Final Environmental Impact Statement Volume II Appendix K, Part 2

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61 00 U COMMENTS OF U.S. ENVIRONMENTAL PROTECTION AGENCY RESPONSES TO U.S. ENVIRONMENTAL PROTECTION AGENCY 24 7. P. 2 -42, Para. 2. The unit values applied to capacity and EPA -50 The unit values used in the revised analysis appear in Section Y PP EPA-50 energy changes (based on estimates provided by NPPD) need to be 2.12. defined. Do they refer to foregone power sales, so, allowances, or some other component? As already stated, these values need to be presented and explained in Appendix G. EPA -51 The revised economic analysis does not include explicit EPA -51 8• P. 2-43, para. 1. The discussion of S02 production and use of allowances requires more elaboration. If implementation of an consideration of S02 allowances. alternative requires additional fossil fuel generation, NPPD may have to use additional S02 allowances. The assumption in this paragraph -- that this would advance installation of a scrubber EPA -52 The production cost analysis has been eliminated. at an existing unit -- may not be correct. If it exceeds its Phase II S02 emissions cap, NPPD may purchase additional allowances as a less costly means of compliance than scrubbing. EPA -53 Phase II allowances are currently selling for $145- 155 /per ton The production cost analysis has been eliminated. (see Utility Environment Report, May 27, 1994). However, NPPD may hold enough unused allowances to offset any additional S02 emissions from a replacement coal -fired plant, if one is EPA -54 The economic analysis is limited to power benefits and direct costs required. The use of existing allowances would involve no costs other than the implied value of the allowances consumed. The to the projects. Gerald Gentleman Station is not part of the maximum S02 allowances required as a result of replacement of lost generating capacity would be about 113 tons (Conservation licensed project. Intervenor's Plan). EPA -52 9- P. 2-46. The production cost analysis (Table 2 -13) includes for relicensing measure. The table does EPA -55 The economic analysis appendix has been very much simplified in present value costs each not include costs for additional energy and capacity that may be keeping with current Commission policy. required due to foregone power generation. The view stated in the RDEIS is that inclusion of these costs would amount to double counting, because each alternative was adjusted to take into account the effect it would have on average annual electrical generation. To ensure that potential costs of production are not underestimated, foregone energy and capacity costs should be used in the analysis at the generation levels required to meet the needs of the grid. EPA -53 . P. 2 -47. To be consistent with the other unit values llopresented, Table 2 -13 should express monetary values in thousands of dollars and unit cost in $ /mWh (not mills /kWh). 11. P. 5 -6. Table 5 -1 ( "Comparative Environmental Impacts ") EPA-54 indicates that the Gerald Gentleman Plant may have to curtail operations during dry years under some alternatives (e.g., the Nebraska Plan and Modified Nebraska Plan). This could represent a significant impact and cost, and should be included in the economic evaluation of these alternatives. The RDEIS does not appear to have included this in the analysis of costs. Appendix G. To reiterate the first general comment about EPA -55 112. economic analysis, the information in this Appendix does not include enough description and explanation to allow independent 24