[37 Pa.B. 883]
[Saturday, February 17, 2007]
[Continued from previous Web Page] Commentators contended that an owner of a standby unit cannot rely on the potential for allowances to be made available to assure they are in compliance with this proposed rulemaking. An owner must be certain a standby unit can come back into service and be in compliance, or there will be no choice but to prematurely retire that unit. A cap-and-trade program would provide that opportunity. The Board disagrees. This Commonwealth currently does not have units that qualify as standby units. If the owner or operator of a unit changes its designation to standby in the future, its allowances will be transferred to the annual emission limit supplement pool established under § 123.208. If the owner or operator subsequently applies to restart a designated standby unit, it would then need to meet the applicable emission limit requirements of § 123.205.
One commentator believed that the Department's compliance bank may not cover all potential requests for allowances. The Board disagrees. The annual emission limit supplement pool established under § 123.208 is not a ''compliance bank'' nor is it intended to be a permanent ''crutch'' for owners and operators of units to rely upon to meet their annual emissions cap. The owner or operator of each affected unit should design its compliance program to comply with the applicable requirements in the final-form rulemaking. In the event then that the unit happens to exceed its limit, the Department can make nontradable supplemental allowances available to that unit if the owners or operators successfully petition the Department in accordance with § 123.209. The Department's analysis shows that the Pennsylvania mercury rulemaking would achieve approximately a 29% greater reduction than the CAMR during Phase 1. This would amount to 1.2567 tons (2,513.4 lbs.) of mercury emissions as opposed to 1.77 tons (3,540 lbs.) mercury emissions under the CAMR cap. During Phase 2, it is anticipated that the Pennsylvania mercury rulemaking would achieve approximately a 39% greater reductions than the CAMR under Phase 2. Therefore, the Commonwealth would achieve its cap of 0.702 ton (1,404 lbs.) by 2015 rather than exceeding it by 0.451 ton (902 lbs.). As a result, there should be sufficient allowances in the supplemental pool.
One commentator believed that proposed §§ 123.206 and 123.209 are unconstitutional under the commerce clause of the United States Constitution because they effect a preference for Pennsylvania coal under the guise of bituminous coal. The Board disagrees that these sections are unconstitutional. However, after consideration of comments received on the proposed rulemaking, the Board has removed the provisions for presumptive compliance with the emission standards and preferential allowance allocations for bituminous coal. While the original intent of the bituminous coal preference was to reflect known control capabilities while burning bituminous coal, the intended simplification of implementation of the mercury regulations was outweighed by the possible legal challenges that jeopardized the reliance of our industry on these provisions. Therefore, the final-form rulemaking does not contain these provisions.
One commentator stated that the Commonwealth must modify proposed § 123.210(b) by adding a statement that source owners and operators must also comply with the requirements of 40 CFR Part 75 with regard to mercury mass emissions. The Board agrees and the requirements for 40 CFR Part 75, Subpart I compliance, for mass emission monitoring systems, have been added to the final-form rulemaking.
A commentator asked that the Commonwealth state in its regulation that 40 CFR Part 75 requirements will take precedence if a case should arise where there is a conflict between 40 CFR Part 75 and the Commonwealth's requirements. The Board agrees. This change has been made to § 123.210.
A commentator asked that the Commonwealth clarify in the proposed rulemaking that the Department will not approve alternative requirements unless they are consistent with 40 CFR Part 75. The Board agrees. This change has been made to § 123.210.
Another commentator believes that the Board should adopt the sampling provisions laid out in the CAMR and not the daily 'as fired' sampling protocol. The Board disagrees. The CAMR does not provide methodology for determining or demonstrating compliance with percent-reduction limits or coal sampling and analysis. The Board believes daily coal sampling in conjunction with outlet mercury emission monitoring will accomplish the goal of ensuring compliance with percent-reduction limits for subject EGUs without imposing unreasonable costs. Daily sampling is specified to establish a relationship between the coal that is sampled and that which is burned, and to conform with provisions of 40 CFR Part 60 (relating to standards of performance for new stationary sources) for pretreatment for sulfur removal, as well as the discussions and clarifications in the preamble to 40 CFR Part 60, Subpart Da and determinations under 40 CFR Part 60, Subpart Da recorded on the EPA's Applicability Determination Index.
One commentator believed that if sources in this Commonwealth purchase allowances from out-of-State sources that have over-controlled their emissions, in virtually all instances the selling sources would be located to the west and southwest of this Commonwealth. This would benefit the environment in this Commonwealth since those power plants did over-control and are up-wind of this Commonwealth. The Board disagrees. Coal-fired power plants that burn bituminous coal emit oxidized forms of mercury, which are deposited near their source. Sources to the west and south west primarily burn bituminous coal and would see local deposition improve. In this Commonwealth, 85% of the coal burned by coal-fired power plants is bituminous, with the remainder waste coal. As a result, the Commonwealth would not see reductions in actual emissions of mercury within the environs of this Commonwealth and may even see increased emissions, if power plants in this Commonwealth were allowed to purchase allowances from out-of-State sources rather than installing controls.
One commentator believed that MACT would have been a superior way to reduce mercury emissions. By allowing trading, not all geographic areas benefit from pollution reductions. The Board agrees with this comment. The Board believes that the EPA does not have the legal authority to regulate HAP, like mercury, under the less stringent provisions of section 111 of the CAA, as opposed to the more stringent MACT provisions under section 112 of the CAA. Since the EPA promulgated its Section 111 approach for the control of mercury emission from power plants, petitions for review challenging this final EPA action were filed with the United States Court of Appeals for the D.C. Circuit. In addition to the Commonwealth, state challengers include California, Connecticut, Delaware, Illinois, Maine, Massachusetts, New Hampshire, New Mexico, New Jersey, New York, Rhode Island, Vermont and Wisconsin.
Some commentators stated that Dr. Terry Sullivan of Brookhaven National Lab found no evidence of hot spots created by emissions trading. The Board disagrees. Impacts regarding mercury deposition were studied at the Bruce Mansfield coal-fired power plant in Shippingport, PA, and reported in Sullivan, T.M, et al., ''Assessing the Mercury Health Risks Associated with Coal-Fired Power Plants: Impacts of Local Depositions,'' Brookhaven National Laboratory, Upton, NY. The Bruce Mansfield plant is characterized by high total mercury emissions. From the deposition modeling, the average increase in deposition as compared to a background deposition rate of 20 µg/m2/yr over a 2,500 km2 area around the plant was 15% at Bruce Mansfield. Over an area that is 50--100 km2, immediately adjacent to the plant, deposition doubled at the Bruce Mansfield plant. The report concluded that if the plant emissions double the local deposition, the fish concentration would be similarly doubled. As a result, the U.S. mean fish mercury content is 0.21 ppm and near the Bruce Mansfield plant the mean fish mercury content is 0.41 ppm.
One commentator stated that the Board's proposed rulemaking lacked a market-driven cap-and-trade program, a proven tool to reduce air pollution, to promote early reductions of mercury emissions in a cost-effective way. The Board disagrees. The Commonwealth has been a strong proponent of traditional cap-and-trade programs regarding criteria pollutants. However, because mercury is a designated HAP under section 112 of the CAA and a potent neurotoxin, trading of a substance such as this is illegal under the CAA and bad environmental and public health policy. Because of the trading provisions under the CAMR, owners and operators of EGUs in this Commonwealth do not have to make reductions of actual mercury emissions in this Commonwealth. They can purchase allowances to offset the amount of mercury they emit over their cap to ensure compliance, which means that reductions in this Commonwealth may only be realized on paper. Moreover, mercury emissions in this Commonwealth may be much higher than the EPA projects.
Some commentators said there is no certainty a pool of allowances will be created under the proposed rulemaking to be available to owners of EGUs without the economic incentives included in the CAMR cap-and-trade program. The Board disagrees. After Phase 1 of the program, the Board anticipates that the Pennsylvania mercury rulemaking will achieve approximately 29% greater reductions than the CAMR. After Phase 2, the Board anticipates that the Pennsylvania mercury rulemaking will achieve approximately 39% greater reductions than the CAMR. As a result, the Board anticipates that there will be a supplemental pool available for use for eligible owners or operators of EGUs. Furthermore, the Board has added a system-wide emissions averaging approach to address the commentator's concerns regarding incentives for early reductions. Under this approach, owners or operators of two or more affected EGUs under common ownership or operator control within this Commonwealth may achieve compliance with the annual mercury emission limitation by ensuring that the aggregate of actual mass emissions from all units, under the averaging demonstration, is less than the aggregate of allowable mass emissions from these units.
Some commentators believed that the Board has viewed the public comment period as a public opinion poll, rather than a genuine opportunity to solicit and consider substantive comments. The commentators felt that the vast majority of the comments received were form e-mails or letters drafted by advocacy organizations to ''run up the numbers.'' The Board disagrees. It is undisputed that there is a substantial public interest in the State-specific rulemaking to reduce mercury emissions from coal fired power plants. The unprecedented number of commentators for this final-form rulemaking shows that the public is extraordinarily concerned about mercury emissions from coal-fired power plants and is exercising their constitutional right to comment on an issue that directly affects them. Many of these comments were substantive in nature, which resulted in the Board making revisions to the final-form rulemaking.
Some commentators believed that if trading is not added to the proposed rule and controls cannot be built because of time, labor or financial constraints. The Board disagrees. Section 123.206(c) provides that the Department may approve of an alternative mercury emission standard or schedule, or both, if the owner or operator of an EGU subject to the emission standards of § 123.205 demonstrates in writing to the Department's satisfaction that the mercury reduction requirements are economically or technologically infeasible. While the Department's approval of an alternate standard or a compliance schedule will not relieve the owner or operator of an EGU from complying with the other requirements of §§ 123.207--123.215, owners and operators of these plants may also petition the Department for supplemental allowances under § 123.209. As a result, there are a number of provisions in the regulation to ensure that plants are safeguarded. In addition, an alternate schedule would not require these units to operate at a reduced level of output.
One commentator stated that a recent study shows the proposed mercury rulemaking would increase this Commonwealth's cost for compliance by $1.7 billion, doubling the investments EGUs would have to make in advanced pollution control equipment over the CAIR/CAMR. The commentator further stated that the Board has done no detailed study of the cost impacts of this proposed rulemaking on electric generators or electric customers. The Board disagrees. The Department has done a thorough cost analysis and has found that the increase in cost to electric utility customers in this Commonwealth would be very small, and that the increased cost would be $0.0012 to 0.0038 KWh.
Some commentators are extremely concerned about the impact the Board's proposed rulemaking will have on the economy. Imposition of burdensome, unnecessary mercury regulations can have a devastating, rippling effect throughout the energy production, mining and manufacturing sectors. The Board shares these concerns as well, but does not believe the final-form rulemaking will have this effect. There will be compliance costs related to the construction and operation of air pollution control devices to control mercury, NOx and SO2. The total cost of complying with the State-specific mercury rulemaking in Phase 1 is estimated to be between $15.4 and $15.8 million per year. Purchasing mercury allowances (at $953 per ounce, according to the DOE) would cost approximately $15.7 million per year.
The Phase 2 cost range is based on the control technologies needed to meet the annual limit. The high end cost estimate is based upon using TOXECON/COHPAC at an annual cost of $53.4 million. The low end is based upon utilizing B-ACI at an annual cost of $16.7 million. The capital costs for each of these technologies were annualized based upon 20 years and an interest rate of 10%. The Phase 2 mercury allowance cost was estimated to be $28.3 million annually based upon the assumption of allowances costing $41,900/lb. This allowance cost is based on an average from DOE projected costs for 2015 and 2030.
The cost differential between allowance costs and technology costs were $25.1 million on the high end and a savings of $11.6 million on the low end. The total kilowatt-hours calculated for the 18 units that may not be installing CAIR controls to meet the Phase 2 requirements are 13,748,393,901. The resulting cost per kilowatt-hour ranges from $0.0018/KWh for the use of the TOXECON/COHPAC control technology to a savings of $0.00084/KWh for using B-ACI to comply with the Phase 2 limits.
A commentator contended that there is a lack of evidence that the proposed rulemaking will provide an environmental benefit to this Commonwealth beyond the CAMR. The Board disagrees. The Board's analysis shows that a Pennsylvania-specific mercury reduction rule will reduce mercury emissions in this Commonwealth. A reduction in mercury emissions will lead to improved environmental quality. This improvement in the environment will lead to reduced environmental and public health impacts. These reduced impacts will improve the health of ecosystems and improve public health.
Commentators stated that in 1996, then Governor Tom Ridge promulgated Executive Order 1 of 1996. This order dictated that State rules should be no more stringent than Federal requirements unless there is a compelling State reason to do so. Commentators believed that to date, the Department has demonstrated no compelling reason to implement a State-specific mercury rulemaking. Since executive orders stand until formally withdrawn and this action has not occurred with Executive Order 1 of 1996, the Department's mercury rule should not be promulgated.
The Board disagrees. The Department believes that it has demonstrated that a State-specific rulemaking is necessary because of compelling reasons. A large body of scientific evidence, some of which was developed as a result of the EPA's obligations under the CAA, has clearly demonstrated that mercury is a persistent, toxic, bio-accumulative pollutant that can have adverse effects on human health and the environment. The Department has determined that effective mercury control technology does exist to significantly reduce mercury emissions from EGUs. Furthermore, mercury control technology is presently being implemented at a number of air pollution emitting sources, and recent testing of mercury control technologies on coal-fired utilities has been shown to be effective in reducing mercury emissions. The Department has joined a number of other parties in a lawsuit challenging the EPA's National cap-and-trade approach as both inappropriate for regulating a potent neurotoxin like mercury and also contrary to the statutory provisions of the CAA. The Department has determined that the provisions in the EPA's final mercury rule for the utility sector that was promulgated under section 111 of the CAA are not adequate to ensure that the citizens of this Commonwealth and the environment will be adequately protected from the harmful effects of mercury emissions.
G. Benefits, Costs and Compliance
Benefits
Overall, the citizens of this Commonwealth will benefit from this final-form rulemaking because they will result in improved air quality by reducing mercury emissions. In addition, it is anticipated that local mercury deposition will be reduced since coal-fired power plants that burn bituminous coal emit oxidized forms of mercury, which are deposited near their source. Moreover, the Board believes that there are a number of reliable cost/benefit studies which indicate cost savings and public health benefits from controlling mercury emissions from EGUs.
The Commonwealth is concerned that the CAMR's cap-and-trade approach will result in hot spots to which this Commonwealth is particularly susceptible given that all 36 coal-fired utilities in this Commonwealth burn bituminous coal as their primary fuel source. Bituminous coals generally have high mercury, chlorine and sulfur contents and low calcium content, resulting in a high percentage of organic mercury. This type of mercury has a residence time of a few days and is deposited near the source of the release. Therefore, it is not a suitable candidate for emission trading against emission reductions in other regions because it results in hot spots.
Impacts regarding mercury deposition were studied at the Bruce Mansfield coal-fired power plant in Shippingport, PA. Sullivan, T.M., et al., Assessing the Mercury Health Risks Associated with Coal-Fired Power Plants: Impacts of Local Depositions, Brookhaven National Laboratory, Upton, NY. This plant is characterized by high total mercury emissions. From the deposition modeling, the average increase in deposition as compared to a background deposition rate of 20 µg/m2/yr over a 2,500 km2 around the plant was 15% at Bruce Mansfield. Over an area that is 50--100 km2, immediately adjacent to the plant, deposition doubled at the Bruce Mansfield plant. The report concluded that if the plant emissions double local deposition, the fish concentration would be similarly doubled. As a result, the United States mean fish mercury content is 0.21 ppm and near the Bruce Mansfield plant the mean fish mercury content is 0.41 ppm.
The 2003 results of the EPA Office of Water study ''Draft Mercury REMSAD Deposition Modeling Results'' reinforce the Commonwealth's concern. This Regulatory Modeling System for Aerosols and Deposition modeling shows that, at mercury hot spots, local emission sources within a state can be the dominant source of deposition. At hot spots, local sources within a state commonly account for 50% to 80% of the mercury deposition. In-state sources contribute more than 50% of the pollution to sites in the top eight worst hot spot states, which are Michigan, Maryland, Florida, Illinois, South Carolina, North Carolina, Pennsylvania and Texas, respectively.
In addition to these studies, ''Sources of Mercury Wet Deposition in Eastern Ohio, USA,'' which is the EPA-funded Steubenville Mercury Deposition Source Apportionment Study, was published in Environmental Science and Technology. See Environ SciTechnol. 40(19)5874-5881 (2006). This study found that approximately 70% of the mercury in rain collected at an Ohio River Valley monitoring site originated from nearby coal-burning industrial plants.
NESCAUM sponsored a report analyzing the cost savings and public health benefits of controlling mercury emissions from power plants. NESCAUM, Economic Valuation of Human Health Benefits of Controlling Mercury Emissions from U.S. Coal-fired Power Plants (February 2005) (Harvard Study). The Harvard Study was prepared by the Harvard Center for Risk Analysis, funded by the EPA, co-authored by an EPA scientist and peer-reviewed by two other EPA scientists. The Harvard Study reveals that the EPA miscalculated the ''nature of the risk involved'' by underestimating the public health benefits of reducing mercury. Specifically, the Harvard Study indicates that the public benefit of reducing power plant mercury emissions to 15 tpy ranges from $119 million annually (if only persistent IQ deficits from fetal exposures to methylmercury are counted) to as much as $5.2 billion annually (if IQ deficits, cardiovascular effects and premature mortality are all counted).
The May 2005 edition of Environmental Health Perspectives indicates that the EPA underestimated the health benefits to be gained from reducing mercury. In one study, scientists from the Mount Sinai School of Medicine examined National blood mercury prevalence data from the CDC and found that between 316,588 and 637,233 children each year have cord blood mercury levels greater than 5.8 micrograms per liter--the level associated with loss of IQ. See Leonardo Trasande, et al., Public Health and Economic Consequences of Methylmercury Toxicity to the Developing Brain, 113:590-596 Environmental Health Perspectives (2005). They estimated that the resulting loss of intelligence and diminished economic activity amounted to $8.7 billion annually, with $1.3 billion each year being directly attributable to mercury emissions from power plants. The scientists further caution that these costs will recur each year with each new birth cohort as long as mercury emissions are not controlled.
Trasande and his colleagues have further concluded that their calculations on economic cost may, in fact, be an underestimate. See ''Mental retardation and prenatal methylmercury toxicity,'' AM J Ind Med. 2006 Mar; 49(3):153-8. Downward shifts in IQ resulting from prenatal exposure to methylmercury of anthropogenic origin are associated with 1,566 excess cases of mental retardation annually (range: 376--14,293). This represents 3.2% of mental retardation cases in the United States (range: 0.8%--29.2%). The mental retardation costs associated with decreases in IQ in these children amount to $2.0 billion/year (range: $0.5--$17.9 billion). Mercury from American power plants accounts for 231 of the excess mental retardation cases/year (range: 28--2,109), or 0.5% (range: 0.06%--4.3%) of all mental retardation. These cases cost $289 million (range: $35 million--$2.6 billion). Therefore, Trasande concludes that toxic injury to the fetal brain caused by mercury from coal-fired power plants exacts a significant human and economic toll on American children. These conclusions have been peer-reviewed.
On April 28, 2005, an unpublished report that was funded and completed by the EPA's Office of Wetlands, Oceans and Watersheds became available to the public. See Douglas Rae & Laura Graham, Benefits of Reducing Mercury in Saltwater Ecosystems. This study found that a 30%--100% reduction of mercury emissions would translate into a $600 million to $2 billion cost savings. The cost savings were largely attributable to reduced health risks, including cardiovascular risks.
As a result of these and other studies, the Board believes that there are substantial benefits regarding the final rulemaking. Moreover, the final rulemaking is designed to maximize the cobenefit of mercury emission reduction achieved through the installation of pollution controls, which are required for compliance with the CAIR program. Owners and operators of EGUs are not disadvantaged under this time frame, and there should not be any reliability concerns for delivery of power over the electric grid.
Under a Pennsylvania-specific mercury rule, EGUs in this Commonwealth will emit no more than 0.702 ton (1,404 lbs.) by 2015. As a result, annual benefit associated with IQ increases in the annual birth cohort ranges are $4.165 million to $10.08 million. This benefit is from reduced fetal methylmercury exposure. This means that the Pennsylvania mercury rulemaking will provide an additional benefit of $1.49 million to $3.63 million per year over the CAMR. If cardiovascular effects are only experienced by the male population that consumes nonfatty freshwater fish, then the monetized annual benefits are $1.8 million. This means that the Pennsylvania mercury rulemaking will provide an additional benefit of $0.65 million per year over the CAMR. If these positive cardiovascular effects are experienced by all citizens in this Commonwealth, then the monetized annual benefits are predicted to be $200.9 million. This means that the Pennsylvania mercury rulemaking will provide an additional benefit of $72.3 million per year over the CAMR. Moreover, citizens of this Commonwealth will see these results being achieved by 2015.
In comparison, the total cost of complying with Phase 1 of the Pennsylvania-specific mercury rulemaking would be no more than the cost of complying with the CAMR. For Phase 2, at the low end of the cost estimate, the annualized cost of mercury specific technology may not be any more than the costs of purchasing the allowances. However, at the high end of the cost estimate, the additional cost above purchasing allowance would be around $24.7 million. Consequently, the benefits of a Pennsylvania mercury rulemaking outweigh the costs.
The Department's analysis assumes the continued use of the existing coal feedstocks. Because it is anticipated that the majority of the mercury reductions in this Commonwealth will be achieved through the installation of CAIR controls for NOx and SO2, there will not exist the same incentive to utilize fuel switching to lower mercury content coal as there is under the CAMR. A control strategy combining fuel switching and the purchase of mercury allowances is a viable option that many companies are expected to use to meet the CAMR requirements. The Board's final-form rulemaking disallows the purchase and trading of allowances. Based on the data submitted in response to the Department's data request, fuel switching is not necessary to comply with its final-form rulemaking emission standards. Therefore, fuel switching is not necessary to comply with the final-form rulemaking and the continued use of the existing coal feedstocks should not be affected. However, owners and operators of affected EGUs are free to employ any compliance strategy necessary to comply with this final-form rulemaking.
Compliance Costs
The Department performed a cost analysis as part of the development process of the Pennsylvania mercury rulemaking. The analysis was also conducted to determine the cost of the rulemaking emission limits above and beyond the CAIR. The CAIR involves the installation air pollution control equipment for SO2 and NOx control. For each applicable EGU in this Commonwealth, the Department determined the amount of mercury, if any, that would need to be controlled beyond CAIR control levels for Phase 1 and Phase 2.
For each unit the capital cost, annualized capital costs and operating costs were determined. This was offset against how much it would cost to purchase an equivalent amount of emissions allowances based on the EPA's projections of mercury allowance costs from 2010--2030. These projections come from a DOE document entitled ''Annual Energy Outlook 2006 With Projections to 2030.'' The costs of control were based on cost estimates for installing and operating ACI systems. The capital costs were determined by estimating the cost ranging from $2/kW--$4/kW of plant electrical generating capacity. This capital cost was then annualized over 20 years assuming a 10% interest rate. The operating costs were calculated for Phase 1 based on a B-ACI injection rate of 6 lbs. per million actual cubic feet of exhaust gas. For Phase 2 an injection rate of 4.84 or 9.68 lbs. per million actual cubic feet of exhaust gas was used depending on how much was needed to meet the emission limit. The injection rate was multiplied by the average of the 3 highest years of heat input between 1998 and 2002 and then multiplied by $ 0.0175 lb of sorbent/Million Btu. This calculation was performed for each effected emission unit.
For Phase 1, the Department estimated that 16 units at 7 facilities might opt for mercury-specific control beyond the CAIR control installations. The total capital costs needed for B-ACI were estimated to be approximately $4.9 to $9.8 million. The annual operating costs were estimated to be approximately $14.7 million. The total annualized costs for Phase 1 were estimated to be approximately $15.4 to $15.8 million. The cost of $0.0012/kWh represents the upper bound cost estimate for the EGUs to comply with the Phase 1 limits.
The mercury allowance costs were approximately $15.7 million using the DOE's projections of mercury allowance costs from 2010--2015 at $953 per ounce. As a result, the total cost of complying with Phase 1 of the Pennsylvania-specific mercury rulemaking would be no more than the cost of complying with the CAMR.
For Phase 2, the Department estimated that 18 units at 7 facilities might opt for mercury specific control beyond the CAIR control installations. Some EGU owners and operators may choose to install compact hybrid powdered activated carbon (COHPAC) filter systems to comply with the Pennsylvania mercury rulemaking. The Electric Power Research Institute has patented the ''TOXECON'' process which employs COHPAC in the control configuration. TOXECON/COHPAC has been demonstrated to achieve around 90% reduction of mercury emissions. The capital costs for were determined by estimating the cost ranging from $56.53/kW--$125/kW of plant electrical generating capacity.
The difference between the lower-bound and upper-bound costs estimates reflects the difference between carbon injection and the installation of TOXECON/COHPAC filter systems. The total capital costs are estimated to range from $141.6 to $313.3 million. The total annualized cost (capital and operating) of mercury-specific control technology that EGU owners and operators might opt to install beyond CAIR to comply with the Pennsylvania mercury rulemaking would range from $16.7 to $53 million per year. The resulting cost per kilowatt-hour would be no greater than $0.0038/kWh for the EGUs utilizing the TOXECON/COHPAC control technology to comply with the Phase 2 limits. The cost of $0.0038/kWh represents the upper bound cost estimate for the EGUs to comply with the Phase 2 limits.
The estimated total cost of purchasing mercury allowances (using $2,619 per ounce, according to a DOE estimate) would be approximately $28.3 million per year if EGU owners and operators did not implement additional measures beyond the CAIR to comply with the CAMR. At the low end of the cost estimate, the annualized cost of mercury specific technology may not be any more than the costs of purchasing the allowances. However, at the high end of the cost estimate, the additional cost above purchasing allowance would be around $24.7 million. This would represent about $0.0018/kWh.
Based on the Department's analysis, there is no compelling evidence to suggest that electricity rates will significantly be impacted because of the final-form rulemaking.
Compliance Assistance
The Department plans to educate and assist the public and regulated community with understanding newly revised requirements and how to comply with them. This will be accomplished through the Department's ongoing Regional Compliance Assistance Program.
Paperwork Requirements
This final-form rulemaking will not increase the paperwork that is already generated during the normal course of business.
H. Pollution Prevention
The Pollution Prevention Act of 1990 (42 U.S.C.A. §§ 13101--13109) established a National policy that promotes pollution prevention as the preferred means for achieving state environmental protection goals. The Department encourages pollution prevention, which is the reduction or elimination of pollution at its source, through the substitution of environmentally friendly materials, more efficient use of raw materials and the incorporation of energy efficiency strategies. Pollution prevention practices can provide greater environmental protection with greater efficiency because they can result in significant cost savings to facilities that permanently achieve or move beyond compliance. This final-form rulemaking will reduce mercury emissions from EGUs. Coal-fired power plants that burn subbituminous coal emit Hg0, which can be transported over transcontinental distances. Coal-fired power plants that burn bituminous coal emit oxidized forms of mercury, which are deposited near their source. In this Commonwealth, 85% of the coal burned by coal-fired power plants is bituminous, with the remainder as waste coal. Reducing mercury emissions will reduce mercury deposition and will therefore reduce mercury related water pollution.
I. Sunset Review
This final-form rulemaking will be reviewed in accordance with the sunset review schedule published by the Department to determine if the regulations effectively fulfill the goals for which they were intended.
J. Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on October 17, 2006, the Department submitted a copy of this final-form rulemaking and a copy of a Regulatory Analysis Form to IRRC and to the Chairpersons of the House and Senate Environmental Resources and Energy Committees for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department considered the comments received by IRRC, the Committees and the public.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), on November 15, 2006, this final-form rulemaking was deemed approved by the House Committee. Under section 5.1(e) of the Regulatory Review Act, IRRC met on November 16, 2006, and approved the final-form rulemaking. Under section 5.1(j.2) of the Regulatory Review Act, on October 18, 2006, the Senate Committee notified IRRC of its intent to review the regulation under section 5.1(j.2) of the Regulatory Review Act. The Senate Committee's 14 calendar day period for review began on the date that IRRC delivered notice of its approval, November 16, 2006. It expired without the Senate Committee taking further action.
(Editor's Note: The General Assembly adjourned sine die on November 28, 2006, leaving the Senate Environmental Resources and Energy Committee unable to assert its full 14-day review of the final form regulation.
Under section 5.1(j.3) of the Regulatory Review Act (71 P. S. § 745.5a(j.3)) the Department of Environmental Protection resubmitted this regulation to the Environmental Resources and Energy Committee of the Senate on January 31, 2007, to the Environmental Resources and Energy Committee of the House of Representatives and to the Independent Regulatory Review. The Environmental Resources and Energy Committee of the House of Representatives and the Independent Regulatory Review Commission affirmed their original approvals. The final form rulemaking was deemed approved by the Senate Committee on February 12, 2007.
K. Findings
The Board finds that:
(1) Public notice of proposed rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and regulations promulgated thereunder, at 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and all comments were considered.
(3) These regulations do not enlarge the purpose of the proposed rulemaking published at 36 Pa.B. 3185.
(4) These regulations are necessary and appropriate for administration and enforcement of the authorizing acts identified in Section C of this order.
L. Order
The Board, acting under the authorizing statutes, orders that:
(a) The regulations of the Department, 25 Pa. Code Chapter 123, are amended by adding §§ 123.201--123.215 to read as set forth in Annex A.
(b) The Chairperson of the Board shall submit this order and Annex A to the Office of General Counsel and the Office of Attorney General for review and approval as to legality and form, as required by law.
(c) The Chairperson of the Board shall submit this order and Annex A to IRRC and the Senate and House Environmental Resources and Energy Committees as required by the Regulatory Review Act.
(d) The Chairperson of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau, as required by law.
(e) This order shall take effect immediately upon publication in the Pennsylvania Bulletin.
KATHLEEN A. MCGINTY,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 36 Pa.B. 7353 (December 2, 2006).)
Fiscal Note: Fiscal Note 7-405 remains valid for the final adoption of the subject regulations.
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