Tim Lohner, Ph.D.

American Electric Power

American Electric Power

Serves 5.3 million customers in 11 states

Over 37,400 MW generating capacity, 87%

utilizing fossil fuels

Nation’s largest transmission system–39,000 mi.

American Electric Power

Lake Erie

Ohio River

Power Plant Nutrient Sources

Nitrogen Emissions

SCRs/SNCR Installations

Haze Mitigation

Scrubber Installations

Chilled ammonia carbon capture

0

10

20

30

40

50

60

3/5/

2009

3/25

/200

9

4/17

/200

9

5/7/

2009

Ohio

Riv

er

Ch

loro

ph

yll

(u

g/L

)

Regulatory Requirements

NPDES Permit Limits

Nutrient-based TMDLs

Antidegradation Reviews

New Steam Electric Effluent

Guidelines

Limited Expensive

Treatment Options

Ohio River Basin Water Quality

Trading Project

Innovative, market-based,

voluntary program.

First interstate program of its kind.

Leading practice in the watershed.

Wide collaboration and input from

regulatory and environmental

organizations.

Compliance Cost Options

Conventional Costs Trading Costs

$52 million DFA conversion

$3 to $7 million DFA O&M$100 thousand per year

$15 to $165 per pound $2 to $8 per pound

Cost Savings With Trading

Concentration Limits - Based on Actual Flows

8 mg/L TN 5 mg/L TN

Facility Unit Cost

Pounds Reduced

Potential Annual Savings

Unit Cost Pounds Reduced

Potential Annual Savings

TN ($/pound) TN TN ($/pound) TN

Base Case $ 13.84 603,989 $352,724.76 $14.41 64,969 $416,184.07

1. Plant #2 N/A 0.0 N/A 0.0

2. Plant #1A N/A 0.0 $ 163.98 5,708 $890,273.09

3. Plant #3 $ 59.60 14,025 $723,714.61 $ 56.75 16,493 $803,991.11

4. Plant #4 N/A 0.0 N/A 0.0

5. Plant #1E N/A 0.0 N/A 0.0

8. Plant #1B N/A 0.0 $ 33.75 27,730 $714,089.78

9. Plant #1C N/A 0.0 $ 57.83 16,183 $806,464.95

Resulting Demand for Credits

74,424 Credits 131,083 Credits

Achieve compliance

Save money

Environmental Stewardship and Sustainability

Improved public relations

Credit Stacking

Advantages of Trading

Added Benefits to AEP

Future authorization to trade

First access to credit pool

Reduced trading ratios

Extended compliance

schedules

Greenhouse Gas

credits

Particularly pilot trades:

Greenhouse Gas Credits

EPRI PID# 1013128 A. Diamant, Project Manager

Nitrous oxide is a powerful GHG.

One ton of N2O

is equivalent to

296 tons of CO2.

Accelerating Application to

Other Watersheds

Precedent for cooperation among

regulators and industry.

Regulatory drivers and incentives.

Manage liabilities.

Validation of results.

Removal of regulatory

barriers.

Draft rule issued June 7, 2013.

Nitrate/nitrite limits on FGD WW. 0.17 mg/L max

0.13 mg/L avg

Forces biological treatment.

Limits must be met before commingling

or discharge.

Capital costs - $14 to $47 million.

O&M costs - $250K to $750K.

Removal of Regulatory Barriers

EPA Proposed Effluent Guidelines:

QUESTIONS?

Tim Lohner, Ph.D.Consulting Environmental Specialist

Water & Ecological Resource Services

614.716.1255

twlohner@aep.com

American Electric Power1 Riverside Plaza

Columbus, Ohio614.716.1000

aep.com