APPA Engineering & Operations Technical Conference

1. APPA Engineering & Operations Technical Conference Presented by: Dale Evely – Southern Company Generation April 17, 2007 Preparing for Mercury Monitoring

2. Basic Outline • Regulatory overview • Impact on Southern Company • Technology review process • RFP process followed • Implementation plans and staffing • Open issues with the technology

3. Regulatory Overview • EPA’s Clean Air Mercury Rule (CAMR) issued March 15, 2005 • Cap and trade – two phases, 2010 and 2018 • First phase cap set at 38 tons • Second phase cap set at 15 tons • Mercury monitoring must be in place and certified by January 1, 2009 • Rule left the impression that mercury monitoring technology was already proven

4. Impact on Southern Company • Approximately 1000 mercury monitors required across all affected industries in the United States • Approximately 56 Southern Company Generation (SCGen) stacks require some sort of monitoring • 5 of the 56 are new FGD stacks coming on-line in 2008 • 4 new FGD stacks coming on-line in 2009 • 6 additional FGD stack systems needed in 2010 • At least 49 mercury monitors required in the near term

5. Technology Review Process • EPA began evaluations of mercury monitoring technology using coal combustion test facilities around the year 2000 • EPRI CEM Program began high level evaluations of the technology in the same time frame • Southern Company followed the issue through EPRI • EPRI report 1004076 in 2002 showed existing monitors were semi-continuous and needed further development

6. Technology Review Process • Mid-2004 indications were that EPA was working on setting mercury monitoring requirements • EPRI setup a supplemental project to work with EPA on monitor evaluation/development and SCGen signed on to it as a funder • SCGen decided its own hands-on evaluation would also be required since 61 systems were believed to potentially be needed • SCGen needed to begin budgeting for the potential monitoring

7. Initial Budgeting Assumptions (2004) • Able to plug a mercury analyzer into our existing SOx/NOx racks in our existing shelters • Could slightly modify our existing dilution air clean-up systems • Existing probes and sample lines would work for Hg • Oxidized to elemental Hg conversion done at analyzer using dry means • Calibration gas cylinders would be used • Analyzer cost would hold or fall over time

8. SCGen Monitor Review Process • Had excellent working relationship with our CEMS integrator since 1992 and a lot of synergies with them • Began discussions with our integrator to jointly become more familiar with Hg monitoring technology • Had first of three different monitors (from different manufacturers) up and running at Plant Crist in early 2005; moved to Plant Yates in early 2006 • Two of the monitors were promising • One monitor was a disaster

9. EPA Monitor Review Process • EPA desired to “prove” the technology • Identified a dry stack in North Carolina and a wet stack in Kentucky as demonstration sites • EPA allowed EPRI’s contractor to observe and provide feedback • Difficulties at both sites keeping the monitors running and Part 75 QA/QC procedures were not attempted • EPA Dry stack work shutdown late 2005 • EPA Wet stack work shutdown early 2006

10. EPRI Monitor Review Process • EPRI took over the Kentucky wet stack site • EPRI desired to work with the manufacturers to further refine the technology • EPRI also desired to identify issues to EPA that would impact meeting Part 75 QA/QC requirements • Site has provided great value to the manufacturers and to the industry and much needed feedback to EPA • Seven different systems are currently installed at this site and will continue until August

11. SCGen CMM Procurement Process • SCGen CEMS Task Force began Continuous Mercury Monitor (CMM) procurement planning in early 2006 • Concerned that only two manufacturers appeared to be close to an acceptable solution • Questionable that industry need for 1000 monitors could be met by just these two manufacturers • Decided to “lock” manufacturing and integration capacity to meet our needs

12. SCGen CMM Procurement Process • Basic schedule that was followed: • 7/01/06 Begin development of Specification • 8/01/06 Issue RFP • 9/05/06 Begin Bid Evaluation • 9/15/06 Assemble Implementation Team • 9/15/06 Begin refining overall cost estimates • 10/05/06 Purchase Recommendation to Management • 10/31/06 Award Volume Procurement Contract • 4/05/07 Deliver first System

13. SCGen CMM Specification High Points • Must meet 40CFR75 QA/QC, 40CFR75 certification, and CAMR monitoring requirements • 90% or better availability on quarterly basis • 90 day or better operation on Hg converters • Relative accuracy that allows annual testing • Easy interface to existing CEMS DAHS • NIST traceable, elemental and oxidized, integrated and automatic calibration gas generators • Named only two acceptable manufacturers

14. SCGen CMM Specification High Points • Options for standalone shelters, dual unit shelters, installation at factory in already purchased shelters, installation at site in existing shelters, and more • CMMS must pass all required certification tests • CMMS software updates and system upgrades to meet performance specifications included beyond January 2009 • Bulk of deliveries staggered from April 2007 through July 2008

15. Technological Cost Impacts • Probes and sampling systems more complicated and expensive than SOx/NOx expectation • Umbilical lines cost about twice SOx/NOx lines • Calibration gas cylinders not viable • Entire rack needed per measurement point • Compressed air need greater than expected • Air clean-up needs increased with volume • Higher Risk = Higher Cost • Craft labor and installation cost increases

16. Sample Extraction, Dilution & Conversion Sample Analysis Rack Inertial Probe Sample Transport Umbilical CMM System Overview Mercury Analyzer Calibration Gas Generator Dilution Probe Controller Zero Air Supply

17. CMM Budgeting Assumptions (2007) • Average hardware/software cost twice (or more) of what was originally expected • Average installation cost twice (or more) of what was originally expected • Some sites require air compressors, platforms, etc. • Certification testing cost unknown but could be $100,000 each or more • Annual maintenance cost expected to be $200,000 or more per monitor

18. CMM Program Implementation • Assembled a multi-discipline, dedicated team consisting of: • Program Lead Engineer • I&C, Electrical, Mechanical, and Civil Design Leads • Scheduler & 2 Project support engineers • 2 construction liaisons • Team assisted by: • Retrofit project liaisons • Environmental compliance liaisons

19. CMM Program Implementation • Standardized approach to ensure: • Each system uses a standard vendor drawing package • Each system tested at Integrator’s factory • Mounting pad and infrastructure in place before system arrives at plant site • Installation schedule to support certification testing of all systems in 2008 following expected SOx/NOx RATA testing schedule • First system arrives 7 weeks before next system to allow some back fitting of lessons learned

20. CMM Technology Open Issues • Current SOx/NOx CEMS regularly gives 95%+ data availability • SCGen and EPRI testing have shown availability only in the high 50%’s (but improving) • Biggest problems have been probe plugging and mercury hide-out in the sampling systems • Certification/Accuracy verification is both a technological and a regulatory issue

21. CMM Compliance is a 3 legged Stool • Manufacturers have been making great strides on improving reliability issues • Certification and Accuracy verification issues are in EPA & NIST courts RATA Testing Calibration Reliability

22. Accuracy Verification Issues • Calibration gas in cylinders not a good option • Monitored mercury must include total of both elemental and oxidized mercury • Elemental mercury gas generators proven • Oxidized mercury generators still in development • NIST still investigating all three mechanisms • Once done EPA must issue a NIST traceability protocol • Systems already being manufactured & installed

23. Certification Test & RATA Issues • Ontario Hydro Method (OHM) requires great care, skill and much time • Instrumental Reference Method (IRM) is still in development and start-up cost may be extreme • Sorbent trap Reference Method (TRM) promised this year and only real hope for 2008 testing • SCGen has 52 systems to certify in 2008 and 52+ to RATA every year afterwards • OHM would take more than 1 week each

24. CMM Reliability Open Issues • Mercury hides out in the sampling system • Flue gas (and calibration gas) moisture seems to minimize this hide out • Selenium and other flue gas constituents tend to poison the mercury converters • Sampling systems can plug up over time • Ambient temperature at probe can be an issue

25. CMM Summary • Write a Performance Based Specification • Sign up an Integrator and lock analyzer system and integration shop capacity • Educate your management that capital and O&M costs right now are a shot in the dark • Educate your local regulators that EPA is behind • Expect CAMR monitoring requirements to be revised (DFR) by mid 2007 and respond as needed • Realize you have a lot of company and use your EPRI investment if you have made one

26. Industry CMM Status • EPRI CEM business meeting 2/28/2007 with 19 coal utilities represented • 290 CMM systems needed among this group • 142 of these 290 already committed to • Average expectation is one technician needed for every two monitors for O&M • Sorbent trap based RM being counted upon by most for certification test purposes

27. Questions ?