1. Pennsylvania Draft Regulations for the Control of Mercury From Coal-fired Electric Generating Units Allegheny Section- AWMA Air Quality Issues Workshop May 23, 2006

2. Action Resulted from PennFuture Petition—8/9/04 EPA’s Clean Air Mercury Rule (CAMR) March 2005 A region-wide cap and trade program

3. General Principles PA Draft Mercury Rule No trading of Hg emission allowances. Achieve greater reductions in Hg than EPA's CAMR. Maximize the Hg reduction co-benefits from other SO2 and NOx emission control programs such as CAIR. Discourage fuel switching from bituminous coal. No adverse impact on the capacity and reliability of power generation.

4. Conceptual Approach Applicability - Any coal-fired EGU with a nameplate capacity of 25 MW or more. Each EGU would be required to meet – a numerical emission standard or minimum control efficiency and an annual emission limit in ounces of Hg emitted (as backstop).

5. Exception The owner or operator of an existing EGU that enters into an enforceable agreement before 12/31/07 for the shutdown of an EGU and replacement with Integrated Gasification Combined Cycle ( IGCC) by 12/31/12 will be exempted from compliance with both the Phase 1 Hg emission standards and the Phase 1 annual emission limit requirements.

6. Compliance Deadlines Phase 1 (January 1, 2010) Initial level for numerical emission standard or control efficiency, and an annual emission limit by unit. Phase 2 (January 1, 2015) More stringent emission standard or control efficiency, and Lower annual emission limit by unit.

7. Emission Standards New EGU standards apply at construction for: IGCC PC-Fired CFB Phase 1 and 2 standards for existing EGU units: Pulverized Coal (PC) – Fired Circulating Fluidized Bed (CFB)

8. Emission Standards for New EGUs PC-Fired - output based emission standard of 0.011 lb/GWh or 90% control efficiency (coal to stack). CFB - output based emission standard of 0.011 lb/GWh or 90% control efficiency. IGCC - output based emission standard of 0.0048 lb/GWh or 95% control efficiency.

9. Phase 1 Existing EGU Standards ( 1/1/10 to 12/31/14) PC-Fired - output based emission standard of 0.024 lb/GWh or 80% control efficiency. CFB - output based emission standard of 0.0058 lb/GWh or 95% control efficiency.

10. Phase 2 Existing EGU Standards ( beginning 1/1/15) PC-Fired - output based emission standard of 0.012 lb/GWh or 90% control efficiency. CFB - output based emission standard of 0.0058 lb/GWh or 95% control efficiency.

11. Annual Emission Limit Established for each EGU on ounces of Hg per year basis. Based on CAMR allocation distribution methodology using three highest heat input from the years 2000-2004. CFB unit annual emission limit in Phase 1 is identical to the Phase 2 limit. Provides regulatory assurance for Pennsylvania to meet the EPA CAMR Hg budgets.

12. Phase 1 Emission Standards Compliance Options Unit-by-unit basis. Emissions averaging among the units at a specific facility. Compliance Presumption – cold-side ESP or FF, and wet FGD where 100% bituminous coal is fired. Alternative emission standard/compliance schedule.

13. Phase 2 Emission Standards Compliance Options Unit-by-unit basis. Emissions averaging among the units at the same facility. Compliance Presumption – cold-side ESP or FF, wet FGD and SCR where 100% bituminous coal is burned. Alternative emission standard/compliance schedule.

14. Annual Emission Limit Compliance Components Allocate to each EGU an available amount of non- tradable allowances based on CAMR caps. Set asides for New Source EGUs and CFB units. Each affected unit must draw up to the available amount of allowances based on their actual emissions for compliance with the annual emission limit. The owner/operator of the EGU may petition DEP for additional allowances from surplus allowances Order of preference established for additional allowances.

15. Allocation Method Total allowances 56,960 ounces (3,560 pounds, 1.78 t) of Hg for Phase 1. 22,464 ounces (1,404 pounds, 0.70 t) of Hg for Phase 2. The DEP will set aside 5% of the Phase 1 total and 3% of the Phase 2 allowance total for new sources. Same set asides for CFB units in both Phases.

16. Allocation for Existing Units The maximum number of annual non- tradable Hg allowances set aside for existing sources will be determined by using the average heat input (MMBtu) data from the DEP’s acid rain database for the three highest calendar years from 2000 through 2004.

17. Additional Allowances Petition Process An existing affected EGU that emits amounts of Hg in excess of its maximum number of allowances may petition the DEP for additional allowances from the Emission Limit Supplement pool by no later than January 31. A separate petition for each calendar year. Application information is similar to that required under the alternative emission standard/compliance application.

18. Order of Preference for Additional Allowances Standby units CFBs combusting 100% waste coal or bituminous coal. EGUs combusting 100% bituminous coal which have: SCR, cold-side ESP or FF, wet FGD, and Hg-specific control technology. SCR, cold-side ESP or FF, and wet FGD. wet FGD and Hg-specific control technology. Cold-side ESP or FF, and wet FGD. other air pollution control technologies and measures to control emissions of air contaminants including Hg.

19. Other Requirements Monitoring Requirements Similar to CAMR Testing Requirements Similar to CAMR Recordkeeping and Reporting Requirements Similar to CAMR

20. Anticipated Results - Calculation Used the EGU’s average of three highest years heat-input within years 2000-2004. Used actual coal mercury contents and actual mercury removal efficiencies calculated from reported emission rates wherever available. If not available, used EPA’s default mercury removal efficiencies.

21. Anticipated Results Pennsylvania Hg reductions beyond CAMR for Phase 1 approximately 29% Pennsylvania Hg reductions beyond CAMR for Phase 2 approximately 36 %

22. Status of Draft Hg Rule Air Quality Technical Advisory Committee (AQTAC) voted 7-2 on 3/30/06 to recommend the rule for public comment to the PA Environmental Quality Board (EQB). Listed nine topics to solicit public comments on.

23. Next Steps Place proposal on the regulatory calendar Presented proposed rulemaking to EQB for consideration

24. Tentative Mercury Rule Timeline May 3, 2006Submited proposed mercury rulemaking to EQB for consideration May 17, 2006EQB Action on the proposed rulemaking Late June, 2006Publish Notice of Proposed Rulemaking in the Pa. Bulletin

25. Tentative Mercury Rule Timeline July 2006Three public hearings in Southeast, Southcentral and Southwestern PA July/August 2006Summarize public comments/develop final-form regulations. Meet with AQTAC/CAC/Workgroup to discuss final-form mercury regulation September/October 2006EQB considers final-form mercury regulation November 2006Independent Regulatory Review Commission Meeting November 2006Publish final mercury rulemaking. Submit State Plan to EPA Region III

26. Pennsylvania Draft Regulation for the Control of Mercury From Coal-fired Electric Generating Units The End

28. Alternative Emission Standard/Compliance Application An application including a brief description of the EGU in need of an alternative emission standard or schedule must be submitted to the Department; The application must also include: The date of installation and operation of all control technologies and measures to control emissions, including Hg from each EGU; For each of the technologies and measures listed above, an explanation of how they were installed and if they are being operated properly; A list of any other technologies or measures that are proposed to be installed and operated to control emissions, including Hg from the EGU;

29. Alternative Emission Standard/Compliance Application Where an alternative compliance schedule is sought, the owner or operator must submit a proposed schedule, which includes increments of progress and a date for final compliance as soon as practicable. Where an alternative reduction requirement is sought, the owner or operator must submit an emission reduction proposal and information on the technological feasibility of meeting the Hg emission standard requirements.

30. Hg Content in Coal on a Facility Basis

31. Mercury Removal Rates (PA ICR Data)

32. Mercury Removal Rates Comparison

33. Controls for CAIR Compliance