Impact Assessment Report
for the Reproposed Stack Heights Regulations
August 1981
Control Programs Development Division
Office of Air Quality Planning and Standards
Office of Air, Noise, and Radiation
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1
This report presents the costs and emission reductions that
we expect the reproposed Stack Heights Regulation will produce.
It is based on our April, 1981, Impact Assessment Report for Stack
Heights Regulations but includes analysis of changes in the regula-
tion which we are reproposing and includes some cost recalculations
in response to public comments solicited in the May 1, 1981, Federal
Register Notice.
The major findings of this study are:
1. Eleven power plants will have to reduce the sulfur
content of the coal they burn in order to meet a new
GEP calculated SIP. All of these plants are located
in Federal Regions III, IV, and V.
2. The annual cost of these regulations will be $43.8
million.
3. National electricity rate increase will be negligible.
However, consumers served by utilities owning these
particular plants will see rate increases from 0.2
percent to 1.9 percent.
4. Actual sulfur dioxide emissions will decline by
286,900 tons per year.
5. The regulation will produce no capital costs since
no source will have to install flue gas desulfurization
equipment.
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METHODOLOGY
The methodology used an this analysis is essentially the same
as that detailed in our April, 1981, "Impact Assessment Report for
the Stack Heights Regulations", and the reader should refer to
that document. In the current analysis we have incorporated comments
regarding technical data, such as construction dates, stack height,
and emission rates, where appropriate. We have also inflated the
1979 coal prices we used before by 20 percent to reflect 1981
prices, and we have recalculated the fuel costs using the average
plant costs instead of the average regional costs.
In summary, we first developed an inventory of the fossil-fuel
fired power plants that could be affected by the proposed regulations.
The only criteria for a plant to be on this list was that at least
one stack taller than 65 meters was constructed or permitted after
1970. In total, 148 power plants were identified in this category.
Emissions data, 1979 coal consumption, quality of the 1979 coal
purchases and information on boilers and their related stacks were
compiled on these plants.
We next established a GEP stack height based on the formula
(H + 1.5L)1 for each of the 10 2 plants where information on
structure dimensions existed. For the remaining 46 plants where
no such information existed, we assumed GEP stack height to be the
average of the computed formula heights in the same Region.
1
See 44 PR 2614.
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We compared the calculated GEP stack heights with the actual
stack heights for all 148 plants. For those plants with stacks in
existence after 1970 which exceeded their GEP stack heights, we
calculated a revised emission limitation according to the ratio
developed by Cramer.2 we recognized this generally overestimates
the amount of reductions required, but felt it would provide a
good worst-cost estimate. By comparing the sulfur content of fuel
currently used at the plant (1979 consumption)3 with the revised
emission limitation, we identified the plants which may have to
reduce actual emissions. Where existing fuel sulfur contents
exceeded the plant's current SIP emission limitation, we assumed
that the plant would be brought into compliance with its present
SIP. We then calculated its cost based on the reduction from its
SIP emission limitation. Some plants had actual emission levels
low enough to meet the revised limitation and therefore would not
be affected by the regulation, except for a numerical change in
their SIP emission limitation.
In the next step we calculated the sulfur content of the coal
needed to meet any revised emission limitation that was more
restrictive than current emission levels. If the sulfur content
of the new coal for Eastern plants were less than 0.7 percent, we
would assume the plant required flue gas desulfurization equipment.
2* See "Identifying and Assessing the Technical Bases
for The Stack Height Regulatory Analysis," H.E.
Cramer Co., Inc., Dec. 1979.
3* See "Cost and Quality of Fuels for Electric Otilitv
Plants - 1979" DOE/EIA - 0191(79).
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There is little coal with less than 0.7 percent sulfur content
produced in the East.
The difference in the price of new coal with lower sulfur
content was taken from costs reported in the Department of Energy's
"Costs and Quality of Fuels for Electric Utility Plants - 1979"
(DOE/EIA019(79)). Table 1 contains fuel prices for each state
with affected plants by sulfur content, inflated to 1981 dollars.
The increased cost for each plant was calculated as the difference
between the plant's current average delivered price and the
state average delivered price for the lower sulfur fuel. If the
state price for lower sulfur fuel was less than the plant's current
average price, we used the price of coal delivered to other plants
in the same utility system which met the GEP requirements to calcu-
late increased costs.
Next we calculated how much high sulfur coal would be replaced
by low sulfur coal, assuming a shift,across 1.7 percent sulfur
content would be the best indicator of an absolute shift in coal
markets, (1.7 percent is the mean sulfur content of coal produced
in the U.S.). Shifts in higher percentages would be traded off
among current producers of coal shipping to different users.
Shifts to coal with sulfur content below 1.7 percent would mean an
increase in production of lower sulfur coal at the expenses of
production of higher sulfur levels.
POLICY CHANGES
Two major policy changes which affect the economic costs
of the regulations have been included in the Agency's reproposal
of the regulations. The reproposal changes the definition of
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"in existence" and introduces a method for modeling sources in
complex terrain.
The term "in existence" was originally proposed to mean the
physical stack height on December 31, 1970. Arguments presented
in the public comments and use of the term in other sections of
the Act, persuaded us to define the term "in existence" the same
as "commenced construction." The Congressional intent of these
terms seems to be the same. A further discussion of this issue
may be found in the reproposal Federal Register package. The
result of this change enables any stack for which all permits were
obtained and contracts enacted by December 31, 1970, to be grand-
fathered from the provisions of the regulations. This action
reduces the cost to the power industry by exempting more stacks
from the provisions of the regulation, tte changes in costs and
emissions from this policy change are included in this analysis.
The second change in the reproposed regulations establishes
a procedure for determining the emission limitation for sources
located in complex terrain. Comments received stated that substan-
tial economic impact may result if a source must model its air
quality impact with a GEP stack height below its actual stack
height and plume impaction is predicted on an elevated terrain
feature. The April 1981 economic assessment did not consider this
cost of further reducing emission limitations in the event of
predicted plume impaction because to do so would have required
modeling individual plants. Since the newly proposed regulation
allows the use of stack height to avoid plume Impaction situations.
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no special analysis is necessary in this review. The procedures
for allowing stack height for impact modeling are discussed in the
reproposal of the regulations in the FEDERAL REGISTER.
RESULTS
Our study shows that under the Stack Heights Regulation,
SO2 emissions will decline by 286,900 tons per year at an annual
cost of $43.8 million to the utility industry.
Table 2 lists the eleven affected plants and their predicted
fuel shifts under this regulation. Table 3 presents a regional
breakdown of these costs and the associated reduction in SO2
emissions.
The cost-effectiveness of this regulation is $153 per ton
of SO2 removed. This can be compared with a $1200 per ton of
SO2 cost-effectiveness associated with the 1979 New Source
Performance Standards for power plants.
All costs result from price rises associated with lower sulfur
coal. On a national basis, this rise in fuel cost is negligible.
For the individual plants affected in Region III, the increase in
fuel cost is estimated to range between 1.0 and 14.0 percent. In
Region IV, the range is estimated to be 1.0 to 12.0 percent and
for Region V the range is estimated to be 1.0 to 6.0 percent.
The increase in fuel costs for the power plants will be
passed on to the consumers in higher electric rates. These rates
are based upon fuel costs and operating costs of the electric
system. Most of the affected plants are part of a larger system
which means that actual percent increase in a system's electric
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rates will be less than the percent increase in fuel cost for the
single plant. In addition fuel costs are only a portion of the
costs of producing and transporting electricity. The increase
in consumer electric rates was taken as the ratio of increased
fuel costs to utility revenues. This increase is negligible at the
national level. For the individual affected utilities, the increase
ranges from less than 0.2 percent to 1.9 percent.
Since compliance with this regulation will require utilities
to switch to a lower sulfur coal, the regulation will produce a
small affect on the coal market. The shift from high sulfur
content coal to low sulfur content coal will be less than 11.5
million tons per year. This represents approximately 3.2 percent
of the 354 million tons of coal produced in the Cast. In our
analysis, the Gavin plant is the only one that we assumed would
buy low sulfur coal from the West. We assumed this because Gavin
already has a longterm contract to buy Wyoming coal at the rate
of 3.6 million tons per year and the additional low sulfur coal
they need would equal about one-third of this amount.
The magnitude of both the costs and the coal shifts could
be less if coal washing, coal blending, or other control techniques
were used to achieve the emissions reductions. Coal washing could
be used for small shifts in percent sulfur where the total costs
are less than costs of interrupting current coal supplies. Although
coal washing or other control systems could be used to reduce the
economic impacts of these regulations, they were not considered in
this worst-case study because information was not available on the
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washability of the specific coal used. Coal washing or other
control systems would only be used if they were less costly than
purchasing lower sulfur coal.
An evaluation of other source categories that may be affected
by the regulation, was conducted by Cramer. That report identified
the non-ferrous smelters, the pulp and paper industry, the steel
industry and the oil, gas, and chemical industry as having potential
impacts under the regulations. The majority of these plants would
have stacks in the 65 to 90 meter range. Cramer estimated GEP
heights for these source categories. In this review, Cramer identi-
fies one smelter, no pulp and paper plant stacks, no steel plant
stacks, and with the exclusion of flares, no oil, chemical gas
plant stacks that are affected by the regulation. Smelters are
treated separately under Section 119, of the 1977 Clean Air Act
Amendments.
One commenter pointed out that because of the variability of
sulfur content of coal a plant would have to purchase coal with an
approximate average sulfur content 20 percent below the predicted
SIP requirement in order to meet that requirement on a continuous
basis.
The Agency agrees that in order to meet a short-term sulfur
emission limitation, the long-term average sulfur content must be
below that necessary to just meet the emission limitation. The
conservative ratio developed by H. E. Cramer, Inc., tends to over-
predict the sulfur reductions necessary. We feel this will compen-
sate for sulfur variability. In addition, assuming that the
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current SIP limitation will just result in attainment of the standard
on PSD increment it is also restrictive. However, as a sensitivity
analysis we developed a range of economic impacts with and without
the 20 percent factor. Tables 4 and 5 present the results of that
analysis.
Some commenters indicated that the required reduction in
sulfur content could reduce the efficiency of electrostatic
precipitators. This, in turn, could lead to expenditures for
upgrading electrostatic precipitators in order to maintain
current TSP emission levels. We feel that electrostatic precipi-
tator efficiency losses will not affect most of the plants. For
those plants that may be affected, techniques such as pulse power
supply systems and chemical additives are available and would
not increase the costs of this regulation significantly.
The agency is reproposing its definition of "in existence"
for this regulation. Under the new definition several additional
sources will be exempted from coverage. We reviewed all plants
which had predicted emissions limitations in our April, 1981,
study and in our sulfur variability sensitivity analysis. We
eliminated the following plants from consideration because their
stacks were judged "in existence" prior to December 31, 1970:
Conemaugh, Harllee Branch, Homer City, Sammis, and Mitchell (GA).
Several other plants may have "in existence" dates before December
31, 1970, however, they were left in the study because no construc-
tion dates were available. These plants are Yates and Hammond.
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References
1. "Impact Assessment Report for the Stack Heights
Regulations," Control Programs Development
Division, Office of Air Quality Planning and
Standards, Office of Air, Noise and Radiation,
U.S. Environmental Protection Agency, April,
1981. (Docket No. A-79-01, IV-A-6).
2. 9. E. Cramer Co., Inc., "Identifying and Assessing
the Technical Bases for the Stack Height Regulatory
Analysis," Pinal Report, prepared for the U.S.
EPA, December 1979.
3. Conversations with Lou Nagler, Archie Lee (U.S.
EPA Region IV) and Bill Mitchell (State of Georgia)
concerning commenced construction dates for plants
in Region IV.
4. Conversation with Tim Method (U.S. EPA Region V)
concerning commenced construction dates for plants
in Region V.
5. Conversation with Richard P. Burkhart (Pennsylvania
Electric) concerning commenced construction dates
at Pennsylvania Electric plants.
6. "Economic Impact of Tall Stack Regulations," ICP
Incorporated, June 1981 (Docket No. A-79-01, IV-H-21,
Attachment 2).
7. "Cost and Quality of Fuels for Electric Utility
Plants - 1979," June 1980 (DOE/EIA-O191(79)).
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Table 1
Delivered Coal Prices (1981 $/ton) by Sulfur Content
0.51% S
1.01% S
1.51% S
2.01% S
to
to
to
to
1.00% S
1.50% S
2.00% S
3.00% S
>3.00% i
MD
49.04
39.91
39.98
40.17
PA
31.26
37.81
33.65
35.32
37.12
WV
41.95
41.38
36.95
32.89
27.16
AL
44.52
40.93
42.19
39.17
45.53
GA
47.99
36.29
41.26
38.20
31.90
OH
40.91
37.63
37.66
33.41
33.23
IL
43.74
38.90
35.84
31.40
28.5 2
KY
43.94
38.74
39.02
38.40
27.94
Source: DOE/EIA - 0191(79). 1979 prices inflated
by 20 percent.
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Table 2
Plants Affected by Stack Heights Regulations
Data and Calculations
Region
Plant
Affected
MW
Actual
Stack
Height
(m)
GEP
Fbrmula
Height
(m)
« Boiler
Capacity
Affected
Current
SIP
Limit
% S
Actual
Bnissions
* S
GFP*
SIP
Limit
% S
III
Penn.
Seward
216
184
109
100
2.44
2.30
1.04
Penn.
Shawville
254
183
114
41
2.44
2.07
1.14
W. Va.
Willow Island
246
304
[177]
100
2.29
1.31
0.87
IV
Ala.
Gaston
1,109
229
11421
67
2.4
1.9
1.1
Ala.
Gorgas
800
229
143
80
2.4
1.3
1.1
Ga.
Hammond
722
229
141
100
3.0
1.7
1.4
Ga.
Yates
1,336
252
148
100
3.0
1.8
1.3
V
Oh.
Miami Fbrt
1,000
244
185
33
2.4
1.9
1.5
Ch.
Oonesville
738
244
11571
40
3.5
4.0
1.5
111.
Dallman
180
152
121
52
3.7
3.7
2.5
Oh.
Gavin
2,600
335
207
100
4.9
2.4
2.1
* Based on Cramer (1979) Appendix C Methodology
V \ Average Regional GEP
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TABLE 3
Costs and Emission Reductions for Meeting GEP Requirements
Costs SO2
($1981 Reductions
million) ('000 tons
per year)
Region III 9.0 32.2
Region IV 20.5 98.8
Region V 14.3 155.9
Total 43.8 286.9
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Assessment
Region III
Region IV
Region V
Total
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TABLE 4
of Plants Affected by the GEP Stack Height Rules
Without 20%
Adjustment
Seward
Shawville
Willow Island
Gaston
Gorgas
Hammond
Yates
Miami Fort
Conesville
Dallman
Gavin
With 20%
Adjustment
Seward*
Shawville*
Willow Island
Morganton
Gaston
Gorgas
Hammond
Yates
Smith
Harllee Branch
Mitchell
Brown
Big Sandy
Miami Fort
Conesville
Dallman
Gavin
11
17
* Plants in Pennsylvania not adjusted because emission limitations
are set as an annual average.
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TABLE 5
Cost Estimation for Meeting GEP Requirements
(million dollars per year, 1981)
Without 20% Adjustment With 20% Adjustment
Region III 9.0 10.5
Region IV 20.5 48.5
Region V 14.3 17.5
Total
43.8
76.5
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