pliance with the hourly emission test proposal. Consequently, the analyses of this chapter are relevant to any comparison of NSR prior to proposal of the ERP with the EPA hourly emission test proposal.

The arrangements for the IPM model runs were coordinated through the EPA because of the nature of EPA’s contractual relationship with ICF Consulting, the owner of IPM. The committee provided scenarios to EPA, and EPA in turn provided the scenarios to ICF and oversaw the implementation of the model. The results of the model runs were then checked for errors by EPA employees and provided to the committee. The committee independently analyzed the results by creating graphs and tables and doing cross-scenario comparisons.

The modeling effort is intended to build on the earlier modeling work done by EPA as a part of its regulatory impact analysis (RIA) of the adoption of the ERP (EPA, 2003c). Our analysis looks at a wider range of potential effects upon generation investment decision making under the agency’s prerevision NSR multifactor approach than were examined as part of EPA’s RIA. Furthermore, unlike the EPA analysis, which was prepared before the Clean Air Interstate Rule (CAIR) and the Clean Air Mercury Rule (CAMR) (see Chapter 2) were to be put into place, our analysis takes into account the effects of those rules on industry’s response to the NSR changes.2 The design of these runs and their rationale are reviewed in detail in the next section. After reviewing the results, we discuss the limitations of the model and any conclusions based on them. A set of conclusions closes this chapter.

Table 6-1 summarizes the emission-control status of U.S. coal-fired units in 2004. The focus of our analysis is on the 188.5 gigawatts (GW) of large electricity-generating units (at least 100 MW) that as of 2004 lacked flue-gas desulfurization (FGD) controls for sulfur dioxide (SO2) and on the 190.4 GW of large units that as of the same year lacked selective catalytic reduction (SCR) or selective noncatalytic reduction (SNCR) controls for nitrogen oxides (NOx). That focus is based on our assumption that this capacity constitutes the bulk of power-sector emissions that would potentially be affected by the ERP approach. Those uncontrolled units account for 62% and 63%, respectively, of all coal-fired generation capacity. Our analysis excludes 17 GW of smaller units (less than 100 MW), or about 6% of all coal-fired capacity, on the assumption that they would not be suitable candidates for retrofit of FGD or SCR; we assume that those units avoid undergoing NSR.


EPA did its analysis of the ERP before the CAIR rule was officially proposed in January 2005. However, the Clear Skies Bill, which proposes a national cap on sulfur dioxide (SO2) and nitrous oxides (NOx) emissions from electricity generators, was introduced in the Senate in 2002. That bill included national caps (on SO2, NOx, and mercury from electricity generators) and a proposal to loosen the restrictions imposed by NSR on electricity-generator investments.

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