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Environmental study contrary to testimony

Conclusion first, data second.

Basin Electric Power Cooperative - November 30, 2011
Daryl Hill

A study released Nov. 7 by Resource Insight Inc., and commissioned by the Sierra Club, draws false conclusions based on "pseudo economics." The study incorrectly claims the state of North Dakota and Basin Electric overestimate the cost of installing certain environmental control technologies at the Leland Olds Station, Stanton, ND. The cost estimate is part of Basin Electric's testimony disputing the Environmental Protection Agency's plan to take over the state’s regional haze program.

Lyle Witham, Basin Electric's manager of environmental services, said, "It appears the conclusion (of the study) was the starting point, and the research was designed to support it."

Witham said the differences in boiler designs and coal quality are ignored in the study. "It treats North Dakota cyclone boilers and lignite coal as if they were the same as other coals and boilers, and they are not," he said.

The study, titled "The Cost of Clean Air," is a weak attempt to predict how installing environmental controls will affect retail electric rates. The State Implementation Plan (SIP) proposed by the North Dakota Department of Health (NDDOH) would require Basin Electric to install selective non-catalytic reduction (SNCR) environmental control technology at its Leland Olds Station for reducing emission of oxides of nitrogen (NOx), while the EPA is proposing to require the installation of selective catalytic reduction (SCR).

The differences in cost are huge. The EPA plan would require more than $800 million in unnecessary utility spending that couldn't help but affect regional ratepayers in a difficult economy.

"The impacts of the costs of the FIP will certainly vary by utility, but the real issue is why is the SCR technology continually being promoted when there are known problems with using SCRs on North Dakota lignite-fueled cyclone boilers that have not been resolved?" Witham said.

"North Dakota lignite coal is unique because of its high water content, high levels of sodium and other alkalis," Witham said. "To use it, either very high-temperature cyclone boilers like Leland Olds Unit 2 had to be used, or specially designed boilers like those at Antelope Valley Station—which were two of the largest boilers in the world when they were built—had to be engineered. The exhaust from these types of boilers is high in vaporized sodium and fine particulates that present problems for using SCRs. Engineering firms and vendors that design and supply catalysts for SCRs are unwilling to provide performance guarantees until those issues are addressed. If EPA were to require spending of hundreds of millions of dollars for environmental controls without such performance guarantees, it would set a very bad precedent under the law, as a matter of public policy, and as a matter of common sense."

Leading SCR design firms have testified they are not prepared to design the technology for North Dakota lignite without substantive pilot testing. "The state's plan to control NOx emissions with SNCR is known to be effective – and much less expensive."

Even if the SCR technology would work, the benefits to reducing regional haze are not discernible to the human eye, according to Witham.

Additionally, the study incorrectly compares costs of the SIP to the FIP. "But the costs of the SIP include technologies for not only reducing NOx, but also sulfur dioxide emissions as well," Witham said. "The costs assumed for the FIP only accounted for NOx technology using SCR. It’s not an equitable comparison."

At the end of the day Nov. 21, more than 3,200 comments had been posted on a website, several hundred pages of testimony submitted, and three letters from congressional delegations sent to the EPA, all with the same message: do not impose a FIP on the state of North Dakota.

The comments followed a public hearing held by EPA in Bismarck, ND, Oct. 13-14 to gather testimony about a proposed action to take over the NDDOH management of the Regional Haze program of the Clean Air Act. A comment period followed the hearing and ended Nov. 21.

In filed comments to EPA, Basin Electric supported the state's evaluation of the costs to install SCRs at its Leland Olds Station Unit 2, saying "North Dakota exercised its discretion to determine that the costs are excessive in light of the expected visibility improvement … EPA has no basis or authority to disturb the State's evaluation of the costs of compliance."

Through the website www.stopepand.com, 3,240 visitors submitted letters to EPA.

The congressional delegations from Montana, South Dakota and Wyoming also sent letters to Lisa Jackson, EPA administrator, encouraging her to not impose the FIP. The letters can be viewed on Basin Electric's website: http://www.basinelectric.com/Legislation/EPA_regulations/index.html

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