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16. The Minnesota Municipal Utilities Association, Iowa Association of Municipal <br />Utilities, and Central Minnesota Municipal Power Agency have asked EPA to <br />allow operation of the diesels without emissions controls for up to 100 <br />hours/year, beyond the 100 hours for readiness running. Also, they have asked <br />EPA to allow the diesels to continue to be used for financial gain to the municipal <br />and to make the 100 hours athree-year rolling average. There is no assurance as <br />to when EPA will rule on this request or how they will rule. <br />17. If the EPA agrees to the 100 hours/year or even 60 hours/year for EDR running, <br />and EPA allows income from capacity credits, ERMU could designate the four <br />diesels as Emergency Generators, and continue to obtain capacity credits. <br />18. If emissions controls are installed, the diesel(s) could run up to the hours/year <br />allowed by the MPCA Permit. If they are designated as Emergency Units, they <br />would be limited to far fewer hours of running per year. <br />19. The cost to install emissions controls on Units 3 & 4 is about $50/KW, equal to a <br />total of $400,000. The cost of emissions controls on the Units 1 & 2 is <br />approximately $100/KW, equal to a total of $110,000. <br />20. Emissions controls could be installed in six months after authorization to <br />proceed from the Elk River Utilities Commission. <br />21. Option 1 is to not install emissions controls. The four diesels would be <br />designated Emergency Units. Under the presently proposed regulations, ERMU <br />would receive no capacity credits for the Emergency Units. However, if the EPA <br />extends the hours of operation from 15 to 60 or 100 hours per year, plus 100 <br />hours per year operation for readiness testing, plus allowing the units to be used <br />for financial gain, ERMU could continue to receive capacity credits without <br />installing emissions controls. <br />22. Option 2 is to install emissions controls on Units 3 & 4, if the EPA kept to its <br />present regulations. The cost would be $400,000, and the completion time six <br />months. In 2010, Units 3 & 4 provided capacity credits of $309,936, so the <br />simple payback would be about 15 months. <br />18 <br />