untitled

ILLINOIS POLLUTION CONTROL BOARD

June 21, 2006

IN THE MATTER OF

)

PROPOSED NEW 35 ILL ADM. CODE) R06-25

225 CONTROL OF EMISSIONS FROM) (Rulemaking - Air)

LARGE COMBUSTION SOURCES )

(MERCURY)

)

TESTIMONY OF DAVID FORTER

and SID NELSON

BEFORE MARIE E. TIPSORD

HEARING OFFICER

The testimony of David Forter and Sid

Nelson, witnesses called in the rulemaking proceeding

before the Illinois Pollution Control Board taken on

June 21, 2006, at 9:00 a.m., at the offices of the

Environmental Protection Agency, Springfield, Illinois,

before Holly A. Schmid, Notary Public and Certified

Shorthand Reporter, CSR No. 084-98-254587 for the State

of Illinois.

Page1

A P P E A R A N C E S

MEMBERS OF THE ILLINOIS POLLUTION CONTROL BOARD:

Ms. Marie E. Tipsord, Hearing Officer;

Dr. G. Tanner Girard, Board Member;

Ms. Andrea S. Moore, Board Member;

Mr. Anand Rao, Board Staff;

Mr. Thomas Johnson, Board Staff;

Mr. Tim Fox, Board Staff;

Mr. Nicholas Melas, Board Staff;

Ms. Alisa Liu, Board Staff.

COUNSEL FOR THE ILLINOIS

ENVIRONMENTAL PROTECTION AGENCY:

Mr. Charles Matoesian;

Ms. Gina Roccaforte;

Mr. John Kim;

Mr. Richard Ayres;

COUNSEL FROM SCHIFF-HARDEN

Ms. Kathleen Bassi;

Mr. Stephen Bonebrake;

Mr. Sheldon Zabel;

Mr. Jim Ingram, Dynegy, Inc.

COUNSEL FROM JENNER & BLOCK

Mr. Bill Forcade;

Ms. Katherine Rahill.

COUNSEL FROM McGUIRE-WOODS:

Mr. James Harrington;

Mr. David Rieser;

COUNSEL FROM CHICAGO LEGAL CLINIC

Mr. Keith I. Harley

Page2

E X H I B I T S

IDENTIFICATION

PG.

Exhibit 45

Exhibit 46

Exhibit 47

Exhibit 48

120

Exhibit 49

122

Page3

everyone. Welcome back. This is day seven I believe of

our continuing -- eight. No. This is only Wednesday.

Oh, yeah, it is day eight. So let's get on with it.

I'm Maria Tipsord. With us today are

Andrea Moore and Dr. Tanner Girard, the presiding board

members. Also present is Alisa Liu from our technical

unit and Tim Fox who is Andrea Moore's assistant.

Connie Newman and Erin Conley are going to be in and out

today. Erin is working on some other actual board

business, believe it or not, and John Knittle will also

be in and out because he, too, also has the other board

business to do. I can't believe there's anything else

going on, personally.

We are going to continue with

Mr. Nelson who is under oath. We will proceed with

Kinkade Question No. 2. Before we do that, in speaking

to Mr. Kim and the Agency, it's my understanding that

they would like to and are hopeful that the schedule

today will be the completion of Mr. Nelson, proceeding

Mr. Porter and then Dr. Hausman and finishing with

Dr. Hausman today, so that we could start with

Dr. Staudt tomorrow. Given that, and given that I had

already indicated that we would go late tonight, if it

Page4

looks like we are going to finish up with Dr. Hausman as

the day proceeds, we may even go a little later than

seven. I'm not going to keep you here until 10, but if

it looks like we can finish up in another half hour at

seven o'clock, we will finish and start with Dr. Staudt

in the morning. That being said, Mr. Forcade.

CROSS EXAMINATION BY MR. FORCADE:

Q. Before we go to Question 2, I have some

follow-up questions, if I could.

MADAM HEARING OFFICER: Follow-up

questions to Question No. 1.

MR. FORCADE CONTINUES:

Q. Mr. Nelson, could you tell me what your

degree in engineering -- what field or areas your

engineering degree is in.

A. Technically, on the diploma, it says

"Mining Engineering." It's from Penn State, which is a

coal kind of university. I was in the mineral

processing option of that, so --

Q. I'm sorry?

A. Mineral processing engineering, so.

Q. What courses in deposition modeling have

you taken at an educational institution?

A. I don't have courses in deposition

Page5

modeling, but I spent four years at Harvard Kennedy

School of Government. Much of that is a Kennedy Fellow

of Science Technology and Public Policy where I do have

quite a bit of experience in distilling science and

technology in applying that to public policy issues.

Q. Did you take any educational courses at

Harvard in atmospheric chemistry, deposition modeling,

or similar matters?

A. No.

Q. Do you have any educational courses that

you have taken on those topics?

A. No.

MADAM HEARING OFFICER: Question No.

MR. NELSON: Question No. 2: "Have

you reviewed Dr. Staudt's testimony?" Yes, I have. "If

so did you rely on Dr. Staudt's testimony in forming any

opinions or testimony?" No, I did not. So B and C

don't apply. No. 3: "Have you reviewed the TSD?" Yes,

I have. "If so, did you rely on the TSD in forming any

opinions or testimony?" No, I have not, so B and C,

again, don't apply.

MR. FORCADE CONTINUES:

Q. Mr. Nelson, I believe you indicated that

Page6

you have been provided a copy of the TSD at the early

stages of your connection with the Illinois EPA relating

to this matter. Is that correct?

A. I got an E-mail with it included, yes.

Q. Would it then be safe to say that you had

no part in writing the sections of the TSD because you

received a copy prior to being retained?

A. That would be correct. I had nothing to

do with writing it.

Q. So you had no part in drafting the TSD?

A. None at all.

MR. NELSON: No. 4: "Have you

reviewed the ISF report?" No, I haven't, so the rest of

that is not applicable. Have you reviewed the

information required by the Agency from any of site

inspections at each of the Illinois coal power plants

during the control configuration inspections during late

April and early May of 2006?" I hadn't, until I got

this question and then I asked for this data and some of

it was provided to me. No. 6: "Did you assist in

writing any portion of the TSD, and if so, which

sections? No. I did not participate in that.

CROSS EXAMINATION BY MS. BASSI:

Q. On Question No. 5, you said you had not

Page7

seen the control configuration inspection reports, until

you got the question, and then you -- some of it was

provided to you?

A. Yeah. It came by E-mail and the file was

too big, so I got an edited version of it with most of

the data. A lot of the -- some of the graphics were

very large, and they weren't included, so they couldn't

get it to me by E-mail.

Q. Did someone -- did someone who was sending

it to you edit it? Is that what you're saying?

A. Just to get the file size down. Again, it

was photographs that were missing, and they take up a

lot of room.

Q. The photographs were missing?

A. Most of the photographs.

Q. Who did the editing?

A. Dr. Staudt is the one who sent it to me.

He broke it into a couple files because, like I said, it

was a very large file.

MR. FORCADE CONTINUES:

Q. You said that most of the photographs were

missing. Does that imply that you reviewed the complete

document at a later time and made comparisons.

A. No. The photographs were really

Page8

unnecessary.

Q. How did you know there were photographs

there?

A. By the layout. There would be some notes

about these inspections, and then there would be a

drawing of the configuration, and then there would be

photographs, and like, there were one or two photographs

in there, but you would see a couple blank pages. I

don't think it was missing anything particularly

important.

MADAM HEARING OFFICER: I am going to

shut this questioning off about what was contained in

that because right now that's not an issue. He

testified he didn't receive that, until after his

testimony came in. So far there hasn't been any

questioning to him about what that material means, and

so what was in that material I'm not sure is relevant at

this point because, at this point, he didn't review this

when he got his testimony, and so far none of Kinkade's

questions have asked him to draw conclusions from that

information. I'm not sure we need to belabor what was

in it.

CROSS EXAMINATION BY MR. BONEBRAKE:

Q. I have a related question. Yesterday in

Page9

Exhibit No. 44 was introduced into the record, and it's

the first page entitled "Statewide Coal-Fired Electric

Utilities" and I think, Mr. Nelson, you discussed this

briefly yesterday. Was this document with all these

pages something you prepared or was it provided to you

by somebody?

A. It was provided to me. I had no hand in

preparing it. I had asked for an update for my own data

as to what the configurations of the various plants were

and what -- there's coal data in there, what kind of

coals they are burning.

Q. And exhibit 44 -- you may have mentioned

this yesterday and if so, I missed it, but when was it

that you received Exhibit 44?

MADAM HEARING OFFICER: He did say the

date on the document that he received was sometime in

March, I believe, March 3.

MR. NELSON: My document was March 6,

so it was after March 6.

MADAM HEARING OFFICER: They are going

to provide us with that actual document.

MR. BONEBRAKE CONTINUES:

Q. So there's two versions of this because

the version that's been entered into the record is dated

Page10

May 30, `06. So have you done any independent

investigation to confirm the information that's provided

in Exhibit 44?

A. No, I haven't.

Q. Did you rely upon the information of

Exhibit 44 or the earlier version of that exhibit?

A. In forming some of the opinions that I

have, but not in forming my testimony. That was

submitted earlier.

Q. So you have some additional opinions,

above and beyond, what's in the testimony. Is that

correct, that you're offering today?

A. Any information that I have gathered forms

the opinions that I will express today. You can't help

it. There are no real significant new information in

there. A few more plants have switched to

sub-bituminous coals that clarifies some of the

configurations. There have been some updates with

respect to some of the boiler types and things of that

nature.

MS. BASSI CONTINUES:

Q. Going back, then, to "The Compliance

Configuration Inspection Report, did that form your

opinions?

Page11

A. In particular, there's data in that on

SO3, flue gas conditioning systems at numerous of the

plants that are not in the fact sheets, so that would be

some information that I've gathered within the last two

weeks.

Q. And does that inform your opinions that

you are going to express today?

A. Yes.

Q. Was the copy of that report that you

received redacted at all? Did it have parts of it that

were blacked out?

A. No. Nothing was blacked out, just a few

missing photographs.

MR. KIM: If I may, first of all, any

documentation that Mr. Nelson looked at there might be

one additional piece of information -- well, let me back

up. My understanding is one of the compilation

documents that we submitted yesterday, which is dated in

May of `06, was not the version that Mr. Nelson looked

at. He looked at a version that was dated two months

later. We are in this process of tracking that down.

I think the only distinction is the May one might have a

little more information than the March one, but there's

no conflicting information is my understanding. If

Page12

there is an additional piece of information that he

might have received from Dr. Staudt that is not that

document, we're going to copy that, and make that

available, as well. If that's the case, the only reason

it hasn't been done is, frankly, we're just sort of

drowning in paper on this, but that will be done, as

well. I don't understand the relevance about the

pictures and so forth. Whatever we present is going to

have all the pictures that would ever be there, and if

there's missing pictures that we didn't see we will take

care of that. Having said all that, and just to inject

a little more confusion, our intent in presenting

Mr. Nelson and David Forter of ICAC was that they would

be addressing sort of, in tandem, issues concerning

technology availability and such. Mr. Forter, because

of his organization's background, has a broader

overview, and the questions I think, indeed, that were

presented to him were a little more general in nature.

Mr. Nelson has more specific questions. He has a

greater number of questions and more specific to perhaps

his company's products and some specific technology

applications. I apologize, but because of some bad

directions that Mr. Forter received, he was not here at

exactly nine o'clock. We would have put him on at nine

Page13

o'clock, especially since Mr. Nelson is only on Question

2 this morning. If nobody has any objection, I would

like to keep Mr. Nelson here at the table, so he can

answer anything that comes up, but I would like to

provide Mr. Forter because I'm hoping if he actually

goes through his questions, which are shorter in length,

but more general in nature, that might set some of the

foundation for any questions that would be later

answered by Mr. Nelson, and I apologize for jumping a

little out of order, but I'm saying this now when we are

only five or six questions into Mr. Nelson's testimony.

If someone has a problem with that, we can continue on

with this, but I'm just saying that I think

Mr. Forter's questions and answers are probably a little

more general in nature than some of the ones presented

to Mr. Nelson.

MADAM HEARING OFFICER: Does anybody

have any objection?

MR. KIM: They will both be together

as a panel.

MADAM HEARING OFFICER: Then let's

bring up Mr. Forter, and we will pick up on Question 7

for Mr. Nelson.

MADAM HEARING OFFICER: I have been

Page14

handed a copy of David Forter's prefiled testimony. If

there's no objection, we'll mark that as Exhibit No. 45.

Seeing none, it's marked as Exhibit 45, and could we

have Mr. Forter sworn in, please.

(Exhibit No. 45 was admitted.)

(At which point, Mr. David Forter was

sworn in by the court reporter.)

MR. KIM: Mr. Forter hasn't been a

party to any of the testimony that's happened so far, so

he's fresh.

MADAM HEARING OFFICER: Then I believe

Kinkade and Prairie State had one question, as well, but

it's similar to Question 7 of Kinkade, so if you want,

we will start with Kinkade.

MR. KIM: Thank you for the

accommodation.

MADAM HEARING OFFICER: Mr. Forter,

what we have been having the witness do is read the

question and then respond to it.

MR. FORTER: I will read the question

and then answer the question. "Did you receive any

information from the Agency prior to forming any

opinions, including, but not limited, to the opinions

contained in your testimony? A, "If so, describe that

Page15

information in detail and if so, did you rely on the

information in forming any opinions in your testimony?

If so, specifically, what opinions or parts of the

testimony did you rely on the information that you

received from the Agency." The body of the question is,

"Did you receive any information from the Agency prior

to forming any opinions, including, but not limited, to

the opinions contained in your testimony?" And the

answer is no. Question No. 2: "Have you reviewed

Dr. Staudt's testimony? If so, did you" -- the answer

is no. Actually, I haven't. "If so, did you rely on

Dr. Staudt's testimony?" and the answer would be no.

"If so, which parts?" And the answer is still no. C:

"If so," still no.

MADAM HEARING OFFICER: Question No.

MR. FORTER: "Have you reviewed the

Technical Support Document?" And the answer is yes,

parts of it. I seen that just recently and had taken a

look at it primarily just as it reflects back on my

comments that were already made. "If so, to which parts

of the testimony did you rely?" In general, again, we

have broader questions and broader issues, and it was

looking at general issues that were being brought up.

Page16

MR. FORCADE CONTINUES:

Q. Just as a follow up, did you provide any

information to the Agency that would have formed the

basis for information in the TSD or were you contacted

after the TSD had been prepared?

A. I was contacted after the TSD was

prepared.

MR. BONEBRAKE CONTINUED:

Q. Based upon your review of the TSD, were

there any assertions or statements in the TSD that you

disagreed with?

A. It was a general overview just before

actually this hearing, just to kind of understand a

little of what was in there. Nothing in particular

jumped out at me.

MR. FORTER: "Have you reviewed the

ICF report attached as appendix C to the TSD?" And the

answer is no. "Have you reviewed the information

acquired by the Agency from any state inspections at

each of the Illinois coal-fired power plants control

configuration inspections during late April or early May

of 2006?" I have seen a summary of those things. I'm

not sure which date it was, and that was just prior to

this hearing.

Page17

MR. FORCADE CONTINUES:

Q. For clarification, that would be after you

made your prepared testimony?

A. After my prepared testimony.

Q. Therefore, you didn't rely on that in your

prepared testimony?

A. Not at all.

MADAM HEARING OFFICER: Question No.

MR. FORTER: "Did you assist in

writing any portion of the Technical Support Document?"

The answer is no. Question 7: "What is your definition

of `commercially available'"? And there is no

generally-accepted definition, but we assume as an

institute, Institute of Clean Air Companies, when

something has been offered for sale, it's been -- it's

commercially available. Once it's been sold, it's

definitely commercially available.

MR. FORCADE CONTINUES:

Q. Are you suggesting that any time a company

who puts an advertisement out offering a product for

sale that it's commercially available?

A. Some qualification there, I think if there

was a likely prospect of a market out there to buy it.

Page18

I know of products that have been out there on the

market for 20, 30 years with no prospect of being sold.

In this case, there was a regulatory environment, at

least, on a federal basis that makes it a likely market

for technologies.

Q. Would it be safe to say, then, your

definition of commercially available has to do simply

with the purchase an sale of such pieces of equipment?

A. Yes.

Q. It has nothing to do with whether or not

the equipment will achieve the goals identified?

A. The goals that are achieved or what are

developed between the customer and the vendor, and it

also trying to meet a permit requirement, so there are,

for instance, there's selective catalytic reduction

devices out there, which will achieve maybe in a range

of 20 percent, so to say it's commercially available

only at a certain achievement, would be wrong because

that technology has been available for over 15, 20 years

in this country.

Q. What I'm trying to get at is, if you're

saying, as I believe you did, that "commercially

available" was simply the act of someone offering it and

possibly someone purchasing it, there's no component of

Page19

that evaluation on the achievability of that particular

piece of equipment in your definition, is there?

A. Every application is different, so the

achievement will be different in different applications.

We know -- for sorbent injection, it has very broad

range of achievement on different types of coals and

different configurations. It's offered for sale. It's

actually been sold. I think whether it's commercially

available is a moot point at this point. One of the

things we have also up on our website is a list of 16

different sales that actually have occurred around and

including sorbent injections. At that point, there's

actually been a contract made between a customer and a

vendor and that product has been sold.

Q. If a product is sold, do you subsequently

follow it to see if it achieves the objectives

identified?

A. No.

Q. So you could have a product that's

commercially available that did not achieve the goals of

-- is that correct?

A. That's correct.

MR. FORCADE: I'm confused as to

whether I should repeat the questions for both witnesses

Page20

or we have switched witnesses.

MADAM HEARING OFFICER: We have

switched witnesses. We will go back to Mr. Nelson

because there are many more questions for Mr. Nelson, so

rather than treat them as a panel, I think --

MR. FORCADE: I'm just confused.

MADAM HEARING OFFICER: We'll go on

with Mr. Forter and go back to Mr. Nelson because there

are many, many more questions. I also would note that

this question of commercially available is the one that

Prairie State asked, as well, so we are covering Prairie

State's question at the same time.

CROSS EXAMINATION BY MR. HARRINGTON:

Q. Does commercially availability convey with

it any concept of the volume of material or the ability

to meet any particular market?

A. The Institute deals with a wide range of

air pollution control devices and technologies. In

fact, some of those cases, they are technologies, and

it's a way of doing something, as opposed to an actual

piece of hardware, or in this case, a free agent, which

is injected. So these technologies are commercially

available when they meet sort of a performance

specification. They do achieve something, obviously, in

Page21

order to be able to work. It does not specify that.

When a customer gets in with a vendor, they will work up

different language in their contracts as to what they

will achieve with so much free agent and things like

that.

MR. HARRINGTON: Would you read back

the question, please.

(At which point, the prior question

was read by the court reporter.)

MR. HARRINGTON CONTINUES:

Q. By that, I'm not talking about its

performance, just for clarification, but for example,

does it say, "Yes. It's available to anybody who might

want it?" or could it have very limited supply and still

be commercially available?

A. Again, we are into an area where there is

no definition of "commercially available." My best --

Q. What do you mean by "commercially

available" in your testimony?

A. My best gauge is when something has been

sold. We can backtrack that to when it was being

offered, and in this case, we are well beyond being

offered. We are being sold. It actually has been sold.

Q. But that does not tell us or the Board

Page22

whether the suppliers can supply one plant or 100

plants. It says some has been sold to somebody, and

that's all we know when you say "commercial

availability." Just those terms. I'm not worried about

any particular product.

A. Right.

Q. Does it mean that it has passed any

Highland test to demonstrate it's effectiveness?

A. Typically, I know that the Department of

Energy and even EPA will talk about commercially

available, and they will show how something actually

goes through the initial testing, the RND phases,

demonstrations, which we have had more demonstrations on

activated carbon injection than I think anything I have

ever seen before, before it actually being sold, but

there is no -- again, there is no clear-cut definition

of how that actually occurs, but in this case, we have

clear-cut demonstration on many different

configurations, many different coal types.

MR. HARRINGTON: Would you read back

the question, please?

MADAM HEARING OFFICER: I'm sorry.

(At which point, the prior question

was read by the court reporter.)

Page23

MR. HARRINGTON CONTINUES:

Q. Just the term "commercial availability" is

all I'm asking, not particular product.

A. I will go back to the beginning.

Q. That's a yes or no.

A. The offering of a technology for sale and

that technology can, both, be hardware, software, human

ingenuity. That is the technology.

MR. FORCADE: I'm sorry. But we're

getting nonresponses to our questions. The questions

are really quite specific, and we can keep asking them,

and we can keep asking the court reporter to repeat

them, but if the answer doesn't relate to the question,

this is going to be a very long day and --

MR. KIM: I think the witness is

trying to answer the best he can. It may be that some

of these questions don't lead to an easy yes-or-no

answer. With that in mind, if we can -- I certainly

have no problem if maybe that point is not being made,

or if we can focus more on the answer then we'll

definitely do that because I want to cut to the chase,

too, but I'm just saying that maybe some of these things

are -- I think he's doing the best he can to answer. I

think it sounds like it's a fuzzy area.

Page24

MR. AYRES: Madam Hearing Officer, the

witness has said there's no definition of "commercial"

-- this is a term which they are asking him about which

doesn't have a definition. Now, all these follow-up

questions are trying to flush out what a definition is,

which the witness has already said there isn't one.

MADAM HEARING OFFICER: I must

respectfully disagree. The question -- his first

question was concerned the availability, the volume,

whether or not it could supply one plant or 100 plants,

and I think his answer was that the definition of

"commercially available" doesn't cover whether there's

enough product out there to cover one or 100, and the

second question was whether or not "commercially

available" also meant that there was -- that it worked,

in effect.

MR. HARRINGTON: That it had been

tested.

MADAM HEARING OFFICER: And his answer

was it's been tested, but that doesn't necessarily mean

that it is contained within the definition of

"commercially available."

MR. HARRINGTON: His definition.

MADAM HEARING OFFICER: His

Page25

definition, so I respectably disagree. I think you may

not be getting the answer you want to hear, but I do

think he is answering the questions to the best of his

ability about commercial availability and I'm getting

coffee at the break, I promise.

MR. HARRINGTON: If I might politely

say, you did a fine job of answering those questions.

If I heard that from the witness, we wouldn't be having

this discussion. Thank you.

MADAM HEARING OFFICER: I did not

incorrectly characterize your answers, did I?

MR. FORTER: No. You summarized them

very well.

MR. FORCADE: I was unable, when

Mr. Forter came on, to go back to the fundamental

questions of education, which I did for Mr. Nelson.

Could I have him inquire about his educational

background?

MADAM HEARING OFFICER: Sure.

MR. FORTER: I have a Bachelor's in

Microbiology from the University of Maryland. That is

my educational background.

MR. FORCADE CONTINUES:

Q. You have no engineering degree?

Page26

A. I have no engineering degree. I have

engineer course work, but no degree.

Q. What professional classes have you taken

since your undergraduate degree in microbiology that

would be applicable to the technology that you are

describing today?

A. I have been involved in air pollution

control for almost 20 years and my classes have been

on-the-job training both at the Metropolitan Washington

Council of Government. U.S. EPA, was on the transport

Commission with ICAC. My formal training has probably

been through my peer work.

MR. BONEBRAKE CONTINUES:

Q. Mr. Forter, are you currently an officer

with an Industry of Trade group?

A. I am a part of the board as executive

director for the Institute of Clean Air Companies.

Q. Can you tell me what the mission of that

particular institute is?

A. It is to develop and disseminate

information about the technologies for air pollution

control.

Q. And do you view yourself to be an advocate

for that institute?

Page27

A. I do.

Q. Is Mr. Nelson's company a member of the

institute?

A. Not at this time.

Q. Does the institute represent a number of

companies in the pollution control business?

A. We have 90 members.

Q. Is Mr. Nelson's company one of those

members?

A. No.

MADAM HEARING OFFICER: We are ready

to move on to Question No. 8? Question No. 8.

MR. FORTER: "What is your definition

of cost effectiveness?" Again, this is my definition of

"cost effectiveness," and it has to do with a technology

that is effective at reducing pollution, and then the

costs that's associated with that. And it varies from

pollutant to pollutant and from technology to

technology. We will find for NOx control, the cost

effectiveness would be very different than it is for

mercury. Mercury, as you know, is a hazardous air

pollutant, and the effectiveness of that and the

benefits of that are much greater because its an air

toxic.

Page28

MR. FORCADE CONTINUES: Will we be get

getting answers to the same questions for Mr. Nelson

now?

MADAM HEARING OFFICER: We will go

back to Mr. Nelson and cover these questions. You asked

these questions of Mr. Nelson, and we will cover those

when we are done with Mr. Forter. Question No. 9.

MR. FORTER: "What is your definition

of "economically feasible"? And again, its having a

technology that is available and then the economics of

it working within some marketplace, and usually, a

market is driven by some regulatory driver, such as a

federal rule or state rule, even local rules, so it's

being available and meeting some cost performance there.

MR. FORCADE CONTINUES:

Q. Are you then suggesting that a technology

required by any adopted or proposed regulation is, by

definition, economically feasible?

A. I'm sorry. Could you repeat the question?

Q. Are you suggesting, then, that a

requirement imposed by any adopted or proposed

regulation is, by definition, economically feasible?

A. Generally, when these rules and policies

are made, they look at the economics, and generally,

Page29

what is being proposed is economically feasible. They

go through a whole economic analysis, something that I

don't do, and not required to do as part of my

responsibilities.

Q. Since the particular regulation under

consideration here has not been adopted by any entity,

would it be safe to say that you have no idea whether it

is economically feasible?

A. Again, I will refer back to the fact that

we have -- there's been sales at -- 16 different sales

we have on our website that shows somebody believes it's

economically feasible to buy this. We have some

handouts on that. It's also on our website, which is

www.icac.dom, so the assumption here is somebody has

bought it for some regulatory requirement and the

economics are proving out themselves.

Q. Then would it be correct that you are not

incorporating any evaluation of the total cost of

construction in the operation of the equipment compared

to the amount of pollutant reduction that would be

achieved by that in making your definition of

"economically feasible"?

A. Well, the economic feasible -- are we

talking about sorbents? Are you referring to that?

Page30

Q. I'm just referring to the term

"economically feasible" which actually came from

Mr. Nelson's testimony, since that's where the questions

were directed, but the concept is that the terms

"commercially available" and "cost effective" and

"economically feasible" have been spread throughout the

testimony, and while there may or may not be definitions

to those, we are trying to find out what the individual

witness who uses that term means by it because it has

significant potential impact on the direction the Board

may choose to go in this proceeding, and I'm trying to

find out from you what you mean if you have used the

words "economically feasible" and what I'm hearing so

far is it has to do with adopted regulations, and I'm

trying to inquire if there's other aspects of an

evaluation you would use to determine if something is

economically feasible.

A. The economics in this case are overwhelmed

with the benefits from this. Using the information from

EPA, which says, for every dollar spent, you get 22

dollars back. For the capital costs for sorbents, we

are talking about somewhere less than -- around a

million dollars, so the economics here are such that

it's very feasible for achieving a reduction, but what

Page31

that reduction level might be is really up to the

regulatory body or to customers to determine what that's

going to be.

Q. In your definition of "economically

feasible" you make reference to an EPA report of some

type. Could you tell me what that report is and where

it is in the record?

A. I'm trying to -- I would have to review my

testimony where it referred back to an EPA document.

MR. AYRES: Could you point out where

it is in his testimony?

MR. FORCADE: It came from his answer

he just gave me.

MR. FORTER: EPA -- in doing their

Office of Research Development, within EPA, produced a

report that was used as a Technical Support Document to

CAMR, and I believe it's in proposal phase, and they

talked about the feasibility of the different

technologies and everything else. Their conclusion -- I

disagree with it -- was that -- the body of the document

is very good. The conclusion I disagree with.

MADAM HEARING OFFICER: Excuse me.

Before we go on, we have been handed a document that we

haven't marked as an exhibit. We need to get that taken

Page32

care of before we move on to any more exhibits.

"Commercial Mercury Control Technology Bookings" is

going to be marked as Exhibit 46, if there's no

objection. Seeing none, it's marked as Exhibit 46. And

then, Mr. Forcade, your next question.

(Exhibit 46 was admitted.)

MR. FORCADE CONTINUES:

Q. I'm trying, again, to explore this

economically feasible concept, and you said you relied

for your definition of that term upon some U.S. EPA

reports which you have just identified. I asked if

those reports have been produced into the record. You

also said you had not agreed with all of them, and I

need to explore which portions you disagree with, but

it's hard to do, if I haven't got the document.

MR. KIM: The witness can correct me

if I'm wrong, but I don't think he said he referred to

that. I think he said he was using those as his

examples going beyond his testimony. I just flipped

through his testimony quickly. I didn't see him make

any reference to any U.S. EPA document, other than U.S.

EPA mechanisms that were implemented in other U.S. EPA

programs, but I didn't see him make reference to another

document. If I'm wrong, then he can correct me.

Page33

MR. FORCADE CONTINUES:

Q. The reference to the U.S. EPA document was

in response to my question relating to what he

considered to be economically feasible.

A. EPA has -- the CAIR and the CAMR programs

have had a lot of analysis with them where EPA has gone

out publicly and talked about the cost benefit ratio of,

for every dollar spent, you get 22 dollars back in

response. That makes a lot of technologies economically

feasible within that range because we are still not even

tapped up to the 22-dollar-a-ton range at this point.

Q. Could you explain to me how, for every

dollar spent, you get 22 dollars back?

A. That's EPA's analysis. I can't talk about

that. It's based on direct health benefits coming

from -- it's actually not a ton. It's, for every dollar

spent, you get 22 dollars back in direct health

benefits.

Q. So you're relying upon a U.S. EPA report

on economic benefits, with which you disagree, and can't

explain the 22-dollar return on dollar investments. Is

that correct?

MADAM HEARING OFFICER: We are getting

way off field here. You asked him what he -- you asked

Page34

him economic reasonable. He gave you a definition that

tracks a definition that is used by the U.S. EPA in

adopting CAMR and now you want to question the U.S.

EPA's conclusions with him. They are not a part of this

record, and I think it's time to move on.

MADAM HEARING OFFICER: Mr. Zabel.

MR. ZABEL CONTINUES:

Q. Let me follow up on that, Mr. Forter. As

I heard your testimony, I got two different definitions

of "economically feasible." One is that the benefits

exceed the costs. Is that correct?

A. That's one aspect of it, yes.

Q. That's one aspect of your definition?

A. One aspect of my definition.

Q. And the other one I got sounded like it's

economically feasible if someone is compelled to do it.

A. If it's compelled -- I mean, the driver

for the purchasing is usually -- it could be a

compelling thing. It could also be through a voluntary

type program. I would not make that part of my

definition.

Q. I thought you had said if it's

regulatorily required.

A. Regulatory requirement is one mechanism

Page35

for driving that purchase, but it's not the only

mechanism for driving it.

Q. Is that part of your definition of

"economically feasible"?

A. It would not be -- it would be having some

driver. It would not necessarily be in the regulation,

some market driver.

Q. What would that be?

A. It could be odor control in a local

township. It could be someone -- a plant wanting to do

something for general public good. It doesn't have to

be a forced requirement on somebody to do that.

Q. So the fact that somebody does it for

whatever reason makes its economically feasible?

A. It makes it feasible because they now are

going to be in a purchasing agreement.

Q. On your table, Exhibit 46, do you know

Mr. Forter, how many of these -- looks like -- 16

projects are receiving government funding?

A. I don't know that. I don't know if anyone

is receiving government funding, so I don't know.

Q. You don't know whether any of them are

receiving government funding?

A. Sid is pointing out that the Press Guile

Page36

(phonetic) does receive government funding.

Q. Is that name -- which one is that?

A. Number 1, Unit No. 1.

Q. Any of the others?

A. No.

Q. No?

A. According to Sid Nelson, the answer is no.

Q. Well, we can ask Mr. Nelson that question.

Do you know Mr. Forter?

A. I do not know.

Q. That's what I thought your answer was,

Mr. Forter. Mr. Nelson can answer for himself.

MR. BONEBRAKE CONTINUES:

Q. Just a resulted question. Of the 16

projects on Exhibit 46, do you know which, if any, of

these are designed to test a particular technology?

A. To test a particular --

Q. Test the effectiveness of any particular

technology?

A. This is a list that we have compiled based

on vendor information, and a lot of the information for

this is not available, not transparent. What you see is

what we know. So the answer is I do not know if any of

these are into testing.

Page37

Q. So they all may be or none of them may be?

A. From my experience, many facilities will

do testing before they go into the full-scale operation.

MR. ZABEL CONTINUES:

Q. Do you mean pre-startup testing or do you

mean testing of the technology?

A. Testing of different sorbents, different

injection points, different ports, different flow rates.

They can test their system. Again, none of these power

plants were ever designed to do mercury control or any

other air pollution control, in most cases.

Q. So these could be experimental projects?

A. These are purchases that are occurring, so

I don't know that they are experimental. Some of these

projects are state-regulatory requirements, some are

from consent decrees, which are very publicly available

information. In fact, you get more information than

what I have on this sheet just from that, so I would

have to say, just from those, these are not experimental

at all.

Q. You don't think that a project done under

a consent decree is experimental. I think that was a

double negative. Could a project under a consent decree

be experimental?

Page38

A. I have seen a consent decree that talks

about testing out different configurations of technology

before they go into the full-scale project, so they

could do some testing, but they are aiming at a

long-term operation.

Q. Of course the consent decrees you say are

publicly available. Is that correct?

A. Via the Internet, I believe.

Q. Yet, we can't identify them because you

haven't given us the names of the projects here.

A. The names of the projects are usually

something that's only released by the customer or the

vendor, but the vendor needs to get permission to do

that.

Q. Not of the names on a consent decree.

That's a court-entered document, which is public. If

you know there's consent decree, you know publicly who

the company is.

A. I don't have that information here, but it

is publicly available, if you were to search for that.

MADAM HEARING OFFICER: If I may, the

purpose of this exhibit is to establish that these

companies or these units have bought the sorbent,

correct?

Page39

MR. FORTER: That's correct.

MADAM HEARING OFFICER: Not the

purpose for which the sorbent was bought?

MR. FORTER: No.

MADAM HEARING OFFICER: Or why they

bought the sorbent. Do you, personally, have knowledge

of why any of these units purchased the sorbent or what

they doing with the sorbent?

MR. FORTER: No.

MADAM HEARING OFFICER: Ms. Bassi.

MS. BASSI CONTINUES:

Q. Going back to your definition of

"commercially available," and based on your responses to

the various questions to No. 9 about what is

economically feasible and the questions to Exhibit 46,

do experimental projects -- do purchases for

experimental projects fall into your definition of

"commercially available"? In other words, if someone

purchased a product because they were doing some

experimentation or doing some testing to see what's

going to work there, does that make the product

commercially available?

A. That's a gray area. We have -- like, for

mercury measurement, there is a research and

Page40

development. There's testing, and there's also being

offered for sale some of that equipment. It gets into a

little bit of a gray area. Those vendors will go out --

so a lot of these technologies are continuously being

upgraded to improve the technology. That's the nature

of the engineering around air pollution control. I

will -- when I talk to vendors sometimes, I will talk

about whether or not they are selling for research only,

and they tend to have very small sales and we're beyond

research-only sales.

MR. HARRINGTON CONTINUES:

Q. Just so the record is clear, is it correct

you don't know whether there were any performance

guarantees included with any of these sales?

A. A performance guarantee would be

information held between the customer and the vendor and

not publicly available.

Q. So to your knowledge, there were no

performance guarantees?

A. My understanding is that, when there is a

permit in place, that the vendor is providing

satisfaction to meet that permit condition. You can

call that what you want, but that's what -- they will

satisfy the permit conditions.

Page41

Q. Meaning you don't know, and you're not

testifying today if someone guarantees this 50 percent

removal or 90 percent or 10 percent. Is that correct?

A. Yeah. As an association, we do not talk

about something that guarantees. That occurs between a

customer and an individual vendor because vendors will

use that as marketing their product.

MR. FORCADE CONTINUES:

Q. This is -- what exhibit is this, please?

MADAM HEARING OFFICER: 46.

MR. FORCADE CONTINUES:

Q. Looking at Exhibit 46 and directing your

attention to Unit No. 1, can you tell me when the

contract was signed?

A. No, I can't.

Q. Can you tell me when the equipment was

installed?

A. No, I cannot.

Q. Can you tell me how long the equipment has

been operated?

A. No, I cannot.

Q. Can you tell me whether the equipment has

succeeded in achieving, at least, 90 percent reduction

of mercury in all circumstances?

Page42

A. In this case, if it's part of the

demonstration, then that information will be available

through demonstration, but otherwise, I do not.

Q. So you have no information -- I'm going to

collectively ask then for Units 2 through 16. Would

your answers be the same, if you have none of that

information?

A. I have not included to that information,

and I do not have access to that information.

Q. So in essence, this is just a list of sold

technologies?

MADAM HEARING OFFICER: I believe he

answered that question when I asked it earlier.

MR. ZABEL CONTINUES:

Q. Just for clarity, and I understand you

said the gray areas, but you've used it seems to me four

different terms, research and development, testing,

sale, and now demonstration. Can you define those for

me, as gray as they may be?

A. Well, it's a continuum. In fact, you look

at the programs like environmental technology,

verification program with the EPA. It will often take

commercially available technologies and go through a

whole testing to show how that technology actually

Page43

performs, so it can help get into the market. As the

Department of Energy would call "The Valley of Death"

when you have something commercially available and no

buyers, so it is a continuum, and to try to put cut

points on any one of these things, I think is just -- we

would be here all day trying to define those cut points

because we would all have different opinions.

Q. So it is possible that RND project there

may be a demonstration that involves testing of a

sorbent or technology?

A. In the RND project, that's true.

Q. And somebody in that RND project which

involves testing for a demonstration of a technology

could have paid somebody for the material?

A. They could have paid for that material.

Q. Thank you.

CROSS EXAMINATION BY DR. GIRARD:

Q. Mr. Forter, I have a question, in fact, a

couple questions coming out of a sentence in your

testimony. Do you have your testimony there in front of

you?

A. I do.

Q. If you look at the first page I'm looking

at the second paragraph, which comes under the

Page44

subheading "Commercially Available Technology." I'm at

the first sentence, "Despite the lack of a strong

national mercury requirement for coal-fired utilities, a

number of mercury-controlled technology options are

commercially available while other options are still in

development and testing phases and their deployment can

benefit from regulatory certainty." First, what would

you consider a "strong national mercury requirement"?

A. A strong national mercury requirement

would be something that pairs the required outcome,

which is a health benefit issue, with the technology's

capabilities, and in this case, for mercury, we have a

wide range of different technologies everywhere, from

something that is sort of do nothing co-benefit kind of

approach all the way to very specific mercury control

technologies. It's a pairing of those two together. We

believe, as an association, that when EPA put out its

rule it did not fully use the control technologies that

are available. In fact, in many cases, it looks just at

the co-benefit approach, which is, if you're going to be

putting on an SCR, selective catalytic reduction,

followed by an MGA (phonetic), you are going to get a

certain level of control, and that's good enough because

that comes out of the CAIR program. In CAMR, kind of

Page45

just follows along, at least, in the first phase of

that, and it's not until later in the phase when you

start getting into some more mercury-specific control

technologies that are currently available that the

federal program put in place, so the definition is to

use the available control technologies well. I mean,

that's my definition.

Q. So basically, what you're saying is the

federal program, which has been proposed as a cap and

trade, you say is not as strong as, say, a program where

they come out and say everybody has to have a 90 percent

reduction in mercury emissions?

A. Those would be probably two different ends

of the spectrum on these kind of things. The 90 percent

part of my testimony is using flexibility in there, too,

to allow different configuration, different goals to

achieve different levels of control. But the -- there's

no mistake that we do not agree with EPA's program at

all. We feel that it seriously does not use the

technologies that are currently available.

Q. My second question goes to the last phrase

there in that sentence where you say, "Their deployment

can benefit from regulatory certainty," and so what do

you mean by that?

Page46

A. There are market drivers out there and

regulatory certainty is, obviously, one of those. It

provides an opportunity for competition within the

vendor community to improve upon the technologies that

they currently have for sale and to introduce other

technologies out there for sale, so the regulatory

certainty is the driver, and it allows for a free market

commercial innovation to occur within that market. We

were already seeing that as soon as even the federal

rule came out even being despite it being weak, we see

that as a driver, and it does provide lots of

opportunities for different vendors to come in, and we

have lots of different technologies that are being

looked at, researched, and development within different

companies going through demonstration along those lines.

Does that answer your question?

Q. Yes.

MR. ZABEL CONTINUES:

Q. I'm sorry. Mr. Forter, in the answer to

Dr. Girard's question, is it your view that there are no

health benefits from the CAMR rule with respect to

mercury?

A. No. The CAMR rule, as it tracks CAIR,

there's a tremendous amount of benefits that occur

Page47

there.

Q. For mercury?

A. Well, because you are using co-benefits

control, primarily, that produces mercury reductions in

the first phase.

Q. And therefore, those dollars do yield

public health benefits, do they not?

A. Those do. In getting back to the cost

issue, the question is does CAMR produce another cost on

top of CAIR. If you are already doing it for CAIR, then

the costs associated to CAMR may be zero.

Q. But it still yields health benefits with

respect to mercury?

A. In many of the pollutant control programs,

we have -- you will see cross benefits from different

pollutants out there.

Q. Is your answer yes?

A. The answer does CAIR produce health

benefits?

Q. For mercury control.

A. Yes.

MADAM HEARING OFFICER: Ready for

question 10 I believe.

MR. FORTER: "On page one of your

Page48

testimony, you state that there are a suite of options

available to cost effectively control mercury emissions

from power plants of different configurations and coal

types. List all the different options and explain how

each one works." I will just state right up front that

we have a lots of options on our website. There are --

EPA has documented lots of the different control

options. It would be -- would not be possible to list

all the different options there. There are a number of

different things that are even being done that Sid

probably knows about, but I don't, different

configurations of sorbents that are being looked at,

some amending coals that I don't know about, so there's

a lot out there that's going on. The purpose of my

statement was that there is a range anywhere from

co-benefits, which is your SCRfD combination, all the

way to your mercury-specific types of controls and

everything in-between. I'm assuming that a purchaser

will look at all the different options that are out

there.

"What are the costs associated with

each of those options?" Those costs vary. As I

mentioned, with the co-benefits control, if you assign

the cost back to CAIR, the costs are zero. When we get

Page49

into some of the mercury-specific controls, it depends

on what level of effectiveness you are trying to achieve

and someone like Sid Nelson, or any of the particular

vendors, would know more about what that cost might be

for any particular plant configuration and coal type.

We, as an association, do not go out there and put a

mark on what the cost would be for any particular

control.

MADAM HEARING OFFICER: C.

MR. FORTER: "Which of these options

have been demonstrated to obtain the level of control

currently called for in the IEPA's proposed mercury

control regulations 100 percent of the time under all

operating conditions of the facility of the size and the

type of the Kinkade facility?" I'm not familiar with

the Kinkade facility, so I can't -- as an association, I

do not go into that level in depth -- some individual

companies may and maybe they can give you that kind of

information. But some of the questions here about 100

percent of the time availability, coal-fired power

plants aren't available 100 percent of the time.

Turbines are not available 100 percent of the time. Or

power it doesn't come from any one particular source 100

percent of the time, so absolutes like that just don't

Page50

work in the real world for almost anything. "All

operating conditions" assumes that a lot. If I were to

drive a car under all operating conditions, and then try

to assign the responsibility back to the manufacturer is

just not a feasible thing to do, so there's usually --

when these contracts are developed, the operating

conditions are discussed between the customer and the

vendor to optimize power output and for control

effectiveness, and again, with the Kinkade facility, I'm

just not familiar with it.

MS. BASSI CONTINUES: May I ask a

question on this one first, please. This is kind of a

general gripe I guess. We are required to prefile

questions, so that the Agency's witnesses, the Agency

and its witnesses could be prepared to answer the

questions that are presented. If Mr. Forter, as an

example, is not familiar with the Kinkade facility, it

seems to me that part of the responsibility of the

Agency and the witness was to become familiar and to be

able to answer the question. And I'm sorry, maybe this

is my schoolteachering (sic), but I thought that was

part of the purpose.

MR. KIM: The questions I believe were

intended to follow up on the testimony provided by the

Page51

witnesses. I don't think anything in Mr. Forter's

testimony or in his prefiled testimony or in his

statements today indicates that he would have the

background or the reason to delve into the specificity

of the questions here, so in other words, just because a

question is asked, regardless of whether or not it goes

beyond what the witness has clearly provided us the

scope of his knowledge doesn't mean that that witness

also has to start honing up on information that he's

never looked at before just to provide an answer. he's

answered to the best of his ability, and if conclusions

want to be drawn to that as to whether this witness

should be taken to go to that extent as far as his

reach, then that's fine, but I don't see that that's --

I don't understand how "I don't know" or "That's not my

expertise" is an invalid answer.

MADAM HEARING OFFICER: Because I

agree with you. I disagree with you, Mr. Kim. He

should have been given the information on Kinkade to

answer this question. If the Agency had a problem with

this question -- these questions were prefiled in enough

advance of time that the Agency could easily -- heavens

knows we have seen plenty of paper in this proceeding --

could have filed objections in this case. I don't

Page52

disagree with what Ms. Bassi is saying, and I think part

of this is some of the frustration we talked about the

other day that we also you have the prefiled questions,

and yet, we are still reading questions and saying,

"Well, I can't answer that." Then you need to bring us

who can. It is your job, as the proponent, to support

your rule.

MR. KIM: Having said that, my

follow-up to Ms. Bassi's response is, however, even if

he had been provided with the specifics of the Kinkade

facility, I believe, in his answer, he just stated,

regardless of the facility type, it's impossible to make

that statement that a 100 percent guarantee could be

provided for anything. He gave an example of how it

could be. He did answer the question that you can't

make an absolute 100 percent guarantee for anything,

regardless -- even if he had all of the Kinkade

specifics in front of him.

MADAM HEARING OFFICER: But as an

attorney, you, yourself, know and I suspect that what

Mr. Forcade's follow-up is granted it doesn't operate

100 percent of the time, but 100 percent of the time

it's operating. Let's be realistic. He literally

answered the question, but he was asked, specifically,

Page53

about Kinkade and now we are in the position where

Kinkade has asked the question and it's my understanding

and I have gleaned this from this proceeding that

Kinkade is sort of a unique operation or has some unique

operations as was talked about the TTBS yesterday.

Kinkade's not even eligible for the TTBS because of the

way it runs. Do I remember that correctly?

MR. FORCADE: Yes.

MADAM HEARING OFFICER: So they are

trying to get at whether or not sorbents are

commercially available and economically feasible for

their facility and one of your witnesses about the

availability of sorbents isn't familiar with Kinkade.

All that being said and all that chastising going on,

there's not much we can do about it right now so.

MR. KIM: I would say this, Mr. Nelson

has indicated he will be able to answer that question.

If you want, he can answer that now, but again, I would

still say the question asks which of these options has

been demonstrated to maintain a level of control

currently called for in the regulations 100 percent of

the time, under all operating conditions, at a facility

of the size and type of the Kinkade facility, and I

believe Mr. Forter's answer is, "I'm not specific with

Page54

Kinkade. However, regardless of that" -- so I think his

answer -- I think his answer is -- and we can have it

read back -- he doesn't think you can guarantee 100

percent.

MADAM HEARING OFFICER: I understand

his answer, but like I said, you understand what the

next question probably is. Again, all that being said,

and I can only say that now I wish you had them better

prepared, but we can't do anything about that now. We

need to continue on.

MR. AYERS: Mr. Nelson is prepared to

answer the question.

MR. KIM: That's why he's here as a

panel. We, specifically, have them here.

MADAM HEARING OFFICER: Now I'm now

confused because it was my understanding that we were

going to go to Mr. Nelson, and I, specifically, had

Mr. Forcade hold the identical questions.

MR. KIM: That's fine. I'm just

saying, if the question needs to be answered right now,

we've always indicated that no one witness is going to

be able to answer every single question, and that's just

because of the breath of the subject matter.

MADAM HEARING OFFICER: We will let

Page55

Mr. Nelson answer this question now and we'll let Mr.

Forcade follow up with Mr. Forter and Mr. Nelson on this

question.

DR. GIRARD: We are going to be here a

couple weeks if we keep going back and forth like this.

If a witness doesn't know the answer, there's nothing

wrong with saying, "I don't know." If we say that, we

move on to the next question, and then we'll go to

Mr. Nelson. If a witness takes an "I don't know" and

turns it into two paragraphs, then we are going to have

six follow-ups.

MR. KIM: Yes.

DR. GIRARD: Don't be afraid to say,

"I don't know."

MR. KIM: I would agree with that

wholeheartedly.

MR. FORTER: I don't know.

MADAM HEARING OFFICER: Mr. Nelson, if

you would answer the question and Mr. Forcade, you can

address the follow ups to Mr. Nelson.

MR. NELSON: Specifically, what is the

question on Kinkade? "Which of these options has been

demonstrated to obtain the level of control currently

called for in the IEPA's proposed mercury control

Page56

regulations 100 percent or the time, under all operating

conditions of the facility of the size an type of the

Kinkade facility? Again, when we get to

demonstration -- nothing has been demonstrated 100

percent of the time, particularly because we don't have

any regulations. There currently is not -- even though

we have a lot of different mercury control technologies

out there, there isn't a single power plant in the

United States that is intentionally getting mercury out

on a day-to-day basis, so nothing is going to be claimed

to be 100 percent of the time. We haven't necessarily

ran into 100 percent of the conditions. However,

Kinkade is actually a configuration of type that is

pretty easy for mercury control. It burns, essentially,

100 percent PRB coal. It has SCR. Halogenated sorbents

have been demonstrated at many plants with very similar

configuration coal types to Kinkade and demonstrated

over 90 percent of removal, but even then, it doesn't

necessarily get it 100 percent of the time. It may get

90 percent some hours. It may get 85 percent some

hours, but overall you can reach a high level of

control, particularly in the sense that you can always

inject more sorbent and get more mercury out, so that

one particular technology has been demonstrated to be

Page57

very good. Particularly if it's combined with some kind

of flew gas scrubbing, which is a technology that's

commercially available. It would certainly be more

expensive, but certainly, the technologies are out

there. It's technologically doable.

MR. FORCADE CONTINUES:

Q. Could you tell me which facility in the

United States has had the sorbent technology utilized

the longest period of time for power plant mercury

removal?

A. Our particular products have been

demonstrated at two plants very similar to this, and we

can get into this in my testimony, St. Clair and Stanton

one. There's a competitor's product that's very similar

to ours that has been demonstrated at Meramec in

Missouri and some others that, again, are very similar.

Q. The question is how long --

A. In each of those, the Department of Energy

required a one-month trial.

Q. Are you aware of any trials or any

operational activities with carbon absorption that has

been demonstrated for a period longer than 30 days?

A. Yes. The Gaston plant, Gaston of Southern

Company had, basically, a one-year continuous trial, but

Page58

that plant is different than Kinkade. It burns

bituminous coal as a hot side ESP.

Q. Sticking then with then the cold side ESP

Kinkade type plants, would it be correct to say there

were three that you identified?

A. At least, three. There's some others I'm

not aware of or some others that are slightly different

than that plant.

Q. Were there any documents prepared as a

result of these -- I'm sorry, trial runs? Test runs?

What would you call them?

A. We call them trials, one-month trials.

They are full scale. The plant is supposed to operate

the way it usually does. It doesn't make any

consideration for the tests. This is the structure of

the Department of Energy program that each of those

three trials was part of.

Q. For each of those trials, was there any

document prepared that would be a report that would show

the configuration of the facility, the size of the

various pieces of equipment?

A. Yes.

Q. The type of carbon absorption, the amount

of removal from all the tests?

Page59

A. Yes. That's part of it. There's one

available on the Department of Energy website I know for

St. Clair and Meramec. Those final reports, or at

least, topic or reports are available. The one at

Stanton One is not yet available because that was done

last fall.

Q. Would it be possible for you to produce

those reports, so that we could review them?

A. Certainly.

Q. Am I correct now we have just the three

for the cold side ESP plants with sub-bituminous that

you know of?

A. There are others that include that's the

lowest cost of course. If you include spray dryers or

fabric filters, then there's few more plants. There's

the Holcum plant. There's ADA that had an ESP, as

opposed to a fabric filter, but had a spray dryer, which

is actually a more difficult situation called Laramy

River. When we get into my testimony I can go over

these 30 demonstrations.

Q. Do it later?

MADAM HEARING OFFICER: Yeah. Let's

move on with Mr. Forter.

MADAM HEARING OFFICER: Question No.

Page60

11.

MR. FORTER: "Again, on page one, you

list certain existing control insulation such as fabric

filters and electrostatic precipitators as achieving

high levels of mercury reductions. The question are

those high levels of mercury reductions sufficient to

meet the level of control currently called for in the

IEPA's proposed mercury control regulations 100 percent

of the time, under all operating conditions, at every

one of Illinois facilities that would be subject to

those regulations?" I don't know.

MR. HARRINGTON CONTINUES:

Q. In the second sentence on the last

paragraph on page one you list the various control

technologies and say, "They are currently achieving high

levels of control." Do you know what levels of control

fabric filters by themselves, without activated carbon

injections, achieve?

A. EPA -- a lot of this information came from

the 1999 ICCR data where EPA looked at configurations of

plants and what they were achieving, and that document,

that information that was part of the stakeholder

process part of the rulemaking and everything else. I

do not know -- I don't recall what the fabric filter was

Page61

getting without anything in front of it because you are

talking about some sort of oxidation characteristics or

some other things that might be effecting its capture.

Q. I would like to just have these questions

answered for the record by Mr. Forter, if I could. Is

the fabric filters -- you don't know. Is your answer

the same as to electrostatic precipitators?

A. I'm sorry?

Q. Is your answer the same, that you do not

know what removal of mercury would be achieved by

electrostatic precipitators by themselves?

A. Again, that's part of the EPA record?

Q. You don't personally know?

A. No.

MADAM HEARING OFFICER: U.S. EPA

record.

MR. HARRINGTON CONTINUES:

Q. For the two scrubbers is your answer the

same?

A. SO2 scrubber depends on if it also has

oxidation occurring in front of it, like an SCR, SO2.

When that occurs, then you are at 90-plus percent

reduction.

Q. Is that bituminous coal only?

Page62

A. The different coals will have different

characteristics, but that's one of the real workhorses

in getting co-benefits.

Q. But SO2 scrubbers with selected catalytic

reduction do not achieve 90 percent removal on mercury

for sub-bituminous coal, do they?

A. I don't know that configuration. I don't

know.

Q. You say "and others." What others does

that refer to? Third line of the last paragraph, last

two words.

A. Could you read the whole paragraph, the

whole?

Q. "Based on recent demonstrations, results

significant amount of mercury and the sentence,

"existing control installation, such as fabric filters,

electrostatic precipitators, SO2 scrubbers, selective

catalytic reduction, and others, are currently achieving

high levels of mercury reductions." And the question

I'm asking is -- gone through the first of those, and

I'm asking what "and others" is for purposes of the

record, so it's clear?

A. There are other technologies that are

being looked at with oxidizing catalysts put into the

Page63

stream. It depends on the coal and the coal

configuration as to what else could be used. Amended

silicants and so forth.

Q. Are those others and I assume, obviously,

we have already talked about activated carbon injection,

and I will assume that's not one of these, but is there

something other than those that are listed here

activated carbon injection that are currently achieving

high levels of mercury reductions?

A. In some of the manufacturers' testing,

there's been use of amended silicants. There's been

amended coals. Those are others that do work in this.

There's also a catalyst produced by a company with a

guaranteed oxidation rate, so that would be one of the

others.

Q. Now, they are currently achieving high

levels?

A. Depends on the configuration that they are

going to be in, but the answer would be, generally, yes.

MR. ZABEL CONTINUES:

Q. Just a very brief question. When you

refer to S02 scrubbers, are you referring to, both, wet

and dry?

A. To both. It's been the wet scrubber

Page64

that's been most commonly associated with the oxidizing

catalyst before.

MADAM HEARING OFFICER: 11-B.

MR. FORTER: "Do you know if these

high levels of mercury reductions are sufficient to meet

the level of control called for in the federal CAMR 100

percent of the time, under all operating conditions, at

every one of the Illinois facilities that will be

subject to these regulations?" I do not know, to meet

all these things. Again, a lot of qualifications in

there.

MADAM HEARING OFFICER: So C is then,

since you can't answer A or B, C is -- because I assume

that's 11-A-B-C. Then question 12.

MR. FORTER: "Please explain your

statement on page one of your testimony with the

implementation of mercury regulatory requirements beyond

incidental co-benefits level of control and number of

options for optimizing existing controls will be

implemented to provide cost effective reductions." It's

the basic thing we have talked about before, which is

when you have a market driver out there, in this case,

it being something a regulatory program that goes beyond

a market driver already established in CAIR, then you

Page65

create a new market, new tunnels, new innovation, and

obviously, vendors respond to that.

MR. FORCADE CONTINUES:

Q. Would I be correct then you are talking

about changes in the vendors and in the marketplace, as

opposed to changes that would be made at the facility,

itself?

A. The change -- what they would do is they

would respond to the different requirements of a

facility, so different coal, different configuration

different operating parameters. They will respond to

those kinds of changes. But it's primarily dealing with

the advancements in the technologies finding halogenated

activated carbon when you didn't have it before because

you're responding to a new opportunity, new driver.

MADAM HEARING OFFICER: As Dr. Girard

has just pointed out to me, Questions 13, 14 both deals,

specifically, with Kinkade generation.

MR. FORTER: I will make a point, just

from an association, we would not go on a specific plant

and make that kind of recommendation. You are -- it's

requesting some sort of engineering level analysis that

might occur. We would not be doing that as an

association. I represent 90 different member companies

Page66

and to get a consensus on what a Kinkade-like facility

might look like is probably a monumental task.

MADAM HEARING OFFICER: I guess my

point being, if the answer is "I don't know," there's

not much point in even reading the questions, if you

don't know the answers.

MR. FORCADE: Just reflect that he's

answering "I don't know" to the following questions.

MADAM HEARING OFFICER: 13 and 14.

MR. FORTER: 13 and 14 are both

Kinkade, yeah.

MR. FORCADE CONTINUES:

Q. Are there facilities, other facilities in

Illinois where you would be able to answer a question of

this type or is it no to all facilities in Illinois?

A. As an association, again, because we would

not go in because we -- basically, what you are looking

at is saying the association knows this kind of level of

control or everything that happens at this facility.

That's not going to occur. That kind of discussion

would occur between a customer and an individual vendor,

not within the association making that kind of a

requirement. What we can do is talk about the different

things from an experience list what has actually

Page67

occurred, what kind of sales have actually occurred,

what kind of demonstrations have actually occurred, but

we can't go into that level of analysis, so the answer

would be any other facility like that, same response.

MADAM HEARING OFFICER: Question 15.

MR. FORTER: What is the basis for

your statement `Multicontrol approaches, as well as

other mercury-specific technologies provide low cost,

innovative approaches toward mercury control`"? That is

based primarily on the fact that activated carbon

injection was looked at and it was much more cost

effective than some of the other co-benefits control.

If you were -- did not have a requirement for NOx and

S02, beyond acid rain or something else, putting on a

scrubber, that would cost you tens of millions of

dollars, a very expensive proposition. Putting on an

activated carbon injection system, which costs about a

million dollars, is much more cost effective to do, so

there are other approaches to deal with this, but it

really depends on your regulatory frame work how, much a

customer might be relying on taxes, credits, allowances,

things like that, to make these kinds of decisions, but

the other technologies are low cost because we know what

the cost is of combining an SCR with an FGD.

Page68

Q. I'm having some confusion here where we

continue to use the phrase "low cost," but when asked

about costs, we can't get answers to the question

because you don't know. Can you define "low cost"?

A. We're talking about ranges of costs here,

so the ranges of cost for an SCR is something about 50

million dollars to put in place. To put on an FGG

(phonetic) it's somewhere around 100 million dollars, so

that's usually my upper bound of that cost. Anything

that's going to cost less than that would be a low cost.

When we're down to the margins of one million dollars

for capital costs, I would say that's very low cost.

MADAM HEARING OFFICER: 15-A.

MR. FORTER: "What, specifically, are

the multipollution control approaches and other mercury

specific technologies to which you refer to in this

statement?" Again, this is a range of different

technologies that are out there. It difficult to

characterize because there are so many innovations that

are occurring, and I mentioned a few of those, the

amendments to coal that some companies are putting out

there that help to get mercury reductions. I mentioned

there's another company that actually has oxidation

catalyst, which puts guarantees on the catalyst, so

Page69

there is a whole suite of different types of controls

that are out there to be used. There are also amended

silicants, which are being used, and almost monthly you

will see another press announcement of somebody else who

has got another control for mercury.

MADAM HEARING OFFICER: I think we

have answered B and C because I think you actually had

the follow-up on asking him to define low cost, but go

ahead.

MR. FORCADE CONTINUES:

Q. The same question I posed somewhat

earlier. I'm not sure what page of Mr. Nelson's

testimony. Can you provide us any additional examples

of situations where carbon injection has been utilized

beyond those provided by Mr. Nelson, and if so, are

there any reports identifying the nature of the unit,

the types of controls, effectiveness of the controls and

how long the test was run.

A. The DOE demonstration projects are

probably the Bible of the controlled technologies that

have been used that demonstrate. At each of those

demonstrations, there's a cost involved in that, and

there's usually a report that comes out of that, so that

is the best documented demonstration that occurs. My

Page70

understanding is that some companies will also do RND,

some companies set up RND research facilities, and I

don't know what its intention is in developing documents

that will be put out there. My guess is that RND is

mostly -- the beneficiary of that is going to be

southern companies, not other companies.

Q. Again, going to the idea that if you are

identifying other active programs, research activities

that demonstrate the effectiveness over time of

activated carbon absorption, are there reports you can

submit into the record that we can look at?

A. The reports would be the same as the ones

Sid Nelson was talking about.

Q. So you have no reports, other than

those --

A. No. Those are the only documentation that

I'm aware of. Individual vendors that have been

involved in those programs may put out information on

that, but my understanding is that that's all been

through an agreement set up like that.

Q. We are going to get the information from

Mr. Nelson?

MR. KIM: Yes. We will work to get

that.

Page71

MADAM HEARING OFFICER: Question No.

16.

MR. FORTER: "Do you believe that

regulatory programs with flexibility have value for the

regulators to regulate community and the public?" I

have, in our comments, we actually talk about

flexibility, and as an association, we agree that having

flexibility allows for innovation within the market,

other controls to be used in different places. I come

from a background of public policy in using

cap-and-trade programs for NOx control, so I,

personally, believe, and our association believes, in

flexibility. What I don't believe in is putting

flexibility in front of caps because it's always called

a cap-and-trade kind of program, so what you want to do

is assign a certain level of reduction that you need to

achieve and then provide the flexibility, so the

companies that might need that to find innovative and

low cost mechanisms to achieve those caps. I could go

on about different types of trading things, but I'm not

going to, but some level of flexibility, but it is not

an absolute and definitely should not be in front of

caps.

MR. HARRINGTON CONTINUES:

Page72

Q. Do you think that some form of

cap-and-trade program for mercury regulation would be

appropriate?

A. The cap and trade -- flexibility does not

have to only be a cap-and-trade program. I believe that

a cap-and-trade program could be one mechanism for

flexibility. It's not necessarily my preferred

mechanism in dealing with an air toxicant.

Q. Have you reviewed the proposed Illinois

regulation?

A. I have.

Q. Do they provide the level of flexibility

you would normally look for?

A. In its proposal, it has -- there's quite a

bit of flexibility in the first phase, and it has a lot

of components. We have seen a lot of different states

and lots of types of flexibility. The level of use of

those mechanisms varies quite a bit.

MR. BONEBRAKE CONTINUES:

Q. Has your association taken a public

position with respect to whether it does or does not

endorse CAMR?

A. No, we have not.

MR. ZABEL CONTINUES:

Page73

Q. Maybe I didn't hear you right. Did you

use "level of abuse" in your answer to an earlier

question?

A. I don't recall, if I did. Maybe I

misspoke, "level of use" maybe.

Q. Use.

MADAM HEARING OFFICER: Question No.

17.

MR. FORTER: "Do you agree that

regulatory programs with flexibility are economically

efficient?" This is asking for a comparison I would

guess. We have found, from experience, that the

economics work better when you have some level of

flexibility involved. It allows the customer and the

vendor to find technologies that can be done at a lower

cost and are more effective. It's economically

efficient. I would say, in general, we see some

efficiencies that occur there. Caveating that with the

cap is the driving mechanism of flexibility is there for

those who need it to make some economic choices, and to

find the technologies that fit their particular

situation.

MADAM HEARING OFFICER: Question No.

18.

Page74

MR. FORTER: "Do you agree that low

cost, reliable electricity is essential in our economy?"

We have made public statements about coal. We believe

that coal is a mainstay in our society and will remain

so for many years. It's reliable. It's abundant, low

cost, and it can be made clean and probably our biggest

issue with the CAMR rule would be that it doesn't make

coal clean in respects to mercury reductions, so again,

this is not an absolute -- low cost, reliable

electricity should not be an absolute for our society,

but is one of the mechanisms, one of the things we need

in society.

MADAM HEARING OFFICER: Question No.

19.

MR. FORTER: "Do you believe that the

proposed mercury control regulations to be cost

effective, and please explain?" And I'm assuming that

the reference is to the IEPA rule and that -- I guess I

don't really know, on a larger scope, of how this

actually pans out. There is some flexibility in there.

This is a proposed rule. It really -- it will determine

-- when a final rule is in place, the vendors will then

respond, and that's where you are going to find your

most cost-effective solutions starting to really emerge

Page75

because then it will be looking at plant specific

configurations, coal types and issues as you start to go

through the engineering and architectural engineering

analysis for those facilities. Historically, when we

looked at selective catalytic reduction for NOx control,

not every plant that was being looked at needed to --

had to go through an architectural and engineering

analysis, and as it turns out, it was extremely cost

effective on NOx reductions, probably even more so on

the reliance on allowances these days, but really, it's

going to depend on what the final rule looks like, and

how it's going to play out, but typically, you will find

the cost is reduced after the rule is put in place

because you have the competition between technologies

and technology vendors.

CROSS EXAMINATION BY MS. BUGEL:

Q. I have one follow-up on some earlier

questions about commercial availability. Mercury

specific controls, not co-benefits, but mercury specific

controls, are they passed the RND phase."

A. There are mercury specific controls that

are out there that are passed the RND phase. I would

say, with any technology, any air pollution control

technology, there are's going to be continuing RND. We

Page76

have that occurring in every aspect of air pollution

control I can possibly think of. For instance, for

particulates, electrostatic precipitators, there's

continuing RND on electrostatic precipitators, how to

make them clean, how to apply them to new generation,

but activated carbon injection, now that it's being sold

-- and it's about a million dollars of capital cost for

the activated carbon injection systems -- I would say

that's passed the RND phase. Sid and others would be

wise to continue down the RND path to find lower cost

solutions.

Q. Do you believe some combination of

co-benefit technology, mercury-specific controls,

including ACI, is available to meet the goals of the

Illinois proposed rule?

A. Yes.

MADAM HEARING OFFICER: Question No.

20.

MR. HARRINGTON: Could I have that

read back to me?

(At which point, the prior question

was read by the court reporter.)

MR. HARRINGTON CONTINUES:

Q. For clarification, do you believe that

Page77

such technology is available to meet the limits in the

Illinois rule by the dates stated in the Illinois rule

or do you have an opinion on that subject?

A. I would say, because I'm not familiar with

all the facilities and how they would be configured, I

do not have an opinion on it.

MR. ZABEL CONTINUES:

Q. In the question that Ms. Bugel asked

previously co-benefit technology with ACI, in your

answer, what did you assume she meant by "co-benefit

technology."

MS. BUGEL: I'm sorry. I don't think

that was my question, if it could be read back.

MR. ZABEL: Surely.

(At which point, the prior question

was read by the court reporter.)

MR. ZABEL CONTINUES:

Q. In answering the question, what did you

assume she meant by "co-benefit technology"?

A. I was assuming it was some of the

technologies that could be used to do oxidation in the

systems where it's needed, that if there are an FDG

system, wet or dry FDG system that would be operating

the fabric filter and electrostatic precipitator is

Page78

acting, in some way, of a co-benefit approach. All

these technologies are integrated to deal with a number

of different pollutants, and obviously, mercury is a

pollutant de jour for this hearing, but they are

integrated to deal with the whole suite of different

pollutants.

Q. Is it your view that ACA alone would be

sufficient to do that?

A. To do what?

Q. I think her question was to meet the

requirements of the proposed rule, but I can have it

read back.

MR. HARRINGTON: Goals of the proposed

rule.

MR. FORTER: Yeah. Not just because

we do activated carbon injection is being used in

different configurations itself. There are two

different technologies here, the Toxicon I and Toxicon

II, and apparently, there's a Toxicon 1.5 or 3 out there

now, so they do not, in any case, rely just on activated

carbon injection.

MR. ZABEL CONTINUES:

Q. But my question is just ACI. There are

units in the state that have none of those other

Page79

technologies currently on. Is it your view that all of

those units with just ACI could meet the goals of the

proposed regulation?

A. The goal is 90 percent?

Q. Yes, sir, or .08.

A. I really don't know.

MADAM HEARING OFFICER: Question No.

20.

MR. FORTER: "In your testimony, you

list the creation of jobs as a benefit of the proposed

mercury control regulations. Who would pay for these

jobs?" In our industry, the payment of the jobs is --

it's like building something on your house. I end up

paying for it, but I think, in society, we end up --

everybody pays for these kinds of jobs. It's,

obviously, a benefit, and I don't look at it as a

negative in who pays for the jobs. Job creation is a

good thing in this country. These are technologies that

require often times, depending on the different

technologies, some other skilled laborers, including

electricians and craftsmen and stuff like that, so who

pays? I think if it's done through a rate-pay system.

If not, then the power plant, who is in business of

creating power costs, pays for it, but I think it's the

Page80

installation cost will actually pay for it.

MR. FORCADE CONTINUES:

Q. Would you anticipate any circumstance in

which the expenditure for the control devices and

operating expenses of ACI would result in a need by a

company to reduce employment in other areas?

A. I cannot foresee that, but I don't know.

MADAM HEARING OFFICER: Anything else

for Mr. Forter? Thank you very much, Mr. Forter.

MR. KIM: Thank you very much for

allowing us to put him up first.

MR. HARRINGTON: This is not for the

witness. This is a question of procedure, really two

questions. Number one, is it my understanding that the

goal is to get through the economic modeling today, and

then get to the technology with Dr. Staudt tomorrow?

MR. KIM: Working backwards from our

hoped end date of Friday and taking into account that

everyone's appetizing up to the main course of

Dr. Staudt, we are trying to leave as much time for him,

so we would be able to have, at least, two full days for

Dr. Staudt. That's why maybe we're being a little

aggressive, is our way, but we're hoping to get through

these three witnesses today.

Page81

MR. HARRINGTON: In terms of trying to

meet the schedule, if we can meet it -- and that's not

my problem. The question I raised both with the Agency

and with the Board is my understanding all economic

modeling rests on the technology testimony and

conclusions of Dr. Staudt. Reversing those two means

that, if Dr. Staudt changes conclusions as we go through

these plants as to what the economics are and what the

technology is then, the modeling testimony is going to

be left up in the air. If the Agency wants to proceed

that way, I guess that's between them and the Board, but

I think we should be aware of the fact that there is a

real danger that things will be out of whack. I don't

need an answer right now.

MR. KIM: I understand what you're

saying, and that certainly makes a lot of sense. To be

honest with you, I think a big part of our suggestion is

more, again, logistics. I, honestly, haven't asked

Dr. Staudt about his availability for next week. I

haven't wanted to think about it. I know Dr. Hausman is

not available next week and I know Dr. Hausman has

about, at least, on paper, about a seventh of the number

of questions that Dr. Staudt has, so that was, again, I

was just thinking more from a logistical standpoint that

Page82

somebody that has fewer questions and I know he's not

available next week, and someone who has a lot more

questions. That was a big part of it. What you're

saying makes sense, and if I knew somehow that we were

going to get through everybody by Friday, I would have

no problem with --

MR. ZABEL: Just to add a fact to that

analysis, yes, there are a great deal fewer questions

filed for Dr. Hausman, but that was because he was

relying on Dr. Staudt and it was changing so fast, and

we simply didn't file the questions. I have a great

many question for Dr. Hausman, but I didn't file them

because I didn't know where that was going to land.

MR. KIM: I'm assuming that there's

going to be a lot more than on paper for Dr. Hausman,

but I'm assuming there's a lot more for Dr. Staudt, and

I Dr. Staudt has some 150, 160 questions and Dr. Hausman

I think has 20, so that was part of tit. We will do

what the Board asks, and we'll accommodate and roll with

the punches as best we can.

MADAM HEARING OFFICER: We will take a

break and we'll come back. Before we take the break

though I just want to let everyone know for those of you

who, like me, think mercury is the be all and end all of

Page83

our existence right now, the board has a special board

meeting for 12:15 tomorrow, so the board members will

have to be at a video conference, so we will take a

break around noon tomorrow and it will be until like

1:30. I felt that was probably the best way to work it

in with these hearings, but the board does need to hold

a special meeting tomorrow. With that, let's take a

10-minute break.

(A 10-minute break was taken.)

MADAM HEARING OFFICER: Before break,

we were discussing and Mr. Harrington and Mr. Zabel both

brought up the point about the Agency's participated

order, and the Agency indicated would do what the board

preferred. As I indicated to Mr. Kim off the record

yesterday, I, personally, would have liked to see

Dr. Staudt way earlier. That was just my personal

preference, but in talking, we feel that Dr. Staudt will

have some impact on the economics, and I agree with the

points made by Mr. Zabel and Mr. Harrington that

Dr. Hausman's testimony is, if it's not technically

feasible, it's not economically reasonable and vice

versa, so I think we need to hear the technical

testimony next, so it would be my goal to finish with

Mr. Nelson before we finish for lunch and zoom through

Page84

these questions and get there, but I do want to take

this opportunity -- I do appreciate that we are all

working towards the goal of leaving Springfield on

Friday, and I appreciate that, so that would be our

choice. We will go with Mr. Nelson and Dr. Staudt.

MR. ZABEL: Just so the record is

clear because this has been hinted at a number of times

and this may help for Dr. Hausman, in a way, we have

always read your order of May 4 as saying that, if we

don't conclude Friday the proponents' case, that they

will continue on August 14, not next week. The order

specifically, said, in the unlikely event that any

person -- that includes the Agency -- to prefile

testimony for the June 12 hearing cannot testify because

time does not allow, that person will testify at the

beginning of the August 14 hearing. We have prepared,

both, availability of our lawyers and our experts who

are observing these hearings for that eventuality, but

not for one that goes next week.

MADAM HEARING OFFICER: I understand

that that would be an interpretation of my Hearing

Officer Order. However, the intent behind that when I

drafted it was that, if someone other than the Agency

prefiled testimony, I do not see any benefit, if I may,

Page85

of holding off, until two weeks in August, to continue

with the Agency when the two weeks in August is,

specifically, set aside for the people who don't agree

with the Agency's proposal, and that was the intent of

that hearing, and I think that was emphasized in the

prehearing conferences we held. Because how can you

possible be ready to respond to Agency testimony that

has not had a chance to cross-examine on in that August

hearing?

MR. ZABEL: That's exactly the issue

we raised in our motion to be ruled on by the Board. We

have forewarned the Board of that risk, and we have to

take it because you continue the Agency's presentation

into August, and have ours follow immediately after it,

that would be a basis we'll raise on the record as an

objection, and we'll continue and we will go forward

with that objection on the record.

MADAM HEARING OFFICER: I understand

that. As I indicated after the Board ruled that they

were not going to give direction at the hearing officer

at this time. We will discuss that as we reach Friday

if. Let me just tell you that my -- if we don't start

again on Monday, if the Agency is not done, I am

disinclined to wait until August to continue with the

Page86

Agency. That's for a variety of reasons. I do think

that you all deserve your day, and as far as prefiling,

and things like that, if, for some reason, we don't

finish tomorrow -- Friday, if we do not finish on

Friday, obviously, one of the things that we would

certainly discuss is even the requirement of having you

prefile testimony. That may be something that we do not

do. That you are required to prefile testimony because

you won't be able to get that to either the Agency or

the Board in any realistic fashion.

MR. ZABEL: Let me say, I didn't want

to wait until five o'clock on Friday to raise this

issue. I wanted to make clear what my client's position

is on this. We have tried to accommodate timing, and if

Dr. Hausman is unavailable next week and that's the

sequence we go in, and you believed another hearing

sometime between now and August were appropriate, we are

certainly open to that consideration. I just wanted to

today, Wednesday afternoon, not Friday evening, to make

our position clear, so you could have it under

consideration.

MR. KIM: Obviously, you just stated

that if we do go past Friday, one of the options you

would look into would be relieving them of the

Page87

responsibility of submitting prefiled testimony,

obviously, if that was going to happen, we would want to

take that up with some discussion, as well, because that

would put us at a disadvantage, and we don't control, at

this point, the pace of the questions.

MADAM HEARING OFFICER: I would

disagree with that. I would disagree, to some extent,

you do control the pace of answering the questions.

MR. KIM: Answering, yes, but the

number of questions, no.

MADAM HEARING OFFICER: We could

debate that, but we won't at this point. I think this

is premature. I still believe that there's a very real

possibility that we could be done by Friday. So with

that, Mr. Harrington.

MR. HARRINGTON: Second matter.

Earlier we identified Exhibit 31, the response to

significant public comments received in the response to

the revision of the December, 2001, regulatory finding

of emission hazards, air pollutants, basically, responds

to the comment document and said we would provide copies

for the parties and the Board, and we are doing that at

this time.

MADAM HEARING OFFICER: I believe we

Page88

entered as Exhibit 31 the actual Federal Register

Reconsideration Decision, and we will admit this as a

separate exhibit.

MADAM HEARING OFFICER: We will mark

this as Exhibit 47, if there's no objection. Seeing

none, it's marked as Exhibit 47.

(Exhibit No. 47 was admitted.)

MADAM HEARING OFFICER: I believe we

are ready then to continue with Mr. Nelson. Question No.

7 from Kinkade.

MR. NELSON: Question No. 7: "What is

your definition of `commercially available?'" I think

that's very simple, common sense. If you are able to

purchase it, it's commercially available. Are Cadillacs

commercially available? Yes. You are able to purchase

them. Does the supply of Cadillacs -- could General

Motors supply every person in the United States today

with a Cadillac? No. They could not. They don't have

the capacity. If there was a law that they had to, that

everybody could only drive Cadillacs, I'm sure, in short

order, they would have a production capacity for that.

To be commercially available, it simply has to be able

to be purchased, doesn't have to supply a demand that

doesn't currently exist. That would be --

Page89

MR. FORCADE CONTINUES: Would I be

correct, then, that commercially available does not

imply any statement relating to the technology of

achieving a 90 percent reduction?

A. No. Is it commercially -- is technology

available that has been demonstrated at many sites to be

able to achieve 90 percent? Is that technology

commercially available? Yes. At every plant, when you

say "commercially available" is there a standard that

automatically is attached to the term "commercially

available"? No.

MS. BASSI CONTINUES:

Q. Does "commercially available" mean that it

will meet the demand for, in terms of supply and demand

that it will meet the demand?

A. If the demand is there, I guarantee that

the supply will be there. There will be an economic

incentive to do so. For example, right now we can

supply a number of plants on a day-to-day basis from my

existing production facility. That's just my company.

There's other companies that has a larger capacity than

we do, but as I mentioned before, there isn't a single

plant in the country that, on its own volition, is

getting mercury out any more than it is accidently

Page90

today, so my plant 90 percent of the time is not

operating.

Q. I'm sorry. I don't understand. Does your

plant supply the hardware or just --

A. This is just the sorbents.

Q. Just the sorbents. What about the

hardware? And when I refer to "hardware" here I mean

the whole gamut of what's necessary to comply with this

rule. Is that hardware going to meet the demand? Is

the production of that hardware sufficient to meet the

demand?

A. Yes. In my testimony, I asked the

question that's been asked here, "Is activated carbon

injection technology commercially available today?" Of

course, it is. We have incinerators all around the

country for the last five to 10 years. We have these

exact same systems, silos, the feeders, the blowers, the

transporters, the injection lances. They have been

provided and are operating today at incinerators in this

country, and even longer in Europe. The carbons, the

activated carbon is supplied for mercury control and in

incinerators today. There's trucks going out, and it's

being used for that today. Is it commercially

available? Yes. Can we, if there's increased demand,

Page91

can we expand it? Yes. What we need is a little bit of

regulatory certainty. I'm not going to build --

already, as I mentioned, I have a plant I have invested

in, and it's sitting idle 90 percent of time. I'm not

going to expand production three years ahead of time.

That's just throwing money away. The delays caused by

regulatory uncertainty and the lawsuits against the

regulations that make it uncertain, and that's why we

delay the production capacity buildup, but if the demand

is there, there's an economic incentive for the supply.

MR. ZABEL CONTINUES: Using your

Cadillac analogy, Mr. Nelson, if the regulatory

requirement that they supply everyone in the country

with a Cadillac, everyone driving stayed within the law,

if we can, they couldn't do it tomorrow, could they?

A. No, they couldn't.

Q. There would be some time lag, would there

not?

A. Exactly, to build up the capacity to

create all those Cadillacs.

Q. I realize your plant is idle, but do you

know how long it would take to build up the capacity,

not just the sorbent, as Mr. Bassi asked, but for the

entire pathway it would take to comply with this rule?

Page92

A. The issue would be the various halogenated

sorbents, themselves. Right now there is tremendous

excess capacity in the world in activated carbon. Even

in this country, Calgon has production lines that they

have mothballed because of there isn't enough demand.

There's excess capacity in Germany and China, for

example, for base carbons. All we do, that my company

does, for example, is -- we don't actually produce the

carbons. We simply bromate them. We halogenate them,

which is a very simple process kind of a one-step

process to treat the existing product. Particularly, if

Illinois is going to have, instead of the whole country,

it might be -- I would say there would be some issues

with respect to timing, if the whole country was going

to 90 percent control within two years. If just

Illinois, or Illinois and a few other large states do it

within three years, I don't think it's an issue at all.

Q. Is that true, not just for halogenated

activated carbon, but for the hardware and the craft

unions and other things in Illinois that would go with

complying?

A. I'm going to speak, specifically, to

sorbent injection. There are competing technologies.

If you are talking able putting in scrubbers, you do

Page93

need specialized trades labor in that case. With

respect to -- I mean, all we are talking about is a

silo, as you drive around Illinois here, and you pass

the grain silos and things that's that. We're talking

about a feeder and simply a blower. This is

100-year-old technology, just blowing a powder through a

pipe. It's not real high-tech, so with respect to

activated carbon injection technology, there's no trade

labor involved. You can even install these systems

while the plant is currently operating. There's not

long lead times, necessarily. Now, if you are talking

about some of the other mercury control technologies,

like if you have to install a new fabric filter, or if

you have to install a scrubber or something of that

nature, then you can be talking a couple years lead time

in trade labor, and that's a more involved procedure,

but for sorbent injection, it really isn't an issue.

Q. You do need penetrations of the duct, do

you not?

A. Yeah. You can hot tap while the plant is

going. All you do is drill a hole in it. That's not

hard. It would be preferable to have a scheduled

outage, but it's not required.

Q. What kind of trade labor is needed for

Page94

that?

A. Just need -- usually, you don't have to

bring anybody in. When we do our installations, which

are temporary, because these are month-long trials, the

plant personnel will drill the hole, and put in a

fixture there for us. Then all we do is insert the

lance. These are under negative pressure, typically,

the vast majority of plants, so you poke a hole in there

and gas gets sucked in, air gets sucked in and not

coming out, so you can do it while the plant is

operating if you have to.

Q. Have all your installations been

temporary. Is that correct?

A. Our installations, yes. As I mentioned,

there isn't a plant currently doing it. Plants will not

do it of their own volition, unfortunately. They are

not in it to -- as long as they can spew stuff out the

stack, they will. At least, that's the history of

mercury.

MS. BASSI CONTINUES:

Q. Forgive me if I'm jumping ahead, but would

the installation for a permanent -- would a permanent

installation be different from a temporary installation?

A. 90 percent of it would not be. There are

Page95

a couple plants where you have to do a little bit more

than simply sorbent injection. You may want to modify

various pieces of equipment to improve the performance

or lower the costs, but in a temporary month-long test,

it doesn't usually justify the cost to do that.

MR. BONEBRAKE CONTINUES:

Q. I think you mentioned that there's an

excessive supply of carbon. Is that true?

A. Yes.

Q. Would your expectation be that, if there

is increased demand for carbon due to regulatory

developments that that excess will disappear?

A. There's so much that I would not, unless

you see in national 80 or 90 percent cap in the near

future, I would not expect to see it disappear quickly,

nor, for example, at one of the three large carbon

producers in this country. They have plans to increase

their own capacity, but again, they want to make sure

that there's demand out for it. It's a financial

decision. They don't want to have excess capacity and

make those investments and not have any demand to

support them.

Q. Will CAMR require, approximately, 70

percent reduction nationwide by 2018?

Page96

A. No. It says that on the books, but you

have to understand where CAMR came from. According to

the Government Accountability Office, the GAO study, and

this inspector general for the EPA, the origin cap the

2010 cap of only about a 20 percent reduction, and then

2018 of 69 percent, those were not bottom-up

regulations, but according to those internal reports,

government investigations, those were top-down, that the

EPA workers were told that -- to come up with a

standard, for example, of 34 tons nationwide for 2010,

and that number came from, again, top-down. What's been

call co-benefits here is kind of a misnomer. It's

really what is accidently. I call it accidental mercury

reduction. It's what mercury are we getting out with

zero cost without even trying in a scrubber, and

basically, those numbers came from, and the CAMR numbers

came from an analysis. It was a guess by the EPA, if we

install CAIR, if we install NOx control and scrubbers

for S02 and NOx, how much additional mercury

accidentally are we going to be getting out nationwide,

and that's where those numbers come from, according to

the General Accountability Office and inspector general

reports, so I don't anticipate. They kind of had a

baseline, if we do not require a power plant to go out

Page97

of its way and spend one dollar intentionally trying to

reduce mercury, what would the timetable be? So under

CAMR, we don't anticipate much activated carbon

injection because that's another reason why they went to

a cap and trade. There's nothing wrong with cap and

trade, if the cap is high, but if the cap is very low,

like 20 percent, you are going to put some scrubbers in.

They are going to be getting 90-plus percent control.

Then you are going to have a bunch of plants in Illinois

that don't have scrubbers, for example. How do we make

sure that they comply, and get a 20 percent reduction?

Well, we have to allow them to purchase the allocations,

the mercury reductions that are made in the east with

these scrubbers that are being installed, so you won't

necessarily have any mercury reductions within Illinois,

but you will have a lot in Pennsylvania where all these

scrubbers are going in or other places, so you needed a

way to transfer those mercury reductions, so that every

plant would meet the reductions.

Q. I didn't ask you about phase one reduction

and I didn't ask about CAIR co-benefits and I didn't ask

about reductions in Illinois. My question was, as of

2018, does U.S. EPA say in its CAMR cap will result in

reductions of, approximately, 70 percent nationwide?

Page98

A. Yes. My answer -- I thought when we read

the question, do you anticipate carbon sales in 2018.

You were talking about capacity and that sort of thing.

Under CAMR, we don't anticipate much mercury control,

specifically, for mercury, which would be carbon

injection.

MADAM HEARING OFFICER: Could we take

a break.

(Discussion was held off the record.)

MR. NELSON: "Will CAMR require 69

percent from where we are today?" I think that's the

way it's designed.

MR. BONEBRAKE CONTINUES:

Q. Is it true, Mr. Nelson, that, in light of

CAMR and various state efforts, that you expect an

increase in the use of carbon for mercury control in the

next decade or so?

A. I think I have already answered that. No

I do not, under CAMR, do not expect much sales of carbon

for mercury control.

Q. You had also mentioned I believe that, if

ACI is installed, that trade labor is, typically, not

involved, but that's not true if ACI is installed in

connection, either with a change to an ESP, or an

Page99

addition of a bag house. Is that correct?

A. If you had an ESP -- I think I answered

that -- yes. There was quite a bit of trade labor

involved, if you do hardware installations in

conjunction with ACI.

Q. Is it also true that, if it's necessary to

install ACI, to also install duct work, that the duct

work is, typically, done by trade labor?

A. I'm not aware of any demonstrations where

they installed duct work in a simple retrofit, but if

you did construct duct work, then you would need a trade

labor, yes.

MADAM HEARING OFFICER: Can we move on

to Question No. 8.

MR. NELSON: What is your definition

of "cost effectiveness"? I think that's a relative

term. It simply denotes benefits, either total benefits

or one type of benefits, divided by cost. Benefits

divided by cost would be cost effectiveness.

MR. FORCADE CONTINUES:

Q. Do you have a particular value? Eight

dollars per benefit, or whatever it is, that would

constitute something being cost effective. Describe

something as being cost effective.

Page100

A. For example, where the cap-and-trade

program, an allocation is going to be per ounce of

mercury emitted, so you have dollars per ounce of

mercury emitted. We frequently use dollar per pound of

mercury removed and the same thing divided -- times 16.

That varies from site to site, and it varies with the

degree of removal, how much mercury is in the coal, but

if you assume a market in allocations, the market will

be in cost effectiveness units, or dollars per ounce of

mercury removed.

Q. I'm saying do you have a specific value

where you say, "At this value or below, the technology

is cost effective"?

A. "Cost effective" again, is a relative

term. You have to go to what is your next -- you can

compare two alternatives and say which is the more cost

effective. You can't say one thing is cost effective

and another thing is not because it's all relative to

what the alternative is. You mentioned that this comes

from my testimony. If you can point that out, I can be

more specific as to where I used that term and what I

meant in that particular use.

MADAM HEARING OFFICER: Question No.

9: "What is your definition of "economically feasible"?

Page101

I think that depends on context. Again, it matters what

your next best alternative is. I would, just generally,

consider something economically feasible if it doesn't

put the entire operation at risk financially.

MADAM HEARING OFFICER: Question No.

10.

MR. NELSON: "Please explain your

statement on page two of your testimony that the cost

and results for sorbent injection technologies vary,

depending on the type of coal burned, and the existing

equipment at the plant. This is where you would imagine

that each utility is going to try and minimize the costs

of meeting the regulation at each individual plant, so

you have to do a very plant- or boiler-specific

analysis. That will vary, for example, between plants

primarily based on the coal burned and the pollution

equipment. For example, the coal is burned. At least,

with sorbent injection -- well, any technology that we

add to a plant to control mercury for sub-bituminous

coals and northern lignites, sorbent injection of

halogenated injection, so far, has proven to be very,

very cost effective, and is probably the low cost

technology currently at most of these plants. The

bituminous plants, because the flue gas, contains a lot

Page102

more chemicals. Bituminous coal is a more complex

garbage that's being burned. We tend to have to inject

more sorbent to get a similar removal rate. Illinois is

very fortunate in that the vast majority of your

existing fleet is burning these sub-bituminous coals.

With respect to the existing pollution equipment control

equipment at the plant, for example, if you're one of

the lucky plants that have fabric filters existing

today, you can get by with very, very little sorbent

because that helps the mass transfer. You don't have to

purchase and use as much sorbent. If you have a wet

scrubber, for example, you're already, or can, with a

little bit of modification, get very high mercury

removal if you have bituminous coal. If you have a

spray dryer, fabric filter, as on some sub-bituminous

coals, again, adding a very, very little bit amount of

halogenated sorbent can give you high removal rates, so

it is going to vary somewhat plant to plant as to what

we call native removal, or accidental removal at the

plant already is, and then how much sorbent if you're

using sorbent injection, you would have to purchase and

use to get a particular degree of control.

MR. FORCADE CONTINUES:

Q. I believe earlier you had mentioned that

Page103

it could be measured in terms of dollars spent per

either ounce or pound of mercury. Can you give us

dollar ranges that would apply to sub-bituminous plants

so we can put upper and lower bounds on that?

A. For sub-bituminous plants with just cold

side ESP's, which is the dominant configuration in the

state of Illinois, based on those 30-day, full-scale

runs that we and others have done in the DOE programs,

for 90 percent mercury removal, you're probably talking

in the order of $5,000 to $10,000 per pound of mercury

removed. If you go to 75 percent, the lower bound, you

could be talking anywhere from $3,000 to $5,000 per

pound of mercury removed and you would divide that by 16

to get per ounce removed. Now, at some other plants, it

might be significantly higher. For example, bituminous

plants that have high SO3, which I think we will get

into, you would have more sorbent requirements, and you

might be on the order of $20,000 to $25,000 per pound of

mercury removed. If you have lower mercury in the coal,

then, for a given amount of sorbent, you are going to

get less mercury out, so you would have relatively

higher costs, but you would have less mercury to get

out, so it varies from plant to plant.

MR. BONEBRAKE CONTINUES:

Page104

Q. I think you confined that answer to cold

side ESP units. For hot side ESP units, what's the

corresponding dollar amount, Mr. Nelson?

A. You have I believe three hot side units

here in Illinois, one of which is going to switch, for

other reasons, to a fabric filter, so we are talking

particularly about Will County No. 3 and Waukegan Unit

No. 7. We are going to do one of these DOE 30-day

demonstrations at Will County early next year. So far,

we have only demonstrated -- my company has demonstrated

on two hot side units, Cliff Side Unit, and the Buck

Station of Duke Energy. The Buck demonstration was a

30-day demonstration. Cliff Side was a shorter-term

testing. Now, those two were done with bituminous coal,

which I said requires more sorbent. Now, the technical

analysis that Dr. Staudt did assumed the Toxicon

arrangement for those two units where you actually build

a fabric filter and you can inject less sorbent, but you

have higher capital costs, and that's with the

assumption is in his cost calculations in his analysis.

My company believes that we're going to be able to have

significantly lower costs than that because we are

dealing with sub-bituminous coals in our demonstrations

here. We haven't actually shown that, yet. That still

Page105

remains to be seen. We will know a lot more in about

nine months, but I would expect -- my expectation is,

based on all the other demonstrations, is that we will

probably be, for 75 percent control at those units, for

example, at Buck, we got -- 70 percent control at

injection rate of 10 pounds per unit ACF. This was one

of those situations where we could have done even better

if we had invested a little bit in some hardware

modifications, but because it was only a temporary test,

we didn't do that, but I would estimate that we will be

probably in the 10 to -- say 8,000 to 10,000 per pound

of mercury removed. Some of it is going to depend on

how much mercury is in the coal on those particular

units, on those two units, and also, whether they are

going to continue to sell their fly ash. They sell fly

ash, a significant amount of fly ash, out of the

Waukegan Unit.

DR. GIRARD CONTINUES:

Q. What were the costs observed at the

studies that were run?

A. On the coal sides with bituminous coal?

Q. I think we are talking about the hot

sides.

A. The hot sides with bituminous coal. At 70

Page106

percent, 10 pounds per million ACF, the particular

mercury on their coal -- I am going to have to get back

to you on a particular calculation, but my guess is

$25,000 or $30,000 per pound mercury removed. But

again, that was bituminous hot side, which is going to

be more expensive than sub-bituminous.

MR. BONEBRAKE CONTINUES:

Q. The $8,000 to $15,000 per pound number

that you gave us, does that assume no requirement to add

a bag filter.

A. That's correct. This is just simple

injection of sorbents. Dr. Staudt did the costs if you

put in a fabric filter. You consume much, much less

sorbent if you have a fabric filter, but you do have the

capital cost of the fabric filter.

Q. I think you said, Mr. Nelson, that the

only tests studies on the hot side ESP's that your

company has performed, both have involved units that are

burning bituminous, as opposed to sub-bituminous coal?

A. Right.

MADAM HEARING OFFICER: I think we

have answered 10-A, as well, have we not? I think we

are ready for Question No. 11.

MR. ZABEL CONTINUES:

Page107

Q. I had a follow-up. I'm not sure I could

follow all your numbers, Mr. Nelson. Is it, on a per

pound or per ounce of mercury removed, less expensive at

a given percentage removal, I guess, the higher the

mercury content in the coal?

A. Yes, because let me explain the way

sorbent injection works. If you inject -- it's a

constant removal rate kind of technology. If we have 10

molecules of mercury, say it's a high mercury coal, and

we get 90 percent out, we get nine of them out, and

that's the denominator, cost for a certain amount of

carbon divided by how much you get out, mercury removed.

If you have a low mercury coal to start with, and you

only have five there, and you get 90 percent, you are

getting four and a half, so the denominator -- you get

less removed for a given cost. Now, if you -- let's say

we inject one pound or X pounds per million per cubic

feet of gas, and let's say we get 50 percent of the

mercury out. If we inject 2X, we get that 50 percent

with the first X and get 50 percent of the 50 percent we

didn't get out the first time, so you get 75 percent, 50

plus 25. If you inject 3X, you get 50, plus 25, plus 12

and a half with that third X, so there's a bit of

declining returns to increased sorbent, so it,

Page108

generally, costs a little more to get to higher removal

rate levels.

Q. So all things being equal -- and I

understand that all things are never equal -- I would be

better off burning a high mercury content coal than a

low mercury content coal?

A. In terms of cost effectiveness, yes. In

terms of -- however, in terms of getting 90 percent out,

to be honest, it's not going to matter. We will get 90

percent out with so many X pounds if you have high

mercury or low mercury, but frankly, I believe that most

power plants in Illinois are going to end up meeting the

.008 pounds of mercury per gigawatt hour standard

because since most are sub-bituminous, if you look at

what the actual mercury levels are, typically, in

sub-bituminous coal, that will be a slightly easier

standard.

Q. Looking at your example of the 10 and five

molecules, actually get 90 percent and have an entire

molecule of mercury left on the 10. I would have only

half left on the five. So I would have higher mercury

emissions with a higher mercury input to the control

device, even though I'm meeting 90 percent. Is that

correct?

Page109

A. That's true. If you are meeting 90

percent on both, so you have to be careful about how the

standard is written, and actually what the standard is,

definitely.

MADAM HEARING OFFICER: Question No.

11.

MR. NELSON: "Is the St. Clair Power

Plant you discussed on page three of your testimony

similar in operations to the coal-fired electric

generating utilities currently operating in Illinois?" I

would say yes. It's very similar to many of those

because it burns sub-bituminous coal primarily. They

mixed in, as many Illinois plants do, or at least, some

Illinois plants do, they mixed, on average, about 15

percent bituminous and 85 percent sub-bituminous burning

concurrently, so the coal is very similar. The

configuration with just a cold side ESP and no scrubber

is similar to the majority of plants in Illinois.

MR. HARRINGTON CONTINUES:

Q. Let me start. We touched on some of the

same questions, but maybe this is the appropriate place

to explore this a little bit.

MADAM HEARING OFFICER: As long as you

help me remember which one of these questions are.

Page110

MR. HARRINGTON CONTINUES:

Q. We will deal with the other tests, too,

but since this was brought up at this point, you know

the term "SCA"?

A. Certainly.

Q. Can you explain it?

A. "Specific Collection Area" is a

measurement, a relative measurement, of the square feet

of plate collection area in an electrostatic

precipitator to the quantity of gas flow through the

ESP, so it's a relative measure of the size of an ESP

physically.

Q. So the more SCA, specific collecting area,

the larger the ESP as a more removal you would expect it

to achieve. Is that correct?

A. In general, yes. We might want to talk

about this -- you have a number of questions on this

later.

Q. I can postpone these questions, until

then, but maybe just for the record, what's the size of

the SCA in the Detroit study?

A. St. Clair had a large electrostatic

precipitator. It had I believe six fields in it. Two

of them were not energized, were not used, so as

Page111

designed, if it was operating as designed, it would have

a selective collection area of I believe 700 square feet

per thousand actual cubic feet of gas flow, so the

number of 700 is kind of the number to remember. As I

mentioned, only two-thirds of it was operating during

the month of testing, and so it had an effective SCA of

about 470. Now, 470 is still relatively high. It would

probably be about 70th percentile is my guesstimate, if

you look nationwide, so it was still larger than

average, in terms of the physical size of the ESP.

Q. I will reserve my questions on the rest of

these and asked if that's appropriate.

MADAM HEARING OFFICER: That's fine.

DR. GIRARD CONTINUES:

Q. Can I just follow up real quickly. In

your answer to Question No. 11, when you say that the

St. Clair power plant is similar in operations to plants

in Illinois, you are just making a general statement,

aren't you?

A. Yes. There are plants that are totally

different.

Q. So you have not prepared a checklist, a

spreadsheet, and gone down it, and compared this plant

to plants in Illinois on very specific architect or

Page112

engineering or other features?

A. Actually, I have done that now. When I

got those configuration data, that's what I did, so I

can say -- like I said, this pertains to the mode or

there are more plants that are very similar to St. Clair

than any other plant. It is very similar, but there are

some that are totally different.

Q. So it's still a general statement?

A. Yes. It's a general statement.

MR. FORCADE CONTINUES:

Q. When you say it's similar, are you talking

about being configurationally similar? It has cold side

ESP or are you talking similar, in terms of the size of

the output of the facility, the square foot of the bag

house, or electrostatic precipitator? How are you --

A. From a mercury control standpoint, as I

mentioned, the important things are the coal that's

burned and the configuration of existing equipment, and

in those two categories, it is similar to many plants in

Illinois.

Q. I'm sorry. Perhaps my question wasn't

framed correctly. Do you mean it was similar in that it

had a cold side ESP or do you mean it was similar in

that the size of the cold side ESP was similar to the

Page113

one you were evaluating? Configurationally, they might

have been the same plant, but if one had a very large

ESP and the other a very small, would that have made a

difference?

A. Not in terms of mercury removal. I mean,

it makes a difference of potentially in particulate

control, but in terms of mercury removal, it's similar

in the type of coal that's burned to many plants, and

it's similar, in terms of existing air pollution control

configurations that are important for mercury.

Q. Would I be correct that the mercury is

actually removed in the particulate matter of the ESP

after it adheres to an activated carbon?

A. The sorbent is removed. The mercury is

actually captured, predominantly, in the duct work on

the way, but then you have to get the sorbent out of the

gas stream, and that's taken out in the particulate

control device.

Q. So if the particulate control device were

less effective, would you not have higher mercury

emissions?

A. No. 99.X percent of the particulate is

taken out in whatever device you get, so the degree --

there's side issue that we will get to in some of the

Page114

other questions with respect to the SCA of -- are there

balance of plan issues? But with respect to mercury

control, the performance of the ESP, with respect to

mercury control, really has no effect.

MADAM HEARING OFFICER: Question No.

12.

MR. NELSON: "How much do your

companies various control systems as described in your

testimony cost? Would factors weigh into the cost of

the systems?" There's two costs, as the testimony

points out. One is in the capital cost of the equipment

and as Mr. Forter mentioned, the cost of a sorbent

injection system for particulate boiler, assuming a 100

percent redundancy, so you, basically, have two feeders,

in case there's problems with one. You switch over to

the second one. Really, all it is is a silo with some

feeders, a blower, a pipe going to the duct work and

then some lances, which are just, basically, pipes

sticking into the duct blowing into the duct work.

That's the capital usually involved. That will vary --

the cost of the units that we have bid on is $350,000 to

half a million dollars, and then there are costs with

installing them and according to the plant, that might

be another couple hundred thousand dollars, so your cost

Page115

is half a million, to three quarters of a million

dollars per plant. And it can be a little less now on

smaller units, but that's pretty basic. It's also

depending on the plant, two to four dollars in capital

cost per kilowatt of power capacity, so you are talking

two, to four. The larger units would have the two and

the smaller units would have the four. Again, you are

just dividing by a larger or smaller denominator. Now,

in relative terms, a wet scrubber would maybe be $200

per kilowatt, so you are talking 50 to 100 times more

than the capital cost of activated carbon injection.

For, basically, the cost of one medium-sized wet

scrubber in Illinois, you could outfit 50 plants, 50

boilers. For the majority of the boilers, could be

supplied with activated carbon injection. Then you have

operating costs. Operating costs in activated carbon

injection if it's simple activated carbon injection into

an ESP, it's really just the cost of the carbon. For a

halogenated activated carbon today, delivered price cost

would be roughly a dollar a pound, so the question asks

for those costs.

MADAM HEARING OFFICER: Question No.

13.

MR. NELSON: "In your testimony on

Page116

page three, you state the quantity of the sorbent you

need to inject into a sub-bituminous plant is directly

proportional to the mercury removal to be achieved.

What factors go into determining the amount of sorbent

necessary?" I would like to elaborate on my "directly

proportional." What I meant there is, the more sorbent

you inject, the more mercury you remove. It's very

simple. Scientifically, actually the relationship is

inversely proportional to the amount of mercury

remaining in the gas. In other words, in my

explanation, if you double the mercury -- let me restate

this and state it another way. If you plot the amount

of mercury remaining logarithmically on the Y axis

versus sorbent on the X axis, you get a straight line,

and we see this time and time again, plant and plant

again, particularly for ESP's. You have a second

phenomenon with a fabric filter where you have time on

the fabric filter, so that's a little more complicated,

but to answer the question, "Explicitly, what factors go

in to determing the quantity necessary?" As I

mentioned, it's primarily the coal that you're burning

and consequently, the chemistry of the flue gas that's

generated and the existing pollution control equipment.

Do you have a fabric filter? Do you have a hot side

Page117

ESP? Cold side ESP? Do you have SO3 injection? Do you

have -- what temperature is the gas? Those kind of

considerations.

MADAM HEARING OFFICER: Question 14.

MR. NELSON: "Is it important to have

accurate data as to the mercury content of the coal

being fired?" Well, that depends on how you're choosing

to comply. For example, if you're choosing the absolute

standard of .008 pounds per gigawatt hour, the mercury

content of the coal you don't need to measure. All you

need to measure is how much is going out with a stack,

and how much gigawatts of power you generate, so you

don't have to meet that. If you're meeting the 90

percent standard and your 90 percent reduction standard,

and the denominator is the mercury in the coal, then,

yes, you have to measure the mercury in the coal. In

fact, to give a good handle on this, let me consider

Question No. 15, as well, because I do have -- I brought

an exhibit that I think helps understand the answers to

14 and 15.

MADAM HEARING OFFICER: Go ahead and

read question.

MR. NELSON: "If identical systems of

coal were submitted to five different laboratories for

Page118

mercury analysis, what is the largest variation of

analytical results that you would expect? Do you have

any data to support that conclusion?" My answer to that

is yes. There is measurement, or measurements jump

around with respect to mercury, or any coal analysis,

sulfur or anything in a coal. Usually, you have

variation because the issue is how do you get a

representative sample. How much does it jump around?

When the laboratories measure these, they are measuring

just milligrams of the sample, and you want to make sure

that that is the same as the bulk sample, so usually you

have to make a number of different measurements in order

to get a representative sample. I would like to enter

this as an exhibit. It would be easiest if they had

these when I explained it. I think that what the

questions are getting into here are kind of the accuracy

of mercury measurements and how does a power plant feel

confident that they are actually meeting a 90 percent

reduction requirement. What I'm passing out is for the

St. Clair demonstration. Over a period of 30 days,

every day we were -- we took coal samples and measured

the mercury in the coal. We also measured -- actually

that's not what's on here. What is on here is the

mercury in the fly ash, but it's a similar kind of

Page119

variability. You take a fly ash sample, and now you are

measuring how much mercury is in the fly ash. Now, the

fly ash contains the sorbent, which contains the mercury

that we capture, so it's an independent measurement of

how much mercury did we remove from the gas stream.

MADAM HEARING OFFICER: Excuse me, Mr.

Nelson. Before you continue, Mr. Nelson, we have "Fly

Ash Mercury Track CMM Mercury Closely." We will mark

this as Exhibit 47 if there's no objection. Seeing

none --

MR. BONEBRAKE: I think it's 48.

MADAM HEARING OFFICER: I did, indeed.

Thank you for keeping me on track. Exhibit 48. Seeing

none, it's marked as Exhibit 48. Go ahead.

(Exhibit No. 48 was admitted.)

MR. NELSON: The CMM in the title is

an abbreviation for "Continuous Mercury Monitor." This

is a gas phase mercury analysis. There are a number of

things to kind of look at here. One is, on the X axis,

you have 30 different days. That's what's on the X

axis, and on the left Y axis, is the daily average gas

phase mercury . Now, this is time weighted. What we

are measuring is, before injection, how much mercury is

in the flue gas. This is in nanograms and mercury per

Page120

normal cubic meter. The important curves are the two

dark blue curves near in the middle and top of the

graph. The ones with the diamonds is this time weighted

gas phase mercury, and this is an average over the

course of the day, so it reflects how much mercury is

coming in with the coal and the variation in the mercury

of the coal, and you can see, for example, in the first

couple of days it was around 9,000 nanograms per cubic

meter, and then about a week later it was down to six,

so you can see there's a lot of variation of the mercury

coming into the plant, and the coal, as much as about 40

percent lower than it was between the top and bottom.

You can see kind of how that varies with the coal coming

in daily.

The other kind of important one is the

solid the other solid blue line that has the little

crosses on it, and that refers to the X axis. That's

the mercury in the fly ash that was collected. Now,

there are six hoppers. We weighted them, according to

the relative fly ash in the hopper, so it's a daily

average hopper-weighted mercury that we're getting out

of the gas line, basically, and the amount of mercury.

I'm kind of proud of this particular graph. I did not

anticipate a measurement to be quite as consistent as it

Page121

turned out to be, but you can see there's a second graph

that we should enter into the exhibit, and this shows,

over the 30 days, what the average mercury removal was

on each of those.

MADAM HEARING OFFICER: We will mark

this as Exhibit 49, if there's no objection, and I will

give you all a chance to look at it first.

MR. NELSON: What we did in the other

demonstrations that DOE, for the most part, is required

is we injected a constant amount of sorbent, three

pounds of sorbent per million cubic feet of gas

continuously for the first 30 days, never varying. Now

the plant operation varied. The coal varied, and you

can see that the mercury removal varies. It varied here

between the high 80's to the high 90's at any particular

given time, but it averaged pretty consistently about 94

percent, so we are getting pretty much a constant amount

of removal of the level of mercury that was ending up in

that fly ash.

MADAM HEARING OFFICER: If there's no

objection we will mark this as Exhibit 49. Seeing none,

it is marked ass Exhibit 49.

(Exhibit No. 49 was admitted.)

MR. NELSON: The point I was trying to

Page122

make in answering Questions 14 and 15 is it turned out

that the mercury coming back from the lab in the samples

of fly ash, the solid samples tracked extremely well the

amount of -- because we were getting a consistent

fraction of the mercury out, the mercury that was in the

flew gas. That when there was a lot of mercury in the

coal, there would be a lot of mercury in the flue gas.

There would be a lot of mercury we were capturing in the

fly ash. When there was a low amount of mercury in the

coal, there was lower mercury levels in the flue gas,

and consequently, there was a lower quantity of mercury

in the fly ash. So it looks like, at least, at this

plant, the numbers were extremely consistent, and we

were getting very good measurement of mercury, both, in

the gas phase and also in the solid phases. I was very

gratified to see that those two top blue curves tracked

each other very well.

MR. FORCADE CONTINUES:

Q. Would it be safe to say that the test

protocol for mercury content in the exhaust gas was a

different test protocol than the test protocol for

mercury in the fly ash?

A. Oh, yes. They are completely different

instruments.

Page123

Q. For mercury content in the coal, would it

be identical to mercury content in the fly ash or is it

a different test protocol?

A. We use the same equipment. There's a

little bit of variation because the concentrations are

very different, but we use, basically, the same

equipment, basically, the same method, but there are

some differences.

Q. This could be one of the facilities that

you identified as being part of tests for which we will

receive subsequent report data?

A. Yes.

Q. And is there information on inlet or coal

mercury content in those reports?

A. Yes. It similarly gives how the mercury

varied in the coal. I'm not sure all 30 days, but

there's 15 or 20 days, at least, in there.

DR. GIRARD: Let me just clarify, so

we are going to get either copies or citations to the

DOE reports where these graphs came from.

MR. NELSON: Yes. I will supply them

to Illinois, and they can supply them.

MADAM HEARING OFFICER: Are we ready

to move on and do you want to go to Ameren or Dynegy?

Page124

MR. NELSON: Ameren would be fine.

MADAM HEARING OFFICER: That would be

my preference, too, since there's more discussion about

these tests with Ameren, so let get some of these before

we break for lunch.

MR. NELSON: "Please describe your

personal involvement in the development of mercury

control technologies, particularly the sorbents

discussed in your paper and your testimony." I've been

working on mercury for 10 years now, started with the

incinerator mercury. I have a patent on brominated

carbons for utility mercury control and have played a

big part in the development of the hot side version and

the concrete version. "What is your personal

involvement in the development of engineering,

construction and installation of pollution control

equipment?" I've been the project manager at many of

these demonstrations and have been involved in the

design and bidding on the equipment used to inject the

equipment. "Have you reviewed the Technical Support" --

MR. HARRINGTON CONTINUES:

Q. Did I understand you to say you had a

patent on the brominated mercury?

A. On one particular -- yeah, there is a

Page125

patent or -- our particular product is patented. The

particular, what we call B-PAC is patented.

Q. Is that different than the other products?

A. Yes, it is. Our competitors do not

violate our patent, at least I hope they don't.

Q. Is your product more effective than

others?

A. I think that remains to be seen. There

have only been a couple large scale tests where they

have kind of gone head to head, and a couple that we're

aware of we do a little bit better. Let me put an

asterisk. There's an All Stone technology that appears

to show better performance than ours on a per pound

basis.

Q. All Stone?

A. All Stone. It's largest utility company

in the world, utility equipment company.

Q. Is this patent owned by your company or by

you, personally?

A. The company.

Q. Do you own the company?

A. No. It's owned by shareholders. It's

publicly owned. There's -- each company has their own

technology, so there's -- it's not like there's one or

Page126

two patents that are particularly important, but you

can't do precisely what we do.

MR. ZABEL: I couldn't hear that

answer.

MR. NELSON: I'm saying that each

company has their own proprietary way of doing things.

MR. HARRINGTON CONTINUES:

Q. So for example, if a rule lists several

companies having technology, that's referring to

proprietary technology of each of these companies?

A. Could you repeat the question?

Q. Well, the proposed rule before the Board

that's based on injecting halogenated activated carbon

produced by several named companies, yours being one of

them. I assume you're familiar with that?

A. Yes.

Q. Now, are each of those technologies --

would you expect those to be patented?

A. Each -- I know All Stone has their patent,

and we have one that's been issued. Others we're

working on. Noret has patents. Every one tries to

protect their particular technology to the extent that

they can.

Q. Is the patent on the product or on the

Page127

process for producing the product?

A. The patents vary.

Q. In your case?

A. In our case, it covers the production and

use of our particular -- of the B-PAC product, but there

are many ways to skin a cat. Ours, for example, just

covers bromine. Halogens, there's also iodine and

chlorine, phlorene. There's other halogens that can be

used.

Q. Would some of the other companies listed

in the Illinois proposed rule be using these

other halogens?

A. I don't know about All Stone. Noret uses

bromine, but my understanding is they don't infringe our

patent.

MR. FORCADE CONTINUES:

Q. If I correctly understood you, you said

that you had a patent on the manufacture and use. Would

a facility needing to utilize your product have to get a

license from you?

A. To use our particular product, yes.

Q. Is that license covered in the cost that

you were providing to us?

A. As long as they buy the product from us,

Page128

our current business strategy does not call for

licensing fees.

MS. BASSI CONTINUES:

Q. I'm sorry. I believe you said that you

are -- you have a patent on your product, as well as the

use. In taking a look at the hardware, is the hardware

universal?

A. Yeah. The hardware is extremely generic.

Q. So regardless of which company makes the

halogenated ACI, it doesn't make any difference where

the hardware came from. Is that correct?

A. Correct.

MR. BONEBRAKE CONTINUES:

Q. You mentioned that currently you do not

charge a licensing fee. If more utilities start using

your product in response to regulations, would you

anticipate, Mr. Nelson, that your company would start

charging?

A. No. If you buy the product from us, I

don't need a licensing fee.

Q. On Question No. 3, I believe your

statement in response to the similar question for

Mr. Forcade's company was that you did not review the

Technical Support Document prior to your testimony, but

Page129

you have done so since then?

A. Correct.

MADAM HEARING OFFICER: So the

Question 4.

MR. NELSON: "Do you agree with

conclusions of Chapter 8 of the Technical Support

Document therein, particularly as to what technology is

required in various facilities?" Yes. I, generally,

agree. I do disagree. It's my belief that it will be

less expensive to inject hot side sorbents in those two

particular boilers, and that they will not require a

fabric filter, but that's really the only substantive

technical disagreement I have. There is, in fact, a

cheaper way. "Page three of your testimony refers to

the St. Clair Power Plant of Detroit Edison. Were you

personally involved?"

MADAM HEARING OFFICER: Before you

answer these questions, Mr. Nelson, it's my

understanding that this is one of the studies that --

papers that you plan to provide a report with.

MR. NELSON: Yes.

MADAM HEARING OFFICER: Is it going to

be possible for us to get that report today, like, this

afternoon?

Page130

MR. NELSON: If I had my office E-mail

it to you, yes.

MADAM HEARING OFFICER: I'm just

wondering if we had the report in hand how many of the

questions would be answered by the report, itself

versus -- I mean --

MR. NELSON: I don't think that would

help very much.

MADAM HEARING OFFICER: Let's proceed

with the questions, then.

MR. HARRINGTON: May I drop back?

MADAM HEARING OFFICER: You can drop

back to yesterday, if you want.

MR. HARRINGTON: Are you familiar with

Table 8.8 on page 161 of the Technical Support Document,

which I believe sets forth the conclusions as to the

latest technologies?

MR. KIM: What page was it again?

MR. HARRINGTON CONTINUES:

Q. 161.

A. Dealing with the fly ash?

Q. Sorry. I was referring to 8.9 on 162.

A. Yes. I have looked at that.

Q. When you said you agree with Dr. Staudt's

Page131

conclusions, do you agree with the technology set forth

on that page with the exception of the hot side ESP's

for each of the facilities in Illinois?

A. You could certainly use sorbent injection

on all those and co-benefits for those that have

scrubbers. I don't disagree with it. I think it's

reasonable.

Q. Do you agree that those would achieve

either 90 percent removal or the .008 per million

gigawatt hours?

A. Based on what I know, I would say that the

vast bulk of them certainly should. Individual plants

we would have to look at, but again, I, generally,

agree, yes.

Q. Do you know which individual plants we

would have to look at?

A. The ones that burn sub-bituminous coal I

think should have no problems. Some of the ones burning

bituminous coals you can, again, you can -- it's not

that will they get 90 percent or won't. It's more a

question of what would be the optimum technology for

that plant. You really have to look at the individual

specifics of the plant.

Q. So it's your testimony that all of the

Page132

facilities burning sub-bituminous coal in Illinois could

achieve 90 percent reduction of the .008 pounds per

million gigawatt standard solely with sorbent injection?

A. I believe that to be the case.

Q. That, in addition to the installation of

the sorbent injection system, there would be no

additional capital costs for control?

A. Not necessarily. There may be at

individual plants, which we can get into. For example,

when you talk about the SO3 injection systems, and there

may be some modifications that have to be done, but

again, it's a matter of degree. You can always, for

example, add a fabric filter. I don't know anticipate

that necessarily for those plants, but that's I think

partially addressed with the temporary technology, the

TTBS, that, if, in fact -- my understanding of the

purpose of that is, if, in fact, the utilities make a

good faith effort to achieve high removal and install

these sorbent injection systems, and if, for some reason

despite their best efforts, there are particular issues

at a plant, that's what that kind of safety valve is

for, so I think it's certainly with that. I'm much more

confident that there won't be significant costs at more

than maybe one or two of these plants.

Page133

MS. BASSI CONTINUES:

Q. Does the TTBS proposal, however, in any

way, modify -- I believe the earlier statement was that

you believe the bulk of the plants listed here, with the

exception of the hot side ESP plants, will achieve the

90 percent or the 0.008 limitations with only the ACI

and the halogenated carbon?

A. Well, actually, I think the hot side may

be able to emit it, too, but some of the plants have

scrubbers, too, or having scrubbers planned for them

that will go in, so those I would not anticipate having

to install sorbent injection. For example, the Baldwin

plants, those, in order to meet the timetable I believe

their scrubbers planned for those plants, those

timetables I'm assuming would be moved up, so that those

scrubbers would be installed, and you would have the

accidental removal with the wet scrubber without the

sorbent injection, but you could also install sorbent

injection, until the scrubber is built, as well. Did I

answer your question?

Q. Yes, sir.

MR. HARRINGTON CONTINUES:

Q. Referring to the same table, do you agree

with the cost numbers that are here?

Page134

A. Again, generally, I do. I think that the

sorbent costs -- I think that Dr. Staudt used 85 cents

or something like that, per pound where the cost would

probably be a little higher in the sorbent. It would

probably be -- I assumed a dollar a pound, but I mean,

we are cutting shades of grass here. These costs are

very low compared to NOx control or S02 control or

particulate control, so I think these numbers are pretty

respectable. They are not far from what I would have

come up, if I had done a similar exercise.

Q. We'll come back to some of the details of

is facilities later.

MR. ZABEL CONTINUES:

Q. I did want to follow up since Mr. Nelson

mentioned the Baldwin plant. Would it matter whether

the scrubber you referred to was a dry or wet scrubber?

A. Baldwin I believe is burning -- I assume

they are going to burn the same coal, instead of

switching, once they have a scrubber. Some plants

switch once they get a scrubber, so if you are talking

about I believe Baldwin is talking about a spray dryer

fabric filter combination. Is that --

Q. Assume that for a moment. Was that part

of your answer?

Page135

A. In that case, by itself, a spray dryer

fabric filter, even with SCR, which I believe is also

going in there, you won't get accidently 90 percent with

a sub-bituminous coal. You would have to inject a very

small amount of sorbent, perhaps one pound per million

ACF, so you may have to add a small sorbent injection

system, but you would be injecting very, very little

sorbent in that case.

Q. And that would not be your answer if it

was a wet scrubber, would it?

A. If it was a wet scrubber, you shouldn't

even need sorbent injection.

MR. BONEBRAKE CONTINUES:

Q. Mr. Nelson, you mentioned now a couple of

times that you think the hot side units at Will County

and Waukegan can achieve 90 percent with ACI, as I

understand it, without any other hardware being

installed. Is that correct?

A. No. I think there may be some slight

hardware modifications that I can't talk to, for

proprietary reasons, on those hot sides. There might be

a little more hardware than simply the injections

system. I would also like to modify my previous comment

on the wet scrubber. If you are burning sub-bituminous

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coal, simply having a wet scrubber still isn't going to

get it for you. I was assuming sub-bituminous coal with

the scrubber case.

Q. Let me follow up on that. The dry

scrubber would be used on sub-bituminous. Is that

correct?

A. Typically, that's the way it works.

Q. And the average cost of a dry scrubber?

A. Is cheaper than the average cost of a wet

scrubber.

Q. Stipulated, Mr. Nelson.

A. I mentioned $200, on average. $200 per

kilowatt for a wet scrubber. It might be $150 for a

spray dry fabric filter combination.

Q. And use a wet scrubber on sub-bituminous

coal?

A. That's, typically, what's done.

Q. Once the dry scrubber is installed, and

you switch to high sulfur coal, it would be improbably,

would it not?

A. No. Actually, not. You can do it. You

can certainly do it. In fact, you get very good mercury

removal if you have --

Q. Go ahead.

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A. But the issue is your S02 removal is

typically higher with a combination of wet scrubber on a

bituminous coal.

Q. And a dry scrubber on bituminous coal,

would that be sufficient for sulfur standards, to your

knowledge?

A. You are getting into an area that I'm not

an expert in, but they have done a good job in

increasing the performance of those, but it's still not

quite up to the standards of a wet scrubber.

Q. Would it meet the CAIR requirements?

A. It would meet the CAIR requirement.

Q. Go ahead. Would it meet BACT?

A. That, I do not know.

BONEBRAKE CONTINUES:

Q. Mr. Nelson, in your response to a question

I raised, I think you said you believe some additional

hardware would be required at the hot side units, but

you couldn't talk about it.

A. Hardware modifications. The hot side is a

little more difficult situation, so there's more to

consider.

Q. What hardware modifications do you have in

mind?

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A. Again, for proprietary reasons, I can't

answer that.

Q. What proprietary considerations?

A. There are things that for use of our H-PAC

product, which is the variation of B-PAC for hot sides,

at some plants, you may have to make some additional

modifications to either equipment or procedures, but

again, I can't, for proprietary reasons, I can't get

into precisely what those are and it depends on the

plant. There's just a little more going on.

Q. Can you tell us what the range of costs

would be expected associated with the hardware

provisions that you have in mind?

A. That's a fair question. It would

certainly be less than a million dollars per plant, or

per boiler.

Q. When you talk about proprietary

considerations, are you referring to trade secrets,

Mr. Nelson?

A. Well, hopefully, they will be patented in

the future, but we're going through that and that's a

lengthy process. Currently, they are trade secrets.

Q. Are you in a patenting process right now?

A. Yes.

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Q. And you had mentioned in connection with

some earlier discussion of the hot side ESP units, a

couple of studies, one at Cliff Side and another at Buck

that your company had done. Aside from those two

studies, are there other studies, Mr. Nelson, upon which

you rely to support your view that hot side ESP units

could attain the Illinois-proposed standards with the

installation of only ACI, and then perhaps these

additional hardware revisions that you just referred to?

A. With just ACI, those are the only two

plants that I'm aware of that have shown that.

Q. Again, those plants burn a different type

of coal than Will County and Waukegan, right?

A. They do, generally a more difficult coal.

MADAM HEARING OFFICER: Ready to --

Question No. 5 asks about the St. Clair plant of Detroit

Edison and No. 6 wants to know if you were, personally,

involved in that study.

MR. NELSON: Yes, I was. I was

project manager for that project.

MADAM HEARING OFFICER: And question

No. 7 asks about the size and I believe you've

previously answered that.

MR. NELSON: I believe I did.

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MADAM HEARING OFFICER: With that, we

are ready to get into the nuts and bolts of that study,

and it is now -- I have 12:30, so why don't we take an

hour for lunch, and we will come back after lunch and

get into the nuts and bolts on the St. Clair study.

Page141

STATE OF ILLINOIS)

COUNTY OF ST. CLAIR)SS

I, Holly A. Schmid, a Notary Public in

and for the County of Williamson, DO HEREBY CERTIFY that

pursuant to agreement between counsel there appeared

before me on June 21, 2006, at the office of the

Illinois Pollution Control Board, Springfield, Illinois,

Sid Nelson and David Forter, who were first duly sworn

by me to testify the whole truth of their knowledge

touching upon the matter in controversy aforesaid so far

as they should be examined and their examination was

taken by me in shorthand and afterwards transcribed upon

the typewriter and said testimony is herewith returned.

IN WITNESS WHEREOF I have hereunto set

my hand and affixed my Notarial Seal this 3rd day of

July, 2006.

__________________________

HOLLY A. SCHMID

Notary Public -- CSR

084-98-254587

Page142