Indiana Power Plant Mercury Rulemaking Recommendation

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Indiana Power Plant Mercury Rulemaking
Recommendation

• Thomas W. Easterly, Commissioner
• Indiana Department of Environmental Management

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Utility Mercury Regulation Options

• Hoosier Environmental Council Petition requesting
  a 90 reduction in uncontrolled mercury emissions
  from all Coal Fired EGUs with no trading
• Adopt Federal Clean Air Mercury Rule (CAMR)
• Some combination?
• The workgroup process did not reach consensus

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Where are we in the Rulemaking Process?

• We have published the first notice
• We did not publish the second notice which
  includes the proposed rule language because of
  the lack of consensus on which option to select.
• IN will not have a final regulation by EPAs
  11/06 deadline
• We need to chose a direction and move ahead

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Other IN Mercury Initiatives

• We are implementing the program with bounties to
  remove mercury switches from end of life (motor)
  vehicles (ELVs)
• We are also pursuing Regulations to implement the
  program
• Utility mercury emissions estimated at 4,500
  lbsmercury in scrapped autos initially estimated
  at 2,400 lbs, but may be much less

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What is Known About Mercury

• Mercury is a potent neurotoxin
• Studies have shown that high levels of mercury
  result in reduced IQs in newborns
• Some studies have shown that high levels of
  mercury in adult males are associated with higher
  rates of heart attacks and death (but studies
  also show that eating fish generally reduces the
  risk of heart attacks)

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What is Known About Mercury

• In the US, most mercury exposure is through fish
  consumption
• In Indiana, there are many fish consumption
  advisories for mercury
• As shown on the next slide, using Indianas fish
  consumption advisory standard, we would warn
  against consumption of common commercial fish
  available in the supermarket

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IN Commercial Fish Advisories

• Fresh or canned salmon shellfish like shrimp,
  crab, and oysters tilapia herring canned
  light tuna scallops sardines pollock cod
  and catfishUnlimited for all adultsOne meal per
  week
• Canned albacore white tuna (6 oz.), tuna steak,
  halibut, and lobster1 meal per week for
  adultsOne meal per month
• Shark, swordfish, tile fish, king mackerel1 meal
  per month for adult males and femalesDo not
  eat
• References
• USDHHS and US EPA - 2004 EPA FDA Advice for
  Women Who Might Become Pregnant
• Choose Wisely 2004, Wisconsin DNR
• An Expectant Mother's Guide to Eating Minnesota
  Fish, 2004
• Consumption guidelines for the at-risk
  population women of childbearing years, nursing
  mothers, and all children under the age of 15
  years.

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Mercury Questions

• Are US Power Plant mercury emissions deposited
  near the power plants or spread around the world?
• If spread around the world, elimination of US
  mercury emissions will reduce mercury in fish by
  about 1
• If emissions are locally deposited, reductions
  may result in significant reductions in local
  fish mercury concentrations
• Will a reduction in mercury deposition result in
  a corresponding reduction in fish mercury levels?

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Is There a Safe Level of Mercury?

• USEPA has established a Reference Dose of 0.1
  micrograms/kg body weight/day. This calculation
  is based upon limiting the mercury in the fetus
  of a pregnant woman to the no observed affects
  level and a safety factor of 10.
• 88.4 of the Midwest population that consumes
  non-commercial fish is believed to be below the
  reference dose. Full implementation of CAMR will
  increase that value to 90.6.

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Value of Health Benefits

• Based upon published studies, the Hoosier
  Environmental Council has estimated the following
  health costs
• Loss of IQ due to US power plant mercury
  emissions1.5 Billion for the US, 30 Million
  for Indiana and 78 Million for Indiana Power
  Plant Emissions
• Cardiovascular--3.9 Billion for the US, 78
  Million for Indiana and 203 Million in the US
  from Indiana Power Plant Emissions
• Increased mental retardation--289 Million for
  the US, 6 Million for Indiana and 15 Million in
  the US from Indiana Power Plant Emissions

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Value of Health Benefits

• Based upon published studies, the North East
  States Consortium of Air Unit Managers has
  estimated the following benefits from full
  implementation of CAMR
• Improvement in IQ due to US power plant mercury
  emissions119 Million for the US, 2.5 Million
  for Indiana and 6 Million for Indiana Power
  Plant Emissions
• CardiovascularBetween 48 Million and 4.9
  Billion for the US, (Between 1 Million and 98
  Million for Indiana and between 2.5 Million and
  255 Million in the US from Indiana Power Plant
  Emissions

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Health Benefit Uncertainties

• Value of avoiding a fatal heart attack is valued
  at 6,000,000 while average lifetime earnings are
  about 1,000,000while people may be willing to
  pay 6,000,000 to avoid a heart attack, they
  cannot afford to pay that much.
• The value of IQ loss is based on a 0.6 IQ point
  reduction in IQ due to mercury causing a 16,900
  reduction in lifetime earnings times total births

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Health Benefit Overstatement

• Assumption that health benefits are linearly
  related to reductions in US power plant emissions
  when
• USEPA expects that a 69 reduction in US power
  plant emissions will reduce the deposition of
  mercury in the US by about 10
• Reductions in US power plant mercury emissions
  have a very small impact on migratory ocean
  species such as tuna

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Health Cost per Pound of Emissions

• Using the HEC Health Costs and the 1999 Indiana
  Power Plant mercury emissions of 4,884 pounds, we
  can calculate a health cost per pound of mercury
  emissions
• IQ loss 78,000,000/4,884 15,970/lb
• Cardiovascular 41,464/lb
• Mental Retardation 3,071/lb
• TOTAL 60,500 per pound

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What are the Emission Reductions?

• The HEC Petition requires 90 Reduction from
  uncontrolled emissions or 0.6 lbs Hg/Trillion
  BTUmeeting this limit is estimated to result in
  between 1,095 and 1,260 lbs of mercury emissions
  per year in Indiana starting in 2010
• EPAs CAMR Phase 2 emission limits will cap IN
  power plant emissions at 1,656 lbs, but due to
  banking and trading, actual emissions are
  estimated at 2,001 lbs by EPA and 1,492 by the
  Indiana Utility Group

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IN Power Plant Mercury Emissions (Lbs)
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Mercury Control Issue

• Is it physically possible to meet the 90
  reduction target at every power plant?
• Many people assume that the control device
  combination of ESP, SCR and scrubber will result
  in a 90 reduction in mercury emissionstests on
  production units show removals of 40 to 90
• Reported tests indicate that mercury emission
  reductions of 90 to 94 can be achieved on plants
  fueled with PRB (western) coals using brominated
  activated carbon, but that on bituminous coals
  reductions range from 50 to 86

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Costs of Mercury Control Options

• HEC Petition (90 Removal)
• 234,230,000 per year Initial Estimate
• 207,000,000 per year IDEM/EPA Model Run
• 373,137,000 per year IUG Model Run
• (Note, IDEM assumes that ESP, SCR and Scrubber
  will meet 90, IUG assumes that activated carbon
  injection will be required)
• CAMR Phase II
• 64,195,000 per year IDEM/EPA Model Run
• 67,647,000 per year IUG Model Run

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HEC Petition vs CAMR

• Using the 60,505 health cost per pound of
  mercury emissions, the estimated annual costs of
  complying with the HEC petition, and the pounds
  of mercury emissions avoided by the HEC petition
  vs CAMR, we can estimate the cost or benefit of
  the HEC petition versus CAMR

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HEC Petition vs 1999 Baseline

• 1999 emissions 4,884 pounds per year
• HEC emissions 1,095 pounds per year
• Emissions reduction 3,789
• Value of reductions 3,789 60,505
  229,253,445
• Initial HEC Cost Estimate is 234,230,000 per
  year
• Benefit/Cost Ratio 0.98

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HEC vs CAMR Benefit

• We must do CAMR, so the appropriate calculation
  is the marginal benefit of the HEC petition vs
  CAMR. This benefit can be compared with the
  marginal cost.
• The data that we have supports two
  calculationsthose based upon the IDEM/EPA Cost
  and Emissions Model and those based upon the IUG
  Cost and Emissions Model

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HEC vs EPA/IDEM CAMR Benefit

• The IDEM/EPA model indicates that CAMR will
  result in 2,001 pounds of mercury emissions per
  year at an annual control cost of 64,195,000.
• The HEC petition would reduce the emissions by
  906 pounds per year (value 54,817,530) at a
  net cost of 207,485,000-64,195,000
  143,290,000 per year
• Benefit/cost ratio 0.38

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HEC vs CAMR IUG Benefit

• The IUG model indicates that CAMR will result in
  1,492 pounds of mercury per year at an annual
  cost of 67,674,000.
• The HEC petition would reduce the emissions by
  397 pounds per year (value 24,020,485) at a
  net cost of 373,137,000-67,674,000
  305,463,000 per year
• Benefit/cost ratio 0.08

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Total Monthly Electric Costs

• A very simple calculation is that the IDEM/EPA
  annual CAMR cost of 64,195,000 divided by 6.3
  million Hoosiers yields an annual increase of
  10.20 per year per Hoosier or 2.54 per
  household per month.
• For the HEC petition similar values are
  234,230,000 annual cost 37.18 per Hoosier or
  9.29 per household per month
• This calculation includes the assumption that the
  increases in Commercial and Industrial rates are
  passed on to the individual consumers

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Recommendation

• Due to uncertainties over
• Achievability of 90 control
• Reductions in actual mercury exposure levels
• Cardiovascular health benefit
• Thresholds for IQ reduction based upon EPAs
  Reference Dose
• AND the fact that the calculated marginal
  benefits of the HEC petition appear to exceed the
  lowest estimated costs of implementing the
  petition, I recommend that IDEM proceed with
  rulemaking based on CAMR