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•rOP-DOHM' BEST AVAILABLE CONTROL TECHNOLOGY

              GUIDANCE DOCUNENT
       Environmental  Protection  Agency
Office of Air Quality Planning and Standards
       A1r Quality Nanageaent  Division
    Noncrlterla  Pollutants  Prograa Branch
          New Source  Review Section
               March 15, 199r

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                               TABLE OF CONTENTS
 I.   Purpose ..............................  i

 II.  Introduction  ...........................  4

 III.  BACT Applicability ........................  6

 IV.   A Step by Step Summary of the Top-Down Process ..........  7

       A. STEP l--Identify All Control Technologies  .  .  .  . • ......  7
       B. STEP 2--Eliminate Technically Infeasible Options .......  9
       C. STEP 3--Rank Remaining Control Technologies by Control
            Effectiveness .....................      g
       D. STEP 4--Evaluate Most Effective Controls and Document
            Results ...........                                jO
       E. STEP 5--Select BACT . .  .  . ...... '.'.'.'.'.'.'.'.'.'.'.'.  11

V.   Top-Down Analysis: Detailed Procedures ..............  12

       A. Identify Alternatives Emission Control Techniques ......  12

            1.  Demonstrated and Transferable Technologies .......  13
            2.  Innovated Technologies  ................ .14
            3.  Consideration of Inherently Lower Polluting
                 Processes .......................  15
            4.  Example ....................  .".'!!!  16

       B.  Technical Feasibility Analysis ................  19
       C.  Ranking  the Technically  Feasible Alternatives to
            Establish a Control  Hierarchy ............... 24

            1.  Choice of Units of  Emissions Performance to Compare
                Levels Amongst Control  Options ............  24
            2.  Control  Techniques  With a Wide  Range of
                Emissions  Performance Levels  .............  25
            3.  Establishment of the  Control  Options Hierarchy  .....  27

       D.  The BACT Selection Process ..................  28

            1.  Energy Impacts  Analysis .................  32
            2.  Cost/Economic Impacts Analysis  .............  33

                a.  Estimating  Control Costs ..............  35
                b.  Cost Effectiveness ................  38
                c.  Determining  an Adverse  Economic  Impact .......  45

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                               TABLE OF CONTENTS, Continued
                                                           Pace

3. Environmental Impacts Analysis 	  47
                       a. Examples (Environmental Impacts)	49
                       b. Consideration of Emissions of Toxic
                            and Hazardous Pollutants	51

             E. Selecting BACT	55
             F. Other considerations	55

      VI.  Enforceability of BACT	57

      VII. Example BACT Analyses for Gas Turbines	58

             A. Example I — Simple Cycle Gas Turbines Firing Natural Gas ... 59

                  1. Project Summary	59
                  2. BACT Analysis Summary	59

                       a. Control Technology Options. 	 59
                       b. Technical Feasibility Considerations. .   	 62
                       c. Control Technology Hierarchy	63
                       d. Impacts Analysis Summary	66
                       e. Toxics Assessment 	 66
                       f. Rationale for Proposed BACT	69

             B. Example 2--Combined Cycle Gas Turbines Firing Natural Gas .  . 70
             C. Example 3--Combined Cycle Gas Turbine Firing Distillate
                  Oil	74
             D.Other Considerations 	 75


APPENDIX A. Definition of Selected New Source Review Terms

APPENDIX B. Estimating Control Costs
                                             n

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                                LIST OF TABLES
Table

 IV- 1       KEY STEPS IN THE "TOP-DOWN" BACT PROCESS ......... 8

  V-l       SAMPLE BACT CONTROL HIERARCHY ............... 29

  V-2       SAMPLE SUMMARY OF TOP-DOWN BACT IMPACT ANALYSIS RESULTS.  . 30

  V-3       EXAMPLE CONTROL SYSTEM DESIGN PARAMETERS ......... 37

VII-1       EXAMPLE 1 -- COMBUSTION TURBINE DESIGN PARAMETERS ..... 60

VII-2       EXAMPLE 1 -- SUMMARY OF POTENTIAL NO  CONTROL TECHNOLOGY
            OPTIONS .......................... 61

VI I -3       EXAMPLE 1 -- CONTROL TECHNOLOGY HIERARCHY ......... 64

VI I -4       EXAMPLE 1 -- SUMMARY OF TOP-DOWN BACT IMPACT ANALYSIS
            RESULTS FOR NOX ...................... 67

VII-5       EXAMPLE 2 -- COMBUSTION TURBINE DESIGN PARAMETERS ..... 71

VI I -6       EXAMPLE 2 -- SUMMARY OF TOP-DOWN BACT IMPACT ANALYSIS
            RESULTS .......................... 72

  B-l       EXAMPLE OF A CAPITAL COST  ESTIMATE  FOR AN ELECTROSTATIC
            PRECIPITATOR  ....................... B"5

  B-2       EXAMPLE OF A ANNUAL COST ESTIMATE FOR AN ELECTROSTATIC
            PRECIPITATOR APPLIED TO A  COAL-FIRED BOILER ........ B-8
                                       iii

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                                LIST OF FIGURES
Figure                                                                 Eaflfi
 V-l        LEAST-COST ENVELOPE	44
 VII-1      LEAST-COST ENVELOPE FOR EXAMPLE  1	68
 VII-2      LEAST-COST ENVELOPE FOR EXAMPLE  2	73
 B-l        ELEMENTS OF TOTAL CAPITAL COST	B-2
 B-2        ELEMENTS OF TOTAL ANNUAL COST	B-6
                                       IV

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                                  I.   PURPOSE
     This document describes the U.S. Environmental Protection Agency (EPA)
guidance for performing analyses leading to determinations of best available
control technology (BACT) under the prevention of significant air quality
deterioration (PSO) program.  This document supersedes prior EPA guidance

documents, policies, and interpretations in this subject area which are
inconsistent with its terms.
     The BACT requirement is defined as:
      "an emissions limitation (including a visible emission standard)
      based on the maximum degree of reduction for each pollutant
      subject to regulation under the Clean Air Act which would be
      emitted from any proposed major stationary source or major
      modification which the Administrator, on a case-by-case basis,
      taking into account energy, environmental, and economic impacts
      and other costs, determines is achievable for such source or
      modification through application of production processes or
      available methods, systems, and techniques, including fuel
      cleaning or treatment or innovative fuel combustion techniques for
      control of such pollutant.  In no event shall application of best
      available control technology result in emissions of any pollutant
      which would exceed the emissions allowed by any applicable
      standard under 40 CFR Parts 60 and 61.  If the Administrator
      determines that technological or economic limitations on the
      application of measurement methodology to a particular emissions
      unit would make the imposition of an emissions standard
      infeasible, a design, equipment, work practice, operational
      standard, or combination thereof, may be prescribed instead to
      satisfy the requirement for the application of best available
      control technology.  Such standard shall, to the degree possible,
      set forth the emissions reduction achievable by implementation of
      such design, equipment, work practice or operation, and shall
      provide for compliance by means which achieve equivalent results."

      The requirement to conduct a BACT analysis and determination 1s set

forth 1n section 165(a)(4) of the Clean Air Act, 1n federal regulations at

40 CFR 52.21(j), In regulations setting forth the requirements for State

implementation plan approval of a State prevention of significant

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deterioration (PSD) program at 40 CFR 51.166(j), and  in the SIP's of the
various States at 40 CFR Part 52, Subpart A  -  Subpart fFF.  Neither this
guidance document in particular nor EPA's policies regarding BACT in general
establish binding regulatory requirements; such requirements are contained  in
the regulations and implementation plans referred to  above.  Rather, this
document is intended to guide permitting officials in those areas subject to
the federal PSD regulations 40 CFR 52.21.  The EPA strongly recommends that
this guidance also be followed in areas where  a PSD program has received SIP
approval under 40 CFR 51.166.  In any event, both EPA and the States must
continue to adhere to the binding regulatory requirements governing BACT
determinations.  In this regard, EPA notes that it has consistently
interpreted the statutory and regulatory BACT  definitions as containing two
core requirements which EPA believes must be met by any BACT determination,
irrespective of whether it is conducted  in a "top-down" manner.  First, the
BACT analysis must include consideration of  the most  stringent available
technologies, i.e., those which provide the  "maximum degree of emissions
reduction."  Second, any decision to require a lesser degree of emissions
reduction must be justified by an objective  analysis of "energy,
environmental, and economic impacts" contained in the record of the permit
decision.

     A number of terms and acronyms used in  this document have specific
meanings within the context of new source review (HSR).  Since this document
is intended for use by permit engineers and  others generally familiar with
NSR, these terns are used throughout this document, often without definition.
To aid users of the guidance document who are  unfamiliar with these terns,
general definitions of these terns can be found in Appendix A.  The specific
regulatory definitions for most of the terms can be found in 40 CFR 52.21.
Should there be any Inconsistency between the  definitions contained In
Appendix A and the regulatory definitions or other requirements found In Part
40 of the Code of Federal Regulations, Including any policies or

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interpretations Issued pursuant to those regulations following the  issuance of

this document, the regulations and policies, or  interpretations  shall govern.

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                              II.  INTRODUCTION

     On December  1,  1987,  the EPA Assistant  Administrator for Air and
Radiation  Issued  a memorandum that  implemented  certain program  initiatives
designed to  Improve  the  effectiveness of the new  source review  (NSR) programs
within the confines  of existing regulations  and state implementation plans.
Among these was the  "top-down" method for determining best available control
technology (BACT).   The  purpose of  this  document  is to provide  a detailed
description of the top-down method  in order  to  assist permitting authorities
and prevention of significant deterioration  (PSD) applicants in conducting
BACT analyses.

     In brief, the top-down process provides that all available control
technologies be ranked in  descending order of control effectiveness.  The PSO
applicant first examines the  most stringent  --  or "top" -- alternative.  That
alternative  is established as BACT  unless the applicant demonstrates, and the
permitting authority in  its informed judgment agrees, that technical
considerations, or energy, environmental, or economic impacts justify a
conclusion that the  most stringent  technology is not "achievable" in that
case.  If the most stringent  technology  is eliminated in this fashion, then
the next most stringent  alternative is considered, and so on.

     There are two key criteria that must be satisfied in any BACT analysis
under the Clean A1r  Act.   First, the permit  applicant must consider the Host
stringent control technologies available.  Second, if the applicant proposes
less stringent controls, 1t must demonstrate, using objective data,  that the
most stringent controls  are not achievable due  to source-specific energy,
environmental, or economic impacts, and  the  permitting authority must exercise
Us Informed judgment before  accepting that  determination.  The EPA's adoption
of a top-down approach reflects concern  that the Implementation of other prior
approaches to determining  BACT was deficient in fulfilling these key BACT
requirements.  The EPA expects that the  top-down approach will  be «ore

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effective than other  approaches  in assuring that BACT analyses comply with  the

requirements of the Clean  Air Act.

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                            III.   BACT  APPLICABILITY

      The applicability  criteria  for  imposition  of  the  BACT  requirement vary
from State to State.   In general,  BACT is  required  of those  new sources and
modifications to existing  sources  which exceed some specified trigger level.
The trigger level is bases  on potential emissions.

      The BACT requirement  applies to  each  individual new or modified affected
emissions unit and pollutant emitting  activity.  Also,  individual BACT
determinations are performed for each  pollutant  emitted from the same emission
unit.  Consequently, the BACT determination must separately  address, for each
regulated pollutant with a  significant emissions increase at the source, air
pollution controls for each emissions  unit or pollutant emitting activity
subject to review.

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          IV.  A STEP BY STEP SlWilARY OF THE TOP-DOWN PROCESS

     Table IV-1  shows the five basic steps of the top-down procedure,
including some of the key elements associated with each of the individual
steps.  A brief description of each step follows.

IV.A.  STEP 1--IDEHTIFY ALL COHTROL TECHNOLOGIES.
       The first step in a "top-down" analysis is to identify, for the
emissions unit in question (the term "emissions unit" should be read to mean
emissions unit,  process or activity), all "available" control options.
Available control options are those air pollution control technologies or
techniques with a practical potential for application to the emissions unit
and the regulated pollutant under evaluation.  Air pollution control
technologies and techniques include the application of production process or
available methods, systems, and techniques, including fuel cleaning or
treatment or innovative fuel combustion techniques for control of the affected
pollutant.  This includes technologies employed outside of the United States.
In some circumstances inherently  lower-polluting processes are appropriate for
consideration as available control  alternatives.  The control alternatives
should  include not only existing  controls for the source category in question,
but  also  (through technology transfer) controls applied to similar  source
categories  and gas streams, and innovative control technologies.  Technologies
required  under lowest achievable  emission rate (LAER) determinations are
available for BACT purposes and must also be  included as control alternatives
and  usually represent the  top alternative.

      In the course of the  BACT analysis, one or more of the  options may  be
eliminated  from  consideration because they  are demonstrated  to be technically
 infeasible  or have unacceptable energy,  economic, and environmental  Impacts  on
a case-by-case  (or site-specific) basis.  However, at the outset, applicants

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           TABLE IV-1. - KEY STEPS  IN THE 'TOP-DOWN' BACT PROCESS
STEP 1:  IDENTIFY ALL CONTROL TECHNOLOGIES.

            LIST 1s comprehensive  (LAER  included).


STEP 2:  ELIMINATE TECHNICALLY IHFEASIBLE OPTIONS.

            A demonstration of technical infeasibility should be clearly
            documented and should  show, based on physical, chemical, and
            engineering principles, that technical  difficulties would preclude
            the successful use of  the control option on the emissions unit
            under review.


STEP 3:  RANK REN AIMING CONTROL TECHNOLOGIES BY CONTROL EFFECTIVENESS.

      Should include:

            control effectiveness  (percent pollutant removed);
            expected emission rate (tons per year);
            expected emission reduction (tons per year);
            energy impacts (BTU, kWh);
            environmental impacts  (other media and  the emissions of toxic and
            hazardous air emissions); and
            economic impacts (total cost effectiveness, incremental cost
            effeciveness).


STEP 4:  EVALUATE HOST EFFECTIVE CONTROLS AND DOCUMENT RESULTS.

            Case-by-case consideration of energy, environmental, and economic
            impacts.
            If top option 1s not selected as BACT,  evaluate next Most
            effective control option.


STEP 5:  SELECT BACT

           Most effective option not rejected is BACT.
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should initially identify all control options with potential application to
the emissions unit under review.

IV.B.  STEP 2--ELIMINATE TECHNICALLY INFEASIBLE OPTIONS.
     In the second step, the technical feasibility of the control options
identified in step one  is evaluated with respect to the source-specific (or
emissions unit-specific) factors.  In general, a demonstration of technical
infeasibility should be clearly documented and should show, based on physical,
chemical, and engineering principles, that technical difficulties would
preclude the successful use  of the control option on the emissions unit under
review.  Technically infeasible control options are then eliminated from
further consideration  in the BACT analysis.

       For example,  in  cases  where the level  of control  in  a permit  is  not
expected to be  achieved in practice  (e.g., a source has received a  per«it  but
the  project was cancelled, or every  operating source at that  permitted level
has  been physically unable to achieve compliance  with  the  limit), and
supporting documentation  showing why such  limits  are not technically  feasible
 is provided,  the  level of control  (but  not necessarily the technology) may be
eliminated from further consideration.   However,  a  permit  requiring the
 application  of  a  certain technology  or  emission  limit  to be achieved  for such
 technology usually is  sufficient justification to assume the technical
 feasibility  of  that technology  or emission limit.

 IV.C.  STEP  3--RANK REMAINING CONTROL TECHNOLOGIES BY CONTROL EFFECTIVENESS.
       In step 3, all reoaining control alternatives not eliminated 1n step 2
 are ranked and then listed  1n order of over all  control effectiveness for the
 pollutant under review, with the most effective control alternative at the
 top.  A list should be prepared for each pollutant and for each Missions unit
 (or grouping of similar units) subject to a BACT analysis.  The 11st  should
 present the array  of  control technology alternatives and should Include the
 following types of  information:

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      o  control efficiencies  (percent pollutant removed);
      o  expected emission rate  (tons per year, pounds per hour);
      o  expected emissions reduction (tons per year);
      o  economic impacts (cost  effectiveness);
      o  environmental  impacts (includes any significant or unusual
         other media  impacts (e.g., water or solid waste), and, at a
         minimum, the  impact of  each control alternative on emissions of
         toxic or hazardous air  contaminants);
      o  energy  impacts.

      However, an applicant proposing the top control alternative need not
provide cost and other detailed  information in regard to other control
options.  In such cases the applicant should document that the control option
chosen is, indeed, the top, and  review for collateral environmental impacts.

IV.D.  STEP 4--EVALUATE MOST EFFECTIVE CONTROLS AND DOCUMENT RESULTS.
     After the identification of available and technically feasible control
technology options, the energy,  environmental, and economic impacts are
considered to arrive  at the final level of control.  At this point the
analysis presents the associated impacts of the control option in the listing.
For each option  the applicant  is responsible for presenting an objective
evaluation of each impact.  Both beneficial and adverse impacts should be
discussed and, where  possible, quantified.  In general, the BACT analysis
should focus on  the direct impact of the control alternative.

     If the applicant accepts the top alternative in the listing as BACT froa
an economic and  energy standpoint, the applicant proceeds to consider whether
Impacts of unregulated air pollutants or impacts in other eedia would justify
selection of an  alternative control option.  If there are no outstanding
issues regarding collateral environmental impacts,  the analysis is ended and
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the results proposed as BACT.  In the event that the top candidate is shown to
be inappropriate, due to energy, environmental, or economic impacts, the
rationale for this finding should be fully documented for the public record.
Then the next most stringent alternative in the listing becomes the new
control candidate and is similarly evaluated.  This process continues until
the technology under consideration cannot be eliminated by any source-specific
environmental, energy, or economic impacts which demonstrate that alternative
to be inappropriate as BACT.

IV.E.  STEP 5-SELECT BACT
     The most effective control option not eliminated  in step 4 is proposed as
BACT for the pollutant and emission unit under review.
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                   V.   TOP-DOWN ANALYSIS DETAILED PROCEDURE

V.A.  IDENTIFY ALTERNATIVE EMISSION CONTROL  TECHNIQUES  (STEP  1)
     The objective  in step 1  is to identify  all  control options with potential
application to the  source and pollutant  under  evaluation.   Later, one or more
of these options may be eliminated from  consideration because they are
determined to be technically  infeasible  or to  have unacceptable energy,
environmental or economic impacts.

     Each new or modified emission unit  (or  logical grouping of new or
modified emission units) subject to PSD  is required to undergo BACT review.
BACT decisions will generally be made on the information presented in the BACT
analysis, including the degree to which  effective control alternatives were
identified and evaluated.  Potentially applicable control alternatives can be
categorized in three ways.

      o  Inherently Lower-Emitting Processes/Practices, including
         the use of materials and production processes and work
         practices that prevent emissions and  result in lower
         "production-specific" emissions; and
      o  Add-on Controls, such as scrubbers, fabric filters, thermal
         oxidizers and other devices that control and reduce emissions
         after they are produced.
      o  Combinations of Inherently Lower Emitting Processes and Add-on
         Controls.  For example, the application of combustion and post-
         combustion controls to reduce N(L emissions at a gas-fired
         turbine.
     The top-down BACT analysis should consider potentially applicable control
techniques fro* all three categories.  Lower-polluting processes should be
considered based on demonstrations made on the basis of Manufacturing
identical or similar products from identical or similar raw materials or
fuels.  Add-on controls, on the other hand, should be considered based on the
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physical and chemical characteristics of the pollutant-bearing emission
stream.  Thus, candidate add-on controls may have been applied to a broad
range of emission unit types that are similar, insofar as emissions
characteristics, to the emissions unit undergoing BACT review.

V.A.I.  DEMONSTRATED AND TRANSFERABLE TECHNOLOGIES
     Applicants are expected to  identify all demonstrated and potentially
applicable control alternatives.  Information sources to consider include:

      o  EPA's BACT/LAER Clearinghouse and Control Technology Center;
      o  Best Available Control  Technology Guideline - South Coast Air
         Quality Management District;
      o  control technology vendors;
      o  Federal/State/Local new source review permits and associated
         inspection/performance  test  reports;
      o  environmental consultants;
      o  technical journals, reports  and newsletters (e.g., JAPCA and
         the  Mclvaine reports),  air pollution control seminars;  and
      o  EPA's New Source  Review (NSR) bulletin  board.

      The applicant should  make  a good faith effort to compile  appropriate
 information  from  available information sources,  including any  sources
 specified  as  necessary by  the  permit  agency.  The permit agency  should  review
 the  background  search and  resulting  list of control  alternatives presented by
 the  applicant to  check that  it is complete  and comprehensive.

      In Identifying  control  technologies, the applicant needs  to survey the
 range of potentially available options without regard to where and  how  the
 technologies have been applied previously.  This Includes technologies  In
 application outside  the  United States to the  extent  that the  technologies  have
 been successfully demonstrated in  practice  on full  scale operations.  Usually,

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technologies which have not yet been applied  to  (or permitted for) full scale
operations are not considered available;  an applicant should be able to
purchase or construct a process or control device that has already been
demonstrated 1n practice.

     While EPA's Intent Is to ensure broad consideration In determining
alternative control techniques for consideration as BACT, the focus 1s on the
technologies with a demonstrated potential to achieve the highest levels of
control.  It is not necessary to consider unreasonably large numbers of
options.  For example, control options  incapable of meeting an applicable New
Source Performance Standard (NSPS) or State Implementation Plan (SIP) limit
would not meet the definition of BACT under any circumstances and need not be
considered in the BACT analysis and are  not to be considered in step 1.

     The fact that a NSPS for a source category does not require a certain
level of control or particular control technology does not preclude Its
consideration in the top-down BACT analysis.  For example, the fact that S02
scrubbing is not required under the Subpart Db of the NSPS for Industrial-
Commercial -Institutional Steam Generating Units does not preclude the
inclusion of scrubbing from the list of  available technologies or the BACT
selection process.  In the BACT analysis, an  NSPS simply defines the minimal
level of control.  The fact that a more  stringent technology was not selected
for the NSPS (or that a pollutant is not regulated by an NSPS) does not
exclude that control alternative or technology as a BACT candidate.  When
developing a list of possible BACT alternatives, the only reason for comparing
control options to an NSPS 1s to determine whether the control option would
result in an Missions level less stringent than the NSPS.  If so,  the option
is unacceptable.

V.A.2.  INNOVATIVE TECHNOLOGIES
     Although not required in step 1, innovative technologies aav also be
evaluated and proposed as BACT.  To be considered innovative, a control

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technique must meet the provisions of 40 CFR 52.21(b)(19) or, where
appropriate, the applicable SIP definition.  In essence, if a developing
technology has the potential to achieve a more stringent emissions level than
otherwise would constitute BACT or the same level at a lower cost, it may be
proposed as an innovative control technology.  Innovative technologies are
distinguished from technology transfer BACT candidates in that an innovative
technology  is still under development and has not been demonstrated in a
commercial application on identical or similar emission units.  In certain
instances, the distinction between innovative and transferable technology may
not be straightforward.  In these cases, it  is recommended that the permit
agency consult with EPA prior to proceeding with the issuance of  an innovative
control technology waiver.

     Applicants should note that EPA has in  the  past approved only a  limited
number of  innovative control technology waivers  for a  specific control
technology;  if a waiver has been applied for or  granted  to a  similar  source
for the same  technology, granting of additional  waivers  to similar sources  is
highly unlikely.

V.A.3. CONSIDERATION OF  INHERENTLY LOWER POLLUTING PROCESSES/PRACTICES
      Historically,  EPA has  not  considered  the  BACT requirement as a means  to
redefine  the design of the  source when  considering available  control
alternatives.  For example,  applicants  proposing to construct a  coal-fired
electric  generator, have not been  required by EPA as  part  of a BACT  analysis
to consider building  a natural  gas-fired  electric turbine  although the turbine
nay be inherently less polluting per unit  product (in this case  electricity).
 However,  this Is an aspect of the PSD permitting process 1n  which states have
 the discretion to engage 1n a broader analysis if they so  desire. Thus,
 although the gas turbine normally would not be included 1n the list  of control
 alternatives for a coal-fired boiler.   However,  there may be instances where,
 in the permit authority's judgment,  the consideration of alternative
 production processes Is warranted and appropriate for consideration  in the

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BACT analysis.  A production process  is  defined  in  terms of  its physical and
chemical unit operations  used to produce the desired  product from a specified
set of raw materials.   In such cases,  the permit  agency should require the
applicant to Include the  inherently lower-polluting process  in the list of
BACT candidates.

     In many cases, a given production process or emissions unit can be made
to be inherently less polluting (e.g;  the use of  water-based versus solvent
based paints 1n a coating operation or a coal-fired boiler designed to have a
low emission factor for NOX).  In such cases the  ability of design
considerations to make the process inherently less polluting must be
considered as a control alternative for  the  source.   Inherently lower-
polluting processes/practice are usually more environmentally effective
because of lower amounts  of solid wastes  and waste water than are generated
with add-on controls.  These factors are  considered in the cost, energy and
environmental impacts analyses in step 4  to  determine the appropriateness of
the additional add-on option.

     Combinations of inherently lower-polluting processes/practices (or a
process made to be inherently less polluting) and add-on controls are likely
to yield more effective means of emissions control than either approach alone.
Therefore, the option to  utilize a inherently lower-polluting process does
not, in and of itself, mean that no additional add-on controls need be
included in the BACT analysis.  These combinations should be identified in
step 1 of the top down process for evaluation in  subsequent steps.

V.A.4.  EXAMPLE
     The process of Identifying control technology alternatives (step 1 1n the
top-down BACT process)  Is Illustrated 1n  the following hypothetical  example.
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Description of Source
     A PSD applicant proposes to Install automated surface coating process
equipment consisting of a dip-tank priming stage followed by a two-step spray
application and bake-on enamel finish coat.  The product is a specialized
electronics component (resistor) with strict resistance property
specifications that restrict the types of coatings that may be employed.

List of Control Options
      The source is not covered by an applicable NSPS.  A review of the
BACT/LAER Clearinghouse and other appropriate references indicates the
following control options may be applicable:

      Option #1: water-based priaer and finish coat;
      [The water-based coatings have  never been used  in applications
      similar  to this.]
      Option »2: low-VOC solvent/high solids coating  for priaer and
      finish coat;
      [The high  solids/low VOC  solvent  coatings have  recently been
      applied  with  success with  similar products  (e.g., other types of
      electrical components).]
      Option #3: electrostatic  spray  application  to enhance coating
      transfer efficiency; and
       [Electrostatically enhanced  coating  application has  been applied
      elsewhere  on  a  clearly similar  operation.]
      Option  »4: Missions capture with add-on control  via Incineration
      or carbon  adsorber equipment.
       [Jhe VOC capture and control  option  (incineration or carbon
       adsorber)  has been used in many cases  involving the  coating of
      different  products  and the emission  stream  characteristics  *re
       similar to the proposed resistor coating process and is  identified
       as an option available through technology  transfer.]
                                       17

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                                 -DRAFT-
                                   March 15. 1990

     Since the low-solvent  coating,  electrostatically  enhanced  application,
and ventilation with  add-on control  options  may reasonably  be considered for
use in combination to achieve greater  emissions reduction efficiency, a total
of eight control options  are eligible  for  further  consideration.  The options
include each of the four  options  listed  above  and  the  following four
combinations of techniques:

      Option *5; low-solvent coating with  electrostatic applications
      without ventilation and add-on controls;
      Option *6; low-solvent coating without electrostatic  applications
      with ventilation and  add-on  controls;
      Option *7; electrostatic application with add-on control; and
      Option *8: a combination of  all three  technologies.

     A "no control" option  also was  identified  but eliminated because the
applicant's State regulations require at least  a 75 percent reduction in VOC
emissions for a source of this size.  Because  "no control" would not meet the
State regulations it  could  not be  BACT and,  therefore, was not listed for
consideration in the  BACT analysis.

Sin«arv of Kev Points
     The example illustrates several key guidelines for identifying control
options.   These include:

      o  All  available control techniques must be considered in the BACT
         analysis.
      o  Technology transfer uust  be considered  in identifying control
         options.  The fact  that a control option has never been applied
         to process eorission units similar or Identical to that proposed
         does not mean It can be ignored In the BACT analysis if the
         potential for Its application exists.
      o  Combinations of  techniques  should be considered to the extent
         they result  in more effective means of achieving stringent
         emissions levels represented by the "top"  alternative,
         particularly if  the "top" alternative   is eliminated.

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                                 -DRAFT-
                                  March 15. 1990
V.B.  TECHNICAL FEASIBILITY ANALYSIS (STEP 2)
     In step 2, the technical feasibility of the control options identified
in step 1 is evaluated.  This step is straightforward and simple for control
technologies that are demonstrated--if the control technology has been
installed and operated successfully on the type of source under review, it  is
demonstrated and it is technically feasible.  For control technologies that
are not demonstrated in the sense indicated above, the analysis is somewhat
more involved.

      Two key concepts are important in determining whether an undemonstrated
technology is feasible: "availability" and "applicability."  A technology  is
considered "available" if it can be obtained by the applicant through
commercial channels or is otherwise available within the common sense meaning
of the term.  An available technology is "applicable"  if it can reasonably be
installed and operated on the source type under consideration.  A technology
that is available and  applicable is technically feasible.

     Availability in this context  is further explained  using the following
process commonly used  for bringing a control technology concept to reality as
a commercial  product:

     o  concept;
     o   research and patenting;
     o   bench scale or laboratory  testing;
     o   pilot scale testing;
     o   licensing and  cownercial demonstration; and
     o   commercial  sales.

     A control  technique  is  considered  available,  within the context presented
 above,  if it has  reached  the licensing  and  commercial  sales stage  of

                                       19

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                                  -DRAFT-
                                   Harch 15. 1990

 development.   A source would not be required to experience extended time
 delays  or resource penalties to allow research to be conducted on a new
 technique.   Neither is it expected that  an applicant would be required  to
 experience extended trials to learn how  to apply a technology on  a totally
 new and dissimilar source type.  Consequently,  technologies in the pilot scale
 testing stages of development would not  be considered available for BACT
 review.   An exception would be if the technology were proposed and permitted
 under the qualifications  of an innovative control  device  consistent with the
 provisions  of  40 CFR 52.21(v) or,  where  appropriate,  the  applicable SIP.

     In  general,  if a control option is  commercially available, it falls
 within  the  options  to be  identified in step 1.   Commercial  availability  by
 itself,  however,  is not necessarily sufficient  basis  for  concluding a
 technology  to  be  applicable and therefore technically feasible.   Technical
 feasibility, as  determined in Step 2,  also  means  a control  option  may
 reasonably  be  deployed on  or "applicable"  to  the  source type  under
 consideration.

     Technical judgment on the  part of the  applicant  and  the  review authority
 is to be  exercised  in  determining  whether a control alternative is  applicable
 to the  source  type  under consideration.   In general,  a commercially  available
 control option will  be presumed applicable  if  it has  been or  is soon to  be
 deployed  (e.g.,  is  specified in a  permit) on the same or  a  similar  source
 type.  Absent  a  showing of this type,  technical feasibility would be based on
 examination of the  physical  and chemical characteristics  of the pollutant-
 bearing gas stream  and comparison  to the gas stream characteristics of the
 source types to which  the  technology had been applied previously.   Deploy»ent
of the control technology  on an existing source with similar gas stream
characteristics  is  generally sufficient basis for concluding technical
feasibility barring  a  demonstration to the  contrary.
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                                 -DRAFT-
                                  Harch IS. 1990
     Alternately, for process-type control alternatives, more general criteria
must be considered in determining whether or not  it is applicable to the
source 1n question.  The decision would have to be based" on an assessment of
the similarities and differences between the proposed source and other sources
to which the process technique had been applied previously.  Absent an
explanation of unusual circumstances by the applicant showing why a particular
process cannot be used on the proposed source the review authority may presume
it  1s technically feasible.

     In practice, decisions  about technical feasibility are the purview of the
review authority.  Further,  a presumption of technical feasibility nay be made
by  the review authority  based solely on technology transfer.  Decisions of
this type would  be made  in  the case of add-on controls by  comparing  the
physical and chemical  characteristics of  the exhaust  gas stream from the  unit
under review to  those  of the unit from which the  technology  is to be
transferred.  Unless  significant differences between  source  types exist that
are pertinent to the  successful  operation of the  control device,  the control
option  is  presumed  to  be technically  feasible.

      Within the  context  of the  top-down  procedure,  an applicant  becomes
 involved  with  the issue  of technical  feasibility in  asserting that  a control
 option  identified in Step 1 is  technically infeasible.   In this  instance, the
 applicant should make a  practical,  factual  demonstration of infeasibility
 based on  commercial  unavailability and/or unusual circumstances  which exist
 with application of the control  to the applicant's emission units.   Generally,
 such a demonstration would  Involve an evaluation of the pollutant-bearing gas
 stream characteristics and  the capabilities of the technology.   Also a showing
 of unresolvable technical difficulty with applying the control  would
 constitute a showing of technical Infeasibility  (e.g., size of the unit,
 location of the proposed site, and operating problems related to specific
 circumstances of the source),  where the resolution of technical difficulties
 1s a matter of  cost, the applicant should consider the technology as

                                       21

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                                 -DRAFT-
                                   Hareh 15. 1990

technically feasible.   The  economic  feasibility of a  control  alternative  is
reviewed  in the economic  impacts portion of the BACT  selection  process.

     A demonstration of technical  infeasibility is based  on a technical
assessment considering  physical, chemical  and  engineering principles and/or
empirical data showing  that the technology would not  work on  the emissions
unit under review, or that  unresolvable  technical  difficulties  would preclude
the successful deployment of the technique.  Physical modifications needed to
resolve technical obstacles do not in and  of themselves provide a
justification for eliminating the  control  technique on the basis of technical
infeasibility.  However, the cost  of such  modifications can be  considered in
estimating cost and economic impacts which,  in turn,  may  form the basis for
eliminating a control technology.

    Vendor guarantees may provide  an indication of commercial availability and
the technical feasibility of a control technique and  could contribute to a
determination of technical  feasibility or  technical infeasibility, depending
on circumstances.  However,  EPA does not consider  a vendor guarantee alone to
be sufficient justification that a control  option  will work.  Conversely, lack
of a vendor guarantee by  itself does not present sufficient justification that
a control option or an  emissions limit is  technically infeasible.  Generally,
decisions about technical feasibility will  be  based on chemical, and
engineering analyses (as discussed above)  in conjunction  with information
about vendor guarantees.

     A possible outcome of  the top-down  BACT procedures discussed in this
document  Is the evaluation  of Multiple control  technology alternatives which
result in essentially equivalent emissions.  It  1s  not EPA's  Intent to
encourage evaluation of unnecessarily large numbers of control alternatives
for every emissions unit.   Consequently, judgment  should  be used In deciding
what alternatives will  be evaluated  in detail  in the  impacts analysis (Step 4)
of the top-down procedure discussed  In a later  section.    For example,  If two

                                      22

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                                 -DRAFT-
                                  Harch 15. 1990
or more control techniques result in control levels that are essentially
identical considering the uncertainties of emissions factors and other
parameters pertinent to estimating performance, the source may wish to point
this out and make a case for evaluation and use only of the less costly of
these options.  The scope of the BACT analysis should be narrowed in this way
only if there  is a negligible difference in emissions and collateral
environmental  impacts between control alternatives.  Such cases should be
discussed with the reviewing agency before a control alternative is dismissed
at this point  in the BACT analysis due to such considerations.

     It is encouraged that judgments of this type be discussed during a
preapplication meeting between the applicant and the review authority.  In
this way, the applicant can be better assured that the analysis to be
conducted will meet BACT requirements.  The appropriate time to hold such a
meeting during the analysis is following the completion of the control
hierarchy discussed in the next section.

Smaarv of Kev Points
     In summary, important points to remember  in assessing technical
feasibility of control alternatives  include:

    o A control technology that  is "demonstrated" for a given type or
      class of sources is technically feasible unless source-specific
      factors  exist and are documented to justify technical
       infeasibility.
    o Technical feasibility of technology transfer control candidates
      generally 1s assessed based on an evaluation of pollutant-bearing
      gas stream characteristics for the proposed source and other
      source types to which the control had been applied previously.
    o  Innovative controls that have  not been demonstrated on any source
      type  similar to the proposed source need not be considered 1n the
      BACT  analysis.
    o The applicant  is responsible for providing a basis for assessing
      technical feasibility or  infeasibility and the review authority  Is
                                      23

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                                 -DRAFT-
                                  March 15.  1990

      responsible for the decision on what  is and  is not technically
      feasible.

V.C.  RANKING THE TECHNICALLY FEASIBLE ALTERNATIVES TO ESTABLISH A CONTROL
      HIERARCHY (STEP 3)
     Step 3 involves ranking all the technically feasible control alternatives
which have been previously  identified  in  Step 2.   For the regulated pollutant
and emissions unit under review, the control  alternatives are ranked-ordered
from the most to the least  effective  in terms of emission reduction potential.
The primary focus in the ranking at this  time is the overall capabilities of
the control technology options.  Later, once  the control technology is
determined, the focus shifts to the specific  limits to be met by the source.

      Two key issues that must often be addressed  in this process include:

      o  What common units  should be used to  compare emissions
         performance levels among options?
      o  How should control techniques that can operate over a wide
         range of emission  performance levels (e.g., scrubbers, etc.)
         be considered in the analysis?
V.C.I.  CHOICE OF UNITS OF EMISSIONS PERFORMANCE TO COMPARE LEVELS AMONGST
        CONTROL OPTIONS
      In general, this  issue  arises when comparing  inherently lower-polluting
processes to one another or  to  add-on controls.  For example, direct
comparison of powdered (and  low-VOC) coatings and  vapor recovery and control
systems at a «etal furniture finishing operation 1s difficult because of the
different units of neasure for  their effectiveness.  In such cases, 1t 1s
probably most effective to express emissions performance as an average steady
state emissions level per unit  of product or process.  Other examples are:

      o  pounds VOC emission per gallons of solids applied,
      o  pounds PM emission  per ton of cement produced,

                                      24

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                                 -DRAFT-
                                  March 15. 1990
      o  pounds SOo emissions per million Btu heat input, and
      o  pounds SOg emission per kilowatt of electric power produced,

     Calculating annual emissions levels (tons/yr) using these units becomes
straightforward once the projected annual production or processing rates are
known.  The result is an estimate of the annual pollutant emissions that the
source or emissions unit will emit.  Annual "potential" emission projections
are calculated using the source's maximum design capacity and full year round
operation (8760 hours), unless the final permit is to include federally
enforceable conditions restricting the source's capacity or hours of
operation.  However, emissions estimates used for the purpose of calculating
and comparing the cost effectiveness of a control option are based on a
different approach (see section V.D.2.b. COST EFFECTIVENESS).

V.C.2.  CONTROL TECHNIQUES WITH A WIDE RANGE OF EMISSIONS PERFORMANCE LEVELS
    The objective of the top-down BACT analysis is to not only identify the
best control technology, but also a corresponding performance level  (or in
some cases performance range) for that technology considering source-specific
factors.  Many control techniques, including both add-on controls and
inherently lower polluting processes can perform at a wide range of  levels.
Scrubbers, high and low efficiency electrostatic precipitators (ESPs), low-VOC
coatings  are examples of just a few.  It is not the EPA's intention  to require
analysis  of each possible level of efficiency for a control technique, as such
an analysis would result in  a large number of options.  Rather, the  applicant
should use the «>st recent regulatory decisions and performance data for
identifying the emissions performance level(s) to be evaluated In all cases.

      The EPA does not expect an applicant to necessarily accept an  emission
limit as  BACT solely because it was required previously of a similar source
type.  While the most effective level of control must be considered  In the
BACT  analysis, different levels of control for a given control alternative can
                                       25

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                                 -DRAFT-
                                  March 15.  1990
be considered.  This may occur, for example,  the consideration of a lower
level of control for a given technology may be warranted in cases where past
decisions involved different source types.  The evaluation of an alternative
control level can also be considered where the applicant can to the
satisfaction of the permit agency demonstrate that other considerations
demonstrate the need to also evaluate the control alternative at a lower level
of effectiveness.

      Manufacturer's data, engineering estimates and the experience of other
sources provide the basis for determining achievable limits.  Consequently, in
the evaluation, latitude exists to consider any special circumstances
pertinent to the specific source under review, or regarding the prior
application of the control alternative, in assessing the capability of the
control alternative.  However, the basis  for  choosing the alternate level (or
range) of control in the BACT analysis must be well documented 1n the
application.  In the absence of a showing of  differences between the proposed
source and previously permitted sources achieving lower emissions limits, the
permit agency should conclude that the lower  emissions limit is representative
for that control alternative.

     The permit agency should require an  applicant to consider a control
technology alternative otherwise eliminated by the applicant, if the operation
of that control technology at a lower level of control (but still higher than
the next control technology alternative)  could no longer warrant the
elimination of the alternative.  For example, while a scrubber operating at
98% efficiency Bay be eliminated as BACT  by the applicant due to source
specific economic considerations, the scrubber operating in the 90% to 95%
efficiency range nay not have an adverse  economic impact.

     In summary, when reviewing a control technology with a wide range of
emission performance levels,  it  is presumed that the source can achieve the
same emission reduction level as another  source unless the applicant

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                                -DRAFT-
                                  Harch IS. 1990

demonstrates that there are source-specific factors or other relevant
information that provide a technical, economic, energy or environmental
justification to do otherwise.  Also, a control technology that has been
eliminated as having an adverse economic impact at its highest level of
performance, may be acceptable at a lesser level of performance.  For example,
this can occur when the cost effectiveness of a control technology at its
highest level of performance greatly exceeds the cost of that control
technology at a somewhat lower level (or range) of performance.

V.C.3.  ESTABLISHMENT OF THE CONTROL OPTIONS HIERARCHY
     After determining the emissions performance levels (in common units) of
each control technology option identified  in Step 2, a hierarchy is
established that places at the "top" the control technology option that
achieves the lowest emissions level.  Each other control option is then placed
after the "top" in the hierarchy by  its respective emissions performance
level, ranked from lowest emissions to highest emissions (most effective to
least stringent effective emissions control alternative).

     From the hierarchy of control alternatives the applicant  should develop  a
chart (or charts) displaying  the control hierarchy and, where  applicable,:

      o  expected emission rate (tons per  year, pounds per hour);
      o  emissions performance level  (e.g., percent pollutant  removed,
         emissions per  unit product, Ib/MMbtu, ppm);
      o  expected emissions reduction (tons per year);
      o  economic  impacts  (total costs, cost «ffectiveness,  incremental
         cost effectiveness);
      o  environmental  Impacts  (includes any  significant or  unusual
         other  media  Impacts  (e.g.,  water  or  solid waste), and the
          relative  ability  of  each  control  alternative  to control
         emissions of toxic or  hazardous air  contaminants);
       o   energy impacts (indicate  any significant  energy benefits or
          disadvantages).

                                       27

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                                 -DRAFT
                                  March 15. 1990
     This should be done for each pollutant  and  for each emissions unit (or
grouping of similar units) subject to  a  BACT analysis.  The chart is used in
comparing the control alternatives during  step 4 of the BACT selection
process.  Some sample charts are displayed in Table V-l and Table V-2.
Completed sample charts accompany the  example BACT analyses provided in
section VII.

     At this point, it Is recommended  that the applicant contact the reviewing
agency to determine whether the agency feels that any other applicable control
alternative should be evaluated or if  any  issues require special attention in
the BACT selection process.

V.D.  THE BACT SELECTION PROCESS (STEP 4)
     After identification of available control options is the consideration of
energy, environmental, and economic  impacts  and  the selection of the final
level of control.  The applicant is  responsible  for presenting an objective
evaluation of each impact.  Consequently,  both beneficial and adverse impacts
should be discussed and, where possible, quantified.  In general, the BACT
analysis should focus on the direct  impact of the control alternative.
                                      28

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TABLE V-l.  SAMPLE BACT CONTROL HIERARCHY



Pollutant
SO,
2







Technology
First Alternative
Second Alternative
Third Alternative
Fourth Alternative
Fifth Alternative
Baseline Alternative
Range
of
control
W
80-95
80-95
70-85
40-80
50-85
-
Control
level
for BACT
analysis
(*)
95
90
85
75
70
-


Emissions
limit
15 ppm
30 ppm
45 ppm
75 ppm
90 ppm
-
                     29

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                                              TABLE V-2.   SAMPLE SUXNMI7 Of TOP-DOW MCT DIPKT MUTSIS RBSULTS
                                                                                                          DRAFT
 Pollutant/
 Emissions
 Unit
                                                                              Econoalc Impacts
Control alternative
 Emissions
(Wnr,tpy)
Eilssions
reduction(a)
  (tpy)
  Total          Total          Incremental
annualized       Cost             cost
 cost(b)      effectiveness(c)  effectiveness(d)
  ($/yr)         ($/ton)         ($/ton)
                                                                                                Environmental Imnacte
 Toxics
inpact(e)
(Yes/Ho)
  Adverse
environnental
  inpacts(f)
  (Yes/Ho)
  Energy
 Impacts
Incremental
  increase
   over
 baseline(g)
 (HBtu/yr)
NDx/Uhit A
HOx/Unit B
SB/Unit ft
SQ2/Unit. B
Top Alternative
Other Alternatlve(s)
Baseline Alternative

Top Alternative
Other Altenatlve(s)
Baseline Alternative

Top Alternative
Other Alternative(s)
Baseline Alternative

Top Alternative
Other Alternatives)
Baseline Alternative
(a) Missions reduction over baseline level.
(b) Total amiuallied cost (capital, direct, and Indirect) of purchasing,  installing, and operating the proposed control alternative.  A capital recovery
    factor approach using a real interest rate (i.e., absent inflation) is used to express capital costs in present-day annual costs.
(c) Cost Effectiveness Is total annualiied cost for the control option divided by the Missions reductions resulting from the option.
(d) The incremental cost effectiveness is the difference in annualized cost for the control option and the next nost effective control option divided by the
    difference in missions reduction resulting from the respective alternatives.
(e) Toxics Impact mans there is a toxics impact consideration for the control alternative.
(f) Adverse environmental intact Mam there is an  adverse environmental  impact consideration Nith the control alternative.
(g) Energy impacts an the difference la total project energy requirements tilth the control alternative and the baseline control alternative expressed in
    equivalent illlloM of Itw per year.

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                                 -DRAFT
                                  March IS. 1990
     Step 4 validates the suitability of the top control option in the listing
for selection as BACT, or provides clear justification why the top candidate
is Inappropriate as BACT.  If the applicant accepts the top alternative in the
listing as BACT from an economic and energy standpoint, the applicant proceeds
to consider whether collateral environmental impacts (e.g., emissions of
unregulated air pollutants or impacts in other media) would Justify selection
of an alternative control option.  If there are no outstanding issues
regarding collateral environmental impacts, the analysis is ended and the
results proposed as BACT.  In the event that the top candidate is shown to be
inappropriate, due to energy, environmental, or economic impacts, the
rationale for this finding needs to be fully documented for the public record.
Then, the next most effective alternative  in the listing becomes the new
control candidate and is similarly evaluated.  This process continues until
the control technology under consideration cannot be eliminated by any source-
specific environmental, energy, or economic  impacts which demonstrate that the
alternative is  inappropriate as BACT.

     Determining a control alternative to  be inappropriate  involves  a
demonstration that circumstances exist at  the  source under  review which
distinguish  it  from  other  sources where the  control alternative may  have  been
required previously,  or  that argue against  the transfer of  technology or
application of  new technology.  Alternately, where  a control  technique has
been  applied  to only one or  a very limited number of sources,  the applicant
can  Identify  those characteristlc(s)  unique  to those sources  that nay have
made  the  application of  the  control  appropriate  In  those case(s) but not  for
the  source under consideration.   In  showing unusual circumstances, objective
factors dealing with the control  technology and  Its application  should be the
focus of the consideration.   The  specifics of  the  situation will determine  to
what  extent an  appropriate demonstration  has been Bade regarding the
elimination of  the more  effective altematlve(s) as BACT.   In the absence of
 unusual circumstance, the  presumption Is  that  sources  within  the  same category
 are similar in  nature,  and that cost and  other impacts that have been borne by

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                                 -DRAFT-
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one source of a given source category may be  borne by another source of the
same source category.

V.D.I.  ENERGY IMPACTS ANALYSIS
     Applicants should examine the energy requirements of the control
technology and determine whether the use of that technology results in any
significant or unusual energy penalties or benefits.  A source nay, for
example, benefit from the combustion of a concentrated gas stream rich in
volatile organic compounds; on the other hand, more often extra fuel or
electricity is required to power a control device or incinerate a dilute gas
stream.  If such benefits or penalties exist, they should be quantified.
Because energy penalties or benefits can usually be quantified in terms of
additional cost or income to the source, the  energy impacts analysis can, in
most cases, simply be factored into the economic impacts analysis.  However,
certain types of control technologies have inherent energy penalties
associated with their use.  While these penalties should be quantified, so
long as they are within the normal range for  the technology in question, such
penalties should not, in general, be considered adequate justification for
nonuse of that technology.

     Energy impacts should consider only direct energy consumption and not
indirect energy impacts.  For example, the applicant could estimate the direct
energy impacts of the control alternative in  units of energy consumption at
the source ( e.g., Btu, kWh, barrels of oil,  tons of coal).  The energy
requirements of the control options should be shown in terns of total (and in
certain cases also incremental) energy costs  per ton of pollutant removed.
These units can then be converted into dollar costs and, where appropriate,
factored Into the economic analysis.

     As noted earlier, indirect energy impacts (such as energy to produce raw
materials for construction of control equipment) generally are not considered.
However, if the permit authority determines, either independently or based on

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                                 -DRAFT-
                                  March 15. 1990

a showing by the applicant, that the indirect energy impact is unusual or
significant and that the impact can be well quantified, the indirect  impact
may be considered.  The energy impact should still focus on the application of
the control alternative and not a concern over general energy impacts
associated with the project under review as compared to alternative projects
for which a permit is not being sought, or as compared to a pollution source
which the project under review would replace (e.g., it would be inappropriate
to argue that a cogeneration project is more efficient in the production of
electricity than the powerplant production capacity it would displace and,
therefore, should not be required to spend equivalent costs for the control of
the same pollutant).

     The energy impact analysis may also address  concerns over the use of
locally scarce fuels.  The designation of  a  scarce fuel may vary  from region
to region, but  in general  a scarce fuel  is one which  is  in short  supply
locally and can be better  used for alternative purposes, or one which nay  not
be reasonably  available to the source either at  the present time  or  in the
near future.

V.D.2.  COST/ECONOHIC  IMPACTS ANALYSIS
     Cost  effectiveness,  in terms  of dollars per ton  of  pollutant emissions
 reduction,  is  one of the  key criteria  to be  used in  assessing the economic
 feasibility of a  control  alternative.   Incremental  cost  effectiveness may also
 be considered  in  conjunction with  total  cost effectiveness.   In  the  economic
 impacts analysis, primary consideration  should be given  to quantifying  the
 cost of control and not the economic  situation of the individual  source.
 Consequently,  applicants generally should  not  propose elimination of control
 alternatives on the basis of  economic  parameters that provide an Indication of
 the affordablllty of a control  alternative relative to the source.  BACT 1s
 required by law.   Its costs  are Integral to the overall  cost of doing business
 and are not to be considered an afterthought.   Consequently,  for control
 alternatives that have been effectively employed in the same source category,

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                                 -DRAFT-
                                   March 15. 1990
the economic  Impact of  such  alternatives on the particular source under review
should be not nearly  as pertinent  to the BACT decision  making  process as the
total and, where  appropriate,  Incremental  cost effectiveness of  the control
alternative.  Thus, where  a  control  technology has  been successfully applied
to similar sources  in a source  category, an applicant should concentrate on
documenting significant cost differences,  if any, between  the  application of
the control technology  on  those other sources and the particular source under
review.

      Cost effectiveness values above the  levels experienced by  other sources
of the same type  and  pollutant,  are  taken  as an indication  that  unusual and
persuasive differences  exist with  respect  to the source  under  review.  In
addition, where the cost of  a control alternative for the  specific source.
reviewed is within the  range of normal costs for that control  alternative, the
alternative,  in certain limited circumstances,  may  still be eligible for
elimination.  To  justify elimination  of  an  alternative on these  grounds, the
applicant should  demonstrate to the  satisfaction of the  permitting agency that
costs of pollutant removal for  the control  alternative are disproportionately
high when compared to the  cost  of control  for that particular  pollutant and
source in recent  BACT determinations.  If  the circumstances of the differences
are adequately documented  and explained  in  the  application and are acceptable
to the reviewing  agency they may provide a  basis for eliminating the control
alternative.

     In all cases, economic  impacts need to be  considered In conjunction with
energy and environmental Impacts (e.g.,  toxics  and hazardous pollutant
considerations) 1n selecting BACT.  It 1s possible that the environmental
Impacts analysis  or other  considerations (as  described elsewhere) would
override the economic elimination criteria  as described  1n this section.
However, absent overriding environmental  impacts concerns or other
considerations, an acceptable demonstration of a adverse economic Impact  can
be adequate basis for eliminating the control alternative.

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V.D.Z.a.  ESTIMATING CONTROL COST
     Once the control technology alternatives and achievable emissions
performance levels have been identified, capital and annual costs are
developed.  This is an Important step because these costs will form the basis
of the cost and economic impacts used to determine and document If a control
alternative should be eliminated on grounds of  its economic impacts.

     Consistency in the approach to decision-making is a primary objective of
the top-down BACT approach.  In order to maintain and improve the consistency
of BACT decisions made on the basis of cost and economic considerations,
procedures for estimating control equipment costs are based on EPA's OAQPS
Control Cost Manual and are set forth in Appendix B of this document.
Applicants should closely follow the procedures  in the appendix and any
deviations should be clearly presented and justified  in the documentation of
the BACT  analysis.

     Normally the submittal of very detailed  and comprehensive project cost
data  is not necessary.  However, where  initial  control cost projections on  the
part of the applicant  appear excessive or  unreasonable (in light of recent
cost data) more detailed and comprehensive cost data  may be necessary  to
document  the  applicant's projections.  An  applicant proposing the  top
alternative  usually does not need  to  provide  cost data on  the other possible
control  alternatives.

      Control  technology total  cost estimates  developed for BACT  analyses
 should be on the  order of  plus or  minus  30 percent  accuracy.   If wore  accurate
 cost data are available (such  as specific  bid estimates),  these  should be
 used.   However,  these types of costs  nay not  be available  at  the tine  permit
 applications are  being prepared.   Costs should also be  site specific.   Soee
 site specific factors are  costs of raw materials (fuel,  water,  chemicals) and
 labor.  For example, in some remote areas  costs can be  unusually high.  For

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                                 -DRAFT-
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example, remote locations  in Alaska may  experience  a 40  - 50 percent premium
on  installation costs.  The applicant  should document any unusual costing
assumptions used  in the analysis.

     Before costs can be estimated, the  control system design parameters must
be  specified.  The most important item here  is to ensure that the design
parameters used in costing are consistent with emissions estimates used in
other portions of the PSD application  (e.g.,  dispersion modeling inputs and
permit emission limits).  In general,  the BACT analysis should present vendor-
supplied design parameters.  Potential sources of other data on design
parameters are BIO documents used to support  NSPS development, control
technique.guidelines documents, and cost manuals developed by EPA, or control
data in trade publications.  Table V-3 presents some example design parameters
which are important in determining system costs.

     To begin, the limits of the area  or process segment to be costed is
specified.  This well defined area or  process segment is referred to as the
control system battery limits.  The second step is to list and cost each major
piece of equipment within the battery  limits.  The top-down BACT analysis
should provide this list of costed equipment.  The basis for equipment cost
estimates also should be documented, either with data supplied by an equipment
vendor (i.e., budget estimates or bids) or by a referenced source (such as the
OAQPS Control Cost Manual (Fourth Edition), EPA 450/3-90-006,  January 1990).
Inadequate documentation of battery limits is one of the most common reasons
for confusion in comparison of costs of the same controls applied to similar
sources.  For control options that are defined as inherently lower-polluting
processes (and not add-on controls), the battery limits may be the entire
process or project.
                                      36

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            TABLE V-3.  EXAMPLE CONTROL SYSTEM DESIGN PARAMETERS
Control
                                               Deslon parameter
Wet Scrubbers
Carbon Absorbers
Condensers
Incineration
Electrostatic Precipitator
Fabric Filter
 Selective Catalytic Reduction
Scrubber liquor (water, chemicals,  etc.)
Gas pressure drop
Liquid/gas ratio

Specific chemical species
Gas pressure drop
Ibs carbon/lbs pollutant

Condenser type
Outlet temperature

Residence time
Temperature

Specific collection area (ft2/acfm)
Voltage density

Air to cloth ratio
Pressure drop

Space velocity
Ammonia to NOx molar ratio
Pressure drop
Catalyst life
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     Design parameters should correspond to the specified emission level.  The
equipment vendors will usually supply the design parameters to the applicant,
who in turn should provide them to the reviewing agency.  In order to
determine if the design is reasonable, the design parameters can be compared
with those shown in documents such as the OAQPS Control Cost Manual. Control
Technology for Hazardous Air Pollutants (HAPS) Manual (EPA 625/6-86-014,
September 1986), and background  information documents for NSPS and NESHAP
regulations.  If the design specified does not appear reasonable, then the
applicant should be requested to supply performance test data for the control
technology in question applied to the same source, or a similar source.

V.D.2.b.  COST EFFECTIVENESS
     Cost effectiveness, or dollars per ton of pollutant reduction, is one of
the key economic criterion used  to determine  if a control option presents
adverse economic impacts.  By expressing costs in terms of the amount of
emission reduction achieved, comparisons can  more readily be performed among
different locations and types of sources.

     Cost effectiveness is calculated as the  annualized cost of the control
option being considered divided  by the baseline emissions minus the control
option emissions rate, as shown  by the following formula:

                Cost Effectiveness  (dollars per ton  removed)  -
           	Control option annualized cost	
           Baseline emissions rate  -  Control  option  emissions rate

     Costs are calculated in (annualized) dollars per year ($/yr) and
emissions rates are calculated 1n tons per year (tons/yr).  The result is a
cost effectiveness nuaber in (annualized) dollars per ton ($/ton) of pollutant
removed.
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     The baseline emissions rate represents a realistic scenario of upper
boundary uncontrolled emissions for the source.  The NSPS/NESHAP requirements
or the application of controls, including other controls necessary to comply
with State or local air pollution regulations, are not considered in
calculating the baseline emissions.   In other words, baseline emissions are
essentially uncontrolled emissions, calculated using realistic upper boundary
operating assumptions.

      A realistic upper-bound case scenario does not mean that the source
operates in an absolute worst case manner all the time.  For example, in
developing a realistic upper boundary case, baseline emissions calculations
can also consider  inherent physical or operational constraints on the source.
Such constraints should accurately reflect the true upper boundary of the .
source's ability to physically operate and the applicant should submit
documentation to verify these constraints.  If the applicant does not
adequately verify  these constraints,  then the reviewing agency should consider
the application  incomplete  in cases where the constraints would substantively
affect the outcome of the BACT determination.  In addition, the reviewing
agency may require the applicant  to calculate the cost effectiveness based  on
values exceeding the  upper  boundary assumptions to determine whether or  not
the assumptions  have  a deciding  role  in  the BACT determination.   If the
assumptions have a deciding role  in the  BACT determination, the reviewing
agency  should  include enforceable conditions  in the permit.  For  example, VOC
emissions  from  a storage  tank might vary significantly with temperature,
volatility of  liquid  stored, and throughput.   In this case,  1t would not be
realistic  to calculate annual  VOC emissions by extrapolating over the course
of a  year  VOC  emissions based  solely  on  the hottest summer day.   Instead, the
 range of expected  temperatures  should be acknowledged  1n determining baseline
 emissions.   Likewise, 1t  would be unreasonable to assume that gasolIne would
 be stored  1n  a storage tank being build  to feed an  oil-fired power boiler or
 that  such  a  tank will be  continually  filled and emptied. However, on the other
 hand, an upper boundary  case for a storage tank being  constructed to store  and

                                       39

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                                 -DRAFT-
                                   Harch IS. 1990
transfer liquid fuels  at  a  marine  terminal  would  consider  emissions based on
the most volatile liquids at  a  high  annual  through  put  level  since  it would
not be unrealistic for the  tank to operate  in such  a manner.

      In addition, historic upper  boundary  operating data, typical for the
source or  industry, may be  used in defining baseline emissions  in evaluating
the cost effectiveness of a control  option  for a  specific  source.   For
example, if for a source  or industry,  historical  upper  boundary operations
call for two shifts a  day,  it is not necessary to assume full time (8760
hours) operation on an annual basis  in  calculating  baseline emissions.  For
comparing cost effectiveness, the  same  realistic  upper  boundary assumptions
must, however, be used for  both the  source  in question  and other sources (or
source categories) that will  later be  compared during the  BACT analysis.  For
example, suppose  (based  on verified historic data  regarding  the industry in
question) a given source  can  be expected  to utilize numerous  colored Inks over
the course of a year.   Each color  ink  has a different VOC  content ranging from
a high VOC content to  a relatively low  VOC  content.  The source verifies that
its operation will indeed call  for the  application  of numerous color inks.  In
this case, it is more  realistic for  the baseline  emission  calculation for the
source (and other similar sources) to be  based on the expected mix of inks
that would be expected to result in  an  upper boundary case annual VOC
emissions rather than  an  assumption  that  only one color (i.e, the ink with the
highest VOC content) will be  applied exclusively  during the whole year.

      In another example, suppose  sources in a particular  industry
historically operate at most  at 85 percent  capacity.  For BACT cost
effectiveness purposes (but not for  applicability), an applicant aay calculate
cost effectiveness using  85 percent  capacity.   However, In comparing costs
with similar sources,  the applicant  must  consistently use an 85 percent
capacity factor for the cost  effectiveness  of  controls on those other sources.
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                                 -DRAFT-
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      Although permit conditions are normally used to make operating
assumptions enforceable, the use of "standard industry practice" parameters
for cost effectiveness calculations (but nfll applicability determinations) is
acceptable without permit conditions.  However, when a source projects
operating parameters (e.g., limited hours of operation or capacity
utilization, type of fuel, raw materials or product mix or type) that are
lower than standard Industry practice or which have a deciding role in the
BACT determination, then these parameters or assumptions must be made
enforceable with permit conditions.  If the applicant will not accept
enforceable permit conditions, then the reviewing agency should use the
absolute worst case uncontrolled emissions.  This 1s necessary to ensure that
the source operates within the upper boundary of those parameters used 1n
defining baseline emissions.  For example, the baseline emissions calculation
for an emergency standby generator may consider the fact that the source does
not intend to operate more than 2 weeks a year.   On the other hand, baseline
emissions associated with a base-loaded turbine would not consider limited
hours of operation.  This produces a significantly higher level of baseline
emissions than  in the case of the emergency/standby unit and results  in more
cost effective  controls.  As a consequence of  the dissimilar baseline
emissions, BACT for the two cases could be very different.  Therefore, it  is
 important that  the applicant confirm that the  operational assumptions used to
define  the  source's baseline emissions  (and  BACT) are genuine.  As previously
mentioned,  this is usually done through enforceable permit conditions which
 reflect limits  on  the source's operation which were used to calculate baseline
 emissions.   In  certain  cases, as discussed above, such explicit perwlt
 conditions  «ay  not be necessary.   For example, a  source for which continuous
 operation  would be a  physical  Impossibility  (by virtue of  Its design) «ay
 consider this limitation  In  estimating  baseline emissions, without a direct
 permit  limit on operations.   However, the  permit  agency has the responsibility
 to verify that  the source is constructed  and operated consistent with the
 Information and design  specifications contained  in  the permit  application.
                                       41

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                                 -DRAFT-
                                  March IS.  1990
      For some sources it may be more difficult to define what emissions level
actually represents uncontrolled emissions  in calculating baseline emissions.
For example, uncontrolled emissions could theoretically be defined for a spray
coating operation as the maximum VOC content coating at the highest possible
rate of application that the spray equipment could physically process, even
though use of such a coating or application rate  is unrealistic for the
source.  Assuming use of a coating with a VOC content and application rate
greater than expected is unrealistic and would overestimate the emissions
reductions achievable by various control options.  The cost effectiveness of
the options could also be greatly underestimated.  In this case, uncontrolled
emission factors should be represented by the highest realistic VOC content of
the types of coatings and highest realistic application rates that would be
used by the source, rather than by highest  VOC based coating materials or rate
of application in general.

      Conversely, if uncontrolled emissions are underestimated, emissions
reductions to be achieved by the various control  options would also be
underestimated and their cost effectiveness overestimated.  For example, this
type of situation occurs in the previous example  if the baseline for the above
coating operation was based on a VOC content coating or application rate that
is too low  [when the source had the ability and intent to utilize (even
infrequently) a higher VOC content coating  or application rate].

     In addition to the cost effectiveness  of a control option, incremental
cost effectiveness between control options  may also be calculated where the
control option 1s not selected.  The  Incremental  cost effectiveness should be
examined  1n combination with the total cost effectiveness in order to justify
elimination of a control option.  For  the reasons discussed below, the
incremental cost , by Itself, generally is  not an appropriate basis on which
to eliminate a control option.  The Incremental cost effectiveness calculation
compares  the costs and emissions performance  level of a control option to
those of  the next most stringent option,  as shown in the following formula:

                                       42

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                                 -DRAFT-
                                  March 15. 1990
           Incremental Cost  (dollars  per  incremental  ton  removed)  -
    Control option annualized  cost  -  Annualized  cost  of next  control  option
        Next control option emission rate - Control option emissions rate

      Caution should be exercised in deriving incremental costs of candidate
control options.  For example, assume that eight technically available control
options for analysis are listed in the BACT hierarchy.  These are represented
as A through H in Figure V-l.  In calculating incremental costs, the analysis
should only be conducted for control options that are dominant among all
possible options.  In Figure V-l, the dominant set of control options, A, B,
D, F, G, and H, represent the least-cost envelope depicted by the curvilinear
line connecting them.  Points C and  E are inferior options and should not be
considered in the derivation of incremental cost effectiveness.  Points C and
E represent inferior controls because D will buy more emissions reduction for
less money than C; and similarly, F  will by more reductions for less money
than E.

      Consequently, care should be taken  in selecting the dominant  set of
controls when calculating incremental costs.  First, the control options need
to  be rank ordered  in ascending order of higher costs.  Then, as Figure V-l
illustrates, the most reasonable smooth curve of the control options  is
plotted  in such a way that  incremental cost effectiveness should be  ever-
increasing for  increasing levels of  stringency.  The  incremental cost
effectiveness  1s then determined by  the difference 1n total annual  costs
between  two contiguous options divided by the difference  1n emissions
reduction.  An example 1s Illustrated  1n Figure V-l  for the  Incremental cost
effectiveness  for control option F.  The vertical distance, 'delta'  Total
Annual  Costs,  divided by the  horizontal distance,  'delta" Emissions  Reduction,
would  be the measure of  the incremental cost effectiveness for option F.
                                       43

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                        DRAFT



       Figure V-1.  LEAST-COST ENVELOPE
 t
  Dominant controls (A, B, D, F, G, H) lie on envelope
03

o
O
O

U>

s
cc
o
    -A
Inferior controls (C,E)
                                     'd*lta' Total Annual Cost*
                             *(ttta* Emission* Reduction
               I     t
          INCREASING EMISSIONS REDUCTION (Tons/yr)

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                                 -DRAFT-
                                  March 15. 1990
      A comparison of Incremental costs can also be useful in evaluating the
economic viability of a specific control option over a range of efficiencies.
For example, depending on the capital and operational cost of a control
device, total and incremental cost may vary significantly (either increasing
or decreasing) over the operation range of a control device.
      In addition, when evaluating the total or incremental cost effectiveness
of a control alternative, reasonable and supportable assumptions regarding
control efficiencies should be made.  An unrealistically low assessment of the
emission reduction potential of  a certain technology could result in inflated
cost effectiveness figures.

      The final decision regarding the  reasonableness of calculated cost
effectiveness values will be made by the review authority considering  previous
regulatory decisions.  Study cost estimates used  in  BACT are typically
accurate to  ± 20  to 30 percent.  Therefore, control  cost options which are
within  ± 20  to 30 percent of each other should generally be considered to be
indistinguishable when comparing options.

V.D.2.C.  DETERMINING AN ADVERSE ECONOMIC  IMPACT

       It  is important  to keep  in mind  that  BACT is primarily  a technology-
based standard.   In  essence,  if the  cost of reducing emissions with  the top
control alternative,  expressed in dollars  per ton, is on  the  same  order as  the
cost previously borne by other sources of the same type in applying  that
control alternative,  the alternative should initially be  considered
economically achievable, and therefore acceptable as BACT.   However,  unusual
 circumstances «ay greatly affect the cost of controls in  a specific
 application.  If so they should be  documented.  An example of an unusual
 circumstance night be the unavailability In an arid region of the large
 amounts of water needed for a scrubbing system.  Acquiring water from a
 distant location might add unreasonable costs to the alternative,  thereby
 justifying  its elimination on economic grounds.  Consequently, where unusual

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factors  exist  that  result in cost/economic impacts beyond  the  range  normally
incurred by  other sources in that category,  the technology can be  eliminated
provided the applicant  has adequately identified the circumstances,  including
the cost or  other analyses,  that show what is significantly different about
the proposed source.

     Where the cost of  a  control  alternative for the specific  source being
reviewed is  within  the  range of  normal  costs for that control  alternative, the
alternative  may also be eligible for  elimination in  limited circumstances.
This may occur, for example,  where a  control  alternative has not been required
as BACT  (or  its application  as BACT has been extremely limited) and there is a
clear demarcation between recent BACT control  costs  in that source category
and the  control costs for sources in  that  source category  which have been
driven by other constraining  factors  (e.g.,  need to  meet a PSD  increment or a
NAAQS).  To  justify elimination  of an alternative on these grounds, the
applicant should demonstrate  to  the satisfaction of  the permitting agency that
costs of pollutant  removal  (e.g.,  dollars  per  total  ton removed) for the
control  alternative are disproportionately high  when  compared to the cost of
control  for  the pollutant in  recent BACT determinations.   Specifically,  the
applicant should document that the cost  to the applicant of the control
alternative  is significantly  beyond the  range  of  recent costs normally
associated with BACT for  the  type of  facility  (or  BACT control  costs in
general) for the pollutant.   This type  of  analysis should demonstrate that a
technically  and economically  feasible control option  is nevertheless, by
virtue of the magnitude of  its associated  costs  and  limited application,
unreasonable or otherwise not "achievable" as BACT in the particular case.
Total  and Incremental cost effectiveness numbers are factored Into this  type
of analysis.  However,  such economic  information should be coupled with  a
comprehensive demonstration, based  on objective factors,  that the technology
is inappropriate in the specific  circumstance.
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     The economic Impact portion of the BACT analysis should not focus on
inappropriate factors or exclude pertinent factors, as the results may be
misleading.  For example, the capital cost of a control option may appear
excessive when presented by itself or as a percentage of the total project
cost.  However, this type of information can be misleading.  If a large
emissions reduction is projected, low or reasonable cost effectiveness numbers
may validate the option as an appropriate BACT alternative irrespective of the
apparent high capital costs.  In another example, undue focus on incremental
cost effectiveness can give an impression that the cost of a control
alternative is unreasonably high, when, in fact, the total cost effectiveness
is well within the normal range of acceptable BACT costs.

V.D.3.  ENVIRONMENTAL IMPACTS ANALYSIS
     The environmental impacts analysis is not to be confused with the air
quality impact analysis, which is an independent statutory and regulatory
requirement and is conducted separately from the BACT analysis.  The purpose
of the air quality analysis is to demonstrate that the source (using the level
of control ultimately determined to be BACT) will not cause or contribute to a
violation of any applicable national ambient air quality standard or PSD
increment.  Thus, regardless of the level of control proposed as BACT, a
permit cannot be issued to a source that would cause or contribute to such  a
violation.  In contrast, the environmental impacts portion of the BACT
analysis concentrates on impacts other than  impacts on air quality (i.e.,
ambient concentrations) due to emissions of  the regulated pollutant  In
question,  such as solid or hazardous waste generation, discharges of polluted
water  from a control device, visibility impacts, or emissions of unregulated
pollutants.

     Thus, the fact that a given control alternative would result 1n only a
slight decrease  in ambient concentrations of the pollutant 1n question when
compared  to a  less stringent control alternative should not be viewed as an
adverse environmental  impact justifying rejection of the more stringent

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control alternative.  However,  if  the  cost effectiveness  of  the  more  stringent
alternative is exceptionally high,  it  may (as  provided  in section  V.D.2.) be
considered in determining  the existence  of an  adverse economic impact that
would justify rejection of the  more  stringent  alternative.

     The applicant should  identify any significant  or unusual environmental
impacts associated with a  control  alternative  that  have the  potential to
affect the selection or elimination  of a control  alternative.  Some control
technologies may have potentially  significant  secondary (1.C;, collateral)
environmental impacts.  Scrubber effluent,  for example, may  affect water
quality and land use.  Similarly,  emissions of water vapor from  technologies
using cooling towers may affect local  visibility.   Other  examples of secondary
environmental impacts could include  hazardous  waste discharges,  such as spent
catalysts or contaminated  carbon.  Generally,  these types of environmental
concerns become important  when  sensitive site-specific receptors exist or when
the incremental  emissions  reduction  potential  of  the top  control  is only
marginally greater than the next most  effective option.   However, the fact
that a control device creates liquid and solid waste that must be disposed of
does not necessarily argue against selection of that technology  as BACT,
particularly if the control  device has been  applied to similar facilities
elsewhere and the solid or liquid waste  problem under review is not
significantly greater than in those  other  applications.  On  the other hand,
where the applicant can show that unusual  circumstances at the proposed
facility create greater problems than experienced elsewhere, this may provide
a basis for the elimination of that  control  alternative as BACT.

     The procedure for conducting an analysis  of environmental  impacts should
be made based on a consideration of  site-specific circumstances.   In general,
however, the analysis of environmental impacts starts with the Identification
and quantification of the  solid, liquid,  and gaseous discharges from the
control device or devices  under review.  This  analysis of environmental
impacts should be performed  for the entire hierarchy of technologies even if

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the applicant proposes to adopt the "top", or most stringent, alternative).
However, the analysis need only address those control alternatives with any
significant or unusual environmental  impacts that have the potential to affect
the selection or elimination of a control alternative.  Thus, the relative
environmental impacts (both positive and negative) of the various alternatives
can be compared with each other and the "top" alternative.

     Initially, a qualitative or semi-quantitative screening is performed to
narrow the analysis to discharges with potential for causing adverse
environmental effects.  Next, the mass and composition of any such discharges
should be assessed and quantified to the extent possible, based on readily
available information.  Pertinent information about the public or
environmental consequences of releasing these materials should also be
assembled.

V.D.3.a.  EXAMPLES (Environmental Impacts)
     The following paragraphs discuss some possible factors for considerations
in evaluating the potential for an  adverse other media impact.

     o  Hater Impact
     Relative quantities of water used and water pollutants produced and
discharged as a result of use of each alternative emission control  system
relative to  the "top" alternative would be  identified.  Where possible, the
analysis would assess the effect on ground water and  such local surface water
quality parameters as ph, turbidity,  dissolved  oxygen, salinity, toxic
chemical levels, temperature, and any other  important considerations.  The
analysis should consider whether applicable  water quality standards will be
met  and the  availability and effectiveness of various techniques to reduce
potential  adverse effects.
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                                  March IS.  1990
     o  So7/d Haste Disposal Impact
     The quality and quantity of solid waste  (e.g., sludges, solids) that must
be stored and disposed of or recycled as  a result of the application of each
alternative emission control system would be  compared with the quality and
quantity of wastes created with the "top" emission control system.  The
composition and various other characteristics of the solid waste (such as
permeability, water retention, rewatering of  dried material, compression
strength, Teachability of dissolved ions, bulk density, ability to support
vegetation growth and hazardous characteristics) which are significant with
regard to potential surface water pollution or transport into and
contamination of subsurface waters or aquifers would be appropriate for
consideration.

     o  Irreversible or Irretrievable Commitment of Resources
     The BACT decision may consider the extent to which the alternative
emission control systems may involve a trade-off between short-term
environmental gains at the expense of long-term environmental losses and the
extent to which the alternative systems may result in irreversible or
irretrievable commitment of resources (for example, use of scarce water
resources).

     o  Other Environmental Impacts
     Significant differences in noise levels, radiant heat, or dissipated
static electrical energy may be considered.

     One environmental impact that could  be examined Is the trade-off
between emissions of the various pollutants resulting fro* the application of
a specific control technology.  The use of certain control technologies Bay
lead to  Increases  in emissions of pollutants  other than those the technology
was designed to control.  For example, the use of certain volatile organic
compound (VOC) control technologies can Increase nitrogen oxides (NOX)
emissions.   In this instance, the reviewing authority may want to give

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                                  March IS. 1990
consideration to any relevant local  air quality concern relative to the
secondary pollutant (in this case NOX) in the region of the proposed source.
For example, if the region in the example were nonattainment for NOX, a
premium could be placed on the potential NOX impact.  This could lead to
elimination of the most stringent VOC technology (assuming it generated high
quantities of NOX) 1n favor of one having less of an impact on ambient NOX
concentrations.  Another example is the potential for higher emissions of
toxic and hazardous pollutants from a municipal waste combustor operating at a
low flame temperature to reduce the formation of NOX.  In this case the real
concern to mitigate the emissions of toxic and hazardous emissions (via high
combustion temperatures) may well take precedent over mitigating NOX emissions
through the use of a low flame temperature.  However, in most cases  (unless an
overriding concern over the formation and  impact of the secondary pollutant is
clearly present as  in the examples given),  it  is not expected that this type
impact would affect the outcome of the decision.

     Other  examples of collateral environmental  impacts would  include
hazardous waste discharges  such as spent catalysts  or contaminated carbon.
Generally these types  of environmental  concerns  become  important when  site-
specific  sensitive  receptors  exist or when the incremental emissions reduction
potential of the  top  control  option  is  only marginally greater  than  the next
most  effective option.

V.D.3.b.  CONSIDERATION OF EMISSIONS OF TOXIC AND HAZARDOUS  AIR POLLUTANTS
      The generation or reduction  of  toxic  and hazardous  emissions,  Including
 compounds not regulated under the Clean Air Act, are considered as part  of the
 environmental 1«pacts analysis.   Pursuant  to the EPA Administrator's decision
 1n north County Resource Recovery Associates. PSD Appeal  No. 85-2 (Remand
 Order, June 3, 1986), a PSD permitting authority should consider the effects
 of a given control alternative on emissions of toxics or hazardous pollutants
 not regulated under the Clean A1r Act.   The ability of a given control
 alternative to control releases of unregulated toxic or hazardous emissions

                                       51

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                                 -DRAFT-
                                  March IS. 1990
roust be evaluated and nay, as appropriate, affect the BACT decision.
Conversely, hazardous or toxic emissions  resulting from a given control
technology should also be considered and  may, as appropriate, also affect the
BACT decision.

     Because of the variety of sources and pollutants that nay be considered
in this assessment, it Is not feasible for the EPA to provide highly detailed
national guidance on performing an evaluation of the toxic Impacts as part of
the BACT determination.  Also, detailed  Information with respect to the type
and magnitude of emissions of unregulated pollutants for many source
categories 1s currently limited.  For example, a combustion source e«1ts
hundreds of substances, but knowledge of  the magnitude of some of these
emissions or the hazards they produce is  sparse.  While the EPA Is pursuing a
variety of projects that will help pertaining authorities to determine
pollutants of concern, EPA believes it 1s appropriate for agencies to proceed
on a case-by-case basis using the best information available.  Thus, the
determination of whether the pollutants would be emitted in amounts sufficient
to be of concern is one that the permitting authority has considerable
discretion in making.  However, reasonable efforts should be made to address
these issues.  For example, such efforts might include consultation with the:

      o  EPA Regional Office;
      o  Control Technology Center (CTC);
      o  National Air Toxics Information Clearinghouse;
      o  A1r Risk Information Support Center in the Office of Air
         Quality Planning and Standards (OAQPS); and
      o  review of the literature, such as: EPA-prepared compilations of
         emission factors.
Source-specific Information supplied by the permit applicant Is often the best
source of information, and it Is Important that the applicant be made aware of
                                      52

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                                 -DRAFT-
                                  Karch IS. 1990
its responsibility to provide for a reasonable accounting of air toxics
emissions.

     Similarly, once the pollutants of concern are Identified, the permitting
authority has flexibility In determining the methods by which 1t factors air
toxics considerations Into the BACT determination, subject to the obligation
to make reasonable efforts to consider air toxics.  Consultation by the review
authority with EPA's Implementation centers, particularly the CTC, is again
advised.

     It is important to note that several acceptable methods, Including risk
assessment, exist to Incorporate air  toxics concerns Into the BACT decision.
The depth of the toxics assessment will vary with the circumstances of the
particular source under review, the nature and magnitude of the toxic
pollutants, and the locality.  Emissions of toxic or hazardous pollutant of
concern to the permit agency should be  identified and, to the extent possible,
quantified.  In addition, the effectiveness of the various control
alternatives in the hierarchy at controlling the toxic pollutant  should be
estimated and  summarized to assist  in making judgements about how potential
emissions of toxic or hazardous  pollutants may be mitigated through the
selection of one control option  over  another.

     Under a top-down BACT analysis,  the control alternative  selected  as BACT
will most  likely reduce toxic emissions as well as the regulated  pollutant.
An example  1s  the emissions of heavy  metals typically associated  with  coal
combustion.  The metals generally  are a portion of, or adsorbed on, the fine
partlculate  In the exhaust gas stream.  Collection of the ptrtlculate  1n a
high  efficiency fabric filter rather than  a  low efficiency electrostatic
predpltator  reduces  criteria pollutant partlculate matter emissions  and
toxic heavy metals emissions.  Because 1n most  Instances the  Interests of
 reducing toxics coincide  with  the  interests of  reducing  the pollutants subject
                                       53

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                                 -DRAFT-
                                   Narch 15. 1990
to BACT, consideration of toxics In the BACT analysis generally amounts to
quantifying toxic  emission levels  for the various control  options.

      In  limited  other instances, though,  control  of regulated  pollutant
emissions may compete with control  of toxic compounds,  as  in the case of
certain  selective  catalytic reduction (SCR) NOX  control  technologies.  The SCR
technology  itself  results In emissions  of ammonia,  which increase, generally
speaking, with  increasing levels of NOX  control.   It  1s  the Intent of the
toxics screening in  the BACT procedure  to Identify  and quantify  this type of
toxic effect.  Generally,  toxic  effects  of this  type  will  not  necessarily be
overriding concerns  and will  likely not  to affect BACT decisions.  Rather, the
Intent is to require a screening of toxics emissions  effects to  ensure that a
possible overriding  toxics issue does not escape  notice.

     On occasion,  consideration  of  toxics emissions may  support  the selection
of a control technology that  yields less  than the maximum  degree of reduction
in emissions of  the  regulated pollutant  in question.  An example  is the
municipal solid  waste  combustor  and resource recovery facility that was the
subject of the North  County remand.   Briefly, BACT for S02 and PM was selected
to be a lime slurry  spray drier  followed  by a fabric  filter.   The combination
yields good S02  control   (approximately 83  percent),  good  PM control
(approximately 99.5  percent)  and also removes acid gases (approximately 95
percent), metals,  dioxins,  and   other unregulated pollutants.   In this
instance, the permitting authority  determined that good balanced control  of
regulated and unregulated  pollutants  took priority over achieving the maximum
degree of emissions  reduction for one or  more regulated pollutants.
Specifically, higher  levels (up  to  95 percent) of S02 control  could have  been
obtained by a wet  scrubber.
                                      54

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                                 -DRAFT-
                                  Karch 15. 1990

V.E.  SELECTING BACT (STEP 5)
     The most effective control alternative not eliminated 1n Step 4 Is
selected as BACT.

     It 1s Important to note that, regardless of the control level proposed by
the applicant as BACT, the ultimate BACT decision 1s made by the permit
Issuing agency after public review.  The applicant's role 1s primarily to
provide Information on the various control options and, when It proposes a
less stringent control option, provide a detailed rationale and supporting
documentation for eliminating the more stringent options.  It 1s the
responsibility of the permit agency to review the documentation and rationale
presented and; (1) ensure that the applicant has addressed all of the nost
effective control options that could be applied and; (2) determine that the
applicant has adequately demonstrated that energy, environmental, or economic
impacts justify any proposal to eliminate the more effective control options.
Where the permit agency does not accept the basis for the proposed elimination
of  a control option, the agency may inform the applicant of the need for more
information regarding the control option.  However, the BACT selection
essentially should default to the highest level of control for which the
applicant could not adequately justify its elimination based on energy,
environmental and economic impacts.   If the applicant  is unable to provide to
the permit agency's satisfaction an adequate demonstration for one or more
control alternatives, the permit agency should proceed to establish BACT and
prepare a draft permit based on the most effective control option for which an
adequate justification for rejection was not provided.

V.F.  OTHER CONSIDERATIONS
     Once energy, environmental, and  economic  Impacts  have been considered,
BACT can only be made more stringent  by other considerations outside the
normal  scope of the BACT analysis as  discussed under the above steps.
Examples  Include cases where BACT does not produce a degree of control
stringent enough to prevent exceedences of a national  ambient air quality

                                       55

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                                 -DRAFT-
                                  terch 15.  1990
standard or PSD Increment, or where the State or local agency will not accept
the level of control selected as BACT and requires more stringent controls to
preserve a greater amount of the available  Increment.  A permit cannot be
Issued to a source that would cause or contribute to such a violation,
regardless of the outcome of the BACT analysis.  Also, States which have set
ambient air quality standards at levels tighter than the federal standards nay
demand a more stringent level of control at a source to demonstrate compliance
with the State standards.  Another consideration which could override the
selected BACT are legal constraints outside of the Clean Air Act requiring the
application of a more stringent technology  (e.g., a consent decree requiring a
greater degree of control).  In all cases,  regardless of the rationale for the
permit requiring a more stringent emissions limit than would have otherwise
been chosen as a result of the BACT selection process, the emission Unit in
the final permit (and corresponding control alternative) represents BACT for
the permitted source on a case-by-case basis.

     The BACT emission limit in a new source permit is not set until the final
permit is issued.  The final permit is not  issued until a draft permit has
gone through public comment and the permitting agency has had an opportunity
to consider any new information that may have come to light during the comment
period.  Consequently, in setting a proposed or final BACT limit, the permit
agency can consider new information it learns, including recent permit
decisions, subsequent to the submittal of a complete application.  This
emphasizes the Importance of ensuring that  prior to the selection of a
proposed BACT, all potential sources of Information have been reviewed to
ensure that the list of potentially applicable control alternatives 1s
complete («ost Importantly as it relates to any Bore effective control options
than the one chosen) and that all considerations relating to economic, energy
and environmental Impacts have been addressed.  These responsibilities reside
with the applicant.
                                      56

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                                 -DRAFT-
                                  Narch IS.  1990

                         VI.  ENFORCEABILITY  OF BACT

     To complete the BACT process, the reviewing agency oust establish an
enforceable emission limit for each emission  unit at the source and for each
pollutant subject to review that  is emitted from the source.  If technological
or economic limitations in the application of a measurement methodology to a
particular emission unit would make an emissions limit infeasible, a design,
equipment, work practice, operation standard, or combination thereof, nay be
prescribed.  Also, the technology upon which  the BACT emissions limit is based
should be specified in the permit.  These requirements should be written in
the permit so that they are specific to the individual emission unit(s)
subject to PSD review.

     The emissions limits must be included in the proposed permit submitted
for public comment, as well as the final permit.  BACT emission limits or
conditions must be met on a continual basis at all levels of operation (e.g.,
limits written in pounds/MMbtu or percent reduction achieved), demonstrate
protection of short term ambient standards (limits written in pounds/hour) and
be enforceable as a practical  matter (contain appropriate averaging times,
compliance verification procedures and recordkeeping requirements).
Consequently, the permit must:

      o  be able to show compliance or noncompliance (i.e., through
         monitoring times of operation, fuel   input, or other Indices
         of operating conditions and practices); and
      o  specify a reasonable averaging time consistent with established
         reference methods, contain reference methods for determining
         compliance, and provide for adequate reporting and
         recordkeeping so that the permitting agency can determine
         the compliance status of the source.
                                      57

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                                 -DRAFT-
                                  March 15. 1990

                 VII.  EXAMPLE BACT ANALYSES FOR  GAS  TURBINES

/Vote: The  following example provided is for  Illustration  only.   The example
source 1s fictitious and has been created to highlight many of the aspects of
the top-down process.  Finally,  It  must be noted that the cost data and other
numbers presented in the example are used only to demonstrate the BACJ decision
making process.  Cost data are used  In a relative sense to compare control costs
among  sources  In  a source category or  for a  pollutant.  Mo  absolute cost
guidelines have been established above which costs are assumed to be too high
or below which they are assumed reasonable.  Determination of appropriate costs
is made on a case-by-case  basis.

      In this section a  BACT analysis for  a  stationary gas  turbine project  Is
presented and discussed  under three alternative operating scenarios:
     o  Example I—Simple  Cycle  Gas Turbines Firing Natural  Gas
                                                >
     o  Example 2--Combined  Cycle Gas Turbines Firing Natural Gas
     o  Example 3--Combined  Cycle Gas Turbines Firing Distillate Oil

     The purpose of the  examples are  to  illustrate points to be considered  in
developing BACT decision criteria for the  source  under review and selecting
BACT.  They are  intended to  illustrate  the process rather than provide
universal guidance on what constitutes  BACT  for any particular source
category.  BACT wist be  determined  on a  case-by-case  basis.

     These examples are  not  based on  any actual analyses performed for the
purposes of obtaining a  PSD per»1t.   Consequently, the actual emission rates,
costs, and design parameters used are neither representative of any actual
case nor do they apply to any particular facility.
                                       58

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                                 -DRAFT-
                                  Harch 15. 1990

VILA.  EXAMPLE 1--SIMPLE CYCLE GAS TURBINES FIRING NATURAL GAS
VII.A.l  PROJECT SWfWRY
      Table VII-1 presents project data, stationary gas design parameters, and
uncontrolled emission estimates for the new source 1n example 1.  The gas
turbine 1s designed to provide peaking service to an electric utility.  The
planned operating hours are less than 1000 hours per year.  Natural gas fuel
will be fired.  The source will be limited through enforceable conditions to
the specified hours of operation and fuel type.  The area where the source is
to be located is  in compliance for all criteria pollutants.  No other changes
are proposed at this facility, and therefore the net emissions change will be
equal to the emissions shown on Table VII-1.  Only NOX emissions are
significant (i.e., greater than the 40 tpy significance level for NOX) and a
BACT  analysis is  required for NOX emissions only.

VII.A.2.  BACT ANALYSIS SUffWRY
VII.A.Z.a.  CONTROL TECHNOLOGY OPTIONS
      The first step  in evaluating BACT  is  identifying all  candidate control
technology  options for the emissions  unit  under review.   Table  VII-2  presents
the  list of control  technologies  selected  as  potential BACT candidates.   The
first three control  technologies, wet injection and  selective catalytic
reduction,  were  identified by  a  review  of  existing gas turbine  facilities in
operation.    Wet injection can mean  either water  or  steam injection.
 Selective  noncatalytic  reduction was identified  as  a potential  type  of control
 technology because it 1s an  add-on  NOX  control which has  been  applied to other
 types of combustion  sources.

      In this exanple, the control technologies were Identified by the
 applicant based on a review of the BACT/LAER Clearinghouse, and discussions
 with State agencies with experience permitting gas turbines 1n NOX
 nonattainment areas.  A preliminary meeting with the State permit Issuing
 agency was held to determine whether the permitting agency felt that any other
                                       59

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        TABLE VII-1.  EXAMPLE  1-COMBUSTION  TURBINE DESIGN PARAMETERS
Characteristics

Number of emissions units
Unit Type
Cycle Type
Output
Exhaust temperature,
Fuel(s)
Heat rate, Btu/kw hr
Fuel flow, Btu/hr
Fuel flow, Ib/hr
Service Type
Operating Hours (per year)
Uncontrolled Emissions, tpy(a)
      N0y
      SOo
      or
      VOC
      PM
1
Gas Turbines
Simple-cycle
75 HW
1,000 °F
Natural Gas
11,000
1,650 mill ion
83,300
Peaking
1,000

564 (169 ppm)
4.6 (6 ppm)
1
5 (0.0097 gr/dscf)
(a) Based on 1000 hours per year of operation at full load.
                                      60

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     TABLB VII-2.
EXAMPLE 1—SUMMARY OF POTENTIAL NOx CONTROL
      TECHNOLOGY OPTIONS
Control technology(a)
Selective Catalytic
Reductions
Water Injection
Steam Injection
low NOx Burner
Selective Noncatalytic
Reduction
Typical
control
efficiency
range
(X reduction)
40-90
30-70
30-70
30-70
20-50

Simple
cycle
turbines
No
Yes
No
Yes
No
In Service On:
Combined
cycle
gas
turbines
Yes
Yes
Yes
Yes
Yes

Other
conbust Ion
sources (c)
Yes
Yes
Yes
Yes
Yes
Technically
feasible on
simple cycle
turbines
Yes(b)
Yes
No
Yes
No
(a) Ranked in order of highest to lowest stringency.
(b) Exhaust must be diluted with air to reduce its temperature to 600-750*F.
(c) Boiler incinerators, etc.
                                         61

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                                 -DRAFT-
                                  March 15. 1990

applicable control technologies should  be  evaluated and they agreed on the
proposed control hierarchy.

VII.A.2.b.  TECHNICAL FEASIBILITY CONSIDERATIONS
     Once potential control technologies have been identified, each technology
is evaluated for its technical feasibility based on the characteristics of the
source.  Because the gas turbines in this  example are  intended to be used for
peaking service, a heat recovery steam  generator (HRSG) will not be included.
A HRSG recovers heat from the gas turbine  exhaust to make steam and increase
overall energy efficiency.  A portion of the steam produced can be used for
steam injection for NOX control, sometimes increasing the effectiveness of the
net injection control system.  However, the electrical demands of the grid
dictate that the turbine will be brought on line only for short periods of
time to meet peak demands.  Due to the  lag time required to bring a heat
recovery steam generator on line, it is not technically feasible to use a HRSG
at the facility.  Use of an HRSG in this instance was shown to interfere with
the performance of the unit for peaking service, which requires immediate
response times for the turbine.  Although  it was shown that a HRSG was not
feasible, water and steam are readily available for NOX control since the
turbine will be located near an existing steam generating powerplant.

     The turbine type and, therefore, the  turbine model selection process,
affects the achievability of NOX emissions limits.  Factors which the customer
considered  in selecting the proposed turbine model were outlined in the
application as:  the peak demand which  must be net, efficiency of the gas
turbine, reliability requirements, and  the experience of the utility with the
operation and Maintenance service of the particular manufacturer and turbine
design.  In this exaaple, the proposed  turbine Is equipped with a coobustor
                                      62

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                                 -DRAFT-
                                . (torch 15. 1990

designed to achieve an emission level, at 15 percent 0?, of 25 ppm NCL with
                                               i      *•              *
steam Injection or 42 ppm with water  injection.

     Selective noncatalytic reduction  (SNCR) was eliminated as technically
Infeaslble because this technology requires a flue gas temperature of 1300 to
2100°F.  The exhaust from the gas turbines will be approximately 1000°F, which
Is below the required temperature range.

     Selective catalytic reduction (SCR) was evaluated and no basis was found
to eliminate this technology as technically infeasible.  However, there are no
known examples where SCR technology has been applied to a simple-cycle gas
turbine or to a gas turbine in peaking service.  In all cases where SCR has
been applied, there was an HRSG which  served to reduce the exhaust temperature
to the optimum range of 600-750°F and  the gas turbine was operated
continuously.  Consequently, application of SCR to a simple cycle turbine
involves special circumstances.  For  this example, 1t is assumed that dilution
air can be added to the gas turbine exhaust to reduce its temperature.
However, the dilution air will make the system more costly due to higher gas
flows, and may reduce the removal efficiency because the NOX concentration at
the inlet will be reduced.  Cost considerations are considered later in the
analysis.

VII.A.2.C.  CONTROL TECHNOLOGY HIERARCHY
     After deterrain ing technical feasibility, the applicant selected the
control levels for evaluation shown In Table VII-3.  Although the applicant
reported that some sites  in California have achieved levels as low as 9 ppti,
at this facility a 13 ppn level was determined to be the feasible llait with
SCR.  This decision  Is based on the lowest achievable level with steaa
Injection of 25 ppffl and an SCR removal efficiency of 50 percent.  Even though
      1  For some gas turbine models, 25 ppm  is not achievable with either water
 or  steam  injection.
                                      63

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        TABLE VII-3.  EXAMPLE  1--COMTROL TECHNOLOGY HIERARCHY
 Control  Technology
                                              Emissions
 Steam  Injection  plus  SCR
 Steam  Injection  at maximum*5) design  rate
 Water  Injection  at maximum^5) design  rate
 Steam  Injection  to meet NSPS
	•	
 (a) Corrected to 15 percent oxygen.
(b) Water to fuel ratio.
ppm(a)

 13
 25
 42
 93
                                                           TRY
44
84
140
312
                                64

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                                 -DRAFT-
                                  Harch IS. 1990

the reported removal efficiencies for SCR are up to 90 percent at some
facilities, at this facility the actual  NOX concentration at the inlet to the
SCR system will only be approximately 17 ppm (at actual conditions) due to the
dilution air required.  Also the inlet concentrations, flowrates, and
temperatures will vary due to the high frequency of startups.  These factors
make achieving the optimum 90 percent NOX removal efficiency unrealistic.
Based on discussions with SCR vendors, the applicant has established a
50 percent removal efficiency as the highest level achievable, thereby
resulting  in a 13 ppm level (I.e., 50 percent of 25 ppm).

     The next most stringent level achievable would be steam injection at the
maximum water-to-fuel ratio achievable by the unit within its design operating
range.  For this particular gas turbine model, that level is 25 ppm as
supported  by vendor NO  emissions guarantees and unit test data.  The
applicant  provided documentation obtained from the gas turbine manufacturer2
verifying  ability to achieve this range.

      After steam injection the next most stringent level of control would be
water injection  at the maximum water-to-fuel ratio achievable by the unit
within  its design operating range.  For this particular gas turbine model,
that level  is  42 ppm as supported by vendor NOX emissions guarantees and
actual  unit test data.  The applicant provided documentation obtained  from the
gas turbine manufacturer  verifying ability to achieve this range.

     The  least stringent  level evaluated by the applicant was the current NSPS
for utility gas  turbines.   For this model, that level  1s 93 ppm  at  15  percent
02.  By definition,  BACT  can be  no less stringent than NSPS.  Therefore, less
stringent levels are not  evaluated.
       2 It should be noted that achievability of the NOX limits 1s dependent
 on the turbine model,  fuel,  type of wet injection (water or steam),  and system
 design.  Not all  gas turbine models or fuels can necessarily achieve these
 levels.
                                       65

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                                 -DRAFT-
                                  March 15. 1990
VII.A.2.d.  IMPACTS ANALYSIS SUMMARY
     The next steps completed by the applicant were the development of the
cost, economic, environmental and energy  impacts of the different control
alternatives.  Although the top-down process would allow for the selection of
the top alternative without a cost analysis, the applicant felt cost/economic
impacts were excessive and that appropriate documentation «ay justify the
elimination of SCR as BACT and therefore  chose to quantify cost and economic
impacts.  Because the technologies in this case are applied in combination, it
was necessary to quantify impacts for each of the alternatives.  The impact
estimates are shown in Table VII-4.  Adequate documentation of the basis for
the impacts was determined to be included  in the PSD permit application.

     The incremental cost impacts shown are the cost of the alternative
compared to the next most stringent control alternative.  Figure VII-1 Is a
plot of the least-cost envelope defined by the list of control options.

VII.A.2.e.  TOXICS ASSESSMENT
     Potential toxic emissions which could occur as a result of this facility
would be ammonia if SCR were applied.  Ammonia emissions resulting from
application of SCR could be as large as 20 tons per year.  Application of SCR
would reduce NOX by an additional 20 tpy  over steam injection alone
(25 ppm)(not including ammonia emissions).

     Another environmental impact considered was the spent catalyst which
would have to be disposed of at certain operating Intervals.  The catalyst
contains vanadium pentoxide, which is listed as a hazardous waste under RCRA
regulations (40 CFR 261.3).  Disposal of  this waste creates an additional
                                      66

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                                             TABU VIM.   EXAMPLE 1--SUMMMY OF TOP-DOW BUT IMPACT AHALYSIS FEULT3 FOR IOM
Unions Wl Turbine Econonic Imacts
Installed Total Cost
Emissions capital annual lied effectiveness
Missions ra)uction(a) cost(b) cost(c) over baseline(d)
Control alternative (Ib/hr) (tpy) (tpy) ($) ($/yr) ($/ton)
13 ppa Alternative 44 22 260 11,470,000 l,717,000(g) 6,600
25 ppB Alternative 84 42 240 1,790,000 593,000 2,470
42 ppl Alternative 140 70 212 1,304,000 356,000 1,680
KSPS Alternative 312 156 126 927,000 288,000 2,283
Uncontrolled Baseline 564 282 -
Enerav Isoacts Environmental bracts
Incraental
Increnental Increase Adverse
cost over Toxics envlronwntal
effectiveness(e) baseline(f) iapact bqact
($/ton) (MKBtu/yr) (Yes/ No) (Yes /Ho)
56,200 464,000 Yes No
8,460 30,000 No No
800 15,300 NO NO
8,000 NO No

(a) Emissions reduction over baseline control  level.
(b) Installed capital cost relative to  baseline.
(c) Total annualiied cost (capital, direct, and  indirect) of purchasing, installing, and operating the proposed  control alternative.  A capital
    recovery factor approach using a real  Interest rate (i.e., absent Inflation) is used to express capital  costs in  present-day annual costs.
(d) Cost Effectiveness over baseline is equal  to total annualited cost for the control option divided by the Missions reductions  resulting free the
    uncontrolled baseline.
(e) The optional Incremental cost effectiveness  criteria  is the sane as the total cost effectiveness criteria except  that  the  control alternative
    is considered relative to the next  vet stringent alternative rather than the baseline control alternative.
(f) Energy ispacts are the difference  in total project energy requirenents tilth the control alternative and  the  baseline control alternative
    expressed in equivalent •!11ions of Btus per year.
(g) Assued 10 year catalyst life since  this turbine operates only 1000 hours per year.  Assiaptlons Bade on  catalyst  life  My  have a profound affect
    upon cost effectiveness.

                                                                         67

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                  DRAFT
     Figure VIM. Least-Cost Envelope for Example 1
   2,000,000
   1,500,000
o
Q.
to
O
°  1,000,000
"U
O
D
C
i
    500,000
                                   13ppmi
                    NSPS
               50    100    150   200   250    300

              Emissions Reduction (tons per year)
                        68

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                                 -DRAFT-
                                  Harch IS. 1990
economic and environmental burden.  This was considered in the applicant's
proposed BACT determination.

VII.A.2.f.  RATIONALE FOR PROPOSED BACT
     Based on these Impacts, the applicant proposed eliminating the 13 ppm
alternative as economically infeasible.  The applicant documented that the
cost effectiveness 1s high at 6,600 $/ton, and well out of the range of recent
BACT NOX control costs for similar sources.  The Incremental cost
effectiveness of $56,200 also is high compared to the Incremental cost
effectiveness of the next option.

     The applicant documented that the other combustion turbine sources which
have applied SCR have much higher operating hours  (I.e., all were permitted as
base-loaded units).  Also, these  sources had heat  recovery steam generators so
that the cost effectiveness of the application of  SCR was lower.  For this
source, dilution air must be added to cool the flue gas to the proper
temperature.  This increases the  cost of the SCR system relative to the same
gas turbine with a HRSG.  Therefore,  the other sources had much lower cost
impacts for SCR relative  to steam injection alone, and much  lower cost
effectiveness numbers.  Application of  SCR would also result in emission  of
ammonia,  a  toxic chemical,  of possibly  20  tons per year while reducing NOX
emissions by  20 tons  per  year.   The applicant asserted that, based on these
circumstances,  to  apply SCR in this case would be  an unreasonable burden
compared  to what has  been done at other similar  sources.

      Consequently, the applicant proposed  eliminating the SCR plus steam
 Injection alternative.  The applicant then accepted the next control
 alternative,  steam Injection  to  25 ppmv.   The review  authority concurred  with
 the proposed  elimination of SCR  and the selection  of  a 25 ppav 11«1t  as BACT.
                                       69

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                                 -DRAFT-
                                   March 15. 1990

VII.B.  EXAMPLE 2--COMBINED CYCLE  GAS TURBINES FIRING NATURAL GAS
      Table VII-5  presents the design parameters for an alternative  set  of
circumstances.  In this  example, two gas turbines are being Installed.   Also,
the operating hours are  5000 per year and the new turbines  are being  added to
meet  Intermediate  loads  demands.   The source will be limited  through
enforceable conditions to the specified  hours of operation  and fuel type.  In
this  case, HRSG units are installed.   The applicable control  technologies and
control technology hierarchy are the same as the previous example except that
no dilution is required  for the gas  turbine exhaust  because the HRSG  serves to
reduce the exhaust temperature to  the optimum level  for SCR operation.  Also,
since there is no  dilution required  and  fewer startups,  the most  stringent
control option proposed  is 9 ppm based on performance  limits  for  several other
natural gas fired  baseload combustion turbine facilities.

     Table VII-6 presents the results of the cost and  economic  Impact analysis
for the example and  Figure VII-2 is  a plot  of the least-cost  envelope defined
by the list of control options.  The  incremental  cost  impacts  shown are the
cost of the alternative  compared to  the  next most stringent control
alternative.  Due  to the increased operating hours and design changes, the
economic impacts of  SCR  are much lower for  this  case.  There  does not appear
to be a persuasive  argument for stating  that SCR  is economically  infeasible.
Cost effectiveness  numbers are within the range  typically required of this and
other similar source types.

      In this case,  there would also be emissions  of ammonia.  However, now the
magnitude of ammonia emissions, approximately 40  tons per year, Is much lower
than the additional NOX  reduction achieved,  which  Is 270 tons per year.

     Under these alternative  circumstances,  PM emissions are also now above
the significance level (i.e.,  greater than  25 tpy).  The gas turbine
                                      70

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        TABLE VII-5.  EXAMPLE 2--COMBUS7IO* TURBINE DESIGN PARAMETERS
Characteristics
Number of emission units
Emission units
Cycle Type
Output
   Gas Turbines (2 & 75 MW each)
   Steam Turbine (no emissions generated)
Fuel(s)
Gas Turbine Heat Rate, Btu/kw-hr
Fuel Flow per gas turbine, Btu/hr
Fuel Flow per gas turbine, Ib/hr
Service Type
Hours per year of operation
Uncontrolled Emissions per gas turbine, tpy (a)(b)
   NOX
   so2
   CO
   voc
   PM
Gas Turbine
Combined-cycle

150 MW
70 MW
Natural Gas
11,000 BtuAw-hr
1,650 million
83,300
Intermediate
5000

1,410 (169 ppm)
<1
23 (6 ppm)
5
25 (0.0097 gr/dscf)
(a) Based on 5000 hours per year of operation.
(b) Total uncontrolled emissions for the proposed project is equal to the
pollutants uncontrolled emission rate multiplied by 2 turbines.  For example,
total NOX - (2 turbines) x 1410 tpy per turbine) - 2820 tpy.
                                      71

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                                        TABU VII-6.  EXAMPLE 2--SIHMMT OF TOP-DOM BUT HPICT MM.TSIS RESULTS FOR ».
                        Missions oar Turbine
                                               Economic Iroacts
Control alternative
                           Installed
              Missions     capital
  Missions  reduction(a,h) oost(b)
(lb/hr)(tpT)   (tpy)         ($)
                                              Energy Impacts
                                                Incremental
   Total          Cost          Increaental      increase                 Mverse
annualized    effectiveness         cost            over        Toxics  envinwental
   oost(c)    over baseline(d)  effectlveness(e)  baseline(f)   iopact     intact
   ($/yr)        ($/ton)           ($/ton)        (KMBtu/yr)   (fes/Ho)   (Tes/Ho)
9 ppi Alternative
25 ppi Alternative
42 ppn Alternative
KSPS Alternative
Uncontrolled Baseline
30
84
140
312
564
75
210
350
780
1,410
1,335
1,200
1,060
630
•
10,980,000
1,791,000
1,304,000
927,000
•
3,380,000(9)
1,730,000
883,000
805,000
-
2,531
1,440
633
1,280
-
12,200 160,000
6,050 105,000
181 57,200
27,000
•
Yes
No
No
No
*
No
No
No
No
*
(a) Missions reduction over baseline control level.
(b) Installed capital cost relative to baseline.
(c) Total annuallied cost (capital, direct, ahd indirect) of purchasing,  installing, and operating the proposed control alternative.  A capital
    recovery factor approach using a real interest rate (i.e.,  absent inflation)  is used to express capital costs in  present-day annual costs.
(d) Cost Effectiveness over baseline is equal to total annualited cost for  the control option divided by the Missions reductions resulting fro> the
    uncontrolled baseline.
(e) The optional increaental cost effectiveness criteria is the saw as the total cost effectiveness criteria except  that  the control alternative
    Is considered relative to  the next wst stringent alternative rather than the baseline control alternative.
(f) Energy Impacts are the difference in total project energy requirements  with the control alternative and the baseline control alternative
    expressed in equivalent lillions of Btus per year.
(g) ASSIBBS a 2 fear catalyst  life.  Assumptions Bade on catalyst life lay  have a profound affect upon cost effectiveness.
(h) Since the project calls for t» turbines, actual project Hide Missions reductions for an alternative i»lll be equal to two  tiaes the reduction
    listed.
                                                                         72

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     Figure VII-2. Least-Cost Envelope for Example 2
     4,000,000
     3,000,000
(0
0>
Gu
8

O   2,000,000


0)


"(5
D
C
H   1,000,000
                                          9ppm
                         NSPS
             0   200  400  600   800  1,000 1,200 1,400 1,600
                 Emissions Reduction (tons per year)
                              73

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                                 -DRAFT-
                                   Harch 15. 1990
combustors are designed to combust the fuel  as completely as possible  and
therefore reduce  PM to  the lowest  possible level.   Natural  gas contains  no
solids and solids are removed from the Injected water.   The PM emission  rate
without add-on controls is on the  same order (0.009 gr/dscf) as that for other
partlculate matter sources controlled with stringent add-on controls (e.g.,
fabric filter).   Since  the applicant  documented that precorobustlon  or  add-on
controls for PM have never been  required for natural gas fired turbines, the
reviewing agency  accepted  the applicants analysis  that  natural  gas  firing was
BACT for PM emissions and  that no  additional  analysis of PM controls was
required.

VII.C.  EXAMPLE 3-COMBINED CYCLE  GAS TURBINE FIRING DISTILLATE OIL
      In this example,  the same  combined cycle gas turbines are proposed
except that distillate  oil  1s fired rather than natural  gas.   The reason is
that natural gas  is  not available  on  site and there is  no pipeline  within a
reasonable distance.  The  fuel change raises  two issues;  the technical
feasibility of SCR  in gas  turbines firing sulfur bearing  fuel,  and  NOX levels
achievable with water injection  while firing  fuel  oil.

      In this case  the  applicant proposed to  eliminate  SCR  as  technically
infeasible because  sulfur  present  in  the fuel,  even at  low  levels,  will poison
the catalyst and  quickly render  it ineffective.  The applicant  also noted that
there are no cases  in the  U.S. where  SCR has  been  applied to  a  gas  turbine
firing distillate oil as the  primary  fuel.3

      A second Issue would  be the  most  stringent NOX control  level  achievable
with wet Injection.  For oil  firing the  applicant  has proposed  42 ppn at
15 percent oxygen.  Due to  flame characteristics Inherent with  oil firing,  and
Units on the amount of water or steam that can be  Injected, 42 ppa 1s  the
       Though this argument was considered persuasive in this case, advances
in catalyst technology have now made SCR with oil firing technically feasible.
                                      74

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                                 -DRAFT-
                                  Harch IS. 1990

lowest NOX emission level achievable with distillate oil firing.  Since
natural gas 1s not available and SCR  is technically Infeasible, 42 pptn 1s the
most stringent alternative considered.  Based on the cost effectiveness of wet
Injection, approximately 833 $/ton, there is no economic basis to eliminate
the 42 ppro option since this cost Is well within the range of BACT costs for
NO  control.  Therefore, this option  is proposed as BACT.
  x
      The switch to oil from gas would also result in S02, CO, PM, and
beryllium emissions above significance levels.  Therefore, BACT analyses would
also be required for these pollutants.  These analyses are not shown 1n this
example, but would be performed  in the same manner as the BACT analysis for
NOX.

VII.D.  OTHER CONSIDERATIONS
     The previous judgements concerning economic feasibility were  in an area
meeting NAAQS for both NOX and ozone.  If the natural gas fired simple cycle
gas turbine example previously presented were sited adjacent to a  Class I
area, or where  air quality  improvement poses a major challenge, such as next
to  a nonattainment area, the results may differ.   In this case, even though
the region of the actual site location is achieving the NAAQS, adherence to a
local or regional NOX or ozone attainment strategy might result in the
determination that higher costs  than usual  are appropriate.   In such
situations, higher costs (e.g.,  6,600 $/ton) may not necessarily be persuasive
 in  eliminating  SCR as BACT.

     While  1t  1s not the  Intention  of BACT  to prevent construction,  1t  Is
possible that local or  regional  air quality aanagenent concerns regarding  the
need to «1n1»1ze the air quality Impacts of new  sources would  lead the
 permitting  authority to require  a source to either achieve  stringent Mission
 control levels  or, at  a minimum, that control cost expenditures aeet certain
 cost  levels without consideration of  the resultant economic Impact to the
 source.

                                       75

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                                 -DRAFT-
                                   Karch 15. 1990
      Besides local or  regional  air  quality concerns, other  site constraints
may significantly  impact  costs of  particular control technologies.  For the
examples previously presented, two factors  of concern are land and water
availability.

     The cost of the raw  water is  usually a small part of the cost of wet
controls.  However, gas turbines are sometimes located in remote locations.
Though water can obviously be trucked to any location, the costs may be very
high.

      Land availability constraints  may occur where a new source is being
located at an existing plant.  In  these cases,  unusual design and additional
structural requirements could make the costs  of control technologies which are
commonly affordable prohibitively  expensive.   Such considerations »ay be
pertinent to the calculations of impacts and  ultimately the selection of BACT.
                                      76

-------
        -DRAFT-
         ttoreh 15. 1990
         APPENDIX A



DEFINITION OF  SELECTED TERMS

-------
                                                    APPENDIX ft - DEFINITION OF SELECTED RSR TERNS
                                 Best Available Control Technology is the control  level  required  for sources subject to PSD.  Fran the regulation
                                 (reference 40 CFR 52.21(b)) BACT mans "an emissions linitation  (including a visible emission standard) based on the
                                 •lira degree of reduction for each pollutant subject  to regulation under the Clean ftir Act which would be emitted
                                 froi any proposed najor stationary source or najor modification  which the Administrator, on a case-by-case basis,
                                 taking into account energy, environmental, and economic impacts  and other costs, determines is achievable for such
                                 source or modification through application of production processes or available methods, sysUns, and techniques,
                                 including fuel cleaning or treatment or innovative fuel combustion techniques for control of such pollutant.  In no
                                 event shall application of best available control technology  result in emissions of any pollutant which would exceed
                                 the Missions allowed by any applicable standard  under  40 CFR Parts 60 and 61.  If the Administrator determines that
                                 technological or economic limitations on the application of measurement methodology to a particular emissions unit
                                 would make the imposition of an emissions standard infeasible, a design, equipment, work practice, operational
                                 standard, or combination thereof, may be prescribed  instead to satisfy the requirement for the application of best
                                 available control technology.  Such standard shall,  to  the degree possible, set forth the emissions reduction
                                 achievable by implementation of such design, equipment, work  practice or operation, and shall provide for compliance
                                 by means which achieve equivalent results."


Emission Units                   The Individual emitting facilities at a location  that together make up the source.  From the regulation (reference
                                 40 CFR S2.21(b))f it means "any part of a stationary source which emits or would have the potential to emit any
                                 pollutant subject to regulation under the Act."

Intrants                       The mini permissible level of air quality deterioration that  may occur beyond the baseline air quality level.
                                 Increments were defined statutorily by Congress for  SOj and PH.  Recently EPA also has promulgated increments for
                                 RD|.  Increment is consumed or expanded by actual emissions changes occurring after the baseline date and by
                                 construction related actual emissions changes occurring after January 6, 1975, and February 8, 1988 for PM/SOj and
                                 R0_, respectively.
                                                                        A -  l

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                                              APPENDIX A - DEFINITION OP SELECTED KSR TERNS (Continued)
Innovative Control
  Technology                     Proi the regulation (reference 40 CPU 52.21(b)(19)) "Innovative control technology" nans any systei of air
                                 pollution control that has not been  adequately demonstrated in practice, but would have a substantial likelihood of
                                 achieving greater continuous missions reduction than any control systea in current practice or of achieving at
                                 least cnparable reductions at loner cost  In terns of energy, econonics, or nonalr quality environmental bracts.
                                 Special delayed compliance provisions exist that nay be applied when applicants propose innovative control
                                 techniques.

LAEB                             Lowest Achievable Eoissions Rate  is  the control level required of a source subject to nonattainoent review.   Fron
                                 the regulations (reference 40 CFR 51.165(a)), it means for any source "the more stringent rate of  emissions  based on
                                 the following:

                                 (a) The most  stringent missions  limitation which is contained in the implementation plan of  any State  for such
                                 class or category of stationary source, unless the owner or operator of the proposed stationary source  demonstrates
                                 that such 1 inflations are  not  achievable; or

                                 (b) The aost  strir.  nt emissions  limitation which Is achieved in practice  by such  class or category of  stationary
                                 sources.  This  limitation,  when applied to a modification,  means the lowest achievable missions rate of the new or
                                 modified missions units within a stationary source.  In no event shall the application of the  term peralt a
                                 proposed new  or modified stationary source to emit any pollutant in excess of the  amount  allowable  under an
                                 applicable new  source standard of performance."
                                                                       A - 2

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            APPENDIX A - DEFIHITION OP SELECTED HSR TERMS (Continued)
DRAFT
ft major modification is a modification to an existing major stationary source  resulting in a significant net
Missions increase  (defined elsewhere in this table) that, therefore, is subject to PSD review.  From the regulation
(reference 40 CFR 52.21(b)(2)):

"(1) 'Major modification' means any physical change in or change in the method of operation of a major stationary
source that would result in a significant net emissions  increase of any pollutant subject to regulation under the
Act.

(11) Any net emissions increase that is significant for  volatile organic coapounds shall be considered significant
for ozone.

(Hi) A physical change or change in the method of operation shall not include:

(a) routine maintenance, repair and replacement;

(c) use of an alternative fuel by reason of an order or  rule under Section 125 of the Act;

(d) Use of an alternative fuel at a steam generating unit to the extent that the fuel is generated fron municipal
solid waste;

(e) Use of an alternative fuel or raw material by a stationary source which:

(1) The source  was capable of accoroodating before January 6, 1975,  unless such  change would  be prohibited under any
Federally enforceable Derail condition  which was established after January 6, 1975, pursuant  to 40 CFR 52.21 or
under regulations approved pursuant  to  40 CFR Subpart I  or 40 CFR 51.166; or

 (2) The source  is approved  to use under any permit Issued under 40 CFR 52.21 or  under regulations approved pursuant
 to 40 CFR 51.166;

 (f) an Increase in the hours of operation or in  the production rate, unless such change would be prohibited under
any federally enforceable permit condition which was established after January 6, 1975, pursuant to 40 CFR 52.21 or
 under regulations approved pursuant to  40 CFR Subpart I or 40 CFR 51.166; or

 (g)  any change  In ownership at a stationary source."

                                      A - 3

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                                           APPENDIX A - DEFINITION Of SELECTED RSR TEPKS (Continued)
DRAFT
Major Stationary Source          A njor stationary  source is an emissions source of sufficient size to warrant PSD revieii.  Major modification to
                               Mjor stationary sources are also subject to PSD review.   Prcn the regulation (reference 40 CFR 52.21(b)(l)), (i)
                               "Major stationary source" means:

                               "(a) Any of the following stationary sources of air pollutant which emits, or has the potential to enit, 100 tons
                               per fear or nore of any pollutant subject to regulation under the Act:   Fossil fuel-fired stean electric plants of
                               nre than 250 million British thermal units  per hour heat  input, coal  cleaning plants (with thermal dryers), Kraft
                               pulp tills, Portland cement  plants, primary  zinc smelters,  iron and steel sill plants, prliary aluinin ore
                               reduction plants, primary aluminum ore reduction plants, primary copper snelters, nunicipal incinerators capable of
                               charging nre than 250 tons  of  refuse per day, hydrofluoric, sulfuric,  and nitric acid plants, petrolem refineries,
                               line plants,  phosphate rock  processing plants, coke oven batteries, sulfur recovery plants, carbon black plants
                               (furnace process), primary lead snelters,  fuel conversion plants, sintering plants, secondary  netal production
                               plants,  chealcal process plants, fossil fuel  boilers (or combinations  thereof) totaling nre than 250 Billion
                               British thenal units per hour heat input, petrolein storage and transfer units with a total storage capacity
                               exceeding 300,000 barrels, taconite ore processing plants, glass fiber  processing plants,  and  charcoal production
                               plants;

                               (b) notwithstanding the stationary source  sire specified in paragraph (b)(l)(i)  of this section, any stationary
                               source which  enits, or has the potential to enit,  250  tons per year or nre of any air pollutant subject to
                               regulation under the Act; or

                               (c) Any physical change that would occur at a stationary source not otherwise qualifying under paragraph (b)(l) as a
                               •ajor stationary source not otherwise qualifying under paragraph  (b)(l) as a Major stationary  source,  if the  changes
                               wuld constitute a ujor stationary source by itself.

                               (li)  A tajor  stationary source that is ujor for volatile organic conounds shall be considered najor  for ozone."

                               National  Avient Air Quality Standards are Federal standards for  the linlra anbient air quality needed  to protect
                              public health and welfare.  They have been set for six criteria pollutants including SO,, PM/PM10,  »„, CO, 0,
                               (WC), and Pb.
                                                                   X - 4

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                                           APPENDIX A - DEFINITION OP SELECTED HSR TERNS (Continued)
                                                                               DRAFT
KESHAP
HSPS
PSD
Regulated Pollutants'
HESHAP, or national Emission Standard for Hazardous Air Pollutants,  is a technology-based standard of performance
prescribed for hazardous air pollutants fron certain stationary source categories under Section 112 of the Clean Mr
Act.  Where they apply, NESHAP  represent absolute mininun requirements for BACT.

HSPS, or Ken Source Performance Standard, is an mission standard prescribed for criteria pollutants froa certain
stationary source categories under Section 111 of the Clean Air Act.  Where they apply, KSPS represent absolute
•iniwi requirements  for BACT.

Prevention of significant deterioration is a construction air pollution permitting program designed to ensure air
quality does not degrade beyond the NAACjS levels or beyond specified incremental amounts above a prescribed baseline
level.  PSD also ensures application of BACT to major stationary sources and major modifications for regulated
pollutants and consideration of soils, vegetation, and visibility Impacts in the permitting process.

Refers to pollutants  that have  been regulated under the authority of the Clean Air Act (NAAQS, KSPS, KESHAP):
0, (VOC)- Ozone, regulated through volatile organic compounds as precursors
NO.     - Nitrogen oxides
        - Sulfur dioxide
       j- Total suspended participate matter
       ,) - Particulate  matter with <10 nicron aerometric diameter
        - Carbon lonoxide
                               SO,
                               PM(TSP)
                               PM (PK10
                               CO
                               Pb
                               As
                               Be
                               Bg
                               vt
                               F
- Lead
- Asbestos
- Berylliui
- Mercury
- Vinyl chloride
- Fluorides
- Sulfuric acid list
- Hydrogen sulfide
                                       TRS    -Total reduced sulfur (including H,S)
                                       RDS    -  Reduced Sulfur Coopounds (including H,S)
                                       Bz     -  Benzene
                                       Rd     -  Radionuclides
                                       As     -  Arsenic
                                       CFC's  -  Chlorofluorocarbons
                                       Rn-222 -  Radon-222
                                       HaIons
     1 The referenced list of regulated pollutants is current as of Hoveaber  1989.  Presently, additional pollutants nay also be subject to regulation
 under the Clean Air let.
                                                                    A - 5

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                                          APPENDIX \ - DEPIKITION OF SELECTED HSR TEWS (Continued)
DRAFT
Significant Emissions Increase   For neti aajor stationary sources and major modifications, a significant missions increase triggers PSD review.
                              Review requirements must be met for each pollutant undergoing a significant net emissions Increase.  From the
                              regulation (reference 40 CFR 52.21(b)(23)).

                              (1) "Significant" means, in reference to a net eaissions increase from a aodified najor source or the potential of a
                              new tajor source to emit any of the following pollutants, a rate of eaissions  that would equal or exceed any of the
                              following rates:

                              Carbon •onoilde:  100 tons per year (tpy)
                              lltrogen oxides:  40 tpy
                              Sulfur dioxide:   40 tpy
                              Partlculate utter:  25 tpy
                              PMlOi   is tpy
                              OtOMt  40 tpy of volatile organic compounds
                              Lead:   0.6 tpy
                              Asbestos:  0.007 tpy
                              torylliw:  0.0004 tpy
                              Mercury:  0.1 tpy
                              Vinyl  chloride:   1 tpy
                              fluorides:  3 tpy
                              Sulfurlc acid nist:  7 tpy
                              Hydrogen Sulfide (H^S):  10 tpy
                              total  reduced sulfur (including H,s):   10 tpy
                              Reduced sulfur compounds (including H2S):  10 tpy

                              (11) "Significant" means, in reference to a net eaissions increase or the potential  of a source to eait a pollutant
                              subject to regulation under the Act, that (i) above does not list, any emissions rate.

                              (For exanple, benzene and radionuclldes are pollutants falling into the "any emissions rate"  category.)

                              (Hi)  notwithstanding, paragraph (b)(23)(i) of this section, "significant deans any  eaissions rate or any  net
                              eaissions increase associated with a major stationary source or aajor aodification which would construct  within 10
                              klloaeters of a  Class I area, and have an  lapact on such an area equal to or greater than 1 ug/mj,  (24-hour
                              average).

                                                                  A - 6

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                                          ftPPEHDR A - DEPIHITIOH OF SELECTED HSR TERMS (Continued)
                                                                                                               DRAFT
Sip                           State lamentation Plan  is the federally approved State (or local) air quality nanageaent authority's statutory
                              plan for attaining and maintaining the NMQS.  Generally, this refers to the State/local air quality rules and
                              peraittlng requirements that have been accepted by EPA as evidence of an acceptable control strategy.

Stationary Source               For PSD purposes, refers to all emissions units at one location under canon ownership or control.  Fran the
                              regulation (reference 40 CFR 52.21(b)(5) and 51.166(b)(5)), it means "any building, structure, facility, or
                              Installation which emits or may emit any air pollutant subject to regulation under the Ret."

                              "Building, structure, facility, or installation" means all of the pollutant-emitting activities which belong to the
                              saw industrial grouping,  are located on one or more contiguous or adjacent properties, and are under the control of
                              the sane person (or person under cotnnon control).  Pollutant-emitting activities shall be considered as part of the
                              saae industrial grouping if they belong to the sane "Major Croup" (i.e., which have the sane first two digit code)
                              as described in the Standard Industrial Classification Manual, 1972, as amended by the 1977 Supplement
                              (U.S. Governnent Printing  Office stock nunbers 4101-0066 and 003-005-00176-0, respectively).
                                                                  ft - 7

-------
      -DRAFT-
        Narch IS. 1990
       APPENDIX B

ESTIMATING  CONTROL COSTS

-------
                                 -DRAFT-
                                   Hirch 15. 1990
                     APPENDIX B - ESTIMATING CONTROL COSTS
I. CAPITAL COSTS
     Capital costs  include  equipment  costs,  installation  costs,  indirect
costs, and working  capital  (if  appropriate).    Figure  B-l presents the
elements of total capital cost  and represents  a building  block approach that
focuses on the control device as the  basic unit of  analysis for estimating
total capital investment.   The  total  capital  investment has a role in the
determination of total annual costs and  cost effectiveness.

     One of the most common problems  which occurs when comparing costs at
different facilities is that the battery limits are different.  For example,
the battery limit of the cost of a  electrostatic precipitation Bight be the
precipitator itself (housing, plates, voltage  regulators, transformers, etc.),
ducting from the source to  the  precipitator, and the solids handling system.
The stack would not be included because  a stack will be required regardless of
whether or not controls are applied.  Therefore, it should be outside the
battery limits of the control system.

     Direct installation costs  are  the costs for the labor and materials to
install the equipment and includes  site  preparation, foundations, supports,
erection and handling of equipment, electrical  work, piping, insulation and
painting.  The equipment vendor can usually supply direct installation costs.

     The equipment vendor should be able to supply direct installation costs
estimates or general Installation costs  factors.  In addition, typical
installation cost factors for various types of  equipment are available in the
following references.

     o    OAQPS Control Cost Manual (Fourth Edition), January 1990,
          EPA 450/3-90-006
     o    Control Technology for Hazardous Air  Pollutants (HAPS)  Manual.
          September 1986, EPA 625/6-86-014
                                      B-l

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                                                  FIGURE B-l. Eleoents     otal Capital Costs
 o Prliary Cootrol Device
 o toalllary Bqulpnnt
   (Including doctwrt)
 o ftdlf loitloB to Otter Bqulpawt
 o InatruMBtatloo (a)
 o Sales Taws (a)
 o might  (a)
Purchased
Equipment
Cost
 o Foundation and Supports
 o Handling and Enctloo
 o Electrical
 o Piping
 o Insulation
 o Painting
Direct
Installation
Costs (b)

Site Preparation (c,d)

Buildings (d)
             land(e)

             Working Capital  (e)
                          Total
                          Direct
                          Costs
 o Engineering
 o Construction and Field
 o Contractor Feet
 o Start-up
 o Ptrfonance Tests
 o Contingencies
 Indirect
 Installation
 Costs (b)
Total
Indirect
Costs
Total
nondepreciable
Investaant
                                                                                  "Battery
                                                                                   Halts"
                                                                                   Costs
                                                                                   Off-site
                                                                                   Facilities (e)
Total
Depreciable
Investment
                                                      Total
                                                      Capital
                                                      Investment
(a) These costs are factored fra the sm of the control device and auxiliary equipnnt costs.
(b) These costs are factored fra the purchased control equipment.
(c) Usually  required only at "grass roots" installations.
(d) Unlike the otter direct and Indirect costs, costs  for these itens are not factored fra the
    purchased equipwit cost.  Ratter, they are sited  and oosted separately.
(e) (tonally not required Nith add-on control systeas.

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                                 -DRAFT-
                                  Harch IS.  1990
     o    Standards Support Documents
               Background Information Documents
               Control Techniques Guidelines  Documents
     o    Other EPA sponsored costing studies
     o    Engineering Cost and Economics Textbooks
     o    Other engineering cost publications
These references should also be used to validate any installation cost factors
supplied from equipment vendors.

     If standard costing factors are used, they may need to be adjusted due to
site specific conditions.  For example, in Alaska installation costs are on
the order of 40 - 50 percent higher than in the contiguous 48 states due to
higher labor prices, shipping costs, and climate.

     Indirect installation costs include (but are not limited to) engineering,
construction, start-up, performance tests, and contingency.  Estimates of
these costs may be developed by the applicant for the specific project under
evaluation.  However, if site-specific values are not available, typical
estimates for these costs or cost factors are available in:

     o    OAQPS Control Cost Manual (Fourth Edition), EPA 450/3-90-006
     o    Cost Analysis Manual for Standards Support Documents, April 1979

     These references can be used by applicants if they do not have
site-specific estimates already prepared,  and should also be used by the
reviewing agency to determine if the applicant's estimates are reasonable.
Where an applicant uses different procedures or assumptions for estimating
control costs than contained In the referenced Material or outlined In this
document, the nature and reason for the differences are to be documented in
the BACT analysis.
                                      B-3

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                                 -DRAFT-
                                  March IS. 1990
      Working capital 1s a fund set aside to cover initial costs of fuel,
chemicals, and other materials and other contingencies.  Working capital costs
for add on control systems are usually relatively small and, therefore, are
usually not included in cost estimates.

     Table B-l presents an illustrative example of a capital cost estimate
developed for an ESP applied to a spreader-stoker coal-fired boiler.  This
estimate shows the minimum level of detail required for these types of
estimates.  If bid costs are available, these can be used rather than study
cost estimates.

II. TOTAL ANNUAL COST.
     The permit applicant should use the levelized annual cost  approach  for
consistency in BACT  cost analysis.  This approach  is also called the
"Equivalent Uniform  Annual Cost" method, or  simply "Total Annual Cost"  (TAG).
 The components of total annual  costs are  their relationships are  shown  1n
Figure B-2.  The total  annual  costs for control systems  is  comprised  of  three
elements:  "direct"  costs   (DC), "indirect costs"  (1C),  and "recovery credit"
(RC), which are related by   the  following  equation:

                          TAC  -  DC +  1C  -  RC

       Direct  costs  are those which tend  to be  proportional  or partially
proportional  to the quantity of  exhaust  gas  processed  by the control  system
or,  in the case of  Inherently  lower  polluting  processes, the amount of
material  processed  or product  manufactured per unit  time.   These include costs
for raw materials,  utilities (steam,  electricity,  process and cooling water,
etc.),  and waste  treatment  and disposal.   Semivariable direct costs are only
 partly dependent  upon the exhaust or material  flowrate.   These  Include all
 associated labor, maintenance materials,  and replacement parts.  Although
 these costs  are a function of the operating rate,  they are not  linear
                                       6-4

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                           DRAFT
           TABLE B-l.  EXAMPLE OF A CAPITAL COST ESTIMATE FOR AN

                        ELECTROSTATIC PRECIPITATOR

                                                                Capital
                                                                  cost
                                                                   ($)


Direct Investment

     Equipment cost
        ESP unit                                                  175,800
         Ducting                                                  64,100
         Ash handling system                                       97,200
         Total equipment cost                                     337,100

     Installation costs

         ESP unit                                                175,800
         Ducting                                                 102,600
         Ash handling system                                       97,200
         Total installation costs                                 375,600

         Total direct investment (TDI)                             712,700
         (equipment + installation)

Indirect  Investment                                                71,300
     Engineering (10% of TDI)                                       71,300
     Construction and field expenses  (10% of TDI)                     71,300
     Construction fees (10% of TDI)                                  71,300
     Start-up (2% of TDI)                                           14,300
     Performance tests (minimum $2000)                                3,000

         Total indirect investment  (Til)                           231,200
Contingencies (20% of TDI + Til)                                   188,800

TOTAL TURNKEY COSTS (TDI + Til)                                  1,132,700

Working  Capital (25% of total direct  operating costs)a                21,100

         GRAND TOTAL                                           1,153,800
                                   B-5

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                           DRAFT
                FIGURE B-2. Elements of Total Annual Costs
 o Raw Materials
 o Utilities
  - Electricity
  - Steam
  - Water
  - Others
o Labor
  - Operating
  - Supervisory
  • Maintenance
o Maintenance materials
o Replacement parts
Variable
Semi variable
                                                  Direct
                                                  Annual
                                                  Costs
                                 Total
                              -  Annual
                                 Costs
                         o Overhead
                         o Property Taxes
                         o Insurance
                         o Capital Recovery
                         o Recovered Product
                         o Recovered Energy
                         o Useful  byproduct
                         o Energy  Gain
                  Indirect
                  Annual
                  Costs
                  Recovery
                  Credits
                                  B-6

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                                 -DRAFT-
                                  Karch 15. 1990

functions.  Even while the  control  system is  not operating,  some of the
semivariable costs continue to be  incurred.

     Indirect, or "fixed",  annual costs  are those whose values are relatively
independent of the exhaust  or material flowrate and,  in fact, would be
incurred even if the control system were shut down.   They  Include such
categories as overhead, property taxes,  insurance, and capital recovery.

     Direct and indirect annual costs are offset by recovery credits, taken
for materials or energy recovered by the control system, which may be sold,
recycled to the process, or reused  elsewhere  at the site.  These credits, in
turn, may be offset by the  costs necessary for their  purification, storage,
transportation, and any associated  costs required to  make then reusable or
resalable.  For example, in auto refinishing, a source through the use of
certain control technologies can save on raw  materials (I.e., paint) 1n
addition to recovered solvents.  A  common oversight in BACT analyses is the
omission of recovery credits where  the pollutant itself has some product or
process value.  Examples of control techniques which  may produce recovery
credits are equipment leak  detection and repair programs, carbon absorption
systems, baghouse and electrostatic precipitators for recovery of reusable or
saleable solids and many inherently lower polluting processes.

     Table B-2 presents an  example  of total annual costs for the control
system previously discussed.  Direct annual costs are estimated based on
system design power requirements, energy balances, labor requirements, etc.,
and raw materials and fuel  costs.   Raw materials and other consumable costs
should be carefully reviewed.  The  applicant  generally should have documented
delivered costs for most consumables or  will  be able  to provide documented
estimates.  The direct costs should be checked to be  sure they are based on
the same number of hours as the emission estimates and the proposed operating
schedule.
                                      B-7

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                          DRAFT
     TABLE B-2.   EXAMPLE OF A ANNUAL COST ESTIMATE  FOR AN ELECTROSTATIC
                PRECIPITATOR APPLIED TO A COAL-FIRED BOILER

                                                           Annual costs
                                                              (S/yr)
Direct Costs
     Direct labor at  $12.02/man-hour                                 26,300
     Supervision at $15.63/man-hour                                       0
     Maintenance labor at $14.63/man-hour                            16,000
     Replacement parts                                               5,200
     Electricity at $0.0258/kWh                                      3,700
     Water at $0.18/1000 gal                                           300
     Waste disposal at SIS/ton (dry basis)                           33,000
         Total direct costs                                        84,500

Indirect Costs
     Overhead
         Payroll (30% of direct labor)                               7,900
         Plant (26%  of all labor and  replacement parts)              12,400
         Total overhead costs                                      20,300

Capital charges
     G&A taxes and insurance                                        45,300
      (4% of total turnkey costs)
     Capital recovery factor                                       133,100
      (11.75* of total turnkey costs)
     Interest on working capital                                     2,100
      (10% of working capital)
         Total capital charges                                    180,500

         TOTAL ANNUALIZED COSTS                                   285,300
                                   B-8

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                                 -DRAFT-
                                   Harch IS. 1990

      Maintenance costs  1n some  cases  are estimated  as  a  percentage  of  the
total capital  Investment.   Maintenance costs Include actual  costs  to repair
equipment and  also other costs potentially Incurred  due to any  Increased
system downtime which  occurs  as  a  result of pollution control system
maintenance.

      Fixed annual costs Include plant overhead,  taxes, Insurance, and  capital
recovery charges.  In  the  example  shown,  total  plant overhead Is calculated as
the sum of 30  percent  of direct  labor  plus 26 percent of  all labor and
maintenance materials.   The OAQPS  Control  Cost  Manual combines  payroll  and
plant overhead into a  single  Indirect  cost.  Consequently, for  "study"
estimates, it  1s sufficiently accurate to combine payroll and plant  overhead
Into a single  indirect cost.  Total overhead is then calculated as 60 percent
of the sum of  all labor  (operating, supervisory,  and maintenance) plus
maintenance materials.

     Property  taxes are  a  percentage of  the  fixed capital investment.   Note
that some jurisdictions  exempt pollution  control  systems  from property  taxes.
Ad valorem tax data are  available  from local governments.  Annual  insurance
charges can be calculated  by  multiplying  the insurance  rate for the  facility
by the total capital costs.   The typical  values used  to calculate taxes and
insurance is four percent  of  the total capital  investment if specific facility
data are not readily available.

     The annual costs previously discussed do not account for recovery of the
capital cost Incurred.   The capital cost  shown  1n Table B-2 1s  annualIzed
using a capital recovery factor  of 11.75 percent.  When the capital recovery
factor Is nultlpHed by  the total capital  Investment the resulting product
represents the uniform end of year payment necessary to repay the Investment
1n "n" years with an Interest rate "1".
                                      B-9

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                                 -DRAFT-
                                  March 15.  1990

     The formula for the capital recovery factor is:

          CRF - 1 (1 +
                (1 + 1)M

where:
     CPF - capital recovery factor
       n - economic life of equipment
       1 • real interest rate

     The economic life of a control system typically varies between 10 to 20
years and longer and should be determined consistent with data from EPA cost
support documents and the IRS Class Life Asset Depreciation Range System.

      From the example shown in Table B-2 the Interest rate 1s 10 percent and
the equipment life Is 20 years.  The resulting capital recovery factor 1s
11.75 percent.  Also shown is interest on working capital, calculated as the
product of interest rate and the working capital.

     It is important to insure that the labor and materials costs of parts of
the control system (such as catalyst beds, etc.) that must be replaced before
the end of the useful life are subtracted from the total capital Investment
before it is multiplied by the capital recovery factor.  Costs of these parts
should be accounted for in the maintenance costs.  To  include the cost of
those parts in the capital charges would be double counting.  The Interest
rate used Is a real Interest rate (I.e., 1t does not consider Inflation).  The
value used In most control costs analyses 1s 10 percent In keeping with
current EPA guidelines and Office of Management and Budget recommendations for
regulatory analyses.

     It is also recommended that Income tax considerations be excluded froa
cost analyses.  This simplifies the analysis.  Income taxes generally
                                     B-10

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                                 -DRAFT-
                                  Narch IS. 1990

represent transfer payments  from one  segment of  society  to another and as such
are not properly part of economic costs.

III. OTHER COST ITEMS.
     Lost production costs are not  included  in the cost  estimate for a new or
modified source.  Other economic parameters  (equipment life, cost of capital,
etc.) should be consistent with estimates for other parts of the project.
                                     B-ll

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