Amicus Curiae Brief — Environmental Defense v. Duke Energy Corporation

16 Cipreme Cou US.

JUL 2 1 2006

No. 05-848 OFFICE OF THE CLERK !

NN —————E

IN THE

Supreme Court of the United States

ENVIRONMENTAL DEFENSE, ET AL.,

Petitioner,

Vv.

DUKE ENERGY CORPORATION,

Respondent.

ON WRIT OF CERTIORARI TO THE TO THE UNITED

STATES COURT OF APPEALS FOR THE FOURTH

CIRCUIT

BRIEF OF AMICI CURIAE STAPPA AND ALAPCO

IN SUPPORT OF PETITIONER

Richard E. Ayres

Counsel of Record

AYRES LAW GROUP

1615 L Street, N.W. Suite 1350

Washington, D.C. 20036

202-452-9200

Attorney for Amici Curiae

State and Territorial Air Pollution

Program Administrators (STAPPA)

and the

Association of Local Air Pollution

Control Officials (ALAPCO)

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TABLE OF CONTENTS

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ARGUMENT

I. THE LOWER COURT DECISION IS CONTRARY

BAD BERD CAMS ATR FICE ons cccccsccnsccscccncecce sess 3

Il. THE LOWER COURT RULING WILL

ADVERSELY AFFECT AIR QUALITY.............. 4

Ill. STATE AND LOCAL AGENCIES CANNOT MEET

THEIR OBLIGATIONS TO ATTAIN NAAQS AND

PROTECT THE ENVIRONMENT WITHOUT

EMISSION REDUCTIONS FROM’ EXISTING

IV. THE LOWER COURT RULING WILL LIMIT

Ee GIP WT BEE is vccsniencoveseesesscccecovenes 11

V. THE LOWER COURT RULING WILL HINDER

THE MODERNIZATION OF AMERICAN

ENERGY INFRASTRUCTURE. .............00.c0000 13

VI. STATE AND LOCAL AGENCIES NEED

CERTAINTY REGARDING FEDERAL

ENVIRONMENTAL REGULATION ................ 15

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APPENDIX

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TABLE OF AUTHORITIES

CASES Page(s)

1000 Friends of Maryland v. Browner,

265 F.3d 216 (4™ Cir. 2001).............0.sccecceeeees 15

Alabama Power v. Costle,

Ge Fae Bee CO, Ce. BOF iio veces cvcvcesseciiccens 4, 16

Environmental Defense Fund v. Thomas,

SPOT DE GI Che, I anvicscsicccscccevissccscone 16

Harrison v. PPG Indus., Inc.,

Re ee PE ich. bet ccccdcosnutndisavinctadincnedes 16

Husqvarna v. EPA,

Oe BOO Cs Ge Be vd dcicvicconvevsscionts 15

In re TVA,

A HT eich dntsinvinnbidniiaiiessnkentivbincaial 6

International Harvester Co. v. Ruckelshaus,

Fy ee as GE, SP ii veo intnccdccncksctécenses 15

Indianapolis Power & Light Co. v. EPA,

38 Fed. Appx. 613 (D.C. Cir. 2002)................044 16

Massachusetts v. EPA,

8 Fe Fe ls GE, Be Ri cccsicdunsesevicrvccosssven 16

National Petrochemical & Refiners Ass'n v. EPA.,

287 £34 1130 (D.C. Cir. 200Z)}-.......cccccccccscevcees 17

Natural Resources Defense Council v. EPA,

GS Fe FU as CO, TOGED. pccicviccssccccscsscnssot 15

Natural Resources Defense Council v. Thomas,

805 F.2d 410 (D.C. Cir. 1986)...........cceceeeeeeee ces 15

Ohio Public Interest Research Group, Inc. v. Whitman,

386 F.3d 792 (6™ Cir. 2004)........cccceceseeeeeeeeeees 16

Portland Cement Ass'n v. Ruckelshaus,

fe psf leks Se innapeney pepanee 15

U.S. and Envtl Defense, et. al v. Duke Energy Corp.,

278 F.Supp.2d 619 (M.D. N.C. 2003)...................6

U.S. v. American Electric Power Service Corp.,

137 F.Supp.2d 1060 (S.D. Ohio 2001).................. 6

U.S. v. Ho,

311 F.3d 589 (5™ Cir. 2002).............cccssseeeceeoes 16

U.S. v. Ohio Edison Co.,

276 F.Supp.2d 829 (S.D. Ohio 2003)................65 6

Wisconsin Electric Power Co. v. Reilly (WEPCO),

833 F.2d 901 (7th Cir. 1990)..................06. 4,5, 15

LITIGATION MATERIALS

Richard Rosen, Expert Report on behalf of the United States,

U.S. v. American Electric Power Service Corp.,

137 F.Supp.2d 1060 (S.D. Ohio 2001)..............000 6

Ranajit Sahu, Expert Report on behalf of the United States,

U.S. and Envtl Defense, et. al v. Duke Energy Corp.,

278 F.Supp.2d 619 (M.D.N.C. 2003)..........00000 6-7

STATUTES

SITES LCRA It ETERS 16

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SUSC ANG. i ae 4

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Pe ed te PE kbdivisicentsnnbdendeussonuabademiaaeaienan 17

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ae ee Pe cr cndsovasdncecsneraniadecbaredibdenendonde 15

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LEGISLATIVE MATERIALS

Clean Air Amendments of 1970,

Fei DO, OO, WG iad icvsicncissicnchibiccisddio 3

eg i ks SPECIE PE Prem ee ae 12,14

FH PMD MET ici. co oss cinsivise) ocavntscbubpupteincsdabay 14

ADMINISTRATIVE MATERIALS

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OF Be Peo ckiiicctecsacscctcsinnetbameecsie 10

63 Fed. Reg. 57,356 (Oct. 27, 1998).............ccscccesceecesee 11

65 Fed. Reg. 2,674 (Jan. 18, 2000).........csccscssossccscveses's 11

70 Fed. Reg. 25,162 (May 12, 2005)..............0ceeeeeee 10, 11

EMISSIONS REDUCTIONS BY SECTOR, NJ DEPT. OF

ENVIRONMENTAL PROTECTION,

at http://www.nj.gov/dep/airworkgroups/docs/wp _

GUMMMETY ISDIS WED.GIK......ccccrscccrsersessesoerooeses 9

EPA 8-HOUR OZONE SUMMARY,

at http://www.epa.gov/oar/oagps/greenbk/gnsum.html

(last visited July 19, 2006)..............0seesceceeeenes 2,9

iV

EPA, OFFICE OF AIR & RADIATION BRIEFING,

“CLEAN AIR INTERSTATE RULE (CAIR)” 16 (2005),

available at http://www.epa.gov/cleanairinterstaterule

/charts_files/cair final presentation.pdf (last visited

I ori oti ain haadeieieasatnuntesheraunouies ll

EPA PARTICULATE MATTER (PM2s5) NONATTAINMENT AREA

SUMMARY,

at http://www.epa.gov/oar/oaqps/greenbk/qnsum. htm!

(last visited July 19, 2006).................ecceee eee ees 1,8

Letter from John Seitz, Director, U.S. EPA Office of Air

Quality Planning and Standards, to the Honorable Robert C.

I a alas ccittl 4

Testimony of William Wehrum, Acting Assistant

Administrator for Air and Radiation, U.S. EPA, before the

United States Sen. Comm. on Environment and Public

Works, Subcomm. on Clean Air, Climate Change, and

Nuclear Safety (Feb. 9, 2006)............cccccccssescccersescesecs 10

INSTITUTIONAL PUBLICATIONS

NATIONAL ACADEMY OF PUBLIC ADMINISTRATION, “A

BREATH OF FRESH AIR: REVIVING THE NEW SOURCE REVIEW

a nensincmnnens 3,8

NATIONAL PARK SERVICE, “AIR QUALITY IN THE NATIONAL

NATIONAL RESEARCH COUNCIL OF THE NATIONAL

+ CADEMIES, “INTERIM REPORT OF THE COMMITTEE ON

CHANGES IN NEW SOURCE REVIEW PROGRAMS FOR

STATIONARY SOURCES OF AIR POLLUTANTS” (JANUARY

OFFICE OF THE INSPECTOR GENERAL, ENVTL PROTECTION

AGENCY, “NEW SOURCE REVIEW RULE CHANGE HARMS

EPA’S ABILITY TO ENFORCE AGAINST COAL-FIRED ELECTRIC

ED Ui einiachcctcctedcedediccedicbecccnbebpbeetbdensanbend 7

RESOURCES FOR THE FUTURE, “VALUATION OF NATURAL

RESOURCE IMPROVEMENTS IN THE ADIRONDACKS”

INTEREST OF AMICI!

STAPPA2 and ALAPCO? are the national

organizations of state and local clean air agencies in 54 states

and territories and over 165 metropolitan areas across the

country. Under the Clean Air Act (“CAA”), the member

agencies of STAPPA and ALAPCO have the task of

developing and implementing air pollution control strategies

that will protect public health and the environment

throughout the nation. Our member agencies are charged

with improving air that is polluted and preventing

deterioration of clean air. Amici submit this brief because

restoring the long-standing U.S. Environmental Protection

Agency (“EPA”) interpretation of the New Source Review

(“NSR”) rule that requires the installation of modern

pollution controls is necessary for our member agencies to

fulfill their statutory obligations.

INTRODUCTION

STAPPA and ALAPCO ask this Court to reverse the

lower court’s decision because it would prevent states and

local agencies from achieving the health and environmental

goals of the CAA. The number of people exposed to

! The parties have consented to the filing of this brief. Letters of consent

are being filed in conjunction with this brief. Pursuant to this Court’s

Rule 37.6, counsel states that this brief was not authored in whole or in

part by counsel for a party and that no one other than amici and their

counsel made a monetary contribution to the preparation or submission of

this brief.

2 The acronym “STAPPA” stands for State and Territorial Air Pollution

Program Administrators.

3 The acronym “ALAPCO” stands for Association of Local Air Pollution

Control Officials.

pollution levels greater than the EPA’s health-based National

Ambient Air Quality Standards (“NAAQS”) for ozone has

been recently estimated at 158.5 million, and for fine

particulate matter (“PM2;”) at 88.4 million. See EPA 8-

HouR OZONE SUMMARY, at _http://www.epa.gov/oar/

oaqps/greenbk/gnsum.html; and EPA PARTICULATE MATTER

(PM25) NONATTAINMENT AREA SUMMARY, at http://www.

epa. gov/oar/oagps/greenbk/qnsum.html (last visited July 19,

2006). Pollution also adversely affects environmental quality

in our national parks, state parks, and many other less

urbanized areas. See, e.g., NATIONAL PARK SERVICE, “AIR

QUALITY IN THE NATIONAL PARKS” 9 (2002); RESOURCES

FOR THE FUTURE, “VALUATION OF NATURAL RESOURCE

IMPROVE- MENTS IN THE ADIRONDACKS” 26 (2004).

New Source Review is one of the tools provided state

and local agencies by the CAA to manage air quality. In

areas where pollution levels exceed NAAQS, NSR is a

means to reduce emissions in order to attain health-based

standards. NSR is also a strategy to prevent deterioration of

clean air resources in order to protect national parks and

other lands designated in the CAA, 42 U.S.C. § 7472, and to

provide air resources to support industrial growth. NSR also

serves as a tool to protect against transported pollutants, such

as PM2; and ozone. These pollutants are formed through

chemical reactions in the atmosphere involving sulfur

dioxide (“SO”) and nitrogen oxides (“NO,”) emitted by

sources outside nonattainment areas, such as electric

generating units (“EGUs”).

The continuing excessive emissions from

superannuated coal-fired EGUs are the single largest

industrial contributor to concentrations of SO2, NO,, ozone

and PM2;. Seventy-one percent of the nation’s coal-fired

capacity is between 26 and 56 years old, with emission rates

for SO, ranging from more than double to quadruple the

emission rates of modern coal-fired units built since 1990.

NATIONAL RESEARCH COUNCIL OF THE NATIONAL

2

ACADEMIES, “INTERIM REPORT OF THE COMMITTEE ON

CHANGES IN NEW SOURCE REVIEW PROGRAMS FOR

STATIONARY SOURCES OF AIR POLLUTANTS” 54, tbl.3-3

(2005). Many of these obsolete EGUs have required or will

require major investments in “life-extension” projects to keep

them operating. The fundamental practical question

presented in this case is whether these old coal-fired EGUs,

the largest and least controlled industrial sources of pollution

in the country, will be required to install modern pollution

contro] equipment when investments are made to extend their

lives.

STAPPA and ALAPCO submit this brief to (1)

express agreement with the petitioners’ view of the law; (2)

show that affirming the lower court’s ruling will adversely

affect the nation’s air quality; (3) inform the Court that

reversing the lower court’s decision is necessary for state and

local agencies to obtain the emission reductions needed to

attain and maintain federal health-based air quality standards

and protect our natural resources; (4) demonstrate that,

contrary to Congressional intent, the lower court’s decision

would hinder economic growth and slow the modernization

and clean up of our nation’s energy sector; and (5) relate our

concerns about the consequences for state and local clean air

agencies of opening the door to collateral attacks on EPA’s

clean air regulations.

ARGUMENT

I. THE LOWER COURT DECISION IS

CONTRARY TO THE CLEAN AIR ACT

State and local air pollution control officials agree

with petitioners that the lower court decision is at odds with

the fundamental objectives of NSR and the CAA. The

purpose of NSR is to require major polluting facilities

3

“grandfathered” under the Clean Air Amendments of 1970,

P.L. 91-604, 84 Stat. 1676, to be cleaned up whenever they

undergo a renovation that increases emissions. See, e.g.,

NATIONAL ACADEMY OF PUBLIC ADMINISTRATION, “A

BREATH OF FRESH AIR: REVIVING THE NEW SOURCE REVIEW

PROGRAM” 14 (2003), referring to the

clear assumption of Congress that older, high-

emitting sources would gradually be upgraded or

phased out. Then, once a grandfathered facility makes

any changes or is replaced, NSR is triggered and

requires it to install improved technologies that will

prevent or control pollution. The Panel believes these

requirements are, without question, designed to lead

to an overall reduction in emissions from existing

sources.

See also Alabama Power v. Costle, 636 F.2d 323, 400 (D.C.

Cir. 1979) (“The statutory scheme intends to ‘grandfather’

existing industries; but the provisions concerning

modifications indicate that this is not to constitute a perpetual

immunity from all standards under the PSD program.”);

Wisconsin Electric Power Co. v. Reilly (‘WEPCO”), 893

F.2d 901, 909 (7th Cir. 1990) (“Congress did not

permanently exempt existing plants from these

requirements.”). The lower court’s ruling is contrary to this

purpose because it would exempt essentially all life-

extension and other renovation projects from NSR.

Il. THE LOWER COURT RULING WILL

ADVERSELY AFFECT AIR QUALITY

If, as the lower court ruled, the test of whether NSR

applies when existing sources are renovated must be the

same as the applicability test for New Source Performance

Standards (“NSPS”), 42 U.S.C. § 7411(a)(4), then virtually

4

all renovations on existing industrial sources of air pollution

will be exempted from installing modern pollution controls.

As the former head of EPA’s Office of Air Quality Planning

and Standards wrote, “no existing unit has become subject to

new source performance standards (NSPS) under . . . the

modification . . . program.” State and local air pollution

control officials are aware of only one case, memorialized in

WEPCO, 893 F.2d at 901, where an hourly increase in EGU

emissions triggered NSR.

An hourly increase test would affect emissions in two

ways. First, emissions from renovated old units will increase

because they will be operated more after repair. Second,

emission reductions that would have been achieved by the

installation of state-of-the-art pollution control technology

under NSR will be foregone. The net effect is to expose the

public to significantly more air pollution.

A typical example may illustrate the point. Because

of breakdowns and deterioration, an aging medium-sized

(400 MW capacity) coal-fired EGU may be capable of

operation at only 45 percent of its capacity. Burning medium

sulfur coal without SO, emission controls, such a unit might

emit 25,000 tons per year (“tpy”) of SO; prior to a life-

extension modification. Because of replacement of worn

components, the unit might be operated 75 percent of

capacity after the life-extension project. Since the EGU now

generates two-thirds more electricity than it did before, the

uncontrolled annual SO, emissions from the unit now

increase to 41 ,666 tpy.

Under EPA’s long-standing interpretation of NSR,

the increase in annual emissions in this example would be

subject to NSR. A modified unit subject to NSR typically

would be required by state and local agencies to control SO,

4 Letter from John Seitz, Director, U.S. EPA Office of Air Quality

Planning and Standards, to the Honorable Robert C. Byrd (Jan. 26,

1996).

emissions with “scrubber” technology. Installing a scrubber

would eliminate at least 95 percent of the SO, emissions.

This would reduce the example EGU’s SO, emissions from

41,666 tpy to 2,083 tpy or lower — a net reduction from the

post-modification emissions of at least 39,583 tpy.

Under an hourly rate applicability test, NSR would

not be triggered, and no scrubber would be installed. Hence,

the net effect of applying an hourly rate test to this example,

rather than the long-standing EPA annual tonnage increase

test, would be to allow 39,583 tpy more emissions.

Enforcement cases brought by the U.S. Department of

Justice and EPA confirm that electric utility life-extension

projects have resulted in large emission increases (although

they do not quantify the foregone decreases in emissions). In

U.S. v. Ohio Edison Co., (S.D. Ohio 2003), Judge Sargus

ruled that 11 life-extension projects undertaken by Ohio

Edison increased emissions of SO, by 14,921 tpy. 276

F.Supp.2d 829 at 869-874. In U.S. v. American Electric

Power Service Corp., 137 F.Supp.2d 1060 (S.D. Ohio 2001),

the Department of Justice’s expert witness Dr. Richard A.

Rosen determined the emission increases resulting from 33 of

the 47 life-extension projects undertaken by American

Electric Power (“AEP”) for which data were available at the

time. Using AEP’s own projections of the expected increase

in operation of each unit, he calculated actual emissions

before and after each life-extension project. Rosen Expert

Report 38-39.5 Dr. Rosen determined that, as a result of the

life-extension projects, emissions of SO, from the units in

question would increase 115,789 tpy, while NO, emissions

would increase 15,071 tpy. Jd. Similarly, the EPA

Environmental Appeals Board found in Jn re TVA, 9 E.A.B.

357 (2000), that life- extension projects undertaken by the

5 For the convenience of the Court, relevant excerpts of Dr. Rosen’s

expert report are attached as Appendix A.

6

Tennessee Valley Authority on just four units resulted in SO,

emission increases of 15,077 tpy, and NO, emission

increases of 42,005 tpy.

Indeed, in the case below, U.S. and Envtl Defense, et.

al v. Duke Energy, 278 F.Supp.2d 619 (M.D. N.C. 2003), the

district judge heard testimony that the 27 life-extension

projects undertaken. by Duke Energy resulted in substantial

increases in emissions. Using Duke’s own projections of the

increased operation of these units after the projects, expert

witness Ranajit Sahu calculated the increase in emissions that

would result. Sahu Expert Report 42-45. He found that, as

a result of the increased post-life-extension operation of the

units, emissions of SO, increased 68,466 tpy; NO, emissions

increased 26,128.3 tpy; PM emissions increased 5,574.4 tpy;

and PM;o emissions increased 3,734.6 tpy.

The point of our hypothetical example is also

confirmed by a report by the EPA Inspector General. The

report, published in 2004, indicated that if all nine then-

pending NSR enforcement cases were successful, they would

result in total SO emission reductions of 1,750,361 tpy and

NO, emission reductions of 628,865 tpy nationally. OFFICE

OF THE INSPECTOR GENERAL, ENVTL PROTECTION AGENCY,

“NEW SOURCE REVIEW RULE CHANGE HARMS EPA’S

ABILITY TO ENFORCE AGAINST COAL-FIRED ELECTRIC

UTILITIES” 25 (2004).

Il. STATE AND LOCAL AGENCIES CANNOT MEET

THEIR OBLIGATIONS TO ATTAIN NAAQS AND

PROTECT THE ENVIRONMENT WITHOUT EMISSION

REDUCTIONS FROM EXISTING EGUS

© Relevant excerpts of Dr. Sahu’s expert report are attached as Appendix

B.

State and local officials are responsible under the

CAA for developing and implementing air pollution control

programs that will attain and maintain the health-based

NAAQS. Agencies are also responsible for managing air

resources to prevent deterioration of air quality where it is

better than the NAAQS. In order to accomplish these

objectives, they need emission reductions from existing

EGUs and other industrial units required by NSR. As the

long history of air pollution controi under the CAA

demonstrates, there are many obstacles that state and local

agencies must overcome to attain the NAAQS. An hourly

emission rate test for NSR applicability would present a new

— and probably insuperable — obstacle.

Currently EPA classifies 119 areas in 462 counties as

“nonattainment” for the 8-hour ozone NAAQS, EPA 8-HourR

OZONE SUMMARY, supra, and 39 areas in 208 counties as

nonattainment for PM25, EPA PARTICULATE MATTER (PM? 5)

NONATTAINMENT AREA SUMMARY, supra. If the test for

NSR applicability were an hourly emission increase, state

and local officials responsible for attaining and maintaining

the ozone and PM; NAAQS in these areas would be faced

with an impossible task. To return to the example in the

previous section, what can a state or local agency do to make

up for the loss of 39,583 tpy of SO2 emission reductions from

our hypothetical EGU that no longer must undergo NSR?

In fact, that many tons of emission reductions are not

available elsewhere. Large existing coal-fired EGUs account

for about 76 percent of all point source emissions of SO2; 57

percent of NO,; and 41 percent of PM2s5. National

Academies Report, supra, at 49-50 figs.3-8, 3-9, 3-10.

Moreover, to the extent substitute emission reductions are

available from other emitters, they will be far more

expensive, since the most cost-effective emission reductions

come from large uncontrolled sources, such as EGUs.

STAPPA member STAPPA member New Jersey

Department of Environmental Protection (“NJDEP”)

8

demonstrates how crucial EGU emissions reductions are.

The state is now in the second year of a process to identify

strategies to attain the air quality standards for 8-hour ozone

and PM25. The NJDEP is now focusing on about 60

potential emission reduction measures, which are described

in white papers posted at | www.nj.gov/dep/

airworkgroups/docs/wp_summary table web.x\ls. Aside

from controls on EGUs, the four most effective measures

identified to reduce SO, (a major contributor to PM2s) can

achieve a total reduction statewide of less than 14,000 tpy.

These measures include significantly reducing the sulfur

content of home heating oil; further tightening emission

controls at New Jersey’s refineries (which are already heavily

controlled); and reducing sulfur in heavy oil used in

industrial and commercial boilers. The emission reductions

potential of each of the other SO, measures identified is far

less than these. By contrast, installing SO, scrubbers on

existing New Jersey coal-fired EGUs that currently do not

have SQ) pollution control technology will achieve almost

60,000 tpy of SO emission reductions.’

If clean air agencies are unable to find sufficient

alternative emission control measures to demonstrate that

they can attain NAAQS and obtain EPA approval, states and

localities face sanctions mandated by the CAA. These

sanctions include a cutoff of federal highway funds and

requirements that new industrial sources offset emission

reductions at a two-to-one ratio — effectively a ban on new

construction. 42 U.S.C. § 7509(b). State failure may also

result in the air pollution control program being taken over

by the federal government. See, e.g., 42 U.S.C. § 7410(c).

7 New Jersey will be able to achieve this emission reduction from its

coal-fired EGUs because of a settlement in an NSR case that preceded the

lower court decision. Hence in New Jersey, NSR settlements will

provide the majority of the SO, reductions needed to achieve the PM;

NAAQS.

State and local air pollution control officials do not

agree with those who argue that exempting existing sources

from NSR will not affect air quality because of other

programs that EPA has adopted, such as the “Clean Air

Interstate Rule” (“CAIR”). 70 Fed. Reg. 25,162 (May 12,

2005). The CAIR program places a cap on emissions of SO,

and NO, from the 28 states in the eastern half of the country,

and allows states to opt into an emission trading program for

covered emitters. While potentially economically efficient,

CAIR incorporates a number of features that render it an

inadequate substitute for NSR. First, CAIR does not apply at

all in the 22 western States. 40 C.F.R. § 51.123(c). Second,

CAIR addresses only emissions of SO2 and NO,, while NSR

addresses, in addition, particulate matter, volatile organic

compounds, and carbon monoxide, all of which can be

expected to increase if existing sources are effectively

exempted from NSR. Third, because CAIR allows units to

buy emission “allowances” rather than reduce emissions,

state and local agencies cannot assure the citizens affected by

a particular unit that it will install state-of-the-art pollution

control technology. 70 Fed. Reg. 25,162, 25,175 (May 12,

2005).

Fourth, and perhaps most important, the emission

reductions promised by CAIR would not be fully realized for

nearly a generation. CAIR requires no emission reductions

whatsoever for the first five years, and the emissions cap is

not binding until 2015. 40 C.F.R. § 51.123(e)(2). But

because of the structure of the allowance market created by

CAIR, EPA expects that the annual emissions in the covered

states will continue to exceed the cap until some time after

2020. U.S. EPA, OFFICE OF AIR & RADIATION BRIEFING,

“CLEAN AIR INTERSTATE RULE (CAIR)” 16 (2005), available

at http://www.epa.gov/cleanairinterstaterule/charts _files/cair

_final_presentation.pdf (last visited July 18, 2006) See also

70 Fed. Reg. 25,162, 25,166 n4 (May 12, 2005).

Information released recently by EPA indicates that, despite

10

CAIR, only 187 of 975 existing coal-fired EGUs (19 percent)

are projected to be equipped with SO, “scrubbers” and

Selective Catalytic Reduction (“SCR”) units to control NO,

by 2010. By 2020 the number of controlled EGUs is

expected to improve only to 328 of a then-projected 1041

EGUs (31 percent).®

Similarly, neither the “acid rain” program of Title [V

of the CAA, nor the “NO, SIP call,” 63 Fed. Reg. 57,356

(Oct. 27, 1998); 65 Fed. Reg. 2,674 (Jan. 18, 2000), can

substitute for NSR. Like CAIR, the acid rain program

applies only to SO, and NO, emissions from large EGUs,

while the NO, SIP call applies only to NO, emissions from

industrial sources (including EGUs). Most important, like

CAIR, both programs provide for trading of emission

allowances by affected emitters, so state and local agencies

cannot assure citizens near any particular unit that emission

controls will be installed on that unit.

Likewise, STAPPA and ALAPCO do not regard the

CAA’s visibility protection program, 42 U.S.C. §§ 7491-

7492, as an adequate substitute for NSR. This program

requires that “best available retrofit technology” (“BART”)

eventually be installed on certain existing sources that

contribute to degraded visibility in the national parks,

wilderness areas, and wildlife refuges. 42 U.S.C. §

7491(b)(2)(A). But BART applies only to a relatively few

very large existing sources that were in operation between

1962 and 1977. 42 U.S.C. § 7491(b)(1)(A).

Finally, the majority of state and many local agencies

cannot adopt their own regulations as substitutes for the NSR

program. A ruling that binds EPA to an hourly rate

applicability test also binds at least 13 states that administer

8 Testimony of William Wehrum, Acting Assistant Administrator for Air

and Radiation, U.S. EPA, before the United States Sen. Comm. on

Environment and Public Works, Subcomm. on Clean Air, Climate

Change, and Nuclear Safety (Feb. 9, 2006).

11

the NSR program in clean air areas by “delegation” from

EPA rather than under their own authority. | Moreover,

nearly half the state agencies are subject to state laws or

policies that prohibit them from adopting any regulation

more stringent than the minimum federal law.

IV. THE LOWER COURT RULING

WILL LIMIT ECONOMIC GROWTH

An NSR program that effectively exempts renovated

units from installing modern pollution control technology

will limit economic growth. So long as old, polluting EGUs

and other obsolete industrial units largely monopolize the

nation’s air resources, the opportunity for the addition of new

productive capacity will be unnecessarily limited.

NSR is therefore a critical management tool used by

state and local air pollution control officials to increase the

potential for economic growth consistent with air quality

Objectives. When major capital investments are made in

existing units there is an opportunity to increase an area’s

available air resources by requiring installation of pollution

control equipment. If existing units are allowed to continue

consuming a disproportionate share of the air resources, the

supply of air resources available to support further economic

growth will be limited.

The hypothetical example described in Section II

above illustrates how the lower court’s ruling would allow

existing emitters to use excessive air resources. In the

example, as in many real cases encountered by state and local

officials, the lower court’s interpretation would allow the

refurbished old unit to emit 39,583 tpy more than if available

pollution controls were installed. Installing a scrubber would

make 39,583 tpy of air resources available to support

additional industrial growth and to improve the quality of the

environment.

12

Such pollution reductions are consistent with

Congress’ intent when it adopted the NSR program as a part

of the program to prevent significant deterioration of air

quality (“PSD”). The 1977 House Report calls PSD a

“necessary economic measure designed to encourage wise

use of scarce air resources and to preserve the potential for

long-term economic growth.” H.R. Rep. No. 95-294, at 133

(1977). By requiring pollution control equipment on both

new and modified sources, the PSD program would

maximize the air resources available for economic

development:

Obviously there is only a limited amount of clean air

resources in all parts of the country. If new plants are

built in ways which disregard the obvious limits of

our air resources, then fewer plants will absorb all

available air resources. But if each new or modified

major source is located, constructed and operated so

as to minimize its impact on available clean air

resources, then more and bigger plants will be able to

locate in the same area without serious air quality

deterioration.

Id. at 133 (1977).

The lower court ruling, if not reversed, would turn the

Congressional intent on its head. Older EGUs that have

already been “grandfathered” for as long as 36 years would

be rewarded by an indefinite extension of the exemption, and

allowed to commandeer additional scarce air resources in

perpetuity for their increased operations. The temporary

exemption intended by Congress in 1970 would become

permanent, while grandfathered emitters would effectively be

able to override any air resource management options

available to state and local air quality officials.

13

V. THE LOWER COURT RULING WILL HINDER

THE MODERNIZATION OF AMERICAN

ENERGY INFRASTRUCTURE

Some have argued that companies will be deterred

from improving the efficiency of existing units if they are

required to install modern pollution controls when they

invest in life-extension projects. To the contrary, efficiency

gains come from replacing obsolete units with new ones. By

forcing old units to address their public health and

environmental! externalities, NSR levels the playing field for

innovation.

In adopting NSR, Congress intended that facilities

would have “incentives for improved technology,” that those

improvements would “become widespread far more rapidly,”

and that vendors of cleaner technologies would have a

“guaranteed market.” See S. Rep. No. 95-127, at 31 (1977),

reprinted in 1977 CRS Legislative History 1371, 1405; See

also H.R. Rep. No. 95-294, at 186 (1977), reprinted in 1977

CRS Legislative History 2465, 2653.

The lower court’s ruling is entirely contrary to this

objective of NSR. It would allow many existing plants to

increase their emissions with little or no improvement in the

efficiency of their operations. Breakthrough technology

gains do not happen by maintaining and repairing obsolete

production capacity, but instead come when new plants are

brought on line. The efficiency of new state-of-the-art

electric generation facilities today is far higher than was

standard in the 1970s. :

Any modest efficiency improvements that might

result from life-extension projects at units avoiding NSR

would be eclipsed by increased hours of operation and

extended years of service, resulting in greater overall

emissions.

Moreover, by allowing old, dirty plants to extend

their operational lives without having to install the modern

14

pollution controls required of new facilities, while new plants

incur higher environmental costs, an hourly rate applicability

test for NSR would give old plants a perverse advantage

when it comes to bidding for power supply contracts. As in

any sector, financial capital is limited within the power

industry. The lower court’s decision would divert capital

from developing new clean plants to maintaining old dirty

ones because older units that were renovated without

installing pollution controls would be able to generate power

more cheaply than cleaner new units. So long as one set of

competitors is required by law to internalize the societal costs

of air pollution while another set is granted almost indefinite

exemptions, the nation’s energy markets and economy will

be distorted and its air quality impaired.

Exempting obsolete EGUs and other industrial

sources from NSR would nullify the CAA’s incentive to

encourage lower emissions by stimulating the development

of advanced, cleaner, more efficient electric generating

technologies. See 42 U.S.C. § 7475(a)(4). Congress first

adopted “technology forcing” in the Clean Air Amendments

of 1970, Alabama Power, 636 F.2d at 372, in order to

achieve the CAA’s public health and environmental goals.?

9 The federal courts have consistently upheld the CAA’s goal to stimulate

technological innovation as a way to achieve higher environmental goals.

In 1973, the U.S. Court of Appeals for the District of Columbia Circuit

rejected the argument that EPA was limited to standards requiring

“technology in being as of the time of the application.” /nternational

Harvester Co. v. Ruckelshaus, 478 F.2d 615, 629 (D.C. Cir. 1973); see

also Natural Resources Defense Council v. Thomas, 805 F.2d 410, 429

(D.C. Cir. 1986); Portland Cement Ass'n v. Ruckelshaus, 486 F 2d 375,

391 (D.C. Cir. 1973); Natural Resources Defense Council v. EPA, 655

F.2d 318, 328 (D.C. Cir. 1981)( “EPA was ‘expected to press for the

development and application of improved technology rather than be

limited by that which exists today.’” [citations omitted]); WEPCO 893

F.2d at 909-10 (7 Cir. 1990) (“{I]n passing the Clean Air Act

Amendments, Congress intended to stimulate the advancement of

pollution control technology.”); Husqvarna v. EPA, 254 F.3d 195 (D.C.

15

Technologies developed in response to this policy, such as

automobile emission control technologies, sulfur oxide

scrubbers, and NO,-removing SCR units, have reduced

emissions even as the American economy has grown several-

fold since 1970.

VI. STATE AND LOCAL AGENCIES NEED

CERTAINTY REGARDING FEDERAL

ENVIRONMENTAL REGULATION

For 36 years, the CAA has been interpreted to require

any challenge to nationally-applicable EPA regulations to be

filed within a limited time after promulgation and decided in

the United States Court of Appeals for the District of

Columbia Circuit. Harrison v. PPG Indus., Inc., 446 U.S.

578, 588-592 (1980); 1000 Friends of Maryland v. Browner,

265 F.3d 216, 223 (4" Cir. 2001); Massachusetts v. EPA, 415

F.3d 50, 53 (D.C. Cir. 2005); Ohio Public Interest Research

Group, Inc. v. Whitman, 386 F.3d 792, 799 (6 Cir. 2004);

U.S. v. Ho, 311 F.3d 589, 607 (5™ Cir. 2002); Indianapolis

Power & Light Co. v. EPA, 38 Fed. Appx. 613, 614 (D.C.

Cir. 2002); National Petrochemical & Refiners Ass'n Vv.

E.P.A., 287 F.3d 1130, 1150 (D.C. Cir. 2002); Environmental

Defense Fund v. Thomas, 870 F.2d 892, 896 (2 Cir. 1989).

Other federal environmental laws are patterned after the

CAA, limiting the time of filing for review. Resource

Conservation and Recovery Act (“RCRA”) § 7006, 42

U.S.C. § 6976 (a)(1); Comprehensive Environmental

Response, Compensation, and Liability Act (“CERCLA”) §

113(a), 42 U.S.C. § 9613(a). Surface Mining Control and

Reclamation Act of 1977, § 526(1), 30 U.S.C. § 1276(a)(1);

Toxic Substances Control Act, 15 U.S.C. § 2618(a)(1)(A)

Cir. 2001) (“Congress intended the agency to project future advances in

pollution control capability.”) (citing NRDC, 805 F.2d at 410).

16

(1998). CERCLA and RCRA also place exclusive

jurisdiction to review EPA regulations in the D.C. Circuit.

As a result, challenges to EPA regulations adopted

under the Clean Air Act have been resolved expeditiously

and with finality. As state and local air pollution control

officials, we believe this feature has been important to the

workability and success of the CAA.

Expeditious and final resolution of litigation against

EPA rules has allowed state and local agencies the certainty

they need in order to carry out their duties under the Clean

Air Act. Many CAA programs require state and local

agencies to develop complex regulatory structures on a

statutory timetable. See, e.g., 42 U.S.C. § 7410 (State

Implementation Pian); 42 U.S.C. § 7412() (Implementation

of Hazardous Air Pollutant program); (42 U.S.C. §

7429(b)(2) (Enforcement Plan for Solid Waste Combustion

Guidelines); 42 U.S.C. § 7471 (PSD program); 42 U.S.C. §§

7502 and 7511 (Nonattainment plan provisions); 42 U.S.C. §

7661 a(d) (Permit programs).

The lower court’s decision would unfortunately open

a door to collateral attack on EPA’s CAA regulations that

would make it difficult for a state or local agency to

administer its air pollution control programs in a rational

manner. Under the lower court decision, the members of

STAPPA and ALAPCO fear that no federal regulation would

ever have a settled and reliable meaning. To extend the

period of uncertainty over EPA regulations would make it

difficult for state and local agencies to meet statutory

deadlines. Thus affirming the lower court’s end run on

Section 307 of the CAA would weaken the ability of state

and local air pollution agencies, who best understand local

circumstances, to deal with air pollution within their

boundaries.

17

CONCLUSION

For the foregoing reasons, amici STAPPA and

ALAPCO support the petitioners’ position that the lower

court decision should be reversed.

Respectfully submitted.

JULY 21, 2006

Richard E. Ayres

Counsel of Record

AYRES LAW GROUP

1615 L Street, N.W., Suite 1350

Washington, D.C. 20036

202-452-9200

Counsel for Petitioner

State & Territorial Air Pollution

Program Administrators

(STAPPA) and the

Association of Local Air

Pollution Control Officials

(ALAPCO)

APPENDIX

APPENDIX A

Richard Rosen

Expert Testimony Report

On Behalf of the United States of America, the State-

Intervenor Plaintiffs, and the Citizen Plaintiffs

August 2, 2004 (Revised May, 4 2005)

In the United States District Court for the Southern District

of Ohio, Eastern Division

Civil Action No. C2-99-1182

United States of America v. American Electric Power

Service Corp.

Civil Action No. C2-99-1250

Ohio Citizen Action v. American Electric Power Service

Corp.

[Rosen Expert Report page 37]

10.2 Calculation #2: Actual Emissions Compared to

Projected Future Actual Emissions Based on Company

Projections

In this calculation, I examined AEP’s own projections

of re-gained availability heat rate, and capacity from each

generating unit that was expected to occur as a result of each

activity where that data was available in the relevant Capital

Improvement Requisition form (to the extent such

projections were made). I then translated that recovered

availability, heat rate, and/or capacity once the activity was

completed into a change in generation, and subsequently into

a change in emissions. For the 47 activities at the AEP units

studied, adequate data was only available for 33 activities as

of the present time. The results of these calculations appear

in Table 4.

[Rosen Expert Report page 38]

Table 4

NSR/PSD Net Emissions Increases

-Calculation #2-

Actual to Projected Future Actual Based on Company

Data

PM or

SO, NO, PMio

Activity

e CIR# (Tons per Year

AMI 12012 221 174 1

AM2 12130 104 82 0

12473

APCo

sus | 51 -13,286 0

(OPCo)

71448/

CD1 71516 11,592 4,182 -1.637

CD2 72201 608 154 2

CD3 72373 8,353 2,136 26

71449/

CD4 71517 11,094 3,887 -3,881

CD5 98066 621 154 2

CD6 98085 8,942 2,361 30

CRI 12502 316 386 2

CR2 12502 327 390 2

CR3 12502 323 385 2

CV1 75140 1,797 529 l

CV2 75246 1,879 554 ]

MIi 72462 268 125 l

MI3 72206 559 224 2

MRI] 72172 1,779 320 3

MR3 72173 2,141 386 4

72162/

MRS 72254/ 6,606 1,252 10

72258

72163/

MR7 72255/ 6,233 1,219 9

72259

MR8 72398 1,434 272 2

[Rosen Expert Report page 39]

71450/

MRI11 71505/ 25,915 4,845 -1,669

71665

MR12 72202 889 158 2

MR13 71966 7,368 1,440 27

MR 14 72372 12,902 2,434 33

12147/

SP1 12166 248 177 |

72421T

SP2 72466 255 172 l

SP3 72464 47 32 0

SP4 12148 273 181 l

SP5 72429 239 176 l

SP8 72393 477 267 3

TC2 31140 1,002 348 l

TC4

31737

926

-1,045

APPENDIX B

Ranajit (Ron) Sahu

Expert Testimony Report

On Behalf of the United States

August 1, 2002

In the United States District Court for the Middle District of

North Carolina

Civil Action No. 1:00 CV 1262

United States v. Duke Energy Corporation

[Sahu Expert Report page 37]

VI.1.2. PSD Emissions Comparison Tests

[Sahu Expert Report page 38]

1. Prior Two Year Actual Average Emissions Versus

tential t it

In this method, the actual emissions for the prior 24

continuous months (two years) before the modification!°

were calculated and compared with potential to emit for the

unit after modification. In other words, the Unit Calculations

A and B discussed earlier were performed and compared

2. Before and After Modification Emissions Difference

) jectio

In this method, the emissions “delta” is estimated by

comparing the baseline emissions as calculated using Unit

Calculation A (using the period 24 months prior to the

modification for modification when the WEPCO Rule did

not apply or using the 24 month period within the prior 60

month period with the highest emissions for modification

when the WEPCO Rule applied) with the company

[Sahu Expert Report page 39]

projection calculations conducted using Unit Calculation C

discussed earlier. In making this comparison, I used the

10 The smallest calculation time period is a calendar month. It is also

assumed that a particular modification was initiated and completed within

a specific outage that began on a certain date and ended on a certain date.

Depending on the starting date of the outage, either the previous full

calendar month (if the outage began towards the beginning of a calendar

month) or the month of the outage itself (if the outage began towards the

end of a calendar month) was used as the last month before the outage.

company projections for future years 9 and 10!! [in one case

(Buck 3) only years 8 and 9 were available and in another

case (Belews Creek Unit 2, 1999 Mod) years 8 and 9 were

used since year 10 had a non-representatively low capacity

factor presumably due to an anticipated turbine outage] with

the prior 24 month baseline.

3. Emissions Change Based on GADS Activity Factor Data

for Two Years Before Modification

In this method, the emissions change corresponding to a

particular modification was directly estimated based on

GADS-based activity factors such as recovered capacity,

appropriately adjusted for capacity or utilization factor, as

needed. In other words the Unit Calculation D discussed

earlier was used to estimate this emissions change directly.

For units that entered the PMP program, GADS loss data are

often sparse. This is because, even prior to entering PMP,

these units were not running very often and, there was ample

opportunity to make relevant repairs to components, as

needed, during such downtime.

!! The preferred choice to use years 9 and 10 (or 8 and 9 as noted above)

for this comparison was made based on several consideration: (a) Duke

has made projections as far as 10 years for a reason, namely that the 10

year planning horizon was a reasonable basis for future unit operations;

(b) in the case of the PMP units, Duke’s decision to gradually ramp up

the unit capacities factors in the years following PMP (essentially

converting these previously peaking or load-following units into base-

loaded units as its system load increased) rendered the choice of other

years (say years 1 and 2 or years 4 and 5, for example) moot since these

other choices would not be compatible with how Duke intended to run the

units in the foreseeable future; (c) years 9 and 10 were the farthest future

years with forecasted capacity projections that shed light on Duke’s

intended plan for running its units; and finally, (d) consistency in using

similar time frames for all units for purposes of making emissions

estimates.

[Sahu Expert Report page 42]

Table 1 - Summary Emissions Increase Results (Tons/Yr)

for PSD Applicability

Modification/

Compertoen Test Pollutant{1]

SO, NO, PM | PMjo{2]

PSD Significant

Emissions Rate 40 40 25 15

(SER)

SO, NO, PM | PMjo({2]

Modification #6-

Allen 1 (1989)

Comparison Test 1 | 11496.5 | 4538.1 | 1527.7} 1023.6

Comparison Test 2 | 3430.4 | 1857.1 | 620.3 415.6

Comparison Test 3 55.7 30.1 10.1 6.8

Modification #5-

Allen 2 (1988)

Comparison Test 1 | 12559.4 | 4957.7 | 2782.4| 1864.2

Comparison Test 2 | 2991.6 | 1610.3 | 690.1 462.4

Comparison Test 3 34.2 17.7 6.8 4.6

Modification #23-

Allen 3 (1994)

Comparison Test 1 | 15845.6 | 2377.0 | 1468.4| 983.8

Comparison Test 2 | 1705.0 - 237.4 158.8

Comparison Test 3 21.5 5.6 1.6 1.1

Modification # 3-

Allen 4 (1996)

Comparison Test 1 | 13594.2 | 2235.0 | 773.4 | 518.2

Comparison Test 2 | 260.1 - - -

Comparison Test3 | 195.3 65.0 11.3 7.6

Modification #4-

Allen 4 (1998)

Comparison Test 1 | 11124.6 | 2751.0 | 1330.3 | 891.3

Comparison Test 2 | 2114.6 | 872.9 | 597.0 | 400.0

Comparison Test 3 | 150.3 60.6 14.5 9.7

Modification #2-

Allen 5 (1996)

Comparison Test | | 14294.1 | 2210.9 | 1718.2 | 1151.2

Comparison Test 2 | 3324.4 | 191.2 | 408.7 | 273.8

Comparison Test 3 | 234.3 79.4 27.8 18.6

Modification #1-

Allen 5 (2000)

Comparison Test 1 | 8153.1 | 2395.1 - -

Comparison Test2 | 880.0 | 481.3 - -

Comparison Test 3 | 229.7 89.0 10.0 6.7

Modification #9-

Belews Creek |

(2000)

Comparison Test 1 | 14909.3 - - -

[Sahu Expert Report page 43]

Comparison Test 2 - - : .

Comparison Test 3 | 1319.8 537.2 35.5 23.8

Modification #8-

Belews Creek 2

(1996)

Comparison Test 1 | 33644.4 | 22678.3 | 1077.5 | 721.9

Comparison Test d :

2[3] y ;

Comparison Test3 ; 202.0 222.5 8.7 5.8

Modification #7-

Belews Creek 2

(1999)

Comparison Test 1 | 15719.2 - - -

Comparison Test : ¥

2(4) : J

Comparison Test3 | 331.3 147.3 11.0 7.4

10

Modification #12-

Buck (1994)

Comparison Test 1 | 6208.8 | 3063.6 | 369.4 | 247.5

Comparison Test2 | 873.4 278.7 44.6 29.9

Comparison Test 3 0.0 0.0 0.0 0.0

Modification #1 1-

Buck 4 (1994)

Comparison Test 1 | 2981.3 | 1471.0 | 169.3 113.4

Comparison Test 2 | 827.3 264.0 36.7 24.6

Comparison Test 3 4.8 2.4 0.2 0.1

Modification #10-

Buck 5 (1991)

Comparison Test 1 | 9767.9 | 3855.8 | 387.1 | 259.4

Comparison Test2 | 2415.9 | 1223.9 | 87.8 58.8

Comparison Test 3 97.7 49.5 3.6 2.4

Modification #28-

Buck 6 (1990 7

Comparison Te.. 1 | 9678.2 | 3179.8 | 249.5 | 167.2

Comparison Test2 | 361.1 356.3 2.1 1.4

Comparison Test 3 50.0 33.2 2.0 1.3

Modification #21-

Cliffside 1 (1993)

Comparison Test 1 | 6267.9 | 2249.2 | 503.8 | 337.5

Comparison Test2 | 528.8 272.2 51.4 34.4

Comparison Test 3 2.7 1.4 0.3 0.2

Modification #17-

Cliffside 2 (1993)

Comparison Test 1 | 5468.3 | 2158.5 | 759.8 | 509.1

Comparison Test 2 | 641.1 308.3 | 108.6 72.8

Comparison Test 3 0.0 0.0 0.0 0.0

Modification #18-

Cliffside 3 (1991)

1]

[Sahu Expert Report page 44]

Comparison Test 1 | 9183.8 | 3295.6 | 862.2 | 577.7

Comparison Test2 | 960.4 429.2 | 110.7 74.2

Comparison Test3 | 45.2 20.2 5.2 3.5

Modification #19-

Cliffside 4 (1991)

Comparison Test 1 | 6525.7 | 2341.8 | 637.5 | 427.1

Comparison Test2 | 771.9 395.3 89.1 59.7

Comparison Test 3 5.7 2.9 0.7 0.5

Modification #20-

Cliffside 5

(1992)(4]

Comparison Test 1 | 30934.4 | 10164.1 | 1339.1 | 897.2

Comparison Test 2 | 10339.1 | 4394.2 | 53.1 35.6

Comparison Test

314] 0.0 0.0 0.0 0.0

Modification #20-

Cliffside 5

(1995)[4]

Comparison Test 1 | 24077.8 | 3089.8 | 2496.1 | 1672.4

Comparison Test 2 | 5687.6 | 2464.6 - -

Comparison Test 3 | 177.7 48.3 14.1 9.4

Modification #22-

Dan River 3 (1998)

Comparison Test 1 | 10755.8 | 4245.7 | 609.7 | 408.5

Comparison Test 2 | 2160.0 | 1065.8 | 147.3 98.7

Comparison Test3 | 617.9 304.9 51.2 34.3

Modification #29-

Marshall 1 (1992)

Comparison Test 1 | 14217.7 | 4581.1 | 272.5 | 182.6

Comparison Test 2 | 4067.5 | 1491.3 - -

Comparison Test3 | 212.9 83.3 8.4 5.6

Modification #1 5-

12

Marshall 2 (1989)

Comparison Test 1 | 14146.0 | 4456.2 | 1198.9 | 803.3

Comparison Test2 | 2690.8 | 1091.9 | 42.3 28.3

Comparison Test 3 | 873.2 358.1 62.2 41.7

Modification #16-

Marshall 2 (1996)

Comparison Test 1 | 10356.4 | 373.6 | 1673.7 | 1121.4

Comparison Test 2 | 5233.8 - 924.8 | 619.6

Comparison Test3 | 131.3 37.0 9.1 6.1

Modification #14-

Marshall 3 (1999)

Comparison Test 1 | 19530.2 | 4107.9 | 466.4 | 312.5

Comparison Test 2 | 502.2 188.3 88.4 59.2

Comparison Test 3 | 793.7 280.9 19.5 13.1

[Sahu Expert Report page 45]

Modification #13-

Marshall 4 (1990)

Comparison Test 1 | 22399.4 | 7166.8 | 2569.2 | 1721.4

Comparison Test 2 | 7347.2 | 2897.7 | 942.2 | 631.3

Comparison Test 3 | 1299.7 | 518.2 | 113.4 76.0

Modification #24-

Lee 3 (1989/90)

Comparison Test 1 | 9861.7 | 3387.2 | 227.5 | 152.4

Comparison Test 2 | 488.2 380.9 17.5 11.7

Comparison Test 3 | 162.8 78.7 4.6 3.1

Modification #25-

Riverbend 4 (1990)

Comparison Test 1 | 8691.3 | 2859.0 | 137.8 92.3

Comparison Test 2 | 1582.2 | 715.6 35.6 23.9

Comparison Test 3 93.6 42.3 2.1 1.4

Modification #26-

13

Riverbend 6 (1991)

Comparison Test | | 15395.7 | 5064.4 | 482.9 | 323.5

Comparison Test 2 | 2066.9 | 1247.2 | 192.0 | 68.3

Comparison Test 3 | 312.7 | 188.7 | 15.4 10.3

Modification #27-

Riverbend 7 (1992)

Comparison Test | | 10678.6 | 3512.7 | 340.1 | 227.9

Comparison Test 2 | 4215.2 | 1650.1 | 136.7 | 91.6

Comparison Test3 | 313.1 122.6 10.2 6.8

Notes:

[1] “-“ denotes a negative value or reduction in the

comparison for that case. In many such cases, the NO,

comparisons show a reduction because of the installation or

planned installation of low-NO, technologies at that unit that

were factored into the calculation of future projected NO,

emissions. PM emissions were somewhat erratic given the

significant variability in the annual PM source test results

that were used in the calculations.

[2] PMio was estimated as 67% of PM emissions, per AP-42,

Table 1.1-6.

[3] For this modification, it should be noted that its capacity

factor in the baseline year as well as in the projection years

was generally high given that it is a base loaded unit. For

example its baseline year capacity factor was around 73%

while its average post-mod year 1/2 and year 9/10 capacity

factor projection were 76% and 78.5%, respectively. Even

though there is a capacity factor increase, there appears to be

a reduction in the projected SO, emissions in the projected

years as compared to the baseline period because the sulfur

content in the coal in the baseline period (i.e., 24 month

period with the highest SO, emissions for this potentially

WEPCO Rule-eligible unit) was higher (i.c. 0.99%) than in

the years preceding the modification (0.83%) and the latter

14

was used to make the future projections, giving Duke the

benefit of lower sulfur content in the future, even though this

low sulfur content is not enforceable via permits or other

means. If, on the other hand, an average sulfur content for

the entire five year period preceding the modification

(0.89%) is used for all calculations (i.e. baseline actual and

future projections[)], there would be an increase in

Comparison Test 2 for this case.

[4] Although the complaint listed the modification as having

occurred in 1992 and 1995, emissions calculations are

provided for both 1992 and 1995 changes separately. The

lack of GADS based losses attributable to the economizer

prior to the 1992 modification (in which the economizer was

replaced given its documented [see Bates 62CS001] poor

performance in preceding years) needs further discussion.

Closer inspection of the GADS data show that this base load,

low heat rate (i.e., economically efficient) unit was

[Sahu Expert Report page 46]

not operating for a significant portion of time preceding the

1992 modification and was listed as being in reserve

shutdown. It is possible that repairs to the malfunctioning

economizer were made during periods of reserve shutdown

and therefore such periods of time did not get attributed to

the economizer repair.

15

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