Technical Support Document (TSD) for the Cross State Air Pollution Rule Supplemental Rulemaking

Docket ID No. EPA-HQ-OAR-2009-0491

Determination of State Budgets for the
Final Ozone Supplemental of the
Transport Rule

U.S Environmental Protection Agency
Office of Air and Radiation
December 2011


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EPA finalized the Transport Rule in July of 20111. At the same time, EPA also issued a Supplemental Notice of Proposed Rulemaking (SNPR)
proposing to bring six states into the Transport Rule ozone-season NOx program. In this final rulemaking, EPA is finalizing FIPs to address significant
contribution to nonattainment and interference with maintenance in Iowa, Michigan, Missouri, Oklahoma, and Wisconsin. For two of these states (Iowa and
Missouri), the state budgets in this final rule are unchanged from those budgets as quantified at proposal. For three of these states (Michigan, Oklahoma, and
Wisconsin), EPA is finalizing state budgets that reflect adjustments in certain unit-level assumptions that result in changes from the budgets presented for
these states in the proposal. See Section III.E of the preamble for an explanation of these adjustments. This technical support document (TSD) shows the
underlying data and calculations used to determine the amount by which each of these three states have their budget adjusted from proposal. The first
section below summarizes final budgets for all of the states for which EPA is finalizing a FIP under this rule. The second section identifies each specific
unit-level adjustment and quantifies its impact on the relevant state budget and the number of allowances put into the relevant new unit set-aside (NUSA),2
as well as the impact to the relevant assurance level3 for that state, using the methodologies described in the final Transport Rule.

Section A: Summary of State Emission Budgets

EPA is finalizing FIPs to control ozone-season NOx emissions from five states. The state budgets determined for these states maintain a consistent
application of the methodology described in the final Transport Rule to quantify and eliminate emissions that significantly contribute to nonattainment and
interfere with maintenance of the NAAQS assessed in that rulemaking. EPA's regulatory impacts analysis (RIA) of the July 2011 final Transport Rule
included coverage of these states for ozone-season NOx reductions using their state budgets as quantified in the proposal of this supplemental rulemaking.
As shown in further detail below, the final ozone-season NOx budgets for these states in 2014 (the year of analysis in that RIA) vary collectively by less than
3,500 tons from the budgets as originally modeled.4

Final Ozone-Season NOx Budgets (thousand tons)





Final Budget

State



2012

2014

Michigan



28.041

27.016

Oklahoma



36.567

21.8355

1	Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals (76 FR 48208).

2	The "Total NUSAs" presented for each state in section B of this document include allowances under both the State NUSA and the Indian Country NUSA (where the latter
exists in the given state).

3	EPA lias also proposed in a separate action to amend the effective date of the assurance provisions in all states to start in 2014 instead of in 2012. Please see 76 FR 63860
for more information on that proposal.

4	For more information, please see the final Transport Rule Regulatory Impact Analysis in the docket for this rulemaking (EPA-HQ-OAR-2009-0491-4409).

5	Budget effective in 2013 and thereafter.


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Wisconsin



14.784

14.296

Iowa



16.532

16.207

Missouri



22.762

21.073

Section B: Quantification of State Emission Budgets, Assurance Levels, and NUSAs Affected by Unit-Level Adjustments
1) Michigan

As described in the preamble, EPA is finalizing Michigan's 2012 and 2014 ozone-season (OS) NOx budget with an adjustment to account for no
SCR being installed at Monroe Unit 2. This results in a 2,289 ton increase to the state's ozone-season NOx budgets in 2012 and 2014.

Table l.a: Calculation to Determine Michigan Ozone Season Budget Increase Assuming No SCR at Monroe

Jnit # 2





A

B

C

D

E

F

Plant

Unit

Emissions from
TR Remedy
Final_2012 (1000
tons)

HI from

TR Remedy Final 2012
(Tbtu)

Remedy Emission Rate
from from

TR_Remedy_Final_2012
(lbs/mmBtu)

Adjusted
Emission Rate
(lbs/mmBtu)

Adjusted
Emissions

Budget
Adjustment
(1000 tons)

Calculation







A/B



DxB

E-A

Monroe

2

0.675

19.46356305

0.07

0.3046

2.964300653

2.289

Columns A, B, and C show the OS NOx emissions, heat input, and emission rate from the TR_Remedy_Final_2012 modeling when an SCR is
assumed to be present at Monroe Unit 2. Because no SCR is present, EPA modified the emission rate to reflect the "controlled NOx policy rate" in the
NEEDS version from the September 1, 2010 TR Notice of Data Availability (NODA) (column D).6 This value reflects the NOx emission rate assumed in
EPA's modeling of the Transport Rule as originally proposed, when EPA did not assume an SCR to be present at the unit. This value approximates the
emission rate expected at the unit at a cost threshold of $500/ton when no SCR is present at the unit. EPA multiplied this NOx rate (shown in column D) by
the remedy heat input shown in column B to obtain a revised emission projection for the unit (column E). The difference between this revised emission
projection (no SCR assumed) and the final Transport Rule remedy analysis emission projection (SCR assumed) determines the amount of the adjustment to
the state's ozone-season NOx budget as compared to the budget presented at proposal (column F).

The final values for the state's ozone-season NOx budget, assurance level, and new unit set-asides are given in the preamble.

6 See National Electric Energy Data System (NEEDS) v4.10 available at http://www.epa.gov/airmarkets/progsregs/epa-ipm/BaseCasev410.html

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2) Oklahoma

As explained in the preamble section III of the final supplemental rule, EPA has recalculated Oklahoma's state budget for the 2012 ozone season
such that it does not reflect the installation or upgrade of any new combustion controls (see Appendix). This recalculation demonstrates that ozone-season
NOX emissions would be 9,522 tons higher in the 2012 ozone season without the new and upgraded combustion controls previously assumed; EPA has
adjusted the final state budget for the 2012 ozone season only to reflect these emissions. The table below shows the values and calculations used to derive
the 9,522 figure.

Table 2a. Oklahoma Ozone Season NOx Budget Adjustment for the 2012 Ozone Season Reflecting No Combustion Control

Upgrade or Installation
(1000 tons)

A

B

C

D

E

F

G

H

I

Plant Name

ORIS
Plant
Code

Unit ID

2012 OS

NOx

Remedy

Emissions

(1000

tons)

2012 Heat

Input

(Tbtu)

Emission
Rate with
LNB
Upgrade

Base

Emission

Rate

(lbs/mmBtu)

Adjusted
Emissions
(1,000 tons)

Adjustment
Amount
(1,000
tons)

Muskogee

2952

6

1.036

14.216

0.146

0.347

2.466710049

1.430

Muskogee

2952

4

1.045

14.613

0.143

0.321

2.343145371

1.298

Sooner

6095

1

1.071

14.939

0.143

0.319

2.386135045

1.315

Muskogee

2952

5

1.042

14.647

0.142

0.314

2.301435722

1.260

Sooner

6095

2

1.111

15.580

0.143

0.314

2.445420837

1.334

GRDA

165

1

1.465

14.507

0.202

0.349

2.528559526

1.063

Northeastern

2963

3314

1.704

13.160

0.259

0.394

2.594200981

0.890

Northeastern

2963

3313

1.649

13.137

0.251

0.382

2.511937905

0.863

Hugo

6772

1

1.269

14.103

0.180

0.190

1.336456463

0.067

Total















9.522

Columns A, B, and C provide unit level information about the facility. Columns D, E, and F provide projected emissions, heat input and ozone season NOx
emission rates from EPA's 2012 TRRemedyFinal modeling. The emission rate in column F, which formed the basis for the column D expected
emissions, was based on the assumption that the facilities would make certain upgrades or installations with respect to combustion controls. Column G
reflects the ozone-season NOx emission rate at these facilities assuming no combustion control upgrades or installation. That is, column G reflects emission
rates that are typical to that unit's historic operations. This value is obtained from "controlled NOx Base rate" in the NEEDS v.410 used for the Final

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Transport Rule . Column H reflects the emission values expected for each unit when the projected heat input (column E) is multiplied by the historic
emission rate (column G). The difference between column H and column D (when summed) reflects the total amount by which the Oklahoma ozone-season
NOx budget is adjusted as compared to the budget presented at proposal.

Also, as explained in preamble section III, EPA is finalizing an Oklahoma state budget specifically for the 2012 ozone season that reflects revised
projected emissions at oil/gas steam generators consistent with an immediate-term dispatch pattern that maintains the firm power supply arrangements
already in place to serve local electricity demand. The table below illustrates the calculations used to derive the adjustment to the Oklahoma state budget for
the 2012 ozone season assuming a dispatch pattern of oil/gas steam generation in 2012 consistent with recently observed operational data at those units.

Table 2b. Oklahoma Ozone Season NOx Budget Adjustment Reflecting No Major Curtailment of O/G Steam Generating Units

A

B

C

D

E

F

G

H

I

J

Plant Name

Plant Type

ORIS

Code

Unit
ID

2012 OS
NOx
Remedy
Heat Input
(mmBtu)

2012 OS NOx
Remedy
Emissions
(1,000 tons)

2010 Heat Input
(mmBtu)

NEEDS

Controlled NOx
Base Rate
(lbs/mmBtu)

Emissions
Assuming 2010
Heat Input
(1,000 tons)

Emission
Adjustment for
2012

(1,000 tons)

Anadarko Plant

O/G Steam

3006

3

0

0

1,917

0.22

0.000

0.000

Horseshoe Lake

O/G Steam

2951

6

0

0

3,022,970

0.28

0.427

0.427

Horseshoe Lake

O/G Steam

2951

8

0

0

5,904,903

0.14

0.405

0.405

Mooreland

O/G Steam

3008

1

0

0

52,018

0.34

0.009

0.009

Mustang

O/G Steam

2953

1

0

0

648,384

0.20

0.066

0.066

Mustang

O/G Steam

2953

2

0

0

636,546

0.15

0.048

0.048

Mustang

O/G Steam

2953

3

0

0

1,700,657

0.24

0.200

0.200

Mustang

O/G Steam

2953

4

0

0

1,884,097

0.35

0.325

0.325

Northeastern

O/G Steam

2963

3302

0

0

8,298,493

0.40

1.644

1.644

Ponca

O/G Steam

762

2

0

0

1,895

0.19

0.000

0.000

Riverside

O/G Steam

4940

1502

0

0

6,559,178

0.23

0.742

0.742

Southwestern

O/G Steam

2964

8002

0

0

457,715

0.33

0.075

0.075

Southwestern

O/G Steam

2964

8003

0

0

4,603,800

0.44

1.005

1.005

Southwestern

O/G Steam

2964

801N

0

0

244,030

0.25

0.031

0.031

Southwestern

O/G Steam

2964

801S

0

0

244,058

0.21

0.025

0.025

Tulsa

O/G Steam

2965

1402

0

0

1,029,085

0.18

0.094

0.094

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Tulsa

O/G Steam

2965

1403

0

0

112,296

0.28

0.015

0.015

Tulsa

O/G Steam

2965

1404

0

0

1,058,014

0.19

0.099

0.099

Total







0

0

36,460,055



5.210

5.210





















Columns A, B, C and D provide unit level information about the facility. Columns E, and F provide projected ozone season heat input and emissions from
EPA's 2012 TRRemedyFinal modeling. The heat input in column E, which formed the basis for the column E expected emissions, was based on the
assumption that the facilities would reduce uneconomic generation from these less efficient sources under the Transport Rule market incentives. Column G
reflects the 2010 ozone-season NOx heat input at these facilities. Column H reflects emission rates that are typical to that unit's historic operations and
assumed as the "controlled NOx Base rate" in the NEEDS IPM version 4.10 used for the final Transport Rule. Column I reflects the emission values
expected for each unit when the 2010 heat input (column E) is multiplied by the emission rate (column H). The difference between column I and column F
(when summed) reflects the total amount by which the Oklahoma ozone-season NOx budget is adjusted as compared to the budget presented at proposal.

The final values for the state's ozone-season NOxbudget, assurance level, and new unit set-asides are given in the preamble.

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3) Wisconsin

As explained in the preamble section III.E of the final supplemental rule, EPA has recalculated Wisconsin's 2012 and 2014 ozone-season budget
such that it does not reflect the installation of SCR control technology at J P Madgett. This results in a 1,080 ton increase to the state's ozone-season NOx
budget relative to what was proposed in the SNPR. The table below details the values and calculations used to arrive at that amount.

Table 3.a: Calculation to Determine Wisconsin Ozone Season NOx Budget Adjustment Assuming No SCR at J P Madgett





A

B

C

D

E

F

Plant Name

Unit
ID

Emissions
from
TR Remedy
Final_2012
(1000 tons)

Heat Input from
TR Remedy Final 2012
(Tbtu)

Remedy Emission Rate
fromTR Remedy Final 2012
(lbs/mmbtu)

Revised
Emission
Rate
(lbs/mmbtu)

Revised
Emissions
(1000
tons)

Net Budget Adjustment
(1000 tons)

Calculation







A/B



DxB/2

E-A

J P Madgett

B1

.257068143

10.28272555

.05

.26

1.337

1.080

Columns A, B, and C show the emissions, heat input, and emission rate from the 2012 remedy modeling for the J P Madgett unit. However, the
emission rate in column C reflects the existence of a SCR. Because no SCR is present, EPA calculates the source's expected emissions using the emission
rate shown for this unit in the EPA's analysis of the base case for the final Transport Rule, as found in the TRBaseCaseFinal for 2012 (column D) of 0.26
lbs/mmBtu. This ozone-season NOx emission rate reflects generation at this unit without the operation of the assumed SCR, which did not operate in the
final Transport Rule base case because it was modeled as a "dispatchable" control that was not found to be economic to operate in that scenario.7 Moreover,
this emission rate reflects one typically observed at past operation of the facility when no SCR was present. The J P Madgett emission rate without operating
an SCR (column D) multiplied by the remedy heat input (column B) yields the projected emissions from the unit if no SCR were assumed to be in place.
The difference between the projected emissions when no SCR is in place (column E) and the projected emissions when an SCR is assumed (column A)
determines the amount of the adjustment to the state's 2012 and 2014 ozone-season NOx budgets as compared to the budget presented at proposal (column

F).

The final values for the state's ozone-season NOx budget, assurance level, and new unit set-asides are given in the preamble.

7 See "WebReady_ParsedFile_TR_Base_Case_Final_2012" in the Transport Rule docket or on EPA's CSAPR website

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APPENDIX

Assessment of Resource Adequacy for the 2012 Ozone Season in Oklahoma

EPA is setting the Oklahoma state budget for the 2012 ozone season at a level that does not necessitate the installation of new low-NOx burners. See
preamble section III for further discussion. At proposal, EPA quantified Oklahoma's 2012 ozone-season NOx state budget assuming that a number of units
representing 4,452 MW of capacity would install new low-NOx burners (LNB) before the 2012 ozone season. See Table 1 for a list of those units showing
each unit's net summer dependable capacity.

Table 1. Oklahoma Units Projected to Install Low
NOx Burners under the Transport Rule

Capacity

Plant Name

Unit ID

County

(MW)

GRDA

1

Mayes

490

Muskogee

4

Muskogee

511

Muskogee

5

Muskogee

522

Muskogee

6

Muskogee

515

Northeastern

3313

Rogers

450

Northeastern

3314

Rogers

450

Sooner

1

Noble

535

Sooner

2

Noble

540

Hugo

1

Choctaw

440

Total





4452

As explained in preamble section III, EPA assessed the relationship of the capacity identified in Table 1 to the relevant region's total available capacity that
is taken into account in resource adequacy determinations. This assessment shows that if the capacity identified in Table 1 were to be unavailable due to the
installation of low-NOx burners during the 2012 ozone season, the ozone-season planning reserve margin in the IPM region containing Oklahoma (SPPS)
would fall below the target planning reserve margin of 13.6% (see Table 2).

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Table 2. IPM 2012 Ozone-Season Reserve Margin Projections for
SPPS

Capacity (MW)

Ozone-Season Peak Load (MW)
Margin (MW)

Reserve Marginf
Target Planning Reserve Margin

Including All
Plants in IPM

39,093
31,785
7,308
23.0%
13.6%

With Table 1
Capacity
Removed

34,641

31,785

2,856

9.0%

13.6%

f The reserve margin is calculated as the margin (third row) divided by the
available peak load (second row)

The potential unavailability of this capacity would only frustrate the region's target planning reserve margin during the ozone season, because the ozone
season period represents the highest projected load (electricity demand). Even without this capacity available, the regional reserve margin would remain
higher than the target planning reserve margin during the remainder of the year, as shown in Table 3. Because these units would be able to complete LNB
installation without impairing the region's ability to meet its target planning reserve margin after the 2012 ozone season, EPA is not adjusting Oklahoma's
state budgets for years subsequent to 2012 from the budget as quantified at proposal.

Table 3. IPM 2012 Non-Ozone-Season Reserve Margin Projections for

SPPS

Capacity (MW)

Non-Ozone-Season Peak Load (MW)
Margin (MW)

Reserve Marginf
Target Planning Reserve Margin

Including All
Plants in IPM

39,093
24,025
15,068
62%
13.6%

With Table 1
Capacity
Removed

34,641
24,025
10,616
44%
13.6%

f The reserve margin is calculated as the margin (third row) divided by the peak
load (second row)

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