CAIR & MATS

2012 Southern SectionalAWMA Annual Meeting& Technical Conference

September 12, 2012

Chris Goodman, P.E.Environmental Strategy

Southern Company Generating Facilities

• Through 2011, invested about $8.3 B in environmental controls

17 FGDs on 25 units 17 SCRs 4 baghouses with ACI

• Projected base capital environmental expenditures of about $1.5 B over the next 3 years; Projected to spend an estimated $1.8 B for MATS and $0.5 B for ash and water compliance over the next 3 years

• Since 1990, emissions of sulfur dioxide and nitrogen oxides are down over 70 percent,

while electricity generation has increased by more than 30 percent to serve growing demand

Environmental Program at a Glance

Environmental LeadershipNew Projects and Research Programs

National Carbon Capture CenterWilsonville, Alabama

Integrated Gasification Combined CycleMississippi Power Plant Ratcliffe

Second Largest U.S. SolarCimarron Solar Facility

Largest U.S. BiomassNacogdoches Generating Facility

Mercury Research CenterGulf Power Plant Crist

Start-to-finish 25-MW CCSAlabama Power Plant Barry

Water Research CenterGeorgia Power Plant Bowen

Power Delivery and End-Use Technology Lab

U.S. first New NuclearGeorgia Power Plant Vogtle

Smart Grid: Integrated Distribution Management System

Air Quality Science CenterSEARCH network; ARIES; mercury

• CSAPR vacated and remanded to EPA August 21 (CAIR remains in place)– Court held that EPA exceeded its CAA authority

• CAIR Phase II begins in 2015– Tighter SO2 and NOx allowance requirements

Transport Rules (CAIR/CSAPR)

Mercury and Air Toxics Standards (MATS)

• Final rule issued by EPA on February 16, 2012– Largely unchanged from proposed rule– Some additional compliance flexibilities

based on comments

• Imposes stringent emission limits for mercury, particulate matter, and acid gases

• Could force many retirements and large capital expenditures across the industry

• Unreasonable compliance time of three years(April 2015), with case-by-case 1-year extensions

2011 2012 2013 2014 2015 2016 2017 2018

MATS

CriteriaPollutants

(NO2, SO2, Ozone, PM)

CoalCombustionResiduals

Water316 (b)

Effluent Guidelines

GreenhouseGases (GHGs)

(Reporting Rule,Permitting,

PerformanceStandards)

ProposedRule

CommentPeriod

Final Rule

MATS Rule Pre-compliance Period for existing sources

MATS Rule Compliance for existing sources

New or RevisedStandards

Nonattainment Areas Designated andState SIPs Developed

NAAQS SIP Compliance

CAIR Phase I (until new CAIR Replacement Rule)

Possible Compliance w/CAIR RR

Final Rule

EPADevelopingFinal Rule

CCR Rule Pre-compliance

PeriodCCR Rule Compliance

EPA Developing Final316(b) Rule

Developing New Effluent Guidelines Rule

Action

EPA GHG Reporting Rule Compliance

Best Available Control Technology for Modified/New Sources (PSD/NSR/BACT) Smaller Sources Included by EPA

GHG Performance StandardsInc. Existing Units Compliance with New GHG Rules Pre-compliance

Effluent Guidelines ComplianceFinal Rule

Final

Rule316 (b) Rule Compliance

(within 8 years of Final Rule)

Effluent Guidelines Pre-compliance Period

316 (b) Rule Pre-compliance Period

FinalRule

CAIR Phase II (until new CAIR RR)

Proposed and Final CAIR RR

EPA New Regulatory Actions Timeline

• CCR Rule• Effluent Guidelines

AirHeater

BottomAsh

FlyashGypsum

NOX

CombustionControls

Bag

ho

use

(H

g)

(Ac

tiv

ate

d C

arb

on

Inje

cti

on

)Coal-Fired Boiler NOx & Hg Control

SCR

SO2 & Hg(acid gases)

ControlScrubber

Dust&Hg Control

ESPSNCR

• CAIR/CSAPR• PM-2.5 NAAQS• 8-Hour Ozone NAAQS• Mercury (Cobenefit)• Regional Haze (BART)• NO2 NAAQS

• Utility MACT

• CAIR/CSAPR• Regional Haze (BART)• Mercury (Cobenefit)• PM-2.5 NAAQS• SO2 NAAQS

NewStack

CO2

Reduction

Groundwater Monitoring/ Dry

Handling / Landfilling / Pond

Closure

• 316(a) Thermal• 316(b) Intake Structures

• Effluent Guidelines

Scrubber WasteWater

Physical/Chemical/Biological Treatment

Scrubber WasteWater

Ultra Fine Filtration

• GHG Regulation/Legislation

Process Water

Cooling Tower/ Intake Screens

Emission Control Technologies for Coal-Fired Boilers

Scrubbers

CCRWater

SCRs

CC

/CT

Nu

cle

ar IG

CC

Re

ne

wa

ble

s D

SO

NOx

SOx

Hg

PM

Ash

H20

CO2

CCS

Natural GasIGCC

Nuclear

Solar

Wind

Biomass

Regulatory Drivers

New Resources

Balance

Baghouses

Constructive Regulation

Healthy Capital

Spending

High Reliability Low Prices

High Customer Satisfaction

Customers

Hydro

Demand Side Options

Preliminary Assessment of Impactsof EPA Rules – More to Come

Possible Outcome

• Install new controls on 13 GWs - 65% of coal fleet.

• Retire 3 – 4 GWs of coal-fired generation.

• Fuel switching of 3 -4 GWs, primarily to natural gas

Potential Impacts

• Estimated $13B - $ 18B capital cost through 2020

• Possible 10% - 20% electricity price increases over the next 10 years

Summary

• Cumulative impacts of MATS, CSAPR/CAIR, 316(b), new

effluent guidelines, CCBs, NAAQS, GHGs and other

requirements must be considered when making decisions

• Research, testing and planning are the keys to finding the least

cost, least regret, site specific solution

• Continuous process and is complicated by uncertain future

environmental rules and national energy policies