American Electric Power Perspective on Water Quality Trading
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Transcript of American Electric Power Perspective on Water Quality Trading
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Tim Lohner, Ph.D.
American Electric Power
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American Electric Power
Serves 5.3 million customers in 11 states
Over 37,400 MW generating capacity, 87%
utilizing fossil fuels
Nation’s largest transmission system–39,000 mi.
American Electric Power
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Lake Erie
Ohio River
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Power Plant Nutrient Sources
Nitrogen Emissions
SCRs/SNCR Installations
Haze Mitigation
Scrubber Installations
Chilled ammonia carbon capture
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0
10
20
30
40
50
60
3/5/
2009
3/25
/200
9
4/17
/200
9
5/7/
2009
Ohio
Riv
er
Ch
loro
ph
yll
(u
g/L
)
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Regulatory Requirements
NPDES Permit Limits
Nutrient-based TMDLs
Antidegradation Reviews
New Steam Electric Effluent
Guidelines
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Limited Expensive
Treatment Options
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Ohio River Basin Water Quality
Trading Project
Innovative, market-based,
voluntary program.
First interstate program of its kind.
Leading practice in the watershed.
Wide collaboration and input from
regulatory and environmental
organizations.
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Compliance Cost Options
Conventional Costs Trading Costs
$52 million DFA conversion
$3 to $7 million DFA O&M$100 thousand per year
$15 to $165 per pound $2 to $8 per pound
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Cost Savings With Trading
Concentration Limits - Based on Actual Flows
8 mg/L TN 5 mg/L TN
Facility Unit Cost
Pounds Reduced
Potential Annual Savings
Unit Cost Pounds Reduced
Potential Annual Savings
TN ($/pound) TN TN ($/pound) TN
Base Case $ 13.84 603,989 $352,724.76 $14.41 64,969 $416,184.07
1. Plant #2 N/A 0.0 N/A 0.0
2. Plant #1A N/A 0.0 $ 163.98 5,708 $890,273.09
3. Plant #3 $ 59.60 14,025 $723,714.61 $ 56.75 16,493 $803,991.11
4. Plant #4 N/A 0.0 N/A 0.0
5. Plant #1E N/A 0.0 N/A 0.0
8. Plant #1B N/A 0.0 $ 33.75 27,730 $714,089.78
9. Plant #1C N/A 0.0 $ 57.83 16,183 $806,464.95
Resulting Demand for Credits
74,424 Credits 131,083 Credits
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Achieve compliance
Save money
Environmental Stewardship and Sustainability
Improved public relations
Credit Stacking
Advantages of Trading
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Added Benefits to AEP
Future authorization to trade
First access to credit pool
Reduced trading ratios
Extended compliance
schedules
Greenhouse Gas
credits
Particularly pilot trades:
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Greenhouse Gas Credits
EPRI PID# 1013128 A. Diamant, Project Manager
Nitrous oxide is a powerful GHG.
One ton of N2O
is equivalent to
296 tons of CO2.
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Accelerating Application to
Other Watersheds
Precedent for cooperation among
regulators and industry.
Regulatory drivers and incentives.
Manage liabilities.
Validation of results.
Removal of regulatory
barriers.
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Draft rule issued June 7, 2013.
Nitrate/nitrite limits on FGD WW. 0.17 mg/L max
0.13 mg/L avg
Forces biological treatment.
Limits must be met before commingling
or discharge.
Capital costs - $14 to $47 million.
O&M costs - $250K to $750K.
Removal of Regulatory Barriers
EPA Proposed Effluent Guidelines:
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QUESTIONS?
Tim Lohner, Ph.D.Consulting Environmental Specialist
Water & Ecological Resource Services
614.716.1255
American Electric Power1 Riverside Plaza
Columbus, Ohio614.716.1000
aep.com