An investor owned utility (IOU) in the South with multiple coal units encountered NOx and mercury compliance issues in meeting the Clean Air Interstate Rule/Cross State Air Pollution Rule and the SO2 limits and MACT Rule. The company knew they wanted to determine the best alternative for meeting the compliance requirements while considering both costs and risks, and engaged MCR to assist in developing an optimal plan.
MCR assembled a cross-functional working team of client staff to identify the specific compliance requirements and to identify, discuss and evaluate compliance alternatives. Through a series of workshops, MCR helped the team to: define the problem statement; gain a common understanding of the project background, facts and assumptions; and identify specific costs and risks by leveraging previous engineering studies.
With this information, we developed multiple alternatives, and conducted financial and Monte Carlo risk analysis. MCR summarized the alternatives and results, and developed recommendations for meeting the compliance requirements.
The client pursued MCR’s recommended plan to implement a combination of initiatives to meet the compliance standards, which included purchasing a natural gas plant, potentially changing the unit dispatch sequence and purchasing emission allowances. This recommended plan saved approximately $70 million in present value terms compared to the original plan of installing much more costly SCRs at two units.