 14).

     Sulfur is found in raw coal in two major forms:  organic and inorganic
(pyritic sulfur).  The organic sulfur is considered an inherent constituent of
the coal and cannot be reduced by use of conventional cleaning methods.  The
pyritic sulfur occurs in particles of varying size mixed with the coal.  By
crushing (to liberate the pyritic sulfur) and cleaning (to remove the liber-
ated particles), the total amount of sulfur in the coal may be reduced.  The
degree of removal of the pyritic sulfur is dependent on the size of the par-
ticles of pyrites; the finer the particles, the more difficult to remove by
cleaning.  The total sulfur reduction, therefore, is dependent on the amount
of organic sulfur and the effects of crushing to liberate the pyritic sulfur.
The desulfurization process results (as do most beneficiation processes) in
some loss in total heat content of the processed coal.

     To obtain a low sulfur level (less than 1 percent total sulfur) in the
physically cleaned coal requires that the organic sulfur content in the raw
coal be less than 1 percent.  A summary of washability tests by the Bureau of
Mines  (Reference 1), based on work done in cooperation with the Office of Air
Programs, EPA, shows that the organic sulfur and the effects of crushing and
cleaning vary widely, as would be expected, when washability data of coals
throughout the United States are considered.

3.1  Cleaning Cost Factors

     The cost associated with providing 1 ton of physically cleaned coal at
the cleaning plant site (assumed located at mine) is the sum of the following:

     •  The cleaning plant amortization costs associated with each
        ton of cleaned coal.

     «  The cleaning plant operating and maintenance costs associated
        with each ton of cleaned coal.  Operating costs also include
        the disposal of the refuse associated with the cleaning
        operations.
                                       11

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     •  The value of raw coal that is utilized in providing 1 ton
        of cleaned coal.

     •  The share of State and local taxes and insurance (on
        cleaning plant) allocated against each ton of cleaned
        coal.

3.2  Cleaning Plant Amortization Costs

     Mechanical cleaning of coal is possible because of the differences be-
tween the physical properties of coal and those of its impurities.  For the
cleaning process to provide attractive pyrite removal benefits, it is neces-
sary to select coals which possess characteristics amenable to pyrite removal
and to have an appropriately designed cleaning plant.

     The cost of a coal cleaning plant can vary over a wide range.  Plant cost
basically depends on plant capacity, equipment composition, and top size of
prepared coal, assuming no undue site preparation charges.   In general, for a
given cleaning plant capacity, the smaller the coal particles, the greater
the cleaning plant costs.  The increase in plant costs required to clean fine
coal is due to both the greater capital equipment cost for cleaning the finer
coal and the higher operating and capital cost associated with fines dewater-
ing, especially if thermal drying has to be used.

Data Considerations

     Even though some cost data on several existing coal preparation plants
are available, the value of such data is questionable.  This cautious atti-
tude concerning the utilization of past cost information is due to a number
of reasons, including the following:

     •  Existing plants may not be representative of required coal
        cleaning plant(s).

     •  The age of existing plants .is not well defined.

     •  The questionable ability to extrapolate or project current
        plant costs from plants of different total makeup that
        were constructed in past years under different economic
        conditions.

     •  The intricate details of existing plants are not well
        known (effectiveness and utilization restrictions).

     These factors must be considered when using past plant-cost data to
judge the reasonableness of newly acquired plant-cost estimates.

Capital Equipment Costs

     The characteristics of the raw coal to be upgraded have to be carefully
investigated together with a determination of the finished product before an
estimate of cleaning plant configuration and cost can be made.  In general,
the finer we crush the coal, the more we liberate the impurities.  However,
                                       12

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as coal size is reduced and finer coal is cleaned, the complexity of the
cleaning plant increases along with increased capital cost.

     There are four general alternatives that are considered regarding proc-
essing of raw coal, as follows:

     1.  No Cleaning - Steam coals low in sulfur and ash or low in
         sulfur and high in ash are often utilized near the mine
         without cleaning.  Currently, as in the past, cleaning
         is principally employed to upgrade coal by removing impu-
         rities such as clay, rock, shale, and pyrite.  Even so,
         where the cost of transporting the noncombustibles is not
         economically significant, coal can often be sold without
         the benefit of cleaning.

     2.  Partial Washing (Coarse-Size Coal Plant) - In a coarse-
         size coal plant only the larger size fractions of coal
         are treated.  Typically, a given coal could contain
         50 to 60 percent plus 3/8-inch coal with the fines
         reasonably low in ash and sulfur.  The plus 3/8-inch
         portion of the feed is washed and mechanically dried
         to a low moisture content.  The separated and un-
         treated minus 3/8-inch portion of the feed is combined
         with the cleaned coarse coal for shipment.

     3.  Coarse Washing with Partial Washing of Fines (Coarse-Size
         and Fine-Size Coal Plant) - In this case all the feed is
         wetted, but only the plus 48-mesh fraction is washed; the
         minus 48-mesh material is discarded.  All the utilized
         coal would be mechanically dried.  This approach results
         in the exclusion of the minus 48-mesh material (the most
         difficult and expensive to dewater) from the product.  The
         use of this concept generally results in a lower yield and
         often results in higher cost and problems associated with
         disposal of the tailings.

     4.  Total Washing - In this case all the feed is wetted and
         washed.  The cost of the plant will vary depending on
         the top size of coal treated.  Such a plant could con-
         sist of both coarse (e.g., plus 3/8-inch coal) and fine
         (e.g., minus 3/8-inch coal) circuits or could be com-
         posed entirely of fine coal circuits.

         A plant designed to crush run-of-mine (ROM) coal cc
         3- to 5-inch top size resulting in 50 to 60 percent
         plus 3/8-inch (coarse) coal would wash the coarse
         coal, followed by dewatering to remove the surface
         moisture.  The fines  (e.g., minus 3/8-inch coal)
         would be wet-washed, followed by mechanical dewater-
         ing and possibly heat drying.  A plant optimized to
         remove pyritic sulfur and ash from amenable coals
         would most likely be a total fine coal plant.  Such
                                      13

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         a plant would crush ROM coal to 3/8-inch top size prior
         to processing.  Plants of this type would include
         tables and/or cyclones, froth flotation units, filters,
         sizing and dewatering screens, mechanical and/or thermal
         dryers, and water clarification provisions.

     To define current cleaning plant capital costs,  engineering companies
presently engaged in the design and construction of coal cleaning plants were
contacted and cost information requested.  Specifically, turnkey cleaning
plant cost and plant makeup for 3/8-inch and/or 1/2-inch top size (fine coal)
processing of Northern Appalachian and Midwest steam coals were requested.
The requested cost and design information were for fine coal processing plants
that would provide the capability for removing pyritic sulfur from the more
readily cleanable coals.  Obtained information from several designers and con-
structors of coal processing plants indicated that for either Northern Appala-
chian or Eastern Interior steam coals a fine coal preparation plant would cur-
rently cost $16,000 to $18,000 per ton-hour of input capacity for plants with
capacities of 500 or more tons per hour.  The information was supplied by per-
sonnel well aware of the plant capabilities that would be required to bene-
ficiate coals of interest.  Such a plant would include tables and/or cyclones,
froth flotation units, filters, a range of screen sizes, and mechanical and
thermal dryers.  The design would provide for drying of fines and would remove
the surface moisture from the larger fraction to aid shipping.  In addition,
included provisions would provide a slurry pond for the fine refuse and a pit
for the coarse refuse.

     In a previous effort in 1970, we estimated the cost of a medium-high-
quality cleaning plant of the general design required to clean the more read-
ily cleanable coals.  The estimate was for a plant with an input capacity of
500 tons per hour and containing a combination of tables, cyclone separators,
froth flotation units, filters, heat dryers, and sizing and dewatering
screens.  The cost of the plant was estimated at $4 million, the equivalent
of $8,000 per ton-hour of input capacity.

     From 1970 through 1975 the Dodge Building Cost Index has increased ap-
proximately 200 percent.  This index reflects changes in construction costs
based on wage and material price trends.  The index is based on 60 percent
material and 40 percent labor.

     Cost increase indexes covering equipment related to coal beneficiation
are reported by the Bureau of Labor Statistics.  Table 1 provides index ratios
between March 1970 and December 1975.  From 1970 through 1975, both the Dodge
Index and the Bureau of Labor Statistics price trend data support the reason-
ableness of the 1975 cleaning plant capital cost estimate as being essentially
double the 1970 value.
                                      14

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     TABLE 1.   BUREAU OF LABOR STATISTICS COST ESCALATIONS FOR, EqUI.PMENT
	ASSOCIATED WITH COAL BENEFICIATION	

               Category                        Dec. 1975 index/Mar. 1970 index


Crushing, pulverizing, screening machinery                  1.77*

Roll Crusher                                                1.75*

Mining Machinery                                            1.95*

                                               Aug. 1975 index/Jan. 1973 index
Flotation machinery                                         1.80
* Estimate based on Bureau of Labor statistics value through August 1975.
Capital Equipment Amortization

     It is assumed that regardless of tax and depreciation considerations, a
mine operator would probably finance and amortize a coal preparation plant by
means of an equal-payment, self-liquidating loan or its equivalent.  Informa-
tion from designers and constructors of coal preparation plants indicates that
the interest rate for a loan for financing a coal cleaning plant would at best
be 2 to 3 points above the prime interest rate.  The more financially sound
borrowers of course would obtain the more attractive rates.  If the loan is
payable with equal installments, the amount due per period per dollar of loan
as a function of the loan period and the interest rate is given by —

                                       Dn   .                           c ft
                                   (1 + i)n- 1

where                        R = capital recovery per period per dollar
                                 invested,

                             i = interest rate per period expressed as a
                                 decimal,

and                          n = number of periods in the amortization
                                 schedule.

     Therefore,  the factor R multiplied by the amortizable cost yields the
per-period  fixed cost covering interest and principal.

     Industrial-quality coal cleaning plants, when properly maintained, will
undoubtedly have a life expentancy of greater than 20 years.  Even so, the
writeoff or amortization period is usually based strictly on company fiscal
policy as constrained or guided by Internal Revenue Service policies and
regulations.  Reference 2 contains guidelines for depreciable assets used
                                        15

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by business in general.  Under the category of Mining, defined to include the
mining and quarrying of metallic and nonmetallic materials plus the milling,
beneficiation, and other preparation of such materials, Reference 2 indicates
an 8- to 10-year depreciation period.  Even so, discussions with industry in-
dicated that even though a coal cleaning plant can be written off in about
10 years, prudent considerations dictate a writeoff period of 15 years.  A
15-year depreciation period therefore was used for analysis purposes.

     For a 15-year depreciation period, the monthly installment per dollar of
loan value equals:

                                        >180
                            R =
                                i Cl + i)
                                (1 + i)
                                        180
where
   i = monthly interest  rate expressed
       as a decimal.
     It is assumed that obtainable loans will bear an interest value that is
two points in excess of the prime commercial rate.  Therefore we have—
When prime interest
   rate equals—

        6%
        7%
        8%
        9%
       10%
       i per month
        becomes—
(0.06+0.02)712
(0.07+0.02)712
(0.08+0.02)712
(0.09+0.02)712
(0.10+0.02)712
              R per year equals—

0.006667           0.11468
0.0075             0.12171
0.008333           0.12895
0.009167           0.13639
0.01               0.14402
     The yearly amortization costs for various amortization periods and in-
terest rates  (on the unpaid balance) are provided in terms of plant cost per
ton-hour of input capacity.  The share of amortization costs attributable
against each  plant input ton of coal is merely the per-ton-hour input capacity
yearly amortization cost divided by the yearly operating hours.  The amorti-
zation cost per ton of cleaned coal is simply the cost per plant input ton
divided by the recovery  (i.e., yield) expressed as a decimal.

     The yearly operating hours of a cleaning plant as a function of plant
utilization are indicated in Figure 3.  For the purposes of this study a plant
utilization factor of 38.58 percent was used.  This is based upon the cleaning
plant operating 260 days per year, 13 hours per day.  Although this represents
typical current industry practice, greater plant utilization would mean reduced
capital amortization contribution per ton of cleaned coal and thus improve the
economics associated with physical cleaning.

     The per-ton cleaned coal amortization values 'are given in Figure 4.
These values  are provided for a range of plant yields and utilization factors
and are based on—
                                      16

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    100

    90


    80


    70


    60


    50


    40


    30


    20


     10
                        300 doys/yr at 20 hr/day


~                 260 days/yr at 20 hr/day	

_              240 days/yr at 20 hr/day—|

            220 days/yr at 20 hr/day


        300 days/yr at  13 hr/day

_   260 days/yr at 13 hr/day


  240 days/yr at 13 hr/day


 220 days/yr at 13 hr/day
                                                        I
              1000    2000    3000   4000    5000   6000   7000


                        PLANT OPERATING  HOURS  PER YEAR
                                                                     8000  9000
                            Figure 3-Cleaning plant utilization.

-------
CD
               12  1.25
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                                     D- 70

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10    20     30     40    . 50     60     70     80

         PERCENT  UTILIZATION OF CLEANING  PLANT
                     90   100
                             Figure 4-Amortizotion cost/ton cleaned cool  for: plant cost-$18,000

                                      per ton-hour input capacity, interest rate-8%, loan period

                                      15 years.

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     *  A plant costing $18,000 per ton-hour of input capacity

     *  A 15-year amortization period

     *  An 8 percent interest (on unpaid balance)

Curves showing the relationships between amortization costs per ton of clean
coal for various plant costs, interest rates, plant utilization values, and
recovery (yield) values are given in Appendix F.

3.3  Operation and Maintenance Costs

     Operation and maintenance (0 & M) costs are a function of—

     *  Coal yield (i.e., weight percent of plant input coal
        that becomes clean coal)

     *  Cleaning plant labor requirements and rates

     *  Maintenance costs

     *  Cost of operating supplies

     *  Power costs

     *  Refuse handling and disposal costs

     For a given plant, the throughput time required to produce a ton of
"clean" coal depends on yield (i.e., the percentage of raw coal that ends up
as cleaned coal).  As an example, if a cleaning plant operating at input capac-
ity takes X hours with a given yield to process or provide 1 ton of clean coal,
then the same plant when operating at half the previous yield will take essen-
tially 2 X hours to provide 1 ton of clean coal.  Therefore, the cleaning plant
operating costs attributable to 1 ton of cleaned coal are (essentially) in-
versely proportional to cleaning plant yield.  In like manner, maintenance,
supply, and power costs will also be inversely proportional to yield.  Refuse
handling and disposal costs, however, do not follow this same relationship.
This is evident from the fact that for 100 percent yield, refuse will not
exist, and therefore refuse costs will be zero.

     Operations and maintenance costs can therefore be considered to be com-
posed of the sum of two cost categories.  One cost category (i.e., sum of
plant labor, maintenance, supplies, and power costs) is inversely proportional
to yield, and the other cost category (refuse handling and disposal costs) is
directly proportional to the percent of refuse.

Operation and Maintenance Cost Data Considerations

     Information on operation and maintenance (0 & M) costs is available from
various sources. ' '    The basic problem is correlating or projecting past
data to reflect current economic conditions.  Difficulty in assessing  the data
is due to various degrees of uncertainty in the following:
                                      19

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     •  Year of initial data collection

     *  Plant type, total composition, and capacity

     *  Year(s) of cleaning plant construction and date
        of initial operations

     *  Special operating considerations (i.e., duty,
        maintenance, etc.)

     *  Management efficiency of operating companyt

        Total cost inclusions covered by available cost
        information

     The most detailed information available on 0 & M costs is contained in
Reference 12.  Operation and maintenance cost information from the following
sources was also examined and evaluated in arriving at anticipated present-day
0 & M cost values.

     Reference 7 contains preparation costs (i.e., operating cost of coal
cleaning plant) for a 1,500-ton/hour-capacity plant, designed to produce both
metallurgical and utility coal.  The article defined 0 & M costs to be
$0.253/ton of coal processed.  According to the U.S. Bureau of Labor Statis-
tics, th-a average hourly earnings for November 1975 for the bituminous coal
industry are 241 percent of the average 1961 hourly earnings.  Furthermore,
the average hourly earnings for the bituminous coal industry were constant for
1959 through 1962.  Therefore, the 1961 0 & M cost (i.e., $0.253/ton) corrected
for November 1975 becomes $0.61/ton of coal.

     Table 5-1 on page 5-15 of Reference 8 contains operating costs obtained
from extended records of a plant processing over 1 million tons of coal a year
at 500 tons per hour with a plant reject of about 15 percent.  Total labor,
supplies, and power amount to $0.30/ton.  Since the information was published
in 1968, it is assumed that the provided information was for the 1968 or at
worst the 1967 time frame.  Depreciation is listed, and the sum of the pre-
viously mentioned $0.30/ton figure plus the depreciation associated with each
ton is defined as the total cleaning costs.  It is therefore assumed that
preparation plant maintenance cost is included in the $0.30/ton figure.  Cor-
recting the $0.30/ton figure by the ratio of November 1975 to 1967 average
hourly earnings in the bituminous coal industry provides a November 1975 0 & M
cost of $0.60/ton of plant-processed coal.  Thus, both References 7 and 3 re-
sult in essentially the same adjusted November 1975 0 & M cost.

     As previously indicated, Reference 12 contains information on a number of
coal cleaning plants.  The provided data, associated with studies of six dif-
ferent cleaning plants, have been examined as a partial basis for developing
current cleaning plant 0 & M costs per ton of processed coal.  These case
studies, updated to November 1975 conditions, are in Appendix E.

     The development of updated (to November 1975) 0 & M costs indicates that
for examined coal cleaning plants of the general type, class, and costs in-
dicated by practicing engineers, the spread of 0 & M costs is small.  Figure 5
                                      20

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      1.40


      1.30



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 .90


 .80



 .70



 .60



 .50


 .40
                       I
                                 D Current estimate

                                 • Current actual value
                                  I
           100        90          80          70

                    CLEANING PLANT  YIELD, percent


                Figure  5-Operation and maintenance cost.
                                                         60
                           21

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indicates the 0 & M costs associated with three plants that are believed re-
presentative of the expected composition and costs of plants that will be
required to clean "readily cleanable" coals.  In addition, an average curve
of the two extreme cases (i.e., Cases V and VI) is provided.  As indicated,
the 0 & M costs for all three cases differ from the average curve (of the
extreme cases) by not more than 13 cents for a 90 percent yield, by not more
than 16 cents for an 80 percent yield, and by not more than 20 cents for a
70 percent yield.  This spread is not unreasonable and could well be partially
attributed to differences in plant conditions, plant composition, and manage-
ment philosophy.  In addition, three current industry-supplied values are also
indicated on Figure 5.  As compared with current industry values, the average
assumed values for yields greater than 80 percent appear quite conservative.

     For this effort, the values associated with the average curve will be
used.  The deviations of 13, 16, and 20 cents will be considered to be the
uncertainty or maximum possible variation in 0 & M costs (i.e., for the
associated yields).

3.4  Cost of Raw Coal Required Per Ton of Cleaned Coal

     Operator's cost is defined as the operator's break-even cost for providing
1 ton of raw coal input to the cleaning plant.  Such cost would include all
appropriate expenses (e.g., royalties, labor and equipment, fair share of
insurance, taxes, and mine development costs).  For the purposes of this study,
profit was not included in the break-even cost of providing 1 ton of raw coal
input to the cleaning plant.  This was done since the study treats the mine
and the coal preparation plant as an integrated operation under common owner-
ship and therefore the coal is treated as work-in-process until it has been
cleaned.  However, one might argue that under different business management
and/or accounting arrangements profit should be included in the raw coal input
cost to the cleaning plant.  To allow for such variations, a range of mine
operator's costs to provide 1 ton of coal input was used in the analyses.

     Since the clean coal yield is less than 100 percent of the raw coal input,
it takes more than 1 ton of raw coal to provide 1 ton of cleaned coal.  The
cost of raw coal that is used to produce 1 ton of cleaned coal is simply equal
to the per-ton operator's cost divided by the cleaning plant yield expressed
as a decimal.  Curves indicating the cost of raw coal required to produce
1 ton of clean coal are given in Figure 6.  The "additional" raw coal cost  to
provide 1 ton of cleaned coal is the cost of the raw coal lost during the
cleaning process and is equal to the operator's coal cost required to produce
1 ton of cleaned coal less the operator's per-ton coal cost.

3.5  State and Local Taxes and Insurance Allocated Against Each Ton of
     Cleaned Coal

     Each ton of cleaned coal must support its share of cleaning plant insur-
ance and State and local taxes.  For this effort, an overall insurance and
tax (I&T) level of 2 percent of the inital cleaning plant cost is employed.
The load attributable against each ton of cleaned coal (assuming cleaning
plant operates at design capacity) is—
                                      22

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      21
18
15
      12
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        100   95    90    85     80    75     70    65


                 CLEANING PLANT YIELD, percent


           Figure 6—Cost of row cool required to  produce

                     o ton of cleaned coal.
                       23

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I & T load/ton clean coal = cleaning plant cost/ton-hr/input capacity x 0.02
                            operating hr/year x yield (decimal value)

                          = cleaning plant cost/ton-hr/input capacity x 0.02
                            8,760 x utilization (dec.val.) x yield (dec.val.)


     Thus, the insurance and tax load allocated against each ton of cleaned
coal from a cleaning plant costing $18,000 per ton-hour of input capacity is—


I & T/ton clean coal      =                        360
                            8,760 x utilization (dec.val.) x yield (dec.val.)


     Figure 7 indicates the insurance and tax burden per ton of clean coal
for a plant costing $18,000 per ton-hour of input capacity.  The I & T burden
(Figure 7) is a function of plant utilization and plant yield.

4.0  EVALUATION OF ECONOMIC BENEFITS ASSOCIATED WITH THE USE OF CLEANED COAL

4.1  Economic Benefit Factors

     The readily identifiable monetary benefits attributable to a powerplant
burning cleaned coal (dried to or below the original raw coal moisture
content) are as follows:

     1.  Cleaned coal has a higher heat content per ton than the
         raw coal from which it is produced.  Therefore, less
         cleaned coal will be required to provide a given heat
         content value.

     2.  Less cleaned (higher heat content) coal need be shipped
         for a given overall heat content value.  Therefore, the
         cost of shipping will be less.

     3.  Cleaning reduces the ash content of coal.  The ash
         requiring disposal by the utility will be less due
         both to the lower ash content per ton burned and
         to the fact that fewer tons of coal will be burned
         (i.e., for a given heat content value).

     4.  Less clean coal needs to be pulverized for a given
         heat content value, thus reducing the pulverizing
         costs.  Further, cleaning often reduces the amount
         of harder particles in the coal, which should lessen
         wear on pulverizing equipment.  However, the eco-
         nomic impact of this latter factor associated with
         pulverizing is difficult to quantify and will
         therefore not be considered.
                                      24

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                                   B- 90
                                     - 80
                                     - 70
                                   f- 60
            I	I    I     1
                              I
      )     10    20   30  40   50  60   70   80  90 100

          PERCENT  UTILIZATION OF CLEANING  PLANT


      Figure 7-Tox  and insurance burden/ton of cleaned coal,

                plant cost-$18,000 per ton-hour  input

                capacity and tax  and insurance rate of 2%.
                       25

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     5.   Mine operators pay 74 cents to the Pension and Benefit
         Trust Fund for each ton of coal shipped from the mine.
         Cleaning,  by raising the heat content of coal, will
         cause a decrease in the number of tons shipped (for a
         given heat content).  Thereby, a savings equal to
         74 cents times the reduction in shipped tonnage will
         be attained.

     6.   There is evidence that savings in powerplant main-
         tenance costs will be obtained by using coal with
         reduced sulfur and ash content.  Thus, since
         physical cleaning reduces the ash and sulfur con-
         tent of coal, lower powerplant maintenance cost
         may result.  In addition, for a given heat con-
         tent value, fewer tons of cleaned coal need be
         handled by the powerplant.  Therefore, power-
         plant units that are tonnage (utilization)
         limited will have an increased operational life.

     7.   Utilization of a more uniform coal, obtained by
         cleaning,  results in better plant efficiencies
         and ease of operation.  The economic impact of
         this factor will not be considered in this
         report since it has not been quantified
         separately.

4.2  Increased Heat Content

     An economic benefit readily identifiable to the purchaser of cleaned coal
is equivalent to the f.o.b. raw coal price (i.e., price of unprepared coal)
times the fractional increase in heat value of the cleaned coal over that of
the raw coal.  This is the equivalent f.o.b. mine raw coal "price associated
with the amount of coal that provides the equivalent heat increase.

     If raw coal has an initial heat content of A per ton and if upon physical
cleaning the heat content decimal increase is x.» then the physically cleaned
coal will have a heat content of A (1 + x) per ton.  The increase over the
initial value is A (1 + x)-A or Ax per ton.  The fractional amount of cleaned
coal that need not be shipped (i.e., the amount that offsets the heat content
increase) is Ax/A (1 + x) or   x     For the purposes of this study the
                             1 + x
factor   x    shall be termed the multiplier factor K.  Therefore, the
       1 + x
per-cleaned-ton benefit gained, a function of the raw coal f.o.b. price and
the increase  in heat content, is equal to the f.o.b. raw coal price (per
ton) times   x     Figure 8 indicates the benefit gained as a function of
           1 + x
raw coal f.o.b. mine price and the increase in heat content over the initial
value.
                                       26

-------
o
TJ

LU
Q
LJ
in
<
UJ
tr
o
    2.50  —
2.00 —
     1.50  —
     1.00  —
     .50  -
       0       4      8     12     16     20     24   28

         PERCENT  BTU INCREASE  OVER ORIGINAL  VALUE


              Figure 8-Added coal value due to increase
                       in heat content.
                        27

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4.3  Savings in Coal Transport Costs

     Since cleaning increases the heat content of coal, less cleaned coal need
be shipped to supply a given heat value.  The amount of transport savings
attainable by cleaning is a function of the increase in the coal heat content
and the coal shipping costs.

     The effective transport saving per ton of coal cleaned is equal to—


                            T.C. x K,


where                       T.C. = transportation cost per ton of coal,

and                         K    = the multiplier factor   x
                                                         1 + x


Figure 9 indicates the multiplier factor K as a function of heat content
increase.

     Coal is currently shipped by train, waterway carrier, truck, and slurry
pipeline.  The transport mode or combination of modes employed in a given
situation is usually determined by overall economic considerations.  Coal
loaded for shipping in 1973 as reported by mine operators is provided in
Table 2.


      TABLE 2.  COAL LOADED FOR SHIPMENT IN THE UNITED STATES, IN 1973,
	AS REPORTED BY MINE OPERATORS	

                                                          Thousands short tons

Total Railroad shipments                                         397,158

Total Waterway shipments                                          68,604

Shipped by truck to final destination                             57,268

Coal transported to electric utility plants adjacent
  to or near mine                                                 64,424

All others*                                                        4,284
          Total production                                       591,738
* Includes coal used at mine for power and heat, made into beehive coke at
  mine, used by mine employees, used for all other purposes at mine, and
  shipped by slurry pipeline.
                                       28

-------
o
z
z
o
B
cc
o
Q.
    0.20
  8
     .16
.14
     .12
cc
o
u.
cc
o
U
.10
.08
CC
Ul
.06
5    -04
D

*    .02
       0       4      8      12     16     20    24     £8
          PERCENT  BTU INCREASE OVER INITIAL VALUE

         Figure 9-Effective  savings in transport cost due to
                  increase in  coal heat  content (equals
                  shipping cost x K).
                        29

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     As indicated by this Table, the majority of coal is shipped by the rail-
roads.  This study therefore only considers the rail mode of shipping.  The
rail transportation costs used in this study are based on information re-
ported by the Bureau of Mines and the Interstate Commerce Commission.  Trans-
portation costs to be realistic must reflect current conditions and practices
that tend toward large annual tonnages along with economic train-load tonnage
levels.  The actual shipping rates used are based on rates for coal shipped
in cars owned by the railroad (so as to reflect real costs) as reported by
Reference 10 and updated by an appropriate time-cost correction factor so
as to reflect current costs.  Transportation cost development as based on
referenced inputs and study constraints are provided in Appendix G.

4.4  Savings in Ash Disposal Costs

     Savings in ash disposal costs will be realized when cleaned coal is used
(i.e., as opposed to raw coal).  This saving is due to the following two
reasons:

     *  Cleaning lowers the ash content of coal

     *  The heat content is raised by the cleaning process.
        Therefore, less coal needs to be burned for a
        given heat content value.

     The effective saving in ash disposal cost per ton of cledned coal burned
is equal to the ash disposal saving per ton of coal burned, resulting from
lower ash content, times a multiplier factor to account for the higher heat
content of the cleaned coal.  This multiplier factor is (1 + x), where (x) is
the fractional increase in heat content.  Assuming that a (x) fractional
increase in heat content results from a (x) fractional reduction in ash con-
tent, then the total effective ash disposal savings per ton of coal burned is
equal to the disposal cost per ton of ash times x (1 + x).

4.5  Savings in Coal Pulverizing Costs

     Evidence exists that in some cases reducing the amount of the harder
impurities (e.g., pyrite) makes coal easier to pulverize.  However, this
effect does not appear to be universal, and the effect on pulverizing cost
is not always discernible.  It is currently estimated that it costs $0.50 to
pulverize 1 ton of coal, compared with $0.25 5 years ago.  This $0.50 value
is considered the total operation and maintenance cost.

     The identifiable saving associated with cleaning coal results from the
increased heat content of a ton of cleaned coal since less tonnage need be
pulverized to supply a given heat value.  The cost savings relationship (on
a per ton basis) is—
                       Cost savings = $0.50 times K,


where                  K = the multiplier factor   x
                                                 1 + x
                                       30

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     As an example, consider that cleaning raises the heat content of coal by
10 percent; e.g., from 10,000 to 11,000 Btu per pound.  In this case, the
fractional decrease in the amount of coal that would compensate for the in-
crease in heat content is   0.1    = 0.1.  The saving would be (on an
                          1+0.1    1.1
equivalent per-ton basis) equal to 0.50 x 0.1 or $0.0454 for each ton of
                                          1.1
cleaned coal burned.

4.6  Savings in Payment to Trust Fund

     The mine operator pays 74 cents to the Pension and Benefit Trust Fund
for each ton of coal shipped to a consumer.  If by cleaning, the heat content
is raised by a decimal increase of x, then to satisfy a given heat content
demand   x    less coal need be shipped.  The savings attributable to each
       1 + x
ton of cleaned coal is then equal to $0.74 times K.

4.7  Maintenance Savings

     Only two data sources have been identified in which operating conditions
and collected data are such as to permit a judgment relating sulfur and ash
content in coal to powerplant maintenance costs.  The two sets of data are
for identical steam powerplants which burn coals of different ash and sulfur
contents.   The available data, however, do not permit firm assessments of
variations in maintenance savings with variations in coal ash and sulfur
contents.

     These data are derived from two Tennessee Valley Authority (TVA) generat-
ing boiler units each having 200 Mw generating capacity.  These two units,
both pulverized-coal-fired boilers, were placed in operation in the middle
1950's.  Information on the coal-associated maintenance costs for the two
plants is given in Tables 3 and 4.  The data cover approximately 74 million
tons of consumed coal.  The economic data are contained in a February 1969
report (Reference 5) and are assumed to represent economic relationships
during 1968.  The available maintenance data with conclusions indicate—

        Maintenance costs for all the items listed in Table 4
        are greater for the plant burning the higher ash and
        sulfur coal.

     *  The difference in maintenance cost during CY 1968
        amounted to 11.63 cents per ton of coal.  This
        difference in maintenance cost for the two units
        is almost two to one.  This difference is not
        accounted for by the 5 percent difference in heat
        content value between the two coals.  The current
        difference in maintenance cost, as based on esca-
        lation cost of skilled labor, is currently esti-
        mated to equal 19.8 cents per ton of coal.
                                      31

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   TABLE 3.  AVERAGE ANALYSES OF "AS-BURNED" COALS UTILIZED IN TWO IDENTICAL
             STEAM ELECTRIC PLANTS
                                          Plant A
                               Plant B
Moisture, percent
Volatile matter, percent
Fixed carbon, percent
Ash, percent
Sulfur, percent
Btu content (per pound)
      4.9
     32.4
     52.1
     10.8
      1.0
   12,680
   5.1
  33.8
  47.7
  13.4
   2.7
12,053
Source:  Reference 5
    TABLE 4.  COMPARISON OF 1968 MAINTENANCE COSTS IN IDENTICAL POWERPLANTS
              BURNING COALS OF DIFFERENT ASH AND SULFUR CONTENT
Items with coal associated
    maintenance costs
          Maintenance costs
           (cents per ton)
Primary coal crushing
Coal conveyors
Boilers
Soot blowers
Pulverizers
Burners
Air preheaters
Bottom ash hoppers
Fly-ash collectors
Ash disposal system
Coal piping


          Totals
Plant A


  0.34
  1.24
  3.72
  0.80
  3.45
  0.80
  0.41
  0.55
  0.80
  2.70
  0.80
 15.61
                                                                       Plant B
 0.76
 1.65
 6.42
 2.55
   .38
   ,59
5.
1.
 0.62
   73
   52
   60
 1.42
27.24
Source:  Reference 5
                                       32

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     As indicated in Table 3, the average difference in ash content of the
coals consumed by the two plants was 2.6 percent and the average difference
in sulfur content was 1.7 percent.  No information is available on maintenance
costs with variations in ash and sulfur content for a given plant.  However,
these results suggest that maintenance savings of up to 33 cents per ton of
coal burned may be expected in steam plants capable of substituting lower
sulfur and ash coal for their current steam coal.

     For the purposes of this study, it is assumed that the maintenance
savings indicated in Table 5 will be obtained for the listed reductions in
total ash and sulfur contents.  The assumed savings are based on TVA data
(Reference 5) as corrected to reflect current economic conditions.
TABLE 5.  ASSUMED MAINTENANCE SAVINGS AS A FUNCTION OF ASH AND SULFUR REDUCTION
Total additive reduction in ash and              Maintenance savings per ton of
             sulfur                                    coal burned


       15 percent and over                                 $0.33

    12 percent to 15 percent                                0.30

     9 percent to 12 percent                                0.27

     7 percent to 9 percent                                 0.24

     5 percent to 7 percent                                 0.20

     3 percent to 5 percent                                 0.17

     2 percent to 3 percent                                 0.13
5.0  EVALUATION OF COSTS ASSOCIATED WITH FLUE GAS DESULFURIZATION

5.1  Flue Gas Desulfurization Plant Costs

     For assessment purposes, information on capital cost and related data
useable for developing capital-cost-scaling relationships were obtained from
References 9 and 13.  Discussions with the EPA Energy Process Division and
the EPA Office of Planning and Evaluation indicated that cost data contained
in Reference 13 appear to reflect current industry conditions; Reference 9
gives cost information for a little earlier time period.  Even so, data con-
tained in both references provided the basis for development of the required
size-versus-capital cost-scaling relationships.
                                      33

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     Capital costs for 12 model plants CReference 13) are provided in
Table 6.  Each model plant size was analyzed for two S02 control require-
ments: high-sulfur coal (3.5 percent) with a S02 limitation of 1.2 pounds
per million Btu (Federal New Source Performance Standard), and low-sulfur
coal (0.6 percent sulfur by weight) with a SC>2 limitation of 0.15 pound
per million Btu.  These equate to S02 removal efficiencies (assuming coal
containing 23 million Btu per ton) of 80 and 85 percent, respectively.
The provided cost per kilowatt of capacity decreases between 10.2 and 13.5
percent (depending on plant category) as size increases from a 250- to a
500-Mw capacity and are constant per kilowatt of capacity for listed plants
in excess of 500 Mw capacity.  The Environmental Protection Agency, the study
sponsor of the Reference 13 report, indicated that 500 Mw was the break
point and that a 1,000-Mw plant, from a cost standpoint, would be two
500-Mw plants.


             TABLE 6.  LIMESTONE MODEL PLANT CAPITAL COSTS

Model plant
characteristics
Scrubbing*
$/KW
Sludge
disposalt
$/KW
Indirect
costs£
$/KW
Total
$/KW $ MM
250-Mw capacity

Retrofit, 3.5 pet. S      40
New, 3.5 pet. S           30
Retrofit, 0.6 pet. S      38
New, 0.6 pet. S           29

500-Mw capacity

Retrofit, 3.5 pet. S      35
New, 3.5 pet. S           28
Retrofit, 0.6 pet. S      34
New, 0.6 pet. S           27

1,000-Mw capacity
4
5
5
5
3
3
35
28
32
25
30
25
28
23
81
66
74
59
70
58
65
53
20.2
16.5
18.6
14.7
35.1
29.2
32.3
26.4
Retrofit, 3.5 pet. S
New, 3.5 pet. S
Retrofit, 0.6 pet. S
New, 0.6 pet. S
36
29
34
28
4
4
2
2
30
24
28
22
70
57
64
52
69.5
56.8
64.4
52.0

* Includes limestone preparation system (conveyors, storage silo, ball mills,
  pumps, motors, and storage tank) and scrubbing system (absorbers, fans,
  and motors, pumps and motors, tanks, reheaters, soot blowers, ducting, and
  valves).
t Sludge disposal costs do not include associated indirect charges.
£ Includes interest during construction, field labor and expenses, contractor's
  fees and expenses, engineering, freight, spares, taxes, contingency, and
  allowance for shakedown.
                                      34

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     As indicated, other plant cost information was obtained from Reference 9.
Capital investment costs provided by that report are given in Table 7.   The
limestone model plant capital costs according to Table 7 are lower than those
indicated by Reference 13.  It should be noted that investment costs depend
heavily on project definition and the development time period.  For example,
the capital cost for a 500-Mw coal-fired desulfurization unit would be in-
creased per Reference 9 by an additional $13.50 per kw installed capacity by
providing reliability provisions, additional bypass ducts and dampers,  and a
fly-ash pond including closed-loop provisions.
           TABLE 7.  FLUE GAS DESULFURIZATION CAPITAL COST ESTIMATES
       Plant characteristics
Years of      Limestone Process
  life           $          $/kw
90 percent S02 removal; on-site solids
disposal

  200 Mw N* 3.5 percent S
  200 Mw N 3.5 percent S
  500 Mw N 3.5 percent S
  500 Mw N 2.0 percent S
  500 Mw N 3.5 percent S
  500 Mw N 5.0 percent S
  1,000 Mw E* 3.5 percent S
  1,000 Mw N 3.5 percent S

80 percent S02 removal; on-site solids
disposal

  500 Mw N 3.5 percent S

90 percent S02 removal; off-site
solids disposal

  500 Mw N 3.5 percent S

90 percent S02 removal; on-site solids
disposal (existing unit without exist-
ing particulate collection facilities)

  500 Mw E 3.5 percent S
   30
   20
   25
   30
   30
   30
   25
   30
   30
   30
   25
13,031,000
11,344,000
23,088,000
22,600,000
25,163,000
27,343,000
35,133,000
37,725,000
24,267,000
20,532,000
29,996,000
65.
56.
46.
45.
50.
54.
35.
37.7
48.5
41.1
60.0
* N-New; E-Existing.

Source:  Reference 9.
                                      35

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     One would expect that over a limited size range the following plant size-
cost relationship to generally hold:


                        Cost plant A  _  /capacity plant A\  ,
                        Cost plant B     (capacity plant B)


where x is the capacity-cost exponent and is usually less than 1.  For chemi-
cal and processing plants the value of x generally falls between 0.7 and 0.9.
The values of x as determined from Reference 13 (Table 6) cost values are—

     1.  For Retrofit Plant Installation and 3.5 Percent Sulfur Coal


                                 35.1  = /500\X
                                 20.2    (250/


                                 In  35.1        n  0
                                     2b72  = X '  ln 2
                                 x = 0.80
     2.  For New Plant Installation and 3.5 Percent Sulfur Coal
                                 29.2
                                 16.5     250/
                                 i  29.2          „
                                 In -77—- = x • In 2
                                    ID . j
                                 x = 0.82


     3.  For Retrofit Plant Installation and 0.6 Percent Sulfur Coal
                                 32.3  = /500\X
                                 18.6    (250J
                                 In 32.3       .  _
                                         = X '  ln 2
                                    x = 0.80
                                      36

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     4.  New Plant Installation and 0.6 Percent Sulfur Coal

                                 26.4  = /500\x
                                 14.7     250J
                                 i   26.4       .   ,
                                 ln 1477 = *•' ln 2
                                 x = 0.84

     From Table 7, capital cost versus sulfur content data with 90 percent
S02 removal and on-site solids disposal are—

                                                  Costs
          Plant Characteristics          (in millions of dollars)

     500 Mw, New Plant, 2% S Coal                 22.6
     500 Mw, New Plant, 3.5% S Coal               25.163
     500 Mw, New Plant, 5% S Coal                 27.343

     A plot of the foregoing indicates that for the same removal efficiency
the following may be expected:

          Sulfur Content               Capital Cost as Percent of
           Design Level                 3.5% S Design Level Cost

              3%                                  96.6
              2-1/2%                              93.2
              2%                                  89.9
              1-1/2%                              86.4

     Data contained in the same reference indicate that the capital cost for
a plant with a 90-percent S02 removal efficiency is approximately 4 percent
higher than the cost for a plant with an 80-percent removal efficiency.

     The FGD systems' capital costs used for assessment purposes are based on
Reference 13; cost versus designed-sulfur-content scaling relationships are
based on Reference 9.

     The assumed capital costs for a 90-percent S02 removal FGD system in-
stalled as a retrofit are—
                                                    Cost
          Plant Characteristics               (million dollars)

             250 Mw, 3.5% S              20.2 x 1.04 = 21.01
             250 Mw, 3.0% S              20.2 x 1.04 x 0.966 = 20.29
             250 Mw, 2.5% S              20.2 x 1.04 x 0.932 = 19.58
             250 Mw, 2.0% S              20.2 x 1.04 x 0.899 = 18.89
             250 Mw, 1.5% S              20.2 x 1.04 x 0.864 = 18.15
             250 Mw, 1.0% S              20.2 x 1.04 x 0.864 = 18.15
             250 Mw, 0.5% S              20.2 x 1.04 x 0.864 = 18.15
                                       37

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     The assumed capital costs for a 90-percent S02 removal FGD system in-
stalled on a new installation are—

                                                    Cost
          Plant Characteristics               (million dollars)

             250 Mw, 3.5% S              16.5 x 1.04 = 17.16
             250 Mw, 3.0% S              16.5 x 1.04 x 0.966 = 16.58
             250 Mw, 2.5% S              16.5 x 1.04 x 0.932 = 15.99
             250 Mw, 2.0% S              16.5 x 1.04 x 0.899 = 15.43
             250 Mw, 1.5% S              16.5 x 1.04 x 0.864 = 14.83
             250 Mw, 1.0% S              16.5 x 1.04 x 0.864 = 14.83
             250 Mw, 0.5% S              16.5 x 1.04 x 0.864 = 14.83

     Size scaling for plants that differ from 250-Mw capacity are based
on—

     For Retrofit Installation


                    Cost X       _ /capacity X in Mw]  '
               cost 250 Mw size          250
     For New Installations

                                    /                \
                    Cost X       _ /capacity X in Mw' °'8
               cost 250 Mw size           250
     Once the capital cost associated with the FGD system (either new or
retrofit) is determined based upon the above scaling relationships, it is
necessary to properly allocate this cost annually over the reasonable life
expectancy of the installation.  By updating and expanding information
obtained from Reference 9 relative to determining annual capital charges for
the power industry, the following cost components were found to apply.

5.2  Annual Capital Charges For Financing

                                     As Percentage of Original Investment
                                             Years Remaining Life

                                     li      25      2Q      15      10

Depreciation-straight (based on     3.57    4.00    5.00    6.67    10.00
  useable life of unit)
Interim replacement (unit having    0.56    0.40     -
  less than 30-yr life)
Insurance                           0.50    0.50    0.50    0.50     0.50

  Total rate applied to original    4.63    4.90    5.50    7.17    10.5
    investment
                                        38

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5.2  Annual Capital Charges For Financing (Con.)

                                             As Percentage of Outstanding
                                             	Depreciation Base	

Cost of Capital (capital structure
assumed to be 50% debt and 50% equity)
  Bonds at 9% interest                                  4.50
  Equity at 12% return to stockholder                   6.00
Taxes
  Federal (50% of gross return or                       6.00
    same as return on equity)
  State (national average for states                    4.80
    in relation to Federal rates)

Total rate applied to depreciation base                21.30

Rate applied on an average basis                       10.65

     Combining the various annual capital charges for financing gives a set
of total annual percentages applied on an average basis for each of the
possible installation life expectancies as follows:

          For 28 years = 4.63 + 10.65 = 15.28
          For 25 years = 4.90 + 10.65 = 15.55
          For 20 years = 5.50 + 10.65 = 16.15
          For 15 years = 7.17 + 10.65 = 17.82
          For 10 years = 10.5 + 10.65 = 21.15

5.3  Flue Gas Desulfurization Costs Per Ton Of Coal Burned

     Now, having established the scaling relationships and the other relevant
cost components, the FGD system costs on each ton of coal burned can be de-
termined for any given coal-burning installation.  The following FGD costs
per ton of coal burned are based upon an electric utility heat rate of
10,000 Btu/kwh.  In addition, since only a portion of the stack gas would
normally be treated, stack gas reheat would not generally be required.

     a.  Capital Cost Per Ton of Coal =

capital cost ($) x annual % of original investment applied on average basis
                   tons of coal burned per year X 100

     b.  Fuel and Electricity

         Reference 13 indicates a fuel and electricity cost
         of between 0.27 and 0.30 mill per kwh irrespective
         of plant size.  This value is associated only with
         flue gas cleaned.  The levelized cost ($) per ton
         coal burned is equal to—
                                      39

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     0.29 Mill/kwh   Btu per ton coal burned   % flue gas cleaned
     1,000 mill/$  X     10,000 Btu/kwh      X        100
               -10
       2.9 x 10    x Btu per ton coal burned x % flue gas cleaned
               -4
       2.9 x 10   x MM Btu per ton coal burned x % flue gas cleaned
     c.  Raw Materials

         Limestone and fixation chemicals costs are scaled directly
         from cost provided in Reference 13.  The amount of lime-
         stone or fixation chemicals required per hour essentially
         varies directly with plant size and the sulfur content of
         the coal.  For each case, the estimated costs per ton of
         coal burned are as follows:

              Limestone cost ($) per ton of coal burned =

          -4
7.543 x 10   x Mw capacity of scrubber x % sulfur x % flue gas cleaned
                       tons coal burned pe-r hour


      = 7.543 x 10   x MM Btu per ton coal x % S x % gas cleaned
              Fixation chemicals ($) per ton burned =


6.16 x 10   x Mw capacity of scrubber x % sulfur x % flue gas cleaned
                     tons coal burned per hour


      = 6.16 x 10   x MM Btu per ton coal x % S x % gas cleaned
     d.  Operating Labor

         The operating labor estimate is based on two men at
         $8 per man-hour and supervision equal to 15 percent of
         direct labor.  The operating labor ($) per ton coal
         burned is estimated to equal:
                 2 x 1.15 x $8/hr x 8,760 hr/year
                    tons coal burned per year

                    	$161.184	
                    tons coal burned per year
                                      40

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     e.   Maintenance Cost

         Maintenance cost per year fall into two categories:
         (1) Labor and materials,  and (2)  supplies.   Labor
         and materials per year are estimated at 4 percent
         of the fixed investment,  and supplies are estimated
         at 15 percent of the labor and materials value (i.e.,
         0.6 percent of the fixed  investment).  The cost per
         ton of coal burned is merely the yearly values
         divided by the number of  tons burned per year.

     f.   Overhead values are as follows:

         Plant - 50 percent of operation and maintenance
         Payroll - 20 percent of operating labor

6.0  CASE STUDIES

6.1  Basis and Economic Approach Behind Case Study Analysis

     As has been previously stated, the basic objective of this study spon-
sored by the Bureau of Mines was to perform engineering and economic anal-
yses of coal preparation followed  by S02 cleanup processes with the intent
of establishing the attractiveness of keeping some higher sulfur coals in
the energy market.  Since the largest user of coal in this country is the
electric power generating industry, the study was directed at this economic
sector.

     Toward this end, studies were made of the cost factors associated with
coal cleaning (Section 3 and Appendixes D, E, and F).  An analysis of such
costs quite logically leads into a study of the many benefits associated with
physical cleaning of coal.  The major benefits of physical cleaning include
reduced transportation cost for the same heat content, higher Btu per unit
weight,  reduction in pulverizing costs, savings in maintenance cost, reduced
payments to miners' benefit fund,  and savings in ash disposal costs.

     Following the analysis of cleaning cost and benefit factors, an evalua-
tion of the costs associated with flue gas desulfurization (FGD) systems of
various sizes was conducted.  This evaluation provided reasonable estimates
of the capital costs associated with constructing FGD systems, depending on
the particular size of the plant,  its age, and the sulfur content of the flue
gas to be treated.  As has been indicated in Section 5 on the economics asso-
ciated with FGD, a scrubber installed on a new plant is less expensive than
one installed as a retrofit to an existing facility.  These differences in
cost include the inefficiencies of working around existing piping and other
obstructions.  In addition, details of significant operation and maintenance
aspects of FGD systems were considered to arrive at a methodology for esti-
mating such costs for plants of varying sizes burning coal of different sulfur
contents.

     Having identified the costs and benefits associated with coal cleaning
and FGD, the next step was to select a broad range of coal sources which due
                                       41

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to their sulfur content typically would require some level of coal prepara-
tion and/or flue gas desulfurization to render them environmentally accept-
able in many areas of the country.  Eight of the 23 coal districts as
outlined by the Bituminous Coal Act of 1937 were selected as potential
sources.  These encompass a number of Appalachian and Interior coals.

     The final step before commencing the actual economic analysis on a
case-by-case basis was to arrive at reasonable user locations.  To accom-
plish this, we considered the following 20 States:  Alabama, Delaware,
Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan,
Minnesota, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Tennessee,
Virginia, West Virginia, and Wisconsin.  These were considered in that they
represented reasonable transportation distances from and had been historically
served by the previously mentioned Appalachian and Interior Coal sources.  In
addition to considering these potential user States, it was necessary to do
an exhaustive analysis of the environmental regulations governing the emis-
sion of sulfur dioxide from large coal-burning installations.  Many times
these regulations differ for new and existing facilities.  These regulations
were summarized and appear in Appendix A.  Having established the legal emis-
sion levels in each of the potential user States, it was possible to deter-
mine the extent to which a combination of reasonable cleaning and FGD would
suffice.  Such analysis was conducted for each source-user combination on
the basis of both a new and an existing facility.  In addition, each case
was analyzed from the standpoint of using FGD exclusively.  This provided
comparative economics of the two approaches to meeting environmental stand-
ards on both new and existing coal-burning utilities.

     To determine where within each of the potential user States coal from
the selected regions might practically be consumed, publications from the
National Coal Association (Reference 11) and the Illinois Geological Survey
(Reference 6) and confidential sources were consulted.  These gave specific
locations of large power generation facilities which were designated as
"coal use areas" in each of the case studies.  At this point, it was neces-
sary to determine the general locations from which these using locations had
historically obtained their coal.  To .accomplish this, actual utility com-
panies were contacted directly and publications were reviewed such as Bureau
of Mines Information Circular 8614 (Reference 10).  From these same sources,
actual shipping costs on a per-ton basis were extrapolated.  So as not to
distort the impact of this factor, only large-volume transportation cost
information was used.  Since this shipping information covered the 1972
period, it was necessary to update these figures to December 1975, using the
Bureau of Labor Statistics Index of Coal Transportation by Rail.  The proce-
dure for accomplishing this is covered by Appendix G.

6.2  Case Study Analysis - An Example

     Now, having given some of the background of the basic ingredients used
in each of the case studies, a step-by-step example will attempt to high-
light the more significant economic considerations.  In the particular
example given, the new steam-electric plant is assumed to be burning coal
which has been physically cleaned with the flue gas passing through a stack
gas scrubbing system (flue gas desulfurization) to the extent necessary to
                                       42

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achieve the required sulfur dioxide emission level.  This case appears in its
entirety as Case Number 12A in Appendix B and for the purposes of explana-
tion, the same numerical headings and nomenclature will be used.

1.0  CASE CONDITIONS - Case Number: 12A    Combined Use of Physical Cleaning
                                           Followed by Stack Gas Scrubbing

     The case conditions set forth the basic technical, environmental, and
     economic parameters for the particular situation being examined.

1.1  Coal Use Area:   Dickerson (Montgomery County), Maryland

     An electric utility currently operates a 580 Mw coal burning plant at
     this site in Montgomery County, Maryland.  According to available in-
     formation, this plant consumes approximately 1.3 million tons of coal
     per year.

1.2  Emission Standards:   New:      1% Sulfur by Weight
                           Existing: N/A

     Currently, the State of Maryland regulations restrict coal-burning in-
     stallations in the Washington Metropolitan area, which includes Mont-
     gomery County, Maryland, to the use of coal having no more than 1 percent
     sulfur by weight.  This limit has been used for the purpose of case
     analysis, although it is projected that subsequent limits will more
     closely follow the Federal New Source Performance Standard of 1.2 pounds
     of sulfur dioxide per million Btu.

1.3  Coal District of Origin:   No. 3     Coalbed: Pittsburgh
     State: West Virginia                 County:  Marion

     Within district 3, coal from the Pittsburgh coalbed in Marion County,
     West Virginia, was selected.  This choice is consistent with informa-
     tion obtained relative to the areas from which coal has typically been
     procured by this user.

1.4  Raw Coal                                     Ash:        11.0%
     Lb S02/MM Btu: 5.70       Sulfur: 3.80%      MM Btu/Ton: 26.66

     After selecting a reasonable source for the coal in each case, data were
     obtained on a specific coal from Bureau of Mines Report of Investigations
     RI 8118 with  the Btu content adjusted for the moisture level of the raw
     coal.

1.5  Clean Coal                                     Ash:           5.9%
Cleaning Plant Yield: 90.0%   Sulfur:        2.16%  MM/Btu/Ton:   28.09
       Lb S02/MM Btu:  3.08   Btu Recovery: 94.8%   Btu Increase:  5.36%

     As indicated  in Section 2, General Considerations and Approach, a 90 per-
     cent by weight coal cleaning yield will be uniformly applied for the pur-
     poses of  these analyses.  The above data represent Bureau  of Mines labora-
     tory results  published in the Reference 1 report.  For the purpose of
                                        43

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      treating the influence of moisture content,  it is assumed in all cases
      that the moisture content of the clean coal  is the same as that of the
      raw coal.

1.6   Transportation      Mileage: 245      Cost Per Ton:  $6.60

      Using actual information from industry sources on typical transporta-
      tion distances and costs to the using facility,  as well as historical
      data on annual coal shipments and costs from coal district 3 to the
      Maryland area, reasonable estimates were set for purposes of analysis.
      The distances in rail miles were confirmed using current railroad maps,
      and the per-ton shipping costs were confirmed to the greatest extent
      possible from the rail carriers involved.

1.7   Assumed Plant Size      Megawatts: 500

      For the purposes of this study, all case analyses are based upon a
      500-Mw plant size.

1.8   Remaining Life Of Boiler: 25 Yr

      In this particular example, a new installation is assumed to have a
      25-year life.  This factor is important for  purposes of amortizing the
      flue gas desufurization (FGD) system.  In other case studies appearing
      in Appendix B, 15 years is assumed for existing plants where a FGD
      system retrofit would be appropriate.

1.9   Assumed Ash Disposal Cost: $4.00/Ton

      In all case analyses where coal cleaning is  considered, $4.00 per ton
      is assumed for ash disposal cost.  Based upon information obtained from
      industry sources, this is felt to be a realistic estimate on the con-
      servative side.  For example, some utilities are paying as much as
      $7.00 per ton.

1.10  Cleaning Plant      Cost: $18,000 Per Ton-Hour Of Input Capacity
                          Utilization: 38.58%

      As explained in Section 3, current estimates of cleaning plant cost
      range from $16,000 to $18,000 per ton-hour of input capacity.  The upper
      limit of $18,000 has been used in all case analyses where coal cleaning
      is being considered.  As to cleaning plant utilization, it has been
      assumed in all cases that the plant operates 13 hours per day for
      260 days out of the year, or 38.58 percent of the time—

                           260 days/yr x 13 hr/day\.
                           365 days/yr x 24 hr/dayj
                           \                       '
1.11  Assumed Annual Capital Scrubber Charges As Percent Of Original
      Investment: 15.55%

      In Section 5, covering the annual capital charges for financing flue
      gas desulfurization  systems, the total annual percentage to be applied
                                       44

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     on an average basis tp the original investment is derived.   This percent-
     age is 15.55 percent for a new plant having an expected life of 25 years.
     For those cases where an existing installation is assumed,  a 15-year
     remaining life is used consistently and an annual percentage of 17.82
     percent is applied.

2.0  COAL CLEANING COST FACTORS

     Under this part in each of the case analyses,  the major cost factors
     that apply to the particular coal being cleaned are covered.

2.1  Cleaning Plant Costs    Amortization:  $0.68/Ton    0 & M:  $0.75/Ton

     To determine the reasonable amortization on a  per-ton basis of the clean-
     ing plant capital cost of $18,000 per ton-hour of input capacity,  cer-
     tain considerations must be given to the manner in which the plant will
     be operated and the long-term financing market at the time.  For all
     case analyses, it was assumed that cleaning plant owners would be paying
     approximately two points (2 percent) over the  prime interest rate.
     Assuming a prime interest rate of 6 percent, this gives an effective
     rate of 8 percent, which yields an annual capital recovery factor of
     0.11468 as derived in Section 3.   Using this factor and the already
     given operating parameters of the cleaning plant gives—

          18,000 $/ton-hr x 0.11468 $/yr/$ invested  =  $_ ,„,
           3,380 hr/yr x 0.90 cleaning plant yield       >U.bo/ton.

     The figure of $0.75 per ton for cleaning plant operating and maintenance
     cost comes from well-established sources, as set forth in Section 3 and
     taken from Figure 5.

2.2  Additional Cost To Mine Operator To Provide For 1 Ton Of Clean Coal
     When Mine Operator's Cost Per Ton Of Raw Coal  Is—

          $ 9.00/Ton, Additional Cost Is $1.00/Ton
          $ll.CO/Ton, Additional Cost Is $1.22/Ton
          $13.00/Ton, Additional Cost Is $1.44/Ton

     In the cleaning of coal, obviously more than 1 ton of raw coal must be
     processed in order to achieve 1 ton of clean coal.  The amount of addi-
     tional coal required depends on the level to which the coal is cleaned.
     For these analyses, it is assumed that the cleaning plant  is located at
     the mine site and is operated by the mine operator.  From an economic
     standpoint, this additional increment of coal  lost in the  cleaning
     process represents a cost to the cleaning plant operator which must be
     considered.  In the case of coal cleaning to 90 percent weight yield
     this cost is equal to—

            _1  -  1\   X mine operator's cost per ton of raw coal.
          .90
                                      45

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     For the purpose of analysis a reasonable range of  possible mine  opera-
     tor's costs per ton of raw coal was established with the use of  industry
     sources, as well as Bureau of Mines,  Federal Power Commission, and
     National Coal Association publications (References 4,  11,  and 15).

2.3  Cleaning Plant Tax And Insurance Burden: $0.12/Ton

     As covered by Section 3,  a reasonable estimate of  the  tax and insurance
     burden attributable to each ton of coal cleaned is $0.12.

2.4  Total Differential Production Cost To Mine Operator To Provide A Ton Of
     Cleaned Coal, When Mine Operator's Cost Per Ton Of Raw Coal Is—

          $ 9.00/Ton, Differential Cost Is $2.55/Ton
          $11.00/Ton, Differential Cost Is $2.77/Ton
          $13.00/Ton, Differential Cost Is $2.99/Ton

     This part merely summarizes the various cost factors per ton of  coal
     cleaned as covered by parts 2.1, 2.2, and 2.3 categorized according to
     estimated mine operator cost levels per ton of raw coal.

3.0  ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

     Having considered the cost side of the coal cleaning process, this part
     assesses the benefits on a per-ton basis.

3.1  Added Coal Value Due To Higher Heat Content Of Coal, When F.O.B.  Mine
     Raw Coal Price Is—

          $17.00/Ton, Benefit Is $0.86/Ton
          $19.00/Ton, Benefit Is $0.97/Ton
          $2l.OO/Ton, Benefit Is $1.07/Ton

     One of the major economic benefits of coal cleaning is the increase in
     Btu content for the same unit weight.  This means  a mine operator has
     a more valuable product to sell since the buyer is purchasing Btu's,
     not tons.  Therefore, as derived in Section 4, the quantification of
     this benefit is—
            decimal Btu increase
          1 + decimal Btu increase
x  f.o.b. mine raw coal price.
     For the purpose of analysis,  a reasonable range of possible f.o.b.  mine
     raw coal prices per ton of cleaned coal was established with the use of
     industry sources, as well as  Bureau of Mines,  Federal Power Commission,
     and National Coal Association publications.

3.2  Transportation Cost Saving Due To Increased Heat Content Of Coal:
     $0.34/Ton

     The same relationship discussed above also leads to a savings in trans-
     portation costs since fewer tons of coal need  to be shipped to deliver the
     same quantity of Btu's to the user.  On a per  ton of coal basis the
     savings is—
                                      46

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       decimal Btu increase        , .
     ,  ,   ,'—:————;	  x  shipping cost per ton.
     1 -h decimal Btu increase        rr  "      r

3.3  Saving In Ash Disposal Cost: $0.23/Ton

     Since less ash is  generated from the cleaned coal, there are definite
     savings associated with its disposal.  As derived in Section 4, this
     savings is—

decimal Btu increase x  (1 + decimal Btu increase) x ash disposal cost/ton.

3.4  Saving in Pulverizing Cost: $0.03/Ton

     Following the same line of reasoning as that applied to the savings in
     transportation costs, the pulverizing facility at the using location is
     not  required to process as much coal owing to the higher Btu content of
     the  cleaned coal.   Therefore, the savings are—

            decimal Btu increase         ,   .  ,
          ,  ,  .	:	:——	:	  x  pulverizing cost per ton.
          1 + decimal Btu increase

     As explained in Section 4, $0.50 per ton is  representative of pulverizing
     costs in the power generating industry.

3.5  Saving In Benefit  Payment: $0.04/Ton

     In the mining industry, union contracts require the payment of a fixed
     sum  into a Miners' Benefit Trust  Fund for each ton of coal shipped.
     Currently,  this amounts to approximately $0.74 per ton.  Since the higher
     Btu  content of the cleaned coal requires the shipment of fewer tons for
     the  same total Btu yield, the savings in this area is—

            decimal Btu increase      6   .
          •7 ,  ;	:—:nrz	:	  x $0.74 trust fund payment per ton.
          1 + decimal Btu increase                             r

3.6  Saving In Maintenance:  $0.20/Ton

     As was established in Section 4,  there is a  definite relationship between
     the  reduction in sulfur and ash that occurs  during coal cleaning and
     savings in maintenance cost at the coal-burning facility.  This relation-
     ship has been summarized in Table 5 on a per-ton of coal burned basis and
     was  utilized in each case analysis where coal cleaning was considered.
     In this example case, the combined sulfur and ash reduction was 6.74 per-
     cent, and therefore a maintenance saving of  $0.20 per ton was applied.

3.7  Total Benefits Of  Coal Cleaning,  When F.O.B. Mine Raw Coal Selling
     Price Is—

          $17.00/Ton, Benefit Is $1.70/Ton
          $19.00/Ton, Benefit Is $1.81/Ton
          $21.00/Ton, Benefit Is $1.91/Ton
                                      47

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     This part merely summarizes the various benefit factors per ton of coal
     cleaned as covered by parts 3.1 through 3.6 categorized according to
     estimated f.o.b. mine raw coal prices.

4.0  DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                    F.O.B.  Mine Raw Coal Price (Per Ton)

                                              17.00     19.00     21.00
          Mine Operator's Cost       9.00      0.85      0.74      0.64
          Of Raw Coal (Per Ton)     11.00      1.07      0.96      0.86
                                    13.00      1.29      1.18      1.08

     This portion of the case analysis gives the net cost of cleaning 1 ton of
     coal.  These values are the differences between the costs given in
     part 2.4 and the benefits summarized in part 3.7.   This type of presenta-
     tion gives the reader an opportunity to observe the net cleaning cost for
     the selected range of Mine Operator's  Cost and F.O.B. Mine Raw Coal
     Prices.

5.0  STACK GAS COST FACTORS

     Under this part, the magnitude of the  flue gas desulfurization system
     necessary to meet the emission requirements of the particular using
     location is determined along with the  capital amortization and operating
     and maintenance costs associated with  such a system.

5.1  Boiler Capacity: 500 Mw

     In all case analyses, a 500-Mw electric power generating capacity is
     assumed.

5.2  Utilization Factor: 7,000 Hr/Yr

     According to industry sources and Reference 9, coal-burning electric
     power generating facilities operate on the order of 80 percent of the
     time (7,000 hours per year) during the first 10 years following con-
     struction.  This utilization factor has been used in all case analyses
     where a new plant is being considered.   In those cases where an existing
     installation is being considered (15 years remaining life), a utiliza-
     tion factor of 57 percent  (5,000 hours) is assumed.  According to the
     aforementioned Reference, this utilization factor is maintained for
     approximately the next 5 years, at which time it reduces still further.

5.3  Tons Of Coal Burned Per Year: 1,245,995 Tons

     Given the Btu content of the coal being burned and the total hours the
     plant operates, the number of tons of  coal burned annually by a 500-Mw
     plant can be calculated as follows:

     10 x 10  Btu/Mw hour x hours of operation x 500 Mw of capacity
                   Btu/ton of coal being considered
                                      48

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     For this particular example,  the aforementioned value was calculated as
     follows:

          10 x 106 x 7,000 x 500     .  .., OQ,
          	!	7	  =  1,245,995 tons per year
               28.09 x 10
5.4  Minimum Scrubber          Scrubber Rating:  299 Mw
     Requirements              % of Flue Gas Cleaned:  59.7%

     Having established the maximum permissible  emission level at the using
     location 'and the sulfur content of the cleaned coal, the minimum scrubber
     requirements necessary to meet such an emission standard can then be de-
     termined.  The minimum scrubber requirements are determined as a function
     of the percent of flue gas which must be channeled through the flue gas
     desulfurization (FGD) system to meet the emission standard.  This per-
     centage is—

                                      required emission standard
     % of flue gas cleaned  _  	emission from coal prior to FGD
              100              decimal operation efficiency of scrubber

     For this particular case the following applied:

                               , _    1% sulfur  content by weight
     % of flue gas cleaned  =     2.16% sulfur content of cleaned coal
              100                                 0.90
     % of flue gas cleaned  =  59.7.
     This means that for our assumed plant size of 500 Mw, 59.7 percent of the
     gas must be processed by the FGD system to meet standard.  Therefore,
     minimum scrubber rating is—


                         0.597 x 500 Mw  =  299 Mw
5.5  Design Scrubber           Scrubber Rating: 344 Mw
     Requirements              % of Flue Gas Cleaned: 68.8%

     In order to arrive at conservative design scrubber requirements for pur-
     poses of analysis,  a 15-percent margin was allowed over the minimum
     scrubber requirements calculated in 5.4.

5.6  Scrubber Capital Cost:  $20,138,140

     Now, having established the size of the FGD system necessary to meet
     existing emission standards, the total capital cost for such an installa-
     tion is determined by using the scaling relationship derived in Section 5.
                                      49

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      As explained ? this relationship is based upon the known capital costs of
      250-Mw FGD systems and how such costs relate to scrubbing systems of
      varying sizes treating flue gas of comparable sulfur content.  In this
      particular case analysis, the following applies for a FGD system being
      installed in a new plant:


      capital cost of 344-Mw scrubber  =  /344-Mw capacity^
      capital cost of 250-Mw scrubber     I 250-Mw capacity I

                                            /      \
      capital cost of 344-Mw scrubber  _    / 344 Mw \
              15.61 million                 I 250 Mwl


      Capital cost of 344-Mw scrubber  =  $20,138,140


5.7   Scrubber Capital Charges/Yr: $3,131,481

      Using the appropriate annual amortization factors discussed in 1.11
      above, the scrubber capital charges per year are determined by multi-
      plying this factor times the total capital investment of the scrubber
      system; i.e., 0.1555 x $20,138,140  =  $3,131,481.

5.8   Capital Contribution Per Ton Of Coal: $2.51/Ton

      Dividing the scrubber capital charges per year calculated in 5.7 above
      by the number of tons of coal burned determined in 5.3 gives the capital
      contribution per ton of coal for the particular installation under
                     f$3,131,481/vr
      consideration.   1,245,995 tons/yr

5.9   Fuel And Electricity Cost Per Ton Of Coal: $0.56/Ton

      As covered by Section 5, a fuel and electricity cost of 0.29 mill per
      kwh produced regardless of plant size has been used in all case analyses.
      It should be noted that this amount is attributed only to the FGD sys-
      tem.  Specifically, for this case, this cost is determined as follows:


0.29 mill/kwh produced   28.09x10 Btu of clean coal   n ,00  . _,
- 1 nnn — -n it - x - m nnn p.. — /i — v - x 0.688 of flue gas cleaned
    1,000 mill/$              10,000 Btu/kwh


5.10  0 & M Costs Per Ton Of Coal
      Limestone Cost:         $0.31/Ton   Maintenance Labor & Mat'l: $0.67/Ton
      Fixation Chemical Cost: $0.26/Ton   Supplies Cost:             $0.10/Ton
      Operating Labor Cost:   $0.13/Ton   Overhead Cost:             $0.48/Ton

      Using the cost relationships for the operating and maintenance costs of
      the FGD system covered by Section 5, the above costs on a per-ton of
      coal burned basis were calculated.
                                      50

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5.11  Tota,], Sta,ck Ga,g Cost Per Ton Of Coal Burned: $5.Q2/Ton

      Summarizing all of the stack gas cost factors determined in parts 5.8
      through 5.10 gives a total scrubber cost on a per-ton-of-coal-burned
      basis.  This means that given the already physically cleaned coal, it
      will cost an additional $5.02 per ton to bring the sulfur oxides emis-
      sions into compliance with existing regulations in the user area
      selected.

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                     F.O.B. Mine Raw Coal Price (Per Ton)

                                               17.00     19.00     21.00
          Mine Operator's Cost        9.00      5.87      5.76      5.66
          Of Raw Coal (Per Ton)      11.00      6.09      5.98      5.88
                                     13.00      6.31      6.20      6.10

      This portion of the case analysis gives the total cost per ton of coal
      burned for cleaning the coal, using stack gas scrubbing to the extent
      necessary to meet the given emission standards.  These values are the
      sum of the costs given in Parts 2.4 and 5.11 less the benefits given in
      Part 3.7.  This type of presentation gives the reader an opportunity to
      observe the cost of meeting emission standards for all combinations of
      assumed mine operator's cost and f.o.b. mine raw coal prices.  For ex-
      ample, the above chart of values indicates that at a mine operator's
      cost of $13.00 per ton of raw coal and a f.o.b. mine selling price of
      $19.00 per ton, it will cost $6.20 per ton to bring the burning of such
      coal into compliance with governing emission standards.  This cost of
      $6.20 per ton consists of two major components: physical cleaning at
      $1.18 and stack gas scrubbing (FGD) at $5.02.  Although these costs are
      initially felt at various points along the path between the mine and
      final consumption at the utility, the total will ultimately be absorbed
      by the utility and in turn the consumer.

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                     F.O.B. Mine Raw Coal Price (Per Ton)

                                               17.00     19.00     21.00
          Mine Operator's Cost        9.00      0.209     0.205     0.201
          Of Raw Coal (Per Ton)      11.00       .217      .213      .209
                                     13.00       .225      .221      .217

      For the convenience of the reader, the total costs reflected in
      Part 6.0 above are converted to a per-million-Btu basis.
                                      51

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9.00
11.00
13.00
17.00
5.57
5.79
6.00
19.00
5.47
5.68
5.89
21.00
5.36
5.57
5.79
8.0  COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                     F.O.B. Mine Raw Coal Price (Per Ton)
         Mine Operator's Cost
         Of Raw Coal (Per Ton)
     The final portion of the case analysis presents the total cost of the
     combined use of physical cleaning followed by stack gas scrubbing on
     the basis of a ton of raw coal.

6.3  Summarization of Case Results

     A total of 50 case analyses were performed.  All of these cases are pro-
vided in their entirety as Appendix B hereto.  Each case examines 1 of 12
selected coals and possible use areas from the standpoint of both a new and an
existing plant utilizing either combined physical cleaning followed by stack
gas scrubbing or sulfur cleanup exclusively by stack gas scrubbing.  The cases
are grouped according to coal and use area.  This permits ease of comparison
between like plants using the same coal in the same area but utilizing two
different approaches to meeting existing or projected environmental standards.
In most cases, the emission standards used were currently applicable as of
January 1976.  However, where knowledge of projected changes was available,
those standards were used and identified accordingly.

     Immediately following are summaries of each of the 50 case analyses.
These summaries are grouped in sets for comparison of the costs associated
with meeting emission standards from the two different approaches.  For
example, Cases 1A, IB, 1C, and ID are based upon an actual coal coming from
Sullivan County, Indiana, which is assumed being used in a utility plant in
the Knoxville, Tennessee, area.  Cases 1A and IB approach the analysis on the
basis of an assumed new facility, whereas Cases 1C and ID assume an existing
facility.  However, Cases 1A and 1C address the analysis using a combination
of physically cleaned coal followed by stack gas scrubbing, whereas Cases IB
and ID approach the situation from the standpoint of using stack gas scrubbing
alone.  As can be readily seen from the summarization of these cases, the cost
to meet the applicable sulfur emission standard is less in Cases 1A and 1C,
which are the plants using combined physical and flue gas cleaning in new and
existing facilities, respectively.

     In each set of cases, the relative economic advantage (or disadvantage)
is expressed as a percent for comparative purposes.  The manner of stating
economic advantage (less costly) or disadvantage (more costly) is dependent
upon what, if any, action the coal-using plant has taken to meet environ-
mental standards.  For example, if, as in the case of 1C, the utility is
using physically cleaned coal followed by FGD, then economic advantage could
be stated as their cost is 25 percent less than by FGD alone.  If, as in
case ID, the utility is using FGD alone, then economic disadvantage could
be stated as their cost is 33 percent more than by the combined approach.

     The summarization of case results referred to above follows (see pages
53 to 65.

                                      52

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                         SUMMARIZATION OF CASE RESULTS

CASE NUMBERS:  LA, IB, 1C, and ID


CASE CONDITIONS


  Coal use area:  Knoxville (Clinton), Tennessee


  Coal source area:  Sullivan County,  Indiana       Coalbed:   Number  VII


  Raw coal characteristics:  10.5 percent ash, 1.87 percent  sulfur


  Clean coal characteristics:   7.3 percent ash,  1.11 percent  sulfur

CASE RESULTS
                                                                  •
                                                  Cost to  meet
Case
No.
1 A
1 B
1 C
1 D
Type of plant
and approach
Comparison
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)
New plant with sulfur
clean-up exclusively
by stack gas scrubbing
Comparison of
Existing plant with
combined use of physical
cleaning followed by
stack gas scrubbing (FGD)
Existing plant with sulfur
clean-up exclusively by
Emission
standard
emission
standard
Economic
advantage
of Costs for New Plant
1.2 Ib S02 $
per MBTU
1.2 Ib S02 $
per MBTU
Costs for Existing
1.2 Ib S02 $
per MBTU
1.2 Ib S02 $
per MBTU
0.15-0.17
per MBTU
0.19
per MBTU
Plant
0.23-0.25
per MBTU
0.32
per MBTU
16 pet. less
than by FGD
alone
19 pet. more
than by PC
and FGD
25 pet. less
than by FGD
alone
33 pet. more
than by PC
      stack gas scrubbing
and FGD
                                      53

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               SUMMARIZATION OF CASE RESULTS (Continued)




CASE NUMBERS:  2A, 2B, 2C,  and 2D




CASE CONDITIONS




  Coal use area:  Tonawanda (Buffalo),  New York




  Coal source area:  Cambria County, Pennsylvania   Coalbed:   Lower Freeport




  Raw coal characteristics:  11.4 percent ash,  2.4 percent sulfur




  Clean coal characteristics:   6.7 percent ash, 1.01 percent  sulfur




CASE RESULTS




                                                  Cost  to meet
Case
No.
2 A
2 B
2 C
2 D
Type of plant
and approach
Comparison of
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)
New plant with sulfur
clean-up exclusively
by stack gas scrubbing
Comparison of
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)
Existing plant with sulfur
clean-up exclusively by
Emission
standard
Costs for New
1.2 Ib S02
per MBTU
1.2 Ib S02
per MBTU
emission
standard
Plant
$ 0.10-0.12
per MBTU
$ 0.22
per MBTU
Economic
advantage
50 pet.
than by
alone
100 pet.
than by
and FGD
less
FGD
more
PC
Costs for Existing Plant
1.'4 Ib S02
per MBTU
1.4 Ib S02
per MBTU
$ 0.06-0.09
per MBTU
$ 0.15
per MBTU
50 pet.
than by
alone
100 pet.
than by
less
FGD
more
PC
       stack gas scrubbing
and FGD
                                      54

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               SUMMARIZATION OF CASE RESULTS (Continued)




CASE NUMBERS:  3A, 3B, 3C, and 3D




CASE CONDITIONS




  Coal use area:  Essexville (Saginaw),  Michigan




  Coal source area:  Harrison County, Ohio          Coalbed:   Lower Freeport




  Raw coal characteristics:  10.4 percent ash,  2.30 percent sulfur




  Clean coal characteristics:  4.8 percent ash, 1.26 percent  sulfur




CASE RESULTS




                                                  Cost to meet
Case
No.
3 A
3 B
3 C
3 D
Type of plant
and approach
Comparison
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)
New plant with sulfur
clean-up exclusively
by stack gas scrubbing
Comparison of
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)
Existing plant with sulfur
clean-up exclusively by
Emission
standard
emission
standard
Economic
advantage
of Costs for New Plant
1.2 Ib S02 $
per MBTU
1.2 Ib S02 $
per MBTU
Costs for Existing
1.6 Ib S02 $
per MBTU
1.6 Ib S02 $
per MBTU
0.12-0.14
per MBTU
0.21
per MBTU
Plant
0.11-0.14
per MBTU
0.30
per MBTU
38 pet. less
than by FGD
alone
62 pet. more
than by PC
and FGD
58 pet. less
than by FGD
alone
140 pet more
than by PC
       stack gas scrubbing
and FGD
                                      55

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                  SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  4A, 4B, 4C, and 4D

CASE CONDITIONS

  Coal use area:  Boston, Massachusetts

  Coal source area:  Clearfield County, Pennsylvania    Coalbed:
                                                          Upper Kittanning

  Raw coal characteristics:  9.3 percent ash,  0.85 percent sulfur

  Clean coal characteristics:  7.0 percent ash, 0.45 percent  sulfur

CASE RESULTS
Case
 No.
     Type of plant
     and approach
 Emission
 standard
Cost to meet
  emission
  standard
   Economic
  advantage
4 A
4 B
4 C
4 D
                       Comparison of Costs for New Plant
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)

New plant with sulfur
clean-up exclusively
by stack gas scrubbing
0.28 Ib S02   $ 0.12-0.14
per MBTU        per MBTU
0.28 Ib S02
per MBTU
$ 0.17
  per MBTU
                     Comparison of Costs for Existing Plant
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)

Existing plant with sulfur
clean-up exclusively by
stack gas scrubbing
0.28 Ib S02
per MBTU
0.28 Ib S02
per MBTU
$ 0.17-0.19
  per MBTU
$ 0.29
  per MBTU
                24 pet. less
                than by FGD
                alone
31 pet. more
than by PC
and FGD
38 pet. less
than by FGD
alone
61 pet. more
than by PC
and FGD
                                      56

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                   SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  5A, 5B, 5C, and 5D

CASE CONDITIONS

  Coal use area:  Grand Rapids, Michigan
  Coal source area:  Preston County, West Virginia
                                                 Coalbed:
                                                   Upper Freeport
  Raw coal characteristics:  18.5 percent ash,  2.24 percent sulfur

  Clean coal characteristics:   11.9 percent ash,  1.25 percent sulfur

CASE RESULTS
Case
 No.
     Type of plant
     and approach
Emission
standard
Cost to meet
  emission
  standard
   Economic
  advantage
5 A
5 B
5 C
5 D
                       Comparison of Costs for New Plant
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)

New plant with sulfur
clean-up exclusively
by stack gas scrubbing
1.6 Ib S02   $ 0.07-0.10
per MBTU       per MBTU
1.6 Ib S02
per MBTU
$ 0.18
  per MBTU
              Comparison of Costs for Existing Plant

Existing plant with com-      1.6 Ib S02   $ 0.12-0.14
bined use of physical         per MBTU       per MBTU
cleaning followed by
stack gas scrubbing (FGD)

Existing plant with sulfur    1.6 Ib S02   $ 0.30
clean-up exclusively by       per MBTU       per MBTU
stack gas scrubbing
                53 pet. less
                than by FGD
                alone
112 pet. more
than by PC
and FGD
                             57 pet.  less
                             than by FGD
                             alone
                             131 pet. more
                             than by PC
                             and FGD
                                      57

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                   SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  6A, 6B, 6C,  and 6D

CASE CONDITIONS

  Coal use area:  Springfield, Massachusetts

  Coal source area:  Armstrong County, Pennsylvania     Coalbed:
                                                          Upper Freeport

  Raw coal characteristics:  13.0 percent ash,  2.53 percent sulfur

  Clean coal characteristics:  7.2 percent ash,  1.09 percent  sulfur

CASE RESULTS
Case
 No.
     Type of plant
     and approach
 Emission
 standard
Cost to meet
  emission
  standard
   Economic
  advantage
6 A
6 B
6 C
6 D
                       Comparison of Costs for New Plant
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)

New plant with sulfur
clean-up exclusively
by stack gas scrubbing
0.55 Ib S02   $ 0.11-0.13
per MBTU        per MBTU
0.55 Ib S02
per MBTU
$ 0.23
  per MBTU
                     Comparison of Costs for Existing Plant
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)

Existing plant with sulfur
clean-up exclusively by
stack gas scrubbing
0.55 Ib S02
per MBTU
0.55 Ib S02
per MBTU
$ 0.18-0.21
  per MBTU
$0.38
  per MBTU
                48 pet. less
                than by FGD
                alone
92 pet. more
than by PC
and FGD
49 pet. less
than by FGD
alone
95 pet. more
than by PC
and FGD
                                      58

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                   SUMMARIZATION OF CASE RESULTS  (Continued)




CASE NUMBERS:  7A, 7B,  7C,  and 7D




CASE CONDITIONS




  Coal use area:  Lansing,  Michigan




  Coal source area:  Jefferson County,  Ohio             Coalbed:   Pittsburgh




  Raw coal characteristics:  9.8 percent ash,  2.82  percent  sulfur




  Clean coal characteristics:   6.0 percent  ash, 2.03  percent  sulfur




CASE RESULTS




                                                 Cost  to meet
Case
No.
7 A
7 B
7 C
7 D
Type of plant
and approach
Comparison
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)
New plant with sulfur
clean-up exclusively
by stack gas scrubbing
Comparison of
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)
Existing plant with sulfur
clean-up exclusively by
Emission
standard
of Costs for
1.6 Ib S02
per MBTU
1.6 Ib S02
per MBTU
emission
standard
New Plant
$ 0.19-0.22
per MBTU
$ 0.22
per MBTU
Economic
advantage
6.8 pet. less
than by FGD
alone
7.3 pet. more
than by PC
and FGD
Costs for Existing Plant
1.6 Ib S02
per MBTU
1.6 Ib S02
per MBTU
$ 0.30-0.32
per MBTU
$ 0.35
per MBTU
11 pet. less
than by FGD
alone
13 pet. more
than by PC
       stack gas scrubbing
and FGD
                                     59

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                   SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  8A, 8B, 8C, and 8D

CASE CONDITIONS

  Coal use area:  Nashville (Gallatin),  Tennessee

  Coal source area:  Vigo County, Indiana               Coalbed:   Number VII

  Raw coal characteristics:  12.0 percent ash,  1.54 percent sulfur

  Clean coal characteristics:   7.7 percent ash, 0.90 percent sulfur

CASE RESULTS
Case
 No.
     Type of plant
     and approach
 Emission
 standard
Cost to meet
  emission
  standard
   Economic
  advantage
8 A
8 B
8 C
8 D
                       Comparison of Costs for New Plant
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)

New plant with sulfur
clean-up exclusively
by stack gas scrubbing
1.2 Ib S02    $ G.11-0.13
per MBTU        per MBTU
1.2 Ib S02
per MBTU
$ 0.16
  per MBTU
                     Comparison of Costs for Existing Plant
Existing plant with com-     1.2 Ib S02
bined use of physical        per MBTU
cleaning followed by
stack gas scrubbing (FGD)

Existing plant with sulfur   1.2 Ib S02
clean-up exclusively by      per MBTU
stack gas scrubbing
              $ 0.16-0.18
                per MBTU
              $ 0.28
                per MBTU
                25 pet.  less
                than by  FGD
                alone
33 pet. more
than by PC
and FGD
                39 pet.  less
                than by  FGD
                alone
                65 pet.  more
                than by  PC
                and FGD
                                      60

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                   SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  9A, 9R, 9C, and 9D

CASE CONDITIONS

  Coal use area:  Burlington, New Jersey
  Coal source area:  Garrett County, Maryland
                                                 Coalbed :
                                                   Upper Freeport
  Raw coal characteristics:  13.8 percent ash, 2.37 percent sulfur

  Clean coal characteristics:  8.8 percent ash, 1.6 percent sulfur

CASE RESULTS
Case
Mo.
Type of plant
and approach
Emission
standard
Cost to meet
emission
standard
Economic
advantage
9 A
9 B
9 C
9 D
                       Comparison of Costs for New Plant
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)
New plant with sulfur
clean-up exclusively
by stack gas scrubbing
0.3C Ib S02
per MBTU
0.30 Ib S02
per MBTU
This coal will not meet
emission standards for new
plants in the State of
New Jersey even with com-
bined physical and stack
gas cleaning.

This coal will not meet
emission standards for new
plants in the State of
New Jersey using stack gas
scrubbing.
                     Comparison of Costs for Existing Plant
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)
Existing plant with sulfur
clean-up exclusively by
stack gas scrubbing
1 pet. S02
by weight
(or
equivalent
emission)

1 pet. S02
by weight
(or
equivalent
emission)
$ 0.23-0.25
  per MBTU
$0.32
  per MBTU
25 pet. less
than by FGD
alone
33 pet. more
than by PC
and FGD
                                       61

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                   SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  10A, 10B, IOC, and 10D

CASE CONDITIONS

  Coal use area:  Milwaukee, Wisconsin

  Coal source area:  Franklin County, Illinois          Coalbed:   Number 6

  Raw coal characteristics:  14.8 percent ash, 1.12 percent  sulfur

  Clean coal Characteristics:  7.1 percent ash, 0.95 percent  sulfur

CASE RESULTS
Case
 No.
     Type of plant
     and approach
 Emission
 standard
Cost to meet
  emission
  standard
   Economic
  advantage
10 A
10 B
10 C
10 D
                       Comparison of Costs for New Plant
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)

New plant with sulfur
clean-up exclusively
by stack gas scrubbing
1.2 Ib S02    $ 0.07-0.10
per MBTU        per MBTU
1.2 Ib S02
per MBTU
$ 0.12
  per MBTU
                     Comparison of Costs for Existing Plant
Existing plant with com-     1.2 Ib S02
bined use of physical        per MBTU
cleaning followed by
stack gas scrubbing (FGD)

Existing plant with sulfur   1.2 Ib S02
clean-up exclusively by      per MBTU
stack gas scrubbing
              $ 0.12-0.15
                per MBTU
              $ 0.20
                per MBTU
                29 pet. less
                than by FGD
                alone
41 pet. more
than by PC
and FGD
                33 pet. less
                than by FGD
                alone
                48 pet. more
                than by PC
                and FGD
                                      62

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                   SUMMARIZATION OF CASE RESULTS  (Continued)




CASE NUMBERS:  11A, 11B, 11C,  and 11D




CASE CONDITIONS




  Coal use area:  Concord, New Hampshire




  Coal source area:  Greene County, Pennsylvania         Coalbed:   Sewickley




  Raw coal characteristics:  11.4 percent ash,  3.45  percent  sulfur




  Clean coal characteristics:   8.1 percent ash, 2.20 percent  sulfur




CASE RESULTS




                                                  Cost  to meet
Case
No.
11 A
11 B
11 C
11D
Type of plant
and approach
Comparison
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)
New plant with sulfur
clean-up exclusively
by stack gas scrubbing
Comparison of
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)
Existing plant with sulfur
clean-up exclusively by
Emission
standard
of Costs for
1.5 Ib S02
per MBTU
1.5 Ib S02
per MBTU
emission
standard
New Plant
$ 0.09-0.11
per MBTU
$ 0.17
per MBTU
Economic
advantage
41 pet. less
than by FGD
alone
70 pet. more
than by PC
and FGD
Costs for Existing Plant
1.5 Ib S02
per MBTU
1.5 Ib S02
per MBTU
$ 0.12-0.14
per MBTU
$ 0.28
per MBTU
54 pet. less
than by FGD
alone
115 pet. mon
than by PC
       stack gas scrubbing
and FGD
                                     63

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                   SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  HE and 11F

CASE CONDITIONS

  Coal use area:  Concord, New Hampshire

  Coal source area:  Greene County, Pennsylvania        Coalbed:   Sewickley

  Raw coal characteristics:  11.A percent ash,  3.45 percent  sulfur

  Clean coal characteristics:  8.1 percent ash,  2.20 percent  sulfur

CASE RESULTS
Case
 No.
     Type of plant
     and approach
Emission
standard
Cost to meet
  emission
  standard
 Economic
advantage
                       Comparison of Costs for New Plant
11 E
11 F
New plant with combined
use of physical cleaning
followed by stack gas
scrubbing (FGD)

New plant with sulfur
clean-up exclusively
by stack gas scrubbing
1.2 Ib S02
per MBTU
(projected
standard)
1.2 Ib S02
per MBTU
(projected
standard)
$ 0.25-0.28
per MBTU
$ 0.27
per MBTU
2 pet. less
than by FGD
alone
2 pet. more
than by PC
and FGD

-------
                   SUMMARIZATION OF CASE RESULTS (Continued)

CASE NUMBERS:  12A, 12B, 12C, and 12D

CASE CONDITIONS:

  Coal use area:  Dickerson (Montgomery County), Maryland

  Coal source area:  Marion County, VJest Virginia       Coalbed:   Pittsburgh

  Raw coal characteristics:  11.0 percent ash,  3.80 percent sulfur

  Clean coal characteristics:  5.9 percent ash,  2.16 percent  sulfur

CASE RESULTS
Case
 No.
     Type of plant
     and approach
 Emission
 standard
Cost to meet
  emission
  standard
   Economic
  advantage
12 A
12 B
12 C
12 D
                       Comparison of Costs for New Plant
New plant with combined      1 pet. S02
use of physical cleaning     by weight
followed by stack gas
scrubbing (FGD)

New plant with sulfur        1 pet. S02
clean-up exclusively         by weight
by stack gas scrubbing
              $ 0.20-0.23
                per MBTU
              $ 0.27
                per MBTU
                     Comparison of Costs for Existing Plant
Existing plant with com-
bined use of physical
cleaning followed by
stack gas scrubbing (FGD)

Existing plant with sulfur
clean-up exclusively by
stack gas scrubbing
1 pet. S02    $ 0.32-0.34
by weight  %    per MBTU
1 pet. S02
by weight
$ 0.43
  per MBTU
                20 pet. less
                than by FGD
                alone
                26 pet more
                than by PC
                and FGD
                23 pet. less
                than by FGD
                alone
30 pet. more
than by PC
and FGD
                                     65

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7.0  CONCLUSIONS

     The economic analyses covering physical desulfurization of coal followed
by flue gas desulfurization and flue gas desulfurization used alone for
selected coal source-user combinations indicate that economic generaliza-
tions must be approached with caution.  The range of variability is such that
each case must be individually assessed.

     In general, available data indicate that many coals can be beneficiated
to remove ash and sulfur at an attractive net cost.  These coals with reduced
ash and sulfur content levels are often not too far removed from the sulfur
content levels required to meet environmental standards in some areas tradi-
tionally served by these coals.

     When coal can be physically cleaned to a level not too far removed from
that required to meet emission standards, flue gas desulfurization treating
only a portion of the flue gas would satisfy environmental constraints.  In
many cases the net cost of physical desulfurization followed by flue gas
desulfurization is substantially less than that of flue gas desulfurization
alone.  This is due to the net economics associated with physically cleaning
coal combined with the substantially lower flue gas desulfurization costs.
In essence, the net cost (i.e., costs less benefits) associated with physical
desulfurization would be less than the additional cost if flue gas desulfuri-
zation was used alone.

     For existing powerplants, the" real costs for flue gas desulfurization
systems are especially expensive owing both to higher capital costs and to
the shorter economic lives of the systems.  In many such cases, the use of
physical desulfurization followed by flue gas desulfurization can be parti-
cularly attractive.

     The provided case studies indicate that for many potential situations
the economic advantage of a combined approach is quite significant.  Key
elements in economic advantage relate to (1)  the availability of coals cap-
able of significant reductions in ash and sulfur at reasonable weight yields,
and (2) a beneficiated-coal sulfur level that is compatible with signifi-
cantly less than full-scale scrubbing requirements.  Even so, the range of
variables is such that each source-user combination must be individually
assessed.  In this regard, it should be noted, the results can be weighted
unrealistically to indicate excessively attractive economics by employing
unrealistic factors (e.g., shipping coal farther than is normally warranted).

     The assessments imply that the attractiveness of many of our medium- to
high-sulfur content coals can be enhanced by cleaning to provide an assured
supply of coal that could be used with more economic flue gas desulfurization.
This is true for many as-mined medium-sulfur content coals and some higher
sulfur content coals that could serve areas with less restrictive environ-
mental standards.
                                      66

-------
     The overall study findings covering the combined use of physical clean-
ing followed by flue gas desulfurization indicated a savings of 2 percent to
112 percent as compared with flue gas desulfurization alone when applied to
new steam coal utilities.  The results were even more impressive for existing
plants, where study assessments indicated a 13 percent to 140 percent savings
for physical cleaning followed by flue gas desulfurization as compared with
FGD alone.
                                      67

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                                  REFERENCES

 1.   Cavallaro,  J.  A.,  M.  T.  Johnston,  and  A.  W.  Deurbrouck.   Sulfur  Reduction
       Potential of the Coals of the United States.   BuMines  RI  8118,  1976.

 2.   Department  of  the  Treasury, Internal Revenue Service.  Tax  Information
       on Depreciation.  Publication 534.  1975 Edition.

 3.   Deurbrouck, A. W.   Sulfur Reduction Potential of the Coals  of  the United
       States.   BuMines RI 7633, 1972.

 4.   Federal Power  Commission, News Release.   FPC Issues  June 1975  Report On
       Fuel Cost, Quality.  Monthly Fuel Cost  and Quality Information,
       No. 21787, October 7,  1975.

 5.   Holmes, John G., Jr.  (Chief,  Steam-Electric Generation Branch,  TVA).
       The Effect of Coal Quality on the Operation and Maintenance  of  Large
       Central  Station  Boilers.  Paper  for  presentation at Annual Meeting of
       the American Institute of Mining, Metallurgical, and Petroleum
       Engineers, Washington, D.C., February  16-20,  1969.

 6.   Illinois Geological Survey.  Minerals  Note 57.   June 1974.

 7.   Journal of  Mines,  Metals and Fuels. Pages 12-19, August 1961.

 8.   Leonard, J. W., and D.  R. Mitchell. Coal Preparation.  American Institute
       of Mining, Metallurgical, and Petroleum Engineers, Inc.,  New York, 1968.

 9.   McGlamery,  G.  G.,  R.  L.  Torstick,  W. J.  Broadfoot, J.  P. Simpson,  L. J.
       Henson,  S. V. Tomlinson, and J.  F. Young.   Detailed Cost  Estimates for
       Advanced  Effluent Desulfurization Processes.   Tennessee Valley
       Authority, Muscle Shoals, Alabama (TVA Bulletin Y-90). Prepared for
       Office of Research and Development,  U.S. Environmental Protection
       Agency, Washington, D.C. (EPA-600/2-75-006),  January 1975.

10.   Mutschler,  P.  H.,  R.  J.  Evans, and G.  M.  Larwood. Comparative Transpor-
       tation Costs of  Supplying Low-Sulfur Fuels to Midwestern  and Eastern
       Domestic  Energy  Markets.  BuMines 1C 8614, 1973.

11.   National Coal  Association.  Steam-Electric Plant Factors, 1974 Edition.

12.   Paul Weir  Co., Inc.  An Economic Feasibility Study of Coal  Desulfuriza-
       tion. Department of Health, Education and Welfare Contract
       No. PH-86-65-29, October 1965.

13.   PEDCo-Environmental Specialists, Inc.   Flue Gas Desulfurization Process
       Cost Estimates.   Prepared for Office of Planning and Evaluation, U.S.
       Environmental Protection Agency, Washington,  D.C.   Contract
       No. 68-01-3150,  May 6, 1975.
                                                           *
14.   U.S. Bureau of Mines.  Mineral Facts and Problems, 1975  Edition,
       "Bituminous  Coal and Lignite," 1976.
                                      68

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15.   U.S. Bureau of Mines,  Mineral Industry Surveys.   Coal—Bituminous and
       Lignite in 1973.  Prepared in Division of Fuels Data and Division of
       Coal, January 4, 1975.

16.   U.S. Bureau of Mines.   Unit Train Transportation of Coal - Technology
       and Description of Nine Representative Operations.   1C 8444,  1970.

17.   U.S. Department of Commerce, Commerce Technical  Advisory Board.   Report
       on Sulfur Oxide Control Technology.  1975.
                                      69

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                                  APPENDIX A

                 SO  EMISSION REGULATIONS FOR SELECTED STATES
                   x

     Sulfur regulations (for solid fuel) for selected States are provided in
this section.  The States chosen are those that have emission regulations
compatible with the usage of moderate- and low-sulfur coals and are serviced
by coal districts that possess coals of apparently attractive cleaning poten-
tial.  Specifically, coals that have the required cleaning potential are from
the Northern Appalachian Region and the States of Illinois, Indiana, and
Kentucky (western) in the Eastern Interior Region.  The selected States having
regulations consistent with usage of moderate- and low-sulfur coals are
Alabama, Delaware, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massa-
chusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Ohio,
Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin.

     The cognizant regulatory agency within each of the selected States was
contacted to determine their most recent sulfur compound emission standards.
These regulations were abstracted with emphasis on larger fuel-burning in-
stallations—those having rated capacities of 250 million Btu heat input or
greater.  Although it is acknowledged that regulations of this type are sub-
ject to revision, the standards given below were current as of February 1976.

     Alabama

     The Alabama Air Pollution Control Commission regulates the emission of
sulfur compounds by limiting the amount of sulfur dioxide that can be emitted
in pounds per million Btu heat input.  For the purpose of such regulations,
counties are placed in one of two categories where the emission standards are
as follows:

     Category I Counties -

          No fuel-burning installation can operate in such a way to emit
          in excess of 1.8 pounds of sulfur dioxide per million Btu of
          heat input.

     Category II Counties -

          No fuel-burning installation can operate in such a way to emit
          in excess of 4.0 pounds of sulfur dioxide per million Btu of
          heat input.

     Delaware

     The Delaware Department of Natural Resources and Environmental Control
makes the general provision that the emission of sulfur dioxide from fuel-
burning equipment shall be controlled to a limit that shall meet the ambient
air quality requirements.  The only specification standard is established
for New Castle County, where the sulfur content of fuel used by fuel-burning
equipment is limited to 1.0 percent by weight.  Higher sulfur content is
allowed if emission controls give results equivalent to that achieved when
burning fuel meeting the 1-percent limit.
                                      70

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     Illinois

     a.  For new solid fuel combustion with actual heat inputs greater than
         250 million Btu per hour: not to exceed 1.2 pounds of SC>2 per
         million Btu in any 1-hour period.

     b.  For existing solid fuel combustion in the Chicago, St. Louis
         (Illinois), and Peoria Major Metropolitan Areas (MMA): not to
         exceed 1.8 pounds of sulfur dioxide per million Btu of actual
         heat input.

     c.  For existing solid fuel combustion sources located outside the
         Chicago, St. Louis (Illinois), and Peoria Major Metropolitan
         Areas:  (1) not to exceed 6.0 pounds of S02 per million Btu of
         actual heat input, and (2) 1.8 pounds of S02 per million Btu
         of actual heat input from sources located within any MMA other
         than Chicago, Peoria, and St. Louis (Illinois) that measures an
         annual arithmetic average SC>2 level greater than

                     3
              60 ug/M  (0.02 ppm) for any year ending prior
              to May 30, 1976, or

                     3
              45 ug/M  (0.015 ppm) for any year ending on or
              after May 30, 1976.


     Compliance with (c)(2) shall be on or after 3 years from the date upon
which the Board promulgates an Order for Compliance.

     Indiana

     The Indiana Air Pollution Control Board regulates sulfur dioxide emission
by specifying limits on pounds per million Btu fuel heat input and pounds per
hour as well as setting maximum hourly ground level concentration with respect
to distance and at  the critical wind speed for level terrain resulting from
the point source.   In discussions with a representative of the Board on
January 28, 1976, we were advised that the following regulations were current,
but were under consideration for possible revision.

Emission Standards  -

For existing sources maximum sulfur dioxide emission is the lesser of

     E  = 17.0 0  ~°'33 or E  = 17.0 Q  °'67
      m         Tn           p         m

          where E   = E  x 0
                 p    m    m
                                                               «
     E  is the maximum allowable sulfur dioxide emissions in pounds
      m
     per million Btu fuel heat input.
                                      71

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     E  is the maximum allowable sulfur dioxide emissions in pounds
      P
     per hour.

     Q  is total combustion equipment capacity rating, fuel heat

     input in millions of Btu per hour.


The value of Em shall not exceed 6.0 pounds of sulfur dioxide, nor shall it be
required that Em be reduced below 1.2 pounds of sulfur dioxide per million Btu
of heat input.  When the heat input value is for material other than Indiana
coal, Qm shall be modified by the ratio of the dry stoichiometric effluent
gas volume in cubic feet per million Btu heat input of the material to be
burned and the corresponding dry stoichiometric effluent gas volume for average
Indiana coal (9,850 cubic feet per million Btu of heat input at standard
conditions).

     Needless to say, this regulation hits hardest at the larger power plants
which might typically have a fuel input rating of 5,000 million Btu per hour.
This is the capacity necessary to produce 500 megawatts of electric power
        3

          BtU X 5°° X 1()3 kwh = 5)00° X 1()6 Btu)*  F°r examPle» if Em (maximum
allowable SC>2 emission in pounds per 10° Btu) and Ep (maximum allowable S02
emission in pounds per hour) are calculated for such a case, the results would
be as follows:

                  -0 11                -0 11
     Em = 17.0 Qm       = 17.0 x 5,000

     Em = 17.0 x 0.06016 = 1.023 Ib S02 per million Btu

       Adjusted to the minimum level Em = 1.2 Ib S02 per million Btu


     Ep = 17.0 Qm °'67 = 17.0 x 5,000°'67

     Ep = 17.0 x 300.82 = 5,114 Ib S02 per hour


Ground Level Concentration -

Maximum hourly ground level concentration of sulfur dioxide contributed by any
source cannot exceed 200 micrograms per cubic meter in Lake County and 500
micrograms in Dearborn, Marion, and Warrick Counties.  These latter counties
may delay compliance until May 1978, if they install interim controls includ-
ing monitoring, reporting, and burning low-sulfur fuel during adverse meteor-
ological conditions.  Existing sources in all other counties within the
State are not subject to ground level concentration regulation.  Ground level
hourly concentration (Cmax) is calculated by

                      90SfQ  0.75n0.25
               Cmax =    f  m	,
                            ah
                              s
                                      72

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where   Sf is the pounds of sulfur dioxide emitted per million Btu of
        heat input value of the fuel,

        Qm is as defined above,

        n  is the number of stacks or chimneys in fuel-burning operations,

        a  is the plume rise factor of 0.7,

and     hs is the stack height in feet.
     Iowa

     The Iowa Department of Environmental Quality, Air Quality Commission, has
established limits on the emission of sulfur dioxide from coal-burning facili-
ties which became effective August 1, 1975.  In addition, more stringent regu-
lations have been formulated which go into effect August 1, 1978.

     Currently, solid-fuel-burning installations must not emit during any
2-hour period more than an average of 6 pounds of sulfur dioxide per million
Btu of heat input.  Beginning August 1, 1978, this 2-hour average limit is
revised to not more than 5 pounds of sulfur dioxide per million Btu of heat
input.  In this latter case, it is necessary that an emission reduction pro-
gram be submitted to the Air Quality Commission by fuel-burning installations
having a rated capacity of 250 million Btu per hour heat input or more.  These
reduction programs, which were due by December 31, 1975, were to indicate how
the facilities intended to meet the revised future standard.

     Although the above regulations were the latest enacted by Iowa as of
February 1976, the Air Quality Commission is currently studying the feasi-
bility of varying emission standards according to the actual conditions
present at particular locations within the State rather than limiting emis-
sion on a single uniform statewide basis.  This possible change in approach
to emission control procedures was precipatated by a study of actual coal
users in various parts of the State.  The conclusion of this study was that
more restrictive regulation was required in some areas, whereas more relaxed
standards could be observed in other areas without creating dangerous environ-
mental conditions.  If such changes are adopted, greater amounts of higher
sulfur content coal could be used in numerous locations.

     Kentucky

     The Division of Air Pollution of the Kentucky Department for Natural Re-
sources and Environmental Protection has, for the purpose of air quality
control, classified all areas of the State within one of nine air quality
control regions.  These regions are in turn classified according to one of
five priorities for the purpose of specifying limits on the emission of sulfur
dioxide and other contaminants.

     Kentucky's air pollution control regulations give-performance standards
for new and existing indirect heat exchanges.  Coal-burning power generating
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facilities fall within this category for the purpose of such regulations.   The
limitations listed below apply to facilities having a rated heat input capacity
of 250 million Btu per hour or more.

New Facilities (operational on or after April 9, 1972)

     Priority  Classifications I-V (i.e., Statewide)
     1.2 pounds of sulfur dioxide per million Btu heat input.

Existing Facilities (operational prior to April 9, 1972)
        •
     The following standards must be met no later than July 1, 1977:

     Priority Classification I - Jefferson and McCracken Counties
     1.2 pounds of sulfur dioxide per million Btu heat input.

     Priority Classification II - Bell, Clark, and Woodford Counties
     1.8 pounds of sulfur dioxide per million Btu heat input.

     Priority Classification III - Pulaski County
     3.2 pounds of sulfur dioxide per million Btu heat input.

     Priority Classification IV - Muhlenberg, Webster and Hancock Counties
     5.2 pounds of sulfur dioxide per million Btu heat input.

     Priority Classification V - All other counties
     6.0 pounds of sulfur dioxide per million Btu heat input.

     Maine

     Regulations set down by the Maine Department of Environmental Protection
control the emission of sulfur oxides by restricting the use of fuels accord-
ing to their sulfur content by weight.  Specifically,

     1.  In the Central Maine, Downeast, Aroostook County, and Northwest
         Maine Air Quality Control Regions (AQCR), no fuel may be used
         having a sulfur content greater than 2.5 percent by weight.

     2.  In the Metropolitan Portland AQCR outside the Portland Peninsula
         AQCR, no fuel may be used having a sulfur content greater than
         2.5 percent by weight.

     3.  In the Portland Peninsula AQCR no fuel may be used having a sulfur
         content greater than 1.5 percent by weight.  This is scheduled to
         be decreased to 1.0 percent after November 1, 1985.  Additionally,
         in the Portland Peninsula AQCR, construction or expansion of any
         fuel-burning facility after June 1, 1975, is restricted to those
         burning number 2 fuel oil or its equivalent in sulfur and ash
         content.

     Pollution control equipment may be used in order to gain exemption from
the sulfur content limitations.  This is accomplished if a source installs

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sulfur collecting devices that reduce the sulfur dioxi,de emissions to the
equivalent leyel allowed in the particular air quality control region.

     Maryland

     In Maryland, sulfur emission standards are established by the Environ-
mental Health Administration of the Department of Health and Mental Hygiene.
These Standards are set forth by specific regions within the State.  In
Regions III and IV, which comprise the Baltimore and Washington Metropolitan
Areas, respectively, sulfur emission is controlled by prohibiting the use of
coal having a sulfur content of greater than 1.0 percent by weight.  The
balance of the State, consisting of Regions I, II, V, and VI, which are more
rural, are covered by an emission standard limiting the discharge of sulfur
dioxide to not more than 3.5 pounds per million Btu actual heat input per
hour.

     Coal containing sulfur in excess of that necessary to meet the above
standards may be used provided pollution control equipment to desulfurize
the stack gases has been installed or other methods or devices are employed
by the user such that the discharge of sulfur dioxide to the atmosphere does
not exceed that which would have occurred if fuels meeting the above require-
ments had been burned.

     Massachusetts

     The Massachusetts Department of Environmental Quality Engineering Air
Quality Control limits the emission of sulfur oxides by establishing maximum
sulfur content by weight of the coal consumed in the various Air Pollution
Control Districts  (APCD).

     For the Metropolitan Boston APCD, including the cities and towns of
Arlington, Belmont, Boston, Brookline, Cambridge, Chelsea, Everett, Maiden,
Medford, Newton, Somerville, Waltham, and Watertown, the use of coal is
limited to that not having sulfur content in excess of 0.28 pound per
million Btu heat release potential.  Higher sulfur content coals may be
used if it is shown that through the use of pollution control equipment the
total emission of sulfur dioxide will not exceed that occurring under the
use of the 0.28 fuel.

     All other facilities located within the State not mentioned above are
limited to coal not having a sulfur content in excess of 0.55 pound per
million Btu heat release potential unless it can be demonstrated that through
the use of pollution control devices the total emission of sulfur oxides
would not exceed that experienced using the 0.55 content fuel.

     Michigan

     The Air Pollution Division of the Michigan Department of Natural Resources
restricts the emission of sulfur dioxide caused by coal-burning powerplants
through establishing limits on the sulfur content of the fuel used or the
amount of sulfur dioxide emitted per hour if pollution control devices are
used.
                                       75

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     Currently, those installations having a total steam production capacity
of 500,000 pounds per hour or less are restricted to using coal having no more
than 2.0 percent sulfur by weight.  Beginning July 1, 1978, such plants will
be restricted to coal of 1.5 percent or less sulfur content.   However, if
pollution control equipment is used, such plants can now emit up to 3.2
pounds of sulfur dioxide per million Btu of heat input.  On July 1, 1978, this
figure will be lowered to 2.4 pounds of sulfur dioxide per million Btu of heat
input.

     For installations having a total steam production capacity of more than
500,000 pounds per hour, sulfur content of the coal is currently limited to
a maximum of 1.5 percent.  On July 1, 1978, this sulfur content limit will
become 1.0 percent.  When pollution control equipment is installed, power-
plants may elect to be regulated on the basis of not emitting more than
2.4 pounds of sulfur dioxide per million Btu of heat input.  After July 1,
1978, this hourly limit will be placed at 1.6 pounds of sulfur dioxide per
million Btu of heat input.

     Minnesota

     The regulations set down by the Minnesota Pollution Control Agency apply
to fuel-burning installations utilized for the primary purpose of producing
steam, hot water, hot air, or other indirect heating of liquids, gases, or
solids where the products of combustion do not have direct contact with
process materials.

     a.  Within the Minneapolis-St. Paul Air Quality Control Region (AQCR) no
         person shall burn in any installations of greater than 250 million
         Btu/hour a fuel or blend of fuels of greater than 1.5 percent sulfur
         content by weight.

     b.  Outside the Minneapolis-St. Paul AQCR, no fuel-burning installation
         of greater than 250 million Btu/hour shall burn a fuel or blend of
         fuels whose sulfur content by weight exceeds 2.0 percent.

     c.  A fuel-burning installation is exempt from the above regulations if
         the fuel being consumed contains no more than 1.75 pounds of S02 per
         million Btu actual heat input.  As used in the context, "heat input"
         is the aggregate heat content of fuels whose combustion products
         pass through a stack or stacks.  The heat input value used shall be
         the equipment manufacturer's or designer's guaranteed maximum input,
         whichever is greater.

     New Hampshire

     The New Hampshire Air Pollution Control Agency has established sulfur
dioxide emission standards on the basis of sulfur content per million Btu
gross heat content.  These standards apply separately to new as well as
existing stationary combustion installations.
                                      76

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     1.   In the case of installations which were in existence prior to
         April 15, 1970, coal may not be used which has a sulfur content
         greater than 2.8 pounds per million Btu gross heat content.
         However, there is the further provision that the weighted
         average of all coal received during a trimonthly period for
         use in that installation to generate heat or power does not
         exceed 1.5 pounds of sulfur per million Btu gross heat content.

     2.   With regard to installations placed in service to generate heat
         or power on or after April 15, 1970, coal usage is restricted to
         that having 1.5 pounds or less of sulfur per million Btu gross
         heat content.   Prior to Revision III of Regulation No. 5, new
         installations were additionally required to only burn coal
         having a weighted average over a trimonthly peiiod of 1.0 po^uds
         of sulfur or less per million Btu gross heat input.  This require-
         ment was deleted by Revision III, leaving the 1.5-pounds-of-sulfur
         limit without regard to time.  Coal having a higher sulfur content
         may be used if pollution control apparatus continuously restricts
         the sulfur oxide emissions to levels permitted by the regulations
         for uncontrolled burning of coal.

     New Jersey

     The New Jersey Department of Environmental Protection has established
standards to limit the emission of sulfur dioxide from coal-burning facili-
ties.  These standards, which cover both the sulfur content of the coal and
the pounds of sulfur dioxide emitted, are as follows:

     1.   Existing Coal-Burning Facilities Prior to May 6, 1968 -

         Bituminous and anthracite coals may not be used which have a sulfur
         content by weight in excess of 0.2 percent.

         Exceptions -

         a.  User of such coals can be exempted from the 0.2-percent  limita-
             tion if through the use of pollution control equipment the
             sulfur dioxide emission can be kept to 0.30 pound per million
             Btu gross heat input or less.

         b.  In the case of a coal-fired steam and/or electric power  gener-
             ating facility having a rated hourly capacity equal to or
             greater than 200 million Btu gross heat input, or a group of
             such facilities at one location having a combined rated  hourly
             capacity equal to or greater than 450 million Btu gross  heat
             input, the limit on sulfur content by weight may be increased
             upon approval to 1.0 percent for bituminous and 0.70 percent
             for anthracite.  If coals meeting these latter standards cannot
             be burned successfully, the authorities may grant permission to
             use. bituminous coal having as much as 1.5 percent sulfur content
             by weight.
                                      77

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         c.   Coal-burning installations in the New Jersey counties of Atlantic,
             Cape May, Cumberland, Hunterdon, Ocean, Sussex, and Warren that
             were in existence prior to May 6, 1968, are permitted to use
             bituminous coal having up to 1.0 percent sulfur by weight or
             anthracite having up to 0.7 percent sulfur by weight.

     2.  Coal-Burning Installations Expanded, Reconstructed, or Constructed
         On or After May 6, 1968 -

         These facilities are limited to using coal having a sulfur content
         of not more than 0.2 percent by weight unless through the use of
         pollution control equipment, emissions can be kept to 0.3 pound of
         sulfur dioxide or less per million Btu gross heat input.

     New York

     The New York State Department of Environmental Conservation, Division of
Air Resources has prepared regulations governing not only sulfur oxide emis-
sion from existing coal-burning installations but also those plants that are
considering making a conversion from gas or oil to coal.

Emission Standards Applicable To Existing Facilities -

     Coal having 0.6 pound of sulfur per million Btu gross heat content is the
     maximum permissible in the Suffolk County towns of Babylon, Brookhaven,
     Huntington, Islip, arid Smithtown.

     In Erie and Niagara Counties, the maximum permissible is 1.7 pounds, but
     the installation must also adhere to a 1.4-pound average computed by
     dividing the total sulfur content by the total gross heat content of all
     coal received during any consecutive 3-month period.

     For New York City and the counties of Nassau, Rockland, and Westchester,
     the limit is 0.20 pound per million Btu gross heat content.  The balance
     of the State is covered by a 2.5-pound maximum coupled with a 1.9-pound
     average computed as stated above over a trimonthly period.

Emission Standards Applicable To Conversions -

     If a plant changes from the use of fuel oil or gas to coal, it may not
     use coal which has a sulfur content in pounds per million Btu in excess
     of the product of 0.55 times the maximum sulfur content for oil in per-
     cent by weight permitted in the particular location.

Exception -

     The installation of acceptable pollution control equipment can permit a
     facility to utilize coal exceeding the sulfur content restrictions.

     Ohio

     Since July 1, 1975, the Ohio Environmental Protection Agency has had one
uniform standard regarding the emission of sulfur dioxide from fuel-burning
                                      78

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installations whose primary purpose is to produce heat or power by indirect
heat transfer.  This regulation, which applies equally to new and existing
installations, limits the maximum allowable mass rate of emission of sulfur
compounds (measured as sulfur dioxide) to 1.0 pound per million Btu heat input
per hour.  Under this standard, the capacity of any installation is determined
to be the manufacturer's or designer's guaranteed maximum heat input rate.

     Pennsylvania

     The Pennsylvania Department of Environmental Resources, Bureau of Air
Quality and Noise Control, regulates sulfur compound emissions by general
categories:

     A.  For all combustion units falling within the heat input categories
         below which are not located in the Allegheny County, Beaver Valley,
         Monongahela Valley, and Southeast Pennsylvania air basins, the
         following regulations apply:

         1.  For combustion units having heat input greater than 2.5 million
             Btu per hour but less than 50 million Btu per hour, a limit of
             3.0 pounds of sulfur dioxide per million Btu of input applies.

         2.  For combustion units having heat input equal to or greater than
             50 but less than 2,000 million Btu per hour, the allowable
             emission rate must not exceed


                              A=5.1E-°'14

             where   A is the allowable emissions in pounds per million Btu
                     heat input,

             and     E is the heat input to the combustion unit in million
                     Btu per hour.


         3.  For combustion units having heat input equal to or greater than
             2,000 million Btu per hour, the maximum permissible rate of
             emission is 1.8 pounds of sulfur dioxide per million Btu of
             heat input.

     B.  For all combustion units falling within the heat input categories
         below which are located in the Allegheny County, Beaver Valley,
         Monongahela Valley, and Southeast Pennsylvania air basins, the
         following regulations apply:

         1.  For combustion units having heat input of greater  than 2.5 million
             Btu per hour but  less than 50 million Btu per hour, a limit of
             1.0 pound of sulfur dioxide per million Btu of input applies.
                                      79

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         2.   For combustion units having heat input equal to or greater than
             50 but less than 2,000 million Btu per hour, the allowable emis-
             sion rate must not exceed
             where   A is the allowable emissions in pounds per million Btu
                     heat input,

             and     E is the heat input to the combustion unit in million
                     Btu per hour.


         3.  For combustion units having heat input equal to or greater than
             2,000 million Btu per hour, the maximum permissible rate of emis-
             sion is 0.6 pound of sulfur dioxide per million Btu of heat
             input.

     C.  For all combustion units not covered by the above regulations, sulfur
         dioxide emission must not exceed 4.0 pounds per million Btu of heat
         input per hour.

     Tennessee

     The Air Pollution Control Division of the Tennessee Department of Public
Health groups counties into three major classes for the purpose of regulating
the emission of sulfur compounds from coal-burning installations having a
rated capacity of 250 million Btu per hour or less heat input.

     1.  In the Class I counties of Polk, Sullivan, Roane, and  Maury, the
         average emission measured over any 2-hour period from a fuel-
         burning source is limited to not more than 1.6 pounds  of sulfur
         dioxide per million Btu heat input.

     2.  In the Class II county of Humphreys, the average emission measured
         over any 2-hour period from a fuel-burning source is limited to not
         more than 3.0 pounds of sulfur dioxide per million Btu heat input.

     3.  In the Class III counties, which include the balance of the State,
         the average emission measured over any 2-hour period from a fuel-
         burning source is limited to not more than 4.0 pounds  of sulfur
         dioxide per million Btu heat input.

     Additionally, since January 1, 1973, coal-burning sources  constructed
after April 3, 1972, that have a capacity of more than 250 million Btu per
hour heat input are limited to an average hourly emission of 1.2 pounds of
sulfur dioxide per million Btu heat input measured over any 2-hour period.

     In the case of fuel-burning installations having a rated capacity of
more than 1,000 million Btu heat input, several additional requirements must
be met.  The installation must —
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     1.   Demonstrate that the installation will not interfere with attainment
         and maintenance of any primary or secondary ambient air quality
         standard,

     2.   Demonstrate that the installation will not result in air quality
         concentrations in excess of 50 percent of the primary ambient air
         quality standard, and

     3.   Demonstrate that the installation will not increase emissions to
         the extent that resulting air quality concentrations will be greater
         than those concentrations (either measured or calculated) which
         existed in 1972 or those concentrations which existed during the
         first year of operation of the installation if it began operating
         after January 1, 1972.

     Although the above regulations were in effect as of February 1976, revised
emission standards were pending at that time which would establish six classi-
fications of counties as follows:

     Class I    -  Polk
     Class II   -  Humphreys, Maury, and Roane
     Class III  -  Sullivan
     Class IV   -  Shelby
     Class V    -  Anderson, Davidson, Hamilton, Hawkins, Knox, and Rhea
     Class VI   -  All other counties

     Under the proposed changes, the allowable sulfur dioxide emissions for
fuel-burning installations according to rated capacity by county classifica-
tion would be—


 Rated capacity in            ,.  .             i   -,  .       ,   /- ™
    .-,,.    „                   Maximum emission level in pounds of SOo
  million Btu per	£
  hour heat input    Class I  Class II  Class III  Class IV  Class V  Class VI

Greater than 1,000

Less than 1,000


     Virginia

     The State Air Pollution Control Board of Virginia limits the emission from
any source operation of sulfur dioxide in an in-stack concentration exceeding
2,000 parts per million (ppra) by volume except that emissions of sulfur dioxide
from any combustion installation are governed by the following formulas:

     1.    S = 2.64 K For Air Quality Control Regions  (AQCR)  1 through 6

     2.    S = 1.06 K For AQCR 7  (National Capital  Interstate AQCR which
          includes the counties of Arlington, Fairfax, Loudoun, and
          Prince William).
1.2
1.6
1.2
5.0
2.4
2.4
4.0
4.0
4.0
4.0
5.0
5.0
                                      81

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where    S = allowable emissions of sulfur dioxide expressed in Ib/hr,

and      K = actual heat input at total capacity expressed in Btu x
         per hour.


Where there are one or more combustion installation units at a facility, and
where the facility can be shown, to the satisfaction of the Board, to be in
compliance when the facility is operating at total capacity, the facility will
be deemed to be still in compliance if the facility is operated at reduced
load or one or more units are shut down for maintenance or repair.  This para-
graph is applicable only if the remaining unit(s) continues to burn the same
type of fuel with the same sulfur content, or an equivalent, that was shown
above to allow compliance when the facility was operating at maximum load and
if the actual emissions when operating at reduced load do not exceed the maxi-
mum allowable emissions.

     West Virginia

     As of February 1976, the West Virginia Air Pollution Commission regulated
the emission of sulfur dioxide from fuel-burning units according to Air
Quality Control Regions having Priority Classifications of either I, II, or
III.  Under such regulations, fuel-burning installations whose primary purpose
is to produce electric power for sale are categorized as Type "a" units.  For
Type "a" units the following limits apply:

     All Air Quality Control Regions Having Priority Classification I or II—

          Beginning June 30, 1975, the total pounds of sulfur dioxide emitted
          per hour cannot exceed 2.7 times the total design heat input of all
          units located at any particular plant expressed in millions Btu
          per hour.

          Effective June 30, 1978, the limit is changed to 2.0 times the total
          design heat input, with the additional requirement that the total
          emission from the entire plant cannot exceed 45,000 pounds of sulfur
          dioxide per hour.

     Air Quality Control Region IV (Kanawha Valley AQCR, which includes
Kanawha County, Putnam County, and Falls and Kanawha Magisterial Districts
of Fayette County)—

          Beginning January 1, 1973, the total pounds of sulfur dioxide emitted
          per hour cannot exceed 1.6 times the total design heat input of all
          units located at any particular plant expressed in millions Btu per
          hour provided that no more than 45,000 pounds per hour of sulfur
          dioxide shall be discharged into the open air from the entire plant.

     All Air Quality Control Regions Having Priority Classification III except
Region IV—
                                      82

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          Beginning June 30, 1975, the total pounds of sulfur dioxide emitted
          per hour cannot exceed 3.2 times the total design heat input of all
          units located at any particular plant,  expressed in millions Btu per
          hour.

          Effective June 30, 1978, the limit is changed to 2.0 times the total
          design heat input with the additional requirement that the total
          emission from the plant cannot exceed 45,000 pounds of sulfur
          dioxide per hour.

     Wisconsin

     The Wisconsin Department of Natural Resources has established one state-
wide limitation on the emission of sulfur dioxide from coal-fired steam
generating facilities having a rated capacity of over 250 million Btu per
hour.  However, this limitation is written to cover "new or modified fossil
fuel-fired steam generators" and appears to exempt facilities in existance
prior to April 1, 1972.  Such regulation simply restricts emission to not
more than 1.2 pounds of sulfur dioxide per million Btu heat input.

     In addition to this general restriction, coal-burning power generating
facilities may be required during conditions of severe air pollution to burn
coal not having a sulfur content of more than 1.5 percent.  Such lower sulfur
content fuel is maintained by the coal-burning facility on a standby basis for
use under these conditions so that the plant can continue operations.
                                      83

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                                  APPENDIX B

                            DETAILED CASE ANALYSES
                                                        CASE NUMBER:   1A
1.0   CASE CONDITIONS                   Combined Use of Physical  Cleaning
                                        Followed by Stack Gas  Scrubbing

1.1   Coal Use Area:  Knoxville (Clinton),  Tennessee

1.2   Emission S andards:               New:   1.2 Ib S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:  No. 11  Coalbed:  No.   VII
      State:  Indiana                   County:   Sullivan

1.4   Raw Coal*                                           Ash:  10.5%
      Lb S02/MM Btu:                Sulfur:   1.87%        MM Btu/Ton:  24.97

1.5   Clean Coal                                          Ash:  7.3%
      Cleaning Plant Yield:   90.0%  Sulfur:   1.11%        MM Btu/Ton:  25.80
      Lb S02/MM Btu:  1.72          Btu Recovery:  93.0%  Btu  Increase:  3.3%

1.6   Transportation                Mileage:   454         Cost  Per  Ton:  $7.41

1.7   Assumed Plant Size                Megawatts:  500

1.8   Remaining Life of Boiler:  25 Yr

1.9   Assumed Ash Disposal Cost:   $4.00/Ton

1.10  Cleaning Plant          Cost:  $18,000  Per Ton-Hour Input Capacity**
                              Utilization:  38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton     0  & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton  of  Clean Coal,
        When Mine Operator's Cost is:

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant Tax and Insurance Burden:   $0.12/Ton

2.4   Total Differential Production Cost to Mine Operator to Provide
        a Ton of Cleaned Coal, when Mine Operator's Cost is

           $ 7.00/Ton, Differential Cost is $2.33/Ton****
           $ 9.00/Ton, Differential Cost is $2.55/Ton
           $11.00/Ton, Differential Cost is $2.77/Ton
                                      84

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                                                    CASE NUMBER 1A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $12.00/Ton, Benefit is $0.38/Ton
           $14.00/Ton, Benefit is $0.45/Ton
           $16.00/Ton, Benefit is $0.51/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.24/Ton

3.3   Saving in Ash Disposal Cost:  $0.14/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.02/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B.  Mine Raw Coal Selling
        Price is

           $12.00/Ton, Benefit is $0.97/Ton
           $14.00/Ton, Benefit is $1.04/Ton
           $16.00/Ton, Benefit is $1.10/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          7.00       1.36      1.29      1.23
           of Raw Coal (Per Ton)         9.00       1.58      1.51      1.45
                                        11.00       1.80      1.73      1.67

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  1,356,590 Tons

5.4   Minimum Scrubber Requirements     Scrubber Rating: 168 Mw
                                        % of Flue gas  Cleaned:  33.6%

5.5   Design Scrubber Requirements      Scrubber Rating: 193 Mw
                                        % of Flue Gas  Cleaned:  38.6%

5.6   Scrubber Capital Cost:  $12,032,492


                                     85

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                                                   CASE NUMBER 1A (Continued)

5.7   Scrubber Capital Charges/Yr:   $1,871,053

5.8   Capital Contribution Per Ton  of Coal:   $1.38/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:   $0.29/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:   $0.08/Ton
        Maintenance Labor & Material:  $0.35/Ton
        Fixation Chemical Cost:  $0.07/Ton
        Supplies Cost:  $0.05/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.28/Ton

5.11  Total Stack Gas Cost Per Ton  of Coal Burned:   $2.62/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION  STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           7.00       3.98      3.91      3.85
           of Raw Coal (Per Ton)          9.00       4.20      4.13      4.07
                                         11.00       4.42      4.35      4.29

7.0   COST PER MILLION BTU TO MEET  EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           7.00       0.154     0.152      0.149
           of Raw Coal (Per Ton)          9.00        .163      .160       .158
                                         11.00        .171      .169       .166

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           7.00       3.85      3.80      3.72
           of Raw Coal (Per Ton)          9.00       4.07      4.00      3.95
                                         11.00       4.27      4.22      4.15
*      As-received values.
**     Amortized over 15 years,  8% interest  on unpaid  blance.
***    Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****   This represents the  total of all coal-cleaning  cost  factors  at  the
       respective operator  cost  levels as  covered  in Section  2.0  above.
                                    86

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                                                            CASE  NUMBER:   IB

1.0   CASE CONDITIONS                   Sulfur  Clean-up  Exclusively by  Stack
                                        Gas  Scrubbing

1.1   Coal Use Area:   Knoxville (Clinton), Tennessee

1.2   Emission Standards                New:  1.2  Ib of  S02  Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  11  Coalbed:   Number VII
      State:  Indiana                   County:  Sullivan

1.4   Raw Coal                                           Ash:  10.5%
      Lb S02/106 Btu:  3.0          Sulfur:   1.87%       MM Btu/Ton:   24.97*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler:  25  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   7,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,401,682  Tons

2.4   Minimum Scrubber Requirements      Scrubber Rating: 335 Mw
                                        % of  Flue  Gas  Cleaned:  67%

2.5   Design Scrubber Requirements      Scrubber Rating: 385 Mw
                                        % of  Flue  Gas  Cleaned:  77%

2.6   Scrubber Capital Cost:  $21,796,287

2.7   Scrubber Capital Charges/Yr:  $3,389,323

2.8   Capital Contribution Per  Ton of Coal:  $2.42/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.56/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost $0.27/Ton
        Maintenance Labor  & Material:  $0.62/Ton
        Fixation Chemical  Cost:  $0.22/Ton
        Supplies Cost:  $0.09/Ton
        Operating Labor Cost:  $0.11/Ton
        Overhead Cost:  $0.43/Ton
                                     87

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                                               CASE  NUMBER:   IB  (Continued)
2.11  Total Cost Per Ton of Coal Burned  to  Meet  Emission
        Standards:   $4.72/Ton
*  This value has been adjusted for raw coal  moisture  content.
                                     88

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                                                            CASE  NUMBER:   1C

1.0   CASE CONDITIONS                   Combined  Use  of  Physical  Cleaning
                                        Followed  by Stack Gas  Scrubbing

1.1   Coal Use Area:  Knoxville (Clinton),  Tennessee

1.2   Emission Standards                New:
                                        Existing:  1.2 Ib S02  Per MM  Btu

1.3   Coal District of Origin:  No.  11  Coalbed:   Number VII
      State:  Indiana                   County:   Sullivan

1.4   Raw Coal*                                           Ash:  10.5%
      Lb S02/MM Btu:  3.0           Sulfur:   1.87%        MM Btu/Ton:  24.97

1.5   Clean Coal                                          Ash:  7.3%
      Cleaning Plant Yield:   90.0%  Sulfur:   1.11%        MM Btu/Ton:  25.80
      Lb S02/MM Btu:  1.72          Btu Recovery:  93.0%  Btu  Increase:  3.3%

1.6   Transportation                Mileage:   454         Cost  Per  Ton:  $7.41

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life of Boiler:  15  Yr

1.9   Assumed Ash Disposal Cost:   $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000  Per  Ton-Hour Input Capacity**
                              Utilization:  38.58%***

1.11  Assumed Annual Capital Scrubber Charges as  Percent of  Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton     0  & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton of  Clean Coal,
        When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton
                                     89

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                                                 CASE NUMBER 1C (Continued)

2.4   Total Differential Production Cost to Mine Operator to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Differential Cost is $2.33/Ton****
           $ 9.00/Ton, Differential Cost is $2.55/Ton
           $11.00/Ton, Differential Cost is $2.77/Ton

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B. Mine
        Raw Coal Price is

           $12.00/Ton, Benefit is $0.38/Ton
           $14.00/Ton, Benefit is $0.45/Ton
           $16.00/Ton, Benefit is $0.51/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.24/Ton

3.3   Saving in Ash Disposal Cost:  $0.14/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.02/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning When F.O.B. Mine Raw Coal Selling
        Price is

           $12.00/Ton, Benefit is $0.97/Ton
           $14.00/Ton, Benefit is $1.04/Ton
           $16.00/Ton, Benefit is $1.10/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F .0 .B . Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          7.00       1.36      1.29      1.23
           of Raw Coal (Per Ton)         9.00       1.58      1.51      1.45
                                        11.00       1.80      1.73      1.67

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  968,993 Tons
                                      90

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                                                  CASE NUMBER 1C  (Continued)

5.4   Minimum Scrubber Requirements     Scrubber  Rating:   168 Mw
                                        % of Flue Gas  Cleaned: 33.6%

5.5   Design Scrubber Requirements      Scrubber  Rating:   193 Mw
                                        % of Flue Gas  Cleaned: 38.6%

5.6   Scrubber Capital Cost:   $15,121,915

5.7   Scrubber Capital Charges/Yr:  $2,694,726

5.8   Capital Contribution Per Ton of Coal:   $2.78/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:   $0.29/Ton

5.10  0 & M Costs Per Ton of  Coal

        Limestone Cost:  $0.08/Ton
        Maintenance Labor & Material:  $0.62/Ton
        Fixation Chemical Cost:  $0.07/Ton
        Supplies Cost:  $0.09/Ton
        Operating Labor Costs:  $0.17/Ton
        Overhead Cost:  $0.47/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:   $4.57/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal  Price  (Per  Ton)

                                                   12.00      14.00     16.00
           Mine Operator's Cost          7.00       5.93       5.86       5.80
           of Raw Coal (Per Ton)          9.00       6.15       6.08       6.02
                                        11.00       6.37       6.30       6.24

7.0   COST PER MILLION BTU TO MEET EMISSION  STANDARDS

                                        F.O.B. Mine Raw Coal  Price  (Per  Ton)

                                                   12.00      14.00     16.00
           Mine Operator's Cost          7.00       0.230      0.227      0.225
           of Raw Coal (Per Ton)          9.00        .238       .236       .233
                                        11.00        .247       .244       .242
                                      91

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                                                 CASE NUMBER 1C (Continued)

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                        F.O.B.  Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          7.00       5.74      5.67      5.62
           of Raw Coal (Per Ton)         9.00       5.94      5.89      5.82
                                        11.00       6.17      6.09      6.04
*     As-received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hrs/yr.
****  This represents the total of all coal cleaning cost  factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     92

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                                                          CASE  NUMBER  ID

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:  Knoxville (Clinton),  Tennessee

1.2   Emission Standards                New:
                                        Existing:   1.2 Ib  of  S02  Per MM Btu

1.3   Coal District of Origin:   No.  11  Coalbed:   No. VII
      State:  Indiana                   County: Sullivan

1.4   Raw Coal                                            Ash:  10.5%
      Lb S02/106 Btu:  3.0          Sulfur:  1.87%        MM  Btu/Ton:  24.97*

1.5   Assumed Plant Size:   500  Mw
        *
1.6   Remaining Life of Boiler:  15  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   5,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,001,202 Tons

2.4   Minimum Scrubber Requirements      Scrubber Rating:   335 Mw
                                        % of  Flue  Gas Cleaned:  67%

2.5   Design Scrubber Requirements       Scrubber Rating:   385 Mw
                                        % of  Flue  Gas Cleaned:  77%

2.6   Scrubber Capital Cost: $26,683,853

2.7   Scrubber Capital Charges/Yr:   $4,755,063

2.8   Capital Contribution Per  Ton of Coal:  $4.75/Ton

2.9   Fuel and Electricity Cost Per  Ton of  Coal:   $0.56/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost: $0.27/Ton
        Maintenance Labor  & Material:  $1.07/Ton
        Fixation Chemical  Cost:  $0.22/Ton
        Supplies Cost:  $0.16/Ton
        Operating Labor Cost:   $0.16/Ton
        Overhead Cost:  $0.73/Ton
                                     93

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                                                 CASE NUMBER ID (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:   $7.92/Ton
*  This value has been adjusted for raw coal moisture content.
                                      94

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                                                          CASE  NUMBER  2A

1.0   CASE CONDITIONS                   Combined Use  of  Physical  Cleaning
                                        Followed by Stack  Gas Scrubbing

1.1   Coal Use Area:  Tonawanda (Buffalo),  New York

1.2   Emission Standards                New:   1.2  Ib  S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  1   Coalbed:   Lower  Freeport
      State:  Pennsylvania              County: Cambria

1.4   Raw Coal*                                           Ash:  11.4%
      Lb S02/MM Btu:  3.56          Sulfur:   2.4%          MM Btu/Ton:  26.96

1.5   Clean Coal                                          Ash:  6.7%
      Cleaning Plant Yield:   90.0%  Sulfur:   1.01%        MM Btu/Ton:  28.29
      Lb S02/MM Btu:  1.43          Btu Recovery:  94.4%  Btu Increase:  4.9%

1.6   Transportation                Mileage:   300          Cost  Per Ton:  $6.35

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life of Boiler:  25  Yr

1.9   Assumed Ash Disposal Cost:   $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000  Per Ton-Hour  Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton     0 & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator  to Provide  for One  Ton of  Clean Coal,
        When Mine Operator's Cost is

           $14.00/Ton, Additional Cost  is $1.56/Ton
           $16.00/Ton, Additional Cost  is $1.78/Ton
           $18.00/Ton, Additional Cost  is $2.00/Ton

2.3   Cleaning Plant Tax and Insurance  Burden:  $0.12/Ton

2.4   Total Differential Production  Cost to Mine Operator  to Provide
        a Ton of Cleaned Coal,  When  Mine Operator's Cost is

           $14.00/Ton, Differential  Cost is  $3.11/Ton****
           $16.00/Ton, Differential  Cost is  $3.33/Ton
           $18.00/Ton, Differential  Cost is  $3.55/Ton
                                     95

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                                                 CASE NUMBER:   2A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $26.00/Ton, Benefit is $1.21/Ton
           $28.00/Ton, Benefit is $1.31/Ton
           $30.00/Ton, Benefit is $1.40/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content  of
        Coal:  $0.30/Ton

3.3   Saving in Ash Disposal Cost:  $0.21/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.03/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B.  Mine Raw Coal Selling
        Price is

           $26.00/Ton, Benefit is $1.97/Ton
           $28.00/Ton, Benefit is $2.07/Ton
           $30.00/Ton, Benefit is $2.16/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   26.00    28.00     30.00
           Mine Operator's Cost         14.00       1.14     1.04      0.95
           of Raw Coal (Per Ton)        16.00       1.36     1.26      1.17
                                        18.00       1.58     1.48      1.39

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,237,187 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating: 89.5  Mw
                                        % of Flue Gas Cleaned:   17.9%

5.5   Design Scrubber Requirements      Scrubber Rating: 103 Mw
                                        % of Flue Gas Cleaned:   20.6%
                                     96

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                                                CASE NUMBER 2A (Continued)

5.6   Scrubber Capital Cost:   $7,280,807

5.7   Scrubber Capital Charges/Yr:   $1,132,166

5.8   Capital Contribution Per Ton  of Coal:   $0.92/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.17/Ton

5.10  0 & M Costs Per Ton of  Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor & Material:  $0.24/Ton
        Fixation Chemical Cost:  $0.04/Ton
        Supplies Cost:  $0.04/Ton
        Operating Labor Costs:  $0.13/Ton
        Overhead Cost:  $0.23/Ton

5.11  Total Stack Gas Cost Per Ton  of Coal Burned:  $1.81/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F .0 .B.  Mine Raw Coal  Price (Per Ton)

                                                    26.00     28.00     30.00
           Mine Operator's Cost          14.00       2.95      2.85      2.76
           of Raw Coal (Per Ton)         16.00       3.17      3.07      2.98
                                         18.00       3.39      3.29      3.20

7.0   COST PER MILLION BTU TO MEET  EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal  Price (Per Ton)

                                                    26.00     28.00     30.00
           Mine Operator's Cost          14.00       0.104     0.101     0.098
           of Raw Coal (Per Ton)         16.00        .112      .109      .105
                                         18.00        .120      .116      .113

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal  Price (Per Ton)

                                                    26.00     28.00     30.00
           Mine Operator's Cost          14.00       2.80      2.72      2.64
           of Raw Coal (Per Ton)         16.00       3.02      2.94      2.83
                                         18.00       3.24      3.13      3.05
*     As-received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     97

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                                                          CASE NUMBER 2B

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:  Tonawanda (Buffalo),  New York

1.2   Emission Standards                New:   1.2  Ib  S02  Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  1   Coalbed:   Lower  Freeport
      State:  Pennsylvania              County: Cambria

1.4   Raw Coal                                            Ash:   11.4%
      Lb S02/106 Btu:  3.56         Sulfur:  2.4%          MM Btu/Ton:   26.96*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler:  25  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent  of Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   7,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,298,220 Tons

2.4   Minimum Scrubber Requirements      Scrubber Rating:   369  Mw
                                        % of  Flue  Gas Cleaned:   73.7%

2.5   Design Scrubber Requirements       Scrubber Rating:   424  Mw
                                        % of  Flue  Gas Cleaned:   84.8%

2.6   Scrubber Capital Cost: $24,399,962

2.7   Scrubber Capital Charges/Yr:   $3,794,194

2.8   Capital Contribution Per  Ton of Coal:  $2.92/Ton

2.9   Fuel and Electricity Cost Per  Ton of  Coal:   $0,66/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.41/Ton
        Maintenance Labor  & Material:  $0.75/Ton
        Fixation Chemical  Cost:  $0.34/Ton
        Supplies Cost:  $0.11/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.51/Ton
                                      98

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                                                 CASE NUMBER 2B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $5.82/Ton
*  This value has been adjusted for raw coal moisture content.
                                      99

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                                                        CASE NUMBER:   2C

1.0   CASE CONDITIONS                   Combined Use of Physical Cleaning
                                        Followed by Stack Gas Scrubbing

1.1   Coal Use Area:  Tonawanda (Buffalo), New York

1.2   Emission Standards                New:
                                        Existing:  1.4 Ib S Per MM Btu
                                                   (2.8 Ib S02)

1.3   Coal District of Origin:  No. 1   Coalbed:  Lower Freeport
      State:  Pennsylvania              County:  Cambria

1.4   Raw Coal*                                           Ash:   11.4%
      Lb S02/MM Btu:  3.56          Sulfur:   2.4%         MM Btu/Ton:   26.96

1.5   Clean Coal                                          Ash:   6.7%
      Cleaning Plant Yield:  90.0%  Sulfur:   1.01%        MM Btu/Ton:   28.29
      Lb S02/MM Btu:  1.43          Btu Recovery:  94.4%  Btu Increase:  4.9%

1.6   Transportation                Mileage:   300         Cost  Per Ton:  $6.35

1.7   Assumed Plant Size            Megawatts:  500

1.8   Remaining Life of Boiler:  15 Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:  $18,000  Per Ton-Hour Input Capacity**
                              Utilization: 38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton    0 & M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to  Provide for One Ton of Clean Coal,
        When Mine Operator's Cost  is
                                 t
           $14.00/Ton, Additional  Cost is  $1.56/Ton
           $16.00/Ton, Additional  Cost is  $1.78/Ton
           $18.00/Ton, Additional  Cost is  $2.00/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production Cost to Mine Operator to Provide
        a Ton of Cleaned Coal, When Mine Operator's Cost is

           $14.00/Ton, Differential Cost is $3.11/Ton****
           $16.00/Ton, Differential Cost is $3.33/Ton
           $18.00/Ton, Differential Cost is $3.55/Ton

                                     100

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                                                  CASE NUMBER 2C (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B. Mine
        Raw Coal Price is

           $26.00/Ton, Benefit is $1.21/Ton
           $28.00/Ton, Benefit is $1.31/Ton
           $30.00/Ton, Benefit is $1.40/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.30/Ton

3.3   Saving in Ash Disposal Cost:  $0.21/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.03/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $26.00/Ton, Benefit is $1.97/Ton
           $28.00/Ton, Benefit is $2.07/Ton
           $30.00/Ton, Benefit is $2.16/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   26.00     28.00     30.00
           Mine Operator's Cost         14.00       1.14      1.04      0.95
           of Raw Coal (Per Ton)        16.00       1.36      1.26      1.17
                                        18.00       1.58      1.48      1.39

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   883,705 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:  12 Mw
                                        7- of Flue Gas Cleaned:  2.3%

5.5   Design Scrubber Requirements      Scrubber Rating:  14 Mw
                                        % of Flue Gas Cleaned:  2.8%

5.6   Scrubber Capital Cost:  $1,853,803
                                     101

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                                                  CASE NUMBER 2C (Continued)

5.7   Scrubber Capital Charges/Yr:  $330,348

5.8   Capital Contribution Per Ton of Coal:   $0.37/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:   $0.02/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.01/Ton
        Maintenance Labor and Material:  $0.08/Ton
        Fixation Chemical Cost:  $0.01/Ton
        Supplies Cost:  $0.01/Ton
        Operating Labor Cost:  $0.18/Ton
        Overhead Cost:  $0.17/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $0.85/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per  Ton)

                                                    26.00     28.00    30.00
           Mine Operator's Cost          14.00       1.99      1.89     1.80
           of Raw Coal (Per Ton)         16.00       2.21      2.11     2.02
                                         18.00       2.43      2.33     2.24

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per  Ton)

                                                    26.00     28.00    30.00
           Mine Operator's Cost          14.00       0.070     0.067    0.064
           of Raw Coal (Per Ton)         16.00        .078      .075     .071
                                         18.00        .086      .082     .079

8.0   COST PER TON OF RAW COAL TO MEET EMISSION  STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per  Ton)

                                                    26.00     28.00    30.00
           Mine Operator's Cost          14.00       1.89      1.81     1.73
           of Raw Coal (Per Ton)         16.00       2.10      2.02     1.91
                                         18.00       2.32      2.21     2.13
*      As-received values.
**     Amortized over 15 years, 8% interest on unpaid balance.
***    Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****   This represents the  total of all coal cleaning cost  factors at  the
       respective operator  cost levels as covered in Section 2.0 above.
                                     102

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                                                        CASE  NUMBER:   2D

1.0   CASE CONDITIONS                   Sulfur  Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:   Tonawanda (Buffalo),  New  York

1.2   Emission Standards                New:
                                        Existing:  1.4 Ib  S Per MM Btu
                                                   (2.8  Ib S02)

1.3   Coal District of Origin:   No.  1    Coalbed:   Lower  Freeport
      State:  Pennsylvania              County:  Cambria

1.4   Raw Coal                                           Ash:  11.4%
      Lb S02/106 Btu:  3.56         Sulfur:  2.4%         MM  Btu/Ton:   26.96*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life  of Boiler:  15  Yr

1.7   Assumed Annual  Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST  FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   5,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:  927,300 Tons

2.4   Minimum Scrubber Requirements      Scrubber Rating:   119 Mw
                                        % of Flue  Gas Cleaned:  23.7%

2.5   Design Scrubber Requirements       Scrubber Rating:   137 Mw
                                        7, of Flue  Gas Cleaned:  27.4%

2.6   Scrubber Capital Cost:  $12,014,916

2.7   Scrubber Capital Charges/Yr:   $2,141,058

2.8   Capital Contribution Per  Ton of Coal:  $2.31/Ton

2.9   Fuel and Electricity Cost Per  Ton of  Coal:   $0.21/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.13/Ton
        Maintenance Labor  & Material:   $0.52/Ton
        Fixation Chemical  Cost:  $0.11/Ton
        Supplies Cost:  $0.08/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.42/Ton

                                     103

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                                                  CASE NUMBER 2D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $3.95/Ton
*  This value has been adjusted for raw coal moisture content.
                                      104

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                                                        CASE NUMBER:   3A

1.0   CASE CONDITIONS                   Combined Use of Physical Cleaning
                                        Followed by Stack Gas Scrubbing

1.1   Coal Use Area:  Essexville (Saginaw),  Michigan

1.2   Emission Standards                New:  1.2 Ib S02 Per MM Btu
                                                (Anticipated Standard)
                                        Existing:

1.3   Coal District of Origin:   No.  4   Coalbed:  Lower Freeport
      State:  Ohio                      County:   Harrison

1.4   Raw Coal*                                           Ash:   10.4%
      Lb S02/MM Btu:  3^54          Sulfur:   2.30%        MM Btu/Ton:   25.97

1.5   Clean Coal                                          Ash:   4.8%
      Cleaning Plant Yield:   90.0%  Sulfur:   1.26%        MM Btu/Ton:   27.51
      Lb S02/MM Btu:  1.83          Btu Recovery:  95.3%  Btu Increase: 5.9%

1.6   Transportation                Mileage:  375         Cost  Per  Ton: $6.19

1.7   Assumed Plant Size                 Megawatts:  500

1.8   Remaining Life of Boiler:   25  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000 Per Ton-Hour Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton    0  & M: $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton of Clean  Coal,
        When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant Tax and Insurance Burden:   $0.12/Ton

2.4   Total Differential Production  Cost to  Mine Operator to Provide
        a Ton of Cleaned Coal, When  Mine Operator's Cost is

           $ 7.00/Ton, Differential  Cost is  $2.33/Ton****
           $ 9.00/Ton, Differential  Cost is  $2.55/Ton
           $11.00/Ton, Differential  Cost is  $2.77/Ton

                                      105

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                                                  CASE NUMBER 3A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $13.00/Ton, Benefit is $0.72/Ton
           $15.00/Ton, Benefit is $0.84/Ton
           $17.00/Ton, Benefit is $0.95/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.34/Ton

3.3   Saving in Ash Disposal Cost:  $0.25/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B.  Mine Raw Coal Selling
        Price is

           $13.00/Ton, Benefit is $1.58/Ton
           $15.00/Ton, Benefit is $1.70/Ton
           $17.00/Ton, Benefit is $1.81/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price  (Per Ton)

                                                   13.00     15.00      17.00
           Mine Operator's Cost          7.00       0.75      0.63      0.52
           of Raw Coal (Per Ton)         9.00        .97       .85        .74
                                        11.00       1.19      1.07        .96

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,272,265 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating: 192 Mw
                                        % of Flue Gas Cleaned:  38.3%

5.5   Design Scrubber Requirements      Scrubber Rating: 220 Mw
                                        % of Flue Gas Cleaned:  44%

5.6   Scrubber Capital Cost:  $13,374,816
                                     106

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                                                   CASE NUMBER 3A (Continued)

5.7   Scrubber Capital Charges/Yr:  $2,079,784

5.8   Capital Contribution Per Ton of Coal:  $1.63/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.35/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.12/Ton
        Maintenance Labor & Material:  $0.42/Ton
        Fixation Chemical Cost:  $0.09/Ton
        Supplies Cost:  $0.06/Ton
        Operating Labor Cost:  $0.13/Ton
        Overhead Cost:  $0.33/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $2.71/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       3.46      3.34      3.23
           of Raw Coal (Per Ton)          9.00       3.68      3.56      3.45
                                         11.00       3.90      3.78      3.67

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       0.126     0.121     0.117
           of Raw Coal (Per Ton)          9.00        .134      .129      .125
                                         11.00        .142      .137      .133

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F .0 .B. Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       3.27      3.14      3.04
           of Raw Coal (Per Ton)          9.00       3.48      3.35      3.25
                                        •11.00       3.69      3.56      3.45
*     As-received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     107

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                                                          CASE NUMBER:   3B

1.0   CASE CONDITIONS    •               Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Essexville (Saginaw),  Michigan

1.2   Emission Standards                New:  1.2 Ib S02 Per  MM Btu
                                                (Anticipated  Standard)
                                        Existing:

1.3   Coal District of Origin:  No.  4   Coalbed:  Lower Freeport
      State:  Ohio                      County:  Harrison

1.4   Raw Coal                                            Ash:   10.4%
      Lb S02/106 Btu:  3.54         Sulfur:   2.30%        MM  Btu/Ton:  25.97*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  25  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  7,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:   1,347,709 Tons

2.4   Minimum Scrubber Requirements      Scrubber Rating:  367 Mw
                                        % of Flue Gas  Cleaned:   73.4%

2.5   Design Scrubber Requirements       Scrubber Rating:  422 Mw
                                        % of Flue Gas  Cleaned:   84.4%

2.6   Scrubber Capital Cost:  $23,973,401

2.7   Scrubber Capital Charges/Yr:   $3,727,864

2.8   Capital Contribution Per Ton of Coal:   $2.77/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:  $0.64/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.38/Ton
        Maintenance Labor & Material:  $0.71/Ton
        Fixation Chemical Cost:  $0.31/Ton
        Supplies Cost:  $0.11/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.49/Ton

                                      108

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                                                  CASE NUMBER 3B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $5.53/Ton
*  This value has been adjusted for raw coal moisture content.
                                     109

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                                                          CASE NUMBER:   3C

1.0   CASE CONDITIONS                   Combined  Use  of  Physical  Cleaning
                                        Followed  by Stack  Gas  Scrubbing

1.1   Coal Use Area:   Essexville (Saginaw),  Michigan

1.2   Emission Standards                New:
                                        Existing: 1.6 Ib  S02  Per MM  Btu

1.3   Coal District of Origin:   No.  4   Coalbed:   Lower  Freeport
      State:  Ohio                      County:   Harrison

1.4   Raw Coal*                                           Ash:  10.4%
      Lb S02/MM Btu:   3.54          Sulfur:   2.30%        MM Btu/Ton:  25.97

1.5   Clean Coal                                          Ash:  4.8%
      Cleaning Plant  Yield:   90.0%  Sulfur:   1.26%        MM Btu/Ton:  27.51
      Lb S02/MM Btu:   1.83          Btu Recovery: 95.3%  Btu  Increase:  5.9%

1.6   Transportation                 Mileage:  375         Cost  Per Ton:  $6.19

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life  of Boiler:   15  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant                     Cost:   $18,000 Per Ton-Hour Input
                                                 Capacity**
                                        Utilization:  38.58%***

1.11  Assumed Annual  Capital Scrubber Charges  as  Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Costs   Amortization:   $0.68/Ton     0 & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to  Provide for One  Ton  of  Clean Coal,
        When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is  $0.78/Ton
           $ 9.00/Ton, Additional Cost is  $1.00/Ton
           $11.00/Ton, Additional Cost is  $1.22/Ton

2.3   Cleaning Plant  Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production  Cost to  Mine  Operator  to Provide
        a Ton of Cleaned Coal, When  Mine Operator's Cost is

           $ 7.00/Ton, Differential  Cost is  $2.33/Ton****
           $ 9.00/Ton, Differential  Cost is  $2.55/Ton
           $11.00/Ton, Differential  Cost is  $2.77/Ton

                                    110

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                                                   CASE NUMBER 3C (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $13.00/Ton, Benefit is $0.72/Ton
           $15.00/Ton, Benefit is $0.84/Ton
           $17.00/Ton, Benefit is $0.95/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.34/Ton

3.3   Saving in Ash Disposal Cost:  $0.25/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $13.00/Ton, Benefit is $1.58/Ton
           $15.00/Ton, Benefit is $1.70/Ton
           $17.00/Ton, Benefit is $1.8l/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   13.00     15.00     17.00
           Mine Operator's Cost          7.00       0.75      0.63      0.52
           of Raw Coal (Per Ton)         9.00        .97       .85       .74
                                        11.00       1.19      1.07       .96

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   908,761 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:  70 Mw
                                        % of Flue Gas Cleaned:  14%

5.5   Design Scrubber Requirements      Scrubber Rating:  80 Mw
                                        % of Flue Gas Cleaned:  16%

5.6   Scrubber Capital Cost:  $7,475,375


                                     111

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                                                CASE NUMBER 3C (Continued)

5.7   Scrubber Capital Charges/Yr:   $1,332,112

5.8   Capital Contribution Per Ton  of Coal:   $1.47/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.13/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor & Material:  $0.33/Ton
        Fixation Chemical Cost:  $0.03/Ton
        Supplies Cost:  $0.05/Ton
        Operating Labor Cost:  $0.18/Ton
        Overhead Cost:  $0.32/Ton

5.11  Total Stack Gas Cost Per Ton  of Coal Burned:   $2.55/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       3.30      3.18      3.07
           of Raw Coal (Per Ton)          9.00       3.52      3.40      3.29
                                         11.00       3.74      3.62      3.51

7.0   COST PER MILLION BTU TO MEET  EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       0.120     0.116     0.112
           of Raw Coal (Per Ton)          9.00        .128      .124      .120
                                         11.00        .136      .132      .128

8.0   COST PER TON OF RAW COAL TO MEET EMISSION  STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       3.12      3.01      2.91
           of Raw Coal (Per Ton)          9.00       3.32      3.22      3.12
                                         11.00       3.53      3.43      3.32
*     As-received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 360 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost factors at the
      respective operator  cost levels as covered in Section 2.0 above.
                                     112

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                                                          CASE NUMBER:   3D

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively  by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Essexville (Saginaw),  Michigan

1.2   Emission Standards                New:
                                        Existing:  1.6 Ib S02  Per  MM Btu

1.3   Coal District of Origin:   No.  4   Coalbed:   Lower  Freeport
      State:  Ohio                      County:  Harrison

1.4   Raw Coal                                            Ash:  10.4%
      Lb S02/106 Btu:  3.54         Sulfur:   2.30%        MM Btu/Ton:  25.97*

1.5   Assumed Plant Size:  500  Mw

1.6   Remaining Life of Boiler:  15  Yr

1.7   Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  5,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:   962,650 Tons

2.4   Minimum Scrubber Requirements      Scrubber  Rating:  305  Mw
                                        % of Flue Gas Cleaned:  61%

2.5   Design Scrubber Requirements      Scrubber  Rating:  351  Mw
                                        % of Flue Gas Cleaned:  70.2%

2.6   Scrubber Capital Cost:  $25,240,547

2.7   Scrubber Capital Charges/Yr:  $4,497,866

2.8   Capital Contribution Per  Ton of Coal:   $4.67/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.53/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.32/Ton
        Maintenance Labor & Material:  $1.05/Ton
        Fixation Chemical Cost:  $0.26/Ton
        Supplies Cost:  $0.16/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.72/Ton
                                     113

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                                                 CASE NUMBER 3D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:   $7.88/Ton
*  This value has been adjusted for raw coal moisture content.
                                    114

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                                                          CASE  NUMBER:   4A

1.0   CASE CONDITIONS                   Combined  Use  of  Physical  Cleaning
                                        Followed  by  Stack  Gas Scrubbing

1.1   Coal Use Area:   Boston,  Massachusetts

1.2   Emission Standards                New:   0.28 Ib of Sulfur Per MM Btu
                                        Existing:

1.3   Coal District of Origin:  No.  1   Coalbed:  Upper  Kittanning
      State:  Pennsylvania              County:   Clearfield

1.4   Raw Coal*                                           Ash:  9.3%
      Lb S02/MM Btu:   1.31          Sulfur:   0.85%         MM Btu/Ton:  25.94

1.5   Clean Coal                                          Ash:  7.0%
      Cleaning Plant Yield:   90:0%  Sulfur:   0.45%         MM Btu/Ton:  26.55
      Lb S02/MM Btu:   0.68          Btu Recovery: 92.1%  Btu Increase:  2.35%

1.6   Transportation                Mileage:   551         Cost  Per Ton:  $8.75

1.7   Assumed Plant Size                Megawatts:   500

1.8   Remaining Life of Boiler:  25  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000  Per  Ton-Hour  Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton    0 & M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One  Ton of  Clean Coal,
        When Mine Operator's Cost is

           $ 8.00/Ton, Additional Cost is $0.89/Ton
           $10.00/Ton, Additional Cost is $l.ll/Ton
           $12.00/Ton, Additional Cost is $1.33/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production  Cost to Mine  Operator  to Provide
        a Ton of Cleaned Coal, When  Mine Operator's  Cost is

           $ 8.00/Ton, Differential  Cost is  $2.44/Ton****
           $10.00/Ton, Differential  Cost is  $2.66/Ton
           $12.00/Ton, Differential  Cost is  $2.88/Ton
                                     115

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                                                   CASE NUMBER 4A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B. Mine
        Raw Coal Price is

           $16.00/Ton, Benefit is $0.37/Ton
           $20.00/Ton, Benefit is $0.46/Ton
           $24.00/ton, Benefit is $0.55/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.20/Ton

3.3   Saving in Ash Disposal Cost:  $0.10/Ton

3.4   Saving in Grinding Cost:  $0.01/Ton

3.5   Saving in Benefit Payment:  $0.02/Ton

3.6   Saving in Maintenance:  $0.13/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $16.00/Ton, Benefit is $0.83/Ton
           $20.00/Ton, Benefit is $0.92/Ton
           $24.00/Ton, Benefit is $1.01/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   16.00     20.00     24.00
           Mine Operator's Cost          8.00       1.61      1.52      1.43
           of Raw Coal (Per Ton)        10.00       1.83      1.74      1.65
                                        12.00       2.05      1.96      1.87

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,318,268 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:  97 Mw
                                        % of Flue Gas Cleaned:  19.3%

5.5   Design Scrubber Requirements      Scrubber Rating:  112 Mw
                                        % of Flue Gas Cleaned:  22.4%

5.6   Scrubber Capital Cost:  $7,732,853


                                      116

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                                                  CASE NUMBER 4A (Continued)

5.7   Scrubber Capital Charges/Yr:  $1,202,549

5.8   Capital Contribution Per Ton of Coal:  $0.91/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.17/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost $0.02/Ton
        Maintenance Labor & Material:  $0.23/Ton
        Fixation Chemical Cost:  $0.02/Ton
        Supplies Cost:  $0.03/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.21/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $1.71/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    16.00     20.00     24.00
           Mine Operator's Cost           8.00       3.32      3.23      3.14
           of Raw Coal (Per Ton)         10.00       3.54      3.45      3.36
                                         12.00       3.76      3.67      3.58

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    16.00     20.00     24.00
           Mine Operator's Cost           8.00       0.125     0.122     0.118
           of Raw Coal (Per Ton)         10.00        .133      .130      .127
                                         12.00        .142      .138      .135

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    16.00     20.00     24.00
           Mine Operator's Cost           8.00       3.24      3.16      3.06
           of Raw Coal (Per Ton)         10.00       3.45      3.37      3.29
                                         12.00       3.68      3.58      3.50
*     As-received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     117

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                                                          CASE NUMBER:  4B

 1.0    CASE  CONDITIONS                    Sulfur Clean-up Exclusively by
                                         Stack Gas  Scrubbing

 1.1    Coal  Use Area:   Boston, Massachusetts

 1.2    Emission Standards                 New:  0.28 Ib of Sulfur Per MM Btu
                                         Existing:

 1.3    Coal  District of Origin:  No.  1    Coalbed:  Upper Kittanning
       State:  Pennsylvania               County:  Clearfield

 1.4    Raw Coal                                            Ash:  9.3%
       Lb S02/106  Btu:   1.31          Sulfur:  0.85%        MM Btu/Ton:  25.94*

 1.5    Assumed Plant Size:  500 Mw
•
 1.6    Remaining Life of Boiler:  25  Yr

 1.7    Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

 2.0    STACK GAS COST FACTORS

 2.1    Boiler Capacity:  500 Mw

 2.2    Utilization Factor:  7,000 Hr/Yr

 2.3    Tons  of Coal Burned Per Year:  1,349,268 Tons

 2.4    Minimum Scrubber Requirements      Scrubber Rating:  318 Mw
                                         % of Flue Gas Cleaned:  63.6%

 2.5    Design Scrubber  Requirements       Scrubber Rating:  366 Mw
                                         % of Flue Gas Cleaned:  73.2%

 2.6    Scrubber Capital Cost:  $20,076,804

 2.7    Scrubber Capital Charges/Yr:   $3,121,943

 2.8    Capital Contribution Per Ton of Coal:  $2.31/Ton

 2.9    Fuel  and Electricity Cost Per  Ton  of Coal:  $0.55/Ton

 2.10   0 & M Costs Per  Ton of Coal

        Limestone Cost:  $0.12/Ton
        Maintenance Labor & Material:  $0.60/Ton
        Fixation  Chemical Cost:  $0.10/Ton
        Supplies  Cost:  $0.09/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead  Cost:  $0.43/Ton
                                     118

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                                                 CASE NUMBER 4B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $4.32/Ton
*  This value has been adjusted for raw coal moisture content.
                                     119

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                                                             CASE NUMBER:   4C

1.0   CASE CONDITIONS                   Combined  Use  of  Physical  Cleaning
                                        Followed  by Stack Gas Scrubbing

1.1   Coal Use Area:   Boston,  Massachusetts

1.2   Emission Standards                New:
                                        Existing: 0.28  Ib of Sulfur  per MM Btu

1.3   Coal District of Origin:  No.  1   Coalbed:   Upper  Kittanning
      State:  Pennsylvania              County:   Clearfield

1.4   Raw Coal*                                              Ash:   9.3  %
      Lb S02/MM Btu:   1.31          Sulfur:   0.85%           MM Btu/Ton:   25.94

1.5   Clean Coal                                             Ash:   7.0%
      Cleaning Plant  Yield:  90.0%  Sulfur:   0.45%           MM Btu/Ton:   26.55
      Lb S02/MM Btu:   0.68          Btu Recovery: 92.1%     Btu  Increase:   2.35%

1.6   Transportation                 Mileage:   551            Cost  Per Ton:   $8.75

1.7   Assumed Plant Size            Megawatts:  500

1.8   Remaining Life  of Boiler:  15  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant           Cost:   $18,000  Per  Ton-Hour Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual  Capital Scrubber Charges as  Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Costs    Amortization:   $0.68/Ton   0 & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton of  Clean  Coal,
        When Mine Operator's Cost is

           $ 8.00/Ton, Additional Cost is $0.89/Ton
           $10.00/Ton, Additional Cost is $l.ll/Ton
           $12.00/Ton, Additional Cost is $1.33/Ton

2.3   Cleaning Plant  Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production  Cost to Mine  Operator to Provide
        a Ton of Cleaned Coal, When  Mine Operator's Cost is

          $ 8.00/Ton, Differential Cost is  $2.44/Ton****
          $10.00/Ton, Differential Cost is  $2.66/Ton
          $12.00/Ton, Differential Cost is  $2.88/Ton
                                      120

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                                                   CASE NUMBER:   4C (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due To Higher Heat Content of  Coal,  When  F.O.B.  Mine
        Raw Coal Price is

           $16.00/Ton, Benefit is $0.37/Ton
           $20.00/Ton, Benefit is $0.46/Ton
           $24.00/Ton, Benefit is $0.55/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal is $0.20/Ton

3.3   Saving in Ash Disposal Cost:  $0.10/Ton

3.4   Saving in Grinding Cost:  $0.01/Ton

3.5   Saving in Benefit Payment:  $0.02/Ton

3.6   Saving in Maintenance:  $0.13/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $16.00/Ton, Benefit is $0.83/Ton
           $20.00/Ton, Benefit is $0.92/Ton
           $24.00/Ton, Benefit is $1.01/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   16.00     20.00     24.00
           Mine Operator's Cost          8.00       1.61      1.52      1.43
           of Raw Coal (Per Ton)        10.00       1.83      1.74      1.65
                                        12.00       2.05      1.96      1.87

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  941,620 Tons

5.4   Minimum Scrubber Requirements     Scrubber Rating:  97 Mw
                                        % of Flue Gas Cleaned:  19.3%

5.5   Design Scrubber Requirements      Scrubber Rating:  112 Mw
                                        % of Flue Gas Cleaned:  22.4%

5.6   Scrubber Capital Cost:  $9,784,427
                                      121

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                                                   CASE NUMBER:  4C (Continued)

5.7   Scrubber Capital Charges/Yr $1,743,585

5.8   Capital Contribution Per Ton of Coal:  $1.85/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.17/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.02/Ton
        Maintenance Labor & Materials:  $0.42/Ton
        Fixation Chemical Cost:  $0.02/Ton
        Supplies Cost:  $0.06/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.36/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $3.07/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    16.00     20.00     24.00
           Mine Operator's Cost           8.00      .4.68      4.59      4.50
           of Raw Coal (Per Ton)         10.00       4.90      4.81      4.72
                                         12.00       5.12      5.03      4.94

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    16.00     20.00     24.00
           Mine Operator's Cost           8.00       0.176     0.173     0.169
           of Raw Coal (Per Ton)         10.00        .185      .181      .178
                                         12.00        .193      .189      .186

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    16.00     20.00     24.00
           Mine Operator's Cost           8.00       4.57      4.49      4.38
           of Raw Coal (Per Ton)         10.00       4.80      4..70      4.62
                                         12.00       5.01      4.90      4.82
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                      122

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                                                            CASE NUMBER:   4D

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Boston, Massachusetts

1.2   Emission Standards                New:
                                        Existing:  0.28 Ib of Sulfur Per  MM Btu

1.3   Coal District of Origin:  No.  1   Coalbed:   Upper Kittanning
      State:  Pennsylvania              County:  Clearfield

1.4   Raw Coal                                               Ash:  9.3%
      Lb S02/106 Btu:  1.31         Sulfur:  0.85%           MM Btu/Ton:   25.94*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  15  yr

1.7   Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  5,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:   963,763  Tons

2.4   Minimum Scrubber Requirements      Scrubber  Rating:  318 Mw
                                        % of  Flue Gas Cleaned:  63.6%

2.5   Design Scrubber Requirements      Scrubber  Rating:  366 Mw
                                        % of  Flue Gas Cleaned:  73.2%

2.6   Scrubber Capital Cost:  $25,231,659

2.7   Scrubber Capital Charges/Yr:  $4,496,282

2.8   Capital Contribution Per Ton of Coal:  $4.67/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.55/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.12/Ton
        Maintenance Labor & Materials:  $1.05/Ton
        Fixation Chemical Cost:  $0.10/Ton
        Supplies Cost:  $0.16/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.72/Ton


                                     123

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                                                   CASE NUMBER:  4D (Continued)
2.11   Total Cost Per Ton of Coal Burned to Meet Emission
         Standards:  $7.5A/Ton
*  This value has been adjusted for raw coal moisture content.
                                     124

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                                                            CASE NUMBER:   5A

1.0   CASE CONDITIONS                   Combined Use of Physical Cleaning
                                        Followed by Stack Gas Scrubbing

1.1   Coal Use Area:  Grand Rapids, Michigan

1.2   Emission Standards                New:  1.6 Ib of S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:  No. 3   Coalbed:  Upper Freeport
      State:  West Virginia             County:  Preston

1.4   Raw Coal*                                             Ash:  18.5%
      Lb S02/MM Btu:  3.66          Sulfur:  2.24%          MM Btu/Ton:  24.5

1.5   Clean Coal                                            Ash:  11.9%
      Cleaning Plant Yield:  90.0%  Sulfur:  1.25%          MM Btu/Ton:  26.23
      Lb S02/MM Btu:  1.91          Btu Recovery:  96.4%    Btu Increase:  7.1%

1.6   Transportation                Mileage:  575           Cost Per Ton:  $5.41

1.7   Assumed Plant Size            Megawatts:  500

1.8   Remaining Life of Boiler:   25 Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:  $18,000 Per Ton-Hour Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:  $0.68/Ton   0 & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton of Clean Coal,
        When Operator's Cost is

           $ 8.00/Ton, Additional Cost is $0.89/Ton
           $10.00/Ton, Additional Cost is $l.ll/Ton
           $12.00/Ton, Additional Cost is $1.33/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production Cost to Mine Operator to Provide
        a Ton of Cleaned Coal, When Mine Operator's Cost is

           $ 8.00/Ton, Differential Cost is $2.44/Ton****
           $10.00/Ton, Differential Cost is $2.66/Ton
           $12.00/Ton, Differential Cost is $2.88/Ton


                                      125

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                                                  CASE NUMBER:   5A(Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $16.00/Ton, Benefit is $1.06/Ton
           $18.00/Ton, Benefit is $1.19/Ton
           $20.00/Ton, Benefit is $1.33/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content  of
        Coal:  $0.36/Ton

3.3   Saving in Ash Disposal Cost:  $0.30/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.05/Ton

3.6   Saving in Maintenance:  $0.24/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $16.00/Ton, Benefit is $2.04/Ton
           $18.00/Ton, Benefit is $2.17/Ton
           $20.00/Ton, Benefit is $2.31/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   16.00     18.00     20.00
           Mine Operator's Cost          8.00       0.40      0.27      0.13
           of Raw Coal (Per Ton)        10.00        .62       .49       .35
                                        12.00        .84       .71       .57

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  1,334,350 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:   90 Mw
                                         % of Flue Gas Cleaned:  18.0%

5.5   Design Scrubber Requirements       Scrubber Rating:   104  Mw
                                         % of Flue Gas Cleaned:  20.8%

5.6   Scrubber Capital Cost:  $7,344,739
                                      126

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                                                  CASE NUMBER:   5A(Continued)

5.7   Scrubber Capital Charges/Yr:  $1,142,107

5.8   Capital Contribution Per Ton of Coal:   $0.86/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.16/Ton

5.10  0 & M Costs Per Ton of Coal

           Limestone Cost:  $0.05/Ton
           Maintenance Labor & Materials:   $0.22/Ton
           Fixation Chemical Cost:  $0.04/Ton
           Supplies Cost:  $0.03/Ton
           Operating Labor Cost:  $0.12/Ton
           Overhead Cost:  $0.21/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $1.69/Ton

6.0   COST PER TON OF COAL BURNED TO MEET  EMISSION STANDARDS

                                          F.O.B. Mine Raw Coal  Price (Per Ton)

                                                     16.00     18.00     20.00
           Mine Operator's Cost            8.00       2.09      1.96      1.82
           of Raw Coal (Per Ton)          10.00       2.31      2.18      2.04
                                          12.00       2.53      2.40      2.26

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                          F.O.B. Mine Raw Coal  Price (Per Ton)

                                                     16.00     18.00     20.00
           Mine Operator's Cost            8.00       0.080     0.075     0.069
           of Raw Coal (Per Ton)          10.00        .088      .083      .078
                                          12.00        .096      .091      .086

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                          F.O.B. Mine Raw Coal  Price (Per Ton)

                                                     16.00     18.00     20.00
           Mine Operator's Cost            8.00       1.96      1.84      1.69
           of Raw Coal (Per Ton)          10.00       2.16      2.03      1.91
                                          12.00       2.35      2.23      2.11
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost factors at the
      respective operator  cost levels as covered in Section 2.0 above.
                                     127

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                                                             CASE NUMBER:   5B

1.0   CASE CONDITIONS                   Sulfur  Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:   Grand Rapids,  Michigan

1.2   Emission Standards                New:  1.6  Ib  of  S02  Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  3   Coalbed:   Upper  Freeport
      State:  West Virginia             County:  Preston

1.4   Raw Coal                                               Ash: 18.5%
      Lb S02/1Q6 Btu:  3.66         Sulfur:   2.24%           MM Btu/Ton:   24.5*

1.5   Assumed Plant Size:  500  Mw

1.6   Remaining Life of Boiler:  25  Yr

1.7   Assumed Annual Capital Scrubber Charges as  Percent of  Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  7,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:   1,428,572  Tons

2.4   Minimum Scrubber Requirements      Scrubber  Rating:  313 Mw
                                        % of  Flue Gas Cleaned: 62.5%

2.5   Design Scrubber Requirements      Scrubber  Rating:  360 Mw
                                        % of  Flue Gas Cleaned: 72.0%

2.6   Scrubber Capital Cost:  $19,833,148

2.7   Scrubber Capital Charges/Yr:  $3,084,055

2.8   Capital Contribution Per  Ton of Coal $2.16/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.51/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.30/Ton
        Maintenance Labor & Materials:  $0.56/Ton
        Fixation Chemical Cost:  $0.24/Ton
        Supplies Cost:  $0.08/Ton
        Operating Labor Cost:  $0.11/Ton
        Overhead Cost:  $0.40/Ton
                                     128

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                                                   CASE NUMBER:  5B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $4.36/Ton
*  This value has been adjusted for raw coal moisture content.
                                     129

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                                                            CASE NUMBER:   5C

1.0   CASE CONDITIONS                   Combined Use  of  Physical Cleaning
                                        Followed by Stack Gas  Scrubbing

1.1   Coal Use Area:  Grand Rapids,  Michigan

1.2   Emission Standards                New:
                                        Existing:  1.6 Ib S02  Per MM  Btu

1.3   Coal District of Origin:   No.  3   Coalbed:  Upper  Freeport
      State:  West Virginia             County:   Preston

1.4   Raw Coal*                                           Ash:   18.5  %
      S02/MM Btu:  3.66             Sulfur:   2.24%        MM Btu/Ton:  24.5

1.5   Clean Coal                                          Ash:   11.9%
      Cleaning Plant Yield:  90.0%  Sulfur:   1.25%        MM Btu/Ton:  26.23
      Lb S02/MM Btu:  1.91          Btu Recovery:  96.4%  Btu  Increase:  7.1%

1.6   Transportation                Mileage:  575         Cost  Per  Ton:  $5.41

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life of Boiler:   15  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000 Per Ton-Hour Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton     0 &  M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton  of Clean Coal,
        When Mine Operator's Cost is

           $ 8.00/Ton, Additional Cost is $0.89/Ton
           $10.00/Ton, Additional Cost is $l.ll/Ton
           $12.00/Ton, Additional Cost is $1.33/Ton

2.3   Cleaning Plant Tax and Insurance Burden:   $0.12/Ton
                                     130

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                                                CASE NUMBER:   5C (Continued)

2.4   Total Differential Production Cost to Mine Operator to  Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 8.00/Ton, Differential Cost is $2.44/Ton****
           $10.00/Ton, Differential Cost is $2.66/Ton
           $12.00/Ton, Differential Cost is $2.88/Ton

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B. Mine
        Raw Coal Price is

           $16.00/Ton, Benefit is $1.06/Ton
           $18.00/Ton, Benefit is $1.19/Ton
           $20.00/Ton, Benefit is $1.33/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.36/Ton

3.3   Saving in Ash Disposal Cost:  $0.30/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.05/Ton

3.6   Saving in Maintenance:  $0.24/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B. Mine Raw Coal Selling
        Price is

           $16.00/Ton, Benefit is $2.04/Ton
           $18.00/Ton, Benefit is $2.17/Ton
           $20.00/Ton, Benefit is $2.31/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                      F.O.B. Mine Raw Coal Price (Per Ton)

                                                 16.00     18.00     20.00
           Mine Operator's Cost        8.00       0.40     0.27      0.13
           of Raw.Coal (Per Ton)      10.00        .62       .49       .35
                                      12.00        .84       .71       .57

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  953,108 Tons
                                     131

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                                                  CASE NUMBER:   5C (Continued)

5.4   Minimum Scrubber Requirements     Scrubber Rating:   90 Mw
                                        % of Flue Gas  Cleaned:   18.0%

5.5   Design Scrubber Requirements      Scrubber Rating:   104 Mw
                                        % of Flue Gas  Cleaned:   20.8%

5.6   Scrubber Capital Cost:  $9,221,204

5.7   Scrubber Capital Charges/Yr:  $1,643,219

5.8   Capital Contribution Per Ton of Coal:   $1.72/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.16/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.05/Ton
        Maintenance Labor & Materials:  $0.39/Ton
        Fixation Chemical Cost:  $0.04/Ton
        Supplies Cost:  $0.06/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.34/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $2.93/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F.O.B.  Mine Raw Coal Price (Per Ton)

                                                   16.00      18.00     20.00
           Mine Operator's Cost          8.00       3.33       3.20      3.06
           of Raw Coal (Per Ton)        10.00       3.55       3.42      3.28
                                        12.00       3.77       3.64      3.50

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                        F.O.B.  Mine Raw Coal Price (Per Ton)

                                                   16.00      18.00     20.00
           Mine Operator's Cost          8.00       0.127     0.122      0.117
           of Raw Coal (Per Ton)        10.00        .135      .130       .125
                                        12.00        .144      .139       .133
                                     132

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                                                 CASE NUMBER:  5C (Continued)

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)
           Mine Operator's Cost
           of Raw Coal (Per Ton)
 8.00
10.00
12.00
16.00
 3.11
 3.31
 3.53
                                                             18.00
                               20.00
99
19
.87
,06
                                                              3.41
        3.26
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     133

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                                                            CASE NUMBER:   5D

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively  by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:   Grand Rapids,  Michigan

1.2   Emission Standards                New:
                                        Existing:   1.6 Ib  of S02 Per MM Btu

1.3   Coal District of Origin:   No.  3   Coalbed:   Upper  Freeport
      State:  West Virginia             County: Preston

1.4   Raw Coal                                            Ash:   18.5%
      Lb S02/106 Btu:  3.66         Sulfur:   2.24%        MM Btu/Ton:  24.5*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler:  15  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   5,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,020,409 Tons

2.4   Minimum Scrubber Requirements      Scrubber Rating:  313 Mw
                                        % of Flue  Gas Cleaned:   62.5%

2.5   Design Scrubber Requirements      Scrubber Rating:  360 Mw
                                        % of Flue  Gas Cleaned:   72.0%

2.6   Scrubber Capital Cost:  $24,900,206

2.7   Scrubber Capital Charges/Yr:  $4,437,217

2.8   Capital Contribution Per  Ton of Coal:   $4.35/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.51/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.30/Ton
        Maintenance Labor  & Materials:  $0.98/Ton
        Fixation Chemical  Cost:  $0.24/Ton
        Supplies Cost:  $0.15/Ton
        Operating Labor Cost:  $0.16/Ton
        Overhead Cost:  $0.68/Ton
                                      134

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                                                 CASE NUMBER:   5D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $7.37/Ton
*  This value has been adjusted for raw coal moisture content.
                                     135

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                                                            CASE NUMBER:   6A

1.0   CASE CONDITIONS                   Combined  Use  of  Physical Cleaning
                                        Followed  by Stack Gas  Scrubbing

1.1   Coal Use Area:  Springfield,  Massachusetts

1.2   Emission Standards                New:   0.55  Lb of Sulfur  Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No. 2    Coalbed:  Upper  Freeport
      State:  Pennsylvania              County:   Armstrong

1.4   Raw Coal*                                             Ash:  13.0%
      Lb S02/MM Btu:  3.86          Sulfur:   2.53%           MM Btu/Ton:  26.21

1.5   Clean Coal                                            Ash:  7.2%
      Cleaning Plant Yield:   90.0%   Sulfur:   1.09%           MM Btu/Ton:  27.82
      Lb S02/MM Btu:  1.57          Btu Recovery:  95.5%    Btu  Increase:   6.14%

1.6   Transportation                Mileage:   659           Cost Per  Ton:   $9.01

1.7   Assumed Plant Size                Megawatts:   500

1.8   Remaining Life of Boiler:   25 Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:  $18,000  Per  Ton-Hour Input  Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber  Charges as  Percent of  Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton    0 & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton  of Clean Coal,
        When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production Cost to Mine  Operator to Provide
        a Ton of Cleaned Coal,  When Mine Operator's Cost is

           $ 7.00/Ton, Differential Cost is  $2.33/Ton****
           $ 9.00/Ton, Differential Cost is  $2.55/Ton
           $11.00/Ton, Differential Cost is  $2.77/Ton


                                      136

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                                                CASE NUMBER:   6A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $14.00/Ton, Benefit is $0.81/Ton
           $16.00/Ton, Benefit is $0.93/Ton
           $18.00/Ton, Benefit is $1.04/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.52/Ton

3.3   Saving in Ash Disposal Cost:  $0.26/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.24/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $14.00/Ton, Benefit is $1.90/Ton
           $16.00/Ton, Benefit is $2.02/Ton
           $18.00/Ton, Benefit is $2.13/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   14.00     16.00     18.00
           Mine Operator's Cost          7.00       0.43      0.31      0.20
           of Raw Coal (Per Ton)         9.00        .65       .53       .42
                                        11.00        .87       .75       .64

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,258,088 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:  166 Mw
                                        % of Flue Gas Cleaned:  33.2%

5.5   Design Scrubber Requirements      Scrubber Rating:  191 Mw
                                        % of Flue Gas Cleaned:  38.2%

5.6   Scrubber Capital Cost:  $11,932,637


                                     137

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                                                CASE NUMBER:  6A (Continued)

5.7   Scrubber Capital Charges/Yr:  $1,855,525

5.8   Capital Contribution Per Ton of Coal:  $1.48/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.31/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.09/Ton
        Maintenance Labor & Material:  $0.38/Ton
        Fixation Chemical Cost:  $0.07/Ton
        Supplies Cost:  $0.06/Ton
        Operating Labor Cost:  $0.13/Ton
        Overhead Cost:  $0.31/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $2.83/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    14.00     16.00     18.00
           Mine Operator's Cost           7.00       3.26      3.14      3.03
           of Raw Coal (Per Ton)          9.00       3.48     .3.36      3.25
                                         11.00       3.70      3.58      3.47

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    14.00     16.00     18.00
           Mine Operator's Cost           7.00       0.117     0.113     0.109
           of Raw Coal (Per Ton)          9.00        .125      .121      .117
                                         11.00        .133      .129      .125

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    14.00     16.00     18.00
           Mine Operator's Cost           7.00       3.07      2.96      2.86
           of Raw Coal (Per Ton)          9.00       3.28      3.17      3.07
                                         11.00       3.49      3.38      3.28
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                      138

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                                                            CASE  NUMBER:   6B

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:

1.2   Emission Standards                New:   0.55 Lb  of Sulfur Per MM  Btu
                                        Existing:

1.3   Coal District of Origin:   No.  2   Coalbed:   Upper  Freeport
      State:  Pennsylvania              County: Armstrong

1.4   Raw Coal                                              Ash:   13.0%
      Lb S02/106 Btu:  3.86         Sulfur:   2.53%          MM Btu/Ton:   26.21*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life  of Boiler:  25  Yr

1.7   Assumed Annual  Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   STACK GAS COST  FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   7,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,335,369 Tons

2.4   Minimum Scrubber Requirements     Scrubber Rating:   397 Mw
                                       % of Flue Gas Cleaned: 79.4%

2.5   Design Scrubber Requirements     Scrubber Rating:   457 Mw
                                       % of Flue Gas Cleaned: 91.4%

2.6   Scrubber Capital Cost:  $25,907,734

2.7   Scrubber Capital Charges/Yr:  $4,028,653

2.8   Capital Contribution Per  Ton of Coal:   $3.02/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.69  Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.46/Ton
        Maintenance Labor  & Material:  $0.78/Ton
        Fixation Chemical  Cost:  $0.37/Ton
        Supplies Cost:  $0.12/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.53/Ton
                                     139

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                                               CASE NUMBER:   6B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $6.09/Ton
*  This value has been adjusted for raw coal moisture  content.
                                      140

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                                                            CASE  NUMBER:   6C

1.0   CASE CONDITIONS                   Combined  Use  of  Physical  Cleaning
                                        Followed  by Stack  Gas  Scrubbing

1.1   Coal Use Area:   Springfield,  Massachusetts

1.2   Emission Standards                New:
                                        Existing:  0.55  Lb of  Sulfur  Per MM Btu

1.3   Coal District of Origin:   No. 2    Coalbed:   Upper  Freeport
      State:  Pennsylvania              County:   Armstrong

1.4   Raw Coal*                                             Ash:   13.OX
      Lb S02/MM Btu:   1.57          Sulfur:   2.53%          MM Btu/Ton:  26.21

1.5   Clean Coal                                            Ash:   7.2%
      Cleaning Plant  Yield:   90.0%   Sulfur:   1.09%          MM Btu/Ton:  27.82
      Lb S02/MM Btu:   1.57          Btu Recovery:  95.5%    Btu Increase:  6.14%

1.6   Transportation                 Mileage:   659           Cost  Per  Ton:  $9.01

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life  of Boiler:   15 Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant           Cost:  $18,000  Per  Ton-Hour  Input Capacity**
                              Utilization:  38.58%***

1.11  Assumed Annual  Capital Scrubber Charges as  Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Costs    Amortization:   $0.68/Ton       0  & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator  to Provide for One  Ton  of  Clean Coal,
        When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost  is $0.78/Ton
           $ 9.00/Ton, Additional Cost  is $1.00/Ton
           $11.00/Ton, Additional Cost  is $1.22/Ton

2.3   Cleaning Plant  Tax and Insurance  Burden:  $0.12/Ton
                                    141

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                                               CASE NUMBER:  6C (Continued)

2.4   Total Differential Production Cost to Mine Operator to Provide a
        Ton of Cleaned Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Differential Cost is $2,33/Ton****
           $ 9.00/Ton, Differential Cost is $2.55/Ton
           $11.00/Ton, Differential Cost is $2.77/Ton

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B. Mine
        Raw Coal Price is

           $14.00/Ton, Benefit is $0.81/Ton
           $16.00/Ton, Benefit is $0.93/Ton
           $18.00/Ton, Benefit is $1.04/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.52/Ton

3.3   Saving in Ash Disposal Cost:  $0.26/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.24/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $14.00/Ton, Benefit is $1.90/Ton
           $16.00/Ton, Benefit is $2.02/Ton
           $18.00/Ton, Benefit is $2.13/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                      F.O.B. Mine Raw Coal Price (Per Ton)

                                                 14.00     16.00     18.00
           Mine Operator's Cost        7.00       0.43      0.31      0.20
           of Raw Coal (Per Ton)       9.00        .65       .53       .42
                                      11.00        .87       .75       .64

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   898,635 Tons
                                     142

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                                                CASE NUMBER:   6C (Continued)

5.4   Minimum Scrubber Requirements     Scrubber Rating:   166 Mw
                                        % of Flue Gas Cleaned:  33.2%

5.5   Design Scrubber Requirements      Scrubber Rating:   191 Mw
                                        % of Flue Gas Cleaned:  38.2%

5.6   Scrubber Capital Cost:  $14,996,442

5.7   Scrubber Capital Charges/Yr:  $2,672,363

5.8   Capital Contribution Per Ton of Coal:  $2.97/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.31/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.09/Ton
        Maintenance Labor & Materials:  $0.67/Ton
        Fixation Chemical Cost:  $0.07/Ton
        Supplies Cost:  $0.10/Ton
        Operating Labor Cost:  $0.18/Ton
        Overhead Cost:  $0.51/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $4.90/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal  Price (Per Ton)

                                                   14.00      16.00     18.00
           Mine Operator's Cost          7.00       5.33       5.21      5.10
           of Raw Coal (Per Ton)         9.00       5.55       5.43      5.32
                                        11.00       5.77       5.65      5.54

7.0   COST.PER MILLION BTU TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal  Price (Per Ton)

                                                   14.00      16.00     18.00
           Mine Operator's Cost          7.00       0.192     0.187     0.183
           of Raw Coal (Per Ton)         9.00        .200      .195      .191
                                        11.00        .207      .203      .199
                                     143

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                                                CASE NUMBER:   6C (Continued)
8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS
                                        F.O.B.  Mine Raw Coal Price (Per Ton)
                                                   14.00
                                                       16.00
           Mine Operator's Cost
           of Raw Coal (Per Ton)
                                   7.00
                                   9.00
                                  11.00
03
24
90
11
                                                    5.43
        5.32
18.00
 4.80
 5.01
 5.22
*
A*
***
****
As received values.
Amortized over 15 years, 8% interest on unpaid balance.
Based Upon 260 days/yr at 13 hr/day - 3,380 hrs/yr
This represents the total of all coal cleaning cost factors at the
respective operator cost levels as covered in Section 2.0 above.
                                     144

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                                                            CASE  NUMBER:   6D

1.0   CASE CONDITIONS                   Sulfur  Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:  Springfield,  Massachusetts

1.2   Emission Standards                New:
                                        Existing:   0.55  Lb of  Sulfur  Per MM Btu

1.3.  Coal District of Origin:   No. 2   Coalbed:   Upper  Freeport
      State:  Pennsylvania              County: Armstrong

1.4   Raw Coal                                              Ash:   13.0%
      Lb S02/106 Btu:  3.86         Sulfur:   2.53%          MM Btu/Ton:  26.21*

1.5   Assumed Plant Size:  500  Mw

1.6   Remaining Life of Boiler:  15 Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  5,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:  953,835  Tons

2.4   Minimum Scrubber Requirements     Scrubber Rating:  397  Mw
                                        % of  Flue  Gas Cleaned:  79.4%

2.5   Design Scrubber Requirements       Scrubber Rating:  457  Mw
                                        % of  Flue  Gas Cleaned:  91.4%

2.6   Scrubber Capital Cost:  $31,724,417

2.7   Scrubber Capital Charges/Yr:   $5,653,292

2.8   Capital Contribution Per  Ton  of Coal:   $5.93/Ton

2.9   Fuel and Electricity Cost Per Ton of Coal:   $0.69/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.46/Ton
        Maintenance Labor & Materials:  $1.33/Ton
        Fixation Chemical Cost:  $0.37/Ton
        Supplies Cost:  $0.20/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.88/Ton
                                    145

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                                               CASE NUMBER:   6D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:   $10.03/Ton
* This value has been adjusted for raw coal moisture content.
                                     146

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                                                           CASE NUMBER:   7A

1.0   CASE CONDITIONS                   Combined Use of Physical Cleaning
                                        Followed by Stack Gas  Scrubbing

1.1   Coal Use Area:  Lansing, Michigan

1.2   Emission Standards                New:   1.6 Lb S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:  No.  4   Coalbed:  Pittsburgh
      State:  Ohio                      County:   Jefferson

1.4   Raw Coal*                                            Ash:  9.8%
      Lb S02/MM Btu:  4.29          Sulfur:   2.82%         MM  Btu/Ton:   26.32

1.5   Clean Coal                                           Ash:  6.0%
      Cleaning Plant Yield:  90.0%  Sulfur:   2.03%         MM  Btu/Ton:   27.36
      Lb S02/MM Btu:  2.97          Btu Recovery:  93.56%  Btu Increase:   3.95%

1.6   Transportation                Mileage:   323          Cost Per Ton:   $3.87

1.7   Assumed Plant Size                Megawatts:  500

1.8   Remaining Life of Boiler:  25  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000  Per Ton-Hour Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton      0 & M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton  of Cleaned
        Coal, When Mine Operator's Cost is

           $ 6.00/Ton, Additional Cost is $0.67/Ton
           $ 8.00/Ton, Additional Cost is $0.89/Ton
           $10.00/Ton, Additional Cost is $l.ll/Ton

2.3   Cleaning Plant Tax and Insurance Burden:   $0.12/Ton

2.4   Total Differential Production  Cost to Mine Operator to Provide
        a Ton of Cleaned Coal, When  Mine Operator's Cost is

           $ 6.00/Ton, Differential  Cost is  $2,22/Ton****
           $ 8.00/Ton, Differential  Cost is  $2.44/Ton
           $10.00/Ton, Differential  Cost is  $2.66/Ton
                                     147

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                                               CASE NUMBER:  7A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B.  Mine
        Raw Coal Price is

           $12.00/Ton, Benefit is $0.46/Ton
           $14.00/Ton, Benefit is $0.53/Ton
           $16.00/Ton, Benefit is $0.61/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.15/Ton

3.3   Saving in Ash Disposal Cost:  $0.16/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.03/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $12.00/Ton, Benefit is $0.99/Ton
           $14.00/Ton, Benefit is $1.06/Ton
           $16.00/Ton, Benefit is $1.14/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          6.00       1.23      1.16      1.08
           of Raw Coal (Per Ton)         8.00       1.45      1.38      1.30
                                        10.00       1.67      1.60      1.52

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,279,240 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:  266 Mw
                                        % of Flue Gas Cleaned:  51.3%

5.5   Design Scrubber Requirements      Scrubber Rating:  295 Mw
                                        % of Flue Gas Cleaned:  59.0%

5.6   Scrubber Capital Cost:  $17,614,550
                                    148

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                                                CASE NUMBER:  7A (Continued)

5.7   Scrubber Capital Charges/Yr:  $2,739,063

5.8   Capital Contribution Per Ton of Coal:  $2.14/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.47/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.25/Ton
        Maintenance Labor & Material:  $0.55/Ton
        Fixation Chemical Cost:  $0.20/Ton
        Supplies Cost:  $0.08/Ton
        Operating Labor Cost:  $0.13/Ton
        Overhead Cost:  $0.41/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $4.23/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           6.00       5.46      5.39      5.31
           of Raw Coal (Per Ton)          8.00       5.68      5.61      5.53
                                         10.00       5.90      5.83      5.75

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           6.00       0.200     0.197     0.194
           of Raw Coal (Per Ton)          8.00        .208      .205      .202
                                         10.00        .216      .213      .210

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
            Mine Operator's Cost          6.00       5.26      5.19      5.11
            of Raw Coal (Per Ton)         8.00       5.47      5.40      5.32
                                         10.00       5.69      5.61      5.53
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr
****  This represents the  total of all coal cleaning cost factors at the
      respective operator  cost levels as covered in Section 2.0 above.
                                      149

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                                                             CASE NUMBER:   7B

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Lansing, Michigan

1.2   Emission Standards                New:  1.6 Ib S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:  No. 4   Coalbed:   Pittsburgh
      State:  Ohio                      County:  Jefferson

1.4   Raw Coal                                               Ash:  9.8%
      Lb S02/106 Btu:  4.29         Sulfur:   2.82%           MM Btu/Ton:   26.32*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  25 Yr

1.7   Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  7,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:  1,329,788 Tons

2.4   Minimum Scrubber Requirements     Scrubber  Rating:  349 Mw
                                        % of Flue Gas Cleaned:   69.7%

2.5   Design Scrubber Requirements      Scrubber  Rating:  401 Mw
                                        % of Flue Gas Cleaned:   80.2%

2.6   Scrubber Capital Cost:  $23,846,001

2.7   Scrubber Capital Charges/Yr:  $3,708,054

2.8   Capital Contribution Per Ton of Coal:   $2.79/Ton

2.9   Fuel and Electricity Cost Per Ton of Coal:   $0.61/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.45/Ton
        Maintenance Labor & Material:  $0.72/Ton
        Fixation Chemical Cost:  $0.37/Ton
        Supplies Cost:  $0.11/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.50/Ton
                                     150

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                                                CASE  NUMBER:   7B  (Continued)
2.11  Total Cost Per Ton of Coal Burned to  Meet  Emission
        Standards:   $5.67/Ton
*  This value has been adjusted for raw coal  moisture  content.
                                     151

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                                                            CASE NUMBER:   7C

1.0   CASE CONDITIONS                   Combined  Use  of  Physical Cleaning
                                        Followed  by Stack  Gas  Scrubbing

1.1   Coal Use Area:   Lansing,  Michigan

1.2   Emission Standards                New:
                                        Existing:  1.6 Lb  S02  Per MM  Btu

1.3   Coal District of Origin:   No.  4   Coalbed:   Pittsburgh
      State:  Ohio                      County:   Jefferson

1.4   Raw Coal*                                             Ash: 9.8%
      Lb S02/MM Btu:   4.29          Sulfur:   2.82%          MM Btu/Ton:  26.32

1.5   Clean Coal                                            Ash: 6.0%
      Cleaning Plant  Yield:   90.0%  Sulfur:   2.03%          MM Btu/Ton:  27.36
      Lb S02/MM Btu:   2.97          Btu Recovery:  93.56%    Btu Increase:   3.95%

1.6   Transportation                 Mileage:   323           Cost Per  Ton:   $3.87

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life  of Boiler:  15  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant           Cost:   $18,000  Per  Ton-Hour  Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual  Capital Scrubber Charges as  Percent of  Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Costs    Amortization:   $0.68/Ton   0 & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One  Ton  of Cleaned
        Coal When Mine Operator's Cost is

             $ 6.00/Ton, Additional  Cost is  $0.67/Ton
             $ 8.00/Ton, Additional  Cost is  $0.89/Ton
             $10.00/Ton, Additional  Cost is  $l.ll/Ton

2.3   Cleaning Plant  Tax and Insurance Burden: $0.12/Ton
                                     152

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                                                CASE NUMBER:   7C (Continued)

2.4   Total Differential Production Cost to Mine Operator to  Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 6.00/Ton, Differential Cost is $2.22/Ton****
           $ 8.00/Ton, Differential Cost is $2.44/Ton
           $10.00/Ton, Differential Cost is $2.66/Ton

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B.
        Mine Raw Coal Price is

           $12.00/Ton, Benefit is $0.46/Ton
           $14.00/Ton, Benefit is $0.53/Ton
           $16.00/Ton, Benefit is $0.61/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.15/Ton

3.3   Saving in Ash Disposal Cost:  $0.16/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.03/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $12.00/Ton, Benefit is $0.99/Ton
           $14.00/Ton, Benefit is $1.06/Ton
           $16.00/Ton, Benefit is $1.14/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          6.00       1.23      1.16      1.08
           of Raw Coal  (Per Ton)         8.00       1.45      1.38      1.30
                                        10.00       1.67      1.60      1.52

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  913,743 Tons
                                      153

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                                                CASE NUMBER:   7C (Continued)

5.4   Minimum Scrubber Requirements     Scrubber Rating:   266 Mw
                                        % of Flue Gas Cleaned:  51.3%

5.5   Design Scrubber Requirements      Scrubber Rating:   295 Mw
                                        % of Flue Gas Cleaned:  59.0%

5.6   Scrubber Capital Cost:  $21,564,410

5.7   Scrubber Capital Charges/Yr:  $3,842,778

5.8   Capital Contribution Per Ton of Coal:   $4.21/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.47/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.25/Ton
        Maintenance Labor and Materials:  $0.94/Ton
        Fixation Chemical Cost:  $0.20/Ton
        Supplies Cost:  $0.14/Ton
        Operating Labor Cost:  $0.18/Ton
        Overhead Cost:  $0.67/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $7.06/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F .0 .B . Mine Raw Coal  Price  (Per Ton)

                                                   12.00      14.00      16.00
           Mine Operator's Cost          6.00       8.29       8.22       8.14
           of Raw Coal (Per Ton)         8.00       8.51       8.44       8.36
                                        10.00       8.73       8.66       8.58

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal  Price  (Per Ton)

                                                   12.00      14.00      16.00
           Mine Operator's Cost          6.00       0.303     0.300     0.298
           of Raw Coal (Per Ton)         8.00        .311      .308      .306
                                        10.00        .319      .317      .314
                                     154

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                                                 CASE NUMBER:   7C (Continued)

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)
           Mine Operator's Cost
           of Raw Coal (Per Ton)
 6.00
 8.00
10.00
12.00
 7.97
 8.19
 8.40
14.00
 7.90
 8.11
 8.34
16.00
 7.84
 8.05
 8.26
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost factors at the
      respective operator  cost levels as covered in Section 2.0 above.
                                     155

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                                                           CASE NUMBER:   7D

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Lansing, Michigan

1.2   Emission Standards                New:
                                        Existing:  1.6 Lb S02  Per  MM Btu

1.3   Coal District of Origin:  No. 4   Coalbed:  Pittsburgh
      State:  Ohio                      County:  Jefferson

1.4   Raw Coal                      Moisture:  1.4%        Ash:  9.8%
      Lb S02/106 Btu:  4.29         Sulfur:   2.82%         MM  Btu/Ton:   26.32*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  15 Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  5,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:  949,849  Tons

2.4   Minimum Scrubber Requirements       Scrubber Rating:  349  Mw
                                          % of Flue Gas Cleaned:   69.7%

2.5   Design Scrubber Requirements        Scrubber Rating:  401  Mw
                                          % of Flue Gas Cleaned:   80.2%

2.6   Scrubber Capital Cost:  $29,198,946

2.7   Scrubber Capital Charges/Yr:  $5,203,253

2.8   Capital Contribution Per Ton of Coal:   $5.48/Ton

2.9   Fuel and Electricity Cost Per Ton of Coal:  $0.61/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.45/Ton
        Maintenance Labor & Material:  $1.23/Ton
        Fixation Chemical Cost:  $0.37/Ton
        Supplies Cost:  $0.18/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.82/Ton
                                     156

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                                                CASE NUMBER:   7D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $9.31/Ton
*  This value has been adjusted for raw coal moisture  content.
                                     157

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                                                           CASE NUMBER:   8A

1.0   CASE CONDITIONS                   Combined  Use  of  Physical Cleaning
                                        Followed  by Stack  Gas  Scrubbing

1.1   Coal Use Area:   Nashville (Gallatin),  Tennessee

1.2   Emission Standards                New:   1.2 Ib  S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  11  Coalbed:   Number VII
      State:  Indiana                   County:   Vigo

1.4   Raw Coal*                                            Ash:   12.0%
      Lb S02/MM Btu:   2.57          Sulfur:   0.90%         MM  Btu/Ton:   23.99

1.5   Clean Coal                                           Ash:   7.7%
      Cleaning Plant  Yield:   90.0%  Sulfur:   0.90%         MM  Btu/Ton:   25.07
      Lb S02/MM Btu:   1.44          Btu Recovery: 94.04%   Btu Increase:   4.5%

1.6   Transportation                Mileage:   288          Cost Per  Ton:   $4.03

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life  of Boiler:  25  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant           Cost:   $18,000 Per  Ton-Hour  Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Costs    Amortization:   $0.68/Ton     0  & M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One  Ton  of Cleaned
        Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant Tax and Insurance Burden: $0.12/Ton

2.4   Total Differential Production  Cost to  Mine  Operator  to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Differential  Cost is  $2.33/Ton****
           $ 9.00/Ton, Differential  Cost is  $2.55/Ton
           $11.00/Ton, Differential  Cost is  $2.77/Ton
                                     158

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                                                CASE NUMBER:   8A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $12.00/Ton, Benefit is $0.52/Ton
           $14.00/Ton, Benefit is $0.60/Ton
           $16.00/Ton, Benefit is $0.69/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.17/Ton

3.3   Saving in Ash Disposal Cost:  $0.19/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.03/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B.  Mine Raw Coal Selling
        Price is

           $12.00/Ton, Benefit is $1.10/Ton
           $14.00/Ton, Benefit is $1.18/Ton
           $16.00/Ton, Benefit is $1.27/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          7.00       1.23      1.15      1.06
           of Raw Coal (Per Ton)         9.00       1.45      1.37      1.28
                                        11.00       1.67      1.59      1.50

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,396,091 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:  93 Mw
                                        % of Flue Gas Cleaned:  18.5%

5.5   Design Scrubber Requirements      Scrubber Rating:  107 Mw
                                        % of Flue Gas Cleaned:  21.4%

5.6   Scrubber Capital Cost:  $7,506,142
                                     159

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                                                CASE NUMBER:  8A (Continued)

5.7   Scrubber Capital Charges/Yr:  $1,167,205

5.8   Capital Contribution Per Ton of Coal:  $0.84/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.16/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor & Material:  $0.22/Ton
        Fixation Chemical Cost:  $0.03/Ton
        Supplies Cost:  $0.03/Ton
        Operating labor Cost:  $0.12/Ton
        Overhead Cost:  $0.21/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $1.65/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F .0 .B .  Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           7.00       2.88      2.80      2.71
           of Raw Coal (Per Ton           9.00       3.10      3.02      2.93
                                         11.00       3.32      3.24      3.15

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           7.00       0.115     0.112     0.108
           of Raw Coal (Per Ton)          9.00        .124      .120      .117
                                         11.00        .132      .129      .126

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    12.00     14.00     16.00
           Mine Operator's Cost           7.00       2.76      2.69      2.59
           of Raw Coal (Per Ton)          9.00       2.97      2.88      2.81
                                         11.00       3.17      3.09      3.02
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     160

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                                                            CASE NUMBER:   8B

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively  by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:  Nashville (Gallatin),  Tennessee

1.2   Emission Standards                New:   1.2  Lb S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  11  Coalbed:   Number VII
      State:  Indiana                   County:  Vigo

1.4   Raw Coal                                              Ash:   12.0%
      Lb S02/106 Btu:  2.57         Sulfur:   1.54%          MM Btu/Ton:   23.99*

1.5   Assumed Plant Size:   500  Mw
                                      •

1.6   Remaining Life of Boiler:  25  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   7,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,458,942 Tons

2.4   Minimum Scrubber Requirements      Scrubber Rating:  2.96 Mw
                                        % of  Flue  Gas  Cleaned:  59.2%

2.5   Design Scrubber Requirements       Scrubber Rating:  341  Mw
                                        % of  Flue  Gas  Cleaned:  68.2%

2.6   Scrubber Capital Cost: $19,010,461

2.7   Scrubber Capital Charges/Yr:   $2,956,127

2.8   Capital Contribution Per  Ton of Coal:   $2.03/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.47/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.19/Ton
        Maintenance Labor  & Material:  $0.52/Ton
        Fixation Chemical  Cost:  $0.16/Ton
        Supplies Cost:  $0.08/Ton
        Operating Labor Cost:  $0.11/Ton
        Overhead Cost:  $0.38/Ton
                                     161

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                                                 CASE NUMBER:   8B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:   $3.94/Ton
*  This value has been adjusted for raw coal moisture content.
                                      162

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                                                            CASE  NUMBER:   8C

1.0   CASE CONDITIONS                   Combined  Use  of  Physical  Cleaning
                                        Followed  by Stack  Gas  Scrubbing

1.1   Coal Use Area:  Nashville (Gallatin),  Tennessee

1.2   Emission Standards                New:
                                        Existing: 1.2 Lb  S02  Per MM  Btu

1.3   Coal District of Origin:   No.  11  Coalbed:   Number VII
      State:  Indiana                   County:   Vigo

1.4   Raw Coal*                                             Ash:  12.0%
      Lb S02/MM Btu:  2.57          Sulfur:   1.54%          MM Btu/Ton:  23.99

1.5   Clean Coal                                            Ash:  7.7%
      Cleaning Plant Yield:   90.0%  Sulfur:   0.90%          MM Btu/Ton:  25.07
      Lb S02/MM Btu:  1.44          Btu Recovery: 94.04%    Btu Increase:   4.5%

1.6   Transportation                Mileage:  288           Cost  Per  Ton:   $4.03

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life of Boiler:  15  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000 Per  Ton-Hour  Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as  Percent of  Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton       0  & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One  Ton  of  Cleaned
        Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton
                                     163

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                                               CASE NUMBER:  8C (Continued)

2.4   Total Differential Production Cost to Mine Operator to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Differential Cost is $2.33/Ton****
           $ 9.00/Ton, Differential Cost is $2.55/Ton
           $11.00/Ton, Differential Cost is $2.77/Ton

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B. Mine
        Raw Coal Price is

           $12.00/Ton, Benefit is $0.52/Ton
           $14.00/Ton, Benefit is $0.60/Ton
           $16.00/Ton, Benefit is $0.69/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.17/Ton

3.3   Saving in Ash Disposal Cost:  $0.19/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.03/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $12.00/Ton, Benefit is $1.10/Ton
           $!4.00/Ton, Benefit is $1.18/Ton
           $16.00/Ton, Benefit is $1.27/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          7.00       1.23      1.15      1.06
           of Raw Coal (Per Ton)         9.00       1.45      1.37      1.28
                                        11.00       1.67      1.59      1.50

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   997,208 Tons
                                     164

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                                                CASE NUMBER:  8C (Continued)

5.4   Minimum Scrubber Requirements     Scrubber Rating:   93 Mw
                                        % of Flue Gas Cleaned:  18.5%

5.5   Design Scrubber Requirements      Scrubber Rating:   107 Mw
                                        % of Flue Gas Cleaned:  21.4%

5.6   Scrubber Capital Cost:  $9,433,394

5.7   Scrubber Capital Charges/Yr:  $1,681,031

5.8   Capital Contribution Per Ton of Coal:   $1.69/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.16/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor & Material:  $0.38/Ton
        Fixation Chemical Cost:  $0.03/Ton
        Supplies Cost:  $0.06/Ton
        Operating Labor Cost:  $0.16/Ton
        Overhead Cost:  $0.33/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $2.85/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F.O.B.  Mine Raw Coal Price  (Per  Ton)

                                                   12.00      14.00     16.00
           Mine Operator's Cost          7.00       4.08       4.00       3.91
           of Raw Coal (Per Ton)          9.00       4.30       4.22       4.13
                                        11.00       4.52       4.44       4.35

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                        F.O.B.  Mine Raw Coal Price  (Per  Ton)

                                                   12.00      14.00     16.00
           Mine Operator's Cost          7.00       0.163      0.160      0.156
           of Raw Coal (Per Ton)          9.00        .172       .168       .165
                                        11.00        .180       .177       .174
                                    165

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                                                CASE NUMBER:  8C (Continued)

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                        F.O.B.  Mine Raw Coal Price (Per Ton)

                                                   12.00     14.00     16.00
           Mine Operator's Cost          7.00       3.91      3.84      3.74
           of Raw Coal (Per Ton)         9.00       4.13      4.03      3.96
                                        11.00       4.32      4.25      4.17
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     166

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                                                           CASE  NUMBER:   8D

1.0   CASE CONDITIONS                   Sulfur  Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:   Nashville (Gallatin),  Tennessee

1.2   Emission Standards                New:
                                        Existing:   1.2 Lb  S02  Per MM  Btu

1.3   Coal District of Origin:   No.  11  Coalbed:   Number VII
      State:  Indiana                   County:  Vigo

1.4   Raw Coal                                             Ash:  12.0%
      Lb S02/106 Btu:  2.57         Sulfur:   1.54%         MM  Btu/Ton:  23.99*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler:  15  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   5,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,042,101  Tons

2.4   Minimum Scrubber Requirements     Scrubber Rating:  296 Mw
                                       % of  Flue Gas Cleaned:  59.2%

2.5   Design Scrubber Requirements     Scrubber Rating:  341 Mw
                                       % of  Flue Gas Cleaned:  68.2%

2.6   Scrubber Capital Cost:  $23,843,195

2.7   Scrubber Capital Charges/Yr:  $4,248,858

2.8   Capital Contribution Per  Ton of Coal:   $4.08/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.47/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.19/Ton
        Maintenance Labor  & Material:  $0.92/Ton
        Fixation Chemical  Cost:  $0.16/Ton
        Supplies Cost:  $0.14/Ton
        Operating Labor Cost:  $0.15/Ton
        Overhead Cost:  $0.64/Ton
                                     167

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                                               CASE NUMBER:   8D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:   $6.75/Ton
*  This value has been adjusted for raw coal moisture content.
                                      168

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                                                           CASE NUMBER:   9A

1.0   CASE CONDITIONS                   Combined  Use  of  Physical Cleaning
                                        Followed  by Stack Gas  Scrubbing

1.1   Coal Use Area:   Burlington,  New Jersey

1.2   Emission Standards                New:  0.30 Lb S02 Per  MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  1   Coalbed:   Upper  Freeport
      State:  Maryland                  County:  Garrett

1.4   Raw Coal*                                            Ash:   13.8%
      Lb S02/MM Btu:   3.59          Sulfur:   2.37%         MM  Btu/Ton:   26.4

1.5   Clean Coal                                           Ash:   8.8%
      Cleaning Plant  Yield:   90.0%  Sulfur:   1.6%          MM  Btu/Ton:   27.79
      Lb S02/MM Btu:   2.30          Btu Recovery:  94.7%   Btu Increase:  5.27%

1.6   Transportation                 Mileage:  302          Cost  Per Ton:  $6.66

1.7   Assumed Plant Size                Megawatts:  500

1.8   Remaining Life  of Boiler:   25  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant           Cost:   $18,000 Per  Ton-Hour Input  Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual  Capital Scrubber Charges as  Percent of Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Costs    Amortization:   $0.68/Ton     0 & M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton  of Cleaned
        Coal, When Mine Operator's Cost is

           $ 8.00/Ton, Additional  Cost is $0.89/Ton
           $10.00/Ton, Additional  Cost is $l.ll/Ton
           $12.00/Ton, Additional  Cost is $1.33/Ton

2.3   Cleaning Plant  Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production  Cost to  Mine  Operator to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 8.00/Ton, Differential  Cost is  $2.44/Ton****
           $10.00/Ton, Differential  Cost is  $2.66/Ton
           $12.00/Ton, Differential  Cost is  $2.88/Ton


                                     169

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                                                CASE NUMBER:   9A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $19.00/Ton, Benefit is $0.95/Ton
           $21.00/Ton, Benefit is $1.05/Ton
           $23.00/Ton, Benefit is $1.15/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.33/Ton

3.3   Saving in Ash Disposal Cost:  $0.21/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B. Mine Raw Coal Selling
        Price is

           $19.00/Ton, Benefit is $1.76/Ton
           $21.00/Ton, Benefit is $1.86/Ton
           $23.00/Ton, Benefit is.$1.96/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal  Price {Per Ton)

                                                   19.00     21.00     23.00
           Mine Operator's Cost          8.00       0.68      0.58      0.48
           of Raw Coal (Per Ton)        10.00        .90       .80       .70
                                        12.00       1.12      1.02       .92

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  1,259,446 Tons

5.4   Minimum Scrubber Requirements    Scrubber Rating:
                                       % of Flue Gas Cleaned:  96.6%

      The use of this particular coal,  cleaned to 90% yield,  in the State
      of New Jersey in a facility expanded or constructed on or after
      May 6, 1968, is impractical.  This is due to the fact that the
      State Department of Environmental Protection limits sulfur emission
      from bituminous coal burning facilities to not more than 0.3 pound

                                     170

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                                             CASE NUMBER:   9A (Continued)

      of SC-2 per MM Btu gross heat input.   Since following cleaning to
      90% yield this coal would still emit 2.30 pounds of  S02 per MM Btu,
      the stack gas scrubbing installation would have to clean a  minimum
      of 96.6% of the flue gas.  This leaves only a 3.5% margin in the
      design even if 100% of the flue gas  were to be cleaned, which is
      not recommended.   Therefore, this particular coal, cleaned  to
      90% yield, only has economic utility in New Jersey facilities in
      existence prior to May 6, 1968, where 1% sulfur coal may be burned.
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost  factors  at  the
      respective operator  cost levels as covered in Section 2.0 above.
                                    171

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                                                             CASE NUMBER:  9B

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Burlington, New Jersey

1.2   Emission Standards                New:  0.30 Ib of S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:  No. 1   Coalbed:  Upper Freeport
      State:  Maryland                  County:  Garrett

1.4   Raw Coal                                               Ash:  13.8%
      Lb S02/106 Btu:  3.59         Sulfur:  2.37%           MM Btu/Ton:  26.4*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  25 Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  7,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:  1,325,758 Tons

2.4   Minimum Scrubber Requirements    Scrubber Rating:
                                       % of Flue Gas Cleaned:  101.18%

      When only stack gas scrubbing is used to reduce sulfur emission, the
      burning of this particular coal in the State of New Jersey in facili-
      ties expanded or constructed on or after May 6, 1968, is  unacceptable.
      This is due to the fact that the State Department of Environmental
      Protection limits sulfur emission from bituminous coal burning facili-
      ties to not more than 0.3 pound of S02 per MM Btu gross heat  input.
      Since the raw coal emits 3.59 pounds of S02 per MM Btu, it would be
      necessary for the scrubber to clean over 100% of the flue gas, which
      is impossible.  Therefore, this particular coal only has  economic
      utility in New Jersey facilities in existence prior to May 6,  1968,
      where 1% sulfur coal may be burned.
*  This value has been adjusted for raw coal moisture  content.
                                     172

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                                                              CASE NUMBER:   9C

1.0   CASE CONDITIONS                   Combined Use of Physical Cleaning
                                        Followed by Stack Gas Scrubbing

1.1   Coal Use Area:  Burlington, New Jersey

1.2   Emission Standards                New:
                                        Existing:  1% Sulfur by Weight

1.3   Coal District of Origin:  No. 1   Coalbed:  Upper Freeport
      State:  Maryland                  County:  Garrett

1.4   Raw Coal*                                             Ash:  13.°".
      Lb S02/MM Btu:  3.59          Sulfur:   2.37%          MM Btu/Ton:  26.4

1.5   Clean Coal                                            Ash:  8.8%      (t
      Cleaning Plant Yield:  90.0%  Sulfur:   1.6%           MM Btu/Ton:  27.79
      Lb S02/MM Btu:  2.30          Btu Recovery:  94.7%    Btu Increase:  5.27%

1.6   Transportation                Mileage:  302           Cost Per Ton:  $6.66

1.7   Assumed Plant Size                    Megawatts:   500

1.8   Remaining Plant Life of Boiler:  15 Yr

1.9   Assumed Ash Disposal Cost:   $4.00/Ton

1.10  Cleaning Plant          Cost:  $18,000 Per Ton-Hour Input Capacity**
                              Utilization:  38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs          Amortization:  $0.68/Ton 0 & M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton of Cleaned
        Coal, When Mine Operator's cost is

           $ 8.00/Ton, Additional Cost is $0.89/Ton
           $10.00/Ton, Additional Cost is $l.ll/Ton
           $12.00/Ton, Additional Cost is $1.33/Ton

2.3   Cleaning Plant Tax and Insurance Burden:   $0.12/Ton

2.4   Total Differential Production Cost to  Mine Operator to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 8.00/Ton, Differential Cost is  $2.44/Ton****
           $10.00/Ton, Differential Cost is  $2.66/Ton
           $12.00/Ton, Differential Cost is  $2.88/Ton


                                     173

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                                                CASE NUMBER:   9C (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $19.00/Ton, Benefit is $0.95/Ton
           $21.00/Ton, Benefit is $1.05/Ton
           $23.00/Ton, Benefit is $1.15/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.33/Ton

3.3   Saving in Ash Disposal Cost:  $0.21/Ton

3.4M   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $19.00/Ton, Benefit is $1.76/Ton
           $21.00/Ton, Benefit is $1.86/Ton
           $23.00/Ton, Benefit is $1.96/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B.'Mine Raw Coal  Price (Per Ton)

                                                   19.00     21.00     23.00
           Mine Operator's Cost          8.00       0.68      0.58      0.48
           of Raw Coal (Per Ton)        10.00        .90       .80       .70
                                        12.00       1.12      1.02       .92

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   899,605 Tons

5.4   Minimum Scrubber Requirements     Scrubber Rating:  209  Mw
                                       % of Flue Gas Cleaned:  41.7%

5.5   Design Scrubber Requirements     Scrubber Rating:  240  Mw
                                       % of Flue Gas Cleaned:  48%

5.6   Scrubber Capital Cost:  $18,002,381
                                     174

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                                                CASE NUMBER:   9C (Continued)

5.7   Scrubber Capital Charges/Yr:   $3,208,025

5.8   Capital Contribution Per Ton  of Coal:   $3.57/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.39/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.16/Ton
        Maintenance Labor & Material:  $0.80/Ton
        Fixation Chemical Cost:  $0.13/Ton
        Supplies Cost:  $0.12/Ton
        Operating Labor Cost:  $0.18/Ton
        Overhead Cost:  $0.59/Ton

5.11  Total Stack Gas Cost Per Ton  of Coal Burned:   $5.94/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal  Price (Per Ton)

                                                   19.00     21.00     23.00
           Mine Operator's Cost          8.00       6.62      6.52      6.42
           of Raw Coal (Per Ton)        10.00       6.84      6.74      6.64
                                        12.00       7.06      6.96      6.86

7.0   COST PER MILLION BTU TO MEET  EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal  Price (Per Ton)

                                                   19.00     21.00     23.00
           Mine Operator's Cost          8.00       0.238     0.235     0.231
           of Raw Coal (Per Ton)        10.00        .246      .243      .239
                                        12.00        .254      .250      .247

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal  Price (Per Ton)

                                                   19.00     21.00     23.00
           Mine Operator's Cost          8.00       6.28      6.20      6.10
           of Raw Coal (Per Ton)        10.00       6.49      6.42      6.31
                                        12.00       6.71      6.60      6.52
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost factors at the
      respective operator  cost levels as covered in Section 2.0 above.
                                      175

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                                                           CASE NUMBER:   9D

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively  by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:  Burlington,  New Jersey

1.2   Emission Standards                New:
                                        Existing:   1% Sulfur  by Weight

1.3   Coal District of Origin:   No.  1   Coalbed:   Upper  Freeport
      State:   Maryland                  County:  Garrett

1.4   Raw Coal                                             Ash:  13.8%
      Lb S02/106 Btu:  3.59         Sulfur:   2.37%         MM Btu/Ton:   26.4*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler: 15  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   5,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   946,970 Tons

2.4   Minimum Scrubber Requirements     Scrubber Rating:   321  Mw
                                       % of  Flue Gas  Cleaned:  64.2%

2.5   Design Scrubber Requirements     Scrubber Rating:   369  Mw
                                       % of  Flue Gas  Cleaned:  73.8%

2.6   Scrubber Capital Cost:  $2,543,938

2.7   Scrubber Capital Charges/Yr:  $4,730,130

2.8   Capital Contribution Per  Ton of Coal:   $5.00/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.57/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.35/Ton
        Maintenance Labor  & Material:  $1.12/Ton
        Fixation Chemical  Cost: $0.28/Ton
        Supplies Cost:  $0.17/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.76/Ton
                                     176

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                                                CASE NUMBER:   9D  (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet  Emission
        Standards:   $8.42/Ton
*  This value has been adjusted for raw coal moisture  content.
                                     177

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                                                          CASE NUMBER:   10A

1.0   CASE CONDITIONS                   Combined Use of Physical Cleaning
                                        Followed by Stack Gas Scrubbing

1.1   Coal Use Area:  Milwaukee, Wisconsin

1.2   Emission Standards                New:   1.2 Lb of S02  Per MM Btu
                                        Existing:

1.3   Coal District of Origin:   No.  10  Coalbed:  Number 6
      State:  Illinois                  County:   Franklin

1.4   Raw Coal*                                           Ash:   14.8%
      Lb S02/MM Btu:  1.87          Sulfur:   1.12%        MM Btu/Ton:   23.9

1.5   Clean Coal                                          Ash:   7.1%
      Cleaning Plant Yield:   90.0%  Sulfur:   0.95%        MM Btu/Ton:   25.89
      Lb S02/MM Btu:  1.47          Btu Recovery:  97.5%  Btu Increase:  8.33%

1.6   Transportation                Mileage:   375         Cost  Per Ton:  $3.43

1.7   Assumed Plant Size                Megawatts:  500

1.8   Remaining Life of Boiler:   25  Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000  Per Ton-Hour Input Capacity**
                              Utilization:  38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton     0  & M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton of  Cleaned
        Coal  When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant Tax and Insurance Burden:   $0.12/Ton

2.4   Total Differential Production  Cost to Mine Operator to Provide a  Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Differential  Cost is  $2.33/Ton****
           $ 9.00/Ton, Differential  Cost is  $2.55/Ton
           $11.00/Ton, Differential  Cost is  $2.77/Ton
                                     178

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                                               CASE NUMBER:   10A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B.
        Mine Raw Coal Price is

           $13.00/Ton, Benefit is $1.00/Ton
           $15.00/Ton, Benefit is $1.15/Ton
           $17.00/Ton, Benefit is $1.31/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content  of
        Coal:  $0.26/Ton

3.3   Saving in Ash Disposal Cost:  $0.36/Ton

3.4   Saving in Grinding Cost:  $0.04/Ton

3.5   Saving in Benefit Payment:  $0.06/Ton

3.6   Saving in Maintenance:  $0.24/Ton

3.7   Total Benefits of Coal Cleaning When F.O.B. Mine Raw Coal Selling
        Price is

           $13.00/Ton, Benefit is $1.96/Ton
           $15.00/Ton, Benefit is $2.11/Ton
           $17.00/Ton, Benefit is $2.27/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   13.00     15.00     17.00
           Mine Operator's Cost          7.00       0.37     0.22      0.06
           of Raw Coal (Per Ton)         9.00        .59       .44       .28
                                        11.00        .81       .66       .50

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,351,874 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating: 102 Mw
                                        % of Flue Gas Cleaned:   20.4%

5.5   Design Scrubber Requirements      Scrubber Rating: 118 Mw
                                        % of Flue Gas Cleaned:   23.6%

5.6   Scrubber Capital Cost:  $8,117,370


                                     179

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                                               CASE NUMBER:  10A (Continued)

5.7   Scrubber Capital Charges/Yr:  $1,262,251

5.8   Capital Contribution Per Ton of Coal:  $0.93/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.18/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor and Material:  $0.24/Ton
        Fixation Chemical Cost:  $0.04/Ton
        Supplies Cost:  $0.04/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.22/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $1.81/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       2.18      2.03      1.87
           of Raw Coal (Per Ton)          9.00       2.40      2.25      2.09
                                         11.00       2.62      2.47      2.31

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
           Mine Operator's Cost           7.00       0.084     0.078     0.072
           of Raw Coal (Per Ton)          9.00        .093      .087      .081
                                         11.00        .101      .095      .089

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    13.00     15.00     17.00
            Mine Operator's Cost          7.00       2.01      1.86      1.72
            of Raw Coal (Per Ton)         9.00       2.22      2.08      1.94
                                         11.00       2.41      2.27      2.13
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost factors at the
      respective operator  cost levels as covered in Section 2.0 above.
                                     180

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                                                           CASE NUMBER:   10B

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Milwaukee, Wisconsin

1.2   Emission Standards                New:  1.2 Lb of S02 Per MM Btu
                                        Existing:

1.3   Coal District of Origin:  No. 10  Coalbed:   Number 6
      State:  Illinois                  County:  Franklin

1.4   Raw Coal                                             Ash:  14.8%
      Lb S02/106 Btu:  1.87         Sulfur:   1.12%         MM Btu/Ton:  23.9*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  25 Yr

1.7   Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  7,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:  1,464,436 Tons

2.4   Minimum Scrubber Requirements    Scrubber Rating:  199 Mw
                                       % of  Flue  Gas Cleaned:  39.8%

2.5   Design Scrubber Requirements     Scrubber Rating:  229 Mw
                                       % of  Flue  gas Cleaned:  45.8%

2.6   Scrubber Capital Cost:  $13,796,792

2.7   Scrubber Capital Charges/Yr:  $2,145,402

2.8   Capital Contribution Per Ton of Coal:   $1.47/Ton

2.9   Fuel and Electricity Cost Per Ton of Coal:   $0.32/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.09/Ton
        Maintenance Labor & Material:   $0.38/Ton
        Fixation Chemical Cost:  $0.08/Ton
        Supplies Cost:  $0.06/Ton
        Operating Labor Cost:  $0.11/Ton
        Overhead Cost:  $0.30/Ton
                                    181

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                                              CASE NUMBER:   10B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:   $2.81/Ton
*  This value has been adjusted for raw coal moisture content.
                                     182

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                                                          CASE NUMBER:   IOC

1.0   CASE CONDITIONS                   Combined Use  of  Physical  Cleaning
                                        Followed by Stack  Gas  Scrubbing

1.1   Coal Use Area:   Milwaukee,  Wisconsin

1.2   Emission Standards                New:
                                        Existing:  1.2 Ib  of S02  Per MM  Btu

1.3   Coal District of Origin:   No.  10  Coalbed:  Number 6
      State:  Illinois                  County:   Franklin

1.4   Raw Coal*                                           Ash: 14.8%
      Lb S02/MM Btu:   1.87          Sulfur:   1.12%        MM Btu/Ton:  23.9

1.5   Clean Coal                                          Ash: 7.1%
      Cleaning Plant  Yield:   90.0%  Sulfur:   0.95%        MM Btu/Ton:  25.89
      Lb S02/MM Btu:   1.47          Btu Recovery:  97.5%  Btu  Increase:  8.33%

1.6   Transportation                 Mileage:   375         Cost Per  Ton:  $3.43

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life  of Boiler:  15  Yr

1.9   Assumed Ash Disposal Cost:   $4.00/Ton

1.10  Cleaning Plant           Cost:   $18,000  Per Ton-Hour  Input Capacity**
                              Utilization:  38.58%***

1.11  Assumed Annual  Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Cost     Amortization:   $0.68/Ton     0 &  M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One  Ton  of  Clean Coal,
        When Mine Operator's Cost is

           $ 7.00/Ton, Additional Cost is $0.78/Ton
           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton

2.3   Cleaning Plant  Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production  Cost to Mine Operator  to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 7.00/Ton, Differential  Cost is  $2.33/Ton****
           $ 9.00/Ton, Differential  Cost is  $2.55/Ton
           $11.00/Ton, Differential  Cost is  $2.77/Ton
                                      183

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                                               CASE NUMBER:   IOC (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B.  Mine
        Raw Coal Price is

           $13.00/Ton, Benefit is $1.00/Ton
           $15.00/Ton, Benefit is $1.15/Ton
           $17.00/Ton, Benefit is $1.31/Ton

3.2   Transporation Cost Saving Due to Increased Heat Content of
        Coal:  $0.26/Ton

3.3   Saving in Ash Disposal Cost:  $0.36/Ton

3.4   Saving in Grinding Cost:  $O.OA/Ton

3.5   Saving in Benefit Payment:  $0.06/Ton

3.6   Saving in Maintenance:  $0.24/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B.  Mine Raw  Coal Selling
        Price is

           $13.00/Ton, Benefit is $1.96/Ton
           $15.00/Ton, Benefit is $2.11/Ton
           $17.00/Ton, Benefit is $2.27/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price  (Per Ton)

                                                   13.00     15.00      17.00
           Mine Operator's Cost          7.00       0.37      0.22       0.06
           of Raw Coal (Per Ton)         9.00        .59       .44        .28
                                        11.00        .81       .66        .50

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  965,624 Tons

5.4   Minimum Scrubber Requirements    Scrubber Rating:  102 Mw
                                       % of Flue Gas Cleaned:  20.4%

5.5   Design Scrubber Requirements     Scrubber Rating:  118 Mw
                                       % of Flue Gas Cleaned:  23.6%

5.6   Scrubber Capital Cost:  $10,201,559
                                    184

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                                               CASE NUMBER:  IOC (Continued)

5.7   Scrubber Capital Charges/Yr:  $1,817,918

5.8   Capital Contribution Per Ton of Coal:  $1.88/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.18/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor & Material:  $0.42/Ton
        Fixation Chemical Cost:  $0.04/Ton
        Supplies Cost:  $0.06/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.36/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $3.15/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   13.00     15.00     17.00
           Mine Operator's Cost          7.00       3.52      3.37      3.21
           of Raw Coal (Per Ton)         9.00       3.74      3.59      3.43
                                        11.00       3.96      3.81      3.65

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   13.00     15.00     17.00
           Mine Operator's Cost          7.00       0.136     0.130     0.124
           of Raw Coal (Per Ton)         9.00        .144      .139      .132
                                        11.00        .153      .147      .141

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   13.00     15.00     17.00
           Mine Operator's Cost          7.00       3.25      3.11      2.96
           of Raw Coal (Per Ton)         9.00       3.44      3.32      3.15
                                        11.00       3.66      3.51      3.37
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     185

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                                                          CASE NUMBER:   10D

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively  by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:   Milwaukee,  Wisconsin

1.2   Emission Standards                New:
                                        Existing:   1.2 Ib  of  S02  Per MM  Btu

1.3   Coal District of Origin:   No.  10  Coalbed:   No. 6
      State:  Illinois                  County:  Franklin

1.4   Raw Coal                                          Ash:   14.8%
      Lb S02/106 Btu:  1.87         Sulfur:   1.12%      MM. Btu/Ton:  23.9*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler:  15  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   5,000  Hr/Yr

2.3   Tons of Coal Burned  Per Year:   1,046,026 Tons

2.4   Minimum Scrubber Requirements        Scrubber Rating:  199 Mw
                                          %  of Flue Gas  Cleaned:  39.8%

2.5   Design Scrubber Requirements        Scrubber Rating:  229 Mw
                                          %  of Flue Gas  Cleaned:  45.8%

2.6   Scrubber Capital Cost:  $17,339,211

2.7   Scrubber Capital Charges/Yr:  $3,089,848

2.8   Capital Contribution Per  Ton of Coal:   $2.95/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:   $0.32/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.09/Ton
        Maintenance Labor  and Material:  $0.66/Ton
        Fixation Chemical  Cost:  $0.08/Ton
        Supplies Cost:  $0.10/Ton
        Operating Labor Cost:  $0.15/Ton
        Overhead Cost:  $0.49/Ton
                                     186

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                                              CASE NUMBER:   10D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet  Emission
        Standards:   $4.84/Ton
*  This value has been adjusted for raw coal moisture  content.
                                    187

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                                                           CASE NUMBER:  11A

 1.0    CASE  CONDITIONS                    Combined Use of Physical Cleaning
                                         Followed by Stack Gas Scrubbing

 1.1    Coal  Use Area:  Concord, New Hampshire

 1.2    Emission Standards                 New:  1.5 lb of Sulfur Per MM Btu
                                         Existing:

 1.3    Coal  District of Origin:  No. 2    Coalbed:  Sewickley
       State:  Pennsylvania               County:  Greene

 1.4    Raw Coal*                                            Ash:  11.4%
       Lb S02/MM Btu:  5.25          Sulfur:  3.45%         MM Btu/Ton:  26.3

 1.5    Clean Coal                                           Ash:  8.1%
       Cleaning Plant Yield:  90.0%  Sulfur:  2.20%         MM Btu/Ton:  27.2
       Lb 302/MM Btu:  3.24          Btu Recovery:  93.07%  Btu Increase:  3.42%

 1.6    Transportation                Mileage:  745          Cost Per Ton:  $9.31

 1.7    Assumed Plant Size                 Megawatts:  500

 1.8    Remaining Life of Boiler:  25 Yr

 1.9    Assumed Ash Disposal Cost:  $4.00/Ton

 1.10   Cleaning Plant          Cost:  $18,000 Per Ton-Hour Input Capacity**
                              Utilization:  38.58%***

 1.11   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

 2.0    COAL  CLEANING COST FACTORS

 2.1    Cleaning Plant Costs    Amortization:  $0.68/Ton     0 & M:  $0.75/Ton

.2.2    Additional Cost to Mine Operator to Provide for One Ton of Clean Coal,
        When Mine Operator's Cost is

            $12.00/Ton, Additional Cost is $1.33/Ton
            $14.00/Ton, Additional Cost is $1.56/Ton
            $16.00/Ton, Additional Cost is $1.78/Ton

 2.3    Cleaning Plant Tax and Insurance Burden:  $0.12/Ton

 2.4    Total Differential Production Cost to Mine Operator to Provide a Ton
        of  Cleaned Coal, When Mine Operator's Cost is

            $12.00/Ton, Differential Cost is $2.88/Ton****
            $14.00/Ton, Differential Cost is $3.11/Ton
            $16.00/Ton, Differential Cost is $3.33/Ton
                                      188

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                                              CASE NUMBER:  11A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B.  Mine
        Raw Coal Price is

          $22.00/Ton, Benefit is $0.73/Ton
          $24.00/Ton, Benefit is $0.79/Ton
          $26.00/Ton, Benefit is $0.86/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.31/Ton

3.3   Saving in Ash Disposal Cost:  $0.14/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.02/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $22.00/Ton, Benefit is $1.39/Ton
           $24.00/Ton, Benefit is $1.45/Ton
           $26.00/Ton, Benefit is $1.52/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   22.00     24.00     26.00
           Mine Operator's Cost         12.00       1.49      1.43      1.36
           of Raw Coal (Per Ton)        14.00       1.72      1.66      1.59
                                        16.00       1.94      1.88      1.81

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  $7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,286,765 Tons

5.4   Minimum Scrubber Requirements     Scrubber Rating:   41 Mw
                                       % of Flue Gas Cleaned:   8.2%

5.5   Design Scrubber Requirements     Scrubber Rating:   48 Mw
                                       % of Flue Gas Cleaned:   9.6%

5.6   Scrubber Capital Cost:  $4,211,848
                                     189

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                                               CASE NUMBER:  1LA (Continued)

5.7   Scrubber Capital Charges/Yr:  $654,943

5.8   Capital Contribution Per Ton of Coal:  $0.51/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.08/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor & Material:  $0.13/Ton
        Fixation Chemical Cost:  $0.04/Ton
        Supplies Cost:  $0.02/Ton
        Operating Labor Cost:  $0.13/Ton
        Overhead Cost:  $0.17/Ton
                                            •
5.11  Total Stack Gas Cost Per Ton of Coal Burned:   $1.12/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       2.61      2.55      2.48
           of Raw Coal (Per Ton)          14.00       2.84      2.78      2.71
                                         16.00       3.06      3.00      2.93

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       0.096     0.094     0.091
           of Raw Coal (Per Ton)          14.00        .104      .102      .100
                                         16.00        .113      .110      .108

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       2.52      2.47      2.39
           of Raw Coal (Per Ton)          14.00       2.74      2.68      2.63
                                         16.00       2.97      2.89      2.84
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     190

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                                                          CASE NUMBER:   11B

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:  Concord,  New Hampshire

1.2   Emission Standards                New:  1.5  Ib  of Sulfur Per  MM Btu
                                        Existing:

1.3   Coal District of Origin:   No. 2   Coalbed:   Sewickley
      State:  Pennsylvania              County:  Greene

1.4   Raw Coal                                            Ash:  11.4%
      Lb S02/106 Btu:  5.25         Sulfur:   3.45%        MM Btu/Ton:   26.3*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler:  25 Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   7,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:  1,330,799 Tons

2.4   Minimum Scrubber Requirements     Scrubber Rating:  238 Mw
                                        % of Flue  Gas Cleaned:  47.6%

2.5   Design Scrubber Requirements      Scrubber Rating:  274 Mw
                                        % of Flue  Gas Cleaned:  54.8%

2.6   Scrubber Capital Cost:  $18,465,698

2.7   Scrubber Capital Charges/Yr:  $2,871,416

2.8   Capital Contribution Per  Ton of Coal:   $2.16/Ton

2.9   Fuel and Electricity Cost Per Ton of Coal:   $0.42/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.38/Ton
        Maintenance Labor  & Material:  $0.56/Ton
        Fixation Chemical  Cost:  $0.31/Ton
        Supplies Cost:  $0.08/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.40/Ton
                                     191

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                                                CASE NUMBER:   11B  (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet  Emission
        Standards:   $4.43/Ton
*  This value has been adjusted for raw coal moisture  content.
                                     192

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                                                          CASE NUMBER:   11C

1.0   CASE CONDITIONS                   Combined  Use  of  Physical  Cleaning
                                        Followed  by Stack  Gas  Scrubbing

1.1   Coal Use Area:   Concord,  New Hampshire

1.2   Emission Standards                New:
                                        Existing: 1.5 Ib  of Sulfur  Per  MM Btu

1.3   Coal District of Origin:   No. 2   Coalbed:   Sewickley
      State:   Pennsylvania              County:   Greene

1.4   Raw Coal*                                           Ash: 11.4%
      Lb S02/MM Btu:   5.25          Sulfur:   3.45%        MM Btu/Ton:  26.3

1.5   Clean Coal                                          Ash: 8.1%
      Cleaning Plant  Yield:   90.0%  Sulfur:   2.20%        MM. Btu/Ton:  27.2
      Lb S02/MM Btu:   3.24          Btu Recovery: 93.07%  Btu  Increase:   3.42%

1.6   Transportation                Mileage:  745         Cost Per Ton:   $9.31

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life of Boiler:  15 Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant          Cost:  $18,000 Per  Ton-Hour  Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton     0 &  M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One  Ton  of  Clean Coal,
        When Mine Operator's Cost is

           $12.00/Ton, Additional Cost is $1.33/Ton
           $14.00/Ton, Additional Cost is $1.56/Ton
           $16.00/Ton, Additional Cost is $1.78/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production Cost to  Mine  Operator  to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $12.00/Ton, Differential Cost is  $2.88/Ton****
           $14.00/Ton, Differential Cost is  $3.11/Ton
           $16.00/Ton, Differential Cost is  $3.33/Ton
                                     193

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                                              CASE NUMBER:   11C (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal,  When F.O.B.  Mine
        Raw Coal Price is

           $22.00/Ton, Benefit is $0.73/Ton
           $24.00/Ton, Benefit is $0.79/Ton
           $26.00/Ton, Benefit is $0.86/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content  of
        Coal:  $0.31/Ton

3.3   Saving in Ash Disposal Cost:   $0.14/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.02/Ton

3.6   Saving in Maintenance:  $0.17/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B.  Mine Raw Coal Selling
        Price is

           $22.00/Ton, Benefit is $1.39/Ton
           $24.00/Ton, Benefit is $1.45/Ton
           $26.00/Ton, Benefit is $1.52/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   22.00     24.00     26.00
           Mine Operator's Cost         12.00       1.49     1.43     1.36
           of Raw Coal (Per Ton)        14.00       1.72     1.66     1.59
                                        16.00       1.94     1.88     1.81

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  919,118 Tons

5.4   Minimum Scrubber Requirements     Scrubber Rating:  41 Mw
                                        % of Flue Gas Cleaned:   8.2%

5.5   Design Scrubber Requirements       Scrubber Rating:  48 Mw
                                        % of Flue Gas Cleaned:   9.6%

5.6   Scrubber Capital Cost:  $5,138,615
                                     194

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                                               CASE NUMBER:  11C (Continued)

5.7   Scrubber Capital Charges/Yr:  $915,702

5.8   Capital Contribution Per Ton of Coal:  $1.00/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.08/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.04/Ton
        Maintenance Labor & Material:  $0.22/Ton
        Fixation Chemical Cost:  $0.04/Ton
        Supplies Cost:  $0.03/Ton
        Operating Labor Cost:  $0.18/Ton
        Overhead Cost:  $0.25/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $1.84/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B. Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       3.33      3.27      3.20
           of Raw Coal (Per Ton)         14.00       3.56      3.50      3.43
                                         16.00       3.78      3.72      3.65

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F .0 .B. Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       0.122     0.120     0.118
           of Raw Coal (Per Ton)         14.00        .131      .129      .126
                                         16.00        .139      .137      .134

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F .0 .B. Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       3.21      3.16      3.10
           of Raw Coal (Per Ton)         14.00       3.45      3.39      3.31
                                         16.00       3.66      3.60      3.52
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                      195

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                                                          CASE NUMBER:   11D

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Concord, New Hampshire

1.2   Emission Standards                New:
                                        Existing:  1.5 Ib of Sulfur Per MM Btu

1.3   Coal District of Origin:  No. 2   Coalbed:   Sewickley
      State:  Pennsylvania              County:  Greene

1.4   Raw Coal                                            Ash:  11.4%
      Lb S02/106 Btu:  5.25         Sulfur:   3.45%        MM Btu/Ton:  26.3*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  15 Yr

1.7   Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  5,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:  950,571 Tons

2.4   Minimum Scrubber Requirements     Scrubber  Rating:  238 Mw
                                        % of Flue Gas  Cleaned:  47.6%

2.5   Design Scrubber Requirements      Scrubber  Rating:  274 Mw
                                        % of Flue Gas  Cleaned:  54.8%

2.6   Scrubber Capital Cost:  $22,608,643

2.7   Scrubber Capital Charges/Yr:  $4,028,861

2.8   Capital Contribution Per Ton of Coal:   $4.24/Ton

2.9   Fuel and Electricity Cost Per Ton of Coal:   $0.42/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.38/Ton
        Maintenance Labor & Materials:  $0.95/Ton
        Fixation Chemical Cost:  $0.31/Ton
        Supplies Cost:  $0.14/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.66/Ton
                                      196

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                                              CASE NUMBER:   11D  (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet  Emission
        Standards:   $7.27/Ton
*  This value has been adjusted for  raw coal moisture  content.
                                    197

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                                                          CASE NUMBER:   HE

1.0   CASE CONDITIONS                   Combined Use  of  Physical Cleaning
                                        Followed by Stack Gas  Scrubbing

1.1   Coal Use Area:   Concord, New Hampshire

1.2   Emission Standards                New:  1.2 Ib  of  S02  Per MM Btu
                                              (Projected Standard)
                                        Existing:

1.3   Coal District of Origin:  No. 2   Coalbed:  Sewickley
      State:  Pennsylvania              County:   Greene

1.4   Raw Coal*                                           Ash:  11.4%
      Lb S02/MM Btu:   5.25          Sulfur:   3.45%        MM Btu/Ton: 26.3

1.5   Clean Coal                                          Ash:  8.1%
      Cleaning Plant  Yield:  90.0%  Sulfur:   2.20%        MM Btu/Ton: 27.2
      Lb S02/MM Btu:   3.24          B.tu Recovery:  93.07% Btu  Increase:   3.42%

1.6   Transportation                 Mileage:  745         Cost Per Ton:   $9.31

1.7   Assumed Plant Size               Megawatts:  500

1.8   Remaining Life  of Boiler:  25 Yr

1.9   Assumed Ash Disposal Cost:  $4.00/Ton

1.10  Cleaning Plant           Cost:  $18,000 Per Ton-Hour Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual  Capital Scrubber Charges as Percent of  Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant  Costs    Amortization:   $0.68/Ton    0  &  M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One Ton  of Clean Coal,
        When Mine Operator's Cost is

           $12.00/Ton, Additional Cost is $1.33/Ton
           $14.00/Ton, Additional Cost is $1.56/Ton
           $16.00/Ton, Additional Cost is $1.78/Ton

2.3   Cleaning Plant  Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production Cost to  Mine Operator to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $12.00/Ton, Differential Cost is  $2.88/Ton****
           $14.00/Ton, Differential Cost is  $3.11/Ton
           $16.00/Ton, Differential Cost is  $3.33/Ton

                                      198

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                                               CASE NUMBER:   HE (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B.  Mine
        Raw Coal Price is                                                 =

           $22.00/Ton, Benefit is $0.73/Ton
           $24.00/Ton, Benefit is $0.79/Ton
           $26.00/Ton, Benefit is $0.86/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.31/Ton

3.3   Saving in Ash Disposal Cost:  $0.14/Ton

3.4   Saving in Grinding Cost:  $0.02/Ton

3.5   Saving in Benefit Payment:  $0.02/Ton

3.6   Saving in Maintenance:  $0.19/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B.  Mine Raw  Coal Selling
        Price is

           $22.00/Ton, Benefit is $1.39/Ton
           $24.00/Ton, Benefit is $1.45/Ton
           $26.00/Ton, Benefit is $1.52/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   22.00     24.00     26.00
           Mine Operator's Cost         12.00       l'.49      1.43      1.36
           of Raw Coal (Per Ton)        14.00       1.72      1.66      1.59
                                        16.00       1.94      1.88      1.81

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:  1,286,765 Tons

5.4   Minimum Scrubber Requirements    Scrubber Rating:  350 Mw
                                       % of Flue Gas Cleaned:  70.0%

5.5   Design Scrubber Requirements     Scrubber Rating:  403 Mw
                                       % of Flue Gas Cleaned:  80.6%

5.6   Scrubber Capital Cost:  $23,105,945
                                     199

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                                                CASE NUMBER:  HE (Continued)

5.7   Scrubber Capital Charges/Yr:  $3,592,975

5.8   Capital Contribution Per Ton of Coal:   $2.79/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.64/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.36/Ton
        Maintenance Labor & Material:  $0.72/Ton
        Fixation Chemical Cost:  $0.30/Ton
        Supplies Cost:  $0.11/Ton
        Operating Labor Cost:  $0.13/Ton
        Overhead Cost:  $0.51/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:   $5.56/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       7.05      6.99      6.92
           of Raw Coal (Per Ton)          14.00       7.28      7.22      7.15
                                         16.00       7.50      7.44      7.37

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price .(Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       0.259     6.257     0.254
           of Raw Coal (Per Ton)          14.00        .268      .265      .263
                                         16.00        .276      .274      .271

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    22.00     24.00     26.00
           Mine Operator's Cost          12.00       6.81      6.76      6.68
           of Raw Coal (Per Ton)          14.00       7.05      6.97      6.92
                                         16.00       7.26      7.21      7.13
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the total of all coal cleaning cost factors at the
      respective operator cost levels as covered in Section 2.0 above.
                                     200

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                                                           CASE NUMBER:   11F

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Concord, New Hampshire

1.2   Emission Standards                New:  1.2 Ib of S02 Per MM Btu
                                              (Projected Standard)
                                        Existing:

1.3   Coal District Of Origin:  No. 2   Coalbed:   Sewickley
      State:  Pennsylvania              County:   Greene

1.4   Raw Coal                                             Ash:  11.4%
      Lb S02/106 Btu:  5.25         Sulfur:   3.45%         MM Btu/Ton:   26.3*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  25 Yr

1.7   Assumed Annual Capital Scrubber Charges as  Percent of Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  7,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:  1,330,799 Tons

2.4   Minimum Scrubber Requirements     Scrubber  Rating:  429 Mw
                                        % of Flue Gas Cleaned:  85.7%

2.5   Design Scrubber Requirements      Scrubber  Rating:  493 Mw
                                        % of Flue Gas Cleaned:  98.6%

2.6   Scrubber Capital Cost:  $29,542,199

2.7   Scrubber Capital Charges/Yr:  $4,593,812

2.8   Capital Contribution Per Ton of Coal:   $3.45/Ton

2.9   Fuel and Electricity Cost Per Ton of Coal:   $0.75/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.67/Ton
        Maintenance Labor & Material:  $0.89/Ton
        Fixation Chemical Cost:  $0.55/Ton
        Supplies Cost:  $0.13/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.59/Ton

                                      201

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                                               CASE NUMBER:   11F  (Continued)
2.11  Total Cost Per Ton of Coal Burned to  Meet  Emission
        Standards:   $7.15/Ton
*  This value has been adjusted for raw coal moisture  content.
                                    202

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                                                          CASE NUMBER:   12A

1.0   CASE CONDITIONS                   Combined Use  of  Physical  Cleaning
                                        Followed by Stack  Gas  Scrubbing

1.1   Coal Use Area:  Dickerson (Montgomery County),  Maryland

1.2   Emission Standards                New:  1% Sulfur  by Weight
                                        Existing:

1.3   Coal District of Origin:   No.  3   Coalbed:  Pittsburgh
      State:  West Virginia             County:   Marion

1.4   Raw Coal*                                           Ash: 11.0%
      Lb S02/MM Btu:  5.70          Sulfur:  3.80%        MM Btu/Ton:  26.66

1.5   Clean Coal                                          Ash: 5.9%
      Cleaning Plant Yield:  90.0%  Sulfur:  2.16%        MM Btu/Ton:  28.09
      Lb S02/MM Btu:  3.08          Btu Recovery:  94.8%  Btu  Increase:  5.36%

1.6   Transportation                Mileage:  245         Cost Per  Ton:  $6.60

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life of Boiler:  25  Yr

1.9   Assumed Ash Disposal Cost:   $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000 Per Ton-Hour  Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:  $0.68/Ton    0 &  M:  $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide for One  Ton  of  Clean Coal,
        When Mine Operator's Cost is

           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton
           $13.00/Ton, Additional Cost is $1.44/Ton

2.3   Cleaning Plant Tax and Insurance Burden:   $0.12/Ton

2.4   Total Differential Production  Cost to Mine Operator  to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 9.00/Ton, Differential  Cost is $2.55/Ton****
           $11.00/Ton, Differential  Cost is $2.77/Ton
           $13.00/Ton, Differential  Cost is $2.99/Ton


                                      203

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                                              CASE NUMBER:  12A (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B. Mine
        Raw Coal Price is

           $17.00/Ton, Benefit is $0.86/Ton
           $19.00/Ton, Benefit is $0.97/Ton
           $21.00/Ton, Benefit is $1.07/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content of
        Coal:  $0.34/Ton

3.3   Saving in Ash Disposal Cost:  $0.23/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning, When F.O.B. Mine Raw Coal Selling
        Price is

           $17.00/Ton, Benefit is $1.70/Ton
           $19.00/Ton, Benefit is $1.81/Ton
           $21.00/Ton, Benefit is $1.91/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   17.00     19.00     21.00
           Mine Operator's Cost          9.00       0.85      0.74      0.64
           of Raw Coal (Per Ton         11.00       1.07       .96       .86
                                        13.00       1.29      1.18      1.08

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  7,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   1,245,995 Tons

5.4   Minimum Scrubber Requirements      Scrubber Rating:  299 Mw
                                        % of Flue Gas Cleaned:  59.7%

5.5   Design Scrubber Requirements      Scrubber Rating:  344 Mw
                                        % of Flue Gas Cleaned:  68.8%

5.6   Scrubber Capital Cost:  $20,138,140
                                    204

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                                              CASE NUMBER:   12A (Continued)

5.7   Scrubber Capital Charges/Yr:  $3,131,481

5.8   Capital Contribution Per Ton of Coal:  $2.51/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.56/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.31/Ton
        Maintenance Labor & Material:  $0.67/Ton
        Fixation Chemical Cost:  $0.26/Ton
        Supplies Cost:  $0.10/Ton
        Operating Labor Cost:  $0.13/Ton
        Overhead Cost:  $0.48/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:  $5.02/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    17.00     19.00     21.00
           Mine Operator's Cost           9.00       5.87      5.76      5.66
           of Raw Coal (Per Ton)          11.00       6.09      5.98      5.88
                                         13.00       6.31      6.20      6.10

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    17.00     19.00     21.00
           Mine Operator's Cost           9.00       0.209      0.205     0.201
           of Raw Coal (Per Ton)          11.00        .217       .213      .209
                                         13.00        .225       .221      .217

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                         F.O.B.  Mine Raw Coal Price (Per Ton)

                                                    17.00     19.00     21.00
           Mine Operator's Cost           9.00       5.57      5.47      5.36
           of Raw Coal (Per Ton)          11.00       5.79      5.68      5.57
                                         13.00       6.00      5.89      5.79
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost  factors  at  the
      respective operator  cost levels as covered in Section 2.0 above.
                                    205

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                                                          CASE NUMBER:   12B

1.0   CASE CONDITIONS                   Sulfur Clean-up Exclusively by
                                        Stack Gas Scrubbing

1.1   Coal Use Area:  Dickerson (Montgomery County),  Maryland

1.2   Emission Standards                New:  1% Sulfur by Weight
                                        Existing:

1.3   Coal District of Origin:  No.  3   Coalbed:  Pittsburgh
      State:  West Virginia             County:  Marion

1.4   Raw Coal                                            Ash:  11.0%
      Lb S02/106 Btu:  5.70         Sulfur:  3.80%        MM Btu/Ton:  26.66*

1.5   Assumed Plant Size:  500 Mw

1.6   Remaining Life of Boiler:  25  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  15.55%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:  7,000 Hr/Yr

2.3   Tons of Coal Burned Per Year:   1,312,829 Tons

2.4   Minimum Scrubber Requirements     Scrubber Rating:  410 Mw
                                       % of Flue Gas  Cleaned:  81.9%

2.5   Design Scrubber Requirements     Scrubber Rating:  472 Mw
                                       % of Flue Gas  Cleaned:  94.4%

2.6   Scrubber Capital Cost:  $28,531,124

2.7   Scrubber Capital Charges/Yr:  $4,436,590

2.8   Capital Contribution Per Ton of Coal:  $3.38/Ton

2.9   Fuel and Electricity Cost Per  Ton of Coal:  $0.73/Ton

2.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.72/Ton
        Maintenance Labor & Material:  $0.87/Ton
        Fixation Chemical Cost:  $0.59/Ton
        Supplies Cost:  $0.13/Ton
        Operating Labor Cost:  $0.12/Ton
        Overhead Cost:  $0.58/Ton
                                     206

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                                              CASE NUMBER:   12B (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:  $7.12/Ton
*  This value has been adjusted for raw coal moisture  content.
                                     207

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                                                         CASE NUMBER:   12C

1.0   CASE CONDITIONS                   Combined Use  of  Physical  Cleaning
                                        Followed by Stack Gas Scrubbing

1.1   Coal Use Area:   Dickerson (Montgomery  County),  Maryland

1.2   Emission Standards                New:
                                        Existing:  1% Sulfur by Weight

1.3   Coal District of Origin:   No.  3   Coalbed:   Pittsburgh
      State:   West Virginia             County:  Marion

1.4   Raw Coal*                                          Ash:  11.0%
      Lb S02/MM Btu:   5.70          Sulfur:   3.80%       MM Btu/Ton:  26.66

1.5   Clean Coal                                         Ash:  5.9%
      Cleaning Plant Yield:  90.0%  Sulfur:   2.16%       MM Btu/Ton:  28.09
      Lb S02/MM Btu:   3.08          Btu Recovery:  94.8% Btu Increase:  5.36%

1.6   Transportation                Mileage:   245         Cost Per  Ton:  $6.60

1.7   Assumed Plant Size                Megawatts: 500

1.8   Remaining Life of Boiler:  15  Yr

1.9   Assumed Ash Disposal Cost:   $4.00/Ton

1.10  Cleaning Plant          Cost:   $18,000 Per Ton-Hour Input Capacity**
                              Utilization:   38.58%***

1.11  Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   COAL CLEANING COST FACTORS

2.1   Cleaning Plant Costs    Amortization:   $0.68/Ton   0 & M:   $0.75/Ton

2.2   Additional Cost to Mine Operator to Provide  for One Ton of  Clean Coal,
        When Mine Operator's Cost is

           $ 9.00/Ton, Additional Cost is $1.00/Ton
           $11.00/Ton, Additional Cost is $1.22/Ton
           $13.00/Ton, Additional Cost is $1.44/Ton

2.3   Cleaning Plant Tax and Insurance Burden:  $0.12/Ton

2.4   Total Differential Production  Cost to  Mine Operator to Provide a Ton
        of Cleaned Coal, When Mine Operator's Cost is

           $ 9.00/Ton, Differential  Cost is  $2.55/Ton****
           $11.00/Ton, Differential  Cost is  $2.77/Ton
           $13.00/Ton, Differential  Cost is  $2.99/Ton


                                     208

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                                               CASE NUMBER:   12C (Continued)

3.0   ASSESSABLE BENEFIT FACTORS ASSOCIATED WITH CLEAN COAL

3.1   Added Coal Value Due to Higher Heat Content of Coal, When F.O.B.  Mine
        Raw Coal Price is

           $17.00/Ton, Benefit is $0.86/Ton
           $19.00/Ton, Benefit is $0.97/Ton
           $21.00/Ton, Benefit is $1.07/Ton

3.2   Transportation Cost Saving Due to Increased Heat Content  of
        Coal:  $0.34/Ton

3.3   Saving in Ash Disposal Cost:  $0.23/Ton

3.4   Saving in Grinding Cost:  $0.03/Ton

3.5   Saving in Benefit Payment:  $0.04/Ton

3.6   Saving in Maintenance:  $0.20/Ton

3.7   Total Benefits of Coal Cleaning,  When F.O.B. Mine Raw  Coal Selling
        Price is

           $17.00/Ton, Benefit is $1.70/Ton
           $19.00/Ton, Benefit is $1.81/Ton
           $21.00/Ton, Benefit is $1.91/Ton

4.0   DIFFERENTIAL CLEANING COST LESS BENEFITS PER TON

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   17.00     19.00     21.00
           Mine Operator's Cost          9.00       0.85     0.74     0.64
           of Raw Coal (Per Ton)        11.00       1.07       .96       .86
                                        13.00       1.29     1.18     1.08

5.0   STACK GAS COST FACTORS

5.1   Boiler Capacity:  500 Mw

5.2   Utilization Factor:  5,000 Hr/Yr

5.3   Tons of Coal Burned Per Year:   889,997 Tons

5.4   Minimum Scrubber Requirements       Scrubber Rating:  299  Mw
                                         % of Flue Gas Cleaned:  59.7%

5.5   Design Scrubber Requirements       Scrubber Rating:  344  Mw
                                         % of Flue Gas Cleaned:  68.8%

5.6   Scrubber Capital Cost:  $24,669,221
                                      209

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                                              CASE NUMBER:  12C (Continued)

5.7   Scrubber Capital Charges/Yr:  $4,396,056

5.8   Capital Contribution Per Ton of Coal:  $4.94/Ton

5.9   Fuel and Electricity Cost Per Ton of Coal:  $0.56/Ton

5.10  0 & M Costs Per Ton of Coal

        Limestone Cost:  $0.31/Ton
        Maintenance Labor & Material:  $l.ll/Ton
        Fixation Chemical Cost:  $0.26/Ton
        Supplies Cost:  $0.17/Ton
        Operating Labor Cost:  $0.18/Ton
        Overhead Cost:  $0.77/Ton

5.11  Total Stack Gas Cost Per Ton of Coal Burned:   $8.30/Ton

6.0   COST PER TON OF COAL BURNED TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   17.00     19.00     21.00
           Mine Operator's Cost          9.00       9.15      9.04      8.94
           of Raw Coal Per Ton          11.00       9.37      9.26      9.16
                                        13.00       9.59      9.48      9.38

7.0   COST PER MILLION BTU TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   17.00     19.00     21.00
           Mine Operator's Cost          9.00       0.326     0.322     0.318
           of Raw Coal (Per Ton)         11.00        .334      .330      .326
                                        13.00        .341      .337      .334

8.0   COST PER TON OF RAW COAL TO MEET EMISSION STANDARDS

                                        F.O.B. Mine Raw Coal Price (Per Ton)

                                                   17.00     19.00     21.00
           Mine Operator's Cost          9.00       8.69      8.58      8.48
           of Raw Coal (Per Ton)         11.00       8.90      8,80      8.69
                                        13.00       9.09      8.98      8.90
*     As received values.
**    Amortized over 15 years, 8% interest on unpaid balance.
***   Based upon 260 days/yr at 13 hr/day - 3,380 hr/yr.
****  This represents the  total of all coal cleaning cost factors at the
      respective operator  cost levels as covered in Section 2.0 above.
                                     210

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                                                          CASE NUMBER:   12D

1.0   CASE CONDITIONS                   Sulfur Clean-up  Exclusively by
                                        Stack Gas  Scrubbing

1.1   Coal Use Area:   Dickerson (Montgomery County),  Maryland

1.2   Emission Standards                New:
                                        Existing:   1% Sulfur by Weight

1.3   Coal District of Origin:   No.  3   Coalbed:   Pittsburgh
      State:  West Virginia             County:  Marion

1.4   Raw Coal                                            Ash:   11.0%
      Lb S02/106 Btu:  5.70         Sulfur:  3.80%        MM Btu/Ton:   26.66*

1.5   Assumed Plant Size:   500  Mw

1.6   Remaining Life of Boiler:  15  Yr

1.7   Assumed Annual Capital Scrubber Charges as Percent of Original
        Investment:  17.82%

2.0   STACK GAS COST FACTORS

2.1   Boiler Capacity:  500 Mw

2.2   Utilization Factor:   5,000 Hr/Yr

2.3   Tons of Coal Burned  Per Year:   937,735  Tons

2.4   Minimum Scrubber Requirements     Scrubber Rating:   410 Mw
                                       % of Flue Gas  Cleaned:   81.9%

2.5   Design Scrubber Requirements      Scrubber Rating:   472 Mw
                                       % of Flue Gas  Cleaned:   94.4%

2.6   Scrubber Capital Cost:  $34,932,338

2.7   Scrubber Capital Charges/Yr:   $6,224,943

2.8   Capital Contribution Per  Ton of Coal:  $6.64/Ton

2.9   Fuel and Electricity Cost Per  Ton of  Coal:   $0.73/Ton

2.10  0 & M Costs Per Ton  of Coal

        Limestone Cost:  $0.72/Ton
        Maintenance Labor  & Material:  $1.49/Ton
        Fixation Chemical  Cost:  $0.59/Ton
        Supplies Cost:  $0.22/Ton
        Operating Labor Cost:  $0.17/Ton
        Overhead Cost:  $0.97/Ton
                                      211

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                                              CASE NUMBER:   12D (Continued)
2.11  Total Cost Per Ton of Coal Burned to Meet Emission
        Standards:   $11.53/Ton
*  This value has been adjusted for raw coal moisture content.
                                      212

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                                  APPENDIX C

               COST COMPONENTS AND COST ESTIMATES FOR FULL-SCALE
                       FLUE GAS DESULFURIZATION SYSTEMS

     Total costs of flue gas desulfurization (FGD) systems include both capital
and annualized costs.  Capital costs are direct and indirect.  Direct capital
costs cover plant equipment, instrumentation, piping, electrical and struc-
tural materials, site work, insulation, painting, pilings, and the associated
costs of installation or application.  Indirect capital costs cover, but are
not limited to.; interest assessed during construction; contractors' fees and
expenses; engineering, freight, and off-site expenses; and taxes, allowances,
and contingencies.

     The annualized operating costs include both fixed and variable components.
Variable costs include utilities, labor, maintenance, and in some cases over-
head.  Fixed costs include depreciation, interim replacement, insurance, taxes,
and capital charges.

     Generally, flue gas desulfurization systems can be broken down into.four
major areas, each of which has direct and indirect cost components.  The four
areas are—

     • S02 Emission Control

     • Particulate Emission Control

     • Sludge Disposal

     • Replacement Power

     Our analysis excludes consideration of particulate emission control, since
particulate emission control requirements are separate from S02 emission con-
siderations.  Sludge disposal, being a necessary part of S02 control, is nec-
essarily included.  Cost of replacement power or "capacity penalty" is also
covered.

     CAPITAL COST COMPONENTS

     The major capital cost components of a flue gas desulfurization system
consist of plant equipment, installation, site development, and indirect
costs.

     Plant Equipment and Installation for S02 Control

     Installation of plant equipment requires foundations, steel work for
support; buildings; piping and ducting for effluents, slurries, sludge, steam,
overflows, acid, drainage, and make-up water; control panels; instrumentation;
insulation of ducting, buildings, piping, and other equipment; painting; and
in some instances piling.  Site development includes right of way for sludge
disposal; site clearing and grading; construction of access roads and walkways;
establishment of rail, barge, or truck facilities and parking facilities; and
landscaping and fencing.
                                       213

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     ANNUAL OPERATING COSTS

     Annual operating costs of  a flue gas  desulfurization system comprise—

     Raw materials,  including those required  by the FGD process for sulfur
     dioxide control, system loss,  and sludge fixation.

     Utilities,  including water for slurries, cooling and cleaning; electricity
     for pumps,  fans, valves, lighting controls,  conveyors,  and mixers;  fuel
     for reheating of flue gases; and steam for processing.

     Operating labor, including the supervisory and skilled  and unskilled
     labor required to operate, monitor,  and  control the FGD process.

     Maintenance and repairs, consisting  of both manpower and materials  to
     keep the unit operating efficiently.   The function of maintenance is
     both preventive and corrective to keep outages to a minimum.

     Overhead, a business expense that is not charged directly to a particular
     part of a process, but is  allocated  to it.  Overhead costs include  admin-
     istrative,  safety, engineering, legal, and medical services;  payroll;
     employee benefits; recreation; and public relations.

     Fixed charges,  which continue for the estimated life of the process,
     include costs of the following:

          *  Depreciation - the charge for losses in assets  due to time/use
             deterioration and  other factors, such as technical and/or
             regulatory changes making the physical assets obsolete.

          •  Interim replacement - costs  expended for temporary or provisional
             replacement(s) of  equipment  that has failed or  malfunctioned.

          •  Insurance - costs  of protection from loss by a  specified contin-
             gency,  peril, or unforeseen  event.  Required coverage could
             include but not be limited to losses due to fire, personal
             injury or death, property damage, embezzlement, explosion,  and
             lightning.

          •  Taxes,  including franchise,  excise, and property taxes levied by
             a city, county, State, or Federal government.

          *  Interest on borrowed funds (averaged over economic life).

             Return on investment (averaged over economic life).

     REPLACEMENT CAPACITY AND ENERGY PENALTIES

     There is both a replacement and an energy capacity penalty associated with
flue gas desulfurization systems.  Replacement capacity is the additional
power-generating capacity required to compensate for the power used by the
flue gas desulfurization system.  The energy penalty is the increased number of
Btu's required to produce a kilowatt-hour of electricity.
                                       214

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     For a FGD system treating the total flue gas, approximately 1.5 to 4 per-
cent of a plant's gross energy input is required to run a flue gas desulfuri-
zation system; an additional 1 to 2 percent may be required for particulate
emission control using venturi scrubbers.  In contrast (for particulate
emission control), less than 0.5 percent would be required if an electro-
static precipitator was used in place of the venturi scrubber.  Even so, as
previously indicated, particulate emission control is not and should not be
treated by this effort.

     The power requirement for a full FGD system is approximately equivalent
to the power required to run the boiler feed pumps and fans in the powerplant.
Thus, to generate a net of 1,000 Mw, a plant must have a gross rating of
approximately 1,080 Mw (fallowing 40 Mw to run the plant and 40 Mw to run the
FGD system).

     In general, for a full FGD system, the energy consumed by the FGD system
is about equally split between energy for stack gas reheat and electricity to
run the process equipment (of which about half is to overcome the system
pressure drop and the remainder is for operation of pumps, ball mills, and the
like).  The amount of energy consumed for stack gas reheat varies with the
amount of reheat required and also somewhat with the type of reheat system
used.  Some types of reheat systems will not cause the plant to be derated in
terms of kilowatt-hours of electricity produced (i.e., there will be only an
energy penalty, not a capacity penalty).  For example, if the plant power
production is turbine limited (as opposed to boiler limited), the excess
steam produced by the boiler can be used to reheat the stack gases.  Similarly,
if a direct-fired reheater is used, plant capacity will not be derated although
the energy consumption per kilowatt-hour generated will increase in the same
manner as if the unit was derated.  Furthermore, many plants may operate with-
out flue gas reheat or combine scrubbed and unscrubbed flue gases to attain
desired reheat temperatures.  When reheat is not required, the economics
associated with FGD are enhanced.

     The capital and annualized costs of flue gas desulfurization systems can
vary significantly depending upon design philosophy and site-specific factors.
Factors having a major cost impact are plant size, remaining life, and capac-
ity factor; flue gas desulfurization (FGD) process and design; sulfur content
and heating values of the coal; maximum allowable SC>2 emission rate; partic-
ulate control requirements (if included); and replacement power requirements.

     To present unencumbered cost estimates and illustrate the impact of site
and process factors on total installed and annualized costs of limestone FGD
systems, model plants were defined by Reference 13 and cost estimates prepared
for each (Table C-l).  The 12 model plants analyzed for FGD costs were selected
to incorporate varying cost factors (i.e., plant size, installation status,
and degree of S02 control required).  Boiler capacities of 250 Mw, 500 Mw, and
1,000 Mw were selected to cover a range representative of U.S. powerplant
boilers.  Both new and existing FGD systems applications were considered for
each boiler size.  Also, each plant size was analyzed for two S02 limitations;
one of 1.2 lb/10^ Btu  (Federal New Source Performance Standard) using high-
sulfur coal (3.5 percent), and the other of 0.15 lb/10^ Btu using low-sulfur
coal (0.6 percent).
                                      215

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                                  TABLE C-l

                    LIMESTONE MODEL PLANTS CAPITAL COSTS
Model Plant
Characteristics
250-Mw Capacity
Retrofit, 3.5% S
New, 3.5% S
Retrofit, 0.6% S
New, 0.6% S
500-Mw Capacity
Retrofit, 3.5% S
New, 3.5% S
Retrofit, 0.6% S
New, 0.6% S
1,000-Mw Capacity
Retrofit, 3.5% S
New, 3.5% S
Retrofit, 0.6% S
New, 0.6% S
Scrubbing
$/KW
40
30
38
29
35
28
34
27
36
29
34
28
Sludge
Disposal
$/KW
6
8
4
5
5
5
3
3
4
4
2
2
Indirect
Costs0
$/KW
35
28
32
25
30
25
28
23
30
24
28
22
Total
$/KW
81
66
74
59
70
58
65
53
70
57
64
52
$ MM
20.2
16.5
18.6
14.7
35.1
29.2
32.3
26.4
69.5
56.8
64.4
52.0
a Includes limestone preparation system (conveyors, storage silo, ball
  mills, pumps, motors, and storage tank) and scrubbing system (ab-
  sorbers, fans and motors, pumps and motors, tanks, reheaters, soot
  blowers, ducting, and valves).

  Sludge disposal costs do not include associated indirect charges.

c Includes interest during construction, field labor and expenses,
  contractor's fees and expenses, engineering, freight, spares,
  taxes, contingency, and allowance for shakedown.
                                   216

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     Other variables such as remaining plant life and plant capacity factor were
selected to be representative of each model plant.  Operating costs for such
components as raw materials and utilities, which vary with geographical loca-
tion, were selected to be representative of a Midwest location.

Factors Affecting Capital Cost

     Capital costs can be substantially modified by varying S02  removal re-
quirements and flue gas rates, difficulty of retrofit, conditions of terrain
and subsurface, system redundancy, remaining boiler plant life,  cost escala-
tion, effluent disposal requirements, etc.  The impact of these  factors on
capital costs is discussed, and Table C-2 provides a summary of  capital cost
variations for site specific conditions.

     Flue Gas Flow Rate

     Flue gas flow rate varies primarily with boiler design, including such
factors as operating temperature and exit gas temperature, percent excess air,
and efficiency; coal characteristics, including ash, sulfur and  moisture con-
tents, and heating value; and size and age of the boiler.  The flow rate
directly affects the size of the required FGD system.

     Installation Status (new and retrofit applications)

     Higher capital costs are often required for application of  FGD systems to
existing plants than for application to similar new plants.  Unlike a new
plant, a retrofit application requires that the system be adapted to the rigid
configurations of the existing plant.  The retrofit system must  be built within
fixed space limitations and in a manner that does not interfere  with operation
of the plant.  This often results in unusual and awkward  configurations.

     Other capital cost components that can be increased  because of space re-
strictions are construction labor and expenses, interest  charges during con-
struction (because of longer construction periods), contractor fees and
expenses, and allowances for shakedown.

     Condition of Terrain and Subsurface

     The terrain of the powerplant site affects the capital cost of the FGD
system as well as the cost of the entire powerplant due to the site work and
structural requirements it imposes.  Hilly terrain requires considerable
grading and filling to prepare the site for construction  of foundations and
possible additional structural components.  Subsoil characteristics in many
cases necessitate substantial additional foundation work  with related costs.

     Sludge Disposal Options (nonregenerative processes)

     The amount of sludge generated by a given plant is a function of the
sulfur and ash contents of the coal, coal usage, load factor, mole ratio of
additive, S02 removal efficiency, composition of the sludge, and moisture
content of the sludge.  Several methods are now used for  disposal of scrubber
sludge.  The most common are ponding of untreated sludge  and landfilling of
treated and untreated sludge.
                                       217

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                          TABLE C-2

               TYPICAL CAPITAL COST VARIATIONS
                FOR SITE SPECIFIC CONDITIONS*
                                      Typical Total Capital
           Factor                          Cost Impact

SOV removal requirements                   15% to 20%
  A

Flue gas flow rate                         10% to 30%

Installation status                        10% to 40%
  (new vs. retrofit)

Conditions of terrain and                   3% to 15%
  subsurface

FGD system redundancy                      10% to 40%

Particulate control requirements           25% to 35%

Sludge disposal requirements               10% to 30%
  (nonregenerative processes)
* Variations in capital cost for 250 to 1,000-Mw model
  plants.
                            218

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     Remaining Life of ?lant and Related Capacity Factor

     Boiler life is generally estimated to be about 30 years.   Capacity factor
is defined as the ratio of the average load for the period of  time considered 5
(usually 1 year) to the capacity rating of the plant.

     In general, capacity factor of a powerplant decreases with age owing to
increased maintenance burdens of the older plant as compared to newer boilers.

     Escalation

     Installation of an FGD system from initial design through construction and
subsequent acceptance tests requires approximately 3 years.  Price escalation
during this period directly affects the total capital cost of  the project.   Cost
estimates generally consider projected increases.

     Factors Affecting Operating Costs

     Operating costs are directly affected by the costs of raw materials,
utilities, and operating labor.  Cost of raw materials contribute 3 to 15 per-
cent of the total operating costs for limestone systems and depend primarily on
the quantity of SC>2 to be removed.  Costs of utilities contribute 5 to 10 per-
cent of the annual operating costs (i.e., for limestone systems).  Utility
costs depend primarily on the cost of electricity, amount of S02 to be removed,
and the process water and horsepower requirement.  Operating labor contributes
1 to 5 percent of the total operating costs and depends primarily on the size
of the system.

     Other operating costs covering maintenance, overhead, and fixed costs are
basically dependent on the fixed investment of the FGD system and the costs for
operating labor and raw materials.  Depreciation, a fixed cost, varies with the
life of the FGD system.

     The following factors also affect operating costs:

     S02 Removal Requirements

     The amount of S02 to be removed affects operating costs appreciably, since
it is the major factor that affects the cost of raw materials and utilities.
In addition, since capital costs are also affected by S02 removal requirements,
this impact is reflected in the fixed charges.

     Two member companies of Industrial Gas Cleaning Institute provided esti-
mates of limestone flue gas desulfurization costs.  Table C-3 provides a
summary of these estimates.

     As indicated by a comparison of Tables C-l and C-3, the manufacturers'
capital cost estimates for new plants are slightly lower than the 12 model
plant estimates developed in reference 13.
                                     219

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                          TABLE C-3

            SUMMARY OF MANUFACTURER ESTIMATES OF
                 LIMESTONE FGD SYSTEM COSTS
  Model Plant
Characteristics

250-Mw Capacity

Retrofit, 3.5% S
New, 3.5% S
Retrofit, 0.6% S
New, 0.6% S

500-Mw Capacity

Retrofit, 3.5% S
New, 3.5% S
Retrofit, 0.6% S
New, 0.6% S

1,000-Mw Capacity

Retrofit, 3.5% S
New, 3.5% S
Retrofit, 0.6% S
New, 0.6% S
Range of Capital
      Costs

      $/KW
     61
     56
     55
     50
     55
     49
     49
     43
     48
     43
     42
     37
78
74
58
57
68
68
51
51
66
62
48
48
             Annualized
               Costs

              mills/KWH
4.30
4.27
3.33
3.41
3.66
3.76
2.80
2.91
3.47
3.37
2.88
2.67
                            220

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                                  APPENDIX D

                           AMORTIZATION PAYMENT DATA

     This appendix indicates cleaning plant self-liquidating - yearly
mortgage payments per ton-hour plant input capacity.  These values are
provided for various plant costs and unpaid balance interest rates.
                                TABLE D-l

    SELF-LIQUIDATING MORTGAGE PAYMENT (IN DOLLARS) PER $1,000 OF LOAN
              YEARLY COST—BASED ON EQUAL MONTHLY PAYMENTS

Interest Rate      7%        8%      8-1/2%      9%      9-1/2% '    10%
Loan Period
Years
8 163
10 139
12 123
15 -107
20 93

.69
.41
.48
.93
.10

169.
145.
129.
114.
100.

72
67
97
75
44

172.
148.
133.
118.
104.

78
86
28
23
20

175.
152.
136.
121.
108.

88
08
63
78
03

179.
155.
140.
125.
111.

00
35
03
37
92

182.
158.
143.
129.
115.

16
65
48
02
87
                                   221

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                                TABLE D-2
   SELF-LIQUIDATING YEARLY MORTGAGE PAYMENT (IN DOLLARS)  PER TON-HOUR
     PLANT INPUT CAPACITY.  PAYMENTS BASED ON PLANT COST  OF $15,000
         PER TON-HOUR INPUT CAPACITY AND EQUAL MONTHLY PAYMENTS
Interest Rate

 Loan Period
    Years

      8

     10

     12

     15

     20
   7%
8%
8-1/2%
9%
9-1/2%
10%
2455.35   2545.80   2591.70   2638.20   2685.00   2732.40

2091.15   2185.05   2232.90   2281.20   2330.25   2379.75

1852.20   1949.55   1999.20   2049.45   2100.45   2152.20

1618.95   1721.25   1773.45   1826.70   1880.55   1935.30

1396.50   1506.60   1563.00   1620.45   1678.80   1738.05
                                TABLE D-3

   SELF-LIQUIDATING YEARLY MORTGAGE PAYMENT (IN DOLLARS)  PER TON-HOUR
     PLANT INPUT CAPACITY.  PAYMENTS BASED ON PLANT COST  OF $16,000
         PER TON-HOUR INPUT CAPACITY AND EQUAL MONTHLY PAYMENTS
Interest Rate

 Loan Period
    Years

      8

     10

     12

     15

     20
   7%
8%
8-1/2%
9%
9-1/2%
2619.04   2715.52

2230.56   2330.72
10%
       2764.48   2814.08   2864.00   2914.56

       2381.76   2433.28   2485.60   2538.40
1975.68   2079.52   2132.48   2186.08   2240.48   2295.68

1726.88   1836.00   1891.68   1948.48   2005.92   2064.32

1489.60   1607.04   1667.20   1728.48   1790.72   1853.92
                                   222

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                                TABLE D-A
   SELF-LIQUIDATING YEARLY MORTGAGE PAYMENT (IN DOLLARS)  PER TON-HOUR
     PLANT INPUT CAPACITY.  PAYMENTS BASED ON PLANT COST  OF $17,000
         PER TON-HOUR INPUT CAPACITY AND EQUAL MONTHLY PAYMENTS
Interest Rate

 Loan Period
    Years

      8

     10

     12

     15

     20
   7%
8%
8-1/2%
9%
9-1/2%
10%
2782.73   2885.24   2937.26   2989.96   3043.00   3096.72

2369.97   2476.39   2530.62   2585.36   2640.95   2697.05

2099.16   2209.49   2265.76   2322.71   2380.51   2439.16

1834.81   1950.75   2009.91   2070.26   2131.29   2193.34

1582.70   1707.48   1771.40   1836.51   1902.64   1969.79
                                TABLE D-5

   SELF-LIQUIDATING YEARLY MORTGAGE PAYMENT (IN DOLLARS) PER TON-HOUR
     PLANT INPUT CAPACITY.  PAYMENTS BASED ON PLANT COST OF $18,000
         PER TON-HOUR INPUT CAPACITY AND EQUAL MONTHLY PAYMENTS
Interest Rate

 Loan Period
    Years

      8

     10

     12

     15

     20
   7%
8%
8-1/2%
9%
9-1/2%
10%
2946.42   3054.96   3110.04   3165.84   3222.00   3278.88

2509.38   2622.06   2679.48   2737.44   2796.30   2855.70

2222.64   2339.46   2399.04   2459.34   2520.54   2582.64

1942.74   2065.50   2128.14   2192.04   2256.66   2322.36

1675.80   1807.92   1875.60   1949.40   2014.56   2085.66
                                   223

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                                  APPENDIX E

         COAL CLEANING PLANT OPERATION AND MAINTENANCE COST ESTIMATES

     Information contained in the 1965 Paul Weir study was examined as a basis
for developing current 0 & M cleaning plant costs attributable to 1 ton of
cleaned coal.  As indicated in the main body of this report, current anticipated
0 & M costs for various plant yields were derived from available 1965 data.
The projections from the 1965 data follow.

     These projections were checked against very recent (late 1975) 0 & M clean-
ing cost information obtained from a firm that designs, constructs, and operates
coal cleaning plants.  Three 0 & M values were obtained.  One was an actual
current value, and two are current estimated values for not-yet-operating
plants.  The obtained information relates to cleaning plants of the same
general complexity as that necessary to clean the considered coals.  As indi-
cated, in the range of considered yields (80 percent), the assumed cleaning
costs are higher than the recent industry value.  Even so, it must be recog-
nized that due to many factors, in actual practice there will be a spread in
cleaning cost.  This is due to variations in management concept, individual
plant design, maintenance philosophy, refuse disposal requirements, and other
factors.

     Figure E-l (also in main body of report) indicates the anticipated 0 & M
costs for plants of the variety believed required to clean the more readily
cleanable coals.  The three industry-supplied values are also indicated.  The
indicated maximum deviations (A's) are the maximum anticipated 0 & M cost
variations that may arise due to variations in plant characteristics and
management concepts.
                                      224

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                                                      O —
                                D Current estimate

                                • Current actual value
                      1
           100        90         80         70

                   CLEANING  PLANT YIELD, percent



               Figure E-l-Operation  and  maintenance cost.
                                                  60
                           225

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                                CASE I

           MINE - ILLINOIS NO. 6 BED, FRANKLIN COUNTY, ILL.
               (Cost estimates based on available data)

Plant cost                    $2,560,000

Plant Capacity                700 tons per hour raw coal feed

Date Constructed              1960 (completed)

Plant Type                    Heavy media process for coarse coal,
                              Deister tables for fine sizes, and
                              thermal dryers

Original Plant Cost Per Ton-
  Hour Input Capacity         $3,660

1965 0 & M Cost

     If coal is washed to produce 90% yield

          Plant 0 & M cost (less refuse handling)     $0.344/ton
          Refuse handling                              0.025/ton

                                               Total  $0.369/ton

     If coal is washed to produce 80% yield

          Plant 0 & M cost (less refuse handling)
            (=0.344 x 0.90/0.80)                      $0.387/ton
          Refuse handling (=0.025 x 2)                 0.050/ton

                                               Total  $0.437/ton

     If coal is washed to produce 70% yield

          Plant 0 & M cost (less refuse handling)
            (=0.344 x 0.90/0.70)                      $0.442/ton
          Refuse handling (=0.025 x 3)                 0.075/ton

                                               Total  $0.517/ton

December 1975 0 & M Cost
(Based on December 1975 hourly earnings as compared to 1965 hourly
earnings.  Source; U.S. Bureau of Labor Statistics)

     At 90% yield = 0.369 x 7.51/3.49 = $0.794/ton
     At 80% yield = 0.437 x 7.51/3.49 = $0.940/ton
     At 70% yield = 0.517°x 7.51/3.49 = $l.ll/ton
                                 226

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                               CASE II

         MINE - ILLINOIS NO. 6 BED, MONTGOMERY COUNTY, ILL.
              (Cost estimates based on available data)

Plant Cost                    $2,200,000

Plant Capacity                800 tons per hour raw coal feed

Date Constructed              Not known - 'older plant

Plant Type                    Uses a combination of wet washing and
                              air tables for cleaning.  Plant is not
                              capable of cleaning coal at densities
                              lower than 1.60.

Original Plant Cost Per Ton-
  Hour Input Capacity         $2,750

1965 0 & M Cost

     If coal is washed to produce 90% yield

          Plant 0 & M cost (less refuse handling)     $0.272
          Refuse handling                              0.017

                                               Total  $0.289/ton

     If coal is washed to produce 80% yield

          Plant 0 & M cost (less refuse handling)     $0.306
          Refuse handling                              0.035

                                               Total  $0.341/ton

     Due to equipment type, this plant is not capable of cleaning at
lower densities; for the characteristics of coal processed, 80% yield
appears to be the cleaning limit.

December 1975 0 & M Cost
(Based on December 1975 hourly earnings as compared to 1965 hourly
earnings.  Source: U.S. Bureau of Labor Statistics)

     At 90% yield = 0.289 x 7.51/3.49 = $0.622/ton
     At 80% yield = 0.341 x 7.51/3.49 = $0.734/ton
                                  227

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                               CASE III

            MINE - ILLINOIS NO. 5 BED, FULTON COUNTY, ILL.
               (Cost estimates based on available data)

Plant Cost                    $2,700,000

Plant Capacity                800 tons per hour raw coal feed

Date Constructed              Not known

Plant Type                    Basically Baum jigs for cleaning.  Contains
                              two jigs for 6 inch x 0, one for 2 inch x 0,
                              and a middling jig.  The 1/4 inch x 0 is
                              rewashed in a Rheolavour launder system.
                              The 3/4 x 1/8 inch product is heat-
                              dried.

Original Plant Cost Per Ton-
  Hour Input Capacity         $3,380

1965 0 & M Cost

     If coal is washed to produce 90% yield

          Plant 0 & M cost (less refuse handling)     $0.222/ton
          Refuse handling                              0.017/ton

                                               Total  $0.239/ton

     If coal is washed to produce 80% yield

          Plant 0 & M cost (less refuse handling)     $0.250/ton
          Refuse handling                              0.034/ton

                                               Total  $0.284/ton

     If coal is washed to produce 70% yield

          Plant 0 & M cost (less refuse handling)     $0.285/ton
          Refuse handling                              0.051/ton

                                               Total  $0.336/ton

December 1975 0 & M Cost
(Based on December 1975 hourly earnings as compared to 1965 hourly
earnings.  Source: U.S. Bureau of Labor Statistics)

     At 90% yield = 0.239 x 7.51/3.49 = $0.514/ton
     At 80% yield = 0.284 x 7.51/3.49 = $0.611/ton
     At 70% yield = 0.336 x 7.51/3.49 = $0.723/ton
                                 228

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                                CASE IV

           MINE - WEST KENTUCKY NO. 9.BED, UNION COUNTY, KY.
               (Cost estimates based on available data)

Plant Cost                    $1,850,000

Plant Capacity                1,000 tons per hour raw coal feed

Date Constructed              Not known

Plant Type                    Basically consists of two parallel Baum-
                              type jigs, and a smaller piston-type
                              jig for cleaning 28 mesh x 0.  No heat
                              dryers.

Original Plant Cost Per Ton-
  Hour Input Capacity         $1,850

1965 0 & M Cost

     If coal is washed to produce 90% yield

          Plant 0 & M cost (less refuse handling)     $0.152/ton
          Refuse handling                              0.033/ton

                                               Total  $0.185/ton

     If coal is washed to produce 80% yield

          Plant 0 & M cost (less refuse handling)      $0.171/ton
          Refuse handling                               0.066/ton

                                               Total   $0.237/ton

     If coal is washed to produce 70% yield

          Plant 0 & M cost (less refuse handling)      $0.195/ton
          Refuse handling                               0.100/ton

                                               Total   $0.295/ton
                                                    o
December 1975 0 & M Cost
(Based on December 1975 hourly earnings as compared to 1965 hourly
earnings.  Source: U.S. Bureau of Labor Statistics)

     At 90% yield = 0.185 x 7.51/3.49. = $0.398/ton
     At 80% yield = 0.237 x 7.51/3.49 = $0.510/ton
     At 70% yield ^ 0.295 x 7.51/3.49 = $0.635/ton
                                 229

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                               CASE V

              MINE - PITTSBURGH BED, GREENE COUNTY, PA.
              (Cost estimates based on available data)

Plant Cost                    $3,500,000

Plant Capacity                500 tons per hour raw coal feed

Date Constructed              Completed 1964 or 1965

Plant Type                    Employs separator screens, sink and float
                              screens, flotation cells, Deister tables,
                              magnetite separators, and heat dryers.

Original Plant Cost Per Ton-
  Hour Input capacity         $7,000

1965 0 & M Cost

     If coal is washed to produce 90% yield

          Plant 0 & M cost (less refuse handling)     $0.380/ton
          Refuse handling                              0.035/ton

                                               Total  $0.415/ton

     If coal is washed to produce 80% yield

          Plant 0 & M cost (less refuse handling)     $0.428/ton
          Refuse handling                              0.070/ton

                                               Total  $0.498/ton

     If coal is washed to produce 70% yield

          Plant 0 & M cost (less refuse handling)     $0.488/ton
          Refuse handling                              0.105/ton

                                               Total  $0.593/ton

December 1975 0 & M Cost
(Based on December 1975 hourly earnings as compared to 1965 hourly
earnings.  Source: U.S. Bureau of Labor Statistics)

     At 90% yield = 0.415 x 7.51/3.49 = $0.893/ton
     At 80% yield = 0.498 x 7.51/3.49 = $1.072/ton
     At 70% yield = 0.593 x 7.51/3.49 = $1.276/ton
                                 230

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                               CASE VI

     MINE - OHIO NO. 8 BED, HARRISON AND BELMONT COUNTIES,  OHIO
              (Cost estimates based on available data)

Plant Cost                    $7,500,000

Plant Capacity                1,500 tons per hour raw coal feed

Date Constructed              Not known

Plant Type                    Essentially consists of Baum-type jigs,
                              Chance dense media cones, Deister tables,
                              and heat dryers.

Original Plant Cost Per Ton-
  Hour Input Capacity         $5,000

1965 0 & M Cost

     If coal is washed to produce 90% yield

          Plant 0 & M cost (less refuse handling)     $0.277/ton
          Refuse handling                              0.018/ton

                                               Total  $0.295/ton

     If coal is washed to produce 80% yield

          Plant 0 & M cost (less refuse handling)     $0.311/ton
          Refuse handling                              0.036/ton

                                               Total  $0.347/ton

     If coal is washed to produce 70% yield

          Plant 0 & M cost (less refuse handling)     $0.356/ton
          Refuse handling                              0.054/ton

                                               Total  $0.410/ton

December 1975 0 & M Cost
(Based on December 1975 hourly earnings as compared to 1965 hourly
earnings.  Source:  U.S. Bureau of Labor Statistics)

     At 90% yield - 0.295 x 7.51/3.49 = $0.635/ton
     At 80% yield = 0.347 x 7.51/3.49 = $0.747/ton
     At 70% yield = 0.410 x 7.51/3.49 = $0.882/ton
                                231

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         220 days/yr at 20 hr/day —


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          240 days/yr at 13 hr/day	,  I


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                                                     1
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                    PLANT  OPERATING  HOURS  PER YEAR



                        Figure  F-l-Cleaning  plant utilization.
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                          10
20     30     40    50     60    70     80

  PERCENT UTILIZATION  OF CLEANING  PLANT
90    100
                        Figure  F-2-Amortizotion cost/ton cleaned coal  for:plant cost-$!8,000

                                  per ton-hour input capacity, interest rate-8%, loan  period
                                  15 years.

-------
                                    4-100
                                    B-  90
                                    C-  80
                                    D-  70
                                    E-  60
 10
20     30     40     50     60     70     80
  PERCENT UTILIZATION OF CLEANING PLANT
90    100
Figure F-3-Amortization cost/ton cleaned coal  for:plant cost-$18,000
          per ton-hour  input  capacity, interest rate-9%, loan period
          15 years.

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                                                                      - 100
                                                                      - 90
                                                                    C- 80
                                                                      - 70
                                                                    £- 60
                                20    30     40     50     60    70     80

                                  PERCENT UTILIZATION OF CLEANING PLANT
90    100
                         Figure F-4-Amortizotion cost/ton cleaned coal fonplant  cost-$!8,000
                                  per ton-hour input capacity, interest rate-10%, loan period
                                  15 years.

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                                  APPENDIX G

                            TRANSPORTATION OF COAL

Importance of Transportation Costs

     Because of its bulk, the cost of transporting coal has historically been
an important part of the total cost to the consumer.  However, this relation-
ship has not remained constant and today rail transportation costs are of
declining importance in the marketing of coal.  In 1932 rail rates amounted
to 63.3 percent of the destination value of bituminous coal.  By 1973 rail
rates had declined to 30.4 percent of the destination value.  This decline in
the component of cost associated with transportation has tended to lessen the
importance of location in competition between coal-producing regions.  The
most important competitive factor in the utilities market is the final price
per Btu.  This price may vary greatly depending not only on the amount of
transportation required but also upon the production methods used, the type
of coal produced, and the type and amount of labor used.

Movement of Bituminous Coal From the Mines

  Water -

     At present, water carriers transport about 11 percent of coal traffic.
A single tow of 20 barges can carry 20,000 to 30,000 tons of coal.  Coal is
a major item of traffic along the Ohio River and its tributaries.  Coal also
moves down the Mississippi River, and large tonnages are transferred near the
river mouth to ocean-going barges which cross the Gulf of Mexico to power-
plants in Florida.  Barge lines are also linked to rail loading points in an
efficient, integrated transportation network, so that coal which moves part
way to market by water may move to its ultimate destination by rail.  More
than 100 million tons of coal in the United States presently move each year
over rivers.  The Great Lakes are another waterway for coal.  Lake Erie ports
like Toledo and Sandusky receive coal, mostly by rail, and load it into
freighters for consumers in Canada or for U.S. destinations on the upper
lakes, such as Duluth, Minnesota.  At Norfolk and Newport News, Virginia,
supercolliers built especially for this trade take on as much as 100,000
tons of coal in a matter of hours for delivery to destinations as distant
as Japan.

  Truck -

     Trucks also carry millions of tons of coal - about 11 percent of all
coal is transported over public highways.  Trucks are the prime method of
moving coal from strip mines to preparation plants, rail, or water loading
points, or mine-mouth electric generating stations.  Some off-highway motor
vehicles with power units at each end carry 240 tons of coal.

  Conveyor Belt -

     Conveyor belts deliver coal for distances as much as 10 miles.  One
system in operation in western Kentucky is designed to carry about 140,000
tons of coal a week from mines to a barge loading dock on the Ohio River.
River tows take the coal to a powerplant.


                                      236

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  Pipeline -

     The transportation of coal by pipeline is in slurry form.   This consists
of a mixture of water and finely ground coal.  At present there is only
one coal slurry pipeline operating in the United States.  This  pipeline is
275 miles long and is the longest coal slurry pipeline in the world.  It con-
nects the Black Mesa, Arizona, coalfields with a thermal powerplant on the
Colorado River in Nevada.  Much longer coal slurry pipelines are being con-
sidered in the Western United States.  Currently, there are proposals to
build pipelines from Montana to the Great Lakes and from Wyoming to Arkansas.
However, these longer pipelines are receiving much objection from the rail-
roads, which feel it would injure their revenue base, and from  conservation-
ists and environmentalists.

     The alternative to delivering coal to market is mine-mouth powerplants.
A cluster of these generating plants in western Pennsylvania sends power to
markets as distant as New York City, using 500,000-volt lines.   Other mine-
mouth powerplants in West Virginia, Kentucky, Ohio, and other States use
coal from nearby mines to generate power for distant markets.  In the West,
where coal reserves are rich but remote from electrical load centers, high-
voltage lines send coal-generated electricity from the Four Corners area of
New Mexico to consumers in southern California.

  Rail -

     The great preponderance of coal - over 60 percent - moves  by rail.  The
railroads derive more revenue from it than any other commodity  - over $1.2
billion annually, or about 10 percent of their total freight revenue.  The
hauling of bituminous coal has long been the single most important commodity
for Eastern railroads.  During 1974, the Penn Central railroad  alone handled
73.4 million tons of coal which constituted 27 percent of its overall freight
volume, bringing in $240 million in gross revenues.  On a nationwide basis,
the railroads carried 391 million tons of coal, which accounted for 13.6 per-
cent of all rail,freight tonnage.  Over 20 percent of all coal  mined moves
in unit trains.

Types of Rail Freight Rates on Bituminous Coal

     Bituminous coal is rated class 17-1/2 in the governing Uniform ICC
Freight Classification.  However, extremely little, if any, coal moves at
class rates, although at some shipping points class rates are the only rates
available.  For example, effective June 28, 1974, a unit-train  rate appli-
cable on bituminous coal over the lines of the Kansas City Southern Railway
Company from Heavener, Oklahoma, to Steeltown, Texas, was canceled.  The
cancellation notice provided that class rates would apply.

     There are numerous types of commodity rates applying on bituminous coal.
Those that are necessary for understanding the freight rate structure follow:

     Single-car rates, multiple-car rates, trainload rates, and unit-train
rates are those based essentially on the number of cars used.  In many
instances the rates are not listed as single-car, multiple-car, trainload,
or unit-train rates, and the terminology is not always uniformly defined by
                                      237

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carriers and shippers.  A single-car rate is one that is published based on
tonnage requiring the use of one car only.  This tonnage is usually 100 tons
or less, and is frequently based on the marked capacity of the car.  Multiple-
car rates are rates based on a sufficient tonnage to require the use of two
or more cars, moving from one point of origin to one point of destination at
one time.  A multiple-car rate differs from a trainload rate in that the re-
quired tonnage is less than the amount necessary to make up an entire train-
load as hereafter defined.  A frequently maintained condition for multiple-
car rates is 1,500 tons.  A trainload rate is a rate that is published based
on a sufficient tonnage to make up an entire train, usually 5,000 tons or
more.  The railroad equipment is usually furnished by the carrier and the
movement does not have a predetermined continuously scheduled cycle.  A unit-
train rate is one that is published to apply on traffic moving in a sufficient
set number of railroad cars and a given number of motive units dedicated to
one unit between one point of loading and one point of unloading and moving in
continuously scheduled cycles.  The cars may or may not be permanently coupled.
The equipment and motive power are not taken out of the movement, and in a
number of instances the cars are shipper-owned.

     Annual volume and conditional rates are those based primarily on the
stipulation of the movement of a stated tonnage over a specific time period.
A frequent annual-volume requirement is that 1 million tons of bituminous
coal be tendered during one calendar year.  There are single-car annual-
volume rates, multiple-car annual-volume rates, trainload annual-volume rates,
and unit-train annual-volume rates, depending upon the conditions of the pub-
lished tariff.

     There are certain types of rates based substantially on geographic con-
siderations.  These include concentration rates, gathering rates, tidewater
rates, export rates, river rates, lake-cargo rates, and refund rates.  Con-
centration rates are rates in connection with which it is provided that coal
may originate at various separate mines, concentrated by the customer at one
specific common point, thus permitting the movement of the cars beyond the
concentration point in blocks so that from the place of concentration to the
final destination the movement is multiple-car, trainload, or unit-train
service.  Gathering rates are rates from mines or stations to a concentra-
tion point such as Appalachia, Virginia, for rail movement beyond in multiple-
car, trainload, or unit-train service.  Tidewater rates normally refer to
rates applying on coal moved by rail from the Appalachian fields to the ports
of New York, Philadelphia, Baltimore, and Hampton Roads, for movement beyond
by water to destinations in the United States.  At times the coal movements
destined to Baltimore and Hampton Roads for export are referred to as "tide-
water coal" or "tidewater movements."  This coal moves at export rates.  An
export rate is one specially established for application on export traffic.
River rates are those that are published on traffic having a prior or sub-
sequent movement via barge.  Lake-cargo rates are those that are published
on traffic having a prior or subsequent movement over one or more of the
Great Lakes.  Under certain conditions, a refund is provided in the tariffs
after traffic has moved from the lake ports and the specified conditions are
met.  In some instances, rates applicable to a specific movement may consist
of more than one of these types of rates.
                                     238

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     It is expected that by 1980 more than 85 percent of the domestic coal
traffic will move under annual-volume,  concentration, trainload,  or unit-
train concepts.  Discussions of these rates follow.

     The Annual-Volume and Concentration Rate Concepts

     Annual volume rates have been used mainly as a competitive tool of the
carriers in their efforts to thwart the use of alternative energy sources,
such as natural gas, and the use of other forms of coal or energy transport,
such as slurry pipelines or high-voltage wires.  Also, the annual-volume con-
cept has sometimes been coupled with other transportation conditions designed
to achieve economies in coal handling.   In this way, the carriers have at-
tempted to offset, to the extent possible, the effect of revenue losses from
downward adjustments necessitated by competition.

     Although the cost of large equipment exceeds that of smaller cars, there
are savings in transportation effort flowing from the use of large cars.  The
principle involved is clear when assuming 100 tons of coal is being carried in
one 100-ton car versus two 50-ton cars.  The handling of one carload is saved,
and the car miles are cut in half.  Because the tare weight of a 100-ton car
is less than that of two 50-ton cars, the amount of deadweight per ton of coal
carried is reduced.

     In addition to annual-volume provisions, the railroads have established
rates substantially lower than their single-car rates when the customer con-
centrates shipments at a common point.   This permits the movement of the cars
beyond the concentration point in blocks, so that from the place of concen-
tration to the final destination the movement is multiple-car, trainload, or
unit-train service.

     A relatively new concept in the distribution of coal by railroad in unit
trains was put into operation in September 1966.  One of the problems that
develops in the inauguration of unit trains comes about by virtue of the
fact that coal often originates at many small mines, no single one of which
can produce and load out a trainload in one day.  A past solution to this
problem has been to store coal in large piles from which trainloads can be
originated.  But, coal does deteriorate to some extent when stored in the
open.  The loss of coal resulting from open-air storage has been found to
make the construction of closed storage silos economically feasible.

     The concept is that coal from small-volume mines can be brought to the
transloader in a gathering operation, making use of small hoppers and gon-
dolas.  The small equipment can be economically operated in a short-haul
gathering function, whereas it is largely obsolete for long-haul trans-
portation of volume movements.  The cars feed the transloader silos.  The
silos in turn feed the unit train.

     There is a definite difference between trainload and unit-train service.
Although these terms are often loosely used to describe any trainload ship-
ment of coal, the services involved are completely different.  Some railroads
operate trainloads, using ordinary equipment in single moves at random times
without reference to any scheduled operation.  This type of service should be
called trainload, and the applicable rates referred to as trainload rates.
                                      239

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     On the other hand,  unit trains involve a shuttle service concept with the
train operating on a predetermined schedule and in assigned equipment.  Spe-
cifically, a unit train is a management technique that permits efficient
planning through long-range contractual commitment of producer and consumer
and dedication of the equipment.  A unit train consists of a dedicated set of
haulage equipment loaded at one origin, unloaded at one destination each trip,
and moving in both directions on a predetermined schedule.  Although the
origin and destination are not necessarily the same for each trip, the ship-
ment is never split for any trip.

     In terms of the tariff, or freight rate, a unit train is not a unit train
until so designated by the carrier.  Thus, the success of a unit train depends
on cooperation between shipper, carrier, and consumer.  In fixing tariff
rates, the lowest cost usually is realized when a unit train is limited to a
single-line haul.  When more than one carrier is involved, additional capital
cost and additional operating costs are reflected in the tariff rates.  The
tariff rates specify the haulage cost to the consumer on a net ton basis.
Three parties—the railroad, the producer, and the consumer—must negotiate
the conditions and the rates (coal and transport) for unit-train service.^

     Bureau of Labor Statistics Index For The Transportation of Coal By Rail

     The Bureau of Labor Statistics (BLS) has developed a new set of price
indexes for transportation of railroad freight.  The new index is designed
to measure changes in prices of shipping goods by rail in the United States.
It reflects the price changes for all railroad shipments.

     The index is intended to measure "pure" price change between two periods
of time; that is, to measure price changes not influenced by changes in quan-
tity, shipping terms, type of service, product mix, or other factors.  There-
fore, identical shipments of commodities are used in the periods compared.
For this purpose, the shipments included in the index are defined by precise
specifications which incorporate the principal price-determining factors such
as type of commodity, origin, destination, quantity, routing, service pro-
vided, and type of rail car.  Thus, the prices used in the index conform with
the concept of the railroad's price for shipping a fixed set of commodities
under specified conditions.  The prices used to calculate the index are the
rates in effect on the 15th of each month for identical shipments of
commodities.

     The railroads are required by law to establish rates that are just and
reasonable, publish them, and adhere to .them.  These rates, and changes in
them, covering both interstate and ihtrastate shipments, are published by
the railroads in schedules referred to as tariffs.  The regulations govern-
ing the publication of interstate rail freight tariffs are prescribed by
the Interstate Commerce Commission.  There are approximately 45,000 tariffs
in current use, containing millions of rates.  Each month the tariff, appli-
cable increase tariffs, and supplements are checked by the BLS for each
shipment to determine the applicable rate as of the 15th of that month.
This procedure was adopted to minimize the railroads' burden of reporting
specific rates each month and to simplify quality control.
                                      240

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     The detailed information necessary to select a sample of shipments to be
priced is available on railroad waybills.   A waybill moves with the shipment
and contains all the information necessary for the railroads to transport a
shipment and to prepare a bill.  The information needed for the construction
of the BLS index was abstracted from the waybills.  The commodity shipped,
origin, and destination of the shipment, railroads involved in the movement
(routing), size of shipment, type of service provided,  type of railcar used,
and the rate at which the freight charge was calculated were obtained from
each waybill used.

     The BLS used the ICC 1 percent waybill sample to select the shipments
to be priced for the railroad freight index.  Because of resource constraints,
however, the BLS could not determine the prices for the full 1 percent sample
of waybills every month.  After determining that about  500 waybills would
provide a reasonably accurate price index for all rail  freight, probability
techniques were used to select a sample of shipments from the ICC sample.

     The BLS provided indexes for railroad coal transport from 1969 through
1976 are given in Table G-l.  Through the use of this index, known rates for
prior periods can be adjusted to give a reasonable approximation of the
current cost of shipping a ton of coal.  For example, a 1972 rate of $4.86
per ton could be adjusted to April 1976 as follows:

            April 1976 index  (201,2)     .. „,,      ... co/
           1972 average index (128.8)  X  ^86/t°n = $7.59/ton
                                      241

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                    TABLE  G-l




    PRICE  INDEXES  FOR  RAILROAD  COAL  TRANSPORT




(1969 Standard  Transportation Commodity Code 11)
Month
Year
1969
1970
1971
1972
1973
1974
1975
1976
1977
Jan.
99.5
105.2
119.9
125.5
130.5
138.4
164.8
189.9
209.4
Feb.
99.5
105.2
119.6
128.4
130.5
140.9
164.8
189.9

Mar.
99.5
105.2
119.9
128.5
130.6
146.8
164.8
189.9

Apr.
99.5
105.2
125.1
128.7
130.6
147.8
164.8
201.2

May
99.5
105.2
124.8
128.7
130.6
148.1
175.2
202.2

June
99.5
109.1
125.2
128.7 .
130.6
148.7
175.2
202.8

July
99.6
109.3
125.1
128.9
130.6
162.6
183.3
203.1

Aug.
99.7
109.5
125.2
128.8
130.8
163.2
184.3
203.1

Sept.
99.7
109.7
125.5
128.9
134.3
164.6
184.7
203.1

Oct.
99.7
109.8
125.5
128.9
136.8
165.3
189.1
203.2

Nov.
99.7
109.8
125.5
130.5
137.1
165.3
189.7
203.3

Dec.
104.9
119.5
125.5
130.5
137.1
165.3
189.8
203.3

Annual
Average
100.0
108.6
123.9
128.8
132.5
154.8
177.5
199.6


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                   REPORT DOCUMENTATION PAGE
1.
4.
7.
9.
12.
15.
16.
17.
19.
20.
REPORT NO. 2.
TITLE AND SUBTITLE
Engineering/Economic Analyses of Coal
Preparation With S02 Cleanup Processes
for Keeping Higher Sulfur Coals in the
Energy Market
AUTHOR(S)
Lawrence Hoffman, S. J. Aresco, and
Elmer C. Holt, Jr.
PERFORMING ORGANIZATION NAME AND ADDRESS
The Hoffman-Muntner Corporation
8750 Georgia Avenue
Silver Spring, Maryland 20910
SPONSORING ORGANIZATION NAME AND ADDRESS
U.S. Department of Energy
Washington, D.C. 20545
3. RECIPIENT'S ACCESSION NO.
5. REPORT DATE
November 1976
6.
8. PERFORMING ORGANIZATION
REPORT NO. 5004 FR
10. PROJECT/TASK/WORK UNIT NO.
11. CONTRACT OR GRANT NO.
USBM Contract No. J0155171
13. TYPE OF REPORT
Final Report
14.
SUPPLEMENTARY NOTES
ABSTRACT - For purposes of this study, higher sulfur coals from the Northern
Appalachian and Eastern Interior Regions were selected since they have been
shown to have reasonable physical cleaning potential. Then, possible users
of these coals in the electric power generating industry were established
along with the environmental constraints in their respective localities.
This provided a framework within which to study and compare the economics
associated with meeting sulfur emission standards in two alternative ways.
Specifically, the study considers both new and existing plants using either
combined physical cleaning followed by stack gas scrubbing or sulfur clean-
up exclusively by stack gas scrubbing.
The results of the study indicate that many higher sulfur coals when
physically cleaned to a weight yield of 90 percent begin to approach en-
vironmental acceptability. This permits the installation of an economically
attractive partial stack gas scrubbing system to bring the power generating
facility into compliance with existing emissions standards. The economics
associated with such a combined approach when compared with the exclusive
use of stack gas scrubbing demonstrate a definite advantage.
ORIGINATOR'S KEY WORDS
Coal Cleaning Cost Factors
Economic Benefits of Coal Cleaning
Economics Associated with Flue Gas
Desulfurization (FGD)
Economics Associated With the Combined
Use of Physical Cleaning Followed by
Stack Gas Scrubbing (i.e. FGD)
Sulfur Related Emission Regulations
Transportation of Coal
U.S. SECURITY CLASSIF. OF THE REPORT
UNCLASSIFIED
U.S. SECURITY CLASSIF. OF THIS PAGE
UNCLASSIFIED
18. AVAILABILITY STATEMENT
21. NO. OF PAGES
242
22. PRICE
243
                 "U.S. GOVERNMENT PRINTING OFFICE : 1978 0-260-880-114

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