[Federal Register Volume 79, Number 220 (Friday, November 14, 2014)]
[Notices]
[Pages 68321-68323]
[FR Doc No: 2014-26945]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73557; File No. SR-NYSEArca-2014-131]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule
Relating to Qualified Contingent Cross (``QCC'') Transactions Fees,
Effective November 1, 2014

November 7, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 31, 2014, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission (the
``Commission'') a

proposed rule change as described in Items I, II and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule
relating to Qualified Contingent Cross transaction fees, effective
November 1, 2014. The text of the proposed rule change is available on
the Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to modify the Exchange's fees for QCC
transactions. The Exchange proposes to implement the fee changes on
November 1, 2014.
    Currently, the Exchange charges $0.10 per contract side for QCC
transactions, regardless of whether a Customer is part of the
transaction. The Exchange proposes to adopt a differentiated fee
schedule and to instead charge $0.00 per contract side for Customers
and $0.20 per contract side for non-Customers.
    As is the case today, the Exchange would continue to offer a Floor
Broker rebate of $0.035 per contract side for executed QCC orders, but
proposes to introduce one exception: there would be no Floor Broker
rebate for executions of QCC orders where there are Customers on both
sides of the transaction. For example, a QCC transaction where a
Customer buying 1,000 ABC Dec 40 Calls trades with a different Customer
selling 1,000 ABC Dec 40 Calls would be ineligible for the Floor Broker
rebate. However, a QCC transaction with a Customer on only one side,
executed by a Floor Broker, would continue to receive the rebate.
    The Exchange believes that restructuring the QCC fees as proposed
would allow OTP Holders and OTP Firms to compete on a more equal
footing with other exchanges offering similar QCC fees.
    The Exchange is also proposing a non-substantive, formatting change
to the section of the fee schedule that applies to QCC transactions.
The Exchange is proposing to re-format the ``QUALIFIED CONTINGENT CROSS
TRANSACTION FEES'' section of the Fee Schedule as a table with distinct
rows and columns to make the Fee Schedule easier for participants to
navigate.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\3\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\4\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed rates are reasonable,
equitable and not unfairly discriminatory as they are consistent with
those charged by other markets.\5\ The Exchange believes that proposed
rates are likewise not unreasonable, inequitable or unfairly
discriminatory because the same fee would be charged to all non-
Customers alike. It is also not unreasonable, inequitable or unfairly
discriminatory to impose no charge on Customers for QCC transactions
because this change would enable non-Customers to better compete for
(and, thus, to better attract) Customer business.
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    \5\ See e.g., NASDAQ OMX LLC [sic] Pricing Schedule, available
here, http://www.nasdaqtrader.com/Micro.aspx?id=PHLXPricing.
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    In addition, the Exchange believes that it is not unreasonable,
inequitable or unreasonably discriminatory to exempt from the Floor
Broker rebate those QCC transactions where there are Customers on both
sides of the transaction. A rebate is the refunding of a portion of an
assessed fee; however, when there are Customers on both sides of a QCC
transaction, the Exchange is not assessing any fees. Accordingly, the
Exchange believes that not offering a rebate for QCC transactions on
which a fee that [sic] was never assessed in the first instance, cannot
be viewed as unreasonable, inequitable or unreasonably discriminatory.
    For these reasons, the Exchange believes that the proposal is
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\6\ the Exchange does
not believe that the proposed rule change will impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes the proposed fee change is
reasonably designed to be fair and equitable, and therefore, will not
unduly burden any particular group of market participants trading on
the Exchange vis-[agrave]-vis another group. The Exchange believes the
proposed change to offer QCC transactions to Customers free of charge
may enhance the competitive position of Non-Customers and allow OTP
Holders and OTP Firms to compete more effectively for Customer QCC
orders. In addition, the Exchange believes that the proposed changes
will enhance the competiveness of the Exchange relative to other
exchanges which offer comparable differentiated fees for QCC
transactions.\7\
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    \6\ 15 U.S.C. 78f(b)(8).
    \7\ See supra n. 5.
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    The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues. In
such an environment, the Exchange must continually review, and consider
adjusting, its fees and credits to remain competitive with other
exchanges. For the reasons described above, the Exchange believes that
the proposed fee change reflects this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \8\ of the Act and

subparagraph (f)(2) of Rule 19b-4 \9\ thereunder, because it
establishes a due, fee, or other charge imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \10\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \10\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2014-131 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2014-131. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NYSEArca-2014-
131, and should be submitted on or before December 5, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-26945 Filed 11-13-14; 8:45 am]
BILLING CODE 8011-01-P


ATTACHMENT 1

To NPS/FWS Comments - Maine Draft Regional Haze SIP

NPS Comments Regarding Verso Androscoggin Paper Mill BART Evaluation

July 23, 2010

Power Boilers #1 & #2: NOx

The following statement by Verso is misleading:

The Androscoggin Mill followed the guidance and procedures outlined in
40 CFR Part 51, Appendix Y and the OAQPS Air Pollution Cost Control
Manual. Supporting cost evaluation spreadsheets are provided in
Attachment C, Table Nos. C-1, C-2, C-3, and C-4.

While we applaud Verso’s intent to use the Cost Manual, the actual
Verso approach appears to have borrowed the Cost Manual method for
evaluating wet scrubbers and applied it to SCR and SNCR, which we
believe is inappropriate.

In actuality, there is no OAQPS Air Pollution Cost Control Manual (Cost
Manual) procedure for evaluating costs for SCR or SNCR for oil-fired
EGUs. The procedures described by the Cost Manual are intended for use
with coal-fired boilers > 250 mmBtu/hr. So we adapted them to oil-fired
boilers, but the cost algorithms for the Direct Capital Costs are from
the Cost Manual coal-boiler method and therefore questionable.

Even if we accept the Verso approach as a default, it still contains
some highly questionable estimates for SCR, and Verso clearly did not
follow the Cost Manual:

If we assume that Power Boilers #1 & #2 are capable of producing about
68 MW each, then the Total Capital Investment (TCI) per kW is about $115
for SCR, which is in the middle of the   $50 - $260/kW range for
coal-fired EGUs. The attached Excel workbook estimates a slightly higher
TCI by applying our adapted Cost Manual approach.

Verso has estimated an annual reagent cost of $414,000/boiler. This
exceeds the $54,000 annual reagent cost that the Cost Manual procedure
estimates. Verso must justify this estimate.

Verso has estimated an annual catalyst replacement cost of
$155,000/boiler. Since this exceeds the $92,000 annual catalyst
replacement cost that the Cost Manual procedure estimates for the 330 MW
Naughton Unit #3 (that Wyoming is requiring to install SCR as BART), the
Verso estimate appears to be very high. Our adapted Cost Manual method
estimates catalyst volume at 88 m3, a 24,000 hour catalyst life, and an
annual Catalyst Replacement Cost = $41,000/boiler. Furthermore, because
most catalyst vendors do not charge for recovery of the spent catalyst,
that $30,000 annual cost also appears unfounded.

Verso's Capital Recovery Factor (12.4% interest over a 10-year SCR life)
is inflated. The Cost Manual recommends 7% interest over a 20-year SCR
life.

Verso estimates an annual cost of $5.1 million to control both boilers
versus our estimate of $1.1 million for each boiler, and Verso estimates
$7,361/ton versus our $3,070/ton.

According to Maine Department of Environmental Protection (MEDEP):

The cost effectiveness numbers in the table above are based on
controlling NOx emissions from Power Boilers #1 and #2 at the control
effectiveness rates indicated in the table from the highest estimated
two year average annual emissions between 2002 and 2008.  In recent
years (2008 and 2009) these boilers have been operating close to only
20% of the time, which for example, would result in an actual cost
effectiveness of $16,313 per ton of NOx removed with the installation of
SCR.

MEDEP estimates cost-effectiveness at $5,271/ton versus the $7,361/ton
estimated by Verso; we request an explanation for this difference.
Furthermore, if MEDEP intends to consider the reduced operation of these
boilers in the economic analysis, those reduced operational parameters
should be made federally enforceable if they affect the outcome of the
analysis.

Because BART is a visibility improvement program, we believe that
cost/deciview ($/dv) is a very important parameter. In this case, for
the four Class I areas evaluated by Verso, SCR would improve visibility
by a total of 4.6 dv. (We would also like to see the visibility
improvements that would occur in the other two Class I areas.) This
results in a cost-effectiveness value of less than 0.5 million/dv, which
is quite reasonable compared to the average $13 - $20 million/dv that we
are seeing accepted by states and sources that are proposing reductions
under BART. Even if one considers only the visibility improvement at
Acadia National Park, the addition of SCR results in a
cost-effectiveness value of $1.3 million/dv. This leads to the
conclusion that SCR is BART for the Androscoggin power boilers.

The same situation applies to SNCR. The actual Verso approach appears to
have borrowed the Cost Manual method for evaluating wet scrubbers and
applied it to SNCR, which we believe is inappropriate. Even if we accept
the Verso approach as a default, it still contains some highly
questionable estimates for SNCR:

If we assume that Power Boilers #1 & #2 are capable of producing about
68 MW each, then the Total Capital Investment (TCI) per kW is about $47
for SNCR, which is on the high end of the   $29 - $45/kW range we are
seeing in proposals to install SNCR on coal-fired EGUs (See  HYPERLINK
"http://www.wrapair.org/forums/ssjf/bart.html"
http://www.wrapair.org/forums/ssjf/bart.html ). The attached Excel
workbook estimates $26/kW. Verso should provide vendor quotes to support
its higher-than expected estimates.

Verso has estimated a Direct Annual Cost (DAC) of $0.55 million/boiler.
Since this exceeds the $0.12 million DAC that the Cost Manual procedure
estimates, the Verso estimate appears to be very high. The biggest
difference is in Verso's estimate of almost $0.5 million/year/boiler for
reagent versus the Cost Manual estimate of $0.06 million/yr.

Verso's Capital Recovery Factor (12.4% interest over a 10-year SNCR
life) is inflated. The Cost Manual recommends 7% interest over a 20-year
SCR life.

Verso estimates an annual cost of $2.6 million to control both boilers
versus our estimate of $0.29 million for each boiler, or Verso's
$9,758/ton versus our $2,128/ton.

MEDEP estimates cost-effectiveness at $5,973/ton versus the $9,758/ton
estimated by Verso; we request an explanation for this difference.

In this case, for the four Class I areas evaluated by Verso, SNCR would
improve visibility by a total of 4.3 dv. (We would also like to see the
visibility improvements that would occur in the other two Class I
areas.) This results in a cost-effectiveness value of less than 0.13
million/dv, which is quite reasonable compared to the average $13 - $20
million/dv that we are seeing accepted by states and sources that are
proposing reductions under BART. Even if one considers only the
visibility improvement at Acadia National Park, the addition of SCR
results in a cost-effectiveness value of $0.41 million/dv. This leads to
the conclusion that SNCR could also be a candidate for BART for the
Androscoggin power boilers if SCR is rejected.

Power Boilers #1 & #2: SO2

Some comments on Verso's BART analysis for SO2 from the Androscoggin
mill Power Boilers #1 & #2.

Power Boilers #1 & #2 wet scrubber cost analysis

Verso's Purchased Equipment Costs are not supported or justified.

Is there a state sales tax exemption for pollution control equipment?

Verso's Maintenance costs are not supported or justified.

Verso's Utilities costs are not supported or justified.

Can Verso use waste caustic from the mill to augment caustic purchases?
(We are seeing this at other mills.)

Verso's annualized costs do not make sense--the numbers do not work out
as presented.

Verso overestimated the interest rate and underestimated equipment life.
According to the OAQPS Control Cost Manual, the correct interest rate is
7% and the correct equipment life is 15 years.

Verso's Power Boilers #1 & #2 lower sulfur fuels analysis is incomplete.
For example, FPL evaluated 1%S residual, 0.5% S residual and 0.3% S
residual fuel oils for its Wyman facility, Verso should at least
evaluate the lower sulfur residual oils.

Waste Fuel Incinerator (WFI): NOx

We adapted the OAQPS Air Pollution Cost Control Manual (Cost Manual)
procedure for evaluating costs for SCR or SNCR for oil-fired EGUs to
oil-fired EGUs (see electronic attachment), but the cost algorithms for
the Direct Capital Costs are from the Cost Manual coal-boiler method and
therefore questionable. So, even if we accept the Verso approach as a
default, it still contains some highly questionable estimates for SCR:

If we assume that the WFI is capable of producing about 48 MW, then the
Total Capital Investment (TCI) per kW is about $165 for SCR, which is in
the middle of the   $50 - $260/kW range for coal-fired EGUs. The
attached Excel workbook estimates a slightly lower TCI.

Verso has estimated an annual reagent cost of $286,000. This exceeds the
$72,000 annual reagent cost that the Cost Manual procedure estimates.

Verso's Capital Recovery Factor (12.4% interest over a 10-year SCR life)
is inflated. The Cost Manual recommends 7% interest over a 20-year SCR
life.

Verso estimates an annual cost of $2.4 million to control the WFI versus
our estimate of $0.9 million, or Verso's $5,092/ton versus our
$1,986/ton.

MEDEP estimates cost-effectiveness at $4,676/ton versus the $5,092/ton
estimated by Verso; we request an explanation for this difference.

Because BART is a visibility improvement program, we believe that
cost/deciview ($/dv) is a very important parameter. In this case, for
the four Class I areas evaluated by Verso, SCR would improve visibility
by a total of 1.0 dv. (We would also like to see the visibility
improvements that would occur in the other two Class I areas.) This
results in a cost-effectiveness value of less than $1 million/dv, which
is quite reasonable compared to the average $13 - $20 million/dv that we
are seeing accepted by states and sources that are proposing reductions
under BART. Even if one considers only the visibility improvement at
Acadia National Park, the addition of SCR results in a
cost-effectiveness value of $2.3 million/dv. This leads to the
conclusion that SCR is BART for the Androscoggin WFI.

The same situation applies to SNCR. So, even if we accept the Verso
approach as a default, it still contains some highly questionable
estimates for SNCR:

Although Verso stated that SNCR could achieve 35% control, its cost
analysis is based upon 30% control.

If we assume that the WFI is capable of producing about 48 MW, then the
Total Capital Investment (TCI) per kW is about $65 for SNCR, which is
above the high end of the   $29 - $45/kW range we are seeing in
proposals to install SNCR on coal-fired EGUs. The attached Excel
workbook estimates $31/kW. Verso should provide vendor quotes to support
its higher-than expected estimates.

Verso has estimated a Direct Annual Cost (DAC) of $0.41 million. Since
this exceeds the $0.13 million DAC that the Cost Manual procedure
estimates, the Verso estimate appears to be high. The biggest difference
is in Verso's estimate of almost $0.34 million/year per boiler for
reagent versus the Cost Manual estimate of $0.07 million/yr.

Verso's Capital Recovery Factor (12.4% interest over a 10-year SNCR
life) is inflated. The Cost Manual recommends 7% interest over a 20-year
SNCR life.

Verso estimates an annual cost of $1.1 million to control the WFI versus
our estimate of $0.27 million, or Verso's $7,009/ton versus our
$1,757/ton.

MEDEP estimates cost-effectiveness at $5,944/ton versus the $7,009/ton
estimated by Verso; we request an explanation for this difference.

In this case, for the four Class I areas evaluated by Verso, SNCR would
improve visibility by a total of 0.2 dv. (We would also like to see the
visibility improvements that would occur in the other two Class I
areas.) This results in a cost-effectiveness value of less than 1.4
million/dv, which is quite a bargain compared to the average $10 - $20
million/dv that we are seeing accepted by states and sources that are
proposing reductions under BART. Even if one considers only the
visibility improvement at Acadia National Park, the addition of SCR
results in a cost-effectiveness value of $2.7 million/dv. This leads to
the conclusion that SNCR could also be a candidate for BART for the
Androscoggin power boilers if SCR is ruled out.

Waste Fuel Incinerator (WFI): SO2

This is what Verso says about SO2 BART for the Androscoggin Waste Fuel
Incinerator:

When No. 6 fuel oil is fired at significant levels, the Mill adds
caustic to the wet scrubber to meet the SO2 emission limit for the WFI.

SO2 BART ANALYSIS

Identify BART

The WFI has very low SO2 emissions due to the inherent alkalinity (i.e.,
SO2 control) of the primary fuel and the small amount of fuel oil used
in the WFI. In addition during the limited amount of time that No. 6
fuel oil is used to provide a significant amount of the heat for the
WFI, caustic is added to the wet scrubber. Since there are only 50 tons
of SO2 to control annually, the addition of caustic to the wet scrubber
would end up controlling a very small amount of emissions on an annual
basis. Considering visibility, the low, pre-control visibility impacts
from the WFI mean that any visibility reductions associated with
post-control of SO2 emissions would be imperceptible. Based on the
information developed in the Impacts Analysis, the Androscoggin Mill
believes that there is no SO2 BART determination for SO2 from the WFI.

Is Verso saying that it does not want its current procedure of adding
caustic to the wet scrubber when burning fuel oil to be considered BART,
but will keep doing it anyway? If so, that is clearly wrong because BART
would include this practice as a technically- and economically-feasible
option, as proven by Verso. Finally, a control option does not have to
produce a perceptible improvement to be viable.

ATTACHMENT 2

To NPS/FWS Comments - Maine Draft Regional Haze SIP

NPS Comments Regarding FPL Energy Wyman Station BART Evaluation

July 20, 2010

Beginning in 2006, capacity utilization of, and emissions from Units #3
& #4 dropped so much that, assuming that trend continues, it would
likely be cost-prohibitive to make any substantial capital expenditures
to reduce emissions. Furthermore, as noted by Maine Department of
Environmental Protection (MEDEP), NOX emissions are already so low as to
make any significant additional expenses economically infeasible. So, we
shall focus our comments on reducing SO2 emissions by switching to lower
sulfur fuels.

SO2

This appears to be the only BART analysis conducted by MEDEP in which
cost-effectiveness was not evaluated in terms of annual cost/ton of
pollutant removed. Instead, MEDEP appears to have relied solely upon
annual cost/deciviews (dv) of visibility improvement. While we encourage
the use of the $/dv metric, it was not properly calculated nor applied
in this case.

MEDEP also evaluated the BART strategies on the basis of incremental
cost/dv. While that is certainly a valid and useful parameter, it must
be used with caution and its results placed into the proper perspective.
The basic premise underlying the incremental cost analysis is to
identify those strategies that contribute relatively little
environmental benefit in proportion to their cost. Because, in most
cases, the cost of pollution control rises exponentially with control
efficiency, the slope of the cost curve will also increase. For this
reason, rigid use of incremental cost effectiveness will always result
in the choice of the cheapest option if carried to its ultimate extent.
(For example, if this approach were used to evaluate PM controls, it is
likely that all controls more expensive than a multiple cyclone would be
rejected.) According to the NSR Workshop manual, “As a precaution, the
difference in incremental costs among dominant alternatives cannot be
used by itself to argue one dominant alternative is preferred to
another.” Instead, it should be used to compare closely performing
options.

However, FPL did evaluate the costs and benefits of several SO2
reduction options, including the use of lower sulfur fuels. In doing so,
FPL included estimates of the annual costs and emission reductions for
each option, as well as the cost/ton for each of those options; those
results are contained in Tables 5-3 thru 5-5 of the FPL BART analysis.
We used the data from FPL’s Table 5-3 to generate the cost-benefit
data contained in the electronic attachment, and our results are
summarized below.

Wyman #3 (2007  - 2008)

Fuel Sulfur (%)	1	0.7	0.5	0.3

Increased Annual Fuel Cost 	 $     175,306 	 $     206,243 	 $
835,283 	 $     1,722,127

SO2 Emission Reductions (tpy)	270	351	405	459

SO2 Reductions Cost-Effectiveness ($/ton)	 $           650 	 $
588 	 $        2,064 	 $           3,755

Greatest Visibility Improvement (dv)	0.99	1.43	1.78	2.15

Cost-Effectiveness ($/dv)	 $     177,077 	 $     144,226 	 $     469,260
	 $        800,989

Cumulative Visibility Improvement (dv)	2.61	4.26	5.26	6.28

Cumulative Cost-Effectiveness ($/dv)	 $      67,167 	 $      48,414 	 $
   158,799 	 $        274,224

Wyman #4 (2007  - 2008)

Fuel Sulfur (%)	 	 	0.5	0.3

Increased Annual Fuel Cost 	 	 	 $  2,910,880 	 $     7,014,743

SO2 Emission Reductions (tpy)	 	 	250	499

SO2 Reductions Cost-Effectiveness ($/ton)	 	 	 $      11,656 	 $
  14,045

Greatest Visibility Improvement (dv)	 	 	0.41	0.84

Cost-Effectiveness ($/dv)	 	 	 $  7,099,707 	 $     8,350,885

Cumulative Visibility Improvement (dv)	 	 	1.60	3.38

Cumulative Cost-Effectiveness ($/dv)	 	 	 $  1,819,300 	 $
2,075,368

Our results differ from those presented by MEDEP because we used the
most-recent (2007 – 2008) average fuel use data provided by FPL
instead of the maximum two-year average. We did this because the
most-recent two years are much more representative of anticipated
reduced operation of these units. While use of the reduced-capacity
operation data did not affect the $/ton estimate (which MEDEP did not
include), it has a great effect on the $/dv estimate because of the
reduced annual costs.

Our results indicate that, on a $/ton basis, use of 0.7% sulfur oil is
the most cost-effective. However, BART is not necessarily the most
cost-effective solution. Instead, the $2,000/ton cost of switching Unit
#3 to 0.5 % sulfur oil would be considered reasonable by most states.

As noted above, MEDEP appears to have relied solely upon $/dv of
visibility improvement. However, the baseline for estimating the
increased costs of lower sulfur fuels (2% sulfur) is different from the
baseline for existing visibility impacts (1.6% S). Therefore, the
visibility benefits are underestimated because the baseline impacts are
underestimated. MEDEP has also presented 98th percentile visibility
values despite using only one year of meteorological data—that is
misleading because, when only one year is modeled, only the maximum
values are to be used.

Because BART is a visibility improvement program, we believe that
cost/deciview ($/dv) is a very important parameter. In this case, for
the six Class I areas evaluated by FPL, lower-sulfur (0.5% - 0.3% S)
fuels would improve visibility by a total of 6.9 – 9.7 dv. This
results in a cost-effectiveness value of $0.2 – 2.1 million/dv, which
is relatively inexpensive compared to the average $13 - $20 million/dv
that we are seeing accepted by states and sources that are proposing
reductions under BART. Even if one considers only the visibility
improvement at Acadia National Park, the lower-sulfur fuels result in
cost-effectiveness values of $0.5 – 8.4 million/dv. This leads to the
conclusion that 0.5% - 0.3% sulfur fuels are BART for the FPL boilers.

ATTACHMENT 3

To NPS/FWS Comments - Maine Draft Regional Haze SIP

NPS Comments Regarding SAPPI SD Warren Paper Mill BART Evaluation

July 20, 2010

Page 63 of the 2/06/09 draft of Maine Department of Environmental
Protection (MEDEP)  RH SIP contains Table 8-2 titled "Modeled
Impacts...of Maine BART-Eligible Sources..." That table shows a 0.75 dv
impact at Acadia and 0.78 dv at Moosehorn from Power Boiler #1 at the
SAPPI SD Warren Paper mill.

The September 2009 company BART report did not evaluate Power Boiler #1.

The MEDEP BART analysis (1/21/10) listed Power Boiler #1 as a BART
source and included a BART determination for it.

The MEDEP BART analysis (posted 6/29/10) did not mention Power Boiler
#1.

Why was Power Boiler #1 omitted from the BART determination?

 Verso assumed a $0.08/kWh cost for electricity.

 Verso assumed a $0.08/kWh cost for electricity.

 Verso assumed a $0.08/kWh cost for electricity.

 In Massachusetts, sources evaluated 1%S residual, 0.5% S residual, 0.3%
S residual, 0.3% S distillate, 0.05% S distillate, and 0.0015% S
distillate.

 Verso assumed a $0.07/kWh cost for electricity.

 Verso assumed a $0.07/kWh cost for electricity.

BART Guidelines: “You should consider the incremental cost
effectiveness in combination with the average cost effectiveness when
considering whether to eliminate a control option” and “You should
exercise caution not to misuse these [average and incremental cost
effectiveness] techniques…[but consider them in situations where an
option shows]…slightly greater emission reductions…”