[Federal Register: November 24, 2004 (Volume 69, Number 226)]
[Proposed Rules]               
[Page 68443-68565]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24no04-25]                         
 

[[Page 68443]]

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Part II





Environmental Protection Agency





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40 CFR Parts 9, 122 et al.



National Pollutant Discharge Elimination System--Proposed Regulations 
To Establish Requirements for Cooling Water Intake Structures at Phase 
III Facilities; Proposed Rule


[[Page 68444]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 122, 123, 124, and 125

[OW-2004-0002, FRL-7834-7]
RIN 2040-AD70

 
National Pollutant Discharge Elimination System--Proposed 
Regulations To Establish Requirements for Cooling Water Intake 
Structures at Phase III Facilities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Today's proposed rule would establish national categorical 
requirements under section 316(b) of the Clean Water Act for certain 
existing facilities that employ a cooling water intake structure and 
are designed to withdraw water above a certain design intake flow from 
certain waters of the United States for cooling purposes. Today's 
notice proposes three possible options for defining which existing 
facilities would be subject to uniform national requirements, based on 
design intake flow threshold and source waterbody type: The facility 
has a total design intake flow of 50 million gallons per day (MGD) or 
more, and withdraws from any waterbody; the facility has a total design 
intake flow of 200 MGD or more, and withdraws from any waterbody; or 
the facility has a total design intake flow of 100 MGD or more and 
withdraws water specifically from an ocean, estuary, tidal river, or 
one of the Great Lakes. Because the lowest co-proposed flow threshold 
option is 50 MGD, the proposed requirements would only apply to 
manufacturing facilities--as power producers with a flow greater than 
50 MGD are regulated under the Phase II rule. This proposed rule would 
constitute Phase III of EPA's section 316(b) regulation development and 
would establish national requirements, and procedures for implementing 
those requirements, applicable to the location, design, construction, 
and capacity of cooling water intake structures at Phase III 
facilities. Today's proposed rule would also establish categorical 
section 316(b) requirements for new offshore oil and gas extraction 
facilities, which were specifically excluded from the scope of the 
Phase I new facility rule so that EPA could gather additional data on 
these facilities. The proposed rule would apply to both existing 
manufacturers and new offshore oil and gas extraction facilities that 
withdraw at least 25 percent of the water exclusively for cooling 
purposes.
    The proposed national requirements, which would be implemented 
through National Pollutant Discharge Elimination System (NPDES) 
permits, are based on the best technology available to minimize the 
adverse environmental impact associated with the use of cooling water 
intake structures. For covered existing facilities, today's proposed 
rule would establish performance standards for reducing impingement 
mortality by 80 to 95 percent, or impingement mortality by 80 to 95 
percent and entrainment by 60 to 90 percent. Today's proposal would 
allow existing facilities to select from five compliance alternatives 
consistent with those provided in the final Phase II rule for existing 
large flow electric power generators. Once finalized and implemented, 
the rule would minimize the adverse environmental impact of cooling 
water intake structures by reducing the number of aquatic organisms 
lost as a result of water withdrawals associated with these structures.
    Today's proposed rule does not propose to alter the regulatory 
requirements for facilities subject to the Phase I or Phase II 
regulations, and EPA is not soliciting comment on those regulations. 
EPA is only seeking comment on the proposed regulations for Phase III 
existing facilities and new offshore oil and gas facilities, as 
reflected in the proposed regulatory text for subparts K and N. 
Depending on the options selected in the final section 316(b) 
regulation for Phase III facilities, EPA may decide to integrate the 
regulatory text for subparts K and N proposed today into the existing 
subparts I and J, for purposes of streamlining the number of pages for 
publication.

DATES: Comments must be received on or before March 24, 2005.

ADDRESSES: Submit your comments, identified by Docket ID No. OW-2004-
0002, by one of the following methods:
    I. Federal eRulemaking Portal: http://www.regulations.gov. Follow 

the on-line instructions for submitting comments.
    II. Agency Web site: http://www.epa.gov/edocket. EDOCKET, EPA's 

electronic public docket and comment system, is EPA's preferred method 
for receiving comments. Follow the on-line instructions for submitting 
comments.
    III. E-mail: OW-Docket@epa.gov.
    IV. Mail: Water Docket, Environmental Protection Agency, Mailcode: 
4101T, 1200 Pennsylvania Ave., NW., Washington, DC 20460, Attention 
Docket ID No. OW-2004-0002. Please include a total of 3 copies. In 
addition, please mail a copy of your comments on the information 
collection provisions to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for 
EPA, 725 17th St. NW., Washington, DC 20503.
    V. Hand Delivery: Water Docket, EPA Docket Center, EPA West, Room 
B102, 1301 Constitution Ave., NW., Washington, DC, Attention Docket ID 
No. OW-2004-0002. Such deliveries are only accepted during the Docket's 
normal hours of operation, and special arrangements should be made for 
deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. OW-2004-0002. 
EPA's policy is that all comments received will be included in the 
public docket without change and may be made available online at http://www.epa.gov/edocket
, including any personal information provided, 

unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the regulations.gov websites are ``anonymous 
access'' systems, which means EPA will not know your identity or 
contact information unless you provide it in the body of your comment. 
If you send an e-mail comment directly to EPA without going through 
EDOCKET or regulations.gov, your e-mail address will be automatically 
captured and included as part of the comment that is placed in the 
public docket and made available on the Internet. If you submit an 
electronic comment, EPA recommends that you include your name and other 
contact information in the body of your comment and with any disk or 
CD-ROM you submit. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters, any form of encryption, and be free of any defects 
or viruses. For additional information about EPA's public docket visit 
EDOCKET on-line or see the Federal Register of May 31, 2002 (67 FR 
38102). For additional instructions on submitting comments, go to 
section B of the SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the EDOCKET index 
at http://www.epa.gov/edocket. Although listed in the index, some 

information is not publicly available, i.e., CBI or other

[[Page 68445]]

information whose disclosure is restricted by statute. Certain other 
material, such as copyrighted material, is not placed on the Internet 
and will be publicly available only in hard copy form. Publicly 
available docket materials are available either electronically in 
EDOCKET or in hard copy at the Water Docket, EPA/DC, EPA West, Room 
B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading 
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, 
excluding legal holidays. The telephone number for the Public Reading 
Room is (202) 566-1744, and the telephone number for the Water Docket 
is (202) 566-2426.

FOR FURTHER INFORMATION CONTACT: For additional technical information 
contact Martha Segall at (202) 566-1041 or Paul Shriner at (202) 566-
1076. For economic information, contact Erik Helm at (202) 566-1066. 
For biological information contact Ashley Allen at (202) 566-1012. The 
address for the above contacts is: Office of Science and Technology, 
Engineering Analysis Division (Mailcode 4303T), Environmental 
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; 
fax number: (202) 566-1053; e-mail address: rule.316b@epa.gov.

SUPPLEMENTARY INFORMATION:

General Information

A. What Entities Are Regulated by This Action?

    This proposed rule would apply to ``Phase III existing 
facilities''--i.e., certain existing manufacturing and industrial 
facilities that are: (1) Point sources; (2) use or propose to use one 
or more cooling water intake structures; (3) are designed to withdraw 
water above a certain threshold from certain waters of the U.S. (the 
flow threshold would differ depending on the regulatory option selected 
in the final rule); and (4) use at least 25 percent of water withdrawn 
exclusively for cooling purposes. Depending on the regulatory option 
selected, the facility would be subject to these national requirements 
if it had a design intake flow of: (1) 50 MGD or more from any 
waterbody; (2) 200 MGD or more from any waterbody; or (3) 100 MGD or 
more from an ocean, estuary, tidal river, or one of the Great Lakes. 
This proposed rule would define ``existing facility'' as any 
manufacturing or industrial facility that commenced construction on or 
before January 17, 2002 (or [60 days from publication of the final 
rule] for an offshore oil and gas extraction facility), and any 
modification of, or any addition of a unit at such a facility that does 
not meet the definition of a new facility at Sec.  125.83.
    This proposed rule would also apply to new offshore and coastal oil 
and gas extraction facilities, which were specifically excluded from 
the Phase I new facility rule. An offshore and coastal oil and gas 
extraction facility is new if construction commenced after 60 days from 
publication of the final rule. Exhibit 1 provides examples of 
industrial facility types potentially regulated by this proposed rule.

          Exhibit 1.--Examples of Industrial Facility Types Potentially Regulated by This Proposed Rule
----------------------------------------------------------------------------------------------------------------
                               Examples of potentially regulated    Standard industrial       North American
           Category                         entities               classification codes    industry codes (NAIC)
----------------------------------------------------------------------------------------------------------------
Federal, State and local       Operators of steam electric        4911 and 493..........  221111, 221112,
 government.                    generating point source                                    221113, 221119,
                                dischargers that employ cooling                            221121, 221122
                                water intake structures.
Industry.....................  Operators of industrial point      See below.............  See below
                                source dischargers that employ
                                cooling water intake structures..
                               Agricultural production..........  0133..................  111991, 11193
                               Metal mining.....................  1011..................  21221
                               Oil and gas extraction...........  1311, 1321............  211111, 211112
                               Mining and quarrying of            1474..................  212391
                                nonmetallic minerals.
                               Food and kindred products........  2046, 2061, 2062,       311221, 311311,
                                                                   2063, 2075, 2085.       311312, 311313,
                                                                                           311222, 311225, 31214
                               Tobacco products.................  2141..................  312229, 31221
                               Textile mill products............  2211..................  31321
                               Lumber and wood products, except   2415, 2421, 2436, 2493  321912,321113, 321918,
                                furniture.                                                 321999, 321212,
                                                                                           321219
                               Paper and allied products........  2611, 2621, 2631, 2676  3221, 322121, 32213,
                                                                                           322121, 322122,
                                                                                           32213, 322291
                               Chemical and allied products.....  28 (except 2895, 2893,  325 (except 325182,
                                                                   2851, and 2879).        32591, 32551, 32532)
                               Petroleum refining and related     2911, 2999............  32411, 324199
                                industries.
                               Rubber and miscellaneous plastics  3011, 3069............  326211, 31332, 326192,
                                products.                                                  326299
                               Stone, clay, glass, and concrete   3241..................  32731
                                products.
                               Primary metal industries.........  3312, 3313, 3315,       324199, 331111,
                                                                   3316, 3317, 3334,       331112, 331492,
                                                                   3339, 3353, 3363,       331222, 332618,
                                                                   3365, 3366.             331221, 22121,
                                                                                           331312, 331419,
                                                                                           331315, 331521,
                                                                                           331524, 331525
                               Fabricated metal products, except  3421, 3499............  332211, 337215,
                                machinery and transportation                               332117, 332439,
                                equipment.                                                 33251, 332919,
                                                                                           339914, 332999
                               Industrial and commercial          3523, 3531............  333111, 332323,
                                machinery and computer equipment.                          332212, 333922,
                                                                                           22651, 333923, 33312
                               Transportation equipment.........  3724, 3743, 3764......  336412, 333911, 33651,
                                                                                           336416

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                               Measuring, analyzing, and          3861..................  333315, 325992
                                controlling instruments;
                                photographic, medical, and
                                optical goods; watches and
                                clocks.
                               Electric, gas, and sanitary        4911, 4931, 4939, 4961  221111, 221112,
                                services.                                                  221113, 221119,
                                                                                           221121, 221122,
                                                                                           22121, 22133
                               Educational services.............  8221..................  61131
                               Engineering, accounting,           8731..................  54171
                                research, management and related
                                services.
----------------------------------------------------------------------------------------------------------------

    This exhibit is not intended to be exhaustive, but rather provides 
a guide for readers regarding entities that may be regulated by this 
action if they satisfy the final flow threshold and waterbody type 
criteria. This exhibit lists the types of entities that EPA is now 
aware could potentially be regulated by this action. Other types of 
entities not listed in the exhibit could also be regulated. To 
determine whether your facility is regulated by this action, you should 
carefully examine the applicability criteria in Sec.  125.101 and Sec.  
125.131 of this proposal. If you have questions regarding the 
applicability of this action to a particular entity, consult the 
persons listed for technical information in the FOR FURTHER INFORMATION 
CONTACT section.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting Confidential Business Information (CBI). Do not 
submit information that you consider to be CBI electronically through 
EPA's electronic public docket or by e-mail. Send information claimed 
as CBI by mail only to the following address, Office of Science and 
Technology, Mailcode 4303T, U.S. Environmental Protection Agency, 1200 
Pennsylvania Ave., NW., Washington, DC 20460, Attention: Ahmar Siddiqui 
/Docket ID No. OW-2004-0002. You may claim information that you submit 
to EPA as CBI by marking any part or all of that information as CBI (if 
you submit CBI on disk or CD ROM, mark the outside of the disk or CD 
ROM as CBI and then identify electronically within the disk or CD ROM 
the specific information that is CBI). Information so marked will not 
be disclosed except in accordance with procedures set forth in 40 CFR 
Part 2. In addition to one complete version of the comment that 
includes any information claimed as CBI, a copy of the comment that 
does not contain the information claimed as CBI must be submitted for 
inclusion in the public docket and EPA's electronic public docket. If 
you submit the copy that does not contain CBI on disk or CD ROM, mark 
the outside of the disk or CD ROM clearly that it does not contain CBI. 
Information not marked as CBI will be included in the public docket and 
EPA's electronic public docket without prior notice. If you have any 
questions about CBI or the procedures for claiming CBI, please consult 
the person identified in the FOR FURTHER INFORMATION CONTACT section.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    I. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    II. Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
    III. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    IV. Describe any assumptions and provide any technical information 
and/or data that you used.
    IV. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    V. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    VI. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    VII. Make sure to submit your comments by the comment period 
deadline identified.

C. Supporting Documentation

    The proposed regulation is supported by three major documents:
    1. Economic Analysis for the Proposed Section 316(b) Rule for Phase 
III Facilities (EPA-821-R-04-016), hereafter referred to as the 
Economic Analysis (EA). This document presents the analysis of 
compliance costs, closures, energy supply effects, and benefits 
associated with the final rule.
    2. Regional Benefits Assessment for the Proposed Section 316(b) 
Rule for Phase III Facilities (EPA-821-R-04-017), hereafter referred to 
as the Regional Analysis Document or the Regional Study(ies) Document. 
This document examines cooling water intake structure impacts and 
regulatory benefits at the regional level.
    3. Technical Development Document for the Proposed Section 316(b) 
Rule for Phase III Facilities (EPA-821-R-04-015), hereafter referred to 
as the Technical Development Document. This document presents detailed 
information on the methods used to develop unit costs and describes the 
set of technologies that may be used to meet the final rule's 
requirements.

D. Table of Contents

General Information
    A. What Entities Are Regulated By This Action?
    B. What Should I Consider as I Prepare My Comments for EPA?
    C. Supporting Documentation
    D. Table of Contents
I. Legal Authority, Purpose, and Background of Today's Regulation
    A. Legal Authority
    B. Purpose of Today's Proposed Regulation
    C. Background
II. Scope and Applicability of the Proposed Rule
    A. What is a ``New'' Offshore Oil and Gas Extraction Facility 
for Purposes of the Section 316(b) Proposed Phase III Rule?
    B. What is an ``Existing Facility'' for Purposes of the Section 
316(b) Proposed Phase III Rule?
    C. What is ``Cooling Water'' and What is a ``Cooling Water 
Intake Structure?''
    D. Would My Facility Be Covered if It Withdraws from Waters of 
the United States?
    E. Would My Facility Be Covered if It is a Point Source 
Discharger?
    F. What are the Cooling Water Use and Design Intake Flow 
Thresholds in this Proposed Rule?
    G. When Would a Phase III Existing Facility and New Offshore Oil 
and Gas Extraction Facility Be Required to Comply With Any New 
316(b) Requirements?
    H. What Special Definitions Apply to This Proposal?

[[Page 68447]]

III. Summary of Data Collection Activities
    A. Survey Questionnaires
    B. Existing Data Sources
    C. Data Provided to EPA by Industrial, Trade, Consulting, 
Scientific or Environmental Organizations or by the General Public
IV. Overview of Facility Characteristics (Cooling Water Systems & 
Intake Structures) for Industries Potentially Subject to Proposed 
Rule
    A. Overview of Potentially Regulated Phase III Universe
    B. Existing Manufacturers and Industrial Facilities Potentially 
Subject to Proposed National Requirements
    C. New Offshore Oil and Gas Facilities Subject to Proposed 
National Requirements
V. Environmental Impacts Associated With Cooling Water Intake 
Structures
VI. Basis for the Proposed Requirements
    A. What is the Best Technology Available for Minimizing Adverse 
Environmental Impact at Phase III Existing Facilities?
    B. Economic Practicability
    C. What is the Proposed Role of Restoration and Trading?
VII. Implementation
    A. When Would the Proposed Rule Become Effective?
    B. What General Information Would I Be Required to Submit to the 
Director When I Apply for My Reissued NPDES Permit?
    C. Phase III Existing Facility Implementation
    D. New Offshore Oil and Gas Extraction Facilities
    E. What Are the Respective Federal, State, and Tribal Roles?
    F. Are Permits for Phase III Facilities Subject to Requirements 
Under Other Federal Statutes?
VIII. Economic Impact Analysis
    A. Existing Phase III Facilities: Manufacturers and Electric 
Power Producers
    B. New Offshore Oil and Gas Extraction Facilities
    C. Summary of Total Social Costs and Impacts
IX. Benefits Analysis
    A. Introduction
    B. Study Design and Methods
    C. Impingement and Entrainment
    D. National Benefits
X. Comparison of Benefits and Costs
    A. Benefit-Cost Analysis
    B. Break-even Analysis
XI. Statutory and Executive Order Reviews
    A. E.O. 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. E.O. 13175: Consultation and Coordination With Indian Tribal 
Governments
    G. E.O. 13045: Protection of Children From Environmental Health 
Risks and Safety Risks
    H. Executive Order 13211: Actions that Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. E.O. 12898: Federal Actions to Address Environmental Justice 
in Minority Populations and Low-Income Populations
    K. E.O. 13158: Marine Protected Areas
    L. Plain Language Directive

I. Legal Authority, Purpose, and Background of Today's Regulation

A. Legal Authority

    Today's proposed rule is issued under the authority of sections 
101, 301, 304, 306, 308, 316, 401, 402, 501, and 510 of the Clean Water 
Act, 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342, 1361, 
and 1370. Publication of this proposed rule fulfills an obligation of 
the U.S. Environmental Protection Agency (EPA) under a consent decree 
in Riverkeeper, Inc. v. Leavitt, No. 93 Civ. 0314, (S.D.N.Y).

B. Purpose of Today's Proposed Regulation

    Section 316(b) of the Clean Water Act provides that any standard 
established pursuant to section 301 or 306 of the Clean Water Act and 
applicable to a point source must require that the location, design, 
construction, and capacity of cooling water intake structures reflect 
the best technology available for minimizing adverse environmental 
impact. Today's proposed rule would establish requirements reflecting 
the best technology available for minimizing adverse environmental 
impact, applicable to the location, design, construction, and capacity 
of cooling water intake structures at Phase III facilities (Phase I and 
Phase II are described in section I. C of today's preamble). Today's 
notice proposes the following three possible options for defining which 
existing facilities would be subject to categorical national 
requirements based on the design intake flow of cooling water intake 
structures at a facility and waterbody type: (1) The facility has a 
total design intake flow of 50 million gallons per day (MGD) or more 
and withdraws from any waterbody; (2) the facility has a total design 
intake flow of 200 MGD or more and withdraws from any waterbody; or (3) 
the facility has a total design intake flow of 100 MGD or more and 
withdraws water specifically from an ocean, estuary, tidal river, or 
one of the Great Lakes. Today's notice also proposes a design intake 
flow threshold of greater than 2 MGD for new offshore oil and gas 
extraction facilities consistent with the design intake flow threshold 
for new facilities in the Phase I rule. Under each of these co-proposed 
regulatory options, a Phase III facility must use at least 25 percent 
of the water withdrawn exclusively for cooling purposes and meet other 
specified criteria in order to be within the scope of the rule (see 
Section II--Scope and Applicability of Proposed Rule).

C. Background

1. The Clean Water Act
    The Federal Water Pollution Control Act, also known as the Clean 
Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to ``restore and 
maintain the chemical, physical, and biological integrity of the 
nation's waters.'' 33 U.S.C. 1251(a). The Clean Water Act establishes a 
comprehensive regulatory program, key elements of which are: (1) A 
prohibition on the discharge of pollutants from point sources to waters 
of the United States, except as authorized by the statute; (2) 
authority for EPA or authorized States or Tribes to issue National 
Pollutant Discharge Elimination System (NPDES) permits that regulate 
the discharge of pollutants; and, (3) requirements for limitations in 
NPDES permits based on effluent limitations guidelines and standards 
and water quality standards.
    Section 316(b) addresses the adverse environmental impact caused by 
the intake of cooling water, not discharges into water. Despite this 
special focus, the requirements of section 316(b) are closely linked to 
several of the core elements of the NPDES permit program established 
under section 402 of the Clean Water Act to control discharges of 
pollutants into navigable waters. For example, while effluent 
limitations apply to the discharge of pollutants by NPDES-permitted 
point sources to waters of the United States, section 316(b) applies to 
facilities subject to NPDES requirements that withdraw water from 
waters of the United States for cooling and that use a cooling water 
intake structure to do so.
    Section 402 of the Clean Water Act provides authority for EPA or an 
authorized State or Tribe to issue an NPDES permit to any person 
discharging any pollutant or combination of pollutants from a point 
source into waters of the United States. Forty-five States and one U.S. 
territory are currently authorized under section 402(b) to administer 
the NPDES permitting program. NPDES permits restrict the types and 
amounts of pollutants, including heat, that may be discharged from 
various industrial, commercial, and other sources of wastewater. These 
permits control the discharge of pollutants primarily by requiring 
dischargers to meet effluent limitations established pursuant to 
section 301 or section 306. Effluent

[[Page 68448]]

limitations may be based on Federal effluent limitations guidelines, 
new source performance standards, or the best professional judgment of 
the permit writer. Limitations based on these guidelines, standards, or 
best professional judgment are known as technology-based effluent 
limits. Where technology-based effluent limits are inadequate to ensure 
attainment of water quality standards applicable to the receiving 
water, section 301(b)(1)(C) of the Clean Water Act requires permits to 
include more stringent limits based on applicable water quality 
standards. NPDES permits also routinely include monitoring and 
reporting requirements, standard conditions, and special conditions. In 
addition, NPDES permits contain conditions to implement the 
requirements of section 316(b). Section 301 of the Clean Water Act 
prohibits the discharge of any pollutant by any person, except in 
compliance with specified statutory requirements, including section 
402.
    Section 510 of the Clean Water Act provides that, except as 
provided in the Clean Water Act, nothing in the Act shall preclude or 
deny the right of any State or political subdivision thereof to adopt 
or enforce any requirement respecting control or abatement of 
pollution; except that if a limitation, prohibition or standard of 
performance is in effect under the Clean Water Act, such State or 
political subdivision may not adopt or enforce any other limitation, 
prohibition or standard of performance which is less stringent than the 
limitation, prohibition or standard of performance under the Act. EPA 
interprets this to reserve for the States authority to implement 
requirements that are more stringent than the Federal requirements 
under State law. PUD No. 1 of Jefferson County. Washington Dep't of 
Ecology, 511 U.S. 700, 705 (1994).
    Sections 301, 304, and 306 of the Clean Water Act require that EPA 
develop technology-based effluent limitations guidelines and new source 
performance standards that are used as the basis for technology-based 
minimum discharge requirements in wastewater discharge permits. EPA 
issues these effluent limitations guidelines and standards for 
categories of industrial dischargers based on the pollutants of concern 
discharged by the industry, the degree of control that can be attained 
using various levels of pollution control technology, consideration of 
economics, as appropriate to each level of control, and other factors 
identified in sections 304 and 306 of the Clean Water Act (such as non-
water quality environmental impacts including energy impacts). EPA has 
promulgated regulations setting effluent limitations guidelines and 
standards under sections 301, 304, and 306 of the Clean Water Act for 
more than 50 industries. See 40 CFR 405 through 471. EPA has 
established effluent limitations guidelines and standards that apply to 
most of the industry categories that use cooling water intake 
structures (e.g., steam electric power generation, iron and steel 
manufacturing, pulp and paper manufacturing, petroleum refining, and 
chemical manufacturing).
    Section 316(b) states, in full:

    Any standard established pursuant to section 301 or section 306 
of [the Clean Water] Act and applicable to a point source shall 
require that the location, design, construction, and capacity of 
cooling water intake structures reflect the best technology 
available for minimizing adverse environmental impact.

    The phrase ``best technology available'' in Clean Water Act section 
316(b) is not defined in the statute, but its meaning can be understood 
in light of similar phrases used elsewhere in the Clean Water Act. See 
Riverkeeper v. EPA, slip op. at 11 (2nd Cir. Feb. 3, 2004) (noting that 
the cross-reference in Clean Water Act section 316(b) to Clean Water 
Act section 306 ``is an invitation to look at section 306 for guidance 
in determining what factors Congress intended the EPA to consider in 
determining `best technology available' for new sources.'').
    In sections 301 and 306, Congress directed EPA to set effluent 
discharge standards for new sources based on the ``best available 
demonstrated control technology'' and for existing sources based on the 
``best available technology economically achievable.'' For new sources, 
section 306(b)(1)(B) directs EPA to establish ``standards of 
performance.'' The phrase ``standards of performance'' under section 
306(a)(1) is defined as being the effluent reduction that is 
``achievable through application of the best available demonstrated 
control technology, processes, operating methods or other alternatives. 
* * *'' This is commonly referred to as ``best available demonstrated 
technology'' or ``BADT.'' For existing dischargers, section 
301(b)(1)(A) requires the establishment of effluent limitations based 
on ``the application of best practicable control technology currently 
available.'' This is commonly referred to as ``best practicable 
technology'' or ``BPT.'' Further, section 301(b)(2)(A) directs EPA to 
establish effluent limitations for certain classes of pollutants 
``which shall require the application of the best available technology 
economically achievable.'' This is commonly referred to as ``best 
available technology'' or ``BAT.'' Section 301 specifies that both BPT 
and BAT limitations must reflect determinations made by EPA under Clean 
Water Act section 304. Under these provisions, the limitations on the 
discharge of pollutants from point sources are based upon the 
capabilities of the equipment or ``control technologies'' available to 
control those discharges.
    The phrases ``best available demonstrated technology'' and ``best 
available technology''--like ``best technology available'' in Clean 
Water Act section 316(b)--are not defined in the statute. However, 
section 304 of the Clean Water Act specifies factors to be considered 
in establishing the best practicable control technology currently 
available and best available technology.
    For best practicable control technology currently available, the 
Clean Water Act directs EPA to consider:

the total cost of application of technology in relation to the 
effluent reduction benefits to be achieved from such application, 
and shall also take into account the age of the equipment and 
facilities involved, the process employed, the engineering aspects 
of the application of various types of control techniques, process 
changes, non-water quality environmental impact (including energy 
requirements), and such other factors as [EPA] deems appropriate.

33 U.S.C. 1314(b)(1)(b).
    For ``best available technology,'' the Clean Water Act directs EPA 
to consider:

the age of equipment and facilities involved, the process employed, 
the engineering aspects * * * of various types of control 
techniques, process changes, the cost of achieving such effluent 
reduction, non-water quality environmental impacts (including energy 
requirements), and such other factors as [EPA] deems appropriate.

33 U.S.C. 1314(b)(2)(B).
    Section 316(b) expressly refers to section 301, and the phrase 
``best technology available'' is very similar to ``best available 
technology'' in that section. These facts, coupled with the brevity of 
section 316(b) itself, prompted EPA to look to section 301 and, 
ultimately, section 304 for guidance in determining the ``best 
technology available to minimize adverse environmental impact'' of 
cooling water intake structures for existing Phase II facilities.
    By the same token, however, there are significant differences 
between section 316(b) and sections 301 and 304. See Riverkeeper, Inc. 
v. United States Environmental Protection Agency, slip op. at 13 (2nd 
Cir. Feb. 3, 2004) (``not every statutory directive contained [in

[[Page 68449]]

sections 301 and 306] is applicable'' to a section 316(b) rulemaking). 
Section 316(b) requires that cooling water intake structures reflect 
the best technology available for minimizing adverse environmental 
impact. In contrast to the effluent limitations provisions, the object 
of the ``best technology available'' is explicitly articulated by 
reference to the receiving water: To minimize adverse environmental 
impact in the waters from which cooling water is withdrawn. This 
difference is reflected in EPA's past practices in implementing 
sections 301, 304, and 316(b). While EPA has established effluent 
limitations guidelines based on the efficacy of one or more 
technologies to reduce pollutants in wastewater, considering costs, but 
without necessarily considering the impact on the receiving waters, EPA 
has previously considered the costs of technologies in relation to the 
benefits of minimizing adverse environmental impact in establishing 
section 316(b) limits. In Re Public Service Co. of New Hampshire, 10 
ERC 1257 (June 17, 1977); In Re Public Service Co. of New Hampshire, 1 
EAD 455 (Aug. 4, 1978); Seacoast Anti-Pollution League v. Costle, 597 
F. 2d 306 (1st Cir. 1979).
    For this Phase III rulemaking, EPA therefore interprets Clean Water 
Act section 316(b) as authorizing EPA to consider not only technologies 
but also their effects on and benefits to the water from which the 
cooling water is withdrawn. Based on these two considerations, today's 
proposed rule establishes national requirements for facilities to 
install technology, as appropriate, that is technically available, 
economically practicable, cost-effective, and justified by the benefits 
to the source waterbody.
    At this time, EPA is co-proposing all three options discussed above 
because it sees advantages to each. EPA is also considering an 
alternative under which EPA would not promulgate, at this time, 
categorical requirements under section 316(b) for cooling water intake 
structures unregulated by Phase I and Phase II. Rather, EPA would 
continue to rely on the best professional judgment of the permitting 
authority to determine the best technology available to minimize 
adverse environmental impact, in order to allow these requirements to 
be better tailored to local conditions.
2. Consent Decree
    Publication of this proposal fulfills one of EPA's obligations to 
comply with a consent decree, as amended. The Second Amended Consent 
Decree, which is relevant to today's proposed rule, was filed on 
November 25, 2002, in the United States District Court, Southern 
District of New York, in Riverkeeper, Inc. v. Leavitt, No. 93 Civ 0314 
(AGS). That case was brought against EPA by a coalition of individuals 
and environmental groups. The original Consent Decree, filed on October 
10, 1995, provided that EPA was to propose regulations implementing 
section 316(b) by July 2, 1999, and take final action with respect to 
those regulations by August 13, 2001. Under subsequent interim orders, 
the Amended Consent Decree filed on November 22, 2000, and the Second 
Amended Consent Decree, EPA divided the rulemaking into three phases. 
EPA took final action on a rule governing cooling water intake 
structures used by new facilities (Phase I) on November 9, 2001 (66 FR 
65255, December 18, 2001). EPA took final action on a rule governing 
cooling water intake structures used by large existing power producers 
(Phase II) on February 16, 2004 (69 FR 41576, July 9, 2004). The 
consent decree further requires that EPA propose regulations applicable 
to, at a minimum, existing facilities using cooling water intake 
structures with intake flows above a minimum threshold to be determined 
by EPA, in the following categories: power producers not covered by the 
Phase II regulations, pulp and paper manufacturing, petroleum and coal 
products manufacturing, chemical and allied products manufacturing, and 
primary metal manufacturing (Phase III). EPA is required to propose 
regulations for Phase III facilities by November 1, 2004, and take 
final action by June 1, 2006.
3. What Other EPA Rulemakings and Guidance Address Cooling Water Intake 
Structures?
    In April 1976, EPA published a final rule under section 316(b) that 
addressed cooling water intake structures. 41 FR 17387 (April 26, 
1976), see also the proposed rule at 38 FR 34410 (December 13, 1973). 
The rule added a new Sec.  401.14 to 40 CFR Chapter I that reiterated 
the requirements of Clean Water Act section 316(b). It also added a new 
part 402, which included three sections: (1) Section 402.10 
(Applicability), (2) Sec.  402.11 (Specialized definitions), and (3) 
Sec.  402.12 (Best technology available for cooling water intake 
structures). Section 402.10 stated that the provisions of part 402 
applied to ``cooling water intake structures for point sources for 
which effluent limitations are established pursuant to section 301 or 
standards of performance are established pursuant to section 306 of the 
Act.'' Section 402.11 defined the terms ``cooling water intake 
structure,'' ``location,'' ``design,'' ``construction,'' ``capacity,'' 
and ``Development Document.'' Section 402.12 included the following 
language:

    The information contained in the Development Document shall be 
considered in determining whether the location, design, 
construction, and capacity of a cooling water intake structure of a 
point source subject to standards established under section 301 or 
306 reflect the best technology available for minimizing adverse 
environmental impact.

    In 1977, fifty-eight electric utility companies challenged those 
regulations, arguing that EPA had failed to comply with the 
requirements of the Administrative Procedure Act (APA) in promulgating 
the rule. Specifically, the utilities argued that EPA had neither 
published the Development Document in the Federal Register nor properly 
incorporated the document into the rule by reference. The United States 
Court of Appeals for the Fourth Circuit agreed and, without reaching 
the merits of the regulations themselves, remanded the rule. 
Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later 
withdrew part 402. 44 FR 32956 (June 7, 1979). The regulation at 40 CFR 
401.14, which reiterates the statutory requirement, remains in effect.
    Since the Fourth Circuit remanded EPA's section 316(b) regulations 
in 1977, NPDES permit authorities have made decisions implementing 
section 316(b) on a case-by-case, site-specific basis. EPA published 
draft guidance addressing section 316(b) implementation in 1977. See 
Draft Guidance for Evaluating the Adverse Impact of Cooling Water 
Intake Structures on the Aquatic Environment: Section 316(b) Pub. L. 
92-500 (U.S. EPA, 1977). This draft guidance described the studies 
recommended for evaluating the impact of cooling water intake 
structures on the aquatic environment and recommended a basis for 
determining the best technology available for minimizing adverse 
environmental impact. The 1977 section 316(b) draft guidance states, 
``The environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake 
design, location, construction, and capacity must be made on a case-by-
case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4). 
This case-by-case approach was also consistent with the approach 
described in the 1976 Development Document referenced in the remanded 
regulation.
    The 1977 section 316(b) draft guidance suggested a general process 
for developing information needed to

[[Page 68450]]

support section 316(b) decisions and presenting that information to the 
permitting authority. The process involved the development of a site-
specific study of the environmental effects associated with each 
facility that uses one or more cooling water intake structures, as well 
as consideration of that study by the permitting authority in 
determining whether the facility must make any changes for minimizing 
adverse environmental impact. Where adverse environmental impact is 
present, the 1977 draft guidance suggested a stepwise approach that 
considers screening systems, size, location, capacity, and other 
factors.
    Although the draft guidance described the information that should 
be developed, key factors that should be considered, and a process for 
supporting section 316(b) determinations, it did not establish uniform 
technology-based national standards for best technology available for 
minimizing adverse environmental impact. Rather, the guidance left the 
decisions on the appropriate location, design, capacity, and 
construction of cooling water intake structures to the permitting 
authority. Under this framework, the Director determined whether 
appropriate studies have been performed, whether a given facility has 
minimized adverse environmental impact, and what, if any, technologies 
may be required.
4. Phase I New Facility Rule
    On November 9, 2001, EPA took final action on regulations governing 
cooling water intake structures at new facilities. 66 FR 65255 
(December 18, 2001). On December 26, 2002, EPA made minor changes to 
the Phase I regulations. 67 FR 78947. The final Phase I new facility 
rule (40 CFR 125, Subpart I) establishes requirements applicable to the 
location, design, construction, and capacity of cooling water intake 
structures at new facilities that withdraw greater than two (2) million 
gallons per day (MGD) and use at least twenty-five (25) percent of the 
water they withdraw solely for cooling purposes. In the new facility 
rule, EPA adopted a two-track approach. Under Track I, for facilities 
with a design intake flow more than 10 MGD, the intake flow of the 
cooling water intake structure is restricted, at a minimum, to a level 
commensurate with that which could be attained by use of a closed-
cycle, recirculating cooling system. For facilities with a design 
intake flow greater than 2 MGD, the design through-screen intake 
velocity is restricted to 0.5 feet per second and the total quantity of 
intake is restricted to a proportion of the mean annual flow of a 
freshwater river or stream, or to maintain the natural thermal 
stratification or turnover patterns (where present) of a lake or 
reservoir except in cases where the disruption is beneficial, or to a 
percentage of the tidal excursions of a tidal river or estuary. If 
certain environmental conditions exist, an applicant with intake 
capacity greater than 10 MGD must select and implement appropriate 
design and construction technologies for minimizing impingement 
mortality and entrainment. (Applicants with 2 to 10 MGD flows are not 
required to reduce intake flow to a level commensurate with a closed-
cycle, recirculating cooling system, but must install technologies for 
reducing entrainment at all locations.) Under Track II, the applicant 
has the opportunity to demonstrate to the Director that the 
technologies he employs will reduce the level of adverse environmental 
impact to a comparable level to what would be achieved by meeting the 
Track I requirements for restricting intake flow and velocity. As part 
of this demonstration, EPA initially had allowed the applicant to 
employ control measures other than reducing impingement mortality and 
entrainment, including restoration measures that would result in 
increases in fish and shellfish, comparable to the reduction in 
impingement mortality and entrainment it would achieve were it to 
implement the Track I intake flow and velocity requirements. However, 
in February 2004, the 2nd Circuit Court of Appeals issued a decision in 
response to several petitions challenging the final Phase I rule. The 
Court found that EPA exceeded its authority by allowing new facilities 
to comply with section 316(b) through restoration methods, and remanded 
that aspect of the rule to EPA. Riverkeeper, Inc. v. EPA, 358 F.3d 174, 
191 (2nd Cir., 2004).
    Directors may establish less stringent alternative requirements for 
a facility if compliance with the Phase I standards would result in 
compliance costs wholly out of proportion to those EPA considered in 
establishing the requirements at issue or would result in significant 
adverse impacts on local air quality, water resources, or local energy 
markets.
    With the new facility rule, EPA promulgated national minimum 
requirements for the location, design, capacity, and construction of 
cooling water intake structures at new facilities. The final new 
facility rule establishes a reasonable framework that creates certainty 
for permitting of new facilities, while providing significant 
flexibility to take site-specific factors into account.
    EPA specifically excluded new offshore oil and gas extraction 
facilities from the Phase I new facility rule, but committed to 
consider establishing requirements for such facilities in the Phase III 
rulemaking. 66 FR 65338 (December 18, 2001).
5. Phase II Existing Facility Rule
    On February 16, 2004, EPA took final action on regulations 
governing cooling water intake structures at certain existing power 
producing facilities. 69 FR 41576 (July 9, 2004). The final Phase II 
rule applies to existing facilities that are point sources; that, as 
their primary activity, both generate and transmit electric power or 
generate electric power for sale or transmission; that use or propose 
to use a cooling water intake structure with a total design intake flow 
of 50 MGD or more to withdraw water from waters of the United States; 
and that use at least 25 percent of the withdrawn water exclusively for 
cooling purposes.
    Under the Phase II rule, EPA established performance standards for 
the reduction of impingement mortality and, when appropriate, 
entrainment (see 40 CFR 125.94). The performance standards consist of 
ranges of reductions in impingement mortality and/or entrainment (e.g., 
reduce impingement mortality by 80 to 95 percent and/or entrainment by 
60 to 90 percent). These performance standards reflect the best 
technology available for minimizing adverse environmental impacts. The 
type of performance standard applicable to a particular facility (i.e., 
reductions in impingement mortality only or impingement mortality and 
entrainment) is based on several factors, including the facility's 
location (i.e., source waterbody), rate of use (capacity utilization 
rate), and the proportion of the waterbody withdrawn. In most cases, 
EPA believes that these performance standards can be met using design 
and construction technologies or operational measures. The performance 
standards also can be met, in whole or in part, by using restoration 
measures, following consideration of design and construction 
technologies or operational measures, and provided such measures meet 
certain specified requirements. (See 40 CFR 125.94(c)).
    The Phase II rule identifies five alternatives to achieve 
compliance with the requirements for best technology available for 
minimizing adverse environmental impacts associated with cooling water 
intake structures. A facility must demonstrate to the Director one of 
the following: (1) That it has already reduced its flow commensurate 
with a closed-cycle recirculating system

[[Page 68451]]

(to meet performance standards for impingement and entrainment), or 
that it has already reduced its design intake velocity to 0.5 feet per 
second or less (to meet the impingement performance standard only); (2) 
that its current cooling water intake structure configuration meets the 
applicable performance standards; (3) that it has selected design and 
construction technologies, operational measures, and/or restoration 
measures that, in combination with any existing design and construction 
technologies, operational measures, and/or restoration measures, meet 
the applicable performance standards; (4) that it meets the 
applicability criteria and has installed and is properly operating and 
maintaining a rule-specified and/or State-specified approved design and 
construction technology (i.e., submerged cylindrical wedgewire screen) 
in accordance with 40 CFR 125.99(a) or an alternative technology that 
meets the appropriate performance standards and is approved by the 
Director in accordance with 40 CFR 125.99(b); or (5) that its costs of 
compliance would be significantly greater than the costs considered by 
the Administrator for a like facility to meet the applicable 
performance standards, or than the benefits of meeting the applicable 
performance standards at the facility. A discussion of the legal 
authority and basis for the use of the cost test is found in section VI 
of this preamble.
    During the first permit term and subsequent permit terms, a 
facility that chooses compliance alternatives two (2) through five (5), 
as described above, may request that compliance with the requirements 
of the rule be determined based on the implementation of a Technology 
Installation and Operation Plan (TIOP), indicating how the facility 
will install and ensure the efficacy, to the extent practicable, of 
design and construction technologies and/or operational measures, and/
or a Restoration Plan. Adaptive management practices must be employed 
to ensure compliance during subsequent permit terms. The TIOP must be 
developed and submitted to the Director in accordance with 40 CFR 
125.95(b)(4)(ii). The Restoration Plan must be developed in accordance 
with 40 CFR 125.95(b)(5).
6. Public Participation
    EPA worked extensively with stakeholders from the industry, public 
interest groups, State agencies, and other Federal agencies in the 
development of this proposed rule. EPA included industry groups, 
environmental groups, and other government entities in the development, 
testing, refinement, and completion of the section 316(b) survey, which 
was used as a primary source of data for the Phase III proposed rule. 
As discussed in section III of today's preamble, the survey, 
``Information Collection Request, Detailed Industry Questionnaires: 
Phase II Cooling Water Intake Structures & Watershed Case Study Short 
Questionnaire,'' was initiated in 1997, and was used to collect data 
during 1998. EPA conducted two public meetings on section 316(b) 
issues. In June of 1998, EPA conducted a public meeting focused on a 
draft regulatory framework for assessing potential adverse 
environmental impact from impingement mortality and entrainment. 63 FR 
27958 (May 21, 1998). A second public meeting was held in September of 
1998, and focused on technology, cost, and mitigation issues. 63 FR 
40683 (July 30, 1998). In addition, in September of 1998, and April of 
1999, EPA participated in technical workshops sponsored by the Electric 
Power Research Institute on issues relating to the definition and 
assessment of adverse environmental impact. EPA also participated in 
other industry conferences, and has met with representatives of 
industry and environmental groups.
    In the months leading up to publication of the proposed Phase I 
rule, EPA conducted a series of stakeholder meetings to review the 
draft regulatory framework for the proposed rule and invited 
stakeholders to provide their recommendations. Participants included 
representatives of the electric power industry, as well as the 
petroleum refining, pulp and paper, and iron and steel industries. EPA 
also met with environmental groups, States, and interstate groups. 
After publication of the proposed Phase I rule, EPA continued to meet 
with stakeholders. Summaries of these meetings are in the docket. EPA 
also received many comments on the Phase I proposed rule (65 FR 49059, 
August 10, 2000) and Notice of Data Availability (NODA). (66 FR 28853, 
May 25, 2001). These comments informed the development of the Phase II 
rule and this Phase III proposed rule.
    In January 2001, EPA attended technical workshops organized by the 
Electric Power Research Institute and the Utilities Water Act Group. 
These workshops focused on key issues associated with different 
regulatory approaches considered under the Phase I proposed rule and 
alternatives for addressing section 316(b) requirements.
    On May 23, 2001, EPA held a day-long forum to discuss specific 
issues associated with the development of regulations under section 
316(b) of the Clean Water Act. 66 FR 20658 (April 24, 2001). At the 
meeting, 17 experts from industry, public interest groups, States, and 
academia reviewed and discussed the Agency's preliminary data on 
cooling water intake structure technologies that are in place at 
existing facilities and the costs associated with the use of available 
technologies for reducing impingement mortality and entrainment. Over 
120 people attended the meeting.
    On August 21, 2001, EPA participated in a technical symposium 
sponsored by the Electric Power Research Institute in association with 
the American Fisheries Society on issues relating to the definition and 
assessment of adverse environmental impact under section 316(b) of the 
Clean Water Act.
    During development of the Phase I and Phase II rules, EPA 
coordinated with the Nuclear Regulatory Commission (NRC) to ensure that 
there would not be a conflict with NRC safety requirements. NRC 
reviewed the proposed Phase II rule and did not identify any apparent 
conflict with nuclear plant safety. NRC licensees would continue to be 
obligated to meet NRC requirements for design and reliable operation of 
cooling systems. NRC recommended that EPA consider adding language 
which states that in cases of conflict between an EPA requirement and 
an NRC safety requirement, the NRC safety requirement takes precedence. 
EPA added language to address this concern in the Phase II final rule 
and this proposed rule.
    EPA sponsored a Symposium on Cooling Water Intake Technologies to 
Protect Aquatic Organisms, on May 6-7, 2003. This symposium brought 
together professionals from Federal, State, and Tribal regulatory 
agencies; industry; environmental organizations; engineering consulting 
firms; science and research organizations; academia; and others 
concerned with mitigating harm to the aquatic environment by cooling 
water intake structures. Efficacy and costs of various technologies to 
mitigate impacts to aquatic organisms from cooling water intake 
structures, as well as research and other future needs, were discussed.
    During the development of this proposed regulation, EPA met several 
times with trade associations whose members would be subject to the 
Phase III requirements. EPA also conducted Phase III-specific data 
collection activities, including a study of entrainment at 
manufacturing facilities, contacting Phase III facilities to request

[[Page 68452]]

biological studies and conducted an industry survey of offshore oil and 
gas extraction facilities and seafood processing vessels.
    Finally, EPA convened a Small Business Advocacy Review (SBAR) panel 
(in accordance with the Regulatory Flexibility Act section 609(b) as 
amended by the Small Business Regulatory and Enforcement Fairness Act) 
to provide information to small entities and receive feedback during 
the Phase III rulemaking process. EPA hosted a pre-panel outreach 
meeting for small entities potentially subject to Phase III on January 
22, 2004. The SBAR panel held an outreach meeting with small entity 
representatives (SERs) on March 16, 2004. Based on the information 
gathered from the participating small entities during these outreach 
meetings and subsequent correspondence, the SBAR panel produced a final 
report to the EPA Administrator on April 27, 2004. Results of the final 
report were considered in the development of this proposed Phase III 
rule.
    These coordination efforts and all of the meetings described in 
this section, as well as the comments submitted on the Phase I and II 
section 316(b) rules and EPA's response to these comments, are 
documented or summarized in the dockets for these three rules. The 
Administrative Record for today's proposal includes all materials from 
the Phase I, Phase II, and Phase III section 316(b) rule dockets.

II. Scope and Applicability of the Proposed Rule

    Based on the co-proposed flow thresholds based options in today's 
proposed rule, the proposed national categorical requirements would 
apply to two groups of facilities: (1) Existing manufacturing 
facilities (including but not limited to chemical, metal, pulp and 
paper, and petroleum refining facilities), and (2) new offshore oil and 
gas extraction facilities. In today's proposed rule, the term ``new 
offshore oil and gas extraction facility'' is defined to include 
facilities in both the offshore and the coastal subcategories of EPA's 
Oil and Gas Extraction Point Source Category for which effluent 
limitations are established at 40 CFR part 435. Although the term 
``offshore'' denotes only one of these two subcategories for purposes 
of the effluent guidelines, EPA decided that it was more efficient to 
use the term ``offshore'' to denote facilities in either subcategory 
for purposes of today's rule because the proposed requirements are the 
same for both offshore and coastal facilities and the term ``offshore'' 
is commonly understood to include any facilities not located on land. 
EPA requests comment on whether this definition is likely to cause 
confusion over the scope of covered facilities. In order to be covered 
by today's proposed rule, these facilities would need to use cooling 
water intake structures to withdraw water from waters of the U.S. and 
meet all other applicability criteria, described below.
    Existing facilities that meet all of the following criteria would 
be subject to today's proposed rule, if promulgated as proposed (see 
Sec.  125.101).
     The facility is a point source that has or is required to 
have an NPDES permit under section 402 of the Clean Water Act;
     The facility is an existing facility not subject to the 
Phase II regulation;
     The facility uses at least 25 percent of water withdrawn 
exclusively for cooling purposes, measured on an average annual basis; 
and
     The facility uses, or proposes to use, cooling water 
intake structures, including a cooling water intake structure operated 
by an independent supplier (other than a public water system), with a 
total design intake flow equal to or greater than a certain threshold 
to withdraw cooling water from waters of the United States.
    Today's proposed rule co-proposes three options based on design 
intake flow and source waterbody type for defining which existing 
facilities are Phase III existing facilities subject to categorical 
national requirements:
     The facility has a total design intake flow of 50 MGD or 
more, and withdraws from any waterbody type (``50 MGD All 
Waterbodies'');
     The facility has a total design intake flow of 200 MGD or 
more, and withdraws from any waterbody type (``200 MGD All 
Waterbodies'');
     The facility has a total design intake flow of 100 MGD or 
more and withdraws water from an ocean, estuary, tidal river, or one of 
the Great Lakes (``100 MGD Certain Waterbodies'').
    A facility meeting the above criteria, including any flow threshold 
EPA adopts after considering comments on the three co-proposed options, 
would be referred to as a ``Phase III existing facility.'' If an 
existing facility does not meet the relevant Phase II or Phase III 
cooling water use and intake flow thresholds by itself, and is co-
located with an existing facility that is not subject to the Phase II 
regulation (e.g., a power producing facility below the Phase II flow 
threshold, or a manufacturing facility), both facilities would still be 
subject to Phase III requirements if the cooling water used 
collectively by the co-located facilities meets the applicable 
thresholds (and the facilities meet the other requisite Phase III 
criteria). Co-located facilities adjoin each other and are under common 
ownership, operation, or management. If a facility is a point source 
that uses a cooling water intake structure and has, or is required to 
have, an NPDES permit, but does not meet the proposed applicable design 
intake flow/source waterbody threshold or the 25 percent cooling water 
use threshold, it would continue to be subject to permit conditions 
implementing CWA section 316(b) set by the permit director on a case-
by-case, best professional judgment basis.
    Today's notice also proposes requirements for new offshore oil and 
gas extraction facilities, which were specifically excluded from the 
Phase I new facility rule. (40 CFR 125 Subpart I). Section II.B of the 
preamble discusses what constitutes a ``new'' offshore oil and gas 
extraction facility for purposes of the section 316(b) proposed Phase 
III rule. Requirements for new offshore oil and gas extraction 
facilities are proposed in 40 CFR Subpart N. EPA is seeking comment on 
the requirements contained in this subpart. EPA is not seeking comment 
on the Phase I rule that EPA promulgated in 2001.
    Finally, under today's proposed rule a seafood processing vessel or 
an offshore liquefied natural gas import terminal would not be subject 
to national categorical requirements. Such a facility could be subject 
to permit conditions implementing CWA section 316(b) set by the permit 
director on a case-by-case, best professional judgment basis where the 
facility is a point source that uses a cooling water intake structure 
and has, or is required to have, an NPDES permit.

A. What Is a ``New'' Offshore Oil and Gas Extraction Facility for 
Purposes of the Section 316(b) Proposed Phase III Rule?

    For purposes of this proposed rule, new offshore oil and gas 
extraction facilities are those facilities that are subject to the Oil 
and Gas Extraction Point Source Category Effluent Guidelines (i.e., 40 
CFR 435.10 Offshore Subcategory or 40 CFR 435.40 Coastal Subcategory); 
that commence construction more than 60 days after publication of the 
final rule; and that meet all other aspects of the ``new facility'' 
definition in Sec.  125.83 (other than the date for commencing 
construction). In other words, in order to be covered by today's 
proposed rule, a new offshore oil and gas extraction facility would 
have to be a new source or new discharger per 40 CFR 122.2 and 122.29, 
a greenfield or stand-alone

[[Page 68453]]

facility, and use either a newly constructed cooling water intake 
structure, or an existing cooling water intake structure whose design 
capacity is increased to accommodate the intake of additional cooling 
water.

B. What Is an ``Existing Facility'' for Purposes of the Section 316(b) 
Proposed Phase III Rule?

    In today's proposed rule, the definition of ``existing facility'' 
is the same as in the Phase II rule except for additional language 
addressing new offshore oil and gas extraction facilities: any facility 
that commenced construction on or before January 17, 2002 (or 60 days 
after publication of the final rule for an offshore oil and gas 
extraction facility), as described in 40 CFR 122.29(b)(4).\1\ January 
17, 2002 is the effective date of the Phase I new facility rule and, 
therefore, the date for distinguishing new facilities from existing 
ones. However, offshore oil and gas extraction facilities were not 
subject to the Phase I new facility rule, but rather, would be subject 
to requirements under this proposed Phase III rule. Therefore, the 
effective date of the final Phase III rule would be the date for 
distinguishing new offshore oil and gas extraction facilities from 
existing ones. An ``existing facility'' under this proposed rule would 
include modifications and additions to existing facilities, that do not 
meet the definition of a new facility under the Phase I rule (40 CFR 
125.83). That definition states:
---------------------------------------------------------------------------

    \1\ Construction is commenced if the owner or operator has 
undertaken certain installation and site preparation activities that 
are part of a continuous on-site construction program, and it 
includes entering into certain specified binding contractual 
obligations as one criterion (40 CFR 122.29(b)(4)).

    New facility means any building, structure, facility, or 
installation that meets the definition of a ``new source'' or ``new 
discharger'' in [other NPDES regulations] and is a greenfield or 
stand-alone facility; commences construction after January 17, 2002; 
and uses either a newly constructed cooling water intake structure, 
or an existing cooling water intake structure whose design capacity 
is increased to accommodate the intake of additional cooling water. 
New facilities include only ``greenfield'' and ``stand-alone'' 
facilities. A greenfield facility is a facility that is constructed 
at a site at which no other source is located or that totally 
replaces the process or production equipment at an existing facility 
(see 40 CFR 122.29(b)(1)(i) and (ii)). A stand-alone facility is a 
new, separate facility that is constructed on property where an 
existing facility is located and whose processes are substantially 
independent of the existing facility at the same site (see 40 CFR 
122.29(b)(1)(iii). New facility does not include new units that are 
added to a facility for purposes of the same general industrial 
operation (for example, a new peaking unit at an electrical 
generating station).\2\
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    \2\ The Phase I rule also listed examples of facilities that 
would be ``new'' facilities and facilities that would ``not be 
considered a `new facility' '' in two numbered paragraphs. These 
read as follows:
    ``(1) Examples of `new facilities' include, but are not limited 
to: the following scenarios:
    ``(i) A new facility is constructed on a site that has never 
been used for industrial or commercial activity. It has a new 
cooling water intake structure for its own use.
    ``(ii) A facility is demolished and another facility is 
constructed in its place. The newly-constructed facility uses the 
original facility's cooling water intake structure, but modifies it 
to increase the design capacity to accommodate the intake of 
additional cooling water.
    ``(iii) A facility is constructed on the same property as an 
existing facility, but is a separate and independent industrial 
operation. The cooling water intake structure used by the original 
facility is modified by constructing a new intake bay for the use of 
the newly constructed facility or is otherwise modified to increase 
the intake capacity for the new facility.
    ``(2) Examples of facilities that would not be considered a `new 
facility' include, but are not limited to, the following scenarios:
    ``(i) A facility in commercial or industrial operation is 
modified and either continues to use its original cooling water 
intake structure or uses a new or modified cooling water intake 
structure.
    ``(ii) A facility has an existing intake structure. Another 
facility (a separate and independent industrial operation), is 
constructed on the same property and connects to the facility's 
cooling water intake structure behind the intake pumps, and the 
design capacity of the cooling water intake structure has not been 
increased. This facility would not be considered a `new facility' 
even if routine maintenance or repairs that do not increase the 
design capacity were performed on the intake structure.''

    The definition in today's proposed regulation is intended to be 
consistent with EPA's definition of new facility in the Phase I rule 
(Sec.  125.83) and to ensure that sources excluded from the definition 
of new facility in the Phase I rule are captured by the definition of 
existing facility.
    The determination of whether a facility is ``new'' or ``existing'' 
is focused on the point source discharger--not on the cooling water 
intake structure. In other words, modifications or additions to the 
cooling water intake structure (or even the total replacement of an 
existing cooling water intake structure with a new one) does not 
convert an otherwise unchanged existing facility into a new facility, 
regardless of the purpose of such changes. Rather, the determination as 
to whether a facility is new or existing focuses on the point source 
itself, i.e., whether it is a greenfield facility or a stand-alone 
facility.
    Under this proposed rule, an existing manufacturing facility that 
replaces or modifies an existing generating or manufacturing unit would 
remain subject to regulation as a Phase III existing facility, unless 
(1) the existing facility were completely demolished and another 
facility constructed in its place (a ``greenfield'' facility), or a 
separate facility with substantially independent processes were 
constructed on the property (a ``stand-alone'' facility) and (2) the 
new facility used either a new intake structure or the existing 
structure with an increased design capacity. To illustrate, an existing 
facility that undertook the following facility modifications or 
additions would continue to be characterized as an existing facility--
not a new facility--under today's proposed rule:
     An existing manufacturing facility undergoes a 
modification of its process short of total replacement of the process 
and concurrently increases the design capacity of its existing cooling 
water intake structures;
     An existing manufacturing facility builds a new process at 
its site for purposes of the same industrial operation and concurrently 
increases the design capacity of its existing cooling water intake 
structures;
     An existing manufacturing facility completely rebuilds its 
process but uses the existing cooling water intake structure with no 
increase in design capacity.
    Phase III existing facilities subject to today's proposed rule 
would also include point sources that are new users of cooling water 
intake structures, but do not meet the definition of new facility under 
Sec.  125.83. For example, an existing facility may have historically 
withdrawn its cooling water from a municipal or other source, but then 
begins to withdraw cooling water from a water of the United States. 
This facility would be considered an existing facility because it is 
not a ``greenfield'' or ``stand alone'' facility within the meaning of 
the new facility rule. Similarly, a facility that previously relied on 
unit processes that do not require cooling water, and then adds or 
modifies a unit process for purposes of the same industrial operation 
such that cooling water is subsequently required, would also be 
regulated as an existing facility, not a new facility, under 316(b).

C. What Is ``Cooling Water'' and What Is a ``Cooling Water Intake 
Structure?'

    Today's proposed rule would adopt for Phase III facilities the same 
definition of a ``cooling water intake structure'' that applies to new 
facilities under the final Phase I rule and existing facilities under 
the final Phase II rule. A cooling water intake structure would be 
defined as the total physical structure and any associated constructed 
waterways used to withdraw cooling

[[Page 68454]]

water from waters of the Unites States. Under this definition, the 
cooling water intake structure extends from the point at which water is 
withdrawn from the surface water source up to and including the intake 
pumps. Today's proposed rule also would adopt the definition of 
``cooling water'' used in the Phase I and Phase II rules: water used 
for contact or noncontact cooling, including water used for equipment 
cooling, evaporative cooling tower makeup, and dilution of effluent 
heat content. The definition specifies that the intended use of cooling 
water is to absorb waste heat rejected from the processes used or 
auxiliary operations on the facility's premises. The definition also 
indicates that water used in a manufacturing process either before or 
after it is used for cooling is process water and would not be 
considered cooling water for purposes of determining whether the 
facility was using 25 percent or more of the water withdrawn for 
cooling purposes. This clarification is necessary because cooling water 
intake structures typically bring water into a facility for numerous 
purposes, including use in industrial processes; use as circulating 
water, service water, or evaporative cooling tower makeup water; 
dilution of effluent heat content; equipment cooling; and air 
conditioning. This is particularly true for manufacturers addressed 
under this proposed rule, who often seek to reduce water use and 
increase efficiency through water reuse. EPA does not wish to create a 
disincentive to such improved efficiency and recognizes that to do so 
could result in other forms of environmental impacts. Consequently, and 
consistent with the Phase I and Phase II rules, only the water used 
exclusively for cooling purposes would be counted when determining 
whether the 25 percent threshold in Sec.  125.101(a)(4) or Sec.  
125.131(a)(2) is met.
    This proposed definition of ``cooling water intake structure'' 
differs from the definition provided in the 1977 Draft Guidance for 
Evaluating the Adverse Impact of Cooling Water Intake Structures on the 
Aquatic Environment: Section 316(b) Pub. L. 92-500 (U.S. EPA, 1977). 
The proposed rule definition would clarify that the cooling water 
intake structure includes the physical structure that extends from the 
point at which water is withdrawn from the surface water up to and 
including the intake pumps. Inclusion of the term ``associated 
constructed waterways'' in today's proposed rule is intended to clarify 
that the definition includes those canals, channels, connecting 
waterways, and similar structures that may be built or modified to 
facilitate the withdrawal of cooling water. The explicit inclusion of 
the intake pumps in the definition reflects the key role pumps play in 
determining the capacity (i.e., dynamic capacity) of the intake. These 
pumps, which bring in water, are an essential component of the cooling 
water intake structure since without them the intake structure could 
not work as designed.

D. Would My Facility Be Covered if It Withdraws From Waters of the 
United States?

    The requirements proposed today would apply to cooling water intake 
structures that have the design capacity to withdraw amounts of water 
equal to or greater than the specified proposed intake flow thresholds 
from ``waters of the United States.'' Waters of the United States 
include the broad range of surface waters that meet the regulatory 
definition at 40 CFR 122.2, which includes lakes, ponds, reservoirs, 
nontidal rivers or streams, tidal rivers, estuaries, fjords, oceans, 
bays, and coves. These potential sources of cooling water may be 
adversely affected by impingement mortality and entrainment.
    Some facilities discharge heated water to cooling ponds, then 
withdraw water from the ponds for cooling purposes. EPA recognizes that 
cooling ponds may, in certain circumstances, constitute part of a 
closed-cycled cooling system. See, e.g., Sec.  125.102. However, EPA 
does not intend that this proposed rule would change the regulatory 
status of cooling ponds. Cooling ponds are neither categorically 
included nor categorically excluded from the definition of ``waters of 
the United States'' at 40 CFR 122.2. EPA interprets 40 CFR 122.2 to 
give permit writers discretion to regulate cooling ponds as ``waters of 
the United States'' where cooling ponds meet the definition of ``waters 
of the United States.'' The determination of whether a particular 
cooling pond is a water of the United States is to be made by the 
permit writer on a case-by-case basis, informed by the discussions in 
Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps 
of Engineers, 531 U.S. 159 (2001), and subsequent case law. Therefore, 
facilities that withdraw cooling water from cooling ponds that are 
waters of the United States and that would meet today's other proposed 
criteria for coverage (including the requirement that the facility has 
or will be required to obtain an NPDES permit) would be subject to 
today's proposed rule. The EPA and the U.S. Army Corps of Engineers 
have jointly issued jurisdictional guidance concerning the term 
``waters of the United States'' in light of the Supreme Court's 
decision in Solid Waste Agency of Northern Cook County v. U.S. Army 
Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). A copy of that 
guidance was published as an Appendix to an Advanced Notice of Proposed 
Rulemaking on the definition of the phrase ``waters of the U.S.,'' see 
68 FR 1991 (January 15, 2003), and may be obtained at http://www.epa.gov/owow/wetlands/ANPRM-FR.pdf.
 Proposed Sec.  125.101(d) also 

provides, similar to the Phase I and Phase II rules, that facilities 
that obtain cooling water from a public water system or use treated 
effluent are not deemed to be using a cooling water intake structure 
for purposes of this proposed rule.

E. Would My Facility Be Covered if It Is a Point Source Discharger?

    Today's proposed rule would apply only to facilities that are point 
sources (i.e., have an NPDES permit or are required to obtain one) 
because they discharge or might discharge pollutants, including storm 
water, from a point source to waters of the United States. This is the 
same requirement EPA included in the Phase I and Phase II final rules 
(see, 40 CFR 125.81(a)(1), and 40 CFR 125.91(a)(1), respectively). 
Requirements for complying with section 316(b) will continue to be 
applied through NPDES permits.
    Based on the Agency's review of potential Phase III facilities that 
employ cooling water intake structures, the Agency anticipates that 
most Phase III facilities that would be subject to this proposed rule 
control the intake structure that supplies them with cooling water, and 
discharge some combination of their cooling water, wastewater, and 
storm water to a water of the United States through a point source 
regulated by an NPDES permit. In this scenario, the requirements for 
the cooling water intake structure would be specified in the facility's 
NPDES permit. In the event that a Phase III facility's only NPDES 
permit is a general permit (e.g., for oil and gas production) or a 
general permit for storm water discharges, the Agency anticipates that 
the Director may want to write an individual NPDES permit containing 
requirements for the facility's cooling water intake structure. 
Alternatively, requirements applicable to cooling water intake 
structures could be incorporated into general permits. If requirements 
are placed into a general permit, they must meet the criteria set out 
at 40 CFR 122.28.
    The Agency also recognizes that some facilities that have or are 
required to have an NPDES permit might not own

[[Page 68455]]

and operate the intake structure that supplies their facility with 
cooling water. For example, manufacturing facilities operated by 
separate entities might be located on the same, adjacent, or nearby 
property(ies); one of these facilities might take in cooling water and 
then transfer it to other facilities prior to discharge of the cooling 
water to a water of the United States. Proposed Sec.  125.101(c) of 
today's proposed rule would address such a situation. It provides that 
use of a cooling water intake structure includes obtaining cooling 
water by any sort of contract or arrangement with one or more 
independent suppliers of cooling water if the supplier withdraws water 
from waters of the United States but is not itself subject to 
regulations under 316(b). This provision is intended to prevent 
facilities from circumventing the requirements of today's proposed rule 
by creating arrangements to receive cooling water from an entity that 
is not itself subject to national categorical requirements (e.g., a 
facility that is not a point source).
    For facilities that have or are required to have NPDES permits that 
do not directly control the intake structures that supply their 
facilities with cooling water, proposed Sec.  125.101(d) also provides, 
similar to the Phase I and II rules, that facilities that obtain 
cooling water from a public water system or use treated effluent are 
not deemed to be using a cooling water intake structure for purposes of 
this proposed rule.
    As stated in the preamble to the final Phase I rule (66 FR 65256, 
December 18, 2001), the Agency would encourage the Director to closely 
examine scenarios in which a facility withdraws significant amounts of 
cooling water from waters of the United States but is not required to 
obtain an NPDES permit. As appropriate, under this proposed rule, the 
Director would apply other legal requirements, such as section 404 or 
401 of the Clean Water Act, the Coastal Zone Management Act, the 
National Environmental Policy Act, the Endangered Species Act, or 
similar State or Tribal authorities to address adverse environmental 
impact caused by cooling water intake structures at those facilities.

F. What Are the Cooling Water Use and Design Intake Flow Thresholds in 
This Proposed Rule?

    This proposed rule would apply to existing facilities that meet the 
following thresholds: (1) Use at least twenty-five (25) percent of the 
water withdrawn exclusively for cooling purposes (measured on an 
average annual basis), and (2) have a total design intake flow equal to 
or greater than one of the three proposed thresholds , but are not 
subject to the Phase II rule. As previously discussed, EPA is proposing 
three possible flow threshold-based options in today's proposed rule 
(i.e., 50 MGD, 200 MGD, and 100 MGD \3\). The facility would also have 
to meet the other applicability criteria defined in Sec.  125.101.
---------------------------------------------------------------------------

    \3\ Note: the 100 MGD flow threshold also specifies withdrawal 
from certain source waterbody types. The other proposed flow 
thresholds are not linked to source waterbody types.
---------------------------------------------------------------------------

    The 25 percent exclusive cooling use threshold is the same as 
employed in the Phase I and II regulations. As in the Phase I and Phase 
II rules, water used for both cooling and non-cooling purposes would 
not count towards the 25 percent threshold. Thus, the proposed rule 
would not discourage the reuse of cooling water as process water or 
vice versa. Water that serves as cooling water but is either previously 
or subsequently used as process water would not be considered cooling 
water for purposes of determining whether the 25 percent threshold is 
met. Water withdrawn for non-cooling purposes would include water 
withdrawn for warming by liquified natural gas facilities, water used 
to power hydro-electric plants, and water withdrawn for public water 
systems by desalinization facilities.
    Today's notice proposes three different options for defining which 
existing facilities are Phase III existing facilities subject to 
categorical national requirements. These options include existing 
facilities having a total design intake flow of: 50 MGD or more; 200 
MGD or more; or 100 MGD or more if the facility withdraws water from an 
ocean, tidal river, estuary, or Great Lake. EPA is co-proposing these 
options because EPA believes that all three reflect potentially viable 
alternatives for balancing the many factors EPA considers in 
establishing best technology available for minimizing adverse 
environmental impact. These factors include the percentage of cooling 
water flow subject to national requirements, costs, benefits, cost-
effectiveness, permitting burden and the need for flexibility in 
implementation, projected closures, and potential impacts on small 
businesses. Each of these factors are permissible for consideration 
under the CWA and each of these co-proposed options will fulfill CWA 
requirements. For example, considerations of costs, benefits, 
economically practicability and cost-effectiveness are appropriate 
factors under CWA sections 301 and 304 (e.g., see discussion of Agency 
authority in section I). In addition, EPA is required to consider small 
business impacts under the Regulatory Flexibility Act as amended by the 
Small Business Regulatory Enforcement Fairness Act. Accordingly, the 
discussion below focuses on the relative advantages and disadvantages 
of these co-proposed options and the proposed regulatory language 
reflects all three options.
i. Total Design Intake Flow of 50 MGD or More
    Under this co-proposed option, facilities with a design intake flow 
of 50 MGD or greater, and that meet the other criteria in Sec.  
125.101, would be subject to the performance standards and compliance 
alternatives proposed in today's rule discussed below. Under this 
option, section 316(b) permit conditions for existing facilities with a 
design intake flow of less than 50 MGD would continue to be established 
on a case-by-case, best professional judgment basis.
    EPA is co-proposing the 50 MGD threshold based on several factors. 
With a 50 MGD flow threshold, the proposed rule would regulate 75 
percent of the design intake capacity, and 23 percent of the facilities 
(155 facilities) potentially covered by the Phase III rule,\4\ thus 
subjecting the majority of design intake flows potentially included 
within the scope of the Phase III existing facility rule to national 
performance requirements. Use of a 50 MGD threshold would focus 
national section 316(b) requirements on those Phase III existing 
facilities with moderate to large design intake flows. These facilities 
pose a greater potential for causing significant adverse environmental 
impacts than those withdrawing less than 50 MGD. Assuming full 
implementation of the Phase II rule and today's proposed rule, at the 
co-proposed 50 MGD threshold, section 316(b) program requirements would 
regulate more than 97 percent of the total cooling water withdrawals 
associated with existing facilities. In addition, EPA estimates that 
use of a 50 MGD threshold would avoid facility closures under this 
proposed rule, and would reduce the cost of the proposed rule to 
permittees compared with the costs of a lower threshold.
---------------------------------------------------------------------------

    \4\ Facilities ``potentially covered by the Phase III rule'' 
include all existing manufacturing and power producing facilities 
greater than 2 MGD that were not covered by the Phase II rule. There 
are an estimated 683 manufacturing and electric generating 
facilities (survey weighted) potentially covered by the Phase III 
rule, with a total design intake flow of 40,441 MGD.

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[[Page 68456]]

    EPA estimates this option would cost $47.3 to $50.1 million \5\ or 
$348,000 to $368,000 on average annually per facility. Quantified 
benefits are $1.5 million to $1.9 million (annualized use value). 
Because this option covers the most facilities, it may also have the 
greatest ecological protection benefits, which EPA was not able to 
quantify. EPA estimates that this option would provide the highest 
quantified and monetized benefits of the co-proposed options but would 
also have the highest annualized costs, resulting in the lowest 
quantified benefits-to-cost ratio and the lowest (greatest negative) 
quantified net benefits among these options. See section X of this 
preamble for further discussion of benefits and costs.
---------------------------------------------------------------------------

    \5\ Unless otherwise noted, cost and benefit ranges reflect the 
use of alternative discount rates (3% and 7%) in annualized 2003 
dollars.
---------------------------------------------------------------------------

    Finally, the co-proposed 50 MGD threshold would exclude small 
businesses from national rule requirements. This is consistent with the 
recommendations of the Small Business Advocacy Review Panel final 
report that EPA analyze a range of potential thresholds, particularly 
those between 20 MGD and 50 MGD, as a means of reducing potential 
economic impacts on small businesses while still achieving desired 
environmental benefits under the rule. See section XI.C for additional 
information. EPA estimates that setting an applicability threshold at 
50 MGD would exclude all existing small entities potentially subject to 
the Phase III rule.
ii. Total Design Intake Flow of 200 MGD or More
    Under this co-proposed option, facilities with a design intake flow 
of 200 MGD or greater and that meet the other criteria in Sec.  
125.101, would be subject to the performance standards and compliance 
alternatives proposed in today's notice and discussed above. Under this 
option, section 316(b) permit conditions for existing facilities not 
covered under the Phase II rule, with a design intake flow of less than 
200 MGD, would continue to be established on a case-by-case, best 
professional judgment basis.
    EPA is co-proposing the 200 MGD threshold based on several factors. 
With a 200 MGD flow threshold, the proposed rule would regulate 45 
percent of the design intake capacity and approximately 5% of the 
facilities potentially covered by the Phase III rule. Assuming full 
implementation of the Phase II rule and today's proposed rule, at the 
co-proposed 200 MGD threshold, section 316(b) program requirements 
would regulate more than 94 percent of the total cooling water 
withdrawals associated with existing facilities withdrawing greater 
than 2 MGD.
    EPA estimates this option would cost $22.8 to $24.1 million or 
$912,000 to $964,000 on average annually per facility. Quantified 
benefits are $0.98 to $1.26 million (annualized use value). The option 
would have a higher benefit-to-cost ratio yielding 66 percent of the 
quantified benefits at 48% of the costs and greater (lower negative) 
quantified net benefits compared to the 50 MGD option.
    EPA estimates that use of a 200 MGD threshold would avoid facility 
closures under this proposed rule and would exclude all existing small 
entities.
iii. Facility Has a Total Design Intake Flow of 100 MGD or More and 
Withdraws Water From an Ocean, Tidal River, Estuary, or Great Lake
    Under this co-proposed option, facilities located on estuaries, 
oceans, tidal rivers or streams, or one of the Great Lakes, with a 
design intake flow of 100 MGD or greater, and that meet the other 
criteria in Sec.  125.101, would be subject to the performance 
standards and compliance alternatives proposed in today's rule and 
discussed below. Under this regulatory option, section 316(b) permit 
conditions for all existing facilities not covered under the Phase II 
rule, and located on freshwater rivers and streams or lakes and 
reservoirs, or with a design intake flow of less than 100 MGD would 
continue to be established on a case-by-case, best professional 
judgment basis.
    Under this co-proposed option, 4 percent of the facilities 
potentially subject to regulation under Phase III would be subject to 
national requirements, and 18 percent of total design intake capacity 
associated with potential Phase III facilities would be addressed by 
such national requirements. Assuming full implementation of the Phase 
II rule and today's proposed rule, at the co-proposed 100 MGD 
threshold, section 316(b) program requirements would regulate more than 
91 percent of the total cooling water withdrawals associated with 
existing facilities.
    EPA estimates this option would cost $17.6 to $18.2 million or 
$926,000 to $958,000 on average annually per facility. Quantified 
benefits are $1.1 to 1.4 million (annualized use value). EPA estimates 
that this option would provide the second highest quantified benefits 
of the co-proposed options, and would have the lowest annualized costs 
when compared with the other two options, resulting in the highest 
quantified benefits-to-costs ratio and highest (least negative) 
quantified net benefits among the three options. This option would 
provide about 75 percent of the quantified benefits of the 50 MGD flow 
threshold option at about 36 percent of the cost by focusing the rule 
requirements on the most sensitive waterbodies.
    EPA estimates that use of a 100 MGD threshold would avoid facility 
closures under this proposed rule and would exclude all existing small 
entities.
    EPA requests comment on all aspects of each of these co-proposed 
options, including whether lower (e.g., 20 MGD) or higher (e.g., 250 
MGD) thresholds should be considered, as well as whether different 
conditions (e.g., related to waterbody type) should be combined with 
these or other thresholds. EPA also solicits comment on the resource 
implications for State permitting agencies associated with each of 
these options.

G. When Would a Phase III Existing Facility and New Offshore Oil and 
Gas Extraction Facility Be Required To Comply With Any New 316(b) 
Requirements?

    If EPA were to promulgate today's proposed rule, the final rule 
would become effective sixty (60) days after the date of publication in 
the Federal Register. After the effective date of any such final 
regulation, existing manufacturers and new offshore oil and gas 
extraction Phase III facilities, including existing facilities not 
currently subject to cooling water intake requirements under 40 CFR 
125, would need to comply when an NPDES permit containing requirements 
consistent with the final rule is issued to the facility (see Sec.  
125.100 and Sec.  125.132). Under current NPDES program regulations, 
this will occur when a new NPDES permit is issued or when an existing 
NPDES permit is issued, reissued, or modified or revoked and reissued. 
As in Phase II, the proposed rule for Phase III existing facilities 
includes special provisions to allow sufficient time to complete a 
Comprehensive Demonstration Study during the first permit renewal 
following promulgation of the Phase III rule (see Sec.  
125.104(a)(2)(ii)).
    A discussion of the timing of implementation of this proposed rule, 
if promulgated, is provided in section VII.

H. What Special Definitions Apply to This Proposal?

    EPA is proposing specialized definitions to clarify which 
facilities are subject to national categorical requirements. For the 
new oil and gas extraction facility requirements in

[[Page 68457]]

Subpart N, EPA is proposing five new definitions to clarify those 
facilities subject to the requirements. These definitions are set forth 
in the proposed regulations at Sec.  125.133 and include ``new offshore 
oil and gas extraction facilities,'' ``offshore liquified natural gas 
import terminals,'' ``seafood processing vessels,'' ``sea chest'' and 
``fixed facility''). The remainder of the proposed definitions are the 
same as those found in the final Phase I regulations; however, not all 
of the definitions from Phase I regulations have been used as they are 
not all applicable to these proposed Subpart N regulations.
    EPA is also proposing definitions for Phase III existing facilities 
in Subpart K at Sec.  125.102. All of these definitions are borrowed 
from both Phase I and Phase II and remain unchanged, except for the 
cutoff date in the definition of ``existing facility'' for new versus 
existing offshore oil and gas extraction facilities. Similar to the 
definitions for subpart N described above, not all of the definitions 
from Phase II regulations have been used as they are not all applicable 
to these proposed Subpart K regulations.
    EPA solicits comment on these regulatory definitions.

III. Summary of Data Collection Activities

    For the Phase III proposed rule, EPA focused its data collection 
activities on section 316(b) survey data supplemented by available 
existing data sources including the data developed for the Phase I and 
Phase II rules.

A. Survey Questionnaires

    As discussed in the preamble to the Phase II final rule (69 FR 
41576), EPA's industry survey effort consisted of a two-phase process. 
EPA administered a screener questionnaire focused on nonutility and 
manufacturing facilities as the first phase of this data collection 
process. The screener questionnaire provides information on cooling 
water intake capacity, sources of the water, intake structure types, 
and technologies used to minimize adverse environmental impacts. It 
also provides data on facility and parent firm employee numbers and 
revenues. This information was used to design a sampling plan for the 
subsequent detailed questionnaire. Following the screener survey, the 
Agency administered either a short technical or a detailed 
questionnaire to utility, nonutility, and manufacturing facilities, as 
described below. The two-phase survey was designed to collect 
representative data from a sample group of those categories of 
facilities potentially subject to section 316(b) regulation for use in 
rule development.
    In 1997, EPA estimated that over 400,000 facilities could 
potentially be subject to a cooling water intake regulation. Given the 
large number of facilities potentially subject to regulation, EPA 
decided to focus its data collection efforts on six industrial 
categories that, as a whole, were estimated to account for over 99 
percent of all cooling water withdrawals. These six sectors were: 
Utility Steam Electric, Nonutility Steam Electric, Chemicals & Allied 
Products, Primary Metals Industries, Petroleum & Coal Products, and 
Paper & Allied Products. At the time of the survey, there were about 
48,500 facilities in these six categories. EPA believes that this 
approach provided a sound basis for assessing best technologies 
available for minimizing adverse environmental impacts.
    The screener survey focused on nonutility and manufacturing 
facilities. EPA developed the sample frame (list of facilities) for the 
screener questionnaire using public data sources as described in the 
Information Collection Request (DCN 3-3084-R2 in Docket W-00-03). 
Facilities chosen for the screener questionnaire represented a 
statistical sample of the entire universe of nonutility and 
manufacturing facilities potentially subject to cooling water intake 
regulations. EPA did not conduct a census of all facilities (i.e. send 
a survey to all facilities) for the screener questionnaire because of 
the burden associated with surveying a large number of facilities. 
Rather, EPA refined the industry data using industry-specific sources 
to develop sample frames and mailing lists. EPA believes the sample 
frame was sufficient to characterize the operations of each industrial 
category. EPA sent the screener questionnaire to 2600 facilities 
identified in the sample frame as follows: (1) All identified steam 
electric nonutility power producers, both industrial self-generators 
and nonindustrial generators (1050 facilities, of which 853 responded); 
and (2) a sample of manufacturers from the four non-steam electric 
industrial categories: paper and allied products, chemical and allied 
products, petroleum and coal products, and primary metals (1550 
facilities, of which 1217 responded). EPA adjusted the sample frame for 
the screener questionnaire to account for several categories of non-
respondents, including facilities with incorrect address information, 
facilities no longer in operation, and duplicate mailings. Through 
follow-up phone calls and mailings, EPA increased the response rate for 
the screener questionnaire to 95 percent. The screener questionnaire 
was not sent to utilities, all of which were believed to be identified 
accurately using the publicly-available data described above.
    A sample of manufacturing and nonutility facilities identified as 
in-scope (subject to regulation) by the screener questionnaire and all 
utilities then were sent either a short technical or a detailed 
questionnaire. A total of 878 utility facilities, 343 nonutility 
facilities and 191 manufacturing facilities received one of the two 
questionnaires (short technical or detailed) during the second phase of 
the survey. For utilities, nonutilities, and other manufacturing 
facilities, EPA selected a random sample of these eligible facilities 
to receive a detailed questionnaire. The sample included 282 utility 
facilities and 181 nonutility facilities. All 191 manufacturing 
facilities received a detailed questionnaire. For nonutilities and 
utilities, those facilities not selected to receive a detailed 
questionnaire were sent a Short Technical Questionnaire. EPA's approach 
in selecting a sample involved the identification of population strata, 
the calculation of sample sizes based on desired levels of precision, 
and the random selection of sites given the sample size calculations 
within each stratum. More detail is provided in the report entitled 
``Statistical Summary for Cooling Water Intakes Structures Surveys'' 
(See DCN 3-3077 in Docket W-00-03).
    Five questionnaires were distributed to different industrial 
groups. They were: (1) Detailed Industry Questionnaire: Phase II 
Cooling Water Intake Structures--Traditional Steam Electric Utilities; 
(2) Short Technical Industry Questionnaire: Phase II Cooling Water 
Intake Structures--Traditional Steam Electric Utilities (sent to both 
utilities and nonutilities); (3) Detailed Industry Questionnaire: Phase 
II Cooling Water Intake Structures--Steam Electric Nonutility Power 
Producers; (4) Detailed Industry Questionnaire: Phase III Cooling Water 
Intake Structures--Manufacturers; and, (5) Watershed Case Study Short 
Questionnaire. The questionnaires provided EPA with technical and 
financial data necessary for developing this proposed regulation. 
Specific details about the questions may be found in EPA's Information 
Collection Request (DCN 3-3084-R2 in Docket W-00-03) and in the 
questionnaires (see DCN 3-0030 and 3-0031 in Docket W-00-03 and Docket 
for today's proposal); these documents are also available on EPA's Web 
site

[[Page 68458]]

(http://www.epa.gov/waterscience/316b/question/).

    EPA also conducted outreach to industry groups, environmental 
groups, and other government entities in the development, testing, and 
refinement of a second round of surveys, the section 316(b) Phase III 
Industry Technical and Economic Questionnaires, which have been used as 
an additional source of data for the Phase III rule. The Phase III 
surveys, published in September 2003, were sent to offshore oil and gas 
extraction facilities and seafood processing vessels. Specific details 
about the questions may be found in EPA's Information Collection 
Request (DCN 7-0007) and in the questionnaires (see DCN 7-0008) in the 
Docket for today's proposal); these documents are also available on 
EPA's Web site (http://www.epa.gov/waterscience/316b/question/). In 

addition, EPA utilized a survey conducted by the International 
Association of Drilling Contractors (IADC) in 2003 to access technical 
data on cooling water use by offshore oil and gas extraction 
facilities, including fixed platforms and mobile units.

B. Existing Data Sources

    EPA collected data from multiple sources, both public and 
proprietary, in order to compile an accurate profile of the potentially 
regulated community. EPA reviewed information collected by other 
Federal agencies, as well as data compiled by private companies. In 
those instances where databases are considered confidential, or where 
raw data was unavailable for review, EPA did not consider the 
information. Summaries of the reviewed data sources are listed below.
1. Electric Generators
    EPA collected a substantial amount of data on the electric power 
generating industry in the course of the Phase I, II, and III 
rulemakings. For example, EPA used data from the Federal Energy 
Regulatory Commission (FERC) (Forms 1 and 1-F), the Energy Information 
Administration (EIA) (Forms EIA-412, -767, -860, -861, -867), the Rural 
Utility Service (RUS) (Form 12), as well as information from the U.S. 
Nuclear Regulatory Commission (NRC), the Utility Data Institute (UDI), 
and the Edison Electric Institute (EEI). For detailed information about 
these data sources, refer to the proposed rule for Phase II (67 FR 
17131).
    While electric power generators do not meet the proposed flow 
thresholds and are therefore not subject to Phase III national 
requirements (refer to section VI for further details), EPA did use the 
aforementioned data on electric power generators in reaching this 
decision. Data was used to assess, for example, the cooling water 
intake flows and the amount of electricity generated, and as part of 
the determination of economic impacts of the various compliance 
alternatives that EPA considered in developing the proposed rule.
2. Manufacturers
    In order to identify potential entrainment impacts at facilities 
with a design intake flow below 50 MGD, EPA conducted a field study of 
six manufacturers in the Spring of 2002. This study was conducted in 
the mid-Atlantic region, with particular focus on the Delaware River 
and its tributaries. Sampling sites were selected for three freshwater 
and three tidal river facilities. EPA conducted two 4-day sampling 
events at each facility and conducted measurements of the following 
variables: site location and sampling point, facility intake flow rate, 
sampling pump volume, sampling time and duration and sample chain of 
custody. Additional physicochemical variables were measured, including 
the following: temperature, dissolved oxygen (DO), pH, and 
conductivity. Taxonomic identification was conducted for all organisms 
collected and results are provided in the Data Report for Small 
Facility Ichthyoplankton Entrainment Sampling for the Development of 
the 316(b) Phase III Rule for Cooling Water Intake Structures (EPA, 
2003) (DCN 7-0009).
    In mid-June 2003, in order to supplement the biological data used 
for estimating baseline impingement mortality and entrainment rates, 
EPA compiled a list of facilities who had responded in their industry 
questionnaire that they had conducted a biological study. Some of these 
facilities were then requested to provide EPA with copies of these 
studies. The first data collection effort focused on facilities that 
are located on an inland waterbody and have a high average daily intake 
flow. Preference was given to facilities located on Lake Michigan and 
the Columbia River, as these waterbodies (and more broadly, these 
regions of the country) were identified as having inadequate data for 
future analysis of Phase III impingement mortality and entrainment 
rates. The second data collection effort focused on facilities located 
in particular U.S. Fish and Wildlife Service fish regions to be used by 
EPA in calculation of benefits for the rule. The last data collection 
effort focused specifically on Phase III facilities. In total, 90 
facilities were contacted and these contacts resulted in collection of 
63 biological studies (33 of which were from Phase III facilities) for 
use in estimation of baseline impingement mortality and entrainment 
rates.
3. Offshore Oil and Gas Extraction Facilities and Seafood Processing 
Vessels
    EPA conducted extensive research on the use of cooling water by 
offshore oil and gas extraction facilities and seafood processing 
vessels to determine whether these industry sectors would be subject to 
regulation under the Phase III rule. Information sources included 
industry surveys (one administered by EPA in conjunction with the 
International Association of Drilling Contractors (IADC) and another 
solely by EPA); industry databases and other publicly available 
information, and meetings with government and industry representatives. 
The survey efforts are described in section III.A above.
    In April and May of 2003, EPA conducted site visits and field 
interviews at offshore oil and gas extraction facilities and seafood 
processing vessels to evaluate technologies in use for reducing 
impingement mortality and/or entrainment at these facilities. EPA 
employed the services of a specialized naval engineer to conduct these 
site visits and field interviews. Site visits were conducted at 
platforms and vessels. In addition, field interviews were conducted 
with industry personnel. The data collected from these visits and 
interviews included geographic data, intake design and impingement and 
entrainment technologies in place, impingement and entrainment problems 
encountered as well as any methods utilized in resolving such problems 
(See DCN 7-0010).
    Sources used by EPA to characterize the offshore seafood processing 
industry included the following:
     U.S. Food and Drug Administration (FDA), Center for Food 
Safety and Applied Nutrition, January 2003, which included a list of 
U.S. FDA-European Union (EU) Exporters, Processing Vessels.
     Alaska Department of Fish and Game 2002 Intent to Operate 
Listing.
     Water Discharge Permits (PCS) database searches by SIC 
codes 2091, 2092 and 2077.
     Department of Transportation Maritime Administration 
(MARAD) Web site: http://www.marad.dot.gov/publications/index.html and 

http://www.marad.dot.gov/Marad_Statistics/index.html.

     U.S. Coast Guard Merchant Vessels of the United States 
database.

[[Page 68459]]

     U.S. Coast Guard PSIX/MSIS databases.
     National Transportation Safety Board database.
     U.S. Army Corps of Engineers, Navigation Data Center, 
Waterborne Commerce Statistics Center.
     The Alaska Department of Fish and Game Division of 
Commercial Fisheries Web site: http://www.cf.adfg.state.ak.us     The At-Sea Processors Association Web site: http://www.atsea.org/.
     EPA Region 10 Database of seafood processors permitted in 

Alaska.
     Technical Development Document (TDD) for the Uniform 
National Discharge Standards (UNDS) program (found at http://unds.bah.com/TDD.pdf
) (Appendix A: Seawater Cooling Overboard Discharge 

Report).
     National Marine Fisheries Service Web site, Restricted 
Access Management Program, http://www.fakr.noaa.gov/ram/default.htm.

     National Marine Fisheries Services Web site, link to 
American Fisheries Act (AFA) permits: http://www.fakr.noaa.gov/ram/afa.htm#list
.

     Several vessel operators, naval architects, engineers and 
regulators.

C. Data Provided to EPA by Industrial, Trade, Consulting, Scientific or 
Environmental Organizations or by the General Public

    Since 1993, EPA has been developing cooling water regulations as 
part of a collaborative effort with industry and environmental 
stakeholders, other Federal agencies, the academic and scientific 
communities, and the general public. As a result, EPA has reviewed and 
considered the many documents, demonstration studies, scientific 
analyses, and historical perspectives offered in support of each phase 
of the regulatory process. For example, during the early stages of data 
gathering, EPA created an internal library of reference documents 
addressing cooling water intake structure issues. This library 
currently holds over 2,800 documents, many of which were referenced in 
the rulemaking process and are contained in the record (see the 
following paragraph for further information on the record). The library 
contains a thorough collection of a wide variety of documents, 
including over 80 section 316(b) demonstration documents, over 300 
impingement and entrainment studies, over 100 population modeling 
studies, over 500 fish biology and stock assessment documents, over 350 
biological studies commissioned by power generators, over 80 NPDES 
decisions and NPDES or SPDES-related documents, over 120 intake 
technology reports, over 10 databases on the electric power industry, 
and documents from interagency committees such as the Ohio River Valley 
Water Sanitation Commission (ORSANCO).
    In addition, the record for the Phase I new facility rule contains 
nearly 1,000 documents (research articles, databases, legal references, 
memorandums, meeting notes, and other documents), consisting of 
approximately 47,000 pages of supporting material available for public 
review. And the record for the Phase II existing facility rule contains 
over 2600 additional documents, comprising approximately 125,000 pages 
of supporting material.
    Finally, EPA has worked extensively with stakeholders from 
industry, public interest groups, State agencies, and other Federal 
agencies in the development of this proposed rule. These public 
participation activities have focused on various section 316(b) issues, 
including general issues, as well as issues relevant to development of 
the Phase II rule and issues relevant to this proposed Phase III rule. 
See section I.C.6 of this preamble for a discussion of key public 
participation activities.

IV. Overview of Facility Characteristics (Cooling Water Systems & 
Intake Structures) for Industries Potentially Subject to Proposed Rule

    Today's proposed rule would apply national categorical requirements 
to two groups of facilities that use cooling water intake structures to 
withdraw water from waters of the U.S.: existing manufacturing and 
industrial facilities and new offshore oil and gas extraction 
facilities.

A. Overview of Potentially Regulated Phase III Universe

    EPA's data collection efforts largely focused on five industrial 
sectors: small flow electric power generators (both utilities and 
nonutilities withdrawing less than 50 MGD); chemicals and allied 
products (SIC Major Group 28); primary metals industries (SIC Major 
Group 33); paper and allied products (SIC Major Group 26); and 
petroleum and coal products (SIC Major Group 29). The latter four 
sectors use a significant portion of the cooling water withdrawn among 
all manufacturing industries. EPA also identified other industry 
sectors that use cooling water including: transportation equipment (SIC 
Major Group 37); lumber and wood products (SIC Major Group 24); rubber 
and plastics products (SIC Major Group 30); food and kindred products 
(SIC Major Group 20); tobacco products (SIC Major Group 21); and 
machinery (SIC Major Group 35) (see DCN 7-0011). A more comprehensive 
list of industries that use cooling water and their NAICS and SIC Codes 
can be found in section A of the Supplementary Information. Although 
EPA's survey data collection efforts were not designed to collect data 
from industries other than the five listed above, data were collected 
from the following industries: food processing; aircraft engines and 
engine parts; cutlery; sawmills and planing mills; finishers of broad 
woven fabrics of cotton; potash, soda and borate minerals; iron ores; 
and sugarcane and sugar beets. These data from other industries, while 
not a statistically derived sample, confirm that the five primary 
industry sectors discussed above account for the vast majority of Phase 
III cooling water use. The data also suggest that the intake structure 
design and construction at these industries were substantially similar 
to the industries for which EPA did collect data.
    Of the estimated 683 manufacturing and electric generator 
facilities (survey weighted estimate, as described in the Technical 
Development Document EPA-821-R-04-015, DCN 7-0004) within the Phase III 
universe,\6\ approximately 225 (33 percent) belong to the pulp and 
paper sector, 185 (27 percent) belong to the chemical sector, 88 (13 
percent) belong to the metals sector, and 39 (6 percent) belong to the 
petroleum sector. EPA also surveyed 29 facilities in other industry 
sectors (discussed above, all of which are potentially subject to the 
Phase III rule) in the detailed questionnaire, and those data are also 
being considered in today's proposed rule. In addition, an estimated 
117 (17 percent) electric generating facilities are included within the 
Phase III universe.
---------------------------------------------------------------------------

    \6\ The entire Phase III universe includes facilities with a 
design intake flow greater than 2 MGD which use at least 25 percent 
of the water withdrawn exclusively for cooling, and are not covered 
by Phase II. Offshore oil and gas extraction facilities are not 
included in this estimate.
---------------------------------------------------------------------------

    The information below is generally based on data collected from the 
Short Technical Industry Questionnaire, the Detailed Industry 
Questionnaire, and the Phase III Industry Technical and Economic 
Questionnaires. Additional detail discussing the entire Phase III 
universe as well as facilities subject to the uniform national 
standards and facilities subject to permitting based on best 
professional judgment can be found in the Technical Development 
Document.
    As explained in section V of this preamble, there are five main 
categories of surface water used as sources of cooling water. The 
source of surface water withdrawn for cooling is an

[[Page 68460]]

important factor in determining potential environmental impacts. An 
estimated 11 (2 percent) facilities withdraw cooling water from an 
ocean; an estimated 39 (6 percent) facilities withdraw cooling water 
from an estuary or tidal river; an estimated 496 (73 percent) 
facilities withdraw cooling water from a freshwater stream or river; an 
estimated 60 (9 percent) facilities withdraw cooling water from a lake 
or reservoir; and an estimated 77 (11 percent) facilities withdraw 
cooling water from one of the Great Lakes. EPA estimates a total design 
intake flow of 40,441 MGD and total actual intake flow of 21,624 MGD 
for the Phase III universe.
    Of the facilities within the Phase III universe, 303 (44 percent) 
employ once-through cooling systems, 198 (29 percent) use closed-cycle 
recirculating cooling systems, 121 (18 percent) use ``combination'' 
systems, and 61 (9 percent) use an ``other'' type of system. An 
estimated 286 (42 percent) facilities have installed a cooling tower. 
Note that not all facilities that have installed a cooling tower are 
classified as using closed-cycle recirculating cooling systems, as some 
facilities with multiple cooling water systems may be ``combination'' 
systems that employ both closed-cycle and once-through cooling. 
Facilities may also list ``helper'' cooling towers, which are generally 
used to mitigate discharge temperatures and do not affect intake flows. 
Since facilities may have more than one cooling water system, these 
estimates are based on the predominant cooling water system at each 
facility.
    Facilities within this universe also may have more than one cooling 
water intake structure configuration. Therefore, in providing the 
information on intake structures, a facility may be counted multiple 
times (as many times as it has distinct cooling water intake structure 
configurations). Thus, of the facilities within the Phase III universe, 
683 facilities represent an estimated 747 total cooling water intake 
structure configurations. Of these, an estimated 359 (48 percent) have 
a shoreline intake, 216 (29 percent) have a submerged offshore intake, 
123 (16 percent) withdraw cooling water through a canal or channel, 49 
(7 percent) have an intake situated in a bay or cove, and 47 (6 
percent) are estimated to have some other type of intake or provided no 
information.

B. Existing Manufacturers and Industrial Faciliti