[Federal Register Volume 76, Number 76 (Wednesday, April 20, 2011)]
[Proposed Rules]
[Pages 22174-22288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8033]
[[Page 22173]]
Vol. 76
Wednesday,
No. 76
April 20, 2011
Part II
Environmental Protection Agency
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40 CFR Parts 122 and 125
National Pollutant Discharge Elimination System--Cooling Water Intake
Structures at Existing Facilities and Phase I Facilities; Proposed Rule
Federal Register / Vol. 76 , No. 76 / Wednesday, April 20, 2011 /
Proposed Rules
[[Page 22174]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 122 and 125
[EPA-HQ-OW-2008-0667, FRL-9289-2]
RIN 2040-AE95
National Pollutant Discharge Elimination System--Cooling Water
Intake Structures at Existing Facilities and Phase I Facilities
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish requirements under section
316(b) of the Clean Water Act (CWA) for all existing power generating
facilities and existing manufacturing and industrial facilities that
withdraw more than 2 million gallons per day (MGD) of water from waters
of the U.S. and use at least twenty-five (25) percent of the water they
withdraw exclusively for cooling purposes. The proposed national
requirements, which would be implemented through National Pollutant
Discharge Elimination System (NPDES) permits, would establish national
requirements applicable to the location, design, construction, and
capacity of cooling water intake structures at these facilities by
setting requirements that reflect the best technology available (BTA)
for minimizing adverse environmental impact. The proposed rule
constitutes EPA's response to the remand of the Phase II existing
facility rule and the remand of the existing facilities portion of the
Phase III rule. In addition, EPA is also responding to the decision in
Riverkeeper I and proposing to remove from the Phase I new facility
rule the restoration-based compliance alternative and the associated
monitoring and demonstration requirements. EPA expects this proposed
regulation would minimize adverse environmental impacts, including
substantially reducing the harmful effects of impingement and
entrainment. As a result, the Agency anticipates this proposed rule
would help protect ecosystems affected by cooling water intake
structures and preserve aquatic organisms and the ecosystems they
inhabit in waters used by cooling water intake structures at existing
facilities.
DATES: Comments must be received on or before July 19, 2011.
ADDRESSES: Submit your comments, identified by Docket No. EPA-HQ-OW-
2008-0667 by one of the following methods:
http:www.regulations.gov: Follow the on-line instructions
for submitting comments.
E-mail: [email protected], Attention Docket ID No. EPA-HQ-
OW-2008-0667.
Mail: Water Docket, U.S. Environmental Protection Agency,
Mail Code: 4203M, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
Attention Docket ID No. EPA-HQ-OW-2008-0667. Please include a total of
3 copies. In addition, please mail a copy of your comments on
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.
Hand Delivery: Water Docket, EPA Docket Center, EPA West
Building Room 3334, 1301 Constitution Ave., NW., Washington, DC,
Attention Docket ID No. EPA-HQ-OW-2008-0667. Such deliveries are only
accepted during the Docket's normal hours of operation, and special
arrangements should be made for deliveries of boxed information by
calling 202-566-2426.
Instructions: Direct your comments to Docket No. EPA-HQ-OW-2008-
0667. 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.regulations.gov, 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 http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site
is an ``anonymous access'' system, 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 http://www.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.
Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the Water Docket in
the EPA Docket Center, EPA/DC, EPA West, Room 3334, 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 Paul Shriner at 202-566-1076; e-mail: [email protected]. For
additional economic information, contact Erik Helm at 202-566-1049; e-
mail: [email protected]. For additional biological information, contact
Tom Born at 202-566-1001; e-mail: [email protected].
SUPPLEMENTARY INFORMATION:
What Entities Are Regulated By This Action? This proposed rule
would apply to existing facilities that use cooling water intake
structures to withdraw water from waters of the U.S. and have or
require a National Pollutant Discharge Elimination System (NPDES)
permit issued under Section 402 of the CWA. Existing facilities subject
to this regulation would include those with a design intake flow
greater than 2 MGD. If a facility meets these conditions, it is subject
to today's proposed regulations. If a facility has or requires a NPDES
permit but does not meet the 2 MGD intake flow threshold, it would be
subject to permit conditions implementing section 316(b), developed by
the NPDES permit director, on a case-by-case basis, using best
professional judgment. This proposal defines the term ``cooling water
intake structure'' to mean the total physical structure and any
associated waterways used to withdraw water from waters of the U.S.,
provided that at least twenty-five percent of the water withdrawn is
used for cooling purposes. 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. Generally,
[[Page 22175]]
facilities that meet these criteria fall into two major groups: steam
electric generating facilities and manufacturing facilities.
The following table lists the types of entities that are
potentially subject to this proposed rule. This table is not intended
to be exhaustive, but rather provides a guide for readers regarding
entities likely to be regulated by this action. Other types of entities
not listed in the table could also be regulated.
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Examples of Standard Industrial North American Industry Codes
Category regulated entities Classification Codes (NAIC)
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Federal, State and Local Operators of steam 4911 and 493.............. 221111, 221112, 221113, 221119,
Government. electric generating 221121, 221122, 221111, 221112,
point source 221113, 221119, 221121, 221122.
dischargers that
employ cooling
water intake
structures..
Industry................... Operators of See below................. See below.
industrial point
source dischargers
that employ cooling
water intake
structures..
Steam electric 4911 and 493.............. 221111, 221112, 221113, 221119,
generating. 221121, 221122, 221111, 221112,
221113, 221119, 221121, 221122.
Agricultural 0133...................... 111991, 11193.
production.
Metal mining........ 1011...................... 21221.
Oil and gas 1311, 1321................ 211111, 211112.
extraction
(Excluding offshore
and coastal
subcategories).
Mining and quarrying 1474...................... 212391.
of nonmetallic
minerals.
Food and kindred 2046, 2061, 2062, 2063, 311221, 311311, 311312, 311313,
products. 2075, 2085. 311222, 311225, 31214.
Tobacco products.... 2141...................... 312229, 31221.
Textile mill 2211...................... 31321.
products.
Lumber and wood 2415, 2421, 2436, 2493.... 321912, 321113, 321918, 321999,
products, except 321212, 321219.
furniture.
Paper and allied 2611, 2621, 2631, 2676.... 3221, 322121, 32213, 322121,
products. 322122, 32213, 322291.
Chemical and allied 28 (except 2895, 2893, 325 (except 325182, 32591, 32551,
products. 2851, and 2879). 32532).
Petroleum refining 2911, 2999................ 32411, 324199.
and related
industries.
Rubber and 3011, 3069................ 326211, 31332, 326192, 326299.
miscellaneous
plastics products.
Stone, clay, glass, 3241...................... 32731.
and concrete
products.
Primary metal 3312, 3313, 3315, 3316, 324199, 331111, 331112, 331492,
industries. 3317, 3334, 3339, 3353, 331222, 332618, 331221, 22121,
3363, 3365, 3366. 331312, 331419, 331315, 331521,
331524, 331525.
Fabricated metal 3421, 3499................ 332211, 337215, 332117, 332439,
products, except 33251, 332919, 339914, 332999.
machinery and
transportation
equipment.
Industrial and 3523, 3531................ 333111, 332323, 332212, 333922,
commercial 22651, 333923, 33312.
machinery and
computer equipment.
Transportation 3724, 3743, 3764.......... 336412, 333911, 33651, 336416.
equipment.
Measuring, 3861...................... 333315, 325992.
analyzing, and
controlling
instruments;
photographic,
medical, and
optical goods;
watches and clocks.
Electric, gas, and 4911, 4931, 4939, 4961.... 221111, 221112, 221113, 221119,
sanitary services. 221121, 221122, 22121, 22133.
Educational services 8221...................... 61131.
Engineering, 8731...................... 54171.
accounting,
research,
management and
related services.
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To determine whether your facility could be regulated by this
action, you should carefully examine the applicability criteria in
Sec. 125.91 of the proposed rule. If you have questions regarding the
applicability of this action to a particular entity, consult the person
listed for technical information in the preceding FOR FURTHER
INFORMATION CONTACT section.
Supporting Documentation
1. Docket
EPA has established an official public docket for this action under
Docket ID No. EPA-HQ-OW-2008-0667. The official public docket consists
of the documents specifically referenced in this action, any public
comments received, and other information related to this action.
Although a part of the official docket, the public docket does not
include information claimed as Confidential Business Information (CBI)
or other information the disclosure of which is restricted by statute.
For information on how to access materials in the docket, refer to the
preceding ADDRESSES section. To view docket materials, please call
ahead to schedule
[[Page 22176]]
an appointment. Every user is entitled to copy 266 pages per day before
incurring a charge. The Docket may charge 15 cents for each page over
the 266-page limit plus an administrative fee of $25.00.
2. Electronic Access
You may access this Federal Register document and the docket
electronically, as well as submit public comments, through the Web site
http://www.regulations.gov by searching for Docket ID No. EPA-HQ-OW-
2008-0667. For additional information about the public docket, visit
the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
3. Technical Support Documents
The proposed regulation is supported by three major documents:
1. Economic and Benefits Analysis for the Proposed Section 316(b)
Existing Facilities Rule (EPA-821-R-11-003), hereafter referred to as
the Economic and Benefits Analysis (EBA or more simply EA). This
document presents the analysis of compliance costs, closures, energy
supply effects, and a summary of benefits associated with the proposed
rule.
2. Environmental and Economic Benefits Analysis for the Proposed
Section 316(b) Existing Facilities Rule (EPA-821-R-11-002), hereafter
referred to as the Environmental and Economic Benefits Analysis (EEBA).
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)
Existing Facilities Rule (EPA-821-R-11-001), hereafter referred to as
the Technical Development Document (TDD). 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 proposed
rule requirements.
Table of Contents
I. Legal Authority, Purpose, and Background of Today's Proposed
Regulation
A. Legal Authority
B. Purpose of Today's Proposed Regulation
C. Background
II. Proposed Amendments Related to the Phase I Rule
A. Restoration Provisions Not Authorized
B. Corrections to Subpart I
III. What new information has EPA obtained or developed in support
of this proposed rule?
A. Additional Data
B. Implementation Experience
C. New or Revised Analyses
IV. Revised Industry Description
A. Water Use in Power Production and Manufacturing
B. Overview of Electric Generators
C. Overview of Manufacturers
D. Other Existing Facilities
V. Scope and Applicability of the Proposed Section 316(b) Existing
Facility Rule
A. General Applicability
B. What is an ``existing facility'' for purposes of the section
316(b) Phase II rule?
C. What is ``cooling water'' and what is a ``cooling water
intake structure?''
D. Would my facility be covered if it is a point source
discharger?
E. Would my facility be covered if it withdraws water from
waters of the U.S.? What if my facility obtains cooling water from
an independent supplier?
F. What intake flow thresholds result in an existing facility
being subject to this proposed rule?
G. Offshore Oil and Gas Facilities, Seafood Processing Vessels
or LNG Import Terminals BTA Requirements Under This Proposed Rule
H. What is a ``new unit'' and how are new units addressed under
this proposed rule?
VI. BTA Consideration
A. EPA's Approach to BTA
B. Technologies Considered To Minimize Impingement and
Entrainment
C. Technology Basis for Today's Proposed Regulation
D. Options Considered for Today's Proposed Regulation
E. Option Selection
F. Four Factors Support EPA's Decision To Establish Site-
Specific BTA Entrainment Controls for Existing Facilities
G. The Process for Establishing Site-Specific BTA Entrainment
Controls
H. Implementation
I. EPA's Costing of the Preferred Option
J. Consideration of Cost/Benefit on a Site-Specific Basis
VII. Economic Impact of the Proposed Rule
A. Overview of Costs to Complying Facilities and Federal and
State Governments
B. Development of Compliance Costs
C. Social Cost of the Regulatory Options
D. Economic Impact
VIII. Benefits Analysis
A. Introduction
B. Regional Study Design
C. Physical Impacts of I&E Mortality
D. National Benefits of Today's Considered Options
E. Uncertainty and Limitations
IX. Implementation
A. How would the proposed requirements be applied?
B. When would affected facilities be required to comply?
C. What are my requirements?
D. What information must I submit in my permit application?
E. When are application studies due?
F. What are the monitoring requirements in today's proposal for
existing facilities?
G. What reports would I be required to submit?
H. What records would I be required to keep?
I. Are there other federal statutes that could be incorporated
into a facility's permit?
J. What is the director's role under today's proposal?
X. Related Acts of Congress, Executive Orders, and Agency
Initiatives
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 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. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Executive Order 13158: Marine Protected Areas
XI. Solicitation of Data and Comments
A. General Solicitation of Comment
B. Specific Solicitation of Comments and Data
I. Legal Authority, Purpose, and Background of Today's Proposed
Regulation
A. Legal Authority
Today's proposal is issued under the authority of sections 101,
301, 304, 308, 316, 401, 402, 501, and 510 of the Clean Water Act
(CWA), 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and
1370.
B. Purpose of Today's Proposed Regulation
The purpose of today's proposed rule is to propose national
requirements for cooling water intake structures at existing facilities
that implement section 316(b) of the CWA. Section 316(b) of the CWA
provides that any standard established pursuant to section 301 or 306
of the CWA 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 (BTA) for minimizing
adverse environmental impact.
EPA first promulgated regulations to implement section 316(b) in
1976. The U.S. Court of Appeals for the Fourth Circuit remanded these
regulations to EPA which withdrew them, leaving in place a provision
not remanded that directed permitting authorities to determine BTA for
each facility on a case-by-case basis. In 1995, EPA entered into a
consent decree establishing a schedule for taking final action on
regulations to implement section 316(b).
[[Page 22177]]
Pursuant to a schedule in the amended decree providing for final action
on regulations in three phases, in 2001, EPA published a Phase I rule
governing new facilities. The U.S. Court of Appeals for the Second
Circuit, while generally upholding the rule, rejected the provisions
allowing restoration to be used to meet the requirements of the rule.
Riverkeeper, Inc. v. U.S. EPA, 358 F. 3d 174, 181 (2d Cir.2004)
(``Riverkeeper I''). Today's proposed rule proposes to delete these
restoration provisions.
In 2004, EPA published the Phase II rule applicable to existing
power plants with a design intake flow greater than or equal to 50 MGD.
Following challenge, the Second Circuit remanded numerous aspects of
the rule to the Agency, including the Agency's decision to reject
closed-cycle cooling as BTA. The Agency made this determination, in
part, based on a consideration of costs and benefits. The Second
Circuit concluded that a comparison of the costs and benefits of
closed-cycle cooling was not a proper factor to consider in determining
BTA. Riverkeeper, Inc. v. U.S.EPA, 475 F. 3d 83 (2d Cir. 2007)
(``Riverkeeper II''). In 2008, the U.S, Supreme Court agreed to review
the Riverkeeper II decision limited to a single issue: whether section
316(b) authorizes EPA to balance costs and benefits in 316(b)
rulemaking. In April 2009, in Entergy Corp. v. Riverkeeper Inc., 129 S.
Ct. 1498, 68 ERC 1001 (2009) (40 ER 770, 4/3/09), the Supreme Court
ruled that it is permissible under section 316(b) to consider costs and
benefits in determining the best technology available to minimize
adverse environmental impacts. The court left it to EPA's discretion to
decide whether and how to consider costs and benefits in 316(b)
actions, including rulemaking and BPJ determinations. The Supreme Court
remanded the rule to the Second Circuit. Subsequently, EPA asked the
Second Circuit to return the rule to the Agency for further review of
the rule.
In 2006, EPA published the Phase III rule. The Phase III rule
establishes 316(b) requirements for certain new offshore oil and gas
extraction facilities. In addition, EPA determined that, in the case of
electric generators with a design intake flow of less than 50 MGD and
existing manufacturing facilities, 316(b) requirements should be
established by NPDES permit directors on a case-by-case basis using
their best professional judgment. In July 2010, the U. S. Court of
Appeals for the Fifth Circuit issued a decision upholding EPA's rule
for new offshore oil and gas extraction facilities. Further, the court
granted the request of EPA and environmental petitioners in the case to
remand the existing facility portion of the rule back to the Agency for
further rulemaking. See section C.2 below for a more detailed
discussion of the history of EPA's actions to address standards for
cooling water intake structures.
In response to the remand in Phase II, the remand of the existing
facility portion of the Phase III rule, and the associated Supreme
Court decision, EPA is today proposing a number of requirements. Most
significantly, EPA is proposing requirements reflecting the best
technology available for minimizing adverse environmental impact,
applicable to the location, design, construction, and capacity of
cooling water intake structures for existing facilities. EPA is
treating existing power generating facilities and existing
manufacturing and industrial facilities in one proceeding. Today's
proposal applies to all existing power generating facilities and
existing manufacturing and industrial facilities that have a design
intake flow of at least two million gallons from waters of the United
States and use at least twenty-five (25) percent of the water they
withdraw exclusively for cooling purposes. In addition, EPA is today
also responding to the decision in Riverkeeper I and proposing minor
changes to the Phase I rule for new facilities. Specifically, EPA
proposes to remove from the Phase I rule the restoration-based
compliance alternative and the associated monitoring and demonstration
requirements.
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). Among the goals of the Act is that wherever
attainable, an interim goal of water quality which provides for the
protection and propagation of fish, shellfish, and wildlife and
provides for recreation in and on the water. 33 U.S.C. 1251(a)(2).
In furtherance of these objectives, the CWA 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 in compliance with the statute; (2)
authority for EPA or authorized States or Tribes to issue National
Pollutant Discharge Elimination System (NPDES) permits that authorize
and regulate the discharge of pollutants; and (3) requirements for
effluent limitations and other conditions in NPDES permits to implement
applicable technology-based effluent limitations guidelines and
standards and applicable State water quality standards.
Section 402 of the CWA authorizes 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-seven States and one U.S. territory are 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 by requiring dischargers to meet technology-based effluent
limitations guidelines (ELGs) or new source performance standards
(NSPS) established pursuant to section 301 or section 306. Where such
nationally applicable ELGs or NSPS exist, permit authorities must
incorporate them into permit requirements. Where they do not exist,
permit authorities establish effluent limitations and conditions,
reflecting the appropriate level of control (depending on the type of
pollutant) based on the best professional judgment (BPJ) of the permit
writer. Limitations based on these guidelines, standards, or on best
professional judgment are known as technology-based effluent limits.
Where technology-based effluent limits are inadequate to meet
applicable State water quality standards, section 301(b)(1)(C) of the
Clean Water Act requires permits to include more stringent limits to
meet applicable water quality standards. NPDES permits also routinely
include standard conditions applicable to all permits, special
conditions, and monitoring and reporting requirements. In addition to
these requirements, NPDES permits must contain conditions to implement
the requirements of section 316(b).
Section 510 of the Clean Water Act provides that, except as
provided in the Clean Water Act, nothing 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 may not adopt any other
limitation, prohibition, or standard of performance which is less
stringent than the limitation, prohibition, or standard of
[[Page 22178]]
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
v. Washington Dep't of Ecology, 511 U.S. 700, 705 (1994).
Sections 301, 304, and 306 of the CWA require that EPA develop
technology-based effluent limitations guidelines and new source
performance standards that are used as the basis for discharge
requirements in wastewater discharge permits. EPA develops 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 various
economic tests appropriate to each level of control, and other factors
identified in sections 304 and 306 of the CWA (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 CWA for more than 56
industries. See 40 CFR parts 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, paper and allied products, petroleum
refining, iron and steel manufacturing, and chemicals and allied
products).
Section 316(b) states that 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.
Section 316(b) addresses the adverse environmental impact caused
specifically by the intake of cooling water, rather than discharges of
pollutants, including thermal discharges, into waters of the United
States. Despite this special focus, the requirements of section 316(b)
remain closely linked to several of the core elements of the NPDES
permit program established under section 402 of the CWA to control
discharges of pollutants into navigable waters. Thus, 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 also withdraw water from
a water of the United States for cooling and that use a cooling water
intake structure to do so.
The CWA does not describe the factors to be considered in
establishing section 316(b) substantive performance requirements that
reflect the ``best technology available for minimizing adverse
environmental impact'' nor does it require that EPA develop nationally
applicable performance requirements through rule making. The most
recent guidance in interpreting 316(b) comes from the U.S. Supreme
Court's decision in Entergy Corp. v. Riverkeeper, Inc. As noted, the
decision was limited to the single question of whether Section 316(b)
of the Clean Water Act authorizes EPA to compare costs and benefits of
various technologies when setting national performance standards for
cooling water intake structures under Section 316(b) of the Clean Water
Act. In Riverkeeper II, the Second Circuit rejected EPA's determination
that closed-cycle cooling was not BTA because it could not determine
whether EPA had improperly considered costs and benefits in its 316(b)
rulemaking. The Supreme Court reversed and remanded the Second Circuit
ruling in a 6-3 opinion authored by Justice Scalia. The Court held that
it is reasonable for EPA to conduct a cost-benefit analysis in setting
national performance standards for cooling water intake structures
under Section 316(b). The Court held that EPA has the discretion to
consider costs and benefits under Section 316(b) but is not required to
consider costs and benefits. The Court's discussion of the language of
section 316(b)--section 316(b) is ``unencumbered by specified statutory
factors''--and its critique of the Second Circuit's decision affirms
EPA's broad discretion to consider a number of factors in standard
setting under section 316(b). While the Supreme Court's decision is
limited to whether or not EPA may consider one factor (cost/benefit
analysis) under section 316(b), the language also suggests that EPA has
wide discretion in considering other factors that it deems relevant to
316(b) standard setting. (``It is eminently reasonable to conclude that
Sec. 1326b's silence is meant to convey nothing more than a refusal to
tie the agency's hands as to whether cost-benefit analysis should be
used, and if so to what degree.'' 129 S.Ct. 1498, 1508 (2009).
Regarding the other factors EPA may consider, section 316(b) cross
references sections 301 and 306 of the CWA by requiring that any
standards established pursuant to those sections also must require that
the location, design, construction and capacity of intake structures
reflect BTA. EPA has interpreted the cross reference as authorizing
consideration of the same factors considered under those provisions
Thus, for example, section 306 directs EPA to establish performance
standards for new sources based on the ``best available demonstrated
control technology'' (BADT). 33 U.S.C. 1316(a)(1). In establishing
BADT, EPA ``shall take into consideration the cost of achieving such
effluent reduction, and any non-water quality environmental impact and
energy requirements.'' 33 U.S.C. 1316(b)(2)(B). The specific cross-
reference in CWA section 316(b) to CWA section 306 ``is an invitation
to look to section 306 for guidance in discerning what factors Congress
intended the EPA to consider in determining the `best technology
available' '' for new sources. See Riverkeeper v. EPA, 358 F. 2d 174,
186 (2nd Cir. 2004).
Similarly, Section 301 of the CWA requires EPA to establish
standards known as ``effluent limitations'' for existing point source
discharges in two phases. In the first phase, applicable to all
pollutants, EPA must establish effluent limitations based on the ``best
practicable control technology currently available'' (BPT). 33 U.S.C.
1311(b)(1)(A). In establishing BPT, the CWA 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 to 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).
In the second phase, EPA must establish effluent limitations for
conventional pollutants based on the ``best conventional pollution
control technology'' (BCT), and for toxic pollutants based on the
``best available technology economically achievable'' (BAT). 33 U.S.C.
1311(b)(2)(A), (E).
In determining BCT, EPA must consider, among other factors, the
relationship between the costs of attaining a reduction in effluents
and the effluent reduction benefits derived, and the comparison of the
cost and level of reduction of such pollutants from the discharge from
publicly owned treatment works to the cost and level of reduction of
such pollutants from a class or category of industry source * * * and
the age of equipment and
[[Page 22179]]
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)(4)(B).
In determining BAT, the CWA 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 the phrases ``best
available technology economically achievable'' and ``best practicable
control technology currently available'' in that section. Thus, section
316(b), section 301(b)(1)(A)--the BPT provision--and section
301(b)(1)(B)--the BAT provision--all include the terms ``best,''
``technology,'' and ``available,'' but neither BPT nor BAT goes on to
consider minimizing adverse environmental impacts, as BTA does. See 33
U.S.C. 1311(b)(1)(A) and (2)(A). These facts, coupled with the brevity
of section 316(b) itself, prompt EPA to look to section 301 and,
ultimately, section 304 for further guidance in determining the ``best
technology available to minimize adverse environmental impact'' of
cooling water intake structures for existing 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 (2nd Cir. Feb. 3,
2004) (``not every statutory directive contained [in sections 301 and
306] is applicable'' to a section 316(b) rulemaking). Moreover, as the
Supreme Court recognized, while the provisions governing the discharge
of toxic pollutants must require the elimination of discharges if
technically and economically achievable, section 316(b) has the less
ambitious goal of ``minimizing adverse environmental impact.'' 129
S.Ct. 1498, 1506. 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). EPA has established BAT
effluent limitations guidelines and NSPS based on the efficacy of one
or more technologies to reduce pollutants in wastewater in relation to
their costs without necessarily considering the impact on the receiving
waters. This contrasts to 316(b) requirements, where EPA has previously
considered the costs of technologies in relation to the benefits of
minimizing adverse environmental impact in establishing 316(b) limits,
which historically has been done on a case-by case basis. In Re Public
Service Co. of New Hampshire, 10 ERC 1257 (June 17, 1977); In Re Public
Service Co. of New Hampshire, 1 EBAD 455 (Aug. 4, 1978); Seacoast Anti-
Pollution League v. Costle, 597 F. 2d 306 (1st Cir. 1979). EPA
concluded that, because both section 301 and 306 are expressly cross-
referenced in section 316(b), EPA reasonably interpreted section 316(b)
as authorizing consideration of the same factors, including costs, as
in those sections. EPA interpreted ``best technology available'' to
mean the best technology available at an ``economically practicable''
cost. This approach squared with the limited legislative history of
section 316(b) which suggested the BTA was to be based on technology
whose costs were ``economically practicable.'' In debate on section
316(b), one legislator explained that ``[t]he reference here to `best
technology available' is intended to be interpreted to mean the best
technology available commercially at an economically practicable
cost.'' 118 Cong. Rec. 33,762 (1972) (statement of Rep. Clausen)
(emphasis added).
For EPA's initial Phase II rulemaking, as it had during 30 years of
BPJ section 316(b) permitting, EPA therefore interpreted CWA section
316(b) as authorizing EPA to consider not only the costs of
technologies but also their effects on the water from which the cooling
water is withdrawn.
2. History of Actions To Address Cooling Water Intake Structures Under
the NPDES Program
a. 1976 Rulemaking
In April 1976, EPA promulgated regulations 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 U.S. 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 Sec. 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,
``[t]he 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-
[[Page 22180]]
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 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.
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.
b. Phase I--New Facility Rule
On November 9, 2001, EPA took final action on regulations governing
cooling water intake structures at new facilities. See 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 part 125, subpart I) establishes requirements applicable
to the location, design, construction, and capacity of cooling water
intake structures at new facilities that have a design capacity to
withdraw at least two million gallons per day (MGD) and use at least
twenty-five 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 that withdraw equal to or greater 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
that withdraw 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 a level necessary 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 that withdraws
equal to or greater than 10 MGD must select and implement appropriate
design and construction technologies for further minimizing impingement
mortality and entrainment. Applicants with greater than 2 MGD but less
than 10 MGD flows are not required to reduce intake flow to a level
commensurate with a closed-cycle, recirculating cooling system, but
must still meet specific operational criteria.
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. In making this demonstration, the regulations allow
an applicant to rely on a combination of measures in additional to
technology controls for reducing impingement and entrainment to achieve
results equivalent to the Track I intake flow and velocity
requirements. These include measures to restore the affected water body
such as restocking fish and improvement of the surrounding habitat to
offset the adverse effects that would otherwise be caused by the
operation of the intake structures. These restoration measures would
result in increases in fish and shellfish which, in combination with
any technologies employed, would result in a level of fish and
shellfish in the water body comparable to that which would result from
the reductions in impingement mortality and entrainment that would be
achieved under Track I. Note that restoration provisions are no longer
authorized (and EPA is proposing to delete them from the CFR in this
rule making), but they are included in this description of the Phase I
rule for completeness. See Chapter II of this preamble for more
information.
In addition, under the Phase I rule, the Director (i.e., the
permitting authority) 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 Phase I requirements or would result in
significant adverse impacts on local air quality, water resources, or
local energy markets.
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).
c. Phase II--Large Flow Existing Power Plants
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 applied 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. In addition, power producers fitting the description
above were also subject to the final Phase II rule even if they obtain
their cooling water from one or more independent suppliers of cooling
water. Such facilities were subject to the rule if their supplier
withdraws water from waters of the U.S. even if the supplier was not
itself a Phase II existing facility. EPA included this provision to
prevent circumvention of the Phase II rule requirements by a facility
purchasing cooling water from entities not otherwise subject to Section
316(b).
The final Phase II rule and preamble also clarified the definition
of an ``existing'' power producing facility. The Phase II rule defined
an ``existing facility'' as ``any facility that commenced construction
as described in Sec. 122.29(b)(4) on or before January 17, 2002; and
any modification of, or addition of a unit at such a facility that does
not meet the definition of a new facility at Sec. 125.83.'' Given that
the definition of the term ``existing facility'' was based in part on
the Phase I definition of the term ``new facility,'' the preamble to
the final Phase II rule also clarified and provided some examples of
how the definition of ``existing facility'' might apply to certain
changes at power producing facilities.
Under the Phase II rule, EPA established BTA performance standards
for the reduction of impingement mortality and, under certain
circumstances, entrainment (see 69 FR 41590-41593). The performance
standards consisted 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) relative to a
``calculation baseline'' that reflected the level of impingement
mortality and entrainment that would occur absent specific controls.
These performance standards
[[Page 22181]]
were not based on a single technology but, rather, on consideration of
a combination of technologies that EPA determined were commercially
available and economically achievable for the industries affected as a
whole. (69 FR 41598-41610). EPA based the impingement mortality and
entrainment (I&E) performance standards on a combination of
technologies because it found no single technology to be most effective
at all affected facilities. For impingement standards, these
technologies included: (1) Fine and wide-mesh wedgewire screens, (2)
barrier nets, (3) modified screens and fish return systems, (4) fish
diversion systems, and (5) fine mesh traveling screens and fish return
systems. With regard to entrainment reduction, these technologies
include: (1) Aquatic filter barrier systems, (2) fine mesh wedgewire
screens, and (3) fine mesh traveling screens with fish return systems.
Because EPA based the performance standards on a combination of
technologies and because of the uncertainty inherent in predicting the
efficacy of one or more of these technologies as applied to different
Phase II facilities, EPA promulgated these standards as ranges.
Furthermore, because the site-specific performance was based on a
comparison to a once-through system without any specific controls on
the shoreline near the source waterbody (i.e., calculation baseline,
see section III.A.2 for more details), the rule also allowed facilities
to receive credit towards meeting the performance standards for I&E
reduction associated with alternate locations of their intakes (eg,
deep water where fish and shellfish were less abundant).
The types of performance standard applicable to a particular
facility (i.e., reductions in impingement mortality only or impingement
mortality and entrainment) were 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.
The Phase II rule identified five compliance alternatives to meet
the performance standards. A facility could demonstrate to the Director
one of the following: (1) That it has already reduced its flow
commensurate with a closed-cycle recirculating system (to meet both
impingement mortality and entrainment), or that it has already reduced
its maximum through-screen 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 approved State-specified design and construction
technology (i.e., submerged cylindrical wedgewire screens) in
accordance with Sec. 125.99(a) or an alternative technology that meets
the appropriate performance standards and is approved by the Director
in accordance with Sec. 125.99(b); or (5) that its costs of compliance
would be significantly greater either 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. Under the cost-cost comparison alternative,
a Director could determine that the cost of compliance for a particular
facility would be significantly greater than the costs considered by
EPA in establishing the applicable impingement mortality and
entrainment reduction performance standards. Similarly, under the cost-
benefit comparison alternative, a Director could determine that the
cost of compliance for a particular facility would be significantly
greater than the benefits of complying with the applicable performance
standards. In the event of either of these determinations, the Director
would have to make a site-specific determination of BTA for minimizing
adverse environmental impact that came as close as possible to meeting
the applicable performance standards at a cost that did not
significantly exceed either the costs EPA considered in establishing
these standards or the site-specific benefits of meeting these
standards.
The final Phase II rule also provided that a facility that chooses
specified compliance alternatives might request that compliance with
the requirements of the rule be determined based on the implementation
of a Technology Installation and Operation Plan (TIOP) that would
indicate how the facility would install and ensure the efficacy, to the
extent practicable, of design and construction technologies, and/or
operational measures, and/or a Restoration Plan. The rule also
established requirements for the development and submittal of a TIOP
(Sec. 125.95(b)(4)(ii)) as well as provisions that specified how
compliance could be determined based on implementation of a TIOP (Sec.
125.94(d)). Under these provisions, a TIOP could be requested in the
first permit term and continued use of a TIOP could be requested where
a facility was in compliance with such plan and/or its Restoration
Plan.
d. Phase III Rulemaking--Low Flow Existing Power Plants, Existing
Manufacturing Facilities, and New Offshore Oil and Gas Facilities
On June 16, 2006, EPA published a final Phase III rule that
established categorical regulations for new offshore oil and gas
extraction facilities that have a design intake flow threshold of
greater than 2 MGD and that withdraw at least 25 percent of the water
exclusively for cooling purposes. For most such facilities, the rule
establishes requirements virtually identical to the requirements
applicable to new facilities in the Phase I rule. In the Phase III
rule, EPA declined to establish national standards for Phase III
existing facilities. Instead it concluded that CWA section 316(b)
requirements for electric generators with a design intake flow of less
than 50 MGD and all existing manufacturing facilities would continue to
be established on a case-by-case basis under the NPDES permit program
using best professional judgment. (71 FR 35006).
3. Rulings by the U.S. Court of Appeals for the Second Circuit
Both the Phase I and Phase II 316(b) rules were challenged in the
U.S. Court of Appeals for the Second Circuit. Key aspects of each of
these decisions are discussed below.
a. Phase I Rule
Various environmental and industry groups challenged the Phase I
316(b) rule. In February 2004, the Second Circuit sustained the entire
rule except for the restoration provision, ruling that restoration was
not a technology as provided for in 316(b). With respect to the other
provisions of the rule, the Court concluded the Phase I rule was based
on a reasonable interpretation of the applicable statute and
sufficiently supported by the record. Restoration provisions of the
rule were remanded to EPA for further rulemaking consistent with the
Court's decision. Riverkeeper, Inc. v. EPA, 358 F.3d 174, 191 (2nd
Cir., 2004). Today's proposal rule would remove the restoration
provisions from the Phase I rule. See Chapter II of this preamble for
more details.
[[Page 22182]]
b. Phase II Rule
Industry, environmental stakeholders, and some States \1\
challenged many aspects of the Phase II regulations. On January 25,
2007, the Second Circuit (Riverkeeper, Inc. v. EPA, 475 F.3d 83, (2d
Cir., 2007)) upheld several provisions of the Phase II rule and
decision and remanded others to EPA for further rulemaking.
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\1\ Rhode Island, Connecticut, Delaware, Massachusetts, New
Jersey, and New York.
---------------------------------------------------------------------------
As noted above, for the final rule EPA rejected closed-cycle
cooling as BTA. Instead, EPA selected a suite of technologies to
reflect BTA, including e.g., screens, aquatic filter barriers, and
barrier nets. Based on the chosen technologies, EPA established
national performance standards for reducing impingement mortality and
entrainment of fish and fish organisms but did not require the use of
any specific technology. Among the aspects of the rule the Second
Circuit remanded for further clarification was EPA's decision to reject
closed-cycle cooling as BTA and EPA's determination of performance
ranges as BTA. In addition, the Second Circuit found that, consistent
with its Phase I decision, restoration was not a technology for BTA,
and that EPA's cost-benefit site-specific compliance alternative was
not in accord with the Clean Water Act. There are also several issues
for which the court requested additional clarification, and some
instances where the court determined that EPA had failed to provide
adequate notice and opportunity to comment on certain provisions of the
rule.
4. EPA Suspension of the Phase II Rule
As a result of the decision of the Second Circuit Court of Appeals
in Riverkeeper, Inc. v. EPA, 475 F.3d 83, (2d Cir., 2007), EPA, on July
9, 2007 (72 FR 37107) suspended the requirements for cooling water
intake structures at Phase II existing facilities, pending further
rulemaking. Specifically, EPA suspended the provisions in Sec.
122.21(r)(1)(ii) and (5), and part 125 Subpart J, with the exception of
Sec. 125.90(b). EPA explained that suspending the Phase II requirements
was an appropriate response to the Second Circuit's decision, and that
such action would allow it to consider how to respond to the remand. In
addition, suspending the Phase II rule was responsive to the concerns
of the regulated community and permitting agencies, both of whom sought
guidance regarding how to proceed in light of the approaching deadline
of the remanded rule. EPA's suspension clarified that pending further
rulemaking, permit requirements for cooling water intake structures at
Phase II facilities should be established on a case-by-case, best
professional judgment (BPJ) basis (see 125.90(b)).
5. Ruling by the U.S. Supreme Court
Following the Phase II decision in the Second Circuit, several
industry group litigants petitioned the U.S. Supreme Court to hear an
appeal regarding several issues in the case. Entergy Corp. et al. v.
EPA, S. Ct. No. 07-588, et al. On April 14, 2008, the Supreme Court
granted the petitions for writs of certiorari submitted by these Phase
II litigants, but limited its review to the issue of whether section
316(b) authorizes EPA to compare costs with benefits in determining BTA
for cooling water intake structures. The Supreme Court held oral
arguments in this case on December 2, 2008, and issued a decision on
April 1, 2009. The Supreme Court held that it is permissible for EPA to
rely on cost-benefit analysis in decision making for setting the Phase
II national performance standards, and in providing for cost-benefit
variances from those standards as part of the Phase II regulations. The
Court indicated that the phrase ``best technology available for
minimizing adverse environmental impact'' does not unambiguously
preclude use of cost-benefit analysis in decision making. The ruling
supports EPA's discretion to consider costs and benefits, but imposes
no obligation on the agency to do so.
6. Ruling by the U.S. Court of Appeals for the Fifth Circuit
In 2009, EPA petitioned the Fifth Circuit to remand the existing
facility portion of the Phase III rule. Specifically, EPA requested
remand of those provisions in the Phase III rule that establish 316(b)
requirements at electric generators with a design intake flow of less
than 50 MGD, and at existing manufacturing facilities, on a case-by-
case basis using best professional judgment. This request did not
affect the Phase III rule requirements that establish categorical
regulations for new offshore oil and gas extraction facilities that
have a design intake flow threshold of greater than 2 MGD and that
withdraw at least 25 percent of the water exclusively for cooling
purposes.
On July 23, 2010, the U. S. Court of Appeals for the Fifth Circuit
issued a decision regarding the Phase III rule. The Court granted EPA's
motion to remand the rule with respect to existing facilities. In
addition, the Fifth Circuit affirmed the portion of the rule that
regulated cooling water intake structures for new offshore oil and gas
facilities. In sustaining these requirements, the Fifth Circuit upheld
EPA's decision not to use cost benefit balancing in determining the
requirements for these new facilities. This was in accord with the
discretion afforded by 316(b) and affirmed by the Supreme Court, namely
that EPA properly interpreted section 316(b) as authorizing, but not
requiring, the Agency to consider costs and benefits in its decision
making.
7. Settlement of Litigation in U.S. District Courts
On January 19, 1993, a group of individuals and environmental
organizations \2\ filed, under section 505(a)(2) of the CWA, 33 U.S.C.
1365(a)(2), a complaint in Cronin, et. al. v. Reilly, 93 Civ. 314
(LTS)(S.D.N.Y.). The plaintiffs alleged that EPA had failed to perform
a non-discretionary duty to issue regulations implementing section
316(b) of the CWA, 33 U.S.C. 1326(b). In 1995, EPA and the plaintiffs
executed a consent decree in the case that provided for EPA to
implement section 316(b) of the CWA by prescribed dates in the three
separate rulemaking proceedings described above. In late 2002, the
district court entered an amended consent decree that modified the
schedule for the Phase II and Phase III rulemakings for existing
facilities.
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\2\ There are the following plaintiffs currently: Riverkeeper,
Inc.; Alex Matthiessen, a/k/a The Hudson Riverkeeper; Maya K. Van
Rossum, a/k/a The Delaware Riverkeeper; Terrance E. Backer, a/k/a
The Soundkeeper; John Torgan, a/k/a The Narragansett BayKeeper;
Joseph E. Payne, a/k/a The Casco BayKeeper; Leo O'Brien, a/k/a the
San Francisco BayKeeper; Sue Joerger, a/k/a The Puget Soundkeeper;
Steven E. Fleischli, a/k/a The Santa Monica BayKeeper; Andrew
Willner, a/k/a The New York/New Jersey Baykeeper; The Long Island
Soundkeeper Fund, Inc.; The New York Coastal Fishermen's
Association, Inc.; and The American Littoral Society, Inc.
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On November 17, 2006, some of the same environmental organizations
in the Cronin case filed a second complaint, amended on January 19,
2007, in Riverkeeper, et al. v. EPA, 06 Civ. 12987 (S.D.N.Y.). Here,
the plaintiffs alleged that EPA failed to perform a non-discretionary
duty under section 316(b) of the CWA in its final regulation covering
the Phase III facilities, and also had violated sections 706(2)(A) and
706(2)(C) of the Administrative Procedure Act (APA) in the manner in
which it had made that decision.
Earlier, the same plaintiffs had also petitioned for review of the
Phase III rule in the U.S. Court of Appeals for the Second Circuit.
This and other petitions for review were consolidated for hearing
[[Page 22183]]
in the U.S. Court of Appeals for the Fifth Circuit. Conoco Phillips v.
EPA (5th Cir. No. 06-60662). Following the Supreme Court decision in
Entergy, EPA, Riverkeeper and others requested remand of the regulation
to allow EPA to reconsider its decisions regarding Phase III facilities
in light of more recent technical information and recent court
decisions. As noted above, on July 23, 2010, the Fifth Circuit granted
the joint motion of EPA and environmental petitioners for a voluntary
remand. On September 3, 2010, one of the industry petitioners filed a
petition asking the Fifth Circuit panel to rehear its grant of the
motion to remand.
On August 14, 2008, EPA filed a motion to terminate the Cronin
proceeding because it had discharged its obligations (``to take final
action'') under the decree with respect to the Phase II and III
rulemakings. The plaintiffs in Cronin asserted that EPA had not
discharged its obligations under the second amended decree because the
Second Circuit remanded core provisions of the 316(b) rule for existing
power plants to EPA, and EPA had suspended the Phase II rule. In the
Riverkeeper proceeding, on February 7, 2007, EPA moved to dismiss
arguing that the district court lacked jurisdiction to hear the
challenge to the Phase III rule.
EPA entered into a settlement with the plaintiffs in both lawsuits.
Under the settlement agreement, EPA agreed to sign a notice of a
proposed rulemaking implementing section 316(b) of the CWA at existing
facilities no later than March 14, 2011 and to sign a notice taking
final action on the proposed rule no later than July 27, 2012.
Plaintiffs agreed to seek dismissal of both their suits, subject to a
request to reopen the Cronin proceeding in the event EPA failed to meet
the agreed deadlines. The district courts have now entered orders of
dismissal. On March 11, 2011, the parties agreed to an amendment to the
settlement agreement to extend the date for proposal to March 28, 2011.
II. Proposed Amendments Related to the Phase I Rule
EPA is proposing several limited changes to the Phase I rule at 40
CFR subpart I. The changes fall into two categories. The first is
deletion of the provision in the rule that would allow a facility to
demonstrate compliance with the Phase I BTA requirements in whole or in
part through restoration measures. The proposed change responds to the
decision of the U.S. Court of Appeals for the Second Circuit which
remanded these provisions to EPA because it concluded the statute did
not authorize restoration measures to comply with section 316(b)
requirements. The second category of changes reflects technical
corrections or errors that do not change the substance of the current
Phase I rule. EPA is not reopening any other aspects of the Phase I
rule other than the provisions specifically noted here.
A. Restoration Provisions Not Authorized
As discussed above in Section I.C.2, the Phase I final rule
established two compliance tracks. Track I requires facilities to
restrict intake flow and velocity. Track II gives a facility the option
of demonstrating to the Director that the control measures it employs
will reduce the level of adverse environmental impact to a comparable
level to what would be achieved by meeting the Track I requirements. As
part of this demonstration, Track II allows a facility to make use of
restoration measures. The Comprehensive Demonstration Study allowed a
quantitative or qualitative demonstration that restoration measures
would meet, in whole or in part, the performance levels of Track I.
Similarly, the Verification Monitoring Plan could be tailored to verify
that the restoration measures would maintain the fish and shellfish in
the waterbody at a substantially similar level to that which would be
achieved under Track I. See 65 FR 65280-65281.
As discussed in Section I.C.3, the Second Circuit concluded that
EPA exceeded its authority by allowing new facilities to comply with
section 316(b) through restoration measures, and remanded that aspect
of the rule to EPA. The Supreme Court did not grant the petitions for
writs of certiorari concerning restoration provisions. Thus in EPA's
view the Agency is bound by the Second Circuit decision. Today's
proposed rule proposes to amend Phase I to remove those provisions in
Sec. 125.84(d) and 125.89(b)(1)(ii) authorizing restoration measures.
This proposed rule also specifically proposes deletion of application
requirements contained in the Comprehensive Demonstration Study at
Sec. 125.86(c)(2)(ii); evaluation of proposed restoration measures at
125.86(c)(2)(iv)(C); and verification monitoring requirements at
125.86(c)(2)(iv)(D)(2)) that are specific to restoration. EPA
acknowledges these changes may reduce the alternatives available to
some Phase I facilities. However, EPA notes that the deletion of
restoration measures does not otherwise alter the availability of Track
II. In any event, EPA's determination of BTA for Phase I did not
presume reliance on the restoration provisions, and the deletion of
restoration measures in no way alters the Agency's BTA determination
for Phase I facilities.
B. Corrections to Subpart I
Today's proposed rule proposes to change the applicability
statement at 125.81(a)(3) to match the applicability of the technical
requirements at 125.84 and application requirements at 125.86. The
applicability in all three instances should specify design intake flow
or withdrawals ``greater'' than the specified value of 2 MGD. See Basis
for the Final Regulation at 66 FR 65270.
Today's proposed rule also proposes a correction to the source
waterbody flow information submission requirements. Track I
requirements at 125.84(b)(3) apply to new facilities that withdraw
equal to or greater than 10 MGD. Track I requirements at 125.84(c)(2)
apply to facilities that withdraw less than 10 MGD. The source
waterbody flow information under 125.86(b)(3) requires a facility to
demonstrate it has met the flow requirements of both 125.84(b)(3)
``and'' 125.84(c)(2). However, a facility cannot be subject to both
125.84(b)(3) and 125.84(c)(2) at the same time. Accordingly, the word
``and'' should read as ``or'' in 125.86(b)(3).
In addition, today's proposed rule proposes corrections to the
application requirement for the Source Water Biological
Characterization at 122.21(r)(4). Accordingly, references to the Source
Water Biological Characterization should read as (r)(4). However, the
references to the Source Water Biological Characterization at
125.86(b)(4)(iii), at 125.87(a), and at 125.87(a)(2) incorrectly refer
to 122.21(r)(3) and are thus being corrected.
III. What New Information Has EPA Obtained or Developed in Support of
This Proposed Rule?
In developing the Phase I, Phase II, and Phase III rules, EPA
collected and analyzed a substantial amount of information regarding
cooling water intake structures, their biological impacts, available
technologies to reduce those impacts, and other relevant subjects. EPA
considered a sizable volume of material submitted during previous
public comment periods, as well as additional data from stakeholders,
industry groups, technology vendors, and environmental organizations
since those comment periods. Many of the materials are summarized or
discussed in the preambles to these regulations or in the
administrative record for these rules
[[Page 22184]]
(see, e.g., docket numbers W-00-03, OW-2002-0049, and EPA-OW-2004-
0002). Today's proposal is based on data and information contained in
the records supporting the Phase I, Phase II, and Phase III
rulemakings, as well as new information. This section summarizes new
data collected since the promulgation of the Phase III rule in June
2006; it will not review or summarize previous data collection efforts
except to frame discussions about the new data. For information on
EPA's historic data collection efforts, refer to the preambles and
records for the three rules (see, e.g., 65 FR 49070, 66 FR 28854, 68 FR
17131, 68 FR 13524, 69 FR 41593, 69 FR 68457, and 70 FR 71059).
A. Additional Data
EPA has supplemented the existing documents with additional
information as summarized below.
1. Site Visits
As documented in the suspended 2004 Phase II rule, EPA conducted
site visits to 22 power plants in developing the 2004 rule. See 67 FR
17134. Since 2007, EPA has conducted over 50 site visits to power
plants and manufacturing sites. The purpose of these additional visits
was to: Gather information on the intake technologies and cooling water
systems in place at a wide variety of existing facilities; better
understand how the site-specific characteristics of each facility
affect the selection and performance of these systems; gather
performance data for technologies and affected biological resources;
and solicit perspectives from industry representatives. EPA used a
number of criteria in selecting the sites to visit, including those
sites representing a variety of geographical locations and different
types of intakes, and sites that already had an impingement or
entrainment technology in place for which the facility had collected
performance data. EPA also asked trade associations to recommend sites
facing unique circumstances that may affect the adoption of certain
control technologies. EPA also collected information on 7 additional
facilities that staff did not physically visit; usually, these were
other facilities owned by the parent company of a site visited by EPA.
EPA also held conference calls or met with representatives of other
sites at EPA's Washington, DC location.
Copies of the site visit reports (which provide an overall facility
description as well as detailed information such as electricity
generation, the facility's cooling water intake structure and
associated fish protection and/or flow reduction technologies,
impingement and/or entrainment sampling and associated data, and a
discussion of the possible application of cooling towers) for each site
are provided in the docket for the proposed rule. In addition, in
response to stakeholder inquiries, EPA made these site reports publicly
available well before publication of the proposed rule. A list of the
facilities visited by EPA is provided in the TDD.
2. Data Provided to EPA by Industrial, Trade, Consulting, Scientific or
Environmental Organizations or by the General Public
EPA has continued to exchange information with various stakeholders
in the development of today's proposal. EPA met several times with
Electric Power Research Institute (EPRI), Edison Electric Institute,
Nuclear Energy Institute, and Utility Water Act Group, along with other
representatives from facilities and affected industries on topics
including the latest advancements in fish protection technologies,
permit experience, and the feasibility and cost of installing
technologies at certain types of facilities.
In 2010, the North American Electric Reliability Corporation (NERC)
issued a reliability study and found potentially substantial
reliability effects under a 316(b) rule scenario that would require
closed-cycle cooling of all large power plants. See Potential Resource
Adequacy Impacts of U.S. Environmental Regulations. October 2010. The
scenario assumes all existing steam units with a capacity utilization
factor of less than 35% would close,\3\ and assumes all in-scope
electric generators would be required to install cooling towers within
a 5-year window. While the report's focus was on energy reliability and
reflects a regulatory scenario that is not directly comparable to any
of the options explored for today's proposed rule, the report
nevertheless serves as a useful upper bound estimate of (1) the
potential for premature generating unit retirements to avoid the costs
of retrofitting existing cooling water intake systems and (2) increased
power needs as a result of a capacity derating (i.e., the energy
penalty \4\).
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\3\ IPM analyses do not predict all units with capacity
utilization rates of less than 35% would close as a result of a
closed-cycle cooling retrofit. Thus the total loss in capacity under
EPA's Option 2 would be 14,418 MW or 1.3% of existing capacity.
\4\ The report assumes the total energy penalty of 4 percent is
a constant; EPA believes the energy penalty is reduced over time as
units replace, repower, or make other modifications such as
condenser replacement that would eliminate the turbine backpressure.
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The Edison Electric Institute published a study of the combined
impact of EPA's upcoming air, water (316(b)), and solid waste
rulemakings on the coal fired fleet of power plants. See Potential
Impacts of Environmental Regulation on the U.S. Generation Fleet Final
Report. January 2011. As with the NERC study, conservative assumptions
were made about EPA rules yet to be proposed or promulgated. The report
summarizes reductions in capacity, but does not distinguish how much of
that capacity was unused in the baseline scenario. Conservative costing
assumptions such as 21 percent higher average costs,\5\ and application
of full retrofit costs to new capacity (instead of incremental costs
for installing required technology at new construction) gives results
that are not comparable to any of the options explored for today's
proposed rule. While this study analyzed multiple scenarios, each
scenario combines the effects of multiple rules so that the impact of
the section 316(b) rule alone could not be determined. Even so, the
report provides useful insight on the potential impact of multiple
rulemakings if each EPA rule was promulgated at the level of stringency
assumed in the study.
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\5\ EPRI's site-specific evaluation of 82 facilities provides an
average capital cost of $275 per GPM, but the EEI report uses $319
per GPM.
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EPA met with Riverkeeper and other environmental groups to discuss
the progress of the revisions to the rule, advances in fish protection
technologies, state programs, environmental issues associated with
cooling water withdrawals, and the feasibility of closed-cycle cooling.
Through these interactions, EPA has received additional data and
information including, but not limited to: Efficacy data, operating
information, cost information, feasibility studies, environmental
impacts, and non-water quality related impact information for various
candidate BTA technologies.
3. Other Resources
EPA also collected information on cooling water intake structure-
related topics from a variety of other sources, such as state and
international policies. For example, the California Office of
Administrative Law approved the ``Policy on the Use of Coastal and
Estuarine Waters for Power Plant Cooling'' on September 27, 2010, which
requires that all coastal power plants reduce their intake flow to a
level commensurate with closed-cycle cooling. The Delaware state
legislature passed a resolution that urges the Delaware Department of
Natural
[[Page 22185]]
Resources and Environmental Control (DNREC) to consider closed-cycle
cooling as BTA and to require closed-cycle cooling at all facilities.
The New York Department of Environmental Conservation (DEC) released a
draft policy in March 2010 that would require flow reduction equivalent
to closed-cycle cooling at all existing facilities that withdraw more
than 20 MGD as part of the state's plan to restore the Hudson River.
Additional examples of state programs are discussed further in the TDD.
In addition to state-wide cooling water policies, some recent
individual NPDES permits have incorporated requirements for significant
reductions in cooling water flow. For example, EPA Region I (which
develops NPDES permits for several non-delegated New England states)
issued a final NPDES permit in October 2003 that required Brayton Point
in Somerset, Massachusetts to reduce cooling water intake flow and
thermal discharges approximately 95 percent.\6\ Brayton is currently
constructing two natural draft cooling towers at the facility. New
Jersey, as part of its policy for protecting marine life from the
adverse impacts created by power plants, issued a draft permit for
Oyster Creek that would require closed-cycle cooling, and is studying
closed-cycle cooling for two units at Salem Generating Station. Other
examples are documented in site visit reports found in the record for
today's proposed action.
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\6\ See http://www.epa.gov/ne/braytonpoint/index.html.
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Electric generators are the subject of several rulemaking efforts
that either are or will soon be underway. In addition to this
rulemaking proposal, this includes regulation under section
110(a)(2)(D) of the Clean Air Act (CAA) addressing the interstate
transport of emissions contributing to ozone and PM air quality
problems, coal combustion wastes, hazardous air pollutants under CAA
section 112, and criteria pollutant NSPS standards under CAA section
111. They will also soon be the subject of a rulemaking under CAA
section 111 concerning emissions of greenhouse gases. EPA recognizes
that it is important that each and all of these efforts achieve their
intended environmental objectives in a common-sense manner that allows
the industry to comply with its obligations under these rules as
efficiently as possible and to do so by making coordinated investment
decisions and, to the greatest extent possible, by adopting integrated
compliance strategies. In addition, EO 13563 states that ``[i]n
developing regulatory actions and identifying appropriate approaches,
each agency shall attempt to promote such coordination, simplification,
and harmonization. Each agency shall also seek to identify, as
appropriate, means to achieve regulatory goals that are designed to
promote innovation.'' Thus, EPA recognizes that it needs to approach
these rulemakings, to the extent that its legal obligations permit, in
ways that allow the industry to make practical investment decisions
that minimize costs in complying with all of the final rules, while
still achieving the fundamentally important environmental and public
health benefits that the rulemakings must achieve. The Agency expects
to have ample latitude to set requirements and guidelines in ways that
can support the states' and industry's efforts in pursuing practical,
cost-effective and coordinated compliance strategies encompassing a
broad suite of its pollution-control obligations.
B. Implementation Experience
Following promulgation of the 2004 Phase II rule, states and EPA
Regions began to implement the rule. During that time, EPA worked to
assist states in understanding the rule requirements, develop guidance
materials, and support review of the documentation of the new
requirements. As a result, EPA became aware of certain elements of the
2004 rule that were particularly challenging or time-consuming to
implement. In developing today's proposed rule, EPA has considered
these challenges and crafted a revised regulatory framework that the
Agency believes is easier for all stakeholders to understand and
implement. Some of the key changes are described below.
1. Calculation Baseline
The 2004 Phase II rule required that facilities reduce impingement
mortality and entrainment from the calculation baseline. The
calculation baseline was intended to represent a ``typical'' Phase II
facility and outlined a configuration for a typical CWIS. (See 69 FR
41590.) EPA defined the calculation baseline as follows:
an estimate of impingement mortality and entrainment that would
occur at your site assuming that: the cooling water system has been
designed as a once-through system; the opening of the cooling water
intake structure is located at, and the face of the standard \3/8\
inch mesh traveling screen is oriented parallel to, the shoreline
near the surface of the source waterbody; and the baseline
practices, procedures, and structural configuration are those that
[a] facility would maintain in the absence of any structural or
operational controls, including flow or velocity reductions,
implemented in whole or in part for the purposes or reducing
impingement mortality and entrainment.
Under this approach, a facility that had undertaken efforts to
reduce impingement and entrainment impacts (e.g., by installing a fine
mesh screen or reducing intake flow) would be able to ``take credit''
for its past efforts and only be required to incrementally reduce
impingement mortality or entrainment to meet the performance standards.
In practice, both permittees and regulatory agencies encountered
difficulty with the calculation baseline, specifically how a facility
should determine what the baseline represented and how a particular
facility's site-specific configuration or operations compared to the
calculation baseline. For facilities whose site configuration conforms
to the calculation baseline, it was relatively easy to determine
impingement mortality and entrainment at the conditions representing
the calculation baseline. However, for facilities that have a different
configuration, estimating a hypothetical calculation baseline could be
difficult. For example, facilities with intake configuration that
differed significantly from the calculation baseline (e.g., a submerged
offshore intake) were unsure as to how to translate their biological
and technological data to represent the calculation baseline (a
shoreline CWIS). Oftentimes facilities encountered difficulty in
determining the appropriate location for monitoring to take place.
Other facilities were unsure as to how to take credit for retired
generating units and other flow reductions practices. In site visits,
EPA learned that facilities with little or no historical biological
data encountered a particularly difficult and time-intensive task of
collecting appropriate data and developing the calculation baseline.
For example, EPA found that for some sites impingement was very
difficult to convert into a baseline, as facilities needed to predict
which fish would be impinged and then further estimate which of those
impinged organisms survived. As a result, EPA has developed a new
approach to the technology-based requirements proposed today that does
not use a calculation baseline.
2. Entrainment Exclusion Versus Entrainment Survival
As EPA worked towards revising the existing facility rules, EPA
discovered a nuance to the performance based requirements of the 2004
Phase II rule: Entrainment exclusion versus entrainment survival. As
discussed in section III.C below, EPA re-reviewed the
[[Page 22186]]
data on the performance of intake technologies and conducted
statistical analysis of the data. From this analysis, it became
apparent that the 2004 Phase II rule did not fully consider the true
performance of intake technologies in affecting ``entrainable''
organisms.
By definition, entrainment is the incorporation of aquatic
organisms into the intake flow, which passes through the facility and
is then discharged. In order to pass through the technologies located
at the CWIS (e.g., intake screens, nets, etc.), the organisms must be
smaller than the smallest mesh size.\7\ For coarse mesh screens (3/8''
mesh size), most ``entrainables'' simply pass through the mesh (and
through the facility) with only some contact with the screen.\8\ In
this situation the mortality of organisms passing through the facility
was assumed to be 100 percent. However, as mesh sizes are reduced,\9\
more and more entrainables will actually become impinged on the screens
(i.e., ``converted'' from entrainable to impingeable) and would then be
subjected to spray washes and returned along with larger impinged
organisms as well as debris from the screens. Under the 2004 Phase II
rule, these ``converts'' would be classified as a reduction in
entrainment, since the entrainment performance standard simply required
a reduction in the number (or mass) of entrained organisms entering the
cooling system. However, for some facilities the low survival rate of
converts resulted in the facility having difficulty complying with the
impingement mortality limitations. By comparison, the performance
standard for impingement was measured as impingement mortality.
Organisms that were impinged (i.e., excluded) from the CWIS were
typically washed into a return system and sent back to the source
water. In this case, impingement mortality is an appropriate measure of
the biological performance of the technology.
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\7\ In the case of many soft-bodied organisms such as eggs and
larvae, the force of the intake flow can be sufficient to bend
organisms that are actually larger than the screen mesh and pull
them into the cooling system.
\8\ Eggs are generally smaller than 2 millimeters in diameter,
while larvae head capsids are much more variable in size, increasing
as they mature to the juvenile stage.
\9\ Fine mesh screens were considered to be one technology that
could be used to meet the entrainment performance standards under
the 2004 Phase II rule. EPA also reviewed performance data for
screens with mesh sizes as small as 0.5 mm, as described in section
III.C.
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Through EPA's review of control technologies, the Agency found that
the survival of ``converts'' on fine mesh screens was very poor, and in
some extreme cases comparable to the extremely low survival of
entrained organisms that are allowed to pass entirely through the
facility.\10\ More specifically, EPA found that nearly 100 percent of
eggs were entrained unless the mesh slot size was less than 2 mm, and
mortality of eggs ``converted'' to impingement ranged from 20 to 30
percent. Further, the mortality of larvae collected from a fine mesh
screen was usually greater than 80 percent. As a result, a facility
with entrainment exclusion technologies such as fine mesh screens could
approach 90 percent performance, but the subsequent survival of eggs
and larvae combined ranged from 0 to 52 percent (mean value of 12
percent survival) depending on life stage and species, and the
facility's impingement mortality rates increased. In other words, a
facility that simply excluded entrainable organisms (with no attention
being paid to whether they survive or not) could be deemed to have met
its entrainment requirements under the 2004 Phase II rule, when in fact
it may be causing the same level of mortality as a facility with no
entrainment controls at all. EPA's current review of entrainment and
entrainment mortality shows the same trends identified in the research
reviews by EPRI (2003), namely that entrainment decreases with
increasing larval length, increased sweeping flow, decreasing slot
(intake) velocity, and decreasing slot width. In other words, by using
screens with finer mesh, entrainment mortality can be converted to
impingement mortality without necessarily protecting any more aquatic
organisms.
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\10\ Through-plant entrainment survival has been studied
extensively, with EPRI's Review of Entrainment Survival Studies
being amongst the most comprehensive. See DCN 2-017A-R7 from the
Phase I docket.
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3. Cost-Cost Test
In the 2004 Phase II rule, EPA developed facility-specific cost
estimates, and published those costs in Appendix A (69 FR 41669). The
2004 Phase II rule also included a cost-cost test (see 69 FR 41644)
where a facility could demonstrate that its costs to comply with the
2004 rule were significantly greater than those that EPA had
considered. Since initial implementation of the July 9, 2004 316(b)
Phase II rule, EPA has identified several concerns with the facility-
specific costs listed in Appendix A and their use in the cost-cost
test. First, EPA has identified numerous inconsistencies between
facility permit applications, responses in the facility's 316(b)
survey, and overall plant capacity as reported in the most recent EIA
database. These inconsistencies resulted in Appendix A costs that were
different from the facility's own compliance cost estimates due to
inconsistencies in the underlying parameters used to estimate these
costs. In addition, as described more fully in Chapter 2 of this
proposal's Technical Development Document, EPA does not have available
technical data for all existing facilities. EPA obtained the technical
data for facilities through industry questionnaires. In order to
decrease burden associated with these questionnaires, EPA requested
detailed information from a sample, rather than a census, of
facilities. EPA has thus concluded that the costs provided in Appendix
A are not appropriate for use in a facility-level cost-cost test.
Moreover, for most of the national requirements EPA is proposing here,
a cost-cost variance is not necessary for the reasons described below.
As a result, EPA is not providing a framework similar to Appendix A in
today's proposed rule.\11\ (See section III.C below and VII for more
information about how EPA developed compliance costs.)
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\11\ There is a form of ``cost-cost variance'' for new units at
existing facilities, comparable to the provision in Phase I for new
facilities. See further discussion below.
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First, the impingement mortality requirements of today's proposed
rule are economically achievable,\12\ and the low variability in the
costs of impingement mortality controls at a facility makes such a
provision unnecessary. Second, a cost-cost variance is not necessary
for entrainment mortality requirements because the costs of various
requirements are a factor considered in each site-specific
determination. Under the national rule, entrainment requirements would
be established on a facility specific basis, except in the case of new
units at an existing facility, which are subject to standards based on
closed-cycle cooling or its equivalent. In the facility-specific
process proposed today for entrainment mortality, a facility would be
required to submit facility-specific compliance cost estimates. The
determination of whether the cost of specific entrainment mortality
technologies is too high is made by the Director on a case-by-case
basis and accordingly a cost-cost provision is unnecessary for these
facilities. However, consistent with the Phase I rule, EPA has included
a
[[Page 22187]]
provision for new units at existing facilities that the Director 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
Phase I requirements or would result in significant adverse impacts on
local air quality, water resources other than impingement or
entrainment, or local energy markets.
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\12\ The Phase II rule found impingement mortality (plus
entrainment exclusion on certain waterbodies) was economically
achievable; EPA has not identified any reason for revising this
conclusion. See 69 FR 41603.
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C. New or Revised Analyses
In addition to collecting new information, EPA has re-evaluated
some existing data and analyses that underlay its earlier decisions.
The standards of the 2004 Phase II regulation required impingement
mortality reduction for all life stages of fish and shellfish of 80 to
95 percent from the calculation baseline (for all Phase II facilities)
and entrainment reduction requirements of 60 to 90 percent (for certain
Phase II facilities). EPA based these performance requirements on a
suite of technologies and compliance alternatives. For today's
proposal, EPA has reanalyzed various candidate technologies as the
basis for EPA's BTA decision. This reanalysis includes, but is not
limited to, a reanalysis of candidate BTA technologies, their
effectiveness, their costs, and their application. This section
highlights some of the results from this reanalysis. See Section VI for
a thorough discussion of EPA's updated BTA analysis and determination.
Based on this reanalysis, EPA has reached several conclusions. The
first is that closed-cycle cooling reduces impingement and entrainment
mortality to the greatest extent. The second is that screen
technologies are significantly less effective, particularly in
comparison with closed-cycle cooling, in reducing entrainment mortality
than EPA had concluded in 2004. Finally, EPA determined that while none
of the reviewed technologies cause unacceptable energy reliability
concerns, particulate emission increases, or adverse economic impacts
at the national level, the performance and availability of some
technologies varies widely depending on local factors, and these issues
could be a significant concern at individual sites.
1. Revised Performance Database
In its Section 316(b) rule development efforts to date, EPA has
gathered industry documents and research publications with information
from studies which evaluated the performance of a range of technologies
for minimizing impingement or entrainment. As explained in 68 FR 13538-
13539, EPA previously developed a Technology Efficacy Database in an
effort to document and assess the performance of various technologies
and operational measures designed to minimize the impacts of cooling
water withdrawals (see DCN 6-5000 in the docket for the 2004 Phase II
rule). In support of today's proposal, EPA has updated that performance
database. In updating the database, EPA's objective was to review the
methods used to generate data in these studies and to combine relevant
data across studies in order to produce statistical estimates of the
overall performance of each of the technologies.
In developing the updated database, EPA considered data from over
150 documents. This includes documents previously contained in all
three phases of EPA's 316(b) rulemaking records as well as new
documents obtained during development of today's proposal. These
documents contain information on the operation and/or performance of
various forms and applications of these technologies, typically at a
specific facility or in a controlled setting such as a research
laboratory. The studies presented in these documents were performed by
owners of facilities with cooling water intake structures,
organizations that represent utilities and the electric power industry,
and other research organizations. EPA established two general criteria
for using data from the documents: (1) The data must be associated with
technologies for minimizing impingement mortality or entrainment \13\
that are currently viable (as recognized by EPA) for use by industries
with cooling water intake structures that are (or will be) subject to
Section 316(b) regulation; and (2) the data must represent a
quantitative measure (e.g., counts, densities, or percentages) that is
related to the impingement mortality or entrainment of some life form
of aquatic organisms within cooling water intake structures under the
given technology.
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\13\ There were insufficient numbers of studies specifically
looking at entrainment mortality or entrainment survival, therefore
EPA broadened the review to include any measure of entrainment.
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For studies meeting the above criteria, EPA populated a new
database. This performance study database consisted of two primary data
tables. The first table contains specific information on a particular
study, such as the document and study IDs, facility name, water body,
data classification (e.g., impingement mortality, entrainment),
technology category, and other test conditions when specified (e.g.,
mesh size, intake velocity, flow rate, water temperature, conditions
when the technology is in place, control conditions). The second table
contains the reported performance data for a given study. Each row of
this table contains one or more performance measures for a particular
species along with other factors when they were specified (e.g., age
category, dates or seasons of data collection, water temperature,
velocity, elapsed time to mortality). For one option considered for
today's proposed rule, EPA used this database in an attempt to revise
the impingement mortality and entrainment limits developed for the
Phase II rule. However, as described in section VI, the performance
data for screens and other intake technologies indicates that those
technologies were not very effective at minimizing entrainment
mortality in comparison to closed-cycle cooling. As a result, EPA has
not included this option in today's proposed rule package.
2. Impingement Mortality and Entrainment Technology Performance
Estimates
To evaluate the effectiveness of different control technologies and
the extent to which the various regulatory options considered for
today's proposal minimize adverse environmental impacts associated with
cooling water intake structures, EPA used the data collected in the
revised performance database to develop impingement mortality and
entrainment reduction estimates associated with each technology. For
some technologies, this proposal reflects updated information or a
different methodology for estimating effectiveness. For impingement
mortality, EPA focused on 14 studies of 31 species for traveling
screens with post-Fletcher modifications and with a 48 hour \14\ or
less holding time, and found the monthly impingement mortality
corresponding to the 95th percentile was 31 percent mortality. EPA's
full analysis of impingement mortality limitations may be found in
Chapter XI of the TDD. EPA found the best performance of entrainment
exclusion for fine mesh screens was 73 to 82 percent for eggs and 46 to
52 percent for larvae at 0.5 mm slot sizes. The best performance of
fine mesh screens for entrainment survival (and not just exclusion) was
29 to 34 percent, with zero survival of eggs and larvae under certain
conditions. The next section further discusses the distinction
[[Page 22188]]
between entrainment exclusion and entrainment survival.
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\14\ Holding times beyond 48 hours often result in mortality due
to holding conditions rather than mortality due to impingement.
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3. Exclusion Technologies
As discussed in section III.B above, screens and other technologies
operate using a principle of excluding organisms from entering the
cooling system. For technologies other than cooling towers, EPA
generally calculated their efficacy as the mean percent efficacy of the
available data. Because EPA has sufficient data to evaluate impingement
mortality, its impingement mortality technology efficacy calculation
accounts for mortality. However, because EPA has data on entrainment
exclusion but lacks sufficient entrainment mortality data to calculate
exclusion technology entrainment mortality efficacy, EPA's calculated
mean entrainment percent efficacy does not account for mortality.
Available data on today's proposed technology basis demonstrate that
entrainment reductions associated with fine mesh technologies vary
depending on life stage and mesh size. See Section VIII and the TDD for
additional information on EPA's estimate of entrainment reductions for
today's proposal.
In reality, excluding an organism from the cooling water intake
does not minimize entrainment-related adverse environmental impacts
unless the excluded organisms survive and ultimately return back to the
waterbody. In the 2004 Phase II rule, EPA made the assumption that any
entrainable organism which was entrained died (i.e., 100 percent
mortality for organisms passing through the facility) and any organism
not entrained survived. In other words, if a technology reduced
entrainment by 60 percent, then EPA estimated 40 percent of the
organisms present in the intake water would die in comparison to 100
percent in the absence of any entrainment reduction. As explained in
Section VI, while it has been conjectured that certain species of eggs
have been shown to survive entrainment under certain conditions, EPA
has not received any new data for either the most common species or the
most frequently identified species of concern described in available
studies and, as such, has not altered its decision that for purposes of
national rulemaking, entrainment should be presumed to lead to 100
percent mortality. Today's proposed rule would allow facilities to
demonstrate, on a site-specific basis, that entrainment mortality of
one or more species of concern is not 100 percent.
For today's proposal, EPA analyzed the limited data on the
survivability of organisms that are ``converted'' from entrained to
impinged on fine mesh screens. These data show that under most
operational conditions, many larvae die as a result of the impact and
impingement on fine mesh screens. In the case of eggs, the data
indicate that some species may die, but some do survive. The data also
demonstrate that if the organisms can withstand the initial impingement
on the fine mesh screen, the majority of entrainable organisms survive
after passing through a fish return and returning to the source water.
Finally, the data indicate that survival increases as the body length
and age of the larvae increases.\15\ EPA seeks additional data on the
survivability (or mortality) of organisms that are converted from
entrained to impinged on fine mesh screens.
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\15\ EPA found this is a very important distinction when
reviewing technology efficacy, as some studies do not include the
smaller, more fragile, and often non-motile stages of larvae. Older
stages of larvae have started to develop avoidance responses, and
generally have already started developing scales and skeletal
structures.
---------------------------------------------------------------------------
4. Application of Requirements Based on Capacity Utilization Rate (CUR)
and Waterbody Type
In the 2004 Phase II rule, the type of performance standard
applicable to a particular facility (i.e., reductions in impingement
mortality only or impingement mortality and entrainment) depended on
several factors, including the facility's location (i.e., source
waterbody), capacity utilization rate (CUR) (as an indicator of the
rate of use), and the proportion of the source waterbody withdrawn.
EPA's reanalysis of impingement and entrainment data does not support
the premise that the difference in the density of organisms between
marine and fresh waters justifies different standards. More
specifically, the average density of organisms in fresh waters may be
less than that found in marine waters, but the actual density of
aquatic organisms in some specific fresh water systems exceeds that
found in some marine waters. In other words, there is considerable
overlap in the range of densities found in marine waters and in fresh
waters. EPA also believes the different reproduction strategies of
freshwater versus marine species makes broad characterizations
regarding the density less valid a rationale for establishing different
standards for minimizing adverse environmental impact.
In re-considering the applicability of requirements based on CUR,
EPA found that even infrequently used facilities may still withdraw
significant volumes of water when not generating electricity. EPA also
found that load-following and peaking plants operate at or near 100
percent capacity (and therefore 100 percent design intake flow) when
they are operating, and these operations occur frequently during peak
summer electricity demand, coinciding with some of the most
biologically sensitive portions of the year.\16\ Accordingly, today's
proposed requirements are not based on waterbody type or CUR. See
further discussion in Section VI.
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\16\ Some facilities continue to withdraw cooling water even
when not generating for a variety of reasons: to discourage
biofouling or mechanical seizures, to promote continued water flow,
or to maintain a state of readiness. Peaking facilities (those with
a CUR of less than 15percent, as defined in the 2004 Phase II rule)
may withdraw relatively small volumes on an annual basis, but if
they operate during biologically important periods such as spawning
seasons or migrations, then they may have nearly the same adverse
impact as a facility that operates year round.
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IV. Revised Industry Description
Today's proposed rule applies to all existing electric generating
and manufacturing facilities, except for certain water going vessels as
described in section V. EPA has earlier fully described the electricity
industry in the 2002 Phase II proposed rule (see, for example, 67 FR
17135) and the manufacturing industries in the 2004 Phase III proposed
rule (see, for example, 69 FR 68459).\17\ While these general
descriptions continue to broadly reflect the current state of these
industries, EPA has revised some of its estimates of numbers of
facilities, intakes, flows, and other pertinent information. In
particular, this section describes those facilities with a cooling
water intake structure having a DIF of greater than 2 MGD, related
cooling water use in power production and manufacturing activities, and
an overview of the industry sectors in scope for today's proposed rule.
See the TDD and EA for today's proposed rule for more detailed
information including industry profiles.
---------------------------------------------------------------------------
\17\ EPA also addressed both electric generators and
manufacturers in the 2000 Phase I proposed rule (see, for example,
65 FR 49070). The support documents for all three rule phases also
provide information characterizing the affected industry sectors.
---------------------------------------------------------------------------
A. Water Use in Power Production and Manufacturing
Water is used for a wide variety of application in the United
States. The U.S. Geologic Survey (USGS) publishes a comprehensive
review of water use across industry sectors every 5 years. The 2005
report indicated that 410 billion gallons per day (BGD) of water are
withdrawn for various uses. (See
[[Page 22189]]
DCN 10-6872.) Of that amount, approximately 201 BGD is withdrawn by
electric generators, primarily for non-contact cooling,\18\ plus water
withdrawals by other industrial sites of 18.2 BGD for a total of 219
BGD. This total flow represents the universe of flow potentially
subject to regulation under 316(b), therefore today's proposed rule may
address over half of the water withdrawals in the entire nation.\19\
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\18\ Irrigation was the next highest user of water at 31% of the
total withdrawn.
\19\ In the Phase I rule, EPA also presented data indicating
that the combined 316(b) rules for electric generators and the
largest manufacturing sectors would address approximately 99% of all
cooling water withdrawals in the U.S. See 65 FR 49071 and the Phase
I Economic and Engineering Analyses of the Proposed Sec. 316(b) New
Facility Rule.
---------------------------------------------------------------------------
Industrial water use (broadly defined as water used by power plants
and manufacturers) falls generally into one of four categories: non-
contact cooling water, contact cooling water, process water, and other
water uses. A more detailed description of each category and how it
relates to 316(b) is provided below.
1. Non-Contact Cooling Water
Power plants and manufacturers frequently generate large amounts of
heat in their industrial processes. Non-contact cooling systems are one
of the most common techniques used to dissipate this heat. In a non-
contact cooling system, water is pumped through a heat exchanger or
other equipment where it comes into indirect contact with heated
materials in the industrial process. The water absorbs heat and is
subsequently discharged (in a once-through cooling system) or
recirculated (in a closed-cycle system). In these systems, the cooling
water does not come into contact with any industrial materials,
equipment or processes; the cooling water is contained within the
cooling system for heat absorption and generally requires very little
treatment (except heat removal) before discharge.
At power generators, non-contact cooling is by far the largest
water use. Approximately three quarters of the total annual electricity
output in the United States results from steam powered turbines. Power
plants heat water inside a boiler. The water is turned to steam, at
which point the temperature of the steam can be increased with further
heating, allowing additional energy to be stored in the steam. The
steam is then used to spin a turbine, producing electricity. The steam
must then be condensed and returned to the boiler.\20\ Non-contact
cooling water is used to extract heat and return the steam to water in
a condenser. The water can then be pumped back to the boiler for
heating to repeat the cycle. Consistent with engineering theory, there
are limits to the maximum efficiency of a thermal plant. Thermal power
plants are actually not very efficient at converting fuel to
electricity; only 30 to 60 percent of the fuel is captured as
electricity, with the higher efficiency units relying on further use of
the steam for further heating (usually referred to as cogeneration) or
energy purposes (such as combined cycle power generators or other
process warming). Depending on the type of generating unit, roughly
one-third to two-thirds of the total energy generated is lost in the
form of heat that must be subsequently dissipated.
---------------------------------------------------------------------------
\20\ The thermodynamic laws governing the Rankine cycle in power
plants requires a heat source and a heat sink. The difference in
temperature and pressure is a major factor in maintaining efficiency
of the thermal engine. Additional reasons for condensing the steam
include: handling pressure drops in the system, the need to remove
non-condensable gases before they damage equipment, to allow make-up
water to be added to the system, and to safely allow pumping of the
water back to the boiler.
---------------------------------------------------------------------------
At manufacturers, non-contact cooling is also a significant
component of water use. Some manufacturers have electric generating
units which generally operate in the same manner as summarized above.
In some cases, virtually all of the manufacturing facility's cooling
water withdraws are for power production. In contrast to power
generators, some manufacturing facilities also need a reliable source
of high pressure steam for manufacturing processes. Other manufacturers
may need to condense steam generated from other processes, or may need
to extract heat from a raw or processed material (e.g., to reduce the
temperature of an intermediate petroleum or chemical product before it
enters a subsequent processing stream). Some facilities engage in
testing or research, and have cooling needs for these activities.
2. Contact Cooling Water
Contact cooling water differs from non-contact cooling in that
contact cooling systems use cooling water in direct contact with the
hot equipment or heated materials. As a result, contact cooling water
may intermingle with industrial products or equipment and often will
take up pollutants other than heat, such as oil and grease or metals.
Contact cooling water often requires treatment for these pollutants
before it may be discharged.
In power plants, cooling water may be used for contact cooling of
pumping equipment, such as the cooling water pump bearings. Contact
cooling water is more frequently needed by manufacturing processes,
such as quench water (e.g., water into which bars of hot metal are
dipped for rapid cooling or control of the formed metal temperature),
mechanical pulping, forming and molding processes, food and
agricultural products, and petrochemical gas quenching.
3. Process Water
Process water is water that is used directly in an industrial
process. While steam electric plants do have some process water,
process water is more typically associated with manufacturers, as the
primary industrial process at power plants (electricity generation) is
usually cooled with non-contact cooling water. Examples of process
water include water used to break down wood pulp in a paper mill, water
that is used in creating consumer products such as beverages or
personal care products, water added to facilitate transportation of
materials within a manufacturing process, water needed as a raw
material, and water used in numerous chemical separations processes.
Process water may be used as an ingredient in the intermediate
products, consumed by the products, lost to evaporation, extracted
later in the process line for treatment and discharge, or further
reused.
EPA has found through site visits, extensive experience with
manufacturing water use in the development of previous effluent
guidelines, and a general review of water uses by manufacturing
processes that a significant amount of reduction, reuse, and recycling
has already occurred in most manufacturing processes, in part due to
pretreatment standards and NPDES permit conditions. Beyond these
reductions, today's proposed rule recognizes that many industrial
facilities have worked to reduce the volume of process water usage at
their sites and to increase the reuse of process water for other
purposes within the facility. A leading facility or an entire industry
may have evolved to use less process water in its industrial process.
For example, EPA has found some facilities have undergone plant wide
energy audits to reduce their energy needs by up to 25 percent,
providing a roughly 25 percent reduction in cooling water needs. One
analysis of paper mills estimates that over 39 billion gallons daily of
water is recycled and not used solely for cooling purposes by a typical
mill. Further, there has been a 69 percent reduction in
[[Page 22190]]
the average volume of treated effluent at pulp and paper mills (see DCN
10-6902). In response to effluent guidelines discharge limitations,
some facilities have reduced their compliance costs by reducing the
volume of wastewater they must treat. Some effluent limitation
guidelines have also established explicit requirements for flow
reduction. In the case of iron and steel facilities, effluent
limitations require no discharge of process wastewater pollutants (for
example, see 40 CFR part 420 subpart D Steelmaking). As another
observed example of the recycling of process water, a facility might
use non-contact cooling water for condensing steam, but then reuse the
heated water for washing raw materials instead of discharging the
water.
See section V for more information on how water reuse and
conservation efforts are considered in compliance alternatives for
today's proposed rule.
4. Other Uses
Given the diversity of industrial processes across the U.S., there
are many other industrial uses of water not intended to be addressed by
today's proposed rule. Emergency water withdrawals, such as fire
control systems and nuclear safety systems, are not considered as part
of a facility's design intake flow. Warming water at liquefied natural
gas terminals, and hydro-electric plant withdrawals for electricity
generation are not cooling water uses and are not addressed by today's
proposal. Other water uses might include service water and dilution
water. Service water is a generic term that often refers to uses other
than non-contact cooling (i.e., it may include contact cooling), but
can also include specialty water uses such as makeup water for
radiation waste systems at nuclear power plants. Examples of dilution
water are using water to reduce the concentration of a pollutant for
biological treatment purposes, or to reduce the temperature of an
effluent.
B. Overview of Electric Generators
In the Phase I proposal, EPA described its rationale for setting
the threshold for section 316(b) national requirements at 2 MGD. As
described in that proposed rule, EPA selected 2 MGD to ensure that
almost all cooling water withdrawn from waters of the U.S. is covered
by a national regulation. The Agency recognized that there was
relatively little information currently available regarding the lower
bound of withdrawals at which significant levels of impingement and
entrainment and, therefore, adverse environmental impact, was likely to
occur. At the time, most case studies available to the agency
documenting impingement and entrainment from cooling water withdrawals
focused on facilities withdrawing very large amounts of water (in most
cases greater than 100 MGD). After soliciting comment and data on
several different thresholds, the Agency adopted 2 MGD in the final
rule. 66 FR 65288.
While the overview of the electric generating facilities in the
previous Phase II and III proposed and final rules has not changed
substantially, this section combines those multiple industry profiles
into one overview. The information below is generally based on data
from the U.S. Department of Energy's (DOE) ``Annual Electric Generator
Report'' (Form EIA-860) and ``Annual Electric Power Industry Report''
(Form EIA-861), and EPA's Section 316(b) Industry Surveys. According to
the 2007 EIA database, 38 of the 671 facilities have ceased operation
since the Survey and 15 facilities will likely do so by the time
today's proposed rule is promulgated (i.e., 2012). EPA also excluded 20
electric generators that are already required by state policy to comply
with standards based on closed-cycle cooling, and thus for regulatory
analysis purposes are not expected to be affected by the proposed rule.
In addition, 39 facilities are projected to be baseline closures
according to Integrated Planning Model analyses (see Section VII of
this preamble and Chapter 6 of the EA for discussion of IPM
analysis).\21\ Based on (1) data collected from these Surveys; (2) the
compliance requirements in today's proposed rule, and (3) the in-scope
threshold of 2 MGD DIF (see section V for further explanation of the 2
MGD threshold), EPA has therefore identified 559 Electric Generators
that are in scope of today's 316(b) Existing Facilities Proposed
Rule.22 23
---------------------------------------------------------------------------
\21\ For the purpose of this analysis, a facility is considered
no longer in operation and retired if it no longer has any steam
operations.
\22\ EPA developed the estimates of the number and
characteristics of facilities expected to be within the scope of
today's proposed rule, based on the facility sample weights that
were developed for the suspended 2004 Phase II Final Regulation
analysis. These weights provide comprehensive estimates for the
total of expected in-scope facilities based on the full set of
facilities sampled in the Section 316(b) Industry Surveys. See
Appendix 3.A: Weighting Concepts of the Economic and Benefits
Analysis report for further discussion of the sample weights used in
this analysis.
\23\ EPA estimates of the characteristics of facilities expected
to be within the scope of today's proposed rule are also based on
the facility sample weights that were developed for the suspended
2004 Phase II Final Regulation analysis.
---------------------------------------------------------------------------
EPA estimates that the 559 steam electric generators represent 3
percent of all parent-entities, approximately 11 percent of all
facilities, and over 45 percent of the electric power sector capacity.
Based on the 2007 EIA database, EPA estimates that 388 of these in-
scope facilities are owned by utilities and 171 in-scope facilities are
owned by non-utilities.\24\ The majority of electric generating
facilities expected to be subject to today's proposed Existing
Facilities rule, or 285 facilities, are investor-owned utilities, while
nonutilities make up the second largest category. For a detailed
discussion of parent-entities, see Chapter 5 and 7 of the EA (DCN 10-
0002).
---------------------------------------------------------------------------
\24\ Electric utilities engage in the generation, transmission,
and the distribution of electricity for sale generally in a
regulated market. Utilities include investor-owned, publicly-owned,
and cooperative entities.
---------------------------------------------------------------------------
As reported in Exhibit IV-1, approximately half of the in-scope
electric generators draw water from a freshwater river (306 facilities
or 55 percent), followed by lakes or reservoirs (117 facilities or 21
percent) and estuaries or tidal rivers (83 facilities or 15 percent).
The exhibit also shows that most of the in-scope facilities (355
facilities or 63 percent) employ a once-through cooling system.
Exhibit IV-1--Number of In-Scope Electric Generators by Waterbody and Cooling-System Type \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recirculating Once-through Combination Total \b\
Waterbody type Number Number Number Other Number Number
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary/Tidal River........................................... 5 69 8 1 83
Ocean......................................................... 0 9 0 0 9
Lake/Reservoir................................................ 36 73 7 1 117
Freshwater Stream/River....................................... 102 166 32 5 306
[[Page 22191]]
Great Lake.................................................... 4 37 2 0 43
-----------------------------------------------------------------------------------------
Total..................................................... 148 355 49 7 559
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The numbers of facilities are calculated on a sample-weighted basis.
\b\ Individual values may not sum to totals due to independent rounding.
C. Overview of Manufacturers
EPA obtained information on in-scope Manufacturers presented in the
tables below from the EPA's Section 316(b) Industry Surveys (the
Industry Screener Questionnaire (SQ) and the Industry Detailed
Questionnaire (DQ)). Based on the Survey data and the compliance
requirements in today's proposed rule, EPA estimates 592 industry
facilities with greater than 2 MGD DIF would be subject to today's
proposal; 575 of these facilities are in the 6 primary manufacturing
industries.\25\
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\25\ The remaining 17 facilities have NAICS codes that do not
fall into any of these six primary manufacturing industries.
---------------------------------------------------------------------------
Exhibit IV-2 below presents in-scope and industry-wide facility and
parent entity counts by industry. The largest share of manufacturers,
or 225 facilities, is in the Pulp and Paper industry, while facilities
in the Chemicals and Allied Products make up the second largest
category at 179 facilities.
Exhibit IV-2--Existing Manufacturers by Industry
------------------------------------------------------------------------
Number of facilities
-------------------------
Sector Number in-
Sector scope \b\
total \c\
------------------------------------------------------------------------
Aluminum...................................... 333 26
Chemicals..................................... 4,433 179
Food.......................................... 28,938 37
Paper......................................... 597 225
Petroleum..................................... 352 39
Steel......................................... 1,525 68
-------------------------
Total..................................... 36,178 \a\ 575
------------------------------------------------------------------------
\a\ In-scope facility counts include baseline closures and exclude an
estimated additional 17 facilities with NAICS codes that do not fall
into any of these six primary manufacturing industries.
\b\ Number of in-scope facilities are weighted estimates; see Appendix
3.A of the EA for information on weights development. Individual
values may not sum to totals due to independent rounding of sample-
weighted (non integer) estimates.
\c\ These facility count estimates are based on sample weights that are
applicable for estimating the number of facilities that would be
within the scope of today's proposed rule. However, because of missing
financial data on certain facilities, these weights were not used in
assessing the economic impact of the rule. Alternative weights, which
yield modestly different total in-scope facility estimates (e.g., 569
in-scope facilities in the Primary Manufacturing Industries instead of
the 575 reported in this table), were used for developing facility
count estimates in the economic impact analysis.
Exhibit IV-3 provides the distribution of manufacturing intakes by
source water body and cooling system type. In total, EPA estimates that
593 intakes will be within the scope of today's rule. The vast majority
(453 facilities or 77 percent) withdraw cooling water from freshwater
streams or rivers, followed by Great Lakes (47 facilities). Two hundred
eighty-seven (48 percent) manufacturers employ once-through cooling
systems, 119 (20 percent) use closed-cycle cooling systems, and 124 (21
percent) use ``combination'' systems. An estimated 192 (32 percent)
manufacturers have installed one or more cooling towers. In the total
of 593 facility/intake combinations, EPA does not have information on
the cooling water system type for 4 facilities/intakes. Note that not
all manufacturers that have installed a cooling tower are classified as
using closed-cycle cooling systems, as facilities with multiple cooling
water systems may be ``combination'' systems that employ both closed-
cycle and once-through cooling. Manufacturers may also list ``helper''
cooling towers in their survey responses, which are generally used to
mitigate discharge temperatures and do not necessarily affect intake
flows.
Exhibit IV-3--Number of In-Scope Manufacturers by Waterbody and Cooling-System Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recirculating Once-through Combination Type unknown Total \a\
Waterbody type \b\ Number Number Number Other Number Number Number
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary/Tidal River......................... 1 23 16 0 0 40
Ocean....................................... 0 11 0 0 0 11
Lake/Reservoir.............................. 7 13 12 11 0 42
Freshwater Stream/River..................... 111 215 82 41 4 453
Great Lake.................................. 0 25 14 7 0 47
-----------------------------------------------------------------------------------------------------------
Total................................... 119 287 124 59 4 593
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Facility counts include baseline closures and exclude 17 facilities with NAICS codes that do not fall into the six primary manufacturing industries
(see Chapter 3 of EA for more detail). Individual facilities may be reported more than once in this table if they have multiple intakes while a single
intake that serves both recirculating and once-through systems is counted once as a combination. Individual values may not sum to totals due to
independent rounding of sample-weighted (non integer) estimates.
\b\ Four facilities have an unknown CWS type.
[[Page 22192]]
D. Other Existing Facilities
EPA's data collection efforts largely focused on five industrial
sectors: Chemicals and allied products (SIC Major Group 28); primary
metals industries (SIC Major Group 33); paper and allied products (SIC
Major Group 26); petroleum and coal products (SIC Major Group 29); and
food and kindred products (SIC Major Group 20).\26\ The first four
sectors use a significant portion of the cooling water withdrawn among
all manufacturing industries and were more heavily targeted in EPA's
industry questionnaire effort, but data were also 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 primary industry
sectors discussed above account for the vast majority of non-power
plant cooling water use. The data collected for these other industries
suggests that the intake structure design and construction at these
industries were substantially similar to the industries for which EPA
did collect data, and EPA did not receive any data during the Phase III
proposed rule comment period that suggests otherwise. EPA's analysis of
costs and impacts includes these additional existing facilities.
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\26\ EPA also identified many other industry sectors that use
cooling water; 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.
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V. Scope and Applicability of the Proposed Section 316(b) Existing
Facility Rule
The proposed rule includes all existing facilities with a design
intake flow of more than 2 MGD. The proposed rule also clarifies the
definition and requirements for new units at existing facilities. The
applicable requirements are summarized in Exhibits V-1 and V-2.
Exhibit V-1--Applicability by Phase of the 316(b) Rules
------------------------------------------------------------------------
Facility characteristic Applicable rule
------------------------------------------------------------------------
New power generating or manufacturing Phase I rule.
facility.
New offshore oil and gas facility...... Phase III rule.
New unit at an existing power This proposed rule.
generating or manufacturing facility.
Existing power generating or This proposed rule.
manufacturing facility.
Existing offshore oil and gas facility This proposed rule (Case-by-
and seafood processing facilities. case, best professional
judgment).
------------------------------------------------------------------------
Exhibit V-2--Applicable Requirements of Today's Proposed Rule for
Existing Facilities
------------------------------------------------------------------------
Facility characteristic Applicable requirements
------------------------------------------------------------------------
Existing facility with a AIF >125 MGD.. Impingement mortality
requirements at 125.94(b) and
Entrainment Characterization
Study requirements at
125.94(c) (categorical rule).
Existing facility with a DIF >2 MGD but Impingement mortality
AIF not greater than 125 MGD. requirements at 125.94(b)
(categorical rule).
New unit with a DIF >2 MGD at an Impingement and entrainment
existing facility. mortality requirements at
125.94(d) (categorical
standard).
Other existing facility with a DIF of 2 Case-by-case, best professional
MGD or smaller or that has an intake judgment.
structure that withdraws less than 25
percent of the water for cooling
purposes.
------------------------------------------------------------------------
Initially, EPA divided the 316(b) rulemaking into three phases in
response to litigation and to make the best use of its resources (see
Section I). However, as EPA's analysis progressed, it became clear that
cooling water intake structures are operated similarly at most
industrial facilities (i.e., both power producing and manufacturing
facilities). From a biological perspective, the effect of intake
structures on impingement and entrainment does not differ depending on
whether an intake structure is associated with a power plant or a
manufacturer. Instead the impingement and entrainment impacts
associated with intakes of the same type are generally comparable, and
today's proposed rule addresses these impacts without discriminating
which facilities are behind the intake structure. Thus, EPA is
consolidating the universe of potentially regulated facilities from the
2004 Phase II rule with the existing facilities in the 2006 Phase III
rule for purposes of today's proposed rule. This consolidation also
provides a ``one-stop shop'' for information related to today's
proposed rulemaking, as all existing facilities would be addressed in
an equitable manner by the same set of technology-based requirements.
A. General Applicability
This rule would apply to owners and operators of existing
facilities that meet all of the following criteria:
The facility is a point source that uses or proposes to
use cooling water from one or more cooling water intake structures,
including a cooling water intake structure operated by an independent
supplier not otherwise subject to 316(b) requirements that withdraws
water from waters of the United States and provides cooling water to
the facility by any sort of contract or other arrangement;
The total design intake flow of the cooling water intake
structure(s) is greater than 2 MGD; and
The cooling water intake structure(s) withdraw(s) cooling
water from waters of the United States and at least twenty-five (25)
percent of the water withdrawn is used exclusively for cooling purposes
measured on an average annual basis for each calendar year.
EPA is proposing to continue to adopt provisions to ensure that the
rule does not discourage the reuse of cooling water for other uses such
as process water. The definition of cooling water at 125.93 provides
that cooling water used in a manufacturing process either before or
after it is used for cooling is considered process water for the
purposes of calculating the percentage of a facility's intake flow that
is used for cooling purposes. Therefore, water used for both cooling
and non-cooling purposes does not count towards the 25
[[Page 22193]]
percent threshold. EPA notes this definition is the same definition
used for new facilities in the Phase I rule at 125.83. Examples of
water withdrawn for non-cooling purposes includes water withdrawn for
warming by liquefied natural gas facilities and water withdrawn for
public water systems by desalinization facilities. Further, the
proposed rule at 125.91(c) specifies that obtaining cooling water from
a public water system or using treated effluent (such as wastewater
treatment plant ``gray'' water) as cooling water does not constitute
use of a cooling water intake structure for purposes of this rule.
Today's proposed rule focuses on those facilities that are
significant users of cooling water; only those facilities that use more
than 25% of the water withdrawn for cooling purposes are subject to the
proposed rule. EPA previously considered a number of approaches for
clarifying applicability of the rule (66 FR 28854 and 66 FR 65288). EPA
adopted the 25% threshold in each of the Phase I, II, and III rules,
and EPA has not received any new data or identified new approaches that
would provide further clarity to the applicability of the rule. EPA is
proposing to continue to adopt 25% as the threshold for the percent of
flow used for cooling purposes to ensure that a large majority of
cooling water withdrawn from waters of the U.S. is addressed by
requirements for minimizing adverse environmental impact. Because power
generating facilities typically use far more than 25 percent of the
water they withdraw exclusively for cooling purposes, the 25 percent
threshold will ensure that intake structures accounting for nearly all
cooling water used by the power sector are addressed by today's
proposed requirements. While manufacturing facilities often withdraw
water for more than cooling purposes, the majority of the water is
withdrawn from a single intake structure.\27\ Once water passes through
the intake, water can be apportioned to any desired use, including uses
that are not related to cooling. However, as long as at least 25% of
the water is used exclusively for cooling purposes, the intake will be
subject to the requirements of today's rule. EPA estimates that
approximately 68% of manufacturers and 93% of power-generating
facilities that meet the other proposed thresholds for the rule use
more than 25% of intake water for cooling and thus will be addressed by
today's rule.
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\27\ Facilities may also use groundwater wells or municipal
water for various uses, but the volume of these withdrawals is
usually much smaller than the volume withdrawn from surface waters.
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EPA decided to propose requiring the Director, exercising BPJ, to
establish BTA impingement and entrainment mortality standards for an
existing offshore oil and gas facility, a seafood processing vessel, or
an offshore liquefied natural gas import terminal. Such a facility
would be subject to permit conditions implementing CWA section 316(b)
where the facility is a point source that uses a cooling water intake
structure and has, or is required to have, an NPDES permit. At their
discretion, permit writers may further determine that an intake
structure that withdraws less than 25% of the intake flow for cooling
purposes should be subject to section 316(b) requirements, and set
appropriate requirements on a case-by-case basis, using best
professional judgment. Today's proposed rule is not intended to
constrain permit writers at the Federal, State, or Tribal level, from
addressing such cooling water intake structures.
B. What is an ``existing facility'' for purposes of the Section 316(b)
Phase II rule?
In today's proposed rule, EPA is defining the term ``existing
facility'' to include any facility that commenced construction before
January 18, 2002, as provided for in Sec. 122.29(b)(4).\28\ EPA is
proposing to establish January 17, 2002 as the date for distinguishing
existing facilities from new facilities because that is the effective
date of the Phase I new facility rule. Thus, existing facilities
include all facilities the construction of which commenced on or before
this date. In addition, EPA is defining the term ``existing facility''
in this proposed rule to include modifications and additions to such
facilities, the construction of which commences after January 17, 2002,
that do not meet the definition of a new facility at Sec. 125.83,
which is the definition used to define the scope of the Phase I
rule.\29\
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\28\ 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 (Sec. 122.29(b)(4)).
\29\ 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.
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The preamble to the final Phase I rule discusses this definition at
66 FR 65256; 65258-65259; 65285-65287, December 18, 2001. EPA's
definition of an ``existing facility'' in today's proposed regulation
is intended to ensure that all sources excluded from the definition of
new facility in the Phase I rule are captured by the definition of
existing facility in this proposed rule.
A point source would be subject to Phase I or today's proposed rule
even if the cooling water intake structure it uses is not located at
the facility.\30\ In addition, 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 (e.g., to comply with today's
proposed rule or to increase capacity). Rather, the determination as to
whether a facility is new or existing focuses on whether it is a green
field or stand-alone facility and whether there are changes to the
cooling water intake to accommodate it.
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\30\ For example, a facility might purchase its cooling water
from a nearby facility that owns and operates a cooling water intake
structure.
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C. What is ``cooling water'' and what is a ``cooling water intake
structure?''
EPA has not revised the definition of cooling water intake
structure for today's proposed rule. A cooling water intake structure
is defined as the total physical structure and any associated
constructed waterways used to withdraw cooling water from waters of the
United States. Under the definition in today's proposed rule, 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 proposes for existing facilities
the same definition of a ``cooling water intake structure'' that
applies to new facilities under Phase I. Today's proposal also adopts
the new facility rule's definition of ``cooling water'' as 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 25 percent
or more of the flow is cooling water. This clarification is necessary
because cooling water intake structures typically bring water into a
facility for numerous purposes, including industrial processes; use as
circulating
[[Page 22194]]
water, service water, or evaporative cooling tower makeup water;
dilution of effluent heat content; equipment cooling; and air
conditioning. Note however, that all intake water (including cooling
and process) is included in the determination as to whether the 2 MGD
DIF threshold for covered intake structures is met.
D. Would my facility be covered only 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).
This is the same requirement EPA included in the Phase I new facility
rule at Sec. 125.81(a)(1). Requirements for complying with section
316(b) will continue to be applied through NPDES permits.
Based on the Agency's review of potential existing facilities that
employ cooling water intake structures, the Agency anticipates that
most existing facilities subject to this proposed rule will control the
intake structure that supplies them with cooling water, and discharge
some combination of their cooling water, wastewater, or storm water to
a water of the United States through a point source regulated by an
NPDES permit. Under these circumstances, the facility's NPDES permit
will include the requirements for the cooling water intake structure.
In the event that an existing facility's only NPDES permit is a general
permit for storm water discharges, the Agency anticipates that the
Director would 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 requirements set out at 40 CFR
122.28.
As EPA stated in the preamble to the final Phase I rule (66 FR
65256 (December 18, 2001)), the Agency encourages 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, the Director will
necessarily apply other legal requirements, where applicable, 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.
E. Would my facility be covered if it withdraws water from waters of
the U.S.? What if my facility obtains cooling water from an independent
supplier?
The requirements in today's proposed rule apply to cooling water
intake structures that have the design capacity to withdraw amounts of
water equal to or greater than 2 MGD 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 and entrainment.
Some facilities discharge heated water to manmade cooling ponds,
and then withdraw water from the ponds for cooling purposes. EPA
recognizes that cooling ponds may, in certain circumstances, constitute
a closed-cycle cooling system and therefore may already comply with
some or all of the technology-based requirements in today's proposed
rule. However, facilities that withdraw cooling water from cooling
ponds that are waters of the United States and that meet the other
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. In some cases water is withdrawn from a water of
the United States to provide make-up water for a cooling pond. In many
cases, EPA expects such make-up water withdrawals are commensurate with
the flows of a closed-cycle cooling tower, and again the facility may
already comply with requirements to reduce its intake flow under the
proposed rule. In those cases where the withdrawals of make-up water
come from a water of the United States, and the facility otherwise
meets today's criteria for coverage (including a design intake flow of
2 million gallons per day), the facility would be subject to today's
proposed rule requirements.
EPA does not intend this rule to 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. The determination whether a particular
cooling pond is, or is not, a water of the United States is to be made
by the permitting authority on a case-by-case basis. 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/pdf/ANPRM-FR.pdf). The agencies
additionally published guidance in 2008 regarding the term ``waters of
the United States'' in light of both the SWANCC and subsequent Rapanos
case (Rapanos v. United States, 547 U.S. 715 (2006)).
The Agency recognizes that some facilities that have or are
required to have an NPDES permit might not own and operate the intake
structure that supplies their facility with cooling water. In
addressing facilities that have or are required to have an NPDES permit
that do not directly control the intake structure that supplies their
facility with cooling water, revised Sec. 125.91 provides (similar to
the new facility rule) 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.
However, obtaining water from another entity that is withdrawing water
from a water of the US would be counted as using a cooling water intake
structure for purposes of determining whether an entity meets the
threshold requirements of the rule. For example, 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. Section 125.91(b) specifies 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 or suppliers
withdraw water from waters of the United States but that is not itself
a new or existing facility subject to section 316(b), except if it is a
public water system.
As a practical matter, existing facilities are the largest users of
cooling water, and typically require enough cooling water to warrant
owning the cooling water intake structures. In some cases, such as at
nuclear power plants or critical baseload facilities, the need for
cooling water includes safety and reliability reasons that would likely
preclude any independent supplier arrangements. Therefore, EPA does not
expect much application of this
[[Page 22195]]
provision. EPA is nevertheless retaining the provision in order 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 today's proposed rule, and is not
explicitly exempt from today's rule (such as drinking water or
treatment plant discharges reused as cooling water).
F. What intake flow thresholds result in an existing facility being
subject to this proposed rule?
There are two ways in which EPA determines the cooling water flow
at a facility. The first way is based on the design intake flow (DIF),
which reflects the maximum intake flow the facility is capable of
withdrawing. While this normally is limited by the capacity of the
cooling water intake pumps, other parts of the cooling water intake
system could impose physical limitations on the maximum intake flow the
facility is capable of withdrawing. The second way is based on the
actual intake flow (AIF), which reflects the actual volume of water
withdrawn by the facility. EPA has defined AIF to be the average water
withdrawn each year over the preceding 3 years. Both of these
definitions are used in today's proposed rule.
In this proposed rule EPA considered requirements based on the
intake flow at the existing facility. EPA is proposing the rule to
apply to facilities that have a total design intake capacity of at
least 2 MGD (see Sec. 125.91).\31\ Above 2 MGD, 99.7% of the total
water withdrawals by utilities and other industrial sources would
potentially be covered (if the other criteria for coverage are met)
while 58% of the manufacturers, 70% of the non-utilities, and 100% of
the utilities would be covered. EPA also chose the greater than 2 MGD
threshold to be consistent with the applicability criteria in the Phase
I rule.\32\ EPA continues to believe that this threshold ensures that
the largest users of cooling water will be subject to the proposed
rule.
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\31\ The 2004 Phase II rule applied to existing power-generating
facilities with a design intake flow of 50 mgd or greater.
Facilities potentially in scope of the Phase III rule had a DIF of
greater than 2 MGD.
\32\ See 65 FR 49067/3 for more information.
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EPA proposes to continue to use a threshold based on design intake
flow as opposed to actual intake flow for several reasons. In contrast
to actual intake flow, design intake flow is a fixed value based on the
design of the facility's operating system and the capacity of the
circulating and other water intake pumps. This provides clarity, as the
design intake flow does not change, except in limited circumstances,
such as when a facility undergoes major modifications. On the other
hand, actual flows can vary significantly over sometimes short periods
of time. For example, a peaking power plant may have an actual intake
flow close to the design intake flow during times of full energy
production, but an AIF of zero during periods of standby. Use of design
intake flow provides clarity as to regulatory status, is indicative of
the possible magnitude of environmental impact, and would avoid the
need for monitoring to confirm a facility's status. Also see 69 FR
41611 for more information about these thresholds.
Under current NPDES permitting regulations at Sec. 122.21, all
existing facilities greater than 2 MGD DIF must submit basic
information describing the facility, source water physical data, source
water biological characterization data, and cooling water intake system
data. Under this proposed rule, all facilities greater than 2 MGD DIF
must submit additional facility-specific information including the
proposed impingement mortality reduction plan, relevant biological
survival studies, and operational status of each of the facility's
units.\33\ Certain facilities withdrawing the largest volumes of water
for cooling purposes have additional information and study requirements
such as the Entrainment Characterization Study as described below.
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\33\ The proposed rule contains streamlined information
submission requirements for facilities that already employ closed
cycle cooling.
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EPA is proposing to use actual intake flow (AIF) rather than design
intake flow (DIF) for purposes of determining which facilities must
conduct an Entrainment Characterization Study. Environmental impacts,
particularly entrainment and entrainment mortality, result from actual
water withdrawals, and not the maximum designed withdrawals. Further,
using actual flow may encourage some facilities to reduce their flows
in order to avoid collecting supplemental data and submitting the
additional entrainment characterization study. Furthermore, any
facility that has DIF greater than 2 MGD is required to submit basic
information that will allow the permitting authority to verify its
determination of whether or not it meets the 125 MGD AIF threshold.
EPA has selected a threshold of 125 MGD AIF because a threshold of
125 MGD would capture 90 percent of the actual flows but would only
establish the Entrainment Characterization Study requirements for 30
percent of existing facilities. This would significantly reduce
facility burden by more than two-thirds of the potentially in-scope
facilities, and would focus permit authorities on the majority of
cooling water withdrawals by addressing approximately 200 billion
gallons of daily cooling water withdrawals.
In today's proposal, EPA seeks to clarify that for some facilities,
the design intake flow is not necessarily the maximum flow associated
with the intake pumps. For example, a power plant may have redundant
circulating pumps, or may have pumps with a name plate rating that
exceeds the maximum water throughput of the associated piping. EPA
intends for the design intake flow to reflect the maximum volume of
water that a plant can physically withdraw from a source waterbody over
a specific time period. This also means that a plant that has
permanently taken a pump out of service or has flow limited by piping
or other physical limitations should be able to consider such
constraints when reporting its DIF. EPA solicits comment on whether the
definition of DIF should be revised to make this clarification more
apparent.
G. Offshore Oil and Gas Facilities, Seafood Processing Vessels or LNG
Import Terminals BTA Requirements Under This Proposed Rule
Under today's proposal, existing offshore oil and gas facilities,
seafood processing facilities and LNG import terminals would be subject
to 316(b) requirements on a best professional judgment basis. In the
Phase III rule, EPA studied offshore oil and gas facilities and seafood
processing facilities \34\ and could not identify any technologies
(beyond the protective screens already in use) that are technically
feasible for reducing impingement or entrainment in such existing
facilities.\35\ As discussed in the Phase III rule, known technologies
that could further reduce impingement or entrainment would result in
unacceptable changes in the envelope of existing platforms, drilling
rigs, mobile offshore drilling units (MODUs), seafood processing
vessels (SPVs), and similar facilities as the technologies would
project out from the hull, potentially decrease the seaworthiness, and
potentially interfere with structural
[[Page 22196]]
components of the hull. EPA also believes that for many of these
facilities, the cooling water withdrawals are most substantial when the
facilities are operating far out at sea--and therefore not withdrawing
from a water of the U.S. The EPA is aware that LNG facilities may
withdraw hundreds of MGD of seawater for warming (re-gasification).
However, some existing LNG facilities may still withdraw water where 25
percent or more of the water is used for cooling purposes. As discussed
in section V, EPA has not identified a uniformly applicable and
available technology for minimizing impingement and entrainment (I&E)
mortality at these facilities. However, technologies may be available
for some existing LNG facilities. LNG facilities that withdraw any
volume of water for cooling purposes would be subject to case-by-case,
best professional judgment BTA determinations.
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\34\ EPA studied naval vessels and cruise ships as part of its
development of a general NPDES permit for discharges from ocean-
going vessels. (See http://cfpub.epa.gov/npdes/home.cfm?program_id=350 for more information.) EPA studied seafood processing vessels
and oil and gas exploration facilities in the 316(b) Phase III rule.
\35\ As discussed in today's preamble, requirements for new
offshore facilities set forth in the Phase III rule remain in
effect.
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EPA has not identified any new data or approaches that would result
in a different determination. Therefore, today's rule would continue to
require that the BTA for existing offshore oil and gas extraction
facilities and seafood processing facilities is established by NPDES
permit directors on a case-by-case basis using best professional
judgment. EPA solicits comment and data on the appropriateness of
national categorical standards for these facilities.
H. What is a ``new unit'' and how are new units addressed under this
proposed rule?
The Phase I rule did not distinguish between new stand-alone
facilities and new units where the units are built on a site where a
source is already located and does not totally replace the existing
source. Because EPA is not changing the new facility rule definitions,
and is only proposing clarifying revisions to the existing facility
rule, this proposed provision is not intended to otherwise reopen the
Phase I rule. Today's proposed rule establishes requirements for new
units added to an existing facility that are not a ``new facility'' as
defined at Sec. 125.83. Today's proposal seeks to clarify the
definitions of ``new'' versus ``existing'' by first noting that, for
purposes of section 316(b), a facility cannot be defined as a new
facility and an existing facility at the same time. In this rule, while
EPA will continue to treat replacement and new units for the same
industrial purpose as existing facilities, EPA intends to have
different requirements for the addition of new units. A replacement
unit or repowered unit, as distinct from constructing an additional
unit, would not be treated as a new unit. The requirements for new
units are modeled after the requirements for a new facility in the
Phase I rule.
EPA has adopted this approach for the following reasons. As new
units are built at existing facilities to provide additional capacity,
facilities have the ideal opportunity to design and construct the new
units without many of the additional expenses associated with
retrofitting an existing unit to closed-cycle. The incremental downtime
that can be associated with retrofitting to closed-cycle cooling is
avoided altogether at a new unit. In addition, when new units are
added, the condensers can be configured for closed-cycle, reducing
energy requirements, and high efficiency cooling towers can be designed
as part of the new unit, allowing for installation of smaller cooling
towers. Thus, the capital costs for closed cycle cooling at new units
are lower than the capital costs for once-through cooling. These
advantages may not always be available when retrofitting cooling towers
at an existing unit.
In consideration of the fact that additional unit construction
decisions rest largely within the control of the individual facility,
EPA decided that subjecting new units to the same national BTA
requirements as those applicable to new facilities is warranted.
VI. BTA Consideration
In response to the Supreme Court's decision in Entergy Corp. et al.
v. EPA in April 2009, and the Second Circuit decision in Riverkeeper
II, EPA has reevaluated the requirements for existing facilities under
section 316(b). As discussed in Section III, for the BTA determinations
proposed below, EPA collected additional data and information and
updated the technology efficacy and costs analyses prepared for the
earlier rulemaking efforts. These data and analyses serve to update the
rulemaking record and allow EPA to apply greater technical rigor to
EPA's analysis of BTA. As a result, EPA has decided not to re-propose
requirements similar to those of the final Phase II rule, but would
adopt, for the reasons explained in this preamble, a new framework. In
addition, as previously noted, EPA decided to address all existing
facilities subject to 316(b) in one rule (i.e., Phase II and Phase
III).
A. EPA's Approach to BTA
Section 316(b) of the CWA requires EPA to establish standards for
cooling water intake structures that reflect the ``best technology
available for minimizing adverse environmental impact.'' The statute is
silent with respect to the factors that EPA should consider in
determining BTA but courts have held that, given section 316(b)'s
reference to sections 301 and 306 of the Act, EPA may look to the
factors considered in those sections in establishing those standards
for section 316(b) standard setting. The Supreme Court noted that,
given the absence of any factors language in Section 316(b), EPA has
more discretion in its standard setting under section 316(b) than under
the effluent guidelines provisions. EPA has broad discretion in
determining what is the ``best'' available technology for minimizing
adverse environmental impact. EPA is not bound to evaluate the factors
it considers in standard setting in precisely the same way it considers
them in establishing effluent limitations guidelines under section 304
of the Clean Water Act. Thus, the U.S. Supreme Court has explained
that, under section 316(b), ``best'' technology may reflect a
consideration of a number of factors and that ``best'' does not
necessarily mean the technology that achieves the greatest reduction in
environmental harm that the regulated universe can afford. Rather, the
``best'' (or ``most advantageous'' technology in the court's words) may
represent a technology that most efficiently produces the reductions in
harm.
EPA has interpreted section 316(b) to require the Agency to
establish a standard based on the best technology available that will
minimize impingement and entrainment--the two main adverse effects of
cooling water intake structures. In EPA's view, there are several
important considerations underpinning its decision. First, its BTA
determination should be consistent with,and reflective of, the goals of
Section 101 of the CWA: ``to restore and maintain the physical,
chemical, and biological integrity of the Nation's waters,'' with an
interim goal of protecting water quality so as to provide for the
protection and propagation of fish, shellfish, and wildlife and provide
for recreation in and on the water.
Second, because the Supreme Court has concluded that EPA may
permissibly consider costs and benefits in its BTA determination and
E.O. 13563 directs EPA only to propose regulations based on a reasoned
determination that the benefits justify the costs, EPA has taken costs
and benefits into account in this proposal. EPA has concluded that the
benefits of the proposed option justify its costs. See section VI. E
below.
Both Riverkeeper decisions recognize that EPA may consider a number
of factors in establishing section 316(b) standards. In the Phase I
Riverkeeper case, the court explained that the cross
[[Page 22197]]
reference in section 316(b) to sections 301 and 306 is an
``invitation'' to look to those statutory provisions for guidance
concerning the factors EPA should consider in determining BTA. In the
Phase II decision, the court stated that the interpretation of section
316(b) should be ``informed'' by these other two provisions. EPA may
consider the factors involved in establishing effluent discharge
limitations when regulating intake structures. The factors specifically
delineated in CWA sections 301 and 306 that EPA may consider include:
cost of the technology, taking into account the age of the equipment
and facilities, process employed, engineering aspects associated with a
particular technology, process changes and non-water quality
environmental impact (including energy requirements).
In selecting the ``best'' technology, EPA looked at a number of
factors. Thus, EPA first considered the availability and feasibility of
various technologies, their costs including potential costs to
facilities as well as households, and economic impacts of different
technologies. EPA reviewed the efficacy of these technologies in
reducing impingement and entrainment mortality, including cost-
effectiveness relationships. EPA also considered additional factors set
out in 304(b) of the Clean Water Act, including location, age, size,
and type of facility. EPA next considered the non-water quality effects
of different technologies on energy production and availability,
electricity reliability, and potential adverse environmental effects
that may arise from the use of the different controls evaluated.
EPA has also considered the costs and the benefits of the different
technologies it evaluated for BTA. Consideration of benefits in
particular is complicated by the absence of well-developed tools or
data to fully express the ecological benefits in monetized terms. EPA
has, however, used the best currently available science to monetize the
benefits of the various options in four major categories: Recreational
fishing, commercial fishing, nonuse benefits, and benefits to
threatened and endangered species (see Exhibit VIII-10). EPA believes
that the benefits estimated for the first two categories are fairly
complete, while the benefits estimated for the latter two categories
are incomplete for a number of reasons. For example, the non-use
benefits consider only the northeast and middle Atlantic states. EPA
will continue to refine its tools in order to develop a more complete
analysis concerning benefits during the rulemaking proceeding.
As a result of this thorough evaluation, EPA is proposing the use
of modified traveling screens with a fish handling and return system or
reduced intake velocity as BTA for impingement mortality. EPA's record
shows modified traveling screens are available for all facilities,
whereas reduced intake velocity may not be available at all locations.
For entrainment, on the other hand, EPA could identify no single
technology that represented BTA for all facilities for the reasons
explained in detail below. Instead, as the national BTA entrainment
requirement for existing facilities, EPA is proposing to adopt
regulations that establish a process for the permitting authority to
determine entrainment BTA controls on a site-specific basis following
the consideration of several factors. In addition to the general
considerations discussed above, EPA has identified the following
specific factors as the key elements in its decision not to prescribe a
single technology as the basis for a national BTA determination. These
factors are local energy reliability, air emissions permits, land
availability, and remaining useful plant life. The rest of this chapter
describes each of these considerations in detail.
B. Technologies Considered to Minimize Impingement and Entrainment
As described in Section IV, power plants and manufacturers withdraw
large volumes of cooling water on a daily basis. The majority of
environmental impacts associated with intake structures are caused by
water withdrawals that ultimately result in the loss of aquatic
organisms. These losses may be due to impingement, entrainment, or
both. Impingement occurs when organisms are trapped against the outer
part of a screening device of an intake structure.\36\ The force of the
intake water traps the organisms against the screen and they are unable
to escape. Not all organisms contained in the incoming water are
impinged, however. Some may pass through the screening system and the
intake structure and travel through the entire cooling system including
the pumps, condenser tubes, and discharge pipes. This is referred to as
entrainment. Various factors lead to the susceptibility of an organism
to impingement or entrainment. For more detailed discussion of
impingement and entrainment and their resulting impact, see 67 FR
17136-17140 and the EEBA.
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\36\ Typically, cooling water intake structures use various
screening devices to prevent large objects (e.g., trash, logs) from
being drawn in with the cooling water and ultimately clogging or
damaging the cooling water system.
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As described in Section III.D, reductions in impingement or
entrainment do not necessarily mean reductions in mortality. For
purposes of this proposal, EPA has developed the following definitions
for impingement and entrainment and mortality:
Impingement: The entrapment of all life stages of fish and
shellfish on the outer part of an intake structure or against a
screening device during periods of intake water withdrawal.
Impingement Mortality: The death of fish or shellfish due
to impingement (as defined above). Note impingement mortality need not
occur immediately; impingement may cause harm to the organism, which
results in mortality several hours after the impingement event. For
purposes of this proposed rule, impingement mortality is limited to
those organisms collected or retained by \3/8\ inch sieve.
Entrainment: The incorporation of all life stages of fish
and shellfish with intake water flow entering and passing through a
cooling water intake structure and into a cooling system.
Entrainment Mortality: The death of fish or shellfish due
to entrainment. This also includes the death of those fish and
shellfish due to fine mesh screens or other technologies used to
exclude the organisms from entrainment. For purposes of this proposed
rule, entrainment mortality is limited to those organisms passing
through a \3/8\-inch sieve.
Based on available information, as described in section III.D, EPA
is assuming for purposes of this rule that all entrained organisms are
a loss, i.e., no entrained organisms survive. Therefore, in the absence
of entrainment control, entrainment is assumed to lead to entrainment
mortality. Also see Chapter A7 of the Phase II Regional Studies
Document (DCN 6-0003; EPA-HQ-OW-2002-0049-1490). Entrainable organisms
generally consist of eggs and early life stage larvae. Early larvae
generally do not have skeletal structures, have not yet developed
scales, and in many cases are incapable of swimming for several days
post hatching. However, for impingement, mortality occurs less than
100% of the time. Impingeable organisms are generally larger juvenile
or adult fish, with fully formed scales and skeletal structures, and
well developed survival traits such as avoidance responses. EPA's data
demonstrate that, under the proper conditions, many impinged organisms
survive.
In addition to these definitions it is helpful to further
characterize
[[Page 22198]]
impingement and entrainment as those terms are used in the literature
and in studies conducted by power plants. Historically, traveling
screens deployed by power plants utilized a \3/8\-inch mesh size. For
this reason, most studies and reports referring to impingement are in
fact referring to those organisms impinged on a \3/8\-inch mesh screen.
Impingement can also refer to any organism incapable of swimming away
from the intake structure due to the water velocity at the intake.
Similarly, entrainable organisms are those organisms fitting through a
mesh of less than or equal to \3/8\ of an inch. This also means the
majority of entrainable organisms are comprised of eggs, larvae, and
juveniles. More recent studies, particularly those that evaluate mesh
sizes smaller than \3/8\ of an inch, continue to refer to impingement
as any organism caught on the screen. This can cause some confusion, as
many organisms that would have been entrained with a \3/8\-inch mesh
instead become impinged by the finer mesh. These are referred to as
``impinged entrainables'' or ``converts.'' EPA has also found that most
studies of entrainment are biased towards the larger (older) larvae
with higher survival rates and do not analyze survival of smaller
larvae. This corresponds to larvae body lengths sufficient to have
begun scale and bone development, and generally reflects the more
motile early life stages. EPA found these study findings cannot be
applied to non-motile life stages, which are incapable of avoidance
responses. As discussed in Section III.C, it is also important to note
that the prevention of entrainment by some exclusion technologies may
result in very high entrainment reductions, but these organisms do not
necessarily survive interactions with the exclusion technology.
Therefore, while entrainment refers specifically to passage through the
cooling water intake system, entrainment mortality also includes those
smaller organisms killed by exclusion from the cooling water intake
system. Today's rule proposes to use the \3/8\-inch mesh size as part
of the definition of impingement and entrainment mortality as a means
of clearly differentiating those organisms that may be susceptible to
impingement or entrainment, and thereby avoiding any confusion over the
status of ``impinged entrainables'' or ``converts.''
Generally, there are two basic approaches to reduce impingement and
entrainment (I&E) mortality. The first approach is flow reduction,
where the facility installs technology or operates in a manner to
reduce or eliminate the quantity of water being withdrawn. Reduced
volumes of cooling water produce a corresponding reduction in I&E, and
therefore reduced I&E mortality. The second way to reduce I&E is to
install technologies or operate in a manner that either (a) gently
excludes organisms or (b) collects and returns organisms. Under the
first approach, technologies or practices are used to divert those
organisms that would have been subject to I&E. The second approach is
to install collection and return technologies; organisms not diverted
are collected and returned back to the source water.
Though not available to all facilities, a third approach to
reducing impingement and entrainment is relocating the facility's
intake to a less biologically rich area in a water body, usually
further from shore and/or at greater depths, or varying the timing of
withdrawals by time of day, season, etc., to target withdrawals to
times when organism densities are lower. This approach can be effective
at entrainment reduction, but is not generally available to inland
facilities.
The section below further describes flow reduction and exclusion
technologies.
1. Flow Reduction
Flow reduction is commonly used to reduce impingement and
entrainment. For purposes of rulemaking, EPA assumes that entrainment
and impingement (and associated mortality) at a particular site are
proportional to source water intake volume.\37\ Thus, if a facility
reduces its intake flow, it similarly reduces the amount of organisms
subject to impingement and entrainment. Some common flow reduction
technologies include: Variable frequency drives, variable speed pumps,
seasonal operation or seasonal flow reductions, unit retirements, use
of alternate cooling water sources, water reuse, and closed-cycle
cooling systems. For additional detailed information on these
technologies as well as others, see the TDD, ``California's Coastal
Power Plants: Alternative Cooling System Analysis'' (DCN 10-6964), and
EPRI's ``Fish Protection at Cooling Water Intake Structures: A
Technical Reference Manual'' (DCN 10-6813).
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\37\ Impingement rates are related to intake flow, intake
velocity, and the swimming ability of the fish subject to
impingement. Entrainment is generally considered to be proportional
to flow and therefore reduced on a 1-to-1 basis via flow reductions,
as EPA assumes for purposes of national rulemaking that entrainable
organisms are uniformly distributed throughout the source water. EPA
has consistently applied this assumption throughout the 316(b)
rulemaking process (see, e.g., 66 FR 65276 for a discussion of
proportional flow requirements in the Phase I rule or 69 FR 41599)
and continues to believe that it is broadly applicable on a national
scale and is an appropriate assumption for a national rulemaking.
EPA recognizes that this assumption is not necessarily true on a
site specific basis and that relocating or varying the time pattern
of withdrawals may be effective strategies to reduce I&E in some
cases.
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a. Variable Frequency Drives and Variable Speed Pumps
A facility with variable speed drives or pumps operating at their
design maximum can withdraw the same volume of water as a conventional
circulating water pump. However, unlike a conventional circulating
water pump, variable speed drives and pumps allow a facility to reduce
the volume of water being withdrawn for certain time periods. The pump
speed can be adjusted to reduce water withdrawals when cooling water
needs are lower, such as when ambient water temperatures are colder
(and therefore capable of dissipating more heat) or when fewer
generating units are operating. In site visits, EPA found that variable
speed drives and pumps were typically used at units operating below
capacity, such as load following units. For this reason most base load
generating units and continuously operated manufacturing processes
would obtain minimal reductions in flow as a result of these
technologies. EPA estimates that facilities with intermittent water
withdrawals could achieve a 5 to 10 percent reduction in flow.\38\ EPA
is further aware that some facilities need to withdraw water for
cooling even while the facility is not in production, such as
facilities on standby status, or nuclear facilities where the heat
energy generated by fission must still be dissipated while the facility
is out of service.
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\38\ Withdrawals of colder water could allow facilities to
reduce their intake using variable speed drives and pumps, but EPA
does not have data on the efficacy or availability of this approach.
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b. Seasonal Flow Reductions
Seasonal flow reduction refers to the reduction or elimination of a
quantity of water being withdrawn during certain biologically important
time periods. Most facilities that practice seasonal flow reductions do
so in order to reduce entrainment because peak entrainment events are
often seasonal, typically occurring during local spawning season, while
impingement is more sporadic. For example, clupeids species experience
impingement episodes sporadically all throughout the winter and spring.
Largemouth bass, on the other hand, may spawn in the late-spring, which
would thus be a season of
[[Page 22199]]
potentially high entrainment for this species. During this specific
peak entrainment time period, a facility could operate less (or perhaps
not at all) thereby reducing or eliminating the volume of cooling water
withdrawn. This may be accomplished through a combination of variable
speed pumps or shutting down some portion of the pumping system.
Seasonal flow reduction may also consist of operating a once-through
cooling system during part of the year and switching to closed-cycle
during peak entrainment season. Facilities may also choose to schedule
periodic maintenance to occur during these time periods; these
maintenance activities often require the facility to reduce or cease
operations and can be timed to coincide with the most biologically
productive periods. By identifying species of concern at facilities
visited by EPA, the Agency has identified some sites where entrainment
is significant all year long, and other sites where peak entrainment
occurs in as few as three to four months of the year. In addition, not
all power generating facilities in a local area could stop operating at
the same time without interrupting local electricity reliability.
Therefore, not all facilities can utilize seasonal flow reduction
technologies.
c. Unit Retirements
Some power plants have retired units completely or have essentially
ceased all operations but have yet to be formally retired or
decommissioned. Reasons for their inactivity vary,\39\ but the end
result is the facility eliminates the need for cooling water
withdrawals for these units. Similarly, manufacturers may retire
processing units as market demand changes, process lines are moved to
other sites, or production technologies change. Unit closures provide
clear reductions in flow, but the demand for electricity (or other
products) may dictate that production be increased at the facility in
question or another facility altogether; there is usually no guarantee
that the intake flow will be permanently retired. EPA expects flow
reductions due to unit closures could be reasonably included as part of
a facility's I&E mortality reductions for a period of up to 10 years.
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\39\ Note that some generating units are retired for market-
driven reasons (i.e., the unit is no longer considered sufficiently
profitable to operate). They may also be mothballed, placed on cold
storage, or maintained in various other states of operational
readiness.
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d. Alternate Sources of Cooling Water
While not reducing the overall usage of water at a facility, using
an alternate source of cooling water may have the same effect in
reducing impingement and entrainment, as new or additional withdrawals
from surface waters may be reduced. An example is using ``gray'' water
as a source of cooling water; a facility reaches an agreement with a
nearby wastewater treatment plant to accept the WWTP's effluent as a
source of cooling water.\40\ Such alternative sources are limited by
available capacity, consistency of flow, and increasing competition for
these sources of water, and may be more challenging to find for
existing facilities than for new facilities that are not yet fixed in
location.
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\40\ See, for example, EPA's site visit report for PSEG's Linden
Generating Station (DCN 10-6557), which has a capacity of 1230 MW,
35% CUR, and uses 7-8 mgd of gray water as makeup water for its
cooling towers.
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e. Water Reuse
Typically associated with manufacturing facilities, water reuse
(defined as using water for multiple processes) can reduce the volume
of water needed for cooling, process, or other uses. For example, a
facility might withdraw water for non-contact cooling water and then
re-use the heated effluent as part of an industrial process. In effect,
the facility has eliminated the need to withdraw additional water for
the latter process. EPA has observed significant water reuse at
manufacturing facilities, but has not developed national level data for
such reuse due to the range of different manufacturing sectors and the
significant variability in manufacturing processes (during site visits,
it was observed that complex facilities have found it difficult to
assess their specific water reuse). See Section IV for further
discussion on water usage in specific industrial sectors.
f. Closed-cycle Cooling Towers
Closed-cycle cooling systems allow a facility to transfer its waste
heat to the environment using significantly smaller quantities of (or
in some cases no) water. There are two main types of closed-cycle
cooling systems: Wet cooling and dry cooling. Each of these is
described below.
Wet Cooling Tower Systems
In a wet cooling system, cooling water that has absorbed waste
heat, transfers that heat through evaporation of some of the heated
water into the surrounding air and recirculates the cooling water to
continue the cooling process.\41\ This process enables a facility to
re-use the remaining water, thereby reducing the quantity of water that
must be withdrawn from a water body. Because the heat is transferred
through evaporation, while the amount of water withdrawn from the water
source is greatly reduced, it is not eliminated completely because
make-up water is required to replace that lost through evaporation and
blowdown. There are two main types of wet cooling systems: Natural
draft and mechanical. While wet cooling towers reduce withdrawals
relative to once-through systems, they may increase the consumptive use
of water since they tend to rely on evaporation (which is not returned
to the water body) for heat dissipation. When once-through cooling is
used and withdrawals are a significant portion of the waterbody, the
return of heated water may contribute to greater evaporation from the
water body. However, EPA does not have data on the relative magnitude
of these effects. The relative loss of water through evaporation for
closed cycle and once-through systems is site specific, depending on
the exact design of the systems.
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\41\ In addition, a smaller portion of the heat is also removed
through direct contact between the warm water and the cooler
surroundings.
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A natural draft cooling tower is tall \42\ and has a hyperbolic
shape. The height of these towers creates a temperature differential
between the top and bottom of the tower, creating a natural chimney
effect that facilitates heat transfer as heated water contacts rising
air. In contrast, mechanical cooling towers rely on motorized fans to
draw air through the tower and into contact with the heated water.
These towers are likely to be much shorter units than natural draft
cooling towers,\43\ and due to their modular construction can be built
in multiples, but they may require more land area for the same amount
of cooling. Both types of towers require electricity for pumps, while
mechanical draft towers also require electricity to operate the fans;
both electricity needs serve to reduce a facility's net generating
output. Thus the monetary and environmental costs of making up this
reduction in energy efficiency need to be considered. These
environmental costs include human health and welfare effects from
increased air emissions, including the global climate change effects of
increased greenhouse gas output at fossil-fueled plants. Both natural
draft and mechanical cooling towers can operate in freshwater or
saltwater environments. Saltwater applications typically require more
make-up water than freshwater
[[Page 22200]]
applications, making them less efficient in reducing water
withdrawals.\44\ Optimized cooling towers may achieve flow reductions
of 97.5 percent or better and 94.9 percent or better for freshwater and
saltwater sources, respectively.
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\42\ Natural draft towers can be as high as 500 feet or more.
\43\ Mechanical draft towers typically range from 30 to 75 feet
in height.
\44\ Modular cooling tower units provide an additional cooling
tower alternative. Modular cooling towers resemble mechanical
cooling towers, but are portable, typically rented for short-term
periods and quickly assembled.
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Dry Cooling Tower Systems
Dry cooling systems virtually eliminate the need for cooling water
withdrawals.\45\ Unlike wet cooling systems, in dry cooling systems,
waste heat is transferred completely through convection and radiation,
rather than evaporation. Direct dry cooling is much like a car
radiator; turbine exhaust steam passes through tubes or fins and the
condensate is returned for reuse in the turbine. The system is
completely closed to the atmosphere and there is no contact between the
outside air and the steam or the resulting condensate. Due to the heavy
reliance of dry cooling on ambient air temperatures and the lower
efficiency of heat transfer through convection and radiation, dry
cooling towers are much larger and therefore more expensive \46\ than
wet cooling towers for a given cooling load. Dry cooling towers have
been built in areas where limited water supplies exist for either once-
through cooling or wet cooling make-up water, such as the arid
southwestern U.S. Dry cooling is not demonstrated and available for
nuclear facilities, due to the backup cooling systems and related
safety needs required at a nuclear facility.
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\45\ Dry cooling systems do blow down some of the circulating
water within the cooling system to prevent the buildup of materials
within the condenser. However, the volume of makeup water is
extremely low--a dry cooling system typically reduces intake flows
by 98-99 percent over a comparable once-through cooling system.
\46\ The construction and capital costs for dry cooling towers
have been reported as five to 10 times as expensive as wet cooling
towers, and the parasitic load for dry cooling is higher than for
wet cooling. See DCN 10-6679.
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Hybrid Cooling Tower Systems
In certain applications, a facility may choose a hybrid cooling
tower design that incorporates elements of both wet and dry cooling.
Typically, the base of the tower functions as a wet cooling tower and
the upper portion as a dry tower; the most common reason for this
design is to reduce the visible plume emitted from the tower, which is
accomplished by recapturing some of the water vapor evaporated in the
wet portion of the tower. This design is also usually much shorter than
natural draft wet towers, which can also offer plume abatement
controls.
2. Exclusion Technologies To Minimize Impingement and/or Entrainment
Over the last several decades, in addition to flow reduction and
closed-cycle cooling, numerous technologies have been developed in an
effort to minimize impingement and entrainment mortality associated
with cooling water intake systems. The following summarizes the most
widely used technologies as well as the most effective and best
performing technologies. For additional detailed information on these
technologies as well as others, see the TDD, CA Report, and EPRI
report.
a. Screens
i. Traveling Screens
Traveling screens are a technology in place at virtually all
cooling water intake structures. These screens were originally designed
to prevent debris from entering the cooling water system, but also
prevent some fish and shellfish from entering the cooling water system.
Traveling screens have been installed in numerous environmental
conditions: Salt water, brackish water, fresh water, and icy water.
Based on the technical survey, EPA found 93 percent of electric
generators and 73 percent of manufacturers employ traveling screens or
other intake screens. There are many types of traveling screens (e.g.,
through flow, dual flow, center flow). The most common design in the
U.S. is the through flow system. The screens are installed behind bar
racks (trash racks) but in front of the water circulation pumps. The
screens rotate up and out of the water where debris (including impinged
organisms) is removed from the screen surface by a high pressure spray
wash. Screen wash cycles are triggered manually or by a certain level
of head loss across the screen (indicating clogging). By definition,
this technology works by collecting or ``impinging'' fish and shellfish
on the screen. Traveling screens are ideally used with a fish handling
and return system, discussed further in Section VI.B.3 below.
ii. Cylindrical Wedgewire Screens
Cylindrical wedgewire screens, also called ``V'' screens or profile
screens, unlike traveling screens, are a passive intake system.
Wedgewire screens consist of a v-shaped, cross section wire on a
framing system. Slot sizes for conventional traveling screens typically
refer to a square opening (\3/8\'' x \3/8\'') that is punched or woven
into the screen face. Wedgewire screens are constructed differently,
however, with the slot size referring to the maximum distance between
longitudinally adjacent wires. These screens are designed to have a low
through-slot velocity (less than 0.5 ft/sec or 0.15 m/sec) and
typically have smaller slot sizes than a coarse mesh traveling screen.
The entire wedgewire structure is submerged in the source waterbody.
When appropriate conditions are met, these screens exploit physical
and hydraulic exclusion mechanisms to achieve consistently high
impingement reductions (and as a result, impingement mortality
reductions). Wedgewire screens require an ambient current crossflow to
maximize the sweeping velocity provided by the waterbody. The screen
orientation and cross current flow carries organisms away from the
screen allowing them to avoid or escape the intake current. Lower
intake velocities also allow fish to escape from the screen face.
Entrainment reductions can potentially be observed when the screen slot
size is small enough and intake velocity is low enough to exclude egg
and larval life stages.\47\ There is also limited evidence suggesting
that extremely low intake velocities can allow some egg and larval life
stages to avoid the intake due to hydrodynamic influences of the cross
current. Therefore performance is largely dictated by local conditions
that are further dependent on the source waterbody's biological
composition. Costs of wedgewire screens also increases significantly as
slot size and design intake velocity decrease. Wedgewire screens may
also employ cleaning and de-icing systems such as air-burst sparging to
aid in maintaining open intake structures and low intake velocities.
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\47\ Note that this is entrainment exclusion and not necessarily
related to the survival of entrainable organisms. See Section
III.B.2 for more detail.
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According to data from the industry questionnaire, EPA's site
visits, and industry documents, dozens of facilities across the U.S.
employ cylindrical wedgewire screens. However, wedgewire screens are
not feasible for facilities with limited access to source water, such
as shallow water or limited shoreline frontage. Wedgewire screens may
also not be feasible where the size and number of wedgewire screens
would interfere with navigational traffic. As described above,
locations also need to have an adequate source water sweeping velocity.
Most of the performance data for wedgewire screens is based on coarse
mesh slot sizes with an intake velocity of 0.5 feet per second. As it
is extremely difficult to measure
[[Page 22201]]
impingement and entrainment reductions in the field, most performance
data is based on barge studies and lab studies. EPA does not have data
on the performance of fine mesh wedgewire screens on entrainment
survival; therefore EPA has only considered wedgewire screens for
impingement mortality. For additional discussion of the specific design
and operation of cylindrical wedgewire screens, see the TDD. The
following section discusses the importance of mesh size to impingement
and entrainment mortality reductions.
iii. Screen Mesh Size Considerations
Coarse Mesh
Coarse mesh traveling screens are the typical traveling screen
fitted on the majority of cooling water intakes. A large number of
facilities have intake screens with \3/8\-inch (9.5 mm) mesh panels.
This size mesh is common because, as a general rule of thumb, the
maximum screen slot size is never larger than one half of the condenser
tube diameter (the condenser tubing is the narrowest point in the
cooling water system and, as such, is most susceptible to clogging from
debris), and this tubing is typically \3/4\ or \7/8\ inches in
diameter. Mesh of \3/8\-inch (roughly 9.5 mm) does not prevent
entrainment and in the absence of any other precautions can lead to
high mortality of impinged fish. Coarse mesh traveling screens have
been in use by both power plants and manufacturers for more than 75
years and represent the baseline technology. Similarly, the majority of
successful wedgewire installations are coarse mesh.
Fine Mesh
Fine mesh traveling and wedgewire screens are similar to coarse
mesh screens, with the only difference being the size of the screen
mesh. The mesh size of fine mesh screens varies, depending on the
organisms to be protected, but typically range from 0.5 to 5 mm.
Typically, facilities have incorporated fine mesh in an effort to
reduce entrainment. Data in the record demonstrate that entrainment
typically decreases as mesh size decreases. However, slot sizes larger
than 2 mm do not prevent eggs from passing through the screen. Fine
mesh traveling screens have been in use in this industry since the
1980s. EPA estimates as many as 17 percent of existing intakes could
not be expanded in size to accommodate a 2 mm mesh, and as many as 55
percent of existing intakes could not accommodate a 0.5 mm slot size
under conditions of low intake velocities. For these reasons, fine mesh
screens are demonstrated for some locations, but are not the best
performing technologies, and are not available technologies for the
industry as a whole. See Chapter 6 of the TDD for more details.
b. Barrier Nets
Barrier nets are nets that fully encircle the intake area of water
withdrawal, from the bottom of the water column to the surface and that
prevent fish and shellfish from coming in contact with the intake
structure and screens. According to data from the industry
questionnaire (as of the year 2000), at least a half dozen facilities
employ a barrier net. Typically, barrier nets have large mesh sizes
(e.g., \1/2\-inch or 12.7 mm) \48\ and are designed to prevent
impingement. Due to the large mesh size, they offer no reduction in
entrainment. They are often deployed seasonally, wherever seasonal
migrations create high impingement events or to avoid harsh winter
conditions which jeopardize integrity of the net. Barrier nets also
prevent impingement of shellfish on the intake traveling screen.
Shellfish such as crustaceans may pose a unique issue for traveling
screens because the shellfish are not impinged, but rather they may
grab hold of the traveling screen surface and are not removed from the
traveling screen by pressure wash sprays. Barrier nets have been shown
to be particularly helpful in this regard. For this reason, the costs
of options considered today include the costs of barrier nets to
minimize impingement mortality of shellfish.
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\48\ Barrier net mesh sizes vary, depending on the
configuration, level of debris loading, species to be protected, and
other factors.
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c. Aquatic Filter Barriers
Aquatic Filter Barriers (AFBs), such as the Gunderboom Marine Life
Exclusion System (MLES) or simply ``Gunderboom,'' are similar to
barrier nets in that they extend throughout the area of water
withdrawal from the bottom of the water column to the surface. However,
AFBs consist of water permeable fabric panels with small pores (< 20
microns). AFBs reduce both impingement mortality and entrainment
because they present a physical barrier to all life stages. The surface
area of an AFB is quite large compared to a traveling screen, allowing
for extremely low water velocities. The low velocity allows non-motile
organisms to drift away. EPA is aware of one power plant that used an
AFB, but notes that this facility recently ceased operations.\49\ EPA
has updated performance data for AFB for small flow intakes, but does
not have enough data to evaluate the technology at large intakes and in
all waterbodies.
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\49\ This facility ceased operations for reasons other than
impingement and entrainment related to cooling water intake.
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3. Collection and Return
Conventional traveling screens were not designed with the intention
of protecting fish and aquatic organisms that become entrapped against
them. Marine life may become impinged against the screens from high
intake velocities that prevent their escape. Prolonged contact with the
screens may suffocate insufficiently strong species or certain
susceptible life stages of fish. Exposure to high pressure sprays and
other screening debris may cause significant injuries that result in
latent mortality, or increase the susceptibility to predation or re-
impingement. Organisms that do survive initial impingement and removal
are not typically provided with a specifically-designed mechanism to
return them to the water body and are handled in the same fashion as
other screening debris. Other objects collected on the screen are
typically removed with a high-pressure spray and deposited in a
dumpster or debris return trough for disposal. Screens are rotated
periodically based on a set time interval or when the pressure
differential between the upstream and downstream faces exceeds a set
value. Conventional traveling screen systems have been modified to
reduce impingement-related mortalities with collection and return
systems. In simplest form, this is comprised of a return flume or
trough with sufficient water volume and flow to enable impinged
organisms to return to the source water. Return systems should be
designed to avoid predation and latent mortality while organisms are in
the flume, positioned at an appropriate water depth for high survival
of the organisms, located at an appropriate elevation to avoid large
drops of the organisms back to the surface water, and sited to avoid
repeated impingement of the organisms by the intake structure.
Following the 1972 Clean Water Act's requirement to require
technology-based solutions to minimize adverse environmental impacts,
some conventional coarse mesh traveling screen systems were modified to
reduce impingement mortality by removing fish trapped against the
screen and returning them to the receiving water with as few injuries
as possible. The first modified
[[Page 22202]]
screens, also known as ``Ristroph'' screens, feature capture and
release modifications. In the simplest sense, these screens are fitted
with troughs (also referred to as buckets) containing water that catch
the organisms as they rise out of the water and are sprayed off of the
screen. The return component consists of a gentle mechanism to remove
impinged fish from the collection buckets, such as a low-pressure
spray. The buckets empty into a collection trough that returns fish to
a suitable area in the source water body. These modified screens have
shown significant improvements in reducing impingement mortality
compared with unmodified screen systems.
Data from early applications of the ``Ristroph'' screen design
showed that while initial survival rates might be high at some
installations, latent mortality rates were higher than anticipated,
indicating significant injuries could be sustained during the
impingement and return process that were not immediately fatal. Based
on a study conducted by Ian Fletcher in the 1990s (see DCN 5-4387),
industry identified several additional critical screen modifications to
address latent mortality. These include redesign of the collection
buckets to minimize turbulence, addition of a fish guard rail/barrier
to prevent fish from escaping the collection bucket, replacement of
screen panel materials with ``fish friendly'' smooth woven mesh, and a
low pressure wash to remove fish prior to any high pressure spray to
remove debris on the ascending side. The Fletcher analysis also
identified that longer impingement duration, insufficient water
retention in the buckets, and exposure to the air and temperature
extremes could negatively impact fish survival. Finally, these findings
indicate that modified Ristroph screens must be continually rotated
instead of the periodic rotation schedule common with conventional
screen systems. Performance data for modified traveling screens with
fish return systems show low levels of impingement mortality across a
wide variety of water body types and fish species. Therefore, EPA has
concluded modified traveling screens with a fish return system is a
candidate best performing technology for impingement mortality.
For additional and more detailed discussion of the specific design
and operation of these screen modifications, see the TDD.
4. Intake Location and Velocity Caps
Currently, the most common intake location for a cooling water
intake structure is along a shoreline. In some types of waterbodies,
shoreline locations are thought to have the potential for greater
environmental impact because the water is withdrawn from the most
biologically productive areas especially with regards to earlier life
stages. Some facilities employ an offshore intake to withdraw water
from less biologically productive areas to reduce entrainment relative
to intakes located in more productive shoreline areas, though
impingement (and therefore impingement mortality) reductions have also
been observed. Obviously, reduction in impingement mortality and
entrainment depend on intake location at a particular site, but the
greatest potential for reductions is found with far offshore locations
at distances of several hundred feet, something not possible on many
rivers and streams. Both depth and the offshore location must be
evaluated to determine if fish densities and species distribution at
the offshore location are substantially different than those near the
shoreline. Two areas where far offshore locations are commonly used
today include the oceans and Great Lakes.
EPA found most offshore intakes are fitted with a velocity cap.
Velocity caps are a physical structure rising vertically from the sea
bottom and placed over top of the intake pipe. Intake water is
withdrawn through openings in the velocity cap in a manner which
converts the direction of flow from vertical to horizontal. The
horizontal flow provides a physiological trigger in fish to induce an
avoidance response thereby reducing impingement mortality. The velocity
cap further serves to limit the zone of influence of the intake to the
depth level at which the velocity cap is situated, thus affecting only
the life stages that live at that depth. Furthermore, the velocity at
an offshore intake is lower than the velocity of an equivalent sized
intake at the shoreline due to differences in pressure, resulting in a
lower intake velocity at the velocity cap than at a shoreline intake.
Velocity caps are also usually equipped with supports and bar spacing
selected to prevent larger aquatic organisms (e.g., turtles or marine
mammals) from entering the intake pipe. Because velocity caps operate
under the principle that the organisms can escape the current, velocity
caps do not offer entrainment reductions over and above those achieved
by being located offshore. Reductions in entrainment observed with
velocity caps occur due to the difference in organism densities in far
offshore deep water compared to a surface intake at the shoreline.
For additional and more detailed discussion of the specific design
and operation of offshore intake locations and velocity caps, see the
TDD.
5. Reduced Intake Velocity
Impingement mortality can be greatly reduced by reducing the
through-screen velocity in any screen. Reducing the rate of flow of
cooling water through the screen (through-screen velocity) to 0.5 ft/
sec or less reduces impingement of most fish because it allows them to
escape the intake current. (See 66 FR 65274 and DCN 2-028A, EPRI's
``Technical Evaluation of the Utility of Intake Approach Velocity as an
Indicator of Potential Adverse Environmental Impact Under Clean Water
Act 316(b).'') Limited lab studies indicate that entrainment also may
decrease as through-screen velocity decreases and that through-screen
velocity may have an effect on entrainment survival rates, although
such data is extremely variable by species (see DCN 10-6802 and DCN10-
6803). As a result, some Phase II facilities have designed and operate
their modified traveling screens or wedgewire screens so as not to
exceed a through-screen velocity of 0.5 ft/sec. In addition, for the
reasons described in Section VI.B.2, aquatic filter barriers and
velocity caps \50\ are likely to have velocities of 0.5 ft/sec or less.
Swim speed studies demonstrate that for most facilities, an intake
velocity of 0.5 feet per second or less results in 90 percent or better
reductions in impingement mortality for most species. (EPA notes that
preliminary results from recent studies of fine mesh screens suggest
that at even lower intake velocities such as 0.25 feet per second,
there may be some hydrodynamic influences that reduce entrainment
mortality even more, because flow dynamics are nonlinear. It is unclear
whether such observations hold true when cooling water withdrawals
(water volumes) are large.) Therefore, EPA has concluded reduced intake
velocity is a candidate best performing technology for impingement
mortality.
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\50\ Velocity as measured at the velocity cap opening.
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C. Technology Basis for Today's Proposed Regulation
As described in the previous section, EPA examined the full range
of technologies that reduce impingement and/or entrainment, and
evaluated these technologies based on their efficacy in reducing
impingement and entrainment, availability, and cost. Based on an
assessment of these factors, EPA has
[[Page 22203]]
identified three best performing technologies for further analysis as
the basis for today's proposed rule: Modified traveling screens with a
fish return (for fish impingement), barrier nets (for shellfish
impingement on tidal waters), and mechanical draft wet cooling towers
(for impingement and entrainment at new units). Although EPA has
identified velocity reduction to 0.5 feet per second or less as a
candidate best performing technology for impingement mortality, EPA is
not proposing reduced intake velocity as BTA because it is not
available at all facilities, but is allowing facilities to comply with
intake velocity of 0.5 feet per second or less where available.
EPA has concluded that modified traveling screens, such as Ristroph
screens and equivalent modified traveling screens are a best performing
technology for impingement mortality. These screens use coarse size
mesh with collection buckets designed to minimize turbulence, a fish
guard rail/barrier to prevent fish from escaping the collection bucket,
``fish friendly'' smooth woven mesh, and a low pressure wash to remove
fish prior to any high pressure spray to remove debris on the ascending
side. The fish removal spray must be of lower pressure and the fish
return must be fish friendly and provide sufficient water and minimize
turbulence. Modified traveling screens must generally be continually
rotated to obtain the highest reductions in impingement mortality. As
discussed in Section III, traveling screens with post-Fletcher
modifications achieve a monthly impingement mortality of 31 percent
mortality (performance corresponding to the 95th percentile of the beta
distribution) under conditions of 48 hour or less holding times. The
use of the 95th percentile is consistent with the convention EPA has
used for monthly average limitations in the effluent guidelines program
(i.e., for pollutant discharges). In developing the monthly average
standard proposed for this rule, EPA has taken into account the
reasonable anticipated variability in impingement mortality that may
occur at a well-operated facility. Variability occurs due to changes in
seasons, differing intake locations, higher mortality of certain
species, and speciation found in different water bodies.
In contrast to the monthly average, which is adjusted to reflect
month-to-month variability in performance of the technology, EPA has
not included an upward adjustment of the annual average \51\ standard
to account for year-to-year variability. The annual average standard
requires that impingement mortality not exceed 12 percent, calculated
as the average of monthly impingement mortality for 12 consecutive
months as determined by the Director. The 12 percent value corresponds
to the long-term average performance of the technology that EPA has
identified as BTA, based on available data from eight episodes of
sampling collected on three different waterbody types over all seasons
(see Chapter 11 of the TDD for more information). EPA expects
facilities to track their compliance with the annual average standard
on an ongoing basis, and to proactively modify their technology or
operations when any individual monthly average suggests that they may
be in danger of exceeding the annual average standard in the future.
EPA recognizes that some variability in the annual average is
inevitable, and thus the only way to consistently achieve the 12
percent annual standard is to target a better level of performance as
the long-term average performance. While EPA's data show a long-term
average performance of 12 percent impingement mortality for the BTA
technology, EPA believes that by continuously monitoring and adaptively
adjusting the operation of the technology, facilities can achieve a
better long-term performance than is documented in the data, and thus
consistently meet the annual average.
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\51\ The annual average should not be confused with a rolling
average of the preceding 12 months; EPA has specified in the rule
language at Sec. 125.96 that the annual average means 12
consecutive months as specified by the Director. EPA expects that
compliance with the annual average standard would be determined once
each calendar year.
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EPA also considered applying a confidence or tolerance limit to the
long-term average in deriving the annual average standard. EPA rejected
this approach because EPA believes that facilities can achieve better
long-term performance than documented in the data by maintaining tight
control on their technology and operations and adaptively managing the
technology to achieve the best possible performance. While EPA has not
included any additional costs for this adaptive management, EPA
believes that such adaptive management should be part of the routine
maintenance and operation of the technology and additional costs should
not be necessary.
EPA has occasionally used annual limits in the effluent guidelines
program (most recently for the pulp and paper industry category (40 CFR
430, promulgated in 1998) and has previously not included a variability
factor for annual limits. Thus, EPA's proposed approach to calculating
the annual standard for mortality impingement is consistent with past
practice. EPA requests comment on its proposed approach for calculating
and implementing the annual standard.
This technology does not minimize adverse environmental impacts
associated with entrainment, and does not specifically address
impingement mortality of shellfish.
EPA selected the seasonal deployment of barrier nets on estuaries
and oceans as the best performing technology for minimizing the
impingement mortality of shellfish (crustaceans) because no other
technology has been identified that is available, demonstrated, and
feasible. EPA did not select wedgewire screens as a candidate
technology for impingement mortality because wedgewire screens are not
available and feasible for all existing facilities. Wedgewire screen
performance requires an adequate crossflow of the source water that is
not present in all waterbodies. Wedgewire screens also require a
minimum water depth in order to fully submerge the screens; the
requisite depth and space to submerge the screens is not available at
all locations, and further may pose an obstacle to navigation. However,
where passive screens such as cylindrical wedgewire screens are
feasible, data in the record shows they would perform equally as well
or better than seasonal deployment of barrier nets. EPA has included a
provision in the proposed regulation that specifies that passive
screens meet the IM requirement for shellfish.
One technology for reducing impingement mortality as well as
reducing entrainment mortality is wet cooling towers. Mechanical
cooling towers achieve flow reductions of 97.5 percent for freshwater
and 94.9 percent for saltwater sources by operating the towers at a
minimum of 3.0 and 1.5 cycles of concentration, respectively. Based on
the high levels (greater than 95 percent on average) of flow reduction
obtained by optimized cooling tower operation, EPA has identified wet
cooling towers as a candidate best performing technology for both
impingement mortality and entrainment mortality for new units at
existing facilities. As discussed further below, EPA is not proposing
cooling towers as BTA for existing facilities (other than new units)
because it is not available on a national basis. As described in
Section VI.B, other technologies are demonstrated, but are not the best
performing technologies and/or are not
[[Page 22204]]
available technologies for the industry as a whole.
Although, EPA's record shows numerous instances of existing
facility retrofits to closed-cycle, EPA has not identified it as BTA
for the reasons discussed below. EPA has also not identified any other
available and demonstrated candidate technology for entrainment
mortality that is available on a national basis; see Section VI.B and
the TDD for other entrainment technologies that may be available on a
site-specific basis. EPA did not select the other flow reduction
technologies such as variable speed drives and seasonal flow reductions
as the technology basis for entrainment mortality because these
technologies are not feasible for all facilities. Further, EPA has not
identified a basis for subcategorizing existing facilities for where
these flow reduction technologies are feasible, because their seasonal
operation depends on the site-specific biology of the facility. EPA did
not select relocation of a shoreline intake to far offshore as a
technology basis because this technology is not feasible for all
facilities. Even if EPA subcategorized by water body type (i.e., intake
location), the performance of wet cooling towers for entrainment
mortality is at least three times that of a far offshore intake.
Therefore relocation of the intake is not the best performing
technology for minimizing entrainment mortality.
D. Options Considered for Today's Proposed Regulation
After careful consideration of the technologies available as
described in Section VI.C, EPA developed four primary options based on
these technologies for today's proposed rule. Three of the options
would require the same impingement mortality standards, but would vary
the approach to entrainment mortality controls. The fourth option would
allow both impingement and entrainment mortality controls to be
established on a site-specific BPJ basis for facilities with a DIF less
than 50 MGD. The options are described briefly below, followed by a
discussion of EPA's evaluation of each option as BTA.
1. Option 1--Uniform Impingement Mortality Controls at All Existing
Facilities; Site-Specific Entrainment Controls for Existing Facilities
(Other Than New Units) That Withdraw Over 2 MGD DIF; Uniform
Entrainment Controls for All New Units at Existing Facilities
Under this option, all existing facilities withdrawing more than 2
MGD would be required to meet either the design or the performance
standard for impingement mortality. Entrainment controls would be
established by the permitting authority on a case-by-case basis taking
into account those factors at a particular facility that are specified
in today's proposal and the information required by the existing permit
regulations at Sec. 122.21(r)(1)-(8) for all facilities with at least
2 MGD DIF. In addition, under EPA's CWA sections 301, 308, 316(b), and
402 authority, in the case of facilities withdrawing greater than 125
MDG AIF (actual intake flow), the site-specific determination of BTA
would be based on a submission of certain other required information.
The proposal would amend the permit application requirements at Sec.
122.21(r)(9)-(11) to require the facility to prepare an Entrainment
Characterization Study that would fully characterize the amount of
entrainment at the facility. (See below for more details about the
study). In addition, under the proposal, the facility would provide
detailed information on the other factors relevant to the Director's
site-specific BTA determination. These would include information
concerning the technologies available for control of such entrainment,
the costs of controls, the non-water quality impacts of such controls,
and both the monetized and non-monetized benefits of such controls. The
CWA requires, and EPA encourages, the public to have a role in the
permitting process; therefore EPA has also included meaningful public
opportunity for participation in the site-specific decision making to
help ensure the soundness of both the information and subsequent
determinations.
a. Impingement Mortality Controls
As described earlier in this section, traveling screens have
undergone a number of technological improvements over the years and
modern screens have proven to be highly effective in promoting the
survival of impinged organisms. The proposed rule requires the use of
state-of-the-art screens with fish buckets, a low pressure spray wash,
a dedicated fish return line, etc., but is not specifying any
particular screen configuration, mesh size or screen operations, so
long as facilities can consistently meet the numeric impingement
mortality limits (impingement mortality also includes a design standard
for shellfish). EPA is also not specifying additional design or
operational criteria to promote development of improved technologies,
and to allow facilities to use variations such as dual flow traveling
screens and drum screens.
EPA did not select intake velocity as the sole technology basis for
impingement mortality controls because, although the performance of 0.5
feet per second intake velocity is slightly better than the selected
technology, the intake velocity is not available or feasible for all
existing facilities (see Chapter 6 of the TDD). However, EPA has long
recognized the relationship between impingement and intake velocity.
EPA conducted an analysis of fish swim speeds in the Phase I rule (see
66 FR 65274) and concluded that a design through-screen velocity of 0.5
feet per second would be protective of 96% of motile organisms. As a
result, a facility may chose to comply with the impingement mortality
standards in today's proposed rule by instead demonstrating that the
through-screen design velocity does not exceed 0.5 feet per second, or
by demonstrating that the actual average intake velocity does not
exceed 0.5 feet per second.
While the data shows the majority of healthy motile organisms would
be protected by a maximum intake velocity of 0.5 feet per second, some
species would not be adequately protected. Some facilities employ
traveling screens, but do not have fish friendly modifications such as
a fish handling and return system. EPA is concerned that some
facilities would comply with the impingement mortality requirements by
the intake velocity compliance alternative, and would continue to
operate unmodified traveling screens. This is particularly a concern
where the traveling screens are located in a forebay, potentially
resulting in entrapment of any impinged organisms. Therefore, EPA is
considering a provision that would require facilities to either
demonstrate that the species of concern are adequately protected by the
maximum intake velocity requirements, or to employ specific fish
friendly protective measures including, at a minimum, a fish handling
and return system. EPA solicits comment and data on such a provision.
EPA did not select wedgewire screens as the technology basis for
impingement mortality controls because wedgewire screens are not
available and feasible for all existing facilities. EPA also did not
need to include wedgewire screens as a compliance alternative because
wedgewire screens designed with an intake velocity of 0.5 feet per
second can demonstrate compliance with the impingement mortality limits
based on the intake velocity as just described. EPA did not select flow
reduction by retrofit to closed-cycle cooling as the technology basis
for impingement mortality because closed-cycle cooling
[[Page 22205]]
costs more than 10 times that of modified traveling screens with a fish
return system. In other words, modified traveling screens with a fish
return system and closed-cycle cooling are comparable in impingement
mortality performance, but modified traveling screens with a fish
return system is more cost-effective than flow reduction at preventing
impingement mortality. EPA is not including wet cooling towers as a
compliance alternative (e.g., a pre-approved technology) because EPA's
data shows existing facilities that retrofit to a closed-cycle cooling
system have an intake velocity of less than 0.5 feet per second. As a
practical matter, make-up water withdrawals are made at such low
velocities that facilities with closed-cycle can demonstrate compliance
with the alternative reduced intake velocity to meet the impingement
mortality limits. For estuaries and oceans, EPA is proposing seasonal
deployment of barrier nets on estuaries as the technology basis for
minimizing the impingement mortality of shellfish (crustaceans) because
no other technology has been identified that is available,
demonstrated, and feasible. As noted previously, use of wedgewire
screens (along with the limitations on intake velocity) obviates the
need for barrier nets.
b. Entrainment Controls
The proposal would require consideration of site-specific
entrainment controls for each facility above 2 MGD DIF. EPA considered
proposing no further controls to address entrainment mortality, and to
rely instead only on the BTA impingement mortality controls, which
would achieve up to a 31 percent reduction in total AEI. EPA has not
selected this option as the basis for national BTA because EPA believes
that some facilities may be able to do more to control entrainment and
that requiring a structured site-specific analysis of candidate BTA
technologies for entrainment control will allow the Director to
determine where it is appropriate to require such controls. However,
one outcome of the site specific analysis may be that the Director
would determine that no other technologies beyond impingement control
meet the criteria for selection as BTA, because no other technologies
are feasible and/or their benefits do not justify their costs. EPA
requests comment on the option of basing national BTA on impingement
controls only and dropping the specific requirement for a structured
site-specific analysis of entrainment BTA options, as discussed below.
In the case of site-specific entrainment controls for facilities
withdrawing greater than 125 MGD AIF, EPA's proposal would, in
addition, require these facilities to develop and submit an entrainment
characterization study for use by the Director in establishing site-
specific BTA. See Section V.F for more on development of the 125 MGD
threshold. (Facilities under the 125 MGD AIF threshold must still
provide certain water body and water population information under the
current permit applications requirements at Sec. 122.21(r)). An early
step in conducting the entrainment characterization study is the
preparation of an entrainment mortality data collection plan, which
must be submitted to the Director for review and comment before
implementation. The entrainment mortality data collection plan would
include, at a minimum, the specific entrainment monitoring methods,
taxonomic identification, latent mortality identification,
documentation of all methods, and quality assurance/quality control
procedures for sampling and data analysis appropriate for a
quantitative survey. EPA would also require peer review of the
entrainment mortality data collection plan. Peer reviewers would be
selected in consultation with the Director who may consult with EPA and
federal, State, and Tribal fish and wildlife management agencies with
responsibility for fish and wildlife potentially affected by the
cooling water intake structure(s).
The Entrainment Characterization Study would include information
already collected to meet current Sec. 122.21(r)(4) requirements. In
addition, under the new permit application requirements proposed for
Sec. 122.21(r)(5)-(12), the facility would submit certain additional
site-specific information. This would include an engineering study of
the technical feasibility and incremental costs of candidate
entrainment mortality control technologies. The facility would also
study, evaluate, and document: the technical feasibility of
technologies at a minimum including closed-cycle cooling and fine mesh
screens with a mesh size of 2 mm or smaller; engineering cost estimates
of all technologies considered; any outages, downtime, or other impacts
to revenue along with a discussion of all reasonable attempts to
mitigate these cost factors; and a discussion of the magnitude of water
quality and other benefits, both monetized and non-monetized, of the
candidate entrainment mortality reduction technologies evaluated.
Finally, the information must include a discussion of the changes in
non-water quality factors attributed to technologies and/or operational
measures considered, including but not limited to increases and
decreases in the following: energy consumption; thermal discharges; air
pollutant emissions including particulates and associated human health
and global climate change impacts; water consumption; noise; safety
(e.g., visibility of cooling tower plumes, icing); grid reliability,
and facility reliability. See Section IX for a thorough discussion of
these study requirements.
Under this option, it is EPA's expectation that the Director would
review the candidate technologies for entrainment mortality control
that at a minimum includes closed-cycle cooling and fine mesh screens.
In the decision about what additional entrainment controls (if any) to
require, the Director would consider all of the facility-specific
factors described above. At a minimum, the Director must provide a
discussion explaining how issues concerning local energy reliability,
air emissions or land availability insofar as they relate to the
feasibility of adoption of a particular entrainment technology,
remaining useful plant life, and the relationship of social benefits to
social costs were addressed in the site-specific determination. Under
the proposal, the Director must issue a written explanation for the
basis of the BTA determination for each facility. EPA also expects the
written explanation would provide a review of the social costs (and not
just the facility costs (see chapter 11 of the EA) of the various
technologies; a review of the potential reductions in entrainment and
entrainment mortality; and a review and analysis of monetized and non-
monetized benefits).
Under Option 1, new units at an existing facility that withdraws
more than 2 MGD would have requirements similar to the requirements of
a new facility in Phase I. Under this option, new units would be
required to reduce flow commensurate with closed-cycle cooling for the
new unit. Under the proposal, as with Track II of the Phase I rule, a
facility could demonstrate compliance with entrainment control
requirements by establishing reductions in entrainment mortality for
the new unit that are 90 percent of the reductions that would be
achieved by closed-cycle cooling.
[[Page 22206]]
2. Option 2--Impingement Mortality Controls at All Existing Facilities
That Withdraw Over 2 MGD DIF; Require Flow Reduction Commensurate With
Closed-Cycle Cooling by Facilities Greater Than 125 MGD DIF and at New
Units at Existing Facilities
Under Option 2, all in-scope existing facilities would be required
to achieve the numeric impingement mortality limits described in Option
1 above. In addition, this option would require flow reduction
commensurate with closed-cycle cooling by facilities greater than 125
MGD DIF and at new units. Option 2 explores using the facility size, in
terms of design intake flow (DIF), as a factor for establishing
different BTA for different subcategories. EPA's analysis shows that a
DIF of 125 MGD would be an appropriate threshold for this purpose; see
Section V. For all facilities that withdraw over 2 MGD but less than or
equal to 125 MGD DIF, entrainment controls would be determined by the
permitting authority on a case-by-case basis taking into account the
factors at a particular facility. Facilities greater than 125 MGD DIF
would not submit Entrainment Characterization Studies (because under
this option this rule would have already determined that closed cycle
is BTA for that facility), but all facilities would still submit Sec.
122(r)(2)-(r)(7) to the Director to inform the BTA determination as
described in Option 1. Requirements for new units at an existing
facility would be the same as described in Option 1.
EPA also considered a variation of this option that uses 125 MGD
Actual Intake Flow (AIF) rather than 125 MGD Design Intake Flow (DIF)
as the threshold. Setting the threshold at 125 MGD AIF would allow a
Permit Director to treat differently those facilities that are above
125 MGD on a DIF basis but below 125 MGD on an AIF basis relative to
today's Option 2. EPA traded off introducing more flexibility at those
facilities for simplicity of implementation (DIF is static), but
solicits comment on both the threshold and the flow basis for this
option.
The technology basis for entrainment mortality controls for
facilities greater than 125 MGD DIF under this option would be wet
cooling towers as described in Section VI.B. The record shows optimized
wet cooling towers achieve flow reductions of 97.5 percent and 94.9
percent for freshwater and saltwater sources, respectively. Optimized
operation of wet cooling towers would be demonstrated through flow
monitoring and conductivity measurements. Alternatively, this option
would allow facilities to demonstrate flow reductions commensurate with
closed-cycle cooling based on optimized wet cooling towers.
As part of this option, EPA would provide flexibility to the
Director to establish compliance timelines for each existing facility
to mitigate grid reliability and local electricity reliability. Under
this option, most existing facilities would have no more than 10 years
to complete the retrofit to closed-cycle cooling. Under this option the
Director would determine when and if any such schedule for compliance
is necessary, and if the facility is implementing closed-cycle as soon
as possible. This provision would give the Director the discretion to
provide nuclear facilities with no more than 15 years to complete the
retrofit, because all nuclear facilities are baseload generating units
and the additional flexibility in timelines would further mitigate
energy reliability, and because the retrofits at these types of
facilities in particular involve additional complexities and safety
issues. The Director would have the discretion to provide manufacturing
facilities with no more than 15 years to complete the retrofit due to
the complexity of manufacturing facilities, multiple process units and
product lines, and to allow consideration of production schedules in
setting such a timeline.
3. Option 3--Establish Impingement Mortality Controls at All Existing
Facilities That Withdraw Over 2 MGD DIF; Require Flow Reduction
Commensurate With Closed-Cycle Cooling at All Existing Facilities Over
2 MGD DIF
Under this option, all in-scope existing facilities would be
required to achieve numeric impingement mortality limits as described
in Option 1 above. In addition, this option would require flow
reduction commensurate with closed-cycle cooling by all facilities
(including new units at existing facilities) as described in Option 2.
This option would similarly authorize the Director to establish
compliance timelines for each existing facility to mitigate grid
reliability and local electricity reliability as described in Option 2
above. Requirements for new units at an existing facility would be the
same as described in Option 1.
4. Option 4--Uniform Impingement Mortality Controls at Existing
Facilities With Design Intake Flow of 50 MGD or More; BPJ Permits for
Existing Facilities With Design Intake Flow Between 2 MGD and 50 MGD
DIF; Uniform Entrainment Controls for All New Units at Existing
Facilities
Under Option 4, only in-scope existing facilities with a design
intake flow of 50 MGD or more would be required to comply with uniform
national impingement regulatory requirements as described in Option 1
above. In-scope facilities with a design intake flow less than 50 MGD
would not be subject to the national impingement requirements in
today's proposed rule but would continue to have their 316(b) permit
requirements established on a case-by-case, best professional judgment
basis. In the case of an existing facility below 50 MGD that adds a new
unit, the flow associated with the new unit would be subject to the
uniform entrainment requirements based on closed cycle cooling.
Finally, all existing facilities withdrawing in excess of 2 MGD of
design intake flow would be subject to entrainment controls established
on a site-specific basis.
EPA considered additional thresholds, subcategories, and other
factors to explore other options; see Chapter 7 of the TDD for more
information. In particular, EPA considered an approach that required
impingement mortality controls only, but is not proposing such an
approach because it would only address one-third of the mortality due
to impingement and entrainment on a nationwide basis and EPA believes
there is value in the structured site-specific entrainment BTA
determination required in Option 1. As discussed in Section VI.E, EPA
is aware of technologies that can further reduce entrainment mortality
for some facilities. EPA also considered an approach that would
establish both impingement and entrainment mortality requirements on a
case-by-case basis taking into account the factors at a particular
facility, but is not proposing such an approach because there are low-
cost technologies for impingement mortality that are available,
feasible, and demonstrated for facilities on a national basis. EPA
requests comment on these and the other approaches discussed in Chapter
7.
E. Option Selection
EPA is proposing Option 1 as best technology available for
minimizing adverse environmental impact under section 316(b) of the
CWA. As previously explained, in evaluating
[[Page 22207]]
technologies that reduce impingement or entrainment mortality as the
possible basis for section 316(b) requirements, EPA assessed a number
of different technologies. Based on this technology assessment, EPA
concluded that closed-cycle cooling reduces impingement and entrainment
mortality to the greatest extent.
But EPA has determined that closed cycle cooling is not the ``best
technology available'' for this proposal. After considering all of the
relevant factors, EPA proposes that it should not establish a uniform
BTA entrainment standard based on closed-cycle cooling for existing
facilities other than for new units. Instead, for existing facilities
other than new units, EPA is proposing that the permitting authority
should establish BTA entrainment mortality controls on a site-specific
basis. Site-specific proceedings are the appropriate forum for weighing
all relevant considerations in establishing BTA entrainment mortality
controls as discussed in section F below.
EPA proposes to reject closed-cycle cooling as the basis for
national entrainment controls and choose an option under which the
permitting authority would establish entrainment controls on a site-
specific basis after considering specified factors. EPA concluded that
closed-cycle is not the best technology available for minimizing
adverse environmental impact on a national basis. The record shows that
closed-cycle cooling is not practically feasible in a number of
circumstances. While EPA cannot identify with precision the extent of
these limitations on installation on closed-cycle on a nation-wide
basis, EPA knows that the circumstances are not isolated or
insignificant. In light of this, EPA decided that it should not
establish closed-cycle cooling as the presumptive BTA entrainment
control. Instead, entrainment controls should be determined in a site-
specific setting where the opportunity for local community input in
decision-making process will be maximized.
Four factors, in particular, led EPA, for this proposal, to reject
a uniform standard based on closed-cycle cooling and illustrate why
site-specific standard setting is the proper approach here. These
factors are energy reliability, air emissions permits, land
availability, and remaining useful plant life. Further explanation is
provided below as to why these factors support establishing BTA
entrainment mortality control on a site-specific basis as discussed in
section F below.
As noted, the Supreme Court in its Entergy decision determined that
EPA may permissibly consider the benefits, both quantitative and
qualitative, derived from reductions in the adverse environmental
impacts associated with cooling water intake structures and the costs
of achieving them and determine the extent of reductions warranted
under the circumstances. Further, E.O. 13563 directs agencies, to the
extent permitted by law, to propose or adopt a regulation only upon a
reasoned determination that its benefits justify its costs (recognizing
that some benefits and costs are difficult to quantify). E.O. 13563,
Sec. 1(b)(1).
Pursuant to the principles spelled out in the Executive Order, EPA
has assessed costs and benefits for its proposed regulatory option and
has reasonably determined that the benefits of its proposed rule
justify the costs. EPA has analyzed the social cost of this rule to be
$384 million annually. New unit requirements would cost $15 million per
year. As will be described in more detail below, there are significant
benefits associated with the proposed rule. These benefits include the
annual reduction in impingement of 615 million age-one equivalents. In
addition, there are important other benefits that EPA was not able to
fully quantify such as reductions in impingement and entrainment at new
units, impacts to many shellfish species, and non-use values associated
with the vast majority of fish and shellfish. The rule would also
require establishing site-specific entrainment control through a
process in which specific environmental conditions and the localized
benefits of entrainment reductions will be assessed along with the
costs of controls. The information generated in the required studies
would enhance the transparency of decision-making, and the opportunity
for meaningful public participation and ensure decision-making based on
the best available data. Overall, these requirements will foster
protection and restoration of healthy aquatic ecosystems that have
important commercial, recreational, aesthetic and cultural values to
their surrounding communities. Many of the benefits that would result
from the rule are not quantified, and as a result the Agency's
quantitative benefits analysis underestimates the totality of the
rule's benefits. Based on the record, EPA has determined that the
proposed impingement and entrainment mortality controls will result in
benefits that justify the costs of the rule.
EPA would also note that its valuation of the benefits is not yet
complete. For example, EPA's analysis does not fully quantify or
monetize certain potentially important categories of benefits, such as
existence values for threatened and endangered species, secondary and
tertiary ecosystem impacts, benthic community impacts, shellfish
impacts and the impacts arising from reductions in thermal discharges
that would be associated with closed cycle. Changes in fish assemblages
due to impingement, entrainment and thermal effects are also not fully
valued. These categories of benefits that are not fully valued are
often referred to as non-use benefits: those benefits people derive
absent a use or activity, such as fishing; the value one places on
knowing that an aquatic ecosystem is healthy is a non-use value. Non-
use benefits could be more completely evaluated than they have been to
date. EPA intends to characterize these benefits more fully through the
use of a stated preference survey of the general population and will
consider the results of this survey analysis in development of the
final rule. Although not discussed in this preamble, EPA also conducted
an alternative benefits analysis that is suggestive of the potential
for a more complete analysis to result in monetary benefits that are
much more in line with social costs (see chapter 9 of the EEBA). These
factors all lend further support to EPA's conclusion that benefits
associated with the proposal justify its costs.
EPA is proposing that the permitting authority would consider
social costs and benefits on a site specific basis in establishing
entrainment mortality controls. This approach is consistent with the
direction of E.O. 13563 and supported by several considerations.
On the basis of currently available information, a national
evaluation of benefits no matter how accurate would necessarily fail to
account for the variations in benefits from location to location. A
national assessment would tend to mask variations in benefits and costs
from different geographical locations for different water bodies. Thus
for example, some fish species at coastal facilities have biological
spawning attributes that differ from those at other locations. The
proportion of the receiving water withdrawn for cooling may also vary
among sites. The values that communities place on their resources may
vary from site to site. As a consequence, for example, one ecological
environment may experience large masses of hardier eggs subject to
potential entrainment while another will have fewer but less hardy eggs
susceptible to entrainment. The resulting differences in the value of
reduced entrainment--which may be dramatic for some sites--necessarily
disappear in a national aggregation of
[[Page 22208]]
results. The Agency has decided this masking of variation in benefits
supports a requirement to consider the localized benefits of
entrainment control technologies in the site-specific process to
establish entrainment mortality controls.
Today's proposed rule establishes requirements based on closed-
cycle cooling for new units added to an existing facility that are not
a ``new facility'' as defined at Sec. 125.83. The requirements for new
units are essentially the same as the requirements for a new facility
in the Phase I rule.
EPA also considered a variation of Option 1 that would exclude
existing facilities (except existing facilities that add a new unit)
with a design intake flow under 50 MGD from the national impingement
mortality requirements of today's proposal (Option 4). These smaller
facilities would continue to be permitted on a case-by-case, best
professional judgment basis for both impingement and entrainment
controls. Under this option, 98.9 percent of the monetized benefits of
Option 1 are realized. In addition, almost all small businesses would
be excluded from the impingement requirement of the national rule,
thereby reducing impacts of the national rule to small businesses. The
cost of Option 4 would result in savings of $57 million over Option 1.
EPA rejected Option 4 for the proposal as BTA because EPA found
that Option 1 is available, feasible, and demonstrated for all in-scope
facilities on a national basis. Moreover, EPA analysis showed that
economically Option 1 does not have a significant impact on a
substantial number of small entities, including those that would be
exempted from the national impingement mortality controls under Option
4. Of the 13 full-facility closures discussed below in Section VII,
none are predicted to be small businesses. Additionally, the analysis
performed under the Regulatory Flexibility Analysis showed that under
Option 1, five to six small entities would incur costs exceeding 1
percent of revenue and 3 small entities would incur costs exceeding 3
percent of revenue. As percentages of the estimated total of small in-
scope entities (56-96 small in-scope entities, see above), these small
entities represent 5-13 percent of small in-scope entities at the 1
percent of revenue threshold, and 3-5 percent of small in-scope
entities at the 3 percent of revenue threshold.
Option 4 is similar to the final determination with respect to the
Phase III rule, which relied on BPJ to determine impingement and
entrainment BTA for all facilities with DIF less than 50 MGD. Unlike
the Phase III determination, Option 4 would not rely on BPJ for new
units at existing facilities or manufacturing facilities with DIF
greater than 50 MGD. This is consistent with the recommendations of the
Small Business Advocacy Review Panel for the Phase III rule, which
noted that an applicability threshold in the range of 20 to 50 MGD
would remove a significant number of Phase III facilities, but only a
small percent of flow, from coverage under national requirements, and
recommended that EPA analyze a range of potential thresholds,
particularly those between 20 and 50 MGD. EPA is also aware of concerns
that even though Option 1 by itself does not have a significant adverse
impact on a substantial number of small entities, many of the small
entities affected by the rule, particularly those in the electric power
sector, are subject to cumulative impacts from a number of other major
regulations that will likely have to be implemented in the same time
frame as this rule. For the final rule, EPA will also evaluate the
relative costs and benefits of Option 4, once it has more complete
benefits information, including results from its WTP Survey on impacts
to fish populations. EPA solicits comment on Option 4 and the impacts,
including the cumulative impacts of today's proposal on small entities
generally. EPA also requests comment on whether, if Option 4 were
adopted for the final rule, it should include uniform national
requirements for new units at existing facilities with DIF less than 50
MGD based on closed-cycle cooling.
F. Four Factors Support EPA's Decision To Establish Site-Specific BTA
Entrainment Controls for Existing Facilities
The four key factors that support determining entrainment mortality
controls on a site-specific basis (except with respect to new units)
and rejecting Options 2 and 3 are energy reliability, increased air
emissions, land availability, and remaining useful life. First, EPA
recognized that there may be potential adverse consequences to the
reliability of energy delivery on the local level from the installation
of cooling towers. Second, EPA also is aware that increased air
emissions may be associated with increased combustion of fossil fuel as
the result of installation of closed cycle cooling, and additional PM
formulation associated with plume drift (even with plume abatement
technology). These increased air emissions have human health, welfare,
and global climate change impacts which must be considered.
Furthermore, it may be difficult or impossible to obtain air permits
for cooling towers at existing facilities located in nonattainment
areas or attainment areas with maintenance plans. Third, EPA has
identified land availability concerns that might limit the feasibility
of the installation of cooling towers on a site-specific basis.
Finally, EPA concluded that there are circumstances in which
construction and installation of cooling towers might not be warranted
given the remaining useful life of a particular facility. How all of
these factors support the Agency's conclusion that site-specific, not
national, entrainment controls for most existing facilities except
those installing new units is discussed in detail below.
1. Energy Reliability Should Be Considered on a Localized Basis
During EPA's site visits, several urban areas were identified where
the existing transmission system would not be able to transfer
sufficient electricity during periods of extended downtime. This
limitation to reliability occurs even when a surplus of electricity can
be generated within the same NERC region. For example, EPA identified
localized circumstances in Los Angeles and Chicago where an extended
outage of one or more generating units could not be readily replaced by
excess capacity in nearby areas. Currently available models are not
able to predict localized impacts, and instead are limited to measures
of reserve capacity in broader geographic regions. This uncertainty
about the extent and likelihood of local reliability impacts is an
important consideration in the decision to propose requiring site-
specific development of section 316(b) entrainment requirements.
One approach EPA could have adopted in today's proposed rule would
have been to establish a uniform entrainment requirement and then to
address these local reliability concerns by providing permitting
authorities the flexibility to establish extended compliance timelines
(i.e., 10 to 15 years) (see Option 2). This would have allowed
facilities to develop more workable construction schedules with their
permit writers and coordinate with NERC to schedule installation down
times accounting for generating supply reliability needs. This approach
would have been consistent with EPA's assessment that, at the national
level (rather than local level), closed-cycle cooling would not pose
material energy reliability consequences; see EA for more information.
EPA was concerned that such a flexible approach, however, would not
resolve all local reliability
[[Page 22209]]
concerns, because currently available information is not adequate to
establish either the extent or significance of possible electric
reliability concerns.
These same concerns would not apply in the case of the installation
of new units because of the smaller nature of such projects and the
availability of options like seasonal operation and portable cooling
towers to address the flow reduction requirements. Since the unit is
not yet online, the potential for local energy reliability to be
compromised is minimal; also, local energy reliability is likely
improved with the addition of the new unit, even if older units are
later retired.
2. Increased Air Emissions Could Be a Factor on a Local Basis
As previously discussed, closed-cycle cooling would result in
increased air emissions of various pollutants, including particulates,
sulfur dioxide, nitrogen oxides, mercury, and greenhouse gases, among
others.\52\ As a result of the installation of closed-cycle cooling
structures, fossil-fueled facilities would need to burn additional fuel
(thereby emitting additional PM, CO2, SO2,
NOX, and Hg). There are two reasons for this: (1) To
compensate for energy required to operate cooling towers, and (2)
slightly lower generating efficiency attributed to higher turbine
backpressure. In contrast to retrofits, new units can have their
cooling water intake systems optimized for cooling towers, reducing the
size of the cooling towers, increasing their efficiency, and reducing
energy requirements (see Section VI.E).
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\52\ EPA recognizes that retrofitting closed cycle cooling could
be combined with other energy efficiency or pollution control
technologies with the net effect of reducing air emissions; however,
facilities could (and may well have to under other rules) install
such technologies anyway, without converting to closed cycle cooling
as well. Comparing closed-cycle cooling to once-through cooling with
all other technologies held constant, there is an energy penalty
that would lead to greater air emissions.
---------------------------------------------------------------------------
The impact of the increased emissions varies based on the local
circumstances. The increased emissions may consist of cooling tower
emissions, stack emissions from increased fuel usage, and plumes of
water vapor. EPA's analysis suggests that the most significant impacts
will be specifically for PM2.5, which, in addition to
increased mortality and morbidity, may result in a facility having
difficulty in obtaining air permits in those localities in non-
attainment for PM2.5 because of the need to identify offsets
to its emissions. EPA notes that while there is the potential for
increases in PM (e.g., salt drift) in the vicinity of any wet cooling
tower, there are plume abatement and drift eliminator technologies that
may address this concern (and EPA has included costs for such
technologies in its analysis of Options 2 and 3). However, emissions
may not be eliminated entirely. EPA expects most effects of PM from
cooling tower emissions would be so localized as to be wholly on the
facility's property. (See DCN 10-6954.) EPA recognizes this is separate
from PM emissions from the stack as a result of increased fuel usage.
In addition, plumes of water vapor from the cooling tower may cause
safety issues due to icing of nearby roadways, and visibility
constraints for facilities located near an airport. EPA's review of
emissions data from E-GRID (year 2005) suggests that impacts from other
pollutants will be less significant, but on a localized basis these
could still be significant. They include human health, welfare, and
global climate change impacts associated with a variety of pollutant
that are emitted from fossil fuel combustion generally. EPA is not able
to quantify the frequency with which facilities may experience these
local impacts, and therefore EPA believes a site-specific assessment
must be conducted to fully address such local impacts.
EPA believes that emissions are less of a concern at new units. The
condensers can be optimized for closed-cycle, reducing energy
requirements, and high efficiency cooling towers can be incorporated
into the design of the new unit, potentially allowing for installation
of smaller cooling towers. Turbine backpressure and the associated
energy penalty can be eliminated in a new unit. However, new units will
still have a parasitic energy penalty. Therefore energy penalties and
air emissions for tower operations can be minimized but not eliminated.
The effects of requiring closed cycle cooling at new units of existing
facilities is similar to the effects of this requirement at new
facilities and would not pose an unacceptable impact. See the TDD for
more information.
3. Land Availability Could Be A Factor on a Localized Basis
While EPA's record indicated that the majority of facilities have
adequate available land for placement of cooling towers,\53\ some
facilities do have feasibility constraints. Based on site visits, EPA
has found that several facilities have been able to engineer solutions
when faced with limited available land. EPA attempted to determine a
threshold of land (for example, one option explored a threshold of
approximately 160 acres per GW) below which a facility could not
feasibly install cooling towers. While EPA originally estimated as many
as 23 percent of facilities would not have enough space,\54\ EPA found
some facilities with a small parcel of land were still able to install
closed-cycle cooling by engineering creative solutions. On the other
hand, EPA found that some facilities with large acreage still could not
feasibly install cooling towers due to local zoning or other local
concerns. In conjunction with setback distances to mitigate noise and
plume abatement (based on GPS mapping of residential areas), EPA
estimates as many as 25 percent of facilities may have one or more
constraints on available space that would limit retrofit of cooling
towers for the entire facility or would result in increased compliance
costs. At this time, EPA lacks adequate data to better analyze how land
constraints can be accommodated at existing facilities.
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\53\ In the case of fossil fuel plants, scrubber controls may
also be newly required to comply with air rules and standards.
\54\ EPRI reported at least 6 percent of sites evaluated were
deemed ``infeasible'' on the basis that no space was available on
which to locate a cooling tower. (DCN 10-6951) While EPA does not
have access to the facility level data, and is therefore unable to
confirm the infeasibility analysis, EPRI's report supports EPA's
assertion that there is significant uncertainty around space
constraints for facilities to install closed-cycle cooling.
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In contrast, for new units, because the amount of space dedicated
to closed-cycle would be limited to the new unit rather than the entire
facility, space constraints would be much less of an issue. New units
also pose the opportunity to properly design an optimized closed-cycle
cooling system for the new unit. Retrofitting an existing facility
would require a facility to identify (or possibly obtain) enough acres
to accommodate the cooling towers and their tie-in. By not uniformly
requiring facilities to retrofit to closed-cycle, EPA has determined
that more land is available for new unit construction, especially in
light of compact design and more efficient use of limited resources.
Furthermore, new units and their corresponding cooling system can be
built in stages rather than as a facility-wide retrofit.
While EPA has concluded that space constraints would not foreclose
the installation of closed cycle cooling for new units at existing
facilities, EPA has concerns about whether, on a national basis,
physical geography would constrain the full retrofit of closed-cycle
cooling to existing facilities. Under the
[[Page 22210]]
circumstances, EPA decided not to propose uniform entrainment standards
for all existing facilities based on closed-cycle cooling. Instead, EPA
has determined that it should establish a process for site-specific
determination of entrainment controls. Site-specific proceedings would
provide the opportunity to address these issues, along with the other
factors discussed in this preamble in determining which additional
entrainment mortality controls, if any, are appropriate.
4. Remaining Useful Plant Life Could Be a Factor on a Facility Basis
Many facilities are nearing the end of their useful life.
Considering the long lead time to plan, design, and construct closed-
cycle cooling systems such as wet cooling towers, EPA proposes that the
permit authority should be given the latitude to consider the remaining
useful plant life in establishing entrainment mortality standards for
that facility. The remaining useful plant life along with other site-
specific information, would affect the evaluation of the benefits (non-
monetized and monetized) of closed-cycle at a particular facility. For
example, closed-cycle at a facility that is going to shut down in 3
years would not result in the benefits that a facility that would
continue to operate for 20 years. Because of this factor, EPA proposes
that requiring closed-cycle cooling should be evaluated on a facility-
specific basis, arguing against a uniform national entrainment
mortality standard.
This is obviously not an issue for new units. A new unit has its
full useful life before it and thus would experience the maximum
possible entrainment mortality reductions throughout that useful life.
Considering this factor, EPA is proposing that new units be treated the
same as new facilities. EPA believes this factor, along with the other
factors discussed above, indicates that it is reasonable to require new
units to meet entrainment mortality requirements based on closed-cycle
cooling.
G. The Process for Establishing Site-Specific BTA Entrainment Controls
EPA believes that the factors discussed above support establishment
of BTA entrainment requirements on a site-specific basis and counsels
against establishing a national rule based on a single BTA technology
for entrainment controls. In addition, there are other factors that
also support site-specific decision-making. Thus, as noted, for
example, a national weighing of cost and benefits tends to mask
important local differences and argues for site-specific evaluations.
As a result, EPA proposes that closed-cycle cooling for all
existing units is not BTA on a national basis, except for new units at
existing facilities.
EPA has decided to propose Option 1 as the basis for national
performance standards that represent the ``best technology available''
for cooling water intake structures at existing facilities. EPA
proposes that a uniform national impingement standard coupled with
entrainment controls determined on a site-specific basis represents the
best technology available for minimizing the adverse environmental
impacts associated with intake structures. EPA's proposed decision to
reject a single uniform national entrainment standard is based on
closed-cycle cooling not being the ``best technology available'' on a
national basis and not warranted under the circumstances. This proposed
decision flowed from EPA's consideration of the factors described above
and its conclusion that determination of BTA for entrainment through a
process that allowed full and site-specific assessment of these factors
with respect to candidate entrainment controls including closed-cycle
cooling represented the most appropriate course here.
H. Implementation
EPA's proposal would require a site-specific determination of BTA.
In that process, the permit writer would have access to all the
information necessary for an informed decision about which additional
technology to reduce entrainment mortality, if any, is BTA, including a
full consideration of whether the benefits justify the costs.
The adoption of the proposed Option 1 approach of site-specific BTA
entrainment decisions will result in one of two outcomes at any
facility: BTA is an entrainment mortality technology beyond what the
facility has already installed (this may include closed cycle cooling
or other technologies, see Section VI.B and C), or BTA requires no
additional controls for entrainment mortality. Thus, EPA expects that,
under the proposed approach, there will be additional entrainment
controls for some facilities and none for others.
EPA notes that in a number of areas of the country (California,
Delaware, New York and New England; see, e.g., DCNs 10-6963 and 10-
6841, as well as EPA Region I's Brayton Point), permitting authorities
have already required or are considering requiring existing facilities
to install closed-cycle cooling operations. EPA supports those state
efforts and determinations and thinks that similar decisions would be
able to be made under this proposed rule.
The proposal would require that the facility's permit application
must include the following information: The facility would submit an
engineering study of the technical feasibility and incremental costs of
candidate entrainment mortality control technologies. The facility
would also study, evaluate, and document: the technical feasibility of
technologies at a minimum including closed-cycle cooling and fine mesh
screens with a mesh size of 2 mm or smaller; engineering cost estimates
of all technologies considered; any outages, downtime, or other impacts
to revenue along with a discussion of all reasonable attempts to
mitigate these cost factors; and a detailed discussion of the magnitude
of water quality benefits, both monetized and non-monetized, of the
candidate entrainment mortality reduction technologies evaluated.
Finally, the study must include a detailed discussion of the changes in
non-water quality factors attributed to technologies and/or operational
measures considered, including but not limited to increases and
decreases in the following: energy consumption; thermal discharges; air
pollutant emissions including particulates and their health and
environmental impacts; noise; safety (e.g., visibility of cooling tower
plumes, icing); grid reliability, and facility reliability. See Section
IX for a thorough discussion of these study requirements.
Certain facilities would submit an Entrainment Characterization
Study including an entrainment mortality data collection plan that
would indicate, at a minimum, the specific entrainment monitoring
methods, taxonomic identification, latent mortality identification,
documentation of all methods, and quality assurance/quality control
procedures for sampling and data analysis appropriate for a
quantitative survey. EPA would also require peer review of the
entrainment mortality data collection plan. Peer reviewers would be
selected in consultation with the Director who may consult with EPA and
Federal, State, and Tribal fish and wildlife management agencies with
responsibility for fish and wildlife potentially affected by the
cooling water intake structure(s). Further, facilities with greater
than 125 MGD AIF must complete an Entrainment Characterization Study
(ECS). The ECS could include information already collected to meet
current Sec. 122.21(r)(2)-(r)(4) requirements. With the
[[Page 22211]]
information in this study, the permit writer will know more about
potential entrainment mortality reductions. Data from the ECS would
also corroborate any through-plant entrainment survival study results
from Performance Studies conducted in 122.21(r)(7). Data collected as
part of the ECS would support the Benefits Valuation Study in
122.21(r)(11) by parsing entrainment mortality, for example, by
recreational/commercial species and those species that are strictly
forage species,\55\ by species most susceptible to thermal effects
(including thermal barriers), and by species of particular local or
regional concern and threatened and endangered species. EPA's benefits
estimate were based on an extrapolation of available I&E mortality
studies; the specific entrainment characterization study conducted by a
facility may lead to a different estimate of I&E mortality for that
facility than its portion of EPA's regional estimate in the analysis in
Section VIII.
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\55\ Distinctions between predator and prey cannot be made on
the basis of species alone; the young of some recreational and
commercial species function as forage fish.
---------------------------------------------------------------------------
The purpose of the ECS is to better understand, and thus help
minimize, the impact of entrainment on species of concern. More
specifically, the ECS should identify species of concern that may be
entrained, and estimate their baseline mortality rates given current
entrainment controls. Moreover, the ECS should include as much
information as practical about the aquatic ecosystem effects of
entrainment mortality of species of concern. An understanding of the
potential ecosystem consequences of entrainment mortality for species
of concern will help inform decisions about permit requirements for
additional technologies and management practices. EPA will endeavor to
identify high quality examples of ECSs as they are completed, and post
them to the web site for this rule as a resource for ECS preparation.
Following the permit writer's review of this information, the
permit writer must determine what BTA entrainment standard to propose
and explain in writing the basis for the proposal. The written
explanation and the draft permit would then be available for comment
from the interested public under the Permitting Authority's normal
permitting process. Therefore, EPA's proposed BTA standard would
establish uniform requirements for impingement mortality and a process
in which BTA entrainment controls would be determined on a site-
specific basis.
I. EPA's Costing of the Preferred Option
For the purposes of this proposal, EPA has prepared an economic
analysis according to Executive Order 12866. For the preferred option,
this analysis incorporates the full costs and partially monetized
benefits of impingement controls, including the costs of conducting the
entrainment characterization studies. There may be additional costs and
benefits associated with reductions in entrainment mortality that
result from the Director's BTA entrainment determinations. Because this
process will play out over the next 10 to 15 years as Directors
consider waterbody-specific data, local impacts, and public comment,
and weigh costs and benefits of further entrainment reductions, air
quality impacts, grid reliability, and land availability, estimates of
the costs of these site-specific determinations would be highly
speculative.
For illustrative purposes, EPA analyzed two hypothetical outcomes
for site-specific BTA determinations under Option 1. EPA analyzed the
cost of closed-cycle at the 76 largest fossil fuel plants withdrawing
from tidal waters and arrived at an annual compliance cost for these
facilities of $762 million. EPA also analyzed a variant on the above
scenario. EPA estimates this second scenario would involve 46
facilities at an annual compliance cost of $480 million, assuming only
baseload and load following facilities would retrofit to closed-cycle
cooling.
These hypothetical scenarios illustrate the site-specific costs if
a significant number of facilities install and operate a closed-cycle
cooling system. These scenarios assume facilities would install only
closed-cycle cooling and operate it year-round. This may represent an
upper-bound cost for those facilities. EPA also assumed that cooling
towers will be installed at fossil fuel plants within 10 years. EPA is
aware that there are other possible scenarios for projecting which
facilities might be required to install closed-cycle cooling or other
entrainment mortality technologies as a result of individual BTA
determinations. Some of these would show lower or higher costs than
those presented here. EPA requests comment on other scenarios that
might better capture the range of costs that result from the structured
analysis of entrainment mortality BTA required by today's proposed
rule.
J. Consideration of Cost/Benefit on a Site-Specific Basis
In establishing performance standards for entrainment controls, as
the Supreme Court in Entergy made clear, one factor that EPA may
consider is the costs and benefits associated with various control
options. That is, in setting standards, EPA may consider the benefits
derived from reductions in the adverse environmental impacts associated
with cooling water intake structures and the costs of achieving the
reductions. As previously explained, EPA has determined that the
benefits of the proposed rule justify its costs. In addition, EPA has
explained why consideration of costs and benefits is also appropriate
in the site-specific permit setting when establishing entrainment
controls.
In the site-specific proceeding, the permit writer would be
required to consider, among other factors, quantified and qualitative
social benefits and social costs of available entrainment controls,
including ecological benefits and benefits to any threatened or
endangered species. The permit writer would be able to reject otherwise
available entrainment controls if the costs of the controls are not
justified by their associated benefits (taking into account both
quantified and non-quantified benefits) as well as the other factors
discussed in the proposed rule.
In making the site-specific entrainment BTA determination, the
proposal would require that the Director consider the information
required under Sec. 122.21(r) to be submitted with the section 316(b)
permit application. Further, in the case of the larger cooling water
intake structures (125 MGD AIF or greater), the proposed rule would
require submission of additional information including, among other
things, studies on entrainment at the facility, the costs and
feasibility of control options, and information on the monetized and
non-monetized benefits of entrainment controls. In evaluating benefits,
the Director should not ignore benefits that cannot be monetized and
consider only the I&E reductions that can be counted. The assessment of
benefits must take into account all benefits, including categories such
as recreational, commercial and other use benefits, benefits associated
with reduced thermal discharges, reduced losses to threatened and
endangered species, altered food webs, nutrient cycling effects, and
other nonuse benefits. Merely because there is no price tag on those
benefits does not mean that they are not valuable.
Under the proposal, the Director must explain the basis for
rejecting an available technology not selected for entrainment control
in light of the submissions, with a consideration of the
[[Page 22212]]
same four factors that argued against a uniform requirement for closed-
cycle cooling. EPA expects that the Director's decision about BTA
controls will also reflect consideration of the costs and benefits
(monetized and non-monetized) of the various control technologies
considered for the facilities.
As noted, the permit writer may reject an otherwise available
entrainment technology as BTA (or not require any BTA controls) if the
costs of the controls are not justified by the benefits. EPA decided to
adopt this approach in determining site-specific entrainment controls
because it is permissible under Entergy and consistent with the more
than 30-year history of section 316(b) permitting decisions as well as
E.O. 13563.
This history illustrates the role that cost/benefit considerations
have played. As early as 1977, EPA issued a permitting decision and a
General Counsel opinion that explained that, while Section 316(b) does
not require a formal cost-benefit analysis, the relationship of costs
and benefits may be considered in 316(b) decision-making. In re Pub.
Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1977 WL
22370 (June 10, 1977), remanded on other grounds, 572 F.2d 872 (1st
Cir. 1978); accord In re Central Hudson Gas & Elec. Corp., Op. EPA Gen.
Counsel, NPDES No. 63, 1977 WL 28250, at *8 (July 29, 1977). In the
more than 30 years since then, EPA and state permitting authorities
have considered the relationship between costs and benefits to some
extent in making individual permitting decisions. See, e.g., In re Pub.
Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1978 WL
21140 (E.P.A. Aug. 4, 1978), aff'd, Seacoast Anti-Pollution League v.
Costle, 597 F.3d 306, 311 (1st Cir. 1979).
Because E.O. 13563 directs agencies to propose and adopt rules only
upon a reasoned determination that the benefits justify the costs, EPA
is proposing to apply this same standard in BTA entrainment
determinations. This approach is consistent with the framework EPA has
traditionally followed and would allow for a full assessment in permit
decisions of both qualitative and quantitative benefits and costs. As
designed, EPA's proposed requirement for the establishment of site-
specific BTA entrainment requirements strikes an appropriate balance
between environmental improvements and costs, allowing the permitting
authority to consider all of the relevant factors on a site-specific
basis and determine BTA on the basis of those factors.
After considering all of the factors relevant to a particular site,
the Director must establish appropriate entrainment controls at those
facilities. The Director must review available control technology and
may reject otherwise available entrainment controls as BTA if the
social costs of the controls are not justified by their social benefits
(taking into account both quantified and non-quantified benefits) or if
there are other adverse factors that cannot be mitigated that the
Director deems unacceptable. As designed, EPA's proposed requirement
for the establishment of site-specific BTA entrainment requirements
strikes an appropriate balance between environmental improvements and
costs by electively requiring closed-cycle cooling or other entrainment
technologies at some facilities, without requiring the same
technologies at all facilities.
VII. Economic Impact of the Proposed Rule
This section summarizes EPA's analysis of the social cost and
economic impact for the following regulatory options: Option 1:
Impingement mortality (IM) limitations based on modified traveling
screens for all facilities with flow greater than 2 million gallons per
day (MGD), closed cycle cooling or its equivalent for new units, and a
site-specific determination of entrainment BTA for all other
facilities: Option 2: Intake flow commensurate with closed-cycle
cooling for facilities that have a design intake flow of greater than
125 MGD and IM limitations based on modified traveling screens for all
facilities with flow greater than 2 MGD; Option 3: Intake flow
commensurate with closed-cycle cooling for all facilities and IM
limitations based on modified traveling screens, for all facilities
with flow greater than 2 MGD; and Option 4: Impingement mortality (IM)
limitations based on modified traveling screens for all facilities with
flow greater than 50 million gallons per day (MGD), closed cycle
cooling or its equivalent for new units, and a site-specific
determination of entrainment BTA for all other facilities and of
impingements mortality controls for facilities with flow less than or
equal to 50 MGD. These options are described more fully in Section
VI.C.
The first part of this section provides an overall summary of the
costs of the regulatory options to complying facilities and federal and
state governments. This discussion is followed by a review of the
method for developing compliance cost estimates. The third part
provides an estimate of the total social costs of the regulatory
options. The final part reviews the economic impact of the regulatory
options.
A. Overview of Costs to Complying Facilities and Federal and State
Governments
For estimating the total cost and economic impact of the regulatory
options presented in this preamble, EPA estimated costs associated with
the following cost components: Initial fixed and capital costs, annual
operating and maintenance costs, downtime costs, recordkeeping,
monitoring, studies, and reporting costs. The cost estimates reflect
the incremental costs attributed only to today's proposal. For example,
facilities with closed-cycle recirculating systems would likely already
meet all of the proposed performance standards, and therefore most
facilities with closed-cycle cooling would not incur costs to retrofit
new technologies (though such facilities would still incur some
components of permitting costs). EPA assumes, based on its technical
survey data that most closed-cycle cooling systems operate with an
intake velocity of less than 0.5 fps, and so would comply with the
impingement BTA requirements. However, EPA recognizes a facility with
closed-cycle cooling may incur additional costs to meet the proposed
performance standards; some facilities with closed-cycle cooling were
assumed to incur costs of modified screens with a fish handling and
return system. Because EPA assumes the fish handling and return system
would meet the requirements to eliminate entrapment, EPA has not
included further costs for entrapment.
For the economic analyses, EPA distinguished between the two
industry groups covered by the standards for existing facilities as
follows:
Manufacturing and Other Industries (``Manufacturers'')--
facilities in the paper, aluminum, steel, chemicals, petroleum, food
and kindred products, and other industries. In addition to engaging
in production activities, some of these facilities also generate
electricity for their own use and occasionally for sale. Electric
power producers (``Electric Generators'')--facilities owned by
investor-owned utilities, municipalities, States, Federal
authorities, cooperatives, and nonutilities, whose primary business
is electric power generation or related electric power services.
Costs to complying Electric Generators and Manufacturers include
technology costs, cost of installation downtime, and costs of
administrative activities; in addition, electric generating facilities
are expected to incur certain energy penalty costs (see
[[Page 22213]]
Chapter 3 of the EBA report for a discussion of costs to complying
facilities and of implementation costs to federal, State, and local
governments). Manufacturing facilities may also need additional
electricity to run certain technologies, but if they do not produce
this electricity themselves, these additional energy requirements are
included in operating costs, rather than accounted for separately as an
energy penalty. Electric Generators incurring these costs include
facilities owned by private firms, governments, and electric co-
operatives. Manufacturers incurring these costs include facilities
owned by private firms only. The administrative costs to federal,
State, and local governments include the costs of rule implementation--
e.g., permits, monitoring, and working with in-scope facilities to
achieve compliance. Costs are initially developed on a pre-tax, as
incurred, basis. These costs underlie the analysis of the social costs
of the regulatory options and are also used in assessing the impact of
compliance requirements on in-scope facilities and the affected
industrial categories. In the analysis of facility impacts, costs are
accounted for on an after-tax basis.
B. Development of Compliance Costs
This section describes the data and methods used to estimate
compliance costs of the options considered and the costs of today's
proposed rule. Costs were developed for technology controls to address
impingement mortality separately from controls for entrainment
mortality, as the requirements of the various rule options considered
would lead to different technologies being used by each facility to
comply. Some of the options considered would impose different
compliance timelines for impingement mortality and entrainment
mortality technologies. As a result, different methodologies were used
and each is briefly described below. More detailed information on these
methodologies, as well as costs of other technologies and regulatory
approaches, are available in the TDD.
1. Combined Facility-Specific and Model-Facility Approach
EPA develops national level costs estimates for facilities within
scope of the various regulatory options. In general, facility-specific
data can be used to determine what requirements apply to a given
facility or whether that facility would already meet the requirements
set forth in the proposed rule. This approach requires facility-
specific technical data for all of the approximately 1,200 existing
facilities in scope. An alternative approach is to develop a series of
model facilities that exhibit the typical characteristics of the
affected facilities and calculate costs for each model facility; EPA
would then determine how many of each model facility would be needed to
accurately represent the full universe of affected facilities.
EPA has estimated costs for potentially regulated facilities using
a combination of the facility-specific and model facility approaches.
The facility-specific approach used in this effort involved calculating
compliance costs for 891 individual facilities for which EPA had
detailed technical data from its various industry questionnaires
regarding the intake design and technology. Specifically, these are the
in-scope facilities that completed the detailed technical
questionnaire. Where facilities reported data for separate cooling
water intake structures (CWISs), compliance costs may have been derived
for each intake and these intake costs were summed together to obtain
total costs for each facility. These facilities became model facilities
and each facility's costs were then multiplied by a weighting factor
(derived from a statistical analysis of the industry questionnaire)
specific to each facility to obtain industry-wide costs for the
national economic impacts analyses. The weighting factors are similar
to ones derived during the development of the 2004 Phase II Rule for
extrapolating the impacts of DQ facilities to all in-scope facilities.
2. Updates to the Survey Data
In the 2004 Phase II rule, EPA developed facility-specific cost
estimates for all facilities and published those costs in Appendix A
(69 FR 41669). Since the initial implementation of the 2004 Phase II
rule, EPA identified several concerns with using only the facility-
specific costing approach, as well as the use of those costs in
Appendix A. Since 2004, EPA has collected data from industry and other
groups as described in section III. These data generally reflect
changes to actual intake flow, design intake flow, intake velocity,
technology in place, and operational status. EPA developed a new master
database including this new data to supplement the data from the
detailed technical questionnaire. Although it has been approximately 10
years since the detailed technical questionnaire was initially
collected, EPA has conducted over 50 site visits, reviewed current
permits, and conducted literature reviews including comparisons to data
collected by EPRI, EIA, and EEI. Based on that review EPA has concluded
the master database is representative and appropriate for most
facilities.\56\ The following section describes how EPA used this new
database to estimate compliance costs.
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\56\ EPA notes that, while it has not collected updated
technical information for every facility, it has updated financial
data, as discussed later in this section.
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3. Tools for Developing Compliance Costs
During the 2004 Phase II rule, EPA began developing a spreadsheet
based tool that would provide facilities and permit authorities with a
simple and transparent method for calculating facility-specific
compliance costs. EPA refined the tool in developing the Phase III
regulations. EPA has since made further refinements to the cost tool,
which was used to calculate the compliance costs for impingement
mortality for today's proposed rule. The cost tool employs a decision
tree (see the TDD for a graphical presentation of the decision tree) to
determine a compliance response for each model facility and assigns a
technology ``module'' that represents a retrofit to a given technology.
Cost estimates are derived through a series of computations that apply
facility-specific data (such as DIF, width of intake screens, etc.) to
the selected technology module. Cost tool outputs include capital
costs, incremental operation and maintenance (O&M) costs, and
installation downtime (in weeks).
To calculate the compliance costs of retrofitting to closed-cycle
cooling for controlling entrainment mortality, EPA utilized a second
tool based on a cost-estimating spreadsheet developed by the Electric
Power Research Institute (EPRI). EPRI's first draft methodology
presented three different levels of capital cost (Easy, Average,
Difficult) based on the relative difficulty of the retrofit project.
For electric generators, EPA used costs for the Average level of
difficulty, as it was developed across a broad spectrum of facilities
and is the most appropriate for estimating national level costs.\57\
For manufacturers, EPA used the Difficult level of retrofit costs. This
reflects the more complex water systems and generally more frequent
technical challenges to retrofitting closed-cycle cooling at a
manufacturing facility. While some manufacturers only withdraw cooling
water for power or steam generation, many manufacturers have multiple
units or processes that utilize cooling water. In site visits, EPA
found the largest manufacturing facilities would require multiple
retrofits, and accordingly believes the
[[Page 22214]]
Difficult level of retrofit costs is more representative for purposes
of estimating national level costs. Additionally, EPA's tool includes
additional modifications to EPRI's methodology, such as increased
compliance costs for approximately 25 percent of facilities to reflect
the additional expense of noise control or plume \58\ abatement, and
using only the cooling water flow rate for non-contact cooling water
flow \59\ for purposes of estimating costs for closed-cycle cooling.
EPA has included the spreadsheet tools in the docket for the proposed
rule to assist both facilities and permit authorities in estimating
compliance costs. (See DCNs 10-6655 and DCN 10-6930).
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\57\ For purposes of energy reliability estimates, EPA used the
Difficult level for electric generators.
\58\ The EPRI tool includes drift abatement technologies in its
cost assumptions, so no additional costs were included for drift
eliminators.
\59\ As described in the TDD, EPA only used non-contact cooling
water flows in determining the proper size for wet cooling towers,
the technology that forms the technical basis for entrainment
mortality. Cooling towers are not widely used for contact cooling or
process water, so these flows were excluded. For electric
generators, the vast majority of flow is non-contact cooling, but
manufacturers are more varied in their water usage.
---------------------------------------------------------------------------
4. Which technologies form the basis for compliance cost estimates?
EPA identified two broad classes of control technologies that may
be used singularly or in combination to comply with the proposed rule.
These classes of control technologies are: (1) Technologies that
address impingement mortality (IM) and (2) technologies that address
entrainment mortality (EM). See Section VI for further details. Under
the various options considered, a facility may be subject to one or
both requirements, depending on their configuration, technologies in
use, or other site-specific factors.
For the impingement mortality requirements, EPA analyzed data from
a wide variety of technologies and facilities and concluded that
modified Ristroph (or equivalent) coarse mesh traveling screens are the
most appropriate basis for determining the compliance costs.\60\ As
discussed in Section VI of the preamble, a facility may also comply
with impingement mortality requirements by meeting a maximum intake
velocity limit. Based on facility-specific data, EPA made a preliminary
assessment of which model facilities would not currently meet
impingement mortality requirements through either approach, and
assigned technology costs based on the installation of modified
traveling screens with a fish handling and return system. This assigned
technology is assumed to meet the BTA standard (see Sec. 125.94(b)).
However, some facilities might still incur costs for restructuring
their intakes to avoid entrapment.\61\ EPA solicits comment and data on
the costs of this requirement.
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\60\ Note that this does not preclude the use of other
technologies; EPA simply used the available performance data in
deriving the performance requirements and excluded technologies that
were either inconsistent performers or did not offer sufficient data
for analysis in a national categorical regulation. EPA's research
has shown that other technologies may also be capable of meeting the
proposed requirements, but EPA did not opt to identify these
technologies as the technology basis for today's proposal.
\61\ Facilities incurring costs for impingement mortality are
assumed to meet the requirement for entrapment. Because EPA does not
know how many facilities that already comply with impingement
mortality requirements would incur additional costs to avoid
entrapment, EPA conducted a sensitivity analysis of the additional
costs; see Chapter 12 of the TDD.
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For facilities subject to entrainment mortality requirements, EPA
selected wet cooling towers as the technology basis for determining the
compliance costs. In some cases, costs reflect installation of multiple
technologies, as impingement mortality and entrainment mortality
requirements were applied separately to each facility. EPA also
evaluated other technologies for reducing entrainment mortality, such
as seasonal operation of cooling towers, partial towers, variable speed
pumps, and fine mesh screens. The performance of these technologies is
further described in section VI; a detailed discussion of how the costs
were developed may be found in the TDD.
5. How is facility downtime assessed?
Downtime is the amount of time that a facility may need to shut
down due to the installation of a compliance technology. Downtime
estimates primarily assume that the facility would need to completely
shut down operations to retrofit an intake, such as relocating an
intake, connecting wet cooling towers into the facility, or reinforcing
condenser housings. Downtime estimates are provided as incremental
outages, taking into account the periodic outages all facilities
already incur as part of preventative maintenance or routinely
scheduled outages. For example, nuclear facilities have refueling
outages approximately every 18 months lasting approximately 40
days.\62\ The entrainment control implementation periods, 10 years for
fossil fuel plants and 15 years for nuclear plants, in Options 2 and 3
would provide facilities with an opportunity to schedule the retrofit
when other major upgrades are being done, reducing downtime.
---------------------------------------------------------------------------
\62\ Nuclear Energy Institute (NEI) reported average length of
outage from 2003 to 2009.
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For most facilities subject to impingement mortality, no downtime
was assigned. Facilities that are replacing or rehabilitating existing
traveling screens typically do so one intake bay at a time without
affecting the overall operations. EPA has also found that facilities
that need to scrub screens do so during other routinely scheduled
outages. For some compliance technologies such as relocating an intake,
or expanding an existing intake to lower the intake velocity, several
weeks of downtime are incurred, as these are more invasive tasks.
For facilities subject to entrainment mortality controls, EPA
reviewed historical retrofit data and site visits conducted since 2004,
and has largely retained its assumptions for downtime from the Phase II
and Phase III rules. On average, EPA assumes the net construction
downtime for a cooling tower retrofit for non-nuclear electric
generators is 4 weeks. This total downtime allows for the tie-in of the
cooling tower to the existing cooling water system. The refueling
outage downtime, the safety-sensitive nature of nuclear facility
retrofits, and other data in EPA's record supports 28 weeks as the net
construction downtime for nuclear facilities. Downtime for
manufacturing facilities that use cooling water for power and steam
generation was converted into the incremental cost for purchase of
those utilities during the outage. For individual process units other
than power or steam generation units at a manufacturing facility (i.e.
cooling water use for purposes other than power production), on average
the downtime was assumed to be zero. In EPA's extensive experience with
manufacturers while developing effluent guidelines, EPA found
manufacturers are generally able to shut down individual intakes for
specific process lines, use inventory approaches such as temporary
increases of intermediate products, and develop other workarounds
without interrupting the production of the entire facility. EPA
requests comment from those manufacturing facilities that have made
modifications to their cooling water systems on their experiences with
facility downtime. See below for further discussion of how installation
downtime in weeks is included in the estimated national costs.
6. How is the energy penalty assessed?
The term ``energy penalty'' in relation to a conversion to closed-
cycle cooling has two components: One is the extra
[[Page 22215]]
power required to operate fans at a mechanical draft cooling tower, as
well as additional pumping requirements (often referred to as the
parasitic energy penalty), and the other is the lost power output due
to the reduction in steam turbine efficiency because of an increase in
cooling water temperature (often referred to as the turbine efficiency
penalty or turbine backpressure penalty). Energy penalty costs only
apply to facilities retrofitting a cooling tower; facilities installing
a new impingement mortality technology will generally see little or no
measureable change in energy usage. EPA's national level costs include
the costs for both components. The parasitic energy penalty was
included as a separate component in the O&M costs and was assessed for
all facilities. The turbine efficiency penalty was typically expressed
as a percentage of power output; EPA estimates the turbine efficiency
energy penalty for nuclear and non-nuclear power generation would be
2.5% and 1.5%, respectively (see the TDD). For most manufacturers, the
energy penalty for turbine efficiency loss for non-nuclear power plants
(i.e., 1.5%) was assumed. This may overstate costs where cooling water
is used by a manufacturing facility for purposes other than power
production.
7. How did EPA assess facility-level costs for the national economic
impacts and energy reliability analyses?
To assess the national economic impacts, EPA conducted a modeling
analysis using IPM (Integrated Planning Model). This model is widely
used by EPA for analysis of rules and policies affecting electric
generating facilities. This analysis is used to assess economic
impacts, increases in household electricity bills, and changes in
electricity reliability. In contrast to the model facility costing
approach, the IPM model requires a facility-level cost for each
facility. Model facility costs were converted to a per MGD DIF basis,
and then averaged to derive cost equations using DIF as the independent
variable. This cost equation thus provides average costs that can be
applied to any facility by simply scaling to that facility's DIF. EPA
also used a conservative compliance scenario in order to develop a
bounding ``worst case'' impact analysis by assuming all facilities
would be subject to Entrainment Mortality reductions based on closed-
cycle cooling towers. In the worst case scenario EPA conducted the IPM
analysis using the Difficult level cost for all facilities, thereby
generating an upper bound of total costs and conservative predictions
of the economic impacts. See the EBA for more information. In
conducting its analysis, EPA found the equations used to derive the
cost module estimates produced substantially higher costs per MGD rates
at lower flow levels. To reflect the higher per unit costs of retrofits
at lower DIF (i.e. smaller) facilities, EPA derived separate model
facility cost equations for facilities with DIF <10 MGD and those with
DIF >= 10 MGD. (See the TDD).
8. How did EPA assess costs for new units?
This section describes the data and methods used to estimate
compliance costs for new units at existing electric generators and
manufacturers. Compliance costs for new units at existing electric
generators are calculated using a similar methodology to the compliance
cost estimates for existing facilities. EPA is not able to predict
which facilities will construct new units, however the national
projections of increased capacity (i.e. additional megawatts capacity
to be constructed each year) can be converted to a number of new units
of a specified size; EPA then applied the cost equations to these
projected new units. Based on site visits, EPA has found that industry
trends towards water conservation and reuse in addition to the
operational flexibility at existing manufacturers would result in no
additional compliance costs for achieving flow commensurate with
closed-cycle cooling at new units. EPA solicits comment on this
assumption.
a. New Units at Existing Electric Generators
Power generation units that meet the definition of a ``new unit''
will be required to meet entrainment reduction based on closed-cycle
cooling or an equivalent reduction in entrainment mortality for the
cooling water component of the intake flow based on the average intake
flow (AIF). Estimates for compliance costs for new units are based on
the net difference in costs between what cooling system technologies
would have been built under the current regulatory structure and what
will be built given the change in requirements imposed by the proposed
regulation. Compliance costs are derived using estimates of the new
generating capacity that will be subject to these requirements.
Generally speaking, EPA has identified a number of differences in
costs between a closed-cycle cooling retrofit at an existing facility
compared to installing closed-cycle cooling at a new unit:
New units can incorporate closed-cycle cooling in a more
cost effective manner.
The duration of new unit construction is sufficiently long
enough that there would be, in nearly all circumstances, no net
increase in ``construction downtime.''
For power generation systems, the design of boilers, steam
turbines and condensers ``from scratch'' allows for the optimization of
the system design and cooling water flow volume to minimize the heat
rate penalty. Flow is reduced over a comparable once-through cooling
system, which reduces closed-cycle cooling system costs.
Because major components of the once-through intake and
cooling system must be constructed from scratch, the capital costs of
closed-cycle cooling for new units are lower than the capital costs of
once-through cooling.\63\
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\63\ See DCN 10-6650 and DCN 10-6651.
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There will be an increase in the parasitic energy
requirements associated with fan operation in the closed-cycle cooling
towers.
While parasitic energy requirements for pumping head will
increase as well, it may be offset, at least in part, by reductions in
pumping flow associated with optimization. Any capacity losses due to
parasitic energy penalty can be accounted for in the new unit design.
New construction allows the use of an optimized cooling
system design that can minimize any system efficiency losses associated
with conversion to closed-cycle.
Estimation of New Capacity Subject to the Rule
New generating units will be constructed at either ``greenfield''
facilities subject to the Phase I regulation or at existing facilities
where they may be subject to the new unit requirements for entrainment
reduction.\64\ New generating capacity at existing facilities can occur
in three ways: (1) From new units added to an existing facility; (2)
repowering, replacement and major upgrades of existing units; and (3)
minor increases in system efficiency and output. Repowered, replaced,
and upgraded units are not considered new units under today's proposed
rule and would not be subject to requirements for entrainment
reduction. While a small portion of this new capacity may result from
minor increases in plant efficiency and output, this analysis assumes
all
[[Page 22216]]
new capacity will occur be associated with new units.
---------------------------------------------------------------------------
\64\ This discussion will focus only on new units at existing
facilities; for a discussion of the Phase I rule, see 66 FR 65256.
---------------------------------------------------------------------------
New power generation capacity estimates by fuel/plant type were
derived from IPM modeling. For the new unit costs analysis EPA focused
on coal and combined cycle, since these comprised the majority of
increased capacity that utilize a steam cycle and are most likely to be
constructed at existing generation facilities. In the Phase I rule
analysis, EPA determined that 76% of new coal and 88% of new combined
cycle capacity would be constructed at new ``greenfield'' facilities
and would be subject to Phase I requirements while the remainder (24%
of coal and 12% of combined cycle) would occur at existing facilities
and be subject to existing facility regulations. EPA has selected a
conservative value of 30% reflecting both coal and combined cycle to
serve as an estimate for the portion of new capacity that would be
constructed at existing facilities.
At existing nuclear facilities, only new capacity associated the
construction of new generating units would be subject to the new unit
requirements. Considering their size and heat discharge as well as
recent trends in industry, it is assumed that any new nuclear units
will utilize closed-cycle cooling \65\ and so the capacity for these
nuclear facilities is not included in the costs of requirements for new
units. Exhibit VII-1 presents a summary of new capacity estimates for
all fuel types.
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\65\ Less than half of the current U.S. nuclear plants still use
once through cooling.
Exhibit VII-1--Estimated New Capacity
----------------------------------------------------------------------------------------------------------------
New capacity (MW) \a\ New capacity incurring costs
-------------------------------- under this rule
Fuel type -------------------------------
Annual 24 Year total Annual
average average 24 Year total
----------------------------------------------------------------------------------------------------------------
Coal............................................ 3,573 85,744 1,072 25,723
Combined Cycle.................................. 1,491 35,795 447 10,739
----------------------------------------------------------------------------------------------------------------
\a\ Includes capacity subject to both Phase I and existing facility requirements.
Baseline Compliance
Baseline compliance reflects the scenario whereby new units will
use once-through cooling or closed-cycle cooling. About 32% of existing
facility steam generating capacity already employs closed-cycle and
another 11% employ combination cooling systems. EPA assumes that at
existing plants where closed-cycle cooling is already employed for at
least part of the generating capacity that closed-cycle would be used
for any new capacity, regardless of the requirements of today's
proposed rule. Therefore at least 43% of new capacity is projected to
be compliant in the baseline (i.e., they will already meet the
entrainment mortality requirements of the proposed rule for new units).
For example, a number of regulatory authorities have adopted or pursued
closed-cycle cooling requirements for some or all existing facilities
(e.g., New York, California, Delaware). EPA expects this to be
particularly true where the new unit would result in a substantial
increase in the volume of once-through cooling water withdrawn above
what is currently permitted. Thus, approximately 50% of new fossil
units at existing facilities in the baseline scenario would already be
compliant with the proposed rule. EPA requests comment on this
assumption.
Repowering Versus New Units
The increased capacity at existing fossil fuel facilities is
divided into two types of projects. The first is new unit(s) added
adjacent to the existing generating units which would require a new
intake or the existing intake to be substantially modified in order to
supply the needed additional volume of cooling water. The second is a
repowered unit which replaces an existing generating unit(s) and is
assumed to be sized such that the existing once-through cooling water
intake volume will provide sufficient flow to meet heat discharge
requirements. Based on 2007 IPM projections (since more recent
projections do not include this distinction) approximately 85% of
projected total new combined cycle capacity was estimated to be
repowered oil and gas units. The estimate for repowered coal capacity
was very small (less than 1%). However, since there are significant
economic advantages to repowering, EPA believes this to be an
underestimate and selected a more conservative value of 10%. Exhibit
VII-2 presents the capacity values assumed to be compliant in the
baseline or that require costs associated with closed-cycle cooling for
new added units versus repowering.
Exhibit VII-2--New Capacity Subject to New Unit Requirement by Cost Category
----------------------------------------------------------------------------------------------------------------
Capacity subject to new unit compliance
costs (MW)
Fuel type -------------------------------------------
Annual average 24 Year total
----------------------------------------------------------------------------------------------------------------
Coal.................................... Baseline is Compliant..... 536 12,862
New Added Unit............ 482 11,575
Combined Cycle.......................... Baseline is Compliant..... 224 5,369
New Added Unit............ 34 805
----------------------------------------------------------------------------------------------------------------
[[Page 22217]]
Compliance Cost Estimation
Compliance costs reflect compliance with the proposed requirements
for closed-cycle for the new unit; these costs do not represent costs
to retrofit the entire facility to closed-cycle. Compliance costs for
new units are derived from EPA's estimates for retrofitting a closed-
cycle cooling system at existing facilities where the costs are
expressed on a per MGD basis. For new units, the cost equations are
converted to a cost per MW capacity. The cooling water flow estimates
are based on plant fuel efficiency values of 42% for coal (the average
of values for super-critical and ultra-critical steam), 57% for
combined cycle, and 33.5% for nuclear. [DCN 10-2827]. Cost components
were broken out as follows.
Capital Costs
EPA has found that for new units, the total estimated capital costs
for a closed-cycle cooling system is slightly less than the capital
costs of a once-through cooling system (when including costs for a new
intake structure). Therefore, a conservative estimate of the
incremental compliance capital costs are $0 for new units.
O&M Costs
Fixed and variable O&M costs are adjusted by deducting the O&M
costs for traveling screens assumed in the baseline once-through
system. Energy costs are also adjusted downward to account for reduced
pumping volume passing through the intake structure and adjusted up to
account for the increase in pumping head through the cooling tower.
Downtime
Each of the new units will involve extensive construction
activities that would result in a prolonged construction downtime
regardless of the cooling system requirements. Thus, no downtime costs
are assessed for new unit compliance.
Energy Penalty
The energy penalty consists of parasitic load and heat rate
penalties. Both types of installation--new and retrofit--face parasitic
load associated with fans and pumps, but only retrofits would face a
heat rate penalty, which is the largest portion of a retrofit energy
penalty. Energy penalty costs associated with net changes in parasitic
energy requirements between once-through and closed-cycle cooling are
included in the O&M cost estimates.
b. New Units at Existing Manufacturers
Similar to new units at existing electric generators, manufacturing
``units'' that meet the definition of a ``new unit'' will be required
to meet entrainment reduction requirements. These requirements will
require closed-cycle cooling or an equivalent reduction in entrainment
for the cooling water component of the intake flow based on the average
intake flow (AIF). Estimates for compliance costs for new units are
based on the net difference in costs between what would have been built
under the current regulatory structure (baseline) and what will be
built given the change in requirements imposed by the proposed
regulation. Thus, baseline manufacturing unit process design and
cooling water technology would be based on the response to the
permitting authorities application of existing requirements including
316(b), applicable industrial water use and discharge standards (e.g.,
categorical standards), and BPJ.
As discussed in section IV of the preamble, it has become standard
practice for industries to adopt water use reduction and reuse
practices wherever practical. A new unit provides the opportunity to
employ such measures to the fullest extent. Thus, the baseline cooling
AIF for ``new units'' at manufacturers should, in most cases, be much
smaller than the AIF for a comparable existing unit. This is especially
true for new units that perform a similar function or produce a similar
product to existing units since economic factors such as the need to
increase process efficiencies are often driving factors in the decision
to construct a new unit. EPA recognizes that while this appears to be a
general trend, it may not always be true on a site-specific basis.
For manufacturing process units that are newly constructed, many of
the same cost-related factors listed above for power generators apply
but additional factors may include:
A much greater proportion of intake flow is used for
process water and other non-cooling purposes which greatly increases
the opportunity to design and incorporate cooling water reuse
strategies within the unit.
Where the new unit comprises only a portion of the plant,
cooling water reduction may be accomplished through reuse elsewhere
within the plant. The proposed rule provides credit for such flow
reductions.
The modular nature of closed-cycle cooling allows for the
limited application of closed-cycle cooling only to the portion of
cooling flow necessary to meet any additional reductions not accounted
for by any other reuse or reduction strategies employed. Additionally,
new units can utilize cooling system designs specifically tailored to
process requirements. The modular nature of closed-cycle cooling and
the flexibility inherent in the process system allows for more optimal
placement of cooling tower units, thus minimizing piping costs.
Flow reductions associated with the use of variable speed
pumps can result in benefits associated with both reduced flow and
pumping energy costs.
For power generation facilities and generating units that use once-
through cooling, the majority of the intake flow is used for non-
contact cooling purposes. Process water typically constitutes a few
percent or less of the total. A review of the responses to the detailed
technical survey showed that the median and average values for the
percent of design intake flow used for cooling purposes reported for
each separate cooling water intake at power generation facilities were
100% and 85% respectively. In contrast, most industrial manufacturing
operations utilize a substantial portion of intake water for non-
cooling purpose and the same median and average values for
manufacturing facilities were 50% and 52%, respectively. In addition,
this cooling flow component data includes contact cooling water, as
discussed in section IV.A (i.e., flow reduction is only required for
non-contact cooling water flows), thus decreasing the proportion.
Therefore, a ``typical'' manufacturing unit may use less than 50% of
AIF for cooling purposes of the type that may be subject to the ``new
unit'' requirements. In many cases, this ``typical'' facility may be
able to reuse 100% of the cooling water in place of the process
component. Thus, the ``typical'' manufacturing facility may be capable
of designing a ``new'' process that could meet the ``new unit''
requirements through water reuse alone. EPA has observed significant
innovation and water reuse during site visits to manufacturing
facilities, and notes extensive industry trends towards internal water
and energy audits.
Since this 50% value is the median of all reported manufacturing
cooling water intake systems, at least half of manufacturing cooling
water systems may have the potential to meet the ``new unit''
requirements simply by reusing non-contact water as process water. For
the remainder, modifications to the process that reduce cooling water
use such as use of variable speed pumps may provide additional
reduction. For some, there may be a need to install
[[Page 22218]]
cooling towers for the cooling flow component that cannot be reused.
EPA assumes, however, that this, however, will in most instances be a
small portion of the total intake flow. Also, if the new unit comprises
only a portion of the entire manufacturing facility, there may be other
process units and plant operations nearby that could reuse the cooling
water (or supply reusable water) in order to meet the flow reduction
requirements. The proposed rule encourages facilities to incorporate
flexible water use arrangements, including a provision where cooling
water that is reused elsewhere in the facility is not considered
cooling water; as a result, facilities will have an incentive to reuse
water and avoid being subject to 316(b) requirements.
For new units that would require an increase in intake flow, EPA
has found that the capital costs of the new intake and screen
technology which requires deeper pump and intake wells to accommodate
source water depth variations will be comparable to the capital costs
for closed-cycle technology. In these cases, closed-cycle may have
slightly higher O&M costs for pump and fan energy but these costs may
be offset by other cost savings such as reductions in water treatment
costs.
The definition of new manufacturing units limits the applicability
of closed-cycle requirements to new units. As such, it is assumed that
the construction activities would involve substantial downtime periods
that would be of similar or more likely greater duration than required
for construction and tie-in activities associated with the closed-cycle
cooling technology. EPA concludes that only a small portion of new
units will need to meet new unit flow reduction requirements through
the use of closed-cycle cooling and the associated net costs will be
minimal. EPA requests comment on these costing assumptions.
C. Social Cost of the Regulatory Options
EPA calculated the social cost of the four regulatory options for
existing Manufacturers and Electric Generators using two social
discount rate values: 3 percent and 7 percent. For the analysis of
social costs, EPA discounted all costs to the beginning of 2012, the
date at which this proposal would become effective under the regulation
development schedule. EPA assumed that all facilities subject to the
regulation would achieve compliance between 2013 and 2027, inclusive,
depending on the compliance schedules associated with the four
regulatory options considered in the proposed rule for specific
categories of facilities. EPA performed the social cost analysis over a
50-year period to reflect: The last year in which individual facilities
are expected to achieve compliance (2027) under any of the regulatory
options considered for this analysis, the technology life of the
longest-lived compliance technology installed at any facility (30
years), and a period of 5 years after the last year of compliance
technology operation during which benefits continue to accrue. Under
this framework, the last year for which costs were tallied in the
analysis is 2056, with benefits continuing on a diminishing basis
through 2061. Because the analysis period extends beyond the useful
life of compliance equipment assumed to be installed at facilities that
achieve compliance before 2017, the social cost analysis accounts for
re-installation of IM compliance technologies after the end of their
initial useful life periods; however, EPA does not expect in-scope
facilities to completely re-build cooling towers (components such as
piping and the concrete basin can be reused) and EPA expects other
technology replacement costs (such as pumps and fill material) are
accounted for as part of the ongoing O&M expenses for cooling towers.
Costs incurred by governments for administering the regulation were
analyzed over the same time frame. This analysis accounts for
technology costs associated with new units starting in the first year
after promulgation, i.e., 2013 (for more information on new units see
Chapter 3: Development of Costs for Regulatory Options of the EBA
report).
At a 3 percent discount rate, EPA estimates annualized costs of
compliance of $384 million under Option 1, $4,463 million under Option
2, $4,631 million under Option 3, and $327 million under Option 4. At a
7 percent discount rate, these costs are $459 million, $4,699 million,
$4,862 million, and $383 million, respectively. The largest component
of social cost is the pre-tax cost of regulatory compliance incurred by
complying facilities. These costs include one-time technology costs of
complying with the rule, one-time costs of installation downtime,
annual fixed and variable operating and maintenance (O&M) costs, the
value of electricity requirements for operating compliance technology,
and permitting costs (initial permit costs, annual monitoring costs,
and permit reissuance costs). In addition, all Electric Generators are
expected to become subject to I&E mortality requirements at the 125 MGD
threshold under Option 2. Social cost also includes implementation
costs incurred by Federal and State governments. EPA's social cost
estimates exclude the cost to facilities estimated to be baseline
closures. As further described in the EBA document, in the case of
Electric Generators, the baseline closure generating units were
identified in Energy Information Administration reports or in the
baseline IPM analyses, as having closed or projected to close
independent of the requirements of the existing facilities rule. For
Manufacturers, EPA's analyses indicated that these facilities are in
sufficiently weak financial condition before outlays for this
regulation, that the facilities are likely to close, again, independent
of the requirements of the existing facilities rule. Because these
facilities are not expected to comply with the existing facilities
rule, EPA did not include the costs that would otherwise be assigned to
these facilities in the analysis of social cost. Consistent with this
treatment of costs, EPA also did not include benefits from these
facilities in the tally of benefits to society for the analysis of
social costs and benefits of the existing facilities rule.
Exhibit VII-3 presents the social cost of the proposed options, by
type of cost, using 3 percent and 7 percent discount rates.
Exhibit VII-3--Annualized Social Cost
[In millions, 2009 $] \a\
----------------------------------------------------------------------------------------------------------------
Option 1 Option 2 Option 3 Option 4
----------------------------------------------------------------------------------------------------------------
3% Discount Rate:
Direct Compliance Cost:
Manufacturers....................... $61.31 $141.69 $172.92 $33.99
Electric Generators................. 318.77 4,319.59 4,457.79 289.77
-----------------------------------------------------------------------
Total Direct Compliance Cost........ 380.08 4,461.28 4,630.71 323.77
[[Page 22219]]
State and Federal Administrative Cost... 3.71 1.62 0.92 2.79
-----------------------------------------------------------------------
Total Social Cost................... 383.80 4,462.90 4,631.62 326.55
7% Discount Rate:
Direct Compliance Cost:
Manufacturers....................... 68.90 133.60 157.49 39.04
Electric Generators................. 385.68 4,564.02 4,703.65 340.80
-----------------------------------------------------------------------
Total Direct Compliance Cost........ 454.58 4,697.62 4,861.14 379.84
State and Federal Administrative Cost... 4.23 1.72 0.91 3.26
-----------------------------------------------------------------------
Total Social Cost................... 458.81 4,699.35 4,862.05 383.10
----------------------------------------------------------------------------------------------------------------
\a\ These social cost estimates do not include costs associated with installation of cooling tower technology at
new generating units subject to today's rule. They also do not include costs associated with complying with
site-specific BTA determinations under Options 1, 2, and 4. Section VI.I discusses costs for complying with
site-specific BTA determinations.
As shown in Exhibit VII-3, compliance cost in the Electric
Generators segment accounts for the majority of total social cost and
direct compliance cost under all four options. On a per regulated
facility basis and at a 3 percent discount rate, annualized pre-tax
costs in the Electric Generators segment amount to $0.57 million under
Option 1, $7.73 million under Option 2, $7.97 million under Option 3,
and $0.52 million under Option 4.\66\ For Manufacturers, the average
cost per regulated facility at a 3 percent discount rate is $0.12
million under Option 1, $0.27 million under Option 2, $0.33 million
under Option 3, and $0.07 million under Option 4.\67\ EPA's analysis
found a similar profile of per facility costs by industry segment for
the 7 percent discount rate case (see EBA Chapter 11 for additional
detail). While all four options require some form of control technology
at all facilities with design intake flows of two MGD or greater,
Option 2 and Option 3 require more costly technologies, which raises
the per-facility cost of compliance in these options.
---------------------------------------------------------------------------
\66\ Calculated using the total of 559 in-scope Electric
Generators based on technical facility weights.
\67\ Calculated using the total of 518 in-scope Manufacturers
based on technical facility weights.
---------------------------------------------------------------------------
EPA's estimate of federal and State government costs for
administering this proposal is comparatively minor in relation to the
estimated direct cost of regulatory compliance. EPA estimates
government annual administrative costs under 3 and 7 percent discount
rates, respectively, of approximately $3.71 million and $4.23 million
(Option 1), $1.62 million and $1.72 million (Option 2), $0.92 million
and $0.91 million (Option 3), and $2.79 million and $3.26 million
(Option 4).
EPA also estimated the costs for installation of closed cycle
cooling system technology at New Generating Units, as required by
today's rule. These costs are based on the estimates of occurrence of
new unit construction that would be subject to the New Units
requirement, and the incurrence of costs as described above in the
section titled ``How Did EPA Assess Costs for New Units?''
The social costs of adding closed cycle cooling system capability
at newly constructed units at existing facilities are not included in
the total social cost tallies presented above. EPA did not include
these costs in the tallies presented above because EPA did not estimate
benefits from installation of closed cycle cooling systems at these
units (their location is unknown). As a result, comparisons of social
cost, which would include these costs, with benefits, which would not
include the I&E mortality reductions from installing those closed cycle
cooling systems, would be inconsistent. The costs for adding closed
cycle cooling system capability at newly constructed units are the same
across all four of the regulatory options presented in today's proposed
rule, because the technology performance requirements for existing
units at existing facilities, which vary by regulatory option, do not
apply to these newly constructed generating units. On an annualized
cost base, these amount to $14.7 million at a 3 percent discount rate,
and $10.9 million at a 7 percent discount rate.
D. Economic Impact
EPA assessed the economic impact of the regulatory options in
different ways depending on the affected segment, Manufacturers or
Electric Generators:
For Manufacturers, EPA assessed the impact of compliance costs on
business viability at the level of the affected facility (facility-
level analysis), including assessment of the potential for facility
closures and of the potential for affected facilities to incur
financial stress short of closure. For manufacturers, EPA also assessed
the impact of compliance requirements on the entities that own in-scope
facilities (firm-level analysis), based on the level of compliance
costs incurred by the total of in-scope facilities owned by a firm in
relation to the revenue of the firm.
For Electric Generators, EPA assessed economic impact in three
ways: (1) An assessment of the impact of compliance costs on first,
complying facilities and second, the entities that own those
facilities, based on comparison of compliance costs to facility and
firm revenue, (2) an assessment of potential electricity price effects
on residential and other electricity consumers, and (3) an assessment
of the impact of the proposed regulatory options within the context of
the electricity markets in which affected facilities operate.
These analyses are based on the facilities included in EPA's
previous 316(b) surveys of electric generators and those manufacturing
industries whose operations are most reliant on cooling water and that
are expected to be most affected by this proposal. For each regulatory
option, only those facilities that would be subject to national
standards, based on their DIF, are included in the analyses.
The following sections summarize the methods and findings for
manufacturers and electric power generators for these analyses.
a. Manufacturers
This section presents EPA's estimated economic impacts on
Manufacturers for the three regulatory options. The
[[Page 22220]]
economic impact analyses for Manufacturers assess how facilities, and
the firms that own them, are expected to be affected financially by the
regulatory options. The facility impact analysis starts with compliance
cost estimates from the EPA engineering analysis (see section VII.B)
and then calculates how these compliance costs would affect the
financial performance and condition of the sample facilities and owning
firms.
Measures of economic impact include facility closures and
associated losses in revenue and employment, financial stress short of
closure (``moderate impacts''), and firm-level impacts.\68\
---------------------------------------------------------------------------
\68\ For the analysis of three regulatory options presented in
this document, neither employment loss nor output loss were in fact
relevant because none of these options resulted in regulatory
closures.
---------------------------------------------------------------------------
In conducting the facility impact analysis, EPA first eliminated
from the analysis those facilities that the Agency estimated to be at
substantial risk of financial failure regardless of any additional
financial burden that might result from the regulatory options under
consideration (baseline closure facilities). Second, for the remaining
facilities, EPA evaluated how compliance costs would likely affect
facility financial performance and condition. EPA identified a facility
as a regulatory closure if it would have operated under baseline
conditions but would fall below an acceptable financial performance
level under the new regulatory requirements.
EPA's analysis of regulatory closures is based on the estimated
change in facility After-Tax Cash Flow (cash flow) as a result of the
regulation and specifically examines whether the change in cash flow
would be sufficient to cause the facility's going concern business
value to become negative. EPA calculated business value using a
discounted cash flow framework in which cash flow is discounted at an
estimated cost of capital to calculate the going concern value of the
facility. The specific definition of cash flow used in these analyses
is after-tax free cash flow available to all capital--equity and debt--
including an allowance for ongoing capital expenditures required by the
business. Correspondingly, the cost of capital reflects the combined
cost, after-tax, of equity and debt capital. For its analysis of
economic/financial impacts on the Manufacturers industry segment, EPA
used 7 percent as a real, after-tax cost of capital. Use of the 7
percent discount rate is consistent with guidance from the Office of
Management and Budget on the opportunity cost of capital to society.
In these analyses, EPA first calculated the baseline going concern
value of the facility using its baseline cash flow--i.e., facility cash
flow before compliance-related outlays--and used this value to
determine whether a given facility is a baseline closure (for details
see Chapter 4 of the EBA report). If EPA found the facility's estimated
going concern value to be negative, then the facility was judged a
baseline closure--i.e., likely to fail financially, independent of
incurrence of compliance costs--and removed the facility from further
consideration in the impact and other economic analyses.
As the second step in the facility impact analysis, EPA adjusted
the baseline cash flow to reflect the expected financial effects of
compliance technology installation and operation. Based on an
assessment of cost pass-through potential in the affected industries
(see Chapter 5 and Appendix 4.A of the EBA), EPA assumed that none of
the facility's compliance costs could be passed on to its customers as
price and revenue increases--i.e., all compliance costs must be
absorbed within the facility's cash flow. EPA then recalculated the
facility's business value using the adjusted post-compliance cash flow.
If this analysis found that the facility's business value would become
negative as a result of meeting compliance requirements, then EPA
judged the facility to be a regulatory closure.
EPA also identified facilities that would likely incur moderate
financial impacts, but that are not expected to close, as a result of
the rule. EPA established thresholds for two measures of financial
performance and condition--interest coverage ratio and pre-tax return
on assets--and compared the facilities' performance before and after
compliance under each regulatory option with these thresholds. EPA
attributed incremental moderate impacts to the rule if both financial
ratios exceeded threshold values in the baseline (i.e., there were no
moderate impacts in the baseline), but at least one financial ratio
fell below the threshold value in the post-compliance case.
i. Baseline Closure Analysis
Exhibit VII-4 presents projected baseline closures for the
estimated facilities in the Primary Manufacturing Industries and
additional known facilities in Other Industries.\69\ From the analysis
as outlined above, EPA determined that 73 facilities (or 13 percent) of
the estimated 569 regulated facilities in the six Primary Manufacturing
Industries are baseline closures. The highest percentages of baseline
closures occur in the Steel industry sector (32 percent). An additional
three facilities (or 30 percent) of the 10 known facilities in Other
Industries are projected to be baseline closures. These facilities were
excluded from the post-compliance analysis of regulatory impacts,
leaving 504 facilities for the assessment of compliance impacts.
---------------------------------------------------------------------------
\69\ The estimated number of Manufacturers facilities considered
in the impact analysis (579) differs from the number reported in the
broader analyses (592). EPA determined that the survey responses of
14 sample facilities lacked certain financial data needed for the
facility impact analysis while containing sufficient data to support
estimates of facility counts and compliance costs. EPA therefore
retained these sample facilities (37 sample weighted facilities) in
the broader analyses but excluded them from the impact analysis.
When these sample facilities were excluded from the impact analysis,
the sample weights for the remaining facilities within the affected
sample frames were adjusted upwards to account for their removal
(the revised weights are referred to as the economic analysis
weights). The difference in the reported facility totals in the
impact and social cost analyses reflects the removal of these 14
facilities and the use of adjusted sample weights, which due to
rounding error results in a difference of 13 between the facilities
in the impact analysis and those in the other analyses.
Exhibit VII-4--Summary of Baseline Closures for Manufacturers
----------------------------------------------------------------------------------------------------------------
Number of Percentage of
Sector Total number of baseline baseline Operating in
facilities \a\ closures closures baseline
----------------------------------------------------------------------------------------------------------------
Paper................................... 230 32 14 198
Chemicals............................... 171 4 3 167
Petroleum............................... 36 5 15 30
Steel................................... 68 22 32 46
Aluminum................................ 27 3 12 24
Food and Kindred Products............... 37 6 17 31
Total Facilities in Primary 569 73 13 497
Manufacturing Industries...............
[[Page 22221]]
Additional known facilities in Other 10 3 30 7
Industries.............................
-----------------------------------------------------------------------
Total Manufacturers Facilities...... 579 76 13 504
----------------------------------------------------------------------------------------------------------------
\a\ Economic Analysis Weights were used to determine facility counts. See preceding footnote.
ii. Number of Facilities Subject to National Standards
EPA estimates that all of these 504 Manufacturers facilities--497
facilities in the Primary Manufacturing Industries and 7 facilities in
the Other Industries--are subject to the requirements under the four
regulatory options, although the technology response anticipated at
individual facilities differs under each option. Under Option 1, all
504 facilities passing the baseline closure test would be required to
meet IM standards and EPA estimates that 370 will need to install new
technology in order to do so. Under Option 2, 57 facilities with DIF
exceeding 125 MGD would be required to meet I&E mortality standards,
and EPA estimates that all of these facilities would need to retrofit
closed-cycle cooling. The remaining 448 facilities would be subject
only to IM standards, and EPA estimates that 366 would need to install
new technology to meet these requirements. Under Option 3, all 504
facilities would be required to meet I&E mortality standards, and in
this case EPA estimates that 426 facilities would need to install a
cooling tower to meet these requirements. In addition, EPA estimates
that 181 facilities would need to install additional IM technology to
meet Option 3's regulatory requirements. Under Option 4, 156 facilities
would be required to meet IM standards; in this case, EPA estimates
that 139 facilities would need to install new technology to meet this
requirement.
iii. Post-Compliance Facility Impact Analysis; Summary of Impacts
Of the 504 Manufacturers facilities potentially subject to
regulation after excluding baseline closures, EPA estimated that no
facilities would close or incur employment losses as a result of the
Options. EPA also found that no facilities would incur moderate impacts
under Options 1, 2, and 4, but 17 facilities would incur moderate
impacts under Option 3.
Exhibit VII-5 summarizes the estimated impacts of the proposed rule
on Manufacturers by option, including facility impacts and total
annualized compliance costs on an after-tax basis. The reported costs
exclude compliance costs for baseline closures. The total annualized,
after-tax compliance cost reported in Exhibit VII-5 represents the cost
actually incurred by complying firms, taking into account the
reductions in tax liability resulting from compliance outlays and
assuming no recovery of costs from customers through increased prices.
The after-tax analysis uses a combined federal/State tax rate, and
accounts for facilities' baseline tax circumstances. Specifically, tax
offsets to compliance costs are limited not to exceed facility-level
tax payments as reported in facility questionnaire responses. The total
annualized, after-tax compliance cost reported here is the sum of
annualized, after-tax costs by facility at the year of compliance,
using a 7 percent after-tax cost of capital. This cost calculation
differs from the calculation of compliance costs as included in the
calculation of the total social costs of the regulation (see Section
VII.C) where costs are accounted for on a pre-tax basis.
Exhibit VII-5--Facility Impacts and Compliance Costs for Manufacturers
----------------------------------------------------------------------------------------------------------------
Option 1 Option 2 Option 3 Option 4
----------------------------------------------------------------------------------------------------------------
Primary Manufacturing Industries
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in 497 497 497 497
Baseline...............................
Number of Closures (Severe Impacts)..... 0 0 0 0
Percentage of Facilities Closing........ 0% 0% 0% 0%
Number of Facilities with Moderate 0 0 17 0
Impacts................................
Percentage of Facilities with Moderate 0% 0% 3.40% 0.00%
Impacts................................
Annualized Compliance Costs (after tax, $40.78 $108.71 $147.87 $23.38
million 2009 $)........................
----------------------------------------------------------------------------------------------------------------
Additional Known Facilities in Other Industries
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in 7 7 7 7
Baseline...............................
Number of Closures (Severe Impacts)..... 0 0 0 0
Percentage of Facilities Closing........ 0% 0% 0% 0%
Number of Facilities with Moderate 0 0 0 0
Impacts................................
Percentage of Facilities with Moderate 0% 0% 0% 0%
Impacts................................
Annualized Compliance Costs (after tax, $1.13 $1.52 $1.99 $0.60
million 2009 $)........................
----------------------------------------------------------------------------------------------------------------
iv. Firm-Level Impact
In addition to analyzing the impact of the regulation at the
facility level, EPA also examined the impact of the proposed rule on
firms that own manufacturing facilities with cooling water intake
structures. A firm that owns multiple facilities could be adversely
affected due to the cumulative burden of regulatory requirements over
these facilities. For the assessment of firm-level effects, EPA
calculated annualized after-tax compliance costs as a percentage of
firm revenue and reports here the estimated number and percentage of
affected firms incurring compliance costs in three cost-to-revenue
ranges: Less than 1 percent; at least 1 percent but less than 3
percent; and 3 percent or higher.
[[Page 22222]]
EPA's sample-based analysis of facilities in the Primary
Manufacturing Industries supports specific estimates of the number of
facilities expected to be affected by the regulation and the total
compliance costs expected to be incurred in these facilities. However,
the sample-based analysis does not support specific estimates of the
number of firms that own facilities in the Primary Manufacturing
Industries. In addition, and as a corollary, the sample-based analysis
does not support specific estimates of the number of regulated
facilities that may be owned by a single firm, or of the total of
compliance costs across regulated facilities that may be owned by a
single firm. For the firm-level analysis, EPA therefore considered two
approximate bounding cases based on the sample weights developed from
the facility survey. These cases provide a range of estimates for the
number of firms incurring compliance costs and the costs incurred by
any firm owning a regulated facility. The cases are as follows:
1. Lower bound estimate of number of firms owning facilities that
face requirements under the regulation; upper bound estimate of total
compliance costs that a firm may incur. For this case, EPA assumed that
any firm owning a regulated sample facility(ies), owns the known sample
facility(ies) and all of the sample weights associated with the sample
facility(ies). This case yields an approximate lower bound estimate of
the count of affected firms, and an approximate upper bound estimate of
the potential cost burden to any single firm (see EBA Chapter 4 for
information on the analysis of firm-level impacts).
2. Upper bound estimate of number of firms owning facilities that
face requirements under the regulation; lower bound estimate of total
compliance costs that a firm may incur. For this case, EPA inverted the
prior assumption and assumed (1) that a firm owns only the regulated
sample facility(ies) that it is known to own from the sample analysis
and (2) that this pattern of ownership, observed for sampled facilities
and their owning firms, extends over the facility population
represented by the sample facilities. This case minimizes the
possibility of multi-facility ownership by a single firm and thus
maximizes the count of affected firms, but also minimizes the potential
cost burden to any single firm.
Exhibit VII-6 summarizes the results of the firm-level analysis for
these two analytic cases.
Exhibit VII-6--Firm-Level After-Tax Annual Compliance Costs as a Percentage of Revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
Not analyzed due to Number and percentage with after tax annual compliance costs/
lack of revenue annual revenue of:
information \b\ ---------------------------------------------------------------
Number of firms in the analysis Pot. reg. ---------------------- Less than 1% 1-3% At least 3%
---------------------------------------------------------------
Number % Number % Number % Number %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Manufacturing Industries
--------------------------------------------------------------------------------------------------------------------------------------------------------
Case 1: Lower bound estimate of number of firms owning facilities that face requirements under the regulation; upper bound estimate of total compliance
costs that a firm may incur \a\........................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1............................................... 117 3 3 113 96 0 0 1 1
Option 2............................................... 117 3 3 113 96 0 0 1 1
Option 3............................................... 117 3 3 113 96 0 0 1 1
Option 4............................................... 117 0 0 117 100 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Case 2: Upper bound estimate of number of firms owning facilities that face requirements under the regulation; lower bound estimate of total compliance
costs that a firm may incur............................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1............................................... 359 9 3 349 97 0 0 1 0
Option 2............................................... 359 9 3 349 97 0 0 1 0
Option 3............................................... 359 9 3 349 97 0 0 1 0
Option 4............................................... 359 0 0 359 100 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Other Industries
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1............................................... 9 0 0 9 100 0 0 0 0
Option 2............................................... 9 0 0 9 100 0 0 0 0
Option 3............................................... 9 0 0 9 100 0 0 0 0
Option 4............................................... 9 0 0 9 100 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The alternative analysis case concepts are not applicable to the Other Industries firms and facilities, because these facilities do not receive
sample weights.
\b\ For Options 1, 2, and 3, all facilities and parent firms are assigned costs; however three firms are not analyzed because no revenue data is
available. In Option 4, these three firms are assigned no costs, and so by definition have cost to revenue ratios less than 1% and are categorized as
such.
As presented in Exhibit VII-6, EPA estimated that the number of
firms owning regulated facilities in the Primary Manufacturing
Industries range from 117 (Case 1 estimate) to 359 (Case 2 estimate),
depending on the assumed ownership cases outlined above. An additional
9 firms are known to own facilities in Other Industries.\70\
---------------------------------------------------------------------------
\70\ The alternative analysis case approaches are not applicable
to the Other Industries firms and facilities, because these
facilities do not receive sample weights.
---------------------------------------------------------------------------
EPA's analyses indicate that the number of firms falling in the
reported cost-to-revenue impact ranges is the
[[Page 22223]]
same across Options 1, 2, and 3, by analysis case. No firms fall in the
reported impact ranges under Option 4 for either analysis case. Under
Case 1, Lower Bound Estimate of Number of Firms Owning Facilities/Upper
Bound Estimate of Costs Incurred by these Firms, zero of the estimated
117 firms owning Manufacturers facilities incur costs between 1 and 3
percent of revenue for all Options, and one firm incurs costs exceeding
3 percent of revenue under Options 1, 2, and 3. No firms incur costs
exceeding 3 percent of revenue under Option 4. The remaining 113
(Options 1, 2, and 3), and 117 (Option 4) firms incur costs below 1
percent of revenue or no costs.
Under Case 2, Upper Bound Estimate of Number of Firms Owning
Facilities/Lower Bound Estimate of Costs Incurred by these Firms, zero
firms in the Primary manufacturing industries are estimated to incur
costs between 1 and 3 percent of revenue under all Options. Like Case
1, one firm incurs costs exceeding 3 percent of revenue under Options
1, 2, and 3, and no firms incur costs exceeding 3 percent of revenue
under Option 4. The remaining 349, and 359 firms, respectively, incur
costs below 1 percent of revenue or no costs.
For the firms owning Other Industries facilities, EPA's analysis
indicates that across all Options, no firms incur costs exceeding 1
percent of revenue.
Regardless of the analysis case or regulatory option, the number
and percentage of firms incurring costs between one and three percent
of revenue, or exceeding three percent of revenue, are small.
b. Electric Generators
For Electric Generators, EPA assessed the economic impact of the
regulatory options in three major ways: (1) Entity level impacts (at
both the facility and parent company levels), (2) potential electricity
price effects on residential and other electricity consumers, and (3)
broader electricity market impacts (taking into account the
interconnectedness of regional and national electricity markets, using
five metrics, for the full industry, for in-scope facilities only, and
as the distribution of impacts at the facility level).
1. Assessment of the Impact on Complying Facilities and Parent Entities
EPA assessed the cost to complying facilities and parent entities
based on cost-to-revenue analyses. For these two analyses, the Agency
assumed that none of the compliance costs will be passed on to
consumers through electricity rate increases and will instead be
absorbed by complying facilities and their parent entities. In
performing these and other impact analyses, EPA developed and used
sample weights to extrapolate impacts assessed initially at the level
of a sample of facilities to the full population of in-scope
facilities. Specifically, EPA developed and used different sets of
weights, with each weight set being used to derive a specific estimate
and/or used with a different set of sample facilities to which the
weights were applied to derive a given estimate. (See Appendix 3.A of
the EBA report for a discussion on weights development and
application.)
a. Cost-to-Revenue Analysis for Complying Facilities
To provide insight on the potential significance of the compliance
costs to complying facilities, EPA calculated the annualized after-tax
compliance costs of the regulatory options as a percentage of baseline
annual revenues, for 559 in-scope facilities.71 72 Most of
the revenue estimates used in this analysis were developed using the
average of facility-specific baseline (i.e., pre-promulgation)
projections from the Integrated Planning Model (IPM) for 2015, 2020,
2025, and 2028.\73\ In a few instances where IPM-based revenue values
were not available, EPA used estimates based on Energy Information
Administration (EIA) data. EPA performed this analysis for each of the
257 facilities for which compliance cost estimates were explicitly
developed. As stated above, EPA used facility sample weights to
estimate the total numbers of in-scope facilities that fall within
various cost-to-revenue ranges as reported in Exhibit VII-7 (see
Chapter 5 of the EBA report for a discussion of the facility-level
cost-to-revenue analysis).
---------------------------------------------------------------------------
\71\ For private, tax-paying entities, after-tax costs are a
more relevant measure of potential cost burden than pre-tax costs.
For non tax-paying entities (e.g., State government and municipality
owners of in-scope facilities), the estimated costs used in this
calculation include no adjustment for taxes.
\72\ For the facility cost-to-revenue analysis, EPA estimated
compliance costs for all facilities as of an assumed single proxy
compliance year, 2015, for comparison with 2015 revenues. EPA's
choice of the year for which cost and revenue values are used in a
particular part of the cost analysis was driven by the concept of a
given analysis (e.g., should cost and revenue values be as of the
Rule promulgation year, as of a facility's expected compliance year,
or as of a post-compliance, steady state operations year?) and the
availability of data for the analysis. For more information on the
methodology for the facility-level cost-to-revenue analysis, see
Chapter 5 of the EBA report.
\73\ To develop the average of year-by-year revenue values over
the data years, EPA set aside from the averaging calculation,
revenue values for years that are substantially lower than the
otherwise ``steady state average''--e.g., because of a generating
unit being out of service for an extended period. EPA believes the
resulting cost-to-revenue comparison provides a more realistic
assessment of potential impact on a ``steady state'' operations
basis.
---------------------------------------------------------------------------
Exhibit VII-7, below, summarizes the facility-level cost-to-revenue
analysis results for each option, by North American Electricity
Reliability Corporation (NERC) region.\74\ EPA estimates for Options 1
and 4, that the majority of facilities subject to today's proposal will
incur annualized costs of less than 1 percent of revenue (481
facilities or 86 percent). Under Options 2 and 3, the majority of in-
scope facilities, 333 (or approximately 60 percent) and 386 (or
approximately 69 percent), respectively, will incur annualized costs
exceeding 3 percent of revenue.
---------------------------------------------------------------------------
\74\ The NERC regions used for summarizing these findings are as
of 2008. Some NERC regions have been re-defined over the past few
years. The NERC region definitions used in today's Proposed Existing
Facilities Regulation analyses vary by analysis depending on which
region definition aligns better with the data elements underlying
the analysis.
Exhibit VII-7--Facility-Level Cost-to-Revenue Analysis Results by Regulatory Option and NERC Region \a\
----------------------------------------------------------------------------------------------------------------
Number of facilities with cost-to-
Number of in-scope facilities \a, No revenue revenue ratio of Minimum Maximum
b\ \c\ --------------------------------------- ratio % ratio %
< 1% 1-3% > 3%
----------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC.............................. 0 0 0 0 0.00 0.00
ERCOT............................. 5 28 7 2 0.00 3.28
FRCC.............................. 0 18 4 4 0.00 3.49
[[Page 22224]]
HICC.............................. 0 2 2 0 0.34 1.04
MRO............................... 0 43 4 0 0.00 1.80
NPCC.............................. 0 49 14 0 0.00 2.64
RFC............................... 0 148 13 3 0.00 3.58
SERC.............................. 0 146 6 5 0.00 3.61
SPP............................... 0 28 6 0 0.00 2.38
WECC.............................. 0 19 0 4 0.00 3.38
-----------------------------------------------------------------------------
Total......................... 5 481 55 18 0.00 3.61
----------------------------------------------------------------------------------------------------------------
Option 2: IM Everywhere and EM for Facilities With DIF 125 MGD
----------------------------------------------------------------------------------------------------------------
ASCC.............................. 0 0 0 0 0.00 0.00
ERCOT............................. 5 5 1 31 0.00 43.39
FRCC.............................. 0 5 4 16 0.00 35.37
HICC.............................. 0 0 0 3 3.87 8.48
MRO............................... 0 20 6 20 0.00 10.96
NPCC.............................. 0 15 10 38 0.00 37.53
RFC............................... 0 47 15 102 0.00 12.50
SERC.............................. 0 44 14 100 0.00 24.23
SPP............................... 0 11 6 17 0.00 49.66
WECC.............................. 0 19 0 4 0.00 40.10
-----------------------------------------------------------------------------
Total......................... 5 166 55 333 0.00 49.66
----------------------------------------------------------------------------------------------------------------
Option 3: I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC.............................. 0 0 0 0 0.00 0.00
ERCOT............................. 5 5 1 31 0.00 43.39
FRCC.............................. 0 5 4 16 0.00 35.37
HICC.............................. 0 0 0 3 3.87 8.48
MRO............................... 0 6 7 33 0.00 18.38
NPCC.............................. 0 0 9 55 1.22 37.53
RFC............................... 0 38 8 119 0.00 51.38
SERC.............................. 0 29 22 106 0.00 28.47
SPP............................... 0 11 6 17 0.00 49.66
WECC.............................. 0 17 0 6 0.00 40.10
-----------------------------------------------------------------------------
Total......................... 5 112 57 386 0.00 51.38
----------------------------------------------------------------------------------------------------------------
Option 4: IM for Facilities With DIF 50 MGD
----------------------------------------------------------------------------------------------------------------
ASCC.............................. 0 0 0 0 0.00 0.00
ERCOT............................. 5 28 7 2 0.00 3.28
FRCC.............................. 0 18 4 4 0.00 3.49
HICC.............................. 0 2 2 0 0.34 1.04
MRO............................... 0 43 4 0 0.00 1.80
NPCC.............................. 0 52 11 0 0.00 2.64
RFC............................... 0 151 12 2 0.00 3.54
SERC.............................. 0 148 5 5 0.00 3.61
SPP............................... 0 28 6 0 0.00 2.38
WECC.............................. 0 19 0 4 0.00 3.38
-----------------------------------------------------------------------------
Total......................... 5 488 49 17 0.00 3.61
----------------------------------------------------------------------------------------------------------------
\a\ No explicitly analyzed facilities are located in the ASCC region. For more information on explicitly and
implicitly analyzed in-scope facilities see Appendix 3.A of the EBA report.
\b\ Facility counts exclude baseline closures.
\c\ IPM and EIA report no revenue for 2 facilities (5 on the weighted basis); consequently, facility-level cost-
to-revenue analysis is performed for 257 facilities (559 on the weighted basis).
b. Parent Entity-Level Cost-to-Revenue Analysis
EPA also assessed the economic impact of the options considered for
today's proposed rule at the parent entity-level. The cost-to-revenue
analysis at the entity level provides insight on the impact of
compliance requirements on those entities that own more than one in-
scope facility. For this analysis, EPA identified the domestic parent
entity of each in-scope facility and obtained the entity's revenue from
publicly available data sources. For 5 identified ultimate parent
entities that own at least one explicitly analyzed Electric Generator
(i.e., Detailed Questionnaire (DQ) facilities and a
[[Page 22225]]
subset of the Short Technical Questionnaire (STQ) facilities with re-
circulating systems in their baseline) and that are non-U.S. firms EPA
could not obtain revenue for a domestic entity but did obtain revenue
at the level of the international parent entity; for these 5 entities,
EPA used this international entity revenue in the cost-to-revenue
analysis. EPA compared the total annualized after-tax compliance costs,
as of 2015 to the identified parent entity's total sales revenue (see
Chapter 5 of the EBA report).
Because compliance costs for the regulatory options were directly
attributable to only a subset of the in-scope facilities (i.e., the
explicitly analyzed, Detailed Questionnaire (DQ) facilities and a
subset of the Short Technical Questionnaire (STQ) facilities with re-
circulating systems in their baseline) and were therefore able to be
linked with only a subset of the parent entities that own in-scope
facilities, EPA developed and used entity-level sample weights for this
analysis, as outlined in the Appendix 3.A of the EBA report. EPA
defined two cases combining entity-level sample weights with facility-
level weights to yield approximate estimates of the numbers of parent
entities incurring costs in specific cost-to-revenue ranges. Each case
addresses a specific element of the understanding of entity-level
effects (see Chapter 5 of the EBA report for a discussion of the
entity-level cost-to-revenue analysis):
Estimation of facility costs at the level of the parent
entity, accounting for the potential ownership of implicitly analyzed,
sample-represented facilities by an identified parent entity and
Estimation of the number of parent entities, accounting
for the potential presence of parent entities that own only (an)
implicitly analyzed facility(ies) and thus cannot be associated with
the explicitly analyzed facilities.
The two analysis cases and the findings from their analysis are as
follows:
Using facility-level weights: For this case, facility-
level weights were applied to the estimated compliance costs for
facilities identified as being owned by a given parent entity.\75\ This
calculation may overstate the number of facilities and compliance costs
at the level of any given parent entity, but also likely underestimates
the number of parent entities. This analysis indicates that 97 unique
parent entities own 559 facilities subject to today's proposal. From
this analysis, EPA estimates that the majority of parent entities will
incur annualized costs of less than one percent of revenues under
Option 1 (85 out of 97 parent entities or 89 percent), Option 2 (54 out
of 97 parent entities or 56 percent), and Option 4 (86 out of 97 parent
entities or 91 percent). Under the more costly Option 3, a nearly equal
number of entities are expected to incur costs above and below 1
percent of revenue, i.e., 46 and 45 out of 91 parent entities,
respectively, not taking into account 6 parent entities with unknown
revenue (see Exhibit VII-8).
---------------------------------------------------------------------------
\75\ Parent entity weights were not used in this calculation
because the combination of facility weights and entity weights would
overstate, perhaps substantially, the estimate of in-scope
facilities and compliance costs assigned to parent entities.
Exhibit VII-8--Entity-Level Cost-to-Revenue Analysis Results, Using Facility-Level Weights
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total number Number of entities with cost-to-revenue ratio of\a\
Parent entity type of facilities Total number ---------------------------------------------------------------
\b\ of entities < 1% 1-3% > 3% Unknown
------------------------------------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................... 25 11 10 0 1 0
Federal................................... 16 1 1 0 0 0
Investor-owned............................ 306 38 38 0 0 0
Municipality.............................. 25 13 9 4 0 0
Nonutility................................ 170 30 23 0 1 6
Other political subdivision............... 0 0 0 0 0 0
State..................................... 17 4 4 0 0 0
-------------------------------------------------------------------------------------------------------------
Total................................. 559 97 85 4 2 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2: IM Everywhere and EM for Facilities With DIF 125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................... 25 11 7 1 3 0
Federal................................... 16 1 0 0 1 0
Investor-owned............................ 306 38 20 14 4 0
Municipality.............................. 25 13 6 5 2 0
Nonutility................................ 170 30 18 2 4 6
Other political subdivision............... 0 0 0 0 0 0
State..................................... 17 4 3 0 1 0
-------------------------------------------------------------------------------------------------------------
Total................................. 559 97 54 22 15 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 3: I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................... 25 11 4 3 4 0
Federal................................... 16 1 0 0 1 0
Investor-owned............................ 306 38 20 14 4 0
Municipality.............................. 25 13 2 5 6 0
Nonutility................................ 170 30 18 2 4 6
Other political subdivision............... 0 0 0 0 0 0
State..................................... 17 4 2 1 1 0
-------------------------------------------------------------------------------------------------------------
Total................................. 559 97 46 25 20 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 22226]]
Option 4: IM for Facilities With DIF 50 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................... 25 11 10 0 1 0
Federal................................... 16 1 1 0 0 0
Investor-owned............................ 306 38 38 0 0 0
Municipality.............................. 25 13 10 3 0 0
Nonutility................................ 170 30 23 0 1 6
Other political subdivision............... 0 0 0 0 0 0
State..................................... 17 4 4 0 0 0
-------------------------------------------------------------------------------------------------------------
Total................................. 559 97 86 3 2 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ EPA was unable to determine entity-level revenues for 6 (8 weighted) parent entities; consequently, for the purpose of this analysis, EPA used the
sum of facility-level revenues for facilities owned by these parent entities.
\b\ Facility counts exclude baseline closures.
Using entity-level weights: For this case, entity-level
weights were applied to the calculated number of parent entities
estimated to incur costs in each cost-to-revenue range.\76\ This
calculation may understate the number of facilities and compliance
costs at the level of any given parent entity, but accounts more
comprehensively for the number of parent entities owning in-scope
facilities. This analysis found that 140 unique domestic parent
entities own 257 facilities subject to today's proposal (see Exhibit
VII-9).\77\ From this analysis, EPA estimates that the majority of
parent entities will incur annualized costs of less than one percent of
revenues regardless of the option.
---------------------------------------------------------------------------
\76\ In the same way as stated above, facility weights were not
used in conjunction with entity weights because the combination of
facility weights and entity weights would overstate, perhaps, the
estimate of in-scope facilities and compliance costs assigned to
parent entities.
\77\ The NERC regions used to summarize these findings are as of
2004, which is the NERC region basis used in the utility-level EIA
2007 database. Some NERC regions have been re-defined over the past
few years. The NERC region definitions used in these analyses vary
by analysis depending on which region definition aligns better with
the data elements underlying the analysis.
Exhibit VII-9--Entity-Level Cost-to-Revenue Analysis Results, Using Entity-Level Weights
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total number Total number Number of entities with cost-to-revenue ratio of \a\
Parent entity type of facilities of entities ---------------------------------------------------------------
\b\ \c\ < 1% 1-3% > 3% Unknown
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................................. 13 20 18 2 0 0
Federal................................................. 7 1 1 0 0 0
Investor-owned.......................................... 138 42 42 0 0 0
Municipality............................................ 13 35 35 0 0 0
Nonutility.............................................. 78 38 29 0 1 8
Other political subdivision............................. 0 0 0 0 0 0
State................................................... 8 4 4 0 0 0
-----------------------------------------------------------------------------------------------
Total............................................... 257 140 129 2 1 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2: IM Everywhere and EM for Facilities With DIF 125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................................. 13 20 13 5 2 0
Federal................................................. 7 1 0 0 1 0
Investor-owned.......................................... 138 42 35 6 1 0
Municipality............................................ 13 35 24 8 3 0
Nonutility.............................................. 78 38 25 4 1 8
Other political subdivision............................. 0 0 0 0 0 0
State................................................... 8 4 3 0 1 0
-----------------------------------------------------------------------------------------------
Total............................................... 257 140 101 23 9 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 3: I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................................. 13 20 9 9 2 0
Federal................................................. 7 1 0 0 1 0
Investor-owned.......................................... 138 42 35 6 1 0
Municipality............................................ 13 35 13 11 11 0
Nonutility.............................................. 78 38 25 4 1 8
Other political subdivision............................. 0 0 0 0 0 0
State................................................... 8 4 3 0 1 0
-----------------------------------------------------------------------------------------------
[[Page 22227]]
Total............................................... 257 140 86 29 17 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 4: IM for Facilities With DIF 50MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative............................................. 13 20 18 2 0 0
Federal................................................. 7 1 1 0 0 0
Investor-owned.......................................... 138 42 42 0 0 0
Municipality............................................ 13 35 36 0 0 0
Nonutility.............................................. 78 38 29 0 1 8
Other political subdivision............................. 0 0 0 0 0 0
State................................................... 8 4 4 0 0 0
-----------------------------------------------------------------------------------------------
Total............................................... 257 140 130 2 1 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ EPA was unable to determine entity-level revenues for 6 (8 weighted) parent entities; consequently, for the purpose of this analysis, EPA used the
sum of facility-level revenues for facilities owned by these parent entities.
\b\ Facility counts exclude baseline closures.
\c\ There are a total of 143 parent entities on an unweighted basis, 3 of which are other political subdivision entities. These entities own only
implicitly analyzed facilities; consequently, there is no explicitly analyzed other political subdivision parent entity to represent these implicitly
analyzed parent entities and total weighted entity counts do not include 3 other political subdivision entities.
As discussed above, because compliance costs for the regulatory
options were directly attributable to only a subset of the in-scope
facilities and were therefore able to be linked with only a subset of
the parent entities that own in-scope facilities, EPA conducted entity
cost-to-revenue analysis using two weighting approaches. Using
facility-level weights is likely to underestimate the number of parent
entities and overstate the number of facilities and compliance costs at
the level of any given parent entity. At the same time, using entity-
level weights is likely to account more comprehensively for the number
of parent entities owning in-scope facilities but understate the number
of facilities and compliance costs at the level of any given parent
entity.
Under these alternative approaches, at the 1-3 percent of revenue
impact level, EPA estimates that 4 and 2 firms (4.1 percent and 1.4
percent of firms owning in-scope facilities, respectively) would fall
in this impact range under Option 1, 22 and 23 firms (22.7 percent and
16.4 percent, respectively) under Option 2, and 25 and 29 firms (25.8
percent and 20.7 percent, respectively) under Option 3. At the 3
percent of revenue impact level, the Agency estimates that 2 and 1
firms (2.1 percent and 0.7 percent, respectively) would fall in this
impact range under Option 1, 15 and 9 firms (15.5 percent and 6.4
percent, respectively) under Option 2, and 20 and 17 firms (20.6
percent and 12.1 percent, respectively) under Option 3. The results for
Option 4 are virtually identical to those of Option 1, with one fewer
entity incurring costs between 1 and 3 percent of revenue.
2. Assessment of Potential Electricity Price Effects
As an additional measure of economic impact, EPA assessed the
potential electricity price effects from today's Proposed Existing
Facilities Regulation in two ways: (1) An assessment of the potential
annual increase in household electricity costs and (2) an assessment of
the potential annual increase in electricity costs per MWh of total
electricity sales. These analyses assume that all compliance costs will
be passed through on a pre-tax basis as increased electricity prices as
opposed to the treatment in the facility- and firm-level analyses
discussed in Section VII.D.b.1, which assume that none of the
compliance costs will be passed to consumers through electricity rate
increases. For discussion of the reasonableness of this assumption see
EBA Chapter 5.
a. Cost to Residential Households
Using the assumptions outlined above, EPA estimated the potential
annual increase in electricity costs per household by NERC region. The
analysis uses the total annualized pre-tax compliance cost per megawatt
hour (MWh) for the year 2015, in conjunction with the reported total
electricity sales quantity for each NERC region as reported by the EIA
for 2007 for all NERC regions except ASCC and HICC, for which total
2015 electricity sales projections came from the Department of Energy's
Annual Energy Outlook 2009 (AEO 2009).\78\ This analysis also uses the
quantity of residential electricity sales per household as reported by
the 2007 EIA for all NERC regions 2007.
---------------------------------------------------------------------------
\78\ AEO does not provide information for ASCC and HICC.
---------------------------------------------------------------------------
To calculate the average cost per household, by region, EPA divided
total compliance costs for each NERC region by the reported total MWh
of sales within the region. The potential annual cost impact per
household was then calculated by multiplying the estimated average cost
per MWh by the average MWh per household, by NERC region.\79\
---------------------------------------------------------------------------
\79\ The NERC regions used for summarizing these findings are as
of 2004, which is the NERC region basis used in the utility-level
EIA 2006 database. Some NERC regions have been re-defined over the
past few years. The NERC region definitions used in today's Proposed
Existing Facilities Regulation analyses vary by analysis depending
on which region definition aligns better with the data elements
underlying the analysis.
---------------------------------------------------------------------------
Exhibit VII-10 below, summarizes the annual household impact
results for each option, by NERC region. These results show that for
Option 1, the average annual cost per residential household is expected
to range from $0.05 in WECC to $3.93 in SPP, for Option 2 from $0.09 in
WECC to $27.11 in SERC, and for Option 3 from $0.11 in WECC to $27.88
in SERC. Overall, for a typical U.S. household, Option 4 is expected to
result in the lowest annual cost of $1.37 per household, while Option 3
is expected to result in the highest annual cost of $17.60 per
household. Option 1 and Option 2 are estimated to result in annual
costs of $1.41 per household and $17.09 per household, respectively.
[[Page 22228]]
Exhibit VII-10--Average Annual Cost per Residential Household in 2015 by Regulatory Option and NERC Region \a\
\b\
----------------------------------------------------------------------------------------------------------------
NERC Region \c\ Option 1 Option 2 Option 3 Option 4
----------------------------------------------------------------------------------------------------------------
ASCC.................................... $0.00 $0.00 $0.00 $0.00
ECAR.................................... 1.23 20.00 20.47 1.22
ERCOT................................... 1.76 26.52 26.52 1.74
FRCC.................................... 2.37 17.89 18.21 2.37
HICC.................................... 3.16 23.82 23.82 3.16
MAAC.................................... 2.11 18.97 19.31 1.95
MAIN.................................... 1.46 19.18 20.18 1.41
MAPP.................................... 1.79 16.00 17.04 1.74
NPCC.................................... 1.38 19.89 21.13 1.37
SERC.................................... 1.64 27.11 27.88 1.61
SPP..................................... 3.93 21.56 21.56 3.86
WECC.................................... 0.05 0.09 0.11 0.01
U.S..................................... 1.41 17.09 17.60 1.37
----------------------------------------------------------------------------------------------------------------
\a\ The rate impact analysis assumes full pass-through of all compliance costs to electricity consumers.
\b\ Cost estimates exclude baseline closures.
\c\ No explicitly analyzed facilities are located in the ASCC region. For more information on explicitly and
implicitly analyzed in-scope facilities see Appendix 3.A of the EBA report.
As stated above, this analysis assumes that all of the compliance
costs will be passed onto consumers through increased electricity
rates. However, at least some facilities and firms are likely to absorb
some of these costs, thereby reducing the impact of today's proposed
rule on electricity consumers. At the same time, EPA recognizes that
Electric Generators that operate as regulated public utilities are
generally permitted to pass on environmental compliance costs as rate
increases to consumers.
b. Compliance Cost per Unit of Electricity Sales
EPA also calculated the per unit of electricity sales cost of the
regulatory options. EPA used two data inputs in this analysis (1) total
pre-tax compliance cost by NERC region, and (2) estimated total
electricity sales, from the AEO 2009 for 2015, by NERC region, for all
NERC regions except ASCC and HICC; for ASCC and HICC EPA used 2007 EIA.
The Agency summed sample-weighted pre-tax annualized compliance costs
as of 2015 over complying facilities by NERC region to calculate an
approximate total estimated annual cost in each region. EPA then
calculated the approximate average price impact per unit of electricity
consumption by dividing total compliance costs by the reported total
MWh of sales in each NERC region.
As reported in Exhibit VII-11, annualized compliance costs (in
dollars per KWh sales) range from 0.001[cent] in the WECC region to
0.040[cent] in the HICC region for Option 1, from 0.001[cent] in the
WECC region to 0.303[cent] in the HICC region for Options 2 and 3, and
from less than 0.001[cent] in the WECC region to 0.040[cent] in the
HICC region for Option 4. On average, across the United States, Option
4 results in the lowest cost of 0.012[cent] per KWh, while Option 3
results in the highest cost of 0.157[cent] per KWh. Option 1 and Option
2 result in national costs of 0.013[cent] per KWh and 0.153[cent] per
KWh, respectively.
Exhibit VII-11--Compliance Cost per Unit of Electricity Sales in 2015 by Regulatory Option and NERC Region (2009
[cent]/KWh Sales) \a\ \b\
----------------------------------------------------------------------------------------------------------------
Compliance cost per
Annualized pre-tax Total electricity unit of electricity
NERC Region \c\ compliance costs sales (KWh) sales (2009 [cent]/
(2009 $) KWh sales)
----------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC.......................................... $0 6,326,610,000 0.000
ECAR.......................................... 62,390,503 569,849,487,305 0.011
ERCOT......................................... 40,029,111 313,395,965,576 0.013
FRCC.......................................... 41,259,203 242,320,907,593 0.017
HICC.......................................... 4,259,468 10,585,038,000 0.040
MAAC.......................................... 61,468,467 294,365,234,375 0.021
MAIN.......................................... 41,292,594 275,415,008,545 0.015
MAPP.......................................... 27,565,966 165,189,056,396 0.017
NPCC.......................................... 51,647,619 284,990,412,176 0.018
SERC.......................................... 99,360,633 887,073,303,223 0.011
SPP........................................... 63,811,175 204,172,271,729 0.031
WECC.......................................... 4,015,273 701,826,043,025 0.001
U.S........................................... 497,100,012 3,960,424,804,688 0.013
----------------------------------------------------------------------------------------------------------------
Option 2: IM Everywhere and EM for Facilities with DIF 125 MGD
----------------------------------------------------------------------------------------------------------------
ASCC.......................................... 0 6,326,610,000 0.000
ECAR.......................................... 1,010,953,670 569,849,487,305 0.177
ERCOT......................................... 602,721,709 313,395,965,576 0.192
FRCC.......................................... 311,699,736 242,320,907,593 0.129
HICC.......................................... 32,074,166 10,585,038,000 0.303
[[Page 22229]]
MAAC.......................................... 551,710,436 294,365,234,375 0.187
MAIN.......................................... 542,786,160 275,415,008,545 0.197
MAPP.......................................... 246,541,770 165,189,056,396 0.149
NPCC.......................................... 744,738,535 284,990,412,176 0.261
SERC.......................................... 1,643,059,866 887,073,303,223 0.185
SPP........................................... 350,239,021 204,172,271,729 0.172
WECC.......................................... 6,930,361 701,826,043,025 0.001
U.S........................................... 6,043,455,430 3,960,424,804,688 0.153
----------------------------------------------------------------------------------------------------------------
Option 3: I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC.......................................... 0 6,326,610,000 0.000
ECAR.......................................... 1,035,075,751 569,849,487,305 0.182
ERCOT......................................... 602,721,709 313,395,965,576 0.192
FRCC.......................................... 317,419,881 242,320,907,593 0.131
HICC.......................................... 32,074,166 10,585,038,000 0.303
MAAC.......................................... 561,627,430 294,365,234,375 0.191
MAIN.......................................... 571,233,958 275,415,008,545 0.207
MAPP.......................................... 262,582,596 165,189,056,396 0.159
NPCC.......................................... 791,203,354 284,990,412,176 0.278
SERC.......................................... 1,689,520,164 887,073,303,223 0.190
SPP........................................... 350,239,021 204,172,271,729 0.172
WECC.......................................... 8,641,891 701,826,043,025 0.001
U.S........................................... 6,222,339,919 3,960,424,804,688 0.157
----------------------------------------------------------------------------------------------------------------
Option 4: IM for Facilities with DIF 50MGD
----------------------------------------------------------------------------------------------------------------
ASCC.......................................... 0 6,326,610,000 0.000
ECAR.......................................... 61,651,375 569,849,487,305 0.011
ERCOT......................................... 39,560,948 313,395,965,576 0.013
FRCC.......................................... 41,259,203 242,320,907,593 0.017
HICC.......................................... 4,259,468 10,585,038,000 0.040
MAAC.......................................... 56,749,132 294,365,234,375 0.019
MAIN.......................................... 40,018,375 275,415,008,545 0.015
MAPP.......................................... 26,744,938 165,189,056,396 0.016
NPCC.......................................... 51,290,663 284,990,412,176 0.018
SERC.......................................... 97,785,654 887,073,303,223 0.011
SPP........................................... 62,721,433 204,172,271,729 0.031
WECC.......................................... 913,556 701,826,043,025 0.000
U.S........................................... 482,954,744 3,960,424,804,688 0.012
----------------------------------------------------------------------------------------------------------------
\a\ This analysis assumes full pass-through of all compliance costs to electricity consumers.
\b\ Cost values exclude baseline closures.
\c\ There are no explicitly analyzed facilities located in the ASCC region. For more information on explicitly
and implicitly analyzed in-scope facilities see Appendix 3.A of the EBA report.
3. Assessment of the Impacts in the Context of Electricity Markets
In the analyses for the previous 316(b) regulations, EPA used the
Integrated Planning Model (IPM), a comprehensive electricity market
optimization model, to assess the economic impact of regulatory options
within the context of regional and national electricity markets. For
its economic impact assessment of today's proposed regulatory options,
EPA used an updated version of this same analytic system, Integrated
Planning Model Version 3.02 EISA (IPM V3.02), to assess facility and
market-level effects of the options.
Use of a comprehensive, market analysis system is important in
assessing the potential impact of the options because of the
interdependence of electricity generating units in supplying power to
the electric transmission grid. Increases in electricity production
costs and potential reductions in electricity output at directly
affected facilities--whether due to the temporary shutdown of electric
generating units during technology installation and/or the energy
production penalties that can result from compliance system operation--
can have a range of broader market impacts that extend beyond the
effect on complying facilities and their direct customers. In addition,
the impact of compliance requirements on directly affected facilities
may be seen differently when the analysis considers the impact on those
facilities in the context of the broader electricity market instead of
looking at the impact on a standalone, single-facility basis.
IPM V3.02 provides outputs for the North American Electric
Reliability Corporation (NERC) regions that lie within the continental
United States. IPM V3.02 does not analyze electric power operations in
Alaska and Hawaii because these states' electric power operations are
not connected to the continental U.S. power grid.
IPM V3.02 is based on an inventory of U.S. utility- and non-
utility-owned boilers and generators that provide power to the
integrated electric transmission grid, as recorded in the Department of
Energy's Energy Information Administration databases as
[[Page 22230]]
of 2005.\80\ The IPM baseline universe of facilities includes 533, or
nearly all, of the 559 electric generating facilities that EPA
estimates will be within the scope of today's proposed rule.\81\ IPM
Version 3.02 embeds a baseline energy demand forecast that is derived
from the Department of Energy's Annual Energy Outlook 2008 (AEO2008).
IPM V3.02 incorporates in its analytic baseline the expected compliance
response for the following air regulations affecting the power sector:
Title IV of the Clean Air Act (the Acid Raid Program); the
NOX SIP Call; various New Source Review (NSR) settlements;
\82\ and several state rules \83\ affecting emissions of SO2
and NOX that were finalized through February 3, 2009. IPM
also includes state rules that have been finalized and/or approved by a
state's legislature or environmental agency, and in certain instances,
facility-level compliance technology installations that have already
been undertaken because of CAIR requirements.84 85
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\80\ In some instances, facility information has been updated to
reflect known material changes in a plant's generating capacity
since 2005.
\81\ The exclusions of facilities from the IPM analysis include
4 facilities that are located in Alaska or Hawaii (and thus not
included in IPM), 4 ``lower-48'' facilities that are not connected
to the integrated electric transmission grid, 7 facilities excluded
from the IPM baseline as the result of custom adjustments made by
ICF, and 11 facilities that are not explicitly present in the 316(b)
facility dataset for this analysis. See Chapter 6 of the EBA report
for more details.
\82\ Include agreements between EPA and Southern Indiana Gas and
Electric Company (Vectren), Public Service Enterprise Group, Tampa
Electric Company, We Energies (WEPCO), Virginia Electric & Power
Company (Dominion), Santee Cooper, Minnkota Power Coop, American
Electric Power (AEP), East Kentucky Power Cooperative (EKPC), Nevada
Power Company, Illinois Power, Mirant, Ohio Edison, and Kentucky.
\83\ Include current and future state programs in Connecticut,
Delaware, Georgia, Illinois, Maine, Maryland, Massachusetts,
Minnesota, Missouri, New Hampshire, North Carolina, New Jersey, New
York, Oregon, Texas, and Wisconsin.
\84\ For a detailed description of IPM Version 3.02, see Chapter
6 of the EBA report.
\85\ At the time that EPA began analyzing the Proposed Existing
Facilities Rule options, the Agency was still developing the
regulatory standards to replace CAIR requirements. The Transport
Rule, which replaces CAIR, was proposed on July 6, 2010, i.e., after
EPA began to develop the baseline for the current 316(b) existing
facilities rule analyses. Consequently, the IPM baseline used for
the analysis of the Proposed existing facilities rule options does
not reflect requirements under the newly proposed Transport Rule.
However, because EPA used IPM v3.02 EISA, i.e., the same IPM version
used for the market model analysis of 316(b) regulatory options, to
assess the impact of the proposed Transport Rule on the U.S.
electric power sector, the 316(b) baseline includes other important
existing regulations currently affecting this industry sector.
Consequently, on balance, EPA judges that the performance of the
market model analyses against the v3.02 EISA constitutes a
reasonable cost and economic impact analysis for the Proposed
Existing Facilities Rule--in particular, given the uncertainties
regarding the final standards promulgated, and the specific
requirements that States will adopt in implementing the Transport
Rule.
---------------------------------------------------------------------------
EPA recognizes that due to downtime or connection outages estimated
to occur in conjunction with installation of several of the
technologies, and the number of facilities that will need to come into
compliance over the years after today's rule is promulgated, short-term
electric reliability issues could occur unless care is taken within
each region to coordinate outages with NERC and, where possible, with
normal scheduled maintenance operations. Based on this concern, EPA's
options were developed with flexibility provided to the permit
authority to tailor compliance timelines. EPA anticipates in those
instances where local electric reliability could be affected,
facilities would notify the Director via provisions in the permit
application. Once approved, facilities would receive workable
construction schedules from permit writers to schedule installation
down times without negatively impacting electric supply reliability.
In performing analyses based on IPM V3.02, EPA first developed a
baseline--i.e., without regulation--projection of electricity markets
and facility operations over the period from the expected promulgation
date, 2012, through 2028 (pre-regulation baseline case). EPA then
overlaid this analysis with the estimated compliance costs and other
operating effects--downtime for installation of compliance technology
and energy penalty--for in-scope facilities under selected regulatory
options (post-compliance cases).
For the IPM analysis, EPA analyzed three options that closely
correspond to those discussed elsewhere in this document: (1) Non-
Cooling Tower-Based Impingement and Entrainment requirements at all in-
scope facilities (Option 1: IM Everywhere), (2) Impingement Mortality
Controls at all in-scope facilities, and Cooling Towers at all in-scope
facilities with DIF exceeding 125 MGD (Option 2: IM Everywhere and EM
for Facilities with DIF>125MGD), and (3) Cooling Towers at all in-scope
facilities (Option 3: I&E Mortality Everywhere).\86\ The fourth option
discussed elsewhere in this document--Option 4: Non-Cooling Tower-Based
Impingement and Entrainment requirements at all in-scope facilities
with DIF of 50 MGD or more--was not analyzed in IPM due to time
constraints. Since this option mimics the requirements of Option 1, but
only applies them to a subset of in-scope facilities, the findings for
this option in the IPM analysis would be lower than those estimated for
Option 1.
---------------------------------------------------------------------------
\86\ The costs as analyzed in IPM differ slightly from those
used in the non-IPM analyses. For more details on these differences
see Chapter 6 of the EBA report.
---------------------------------------------------------------------------
The IPM V3.02 runs provide analysis results for selected run-years.
EPA specified these analysis years taking into account the expected
promulgation date for today's Proposed Existing Facilities Regulation
(2012), the years in which facilities would be expected to install
compliance technology and achieve compliance (2013-2027),\87\ and the
years in which all complying facilities would be expected to achieve
compliance (2028 and subsequent years). In the following sections, EPA
reports results for the analysis year 2028, which is the first year
after promulgation in which all in-scope facilities would be expected
to have achieved compliance and thus represents a steady state of post-
compliance operations, i.e., the steady-state year.\88\ In addition,
EPA also analyzed potential electricity market-level effects for years
during which facilities would be expected to shut down operations
temporarily to complete technology installation. For the IPM-based
analyses of IM-only installations, the specified compliance window is
from 2013 to 2017, for cooling tower installations by fossil fuel
electric power generating facilities from 2018 to 2022, and for cooling
tower installations by nuclear electric power generating facilities
from 2023 to 2027. Consequently, the analysis of compliance technology
installation downtime used output from model run-years 2015 for IM
technology installations and 2020 and 2025 for CT installations by
fossil fuel and nuclear electric power generating facilities,
respectively. The impacts of the analysis options are measured as the
difference between key economic and operational impact metrics between
the pre-regulation baseline case and the post-compliance case.
---------------------------------------------------------------------------
\87\ For the IPM-based analyses of IM-only installations, the
specified compliance window is from 2013 to 2017, for cooling tower
installations by fossil fuel electric power generating facilities
from 2018 to 2022, and for cooling tower installations by nuclear
electric power generating facilities from 2023 to 2027.
\88\ The first year of full compliance is 2028 for Options 2 and
3, and 2018 for Option 1. To facilitate comparison of market-level
impacts across options, this presentation focuses on 2028 as the
steady state comparison year.
---------------------------------------------------------------------------
[[Page 22231]]
a. Analysis Results for the Year 2028--To Reflect Steady State, Post-
Compliance Operations
For the steady-state analysis (year 2028), EPA considered impact
metrics of interest at three levels of aggregation: (1) Impact on
national and regional electricity markets, (2) impact on the group of
in-scope power generating facilities (i.e., facilities that are
expected to be within the scope of today's proposed regulation but do
not necessarily incur technology cost), and (3) impact on individual
in-scope facilities.
(1) Impact on National and Regional Electricity Markets
For the assessment of market level impacts, EPA considered five
output metrics from IPM V3.02: (1) Incremental capacity closures,
calculated as the difference between capacity under the regulatory
options and capacity under the base case, which includes both full
facility closures and partial facility closures (i.e., unit closures)
in aggregate capacity terms; (2) incremental capacity closures as a
percentage of baseline capacity; (3) post-compliance changes in
variable production costs per MWh, calculated as the sum of total fuel
and variable O&M costs divided by net generation; (4) post-compliance
changes in energy price, where energy prices are defined as the
wholesale prices received by facilities for the sale of electric
generation; and (5) post-compliance changes in pre-tax income, where
pre-tax income is defined as total revenue minus the sum of fixed and
variable O&M costs, fuel costs, and annualized capital costs.
Exhibit VII-12 reports results for the three market model analysis
Options for each of the five metrics above, with national totals and
detail at level of regional electricity markets defined on the basis of
the current NERC regions. These market model analysis options
correspond to regulatory Options 1, 2, and 3 (EPA did not run Option 4
separately because EPA assumes baseline MW capacity basis Options 1 and
4 are similar, and Option 4 is less stringent than Option 1. Results
for Option 1 can be viewed as an upper bound estimate of the market
impacts of Option 4 in Exhibits VII-12, VII-13, VII-14, and VII-15).
The NERC regions are as follows: ERCOT (Electric Reliability Council of
Texas), FRCC (Florida Reliability Coordinating Council), MRO (Midwest
Reliability Organization), NPCC (Northeast Power Coordination Council),
RFC (ReliabilityFirst Corporation), SERC (Southeastern Electricity
Reliability Council), SPP (Southwest Power Pool), and WECC (Western
Electricity Coordinating Council).
Additional results are presented in Chapter 6 of the EBA report.
Chapter 6 also presents a more detailed interpretation of the results
of the market-level analysis.
Exhibit VII-12--Impact of Market Model Analysis Options on National and Regional Markets at the Year 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental closures
------------------------------------ Change in Change in energy Change in pre-
NERC region Baseline Percent of variable price per MWh tax income
capacity (MW) Capacity (MW) baseline production cost (%) (2009 $) (%)
capacity per MWh (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
ERCOT....................................... 98,757 151 0.2 -0.1 0.0 -0.4
FRCC........................................ 79,298 75 0.1 0.3 0.0 -0.4
MRO......................................... 71,200 29 0.0 -0.4 0.0 -1.0
NPCC........................................ 79,688 682 0.9 -0.4 0.1 0.3
RFC......................................... 244,700 -279 -0.1 0.2 0.1 -0.1
SERC........................................ 286,461 -79 0.0 -0.1 0.0 -0.4
SPP......................................... 67,703 13 0.0 0.0 0.0 -0.5
WECC........................................ 219,764 9 0.0 0.0 0.0 -0.1
-----------------------------------------------------------------------------------------------------------
Total................................... 1,147,571 601 0.1 0.0 NA -0.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2: IM Everywhere and EM for Facilities with DIF 125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
ERCOT....................................... 98,757 4,462 4.5 -1.1 0.2 -9.5
FRCC........................................ 79,298 36 0.0 1.2 0.1 -4.7
MRO......................................... 71,200 806 1.1 1.5 0.1 -8.4
NPCC........................................ 79,688 3,862 4.8 -2.6 -1.6 -10.4
RFC......................................... 244,700 3,197 1.3 2.7 0.3 -10.3
SERC........................................ 286,461 903 0.3 2.0 -0.1 -8.9
SPP......................................... 67,703 969 1.4 0.9 -0.1 -8.6
WECC........................................ 219,764 184 0.1 0.1 -0.3 -0.8
-----------------------------------------------------------------------------------------------------------
Total................................... 1,147,571 14,418 1.3 1.0 NA -7.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 3--I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
ERCOT....................................... 98,757 4,498 4.6 -1.2 0.2 -9.5
FRCC........................................ 79,298 36 0.0 1.3 0.1 -4.8
MRO......................................... 71,200 801 1.1 1.5 0.1 -9.1
NPCC........................................ 79,688 3,861 4.8 -2.7 -1.7 -11.0
RFC......................................... 244,700 3,195 1.3 2.7 0.5 -10.2
SERC........................................ 286,461 997 0.3 2.0 0.0 -8.9
SPP......................................... 67,703 1,004 1.5 0.9 0.0 -8.7
WECC........................................ 219,764 183 0.1 0.1 -0.3 -0.9
-----------------------------------------------------------------------------------------------------------
Total................................... 1,147,571 14,576 1.3 1.0 NA -7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 22232]]
As reported in Exhibit VII-12, the market model analysis indicates
that Option 1 would have very small effects on overall electricity
markets, on both a national and regional sub-market basis, in the year
2028, the first analysis year of full compliance with the regulation.
At the national level, the analysis indicates a total reduction in
capacity from closures of 601 MW, or less than 0.1 percent of the total
capacity baseline in 2028. At the regional level, the greatest capacity
reduction, 682 MW, occurs in the NPCC region; this reduction would be
approximately 0.9 percent of baseline capacity. Two NERC regions--RFC
and SERC--are estimated to experience avoided capacity closures--i.e.,
one or more generating units that are otherwise projected to cease
operations in the baseline become more economically attractive sources
of electricity in the post-compliance case, because of relative changes
in the economics of electricity production across the full market, and
thus avoid closure. This counterintuitive result is due to the
integrated nature of electricity markets.
At the national level, the variable production cost of electricity
stays essentially the same, but with small variations by region. The
greatest increase occurs in FRCC (0.3 percent) and the largest decline
occurring in MRO and NPCC (0.4 percent). Energy prices also change
little across NERC regions, with NPCC and RFC recording small increases
of 0.1 percent--these very small estimated changes in energy prices are
essentially within the analytic ``noise'' of the market model analysis
system. Given the additional costs from compliance with almost no
change in electricity prices, national sector-level pre-tax income is
projected to decline slightly, by 0.3 percent. All regions except NPCC
experience a decrease in pre-tax income; the greatest decrease,
approximately 1.0 percent, occurs in MRO.\89\
---------------------------------------------------------------------------
\89\ IPM does not model traditional utility rate regulation but
attempts to capture price effects as though they occur in
competitive, deregulated markets. As a result, the price effects
estimated in IPM may be less than those that would actually occur,
given that most States continue to operate under traditional utility
regulation. Likewise, the proposed rule's impact on electric
generators' net income may be overstated. In contrast, the
electricity rate impact analyses presented earlier in this section
(Section VII. 2), assume full pass-through of compliance costs as
increased electricity prices, which may more closely approximate the
price effect in regulated markets, but could overstate the price
effect in deregulated markets.
---------------------------------------------------------------------------
Option 2 requires that facilities with cooling water design intake
of 125 MGD or less meet non-cooling tower-based impingement mortality
requirements and site-specific entrainment mortality BTA (i.e., Option
1 specifications), while facilities with cooling water design intake
exceeding 125 MGD install cooling towers. As expected, the market model
analysis projects that the more expensive Option 2 with some facilities
installing cooling towers would have a greater impact than Option 1 on
national and regional electricity markets. Under Option 2, capacity
closures total 14,418 MW, or 1.3 percent of the baseline capacity
value, with all regions projected to incur closures. The largest
percentage impact occurs in NPCC, with a loss of approximately 4.8
percent of the baseline capacity value. Similarly, variable production
costs for electricity generation increase nationally by approximately
1.0 percent, with the largest increase occurring in RFC, at 2.7
percent; only two of the 8 NERC regions--ERCOT and NPCC--experience a
decline of 1.1 percent and 2.6 percent, respectively. The effect on
energy prices varies across regions, with RFC recording the largest
increase, at 0.3 percent, and NPCC recording the largest decline, 1.6
percent. Finally, as would be expected with the higher compliance
outlays, longer installation downtimes, and energy penalties with some
facilities installing cooling towers under Option 2, total sector pre-
tax income is more materially affected compared to Option 1: At the
national level, pre-tax income declines by 7.6 percent. All regions
experience a loss in pre-tax income, with the largest loss occurring in
NPCC, at 10.4 percent.
The market model analysis projects that the most expensive option,
Option 3 (I&E Mortality Everywhere), would have a slightly greater
impact on national and regional electricity markets than Option 2, as
more in-scope facilities are required to install cooling towers (nearly
all) to meet compliance requirements. Under Option 3, capacity loss is
nearly the same as under Option 2--14,576 MW or 1.3 percent of the
baseline capacity value--with all regions projected to incur closures.
As under Option 2, the largest percentage impact under Option 3 occurs
in NPCC, with a loss of approximately 4.8 percent of the baseline
capacity value. Similarly, the impact on variable production costs for
electricity generation under Option 3 is approximately the same as
under Option 2 at the national and regional level. At the national
level, variable production costs increase by 1.0 percent, with the
largest increase also occurring in RFC, at 2.7 percent; again, only two
of the 8 NERC regions--ERCOT and NPCC--record a decline of 1.2 percent
and 2.7 percent, respectively. The effect on energy prices also varies
across regions, with RFC recording the largest increase of 0.5 percent
and NPCC recording the largest decline of 1.7 percent. The impact on
total sector pre-tax income under Option 3 is also similar to the
impact under Option 2; at the national level, pre-tax income declines
by 7.7 percent with all regions experiencing a loss in pre-tax income.
(2) Impact on In-Scope Facilities
EPA used IPM V3.02 results for 2028 to assess the potential impact
of the regulatory Options on the subset of electric generating
facilities that are estimated to be within the scope of today's
proposed regulation compliance requirements. Only results for in-scope
facilities are reported in this analysis.
Exhibit VII-13 reports results for the first three of the
regulatory Options for in-scope facilities, as a group. Chapter 6 of
the EBA presents a more detailed interpretation of the results of the
analysis of today's Proposed Existing Facilities Regulation.
Exhibit VII-13--Impact of Market Model Analysis Options on In-Scope Facilities, at the Year 2028
----------------------------------------------------------------------------------------------------------------
Incremental closures Change in
------------------------------------ variable
NERC region Baseline Percent of production cost
capacity (MW) Capacity (MW) baseline per MWh
capacity (percent)
----------------------------------------------------------------------------------------------------------------
Option 1--IM Everywhere
----------------------------------------------------------------------------------------------------------------
ERCOT................................... 35,985 -99 -0.3 -0.2
FRCC.................................... 27,210 -11 0.0 0.0
[[Page 22233]]
MRO..................................... 29,131 298 1.0 -0.3
NPCC.................................... 33,618 859 2.6 -1.2
RFC..................................... 138,519 -95 -0.1 0.1
SERC.................................... 151,806 198 0.1 0.0
SPP..................................... 23,879 -102 -0.4 -0.2
WECC.................................... 38,906 9 0.0 -0.1
-----------------------------------------------------------------------
Total............................... 479,054 1,056 0.2 -0.1
----------------------------------------------------------------------------------------------------------------
Option 2--IM Everywhere and EM for Facilities With DIF 125 MGD
----------------------------------------------------------------------------------------------------------------
ERCOT................................... 35,985 5,486 15.2 -4.3
FRCC.................................... 27,210 -336 -1.2 0.1
MRO..................................... 29,131 969 3.3 2.6
NPCC.................................... 33,618 4,415 13.1 -8.8
RFC..................................... 138,519 3,329 2.4 1.9
SERC.................................... 151,806 433 0.3 2.1
SPP..................................... 23,879 2,285 9.6 -1.2
WECC.................................... 38,906 234 0.6 0.7
-----------------------------------------------------------------------
Total............................... 479,054 16,815 3.5 0.5
----------------------------------------------------------------------------------------------------------------
Option 3--I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
ERCOT................................... 35,985 5,528 15.4 -4.9
FRCC.................................... 27,210 -336 -1.2 0.0
MRO..................................... 29,131 1,016 3.5 2.7
NPCC.................................... 33,618 4,415 13.1 -9.0
RFC..................................... 138,519 3,329 2.4 2.0
SERC.................................... 151,806 699 0.5 2.1
SPP..................................... 23,879 2,259 9.5 -2.3
WECC.................................... 38,906 234 0.6 0.8
-----------------------------------------------------------------------
Total............................... 479,054 17,144 3.6 0.4
----------------------------------------------------------------------------------------------------------------
The market model analysis results for in-scope facilities show a
greater degree of adverse impact than that observed over all generating
units. These more substantial adverse impacts among the directly
affected in-scope units are offset by generally positive changes in
capacity and energy production at the facilities that are not directly
by the proposed rule's requirements, and which are not included in this
section's analysis.
Under Option 1, today's preferred option, looking over all in-scope
facilities, the total capacity loss from early retirements is 1,056 MW
at the national level, or 0.2 percent of baseline capacity in the in-
scope units. The impact on capacity retirements varies across NERC
regions with 4 out of 8 regions recording capacity closures and the
remaining 4 experiencing avoided capacity closures. Some closures (or
avoided closures) are full facility closures (i.e., all generating
units at the facility close or avoid closure), while others are partial
closures (i.e., at least one generating unit at the facility is
assessed as closing, or avoiding closure, in the post-compliance case).
Overall, 39 generating units close (approximately 9,874 MW) and 30
generating units avoid closure (approximately 8,819 MW) in the post-
compliance case, resulting in net closure of 9 generating units
(approximately 1,055 MW). The 39 generating unit closures reflect full
closure of 20 units in 13 facilities (5,647 MW) and partial closure of
19 units in 16 facilities (4,227 MW). The largest capacity loss occurs
in NPCC (859 MW or 2.6 percent of baseline capacity).
As described in the preceding section, these net losses of capacity
due to early retirements among in-scope facilities are offset at the
total market level by capacity increases among other facilities. These
capacity increases typically occur through ``earlier'' construction of
new generating units or repowering of existing units. These new units
also typically operate with higher energy efficiency and lower
electricity production cost. As a result, the early retirements among
in-scope facilities under the proposed regulatory option have little
impact at the level of national and regional electricity markets.
Finally, at the national level, variable production costs decline
by approximately 0.1 percent as older, less-efficient plants close and
are replaced by newer plants in the IPM model. These effects vary by
region, with some regions experiencing slight increases, while other
regions experience slight decreases. These findings of very small
national and regional effects in these impact metrics confirm EPA's
assessment, stated in the preceding paragraph, that the assessed
capacity closures among in-scope facilities are of little economic
consequence in national and regional electricity markets.
Again, the findings for the more expensive Option 2 (IM Everywhere
and EM for Facilities with DIF > 125MGD) are of greater consequence, as
some facilities would be required to incur the cost of cooling tower
installation. The total loss in capacity in 2028 is assessed at 16,815
MW, with the largest capacity loss of 15.2 percent occurring in NPCC.
[[Page 22234]]
In the same way as reported for Option 1, the capacity loss of
16,815 MW under Option 2 also reflects a combination of early
retirements and avoided retirements of generating units. Under Option
2, 149 generating units close (36,163 MW) and 86 generating units avoid
closure (19,186 MW), leading to an estimated net closure of 63
generating units (16,977 MW). Out of the 149 closed units, 72 units
(22,976 MW) are in 35 fully closed facilities and 77 units (13,186 MW)
are in 46 partially closed facilities.
Under Option 2, the findings for the change in variable production
cost are also considerably larger compared to Option 1. At the national
level, Option 2 results in a 0.5 percent increase in variable
production cost. This effect varies considerably by region, with NPCC
recording the largest decrease in variable production costs (8.8
percent) and MRO incurring the largest increase (2.6 percent).
The analysis results for Option 3 are similar to those for Option
2, and again show a greater degree of impact on capacity and
electricity generation among in-scope facilities compared to the degree
of impact observed at the market level. At the national level, Option 3
results in 17,144 MW of retired capacity (compared to 16,815 MW under
Option 2), which is approximately 3.6 percent of total baseline in-
scope capacity (compared to 3.5 percent under Option 2). As is the case
for Options 1 and 2, the net capacity reduction of 17,144 MW reported
for Option 3 includes early retirement and avoided retirement of
generating units. Under Option 2, 162 generating units close (37,255
MW) and 88 generating units avoid closure (20,258 MW), leading to an
estimated net closure of 74 generating units (16,997 MW). Out of the
162 closed units, 79 units (23,262 MW) are in 39 fully closed
facilities and 83 units (13,992 MW) are in 50 partially closed
facilities.
The impact on variable production costs observed for Option 3 is
similar in magnitude to that observed for Option 2. At the national
level, variable production costs decline by approximately 0.4 percent.
Under Option 3, this effect also varies considerably by region, with
NPCC, again, recording the largest decrease in variable production
costs (9.0 percent) and MRO incurring the largest increase (2.7
percent).
(3) Impact on Individual In-Scope Facilities
Results for the group of in-scope facilities as a whole may mask
shifts in economic performance among individual facilities subject to
today's proposed rule. To assess potential facility-level effects, EPA
analyzed facility-specific changes between the base case and the post-
compliance cases for the following metrics: (1) Capacity utilization
(defined as annual generation (MWh) divided by [capacity (MW) times
8,760 hours]), (2) electricity generation, (3) revenue, (4) variable
production costs per MWh, defined as variable O&M cost plus fuel cost
divided by net generation, and (5) pre-tax income, defined as total
revenues minus the sum of fixed and variable O&M costs, fuel costs, and
capital costs.
Exhibit VII-14 presents the estimated number of in-scope facilities
with specific degrees of change in operations and financial performance
as a result of today's regulatory options. This exhibit excludes in-
scope facilities with estimated significant status changes in 2028 that
render these metrics of change not meaningful--i.e., under the analyzed
Option, a facility that is assessed as either a full or partial closure
between the base case and the post-compliance case. This is done
because the measures presented in Exhibit VII-11 such as change in
revenue would not be meaningful for these facilities. For example, for
a facility that is projected to close in the post-compliance case, the
reduction in revenue would be 100 percent. On this basis, 118
facilities are excluded from assessment under Option 1, 159 facilities
under Option 2, and 165 facilities under Option 3.
In addition, the change in variable production cost per MWh of
generation could not be developed for facilities that have zero
generation in either the baseline or post-compliance cases. For these
facilities--28, 21, and 18 facilities under Options 1, 2, or 3,
respectively--variable production cost per MWh cannot be calculated for
one or other of the two cases (because the divisor, MWh, is zero), and
therefore the change in variable production cost per MWh cannot be
meaningfully determined. Facilities excluded from this assessment are
recorded in the ``N/A'' column.
Exhibit VII-14--Impact of Market Model Analysis Options on Individual In-Scope Facilities at the Year 2028--Number of Facilities by Impact Magnitude
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction Increase
Economic measures --------------------------------- No change --------------------------------- N/A \b\
> 3% 1-3% < 1% < 1% 1-3% > 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1--IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Capacity Utilization \a\.............................. 0 1 23 398 41 5 3 118
Change in Generation............................................ 6 7 39 391 26 0 2 118
Change in Revenue............................................... 5 3 164 4 282 13 0 118
Change in Variable Production Costs/MWh......................... 0 2 91 22 319 6 3 146
Change in Pre-Tax Income........................................ 40 126 243 0 55 4 3 118
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2--IM Everywhere and EM for Facilities With DIF 125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Capacity Utilization \a\.............................. 13 18 102 147 104 24 22 159
Change in Generation............................................ 154 89 6 146 8 12 15 159
Change in Revenue............................................... 139 103 51 0 73 54 10 159
Change in Variable Production Costs/MWh......................... 3 5 24 14 107 55 201 180
Change in Pre-Tax Income........................................ 267 33 55 0 28 23 24 159
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 3--I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Capacity Utilization \a\.............................. 10 16 132 96 118 25 27 165
Change in Generation............................................ 184 110 6 95 9 10 10 165
Change in Revenue............................................... 158 127 44 0 49 38 8 165
Change in Variable Production Costs/MWh......................... 4 8 15 9 74 63 233 183
[[Page 22235]]
Change in Pre-Tax Income........................................ 315 12 41 0 24 11 21 165
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The change in capacity utilization is the difference between the capacity utilization percentages in the base case and post-compliance cases. For
all other measures, the change is expressed as the percentage change between the base case and post-compliance values.
\b\ Facilities with status changes in either base case or post-compliance scenario have been excluded from these calculations. In addition, the change
in variable production cost per MWh could not be developed for 28, 21, and 18 facilities with zero generation in either base case or Options 1, 2, or
3 post-compliance scenarios, respectively.
For Option 1, which corresponds to EPA's proposed option, the
analysis of changes in individual facilities indicates that most
facilities experience very slight effects--no change, or less than a 1
percent reduction or 1 percent increase--in all of the impact metrics
except Change in Pre-Tax Income. Only 1 facility is estimated to incur
a reduction in capacity utilization exceeding 1 percent; 13 facilities
incur a reduction in generation exceeding 1 percent; and 8 facilities
incur a reduction in revenue exceeding 1 percent. Only 9 facilities
incur an increase in variable production costs exceeding one percent.
The estimated change in pre-tax income is more consequential as 126
facilities are projected to incur reductions in pre-tax income of 1-3
percent and 40 facilities are projected to incur reductions in pre-tax
income exceeding 3 percent of the baseline value.
The findings for Option 2 are substantially more consequential
compared to those estimated for Option 1. For 243 facilities, the
reduction in generation is estimated to exceed 1 percent; for 242
facilities, the reduction in revenue is estimated to exceed 1 percent;
for 256 facilities, the increase in variable production costs is
estimated to exceed 1 percent. Again, the change in pre-tax income is
more substantial, with 33 facilities expected to incur reductions in
pre-tax income of 1-3 percent and 267 facilities, greater than 3
percent.
As in the preceding discussions, the findings for Option 3 are
slightly more consequential than those estimated for Option 2. For 294
facilities, the reduction in generation is estimated to exceed 1
percent; for 285 facilities, the reduction in revenue is estimated to
exceed 1 percent; for 296 facilities, the increase in variable
production costs is estimated to exceed 1 percent. The change in pre-
tax income is more substantial, with 12 facilities expected to incur
reductions in pre-tax income of 1-3 percent and 315 facilities, greater
than 3 percent.
b. Analysis Results for the Years 2015, 2020, and 2025--To Capture the
Effect of Installation Downtime
This section presents market-level results for today's proposed
rule options for model run years 2015, 2020, and 2025. As discussed
above, run year 2015 captures the period when in-scope facilities
install IM technologies, while run years 2020 and 2025 capture the
period when fossil fuel and nuclear facilities install cooling towers,
respectively, and may incur installation downtime. Of particular
importance as a potential impact, the additional unit downtime from
installation of compliance technology would manifest as increased
electricity production costs resulting from the dispatch of higher
production cost generating units during the periods when units are
taken offline to install compliance technologies. Because these effects
are of most concern in terms of potential impact on national and
regional electricity markets, this section presents results only for
the total set of facilities analyzed in IPM (Exhibit VII-15) and does
not present results for the subset of only in-scope facilities.
For the assessment of compliance technology installation downtime
impacts at the national level, EPA considered five output metrics from
IPM V3.02: (1) Changes in electricity generation, (2) changes in
revenue, (3) cost changes, including changes in fuel costs, variable
O&M costs, fixed O&M costs, and capital costs, (4) changes in pre-tax
income, and (5) changes in variable production costs per MWh. For each
measure of concern, Exhibit VII-15 presents the results for the base
case and the existing facilities rule options for each downtime year,
i.e., 2015, 2020, and 2025 and the percentage difference between the
two. This section of the preamble discusses downtime impact at the
national level only; for regional-level results see Appendix 6.A of EBA
report.
Exhibit VII-15--Impact of Market Model Analysis Options During the Period of Installation Downtime
----------------------------------------------------------------------------------------------------------------
Option 1 Option 2 Option 3
Economic measures (all dollar Baseline -----------------------------------------------------------------
values in $2009) value Value % Change Value % Change Value % Change
----------------------------------------------------------------------------------------------------------------
2015 (2013-2017)
----------------------------------------------------------------------------------------------------------------
Generation (TWh)................... 4,320 4,320 0.0 4,320 0.0 4,320 0.0
Revenue ($Millions)................ $212,857 $212,883 0.0 $214,124 0.6 $214,201 0.6
Costs ($Millions).................. $144,212 $144,764 0.4 $144,251 0.0 $144,244 0.0
Fuel Cost...................... $81,076 $81,080 0.0 $80,896 -0.2 $80,895 -0.2
Variable O&M................... $12,034 $12,080 0.4 $12,056 0.2 $12,054 0.2
Fixed O&M...................... $43,697 $44,140 1.0 $43,683 0.0 $43,680 0.0
Capital Cost................... $7,405 $7,463 0.8 $7,616 2.8 $7,614 2.8
Pre-Tax Income ($Millions)......... $68,646 $68,119 -0.8 $69,873 1.8 $69,957 1.9
Variable Production Cost ($/MWh)... $21.55 $21.57 0.1 $21.52 -0.2 $21.52 -0.2
----------------------------------------------------------------------------------------------------------------
[[Page 22236]]
2020 (2018-2022)
----------------------------------------------------------------------------------------------------------------
Generation (TWh)................... 4,530 ......... ......... 4,530 0.0 4,530 0.0
Revenue ($Millions)................ $261,531 ......... ......... $270,507 3.4 $270,709 3.5
Costs ($Millions).................. $160,340 ......... ......... $167,450 4.4 $167,719 4.6
Fuel Cost...................... $83,418 ......... ......... $82,295 -1.3 $82,295 -1.3
Variable O&M................... $13,349 ......... ......... $13,661 2.3 $13,673 2.4
Fixed O&M...................... $46,160 ......... ......... $50,888 10.2 $51,016 10.5
Capital Cost................... $17,413 ......... ......... $20,605 18.3 $20,736 19.1
Pre-Tax Income ($Millions)......... $101,191 ......... ......... $103,057 1.8 $102,990 1.8
Variable Production Cost ($/MWh)... $21.36 ......... ......... $21.18 -0.8 $21.18 -0.8
----------------------------------------------------------------------------------------------------------------
2025 (2023-2027)
----------------------------------------------------------------------------------------------------------------
Generation (TWh)................... 4,746 ......... ......... 4,746 0.0 4,746 0.0
Revenue ($Millions)................ $280,613 ......... ......... $282,363 0.6 $282,381 0.6
Costs ($Millions).................. $174,856 ......... ......... $184,900 5.7 $185,148 5.9
Fuel Cost...................... $86,633 ......... ......... $86,812 0.2 $86,834 0.2
Variable O&M................... $13,907 ......... ......... $14,295 2.8 $14,299 2.8
Fixed O&M...................... $47,561 ......... ......... $53,500 12.5 $53,625 12.7
Capital Cost................... $26,755 ......... ......... $30,294 13.2 $30,390 13.6
Pre-Tax Income ($Millions)......... $105,757 ......... ......... $97,463 -7.8 $97,233 -8.1
Variable Production Cost ($/MWh)... $21.18 ......... ......... $21.30 0.6 $21.31 0.6
----------------------------------------------------------------------------------------------------------------
Because in-scope facilities would be required to meet compliance
requirements not later than 5 years following rule promulgation, Option
1 has downtime effects during only the five-year period of 2013-2017.
Results for the year 2015 are indicative of annual effects during each
of these years. With few facilities having an increase in net downtime
under Option 1, the estimated effects of downtime are relatively minor.
Variable production costs increase by less than 0.1 percent. Another
potential market level impact due to the incurrence of downtime is the
possible increase in electricity prices and, consequently, revenue. At
the market level, the change in total revenue is nearly zero,
indicating very small overall effects on consumer prices. While these
effects vary at the regional level, these effects are overall very
small (see Appendix 6.A of the EBA).
Unlike Option 1, Option 2 would be expected to have downtime
effects during each of the three five-year periods, as IM-only
facilities comply during the first five years (2012-2017) following
rule promulgation, fossil fuel facilities installing cooling tower
technology comply during the second five years (2018-2022), and nuclear
facilities installing cooling tower technology comply during the third
five years (2023-2027).
During the first five-year period (2012-2017), downtime effects
under Option 2, although larger than those under Option 1, remain
small. Variable production costs decline by a very minor amount, 0.2
percent, as the market begins to adjust overall in anticipation of the
larger effects on capacity availability as the result of cooling tower
installation in later years. Total market-level revenue increases by
$1.2 billion, or 0.6 percent, indicating small effects on consumer
prices.
During the second five-year period (2018-2022), downtime effects
are more pronounced under Option 2. At the market level, variable
production costs decline again, by 0.8 percent, but revenue increases
by nearly $9.0 billion, or 3.4 percent. Thus, the impact on consumer
prices is greater during this period than during the preceding five
years. Again, the reduction in variable production costs and revenue
reflect replacement of generation from older, less efficient and higher
fuel cost capacity, with generation from more energy efficient, lower
production cost capacity.
The greatest impact on variable production cost under Option 2
occurs during the third five-year period (2023-2027), when nuclear
facilities incur downtime during technology installation. Net downtime
for cooling tower installation at nuclear facilities is estimated at 24
weeks compared to 0.3-4 weeks for installations at fossil fuel
facilities. During this period, variable production costs increase by
$0.12 per MWh or approximately 0.6 percent. Although variable
production cost increases during this period (while declining during
the preceding two five-year periods), annual revenue increases by a
smaller amount, $1.8 billion, or a 0.6 percent increase above baseline.
The smaller increase in revenue, and by inference in consumer prices,
results from the ongoing market adjustment with replacement of less
efficient, higher fuel cost generation with more efficient, lower fuel
cost capacity. The effects at the national level vary at the regional
level (see Appendix 6.A of the EBA).
Like Option 2, Option 3 would be expected to have downtime effects
during each of the three five-year periods. During the first five-year
period (2012-2017), impacts are nearly identical to those of Option 2
at the national and regional level. At the national level, variable
production costs decline by 0.2 percent, and total revenue increases by
$1.2 billion, or 0.6 percent, indicating small effects on consumer
prices. While under Option 2, revenue declines by 0.2 percent, under
Option 3 it increases by 0.5 percent. Further, under Option 3, the
decline in variable production costs as well as the drop in electricity
prices are slightly more significant.
During the second five-year period (2018-2022), downtime effects of
Option 3 are again similar to, but slightly higher than, those of
Option 2.
[[Page 22237]]
At the national level, variable production costs decline by 0.8
percent, while revenue increases by $9.2 billion, or 3.4 percent.
Again, the impact on consumer prices under Option 3 is greater during
this period than during the preceding five years.
As with Option 2, under Option 3 the greatest impact on variable
production cost occurs during the third five-year period (2023-2027).
During this period, market-level variable production costs increase by
$0.13 per MWh or approximately 0.6 percent. Although variable
production cost increases during this period (while declining during
the preceding two five-year periods), annual revenue increases by a
smaller amount, $1.8 billion, or a 0.6 percent increase above baseline.
At the regional level, as is the case for Option 2, under Option 3,
these effects vary across regions. For all three analyzed five-year
periods, the direction of the change in variable production costs,
revenue, and electricity prices under Option 3 is the same as that
under Option 2 for all NERC regions; the difference in the magnitude of
change is not very pronounced either (see Appendix 6.A of the EBA).
5. Summary of Economic Impacts
EPA performed cost and economic impact assessment in two parts. The
first set of cost and economic impact analyses--entity level impacts
(at both the facility and parent company levels), an assessment of the
potential electricity rate impact of compliance costs to the
residential sector, and across sectors--reflects baseline operating
characteristics of in-scope facilities and assumes no changes in those
baseline operating characteristics--e.g., level of electricity
generation and revenue--as a result of the requirements of the proposed
regulatory options. The second set of analyses look at broader
electricity market impacts--taking into account the interconnection of
regional and national electricity markets, for the full industry, for
in-scope facilities only, and as the distribution of impacts at the
facility level. No single metric or impact level definitively measures
economic impacts. Rather, EPA has considered the totality of these
measures of economic impacts in concluding that there are no
significant economic impacts associated with Option 1 (the preferred
option) or Option 4, while there are considerably greater economic
impacts associated with Options 2 and 3.
VIII. Benefits Analysis
A. Introduction
This section presents EPA's estimates of the national environmental
benefits of the options analyzed for 316(b) facilities. In this
section, EPA describes how it calculated values for those benefits it
could monetize. It also presents descriptive information for those
benefits for which it could not develop a monetary value. The benefits
assessed occur because of reductions in impingement, where fish and
other aquatic life are trapped on equipment at the entrance to the
CWIS, and entrainment, where aquatic organisms, eggs, and larvae are
taken into the cooling system, passed through the heat exchanger, and
then discharged back into the source water body, (I&E mortality) at
cooling water intake structures (CWIS) affected by the proposed
rulemaking. I&E mortality kills or injures large numbers of aquatic
organisms at all life stages. Based on impingement mortality and
entrainment data presented in I&E mortality facility studies, EPA
assumes a mortality rate of 100% for both impinged and entrained
individuals. Mortality rates are then adjusted based on the efficiency
of technology in place.\90\ By reducing I&E mortality rates, the
proposed options are likely to increase the number of fish, shellfish,
and other aquatic organisms in affected water bodies. In turn, this
increased number of aquatic organisms directly improves welfare for
individuals using the affected aquatic resources, generating so-called
``use benefits'' such as increases to the value of recreational and
commercial fisheries. Reductions to I&E mortality also improve welfare
for individuals absent any use of the affected resources, so-called
``nonuse benefits,'' such as improved ecosystem function and resource
bequest values. Section VIII.D provides an overview of the types and
sources of benefits anticipated, how these benefits are estimated, the
level of benefits that the proposed options would achieve, and how
monetized benefits compare to costs.
---------------------------------------------------------------------------
\90\ See discussion in Section III on entrainment mortality data
and assumptions.
---------------------------------------------------------------------------
EPA derived national benefit estimates for the proposed options
from a series of regional studies representing a range of water body
types and aquatic resources. Section VIII.B provides detail on the
regional study design. Sections VIII.C through VIII.E briefly describe
the methods EPA used to evaluate I&E mortality impacts at Section
316(b) facilities, and to derive an economic value associated with
these losses. Further, because IPM does not predict where new capacity
occurs, and EPA has not identified any other information projecting
where new units would be located, EPA did not estimate benefits
associated with new capacity (i.e. new units at an existing facility).
As noted above, EPA also did not include costs for these new units in
its social cost analysis. This is consistent with EPA's treatment of
new facilities, such as new offshore oil and gas facilities in the
Phase III rule.
The methodologies used to estimate benefits of proposed options are
largely built upon those used to estimate benefits for the suspended
Phase II regulation and the remanded rule for 316(b) Phase III existing
facilities. In addition to updating these analyses, EPA more fully
investigated the effects of I&E mortality on threatened and endangered
(T&E) species, and improved its estimation of nonuse benefits. The 2011
Environmental and Economic Benefits Analysis document for the proposed
316(b) Existing Facility rule (hereafter EEBA) provides detailed
descriptions of the these new methodologies used to analyze the
benefits of proposed regulatory options, and provides references to (i)
Part A of the 2004 Regional Benefits Analysis for the suspended Final
Section 316(b) Phase II Rule, and (ii) Part A of the 2006 Regional
Benefits Analysis Document for the Final Section 316(b) Phase III
Existing Facilities Rule for analyses using similar methodologies.
The EEBA document provides EPA's benefit estimates for the proposed
options. EPA relied on information on cooling water systems and intake
structures already in place collected in the Section 316(b) Industry
Surveys (the Industry Screener Questionnaire (SQ) and the Detailed
Industry Questionnaire (DQ)) to estimate the number of manufacturing
facilities that would potentially be in-scope of the regulatory options
considered for the Proposed Existing Facilities Rule. Because the DQs
were sent to a sample of the manufacturing industries that use cooling
water, the respondents were assigned sample weights designed to
represent other facilities that were not covered in the survey. For the
analysis of in-scope Electric Generators, EPA used information on
cooling water systems and intake structures already in place, from 656
in-scope facilities that responded to the 2000 Section 316(b) Surveys
(the Industry Short Technical Questionnaire (STQ) and the Detailed
Industry Questionnaire (DQ)). All in-scope facilities have design
intake flow of at least 2 million gallons per day (MGD). Regional
benefits are estimated
[[Page 22238]]
from the sample of facilities for which there is sufficient DQ
information to estimate the environmental impacts of regulatory
options. The environmental impacts from the set of explicitly analyzed
facilities are then extrapolated to the universe of facilities within a
region using statistical weights developed for this analysis. National
benefits are estimated as the sum of all regional benefits.
B. Regional Study Design
EPA evaluated the benefits of today's rule in seven study regions
(California,\91\ North Atlantic, Mid Atlantic, South Atlantic, Gulf of
Mexico, Great Lakes, and Inland). Regions were defined based on
ecological similarities within regions (e.g. similar communities of
aquatic species), and on characteristics of commercial and recreational
fishing activities. The five coastal regions identified (California,
North Atlantic, Mid-Atlantic, South Atlantic, and Gulf of Mexico)
correspond to those of the National Oceanic and Atmospheric
Administration's National Marine Fisheries Service (NMFS). The Great
Lakes region includes Lake Ontario, Lake Erie, Lake Huron (including
Lake St. Clair), Lake Michigan, Lake Superior, and the connecting
channels (Saint Mary's River, Saint Clair River, Detroit River, Niagara
River, and Saint Lawrence River to the Canadian border) as defined in
33 U.S.C. 1268, Sec. 118(a)(3)(b). The Inland region includes all
remaining facilities that withdraw water from freshwater lakes, rivers,
and reservoirs. Notably, of the 521 facilities that are located on
freshwater streams or rivers, 31 percent (164) of these facilities have
average intake greater than 5 percent of the mean annual flow of the
source waters. During periods of low river flow, or during periods of
higher than average withdrawals of cooling water, the proportionate
withdrawal of source waters may be much higher. Thus, the potential for
adverse environmental impacts may increase. The number and total
operational intake flow of all 316(b) facilities by study region is
presented in Exhibit VIII-1.
---------------------------------------------------------------------------
\91\ The California region includes manufacturing facilities in
the state of California and four facilities in Hawaii. It excludes
coastal electric generating facilities in the state of California
due to state regulation of cooling water intakes for these
facilities. There are no coastal facilities in Oregon and a single
facility in Washington classified as a baseline closure.
Exhibit VIII-1--Number of Facilities and Total Mean Operational Flow (BGD), by Region
----------------------------------------------------------------------------------------------------------------
Number of
potentially Once-through Closed-cycle
Region regulated flow flow Total flow
facilities \a\
----------------------------------------------------------------------------------------------------------------
California \b\.......................... 8 1.2 0.0 1.2
Great Lakes............................. 67 18.8 0.2 19.0
Inland \c\.............................. 669 134.9 3.9 138.8
Mid-Atlantic............................ 54 28.1 0.1 28.2
Gulf of Mexico.......................... 30 12.9 0.0 12.9
North Atlantic.......................... 26 7.0 0.0 7.0
South Atlantic.......................... 17 7.4 < 0.1 7.5
-----------------------------------------------------------------------
All Regions......................... 871 210.3 4.2 214.5
----------------------------------------------------------------------------------------------------------------
\a\ This table presents the unweighted number of facilities because weighted facilities counts are not estimated
separately by benefits region. The estimated total weighted number of potentially regulated facilities is 1152
(including baseline closures).
\b\ The California region includes manufacturing facilities in the state of California and four facilities in
Hawaii. It excludes coastal electric generating facilities in the state of California due to state regulation
of cooling water intakes for these facilities. There are no coastal facilities in Oregon and a single facility
in Washington classified as a baseline closure.
\c\ A facility in Texas has intakes located in both the Inland and Gulf of Mexico regions. It is included within
the Inland region in the current table to prevent double-counting.
To estimate regional I&E mortality, EPA extrapolated loss data from
97 facilities that conducted I&E mortality studies (model facilities)
to all in-scope facilities within the same region. EPA judged these 97
studies include the most representative studies with the best available
data. EPA used regions to account for differences in ecosystems,
aquatic species, and characteristics of commercial and recreational
fishing activities. Extrapolation was conducted on the basis of actual
intake flow reported for the period 1996-1998 by facilities in response
to EPA's Section 316(b) Detailed Questionnaire and Short Technical
Questionnaire. Chapter 3 of the EEBA document provides details of the
extrapolation procedure. Because the goal of the analysis was to
provide estimates of I&E mortality losses at regional and national
scales, EPA recognizes that there may be substantial variability in the
number of actual losses (and benefits) of individual facilities.
However, EPA concludes that extrapolation is a reasonable basis for
developing estimates of regional- and national-level benefits for the
purposes of this proposed rulemaking.
C. Physical Impacts of I&E Mortality
EPA's benefits analysis is based on facility-provided I&E mortality
monitoring data. Facility data consist of records of impinged and
entrained organisms sampled at intake structures and cover organisms of
all ages and life stages. Sampling protocols were not standardized
across facilities. Differences among facility protocols included
sampling methods and equipment used, the number of samples taken,
sampling duration, and the unit of time and volume of intake flow used
to express I&E mortality losses. To standardize estimates across
facilities, EPA converted sampling counts into annual I&E mortality
losses. Using standard fishery modeling techniques,\92\ EPA constructed
models that combined facility-derived I&E mortality counts with life
history data from the scientific literature to derive annual estimates
of:
---------------------------------------------------------------------------
\92\ Ricker, W.E. 1975. Computation and interpretation of
biological statistics of fish populations. Fisheries Research Board
of Canada, Bulletin 191; Hilborn, R. and C.J. Walters. 1992.
Quantitative Fisheries Stock Assessment, Choice, Dynamics and
Uncertainty. Chapman and Hall, London and New York.; Quinn, T.J.,
II. and R.B. Deriso. 1999. Quantitative Fish Dynamics. Oxford
University Press, Oxford and New York; Dixon, D.A. 1999. Catalog of
Assessment Methods for Evaluating the Effects of Power Plant
Operations on Aquatic Communities. Final Report. Report number TR--
112013.
---------------------------------------------------------------------------
Age-one equivalent losses (A1Es)--the number of
individuals of different ages impinged and entrained by facility
[[Page 22239]]
intakes, standardized to equivalent numbers of 1-year old fish. A
conversion rate between all life history stages and age 1 is calculated
using species-specific survival tables. The loss of an individual
younger than age 1 results in a conversion rate less than 1 while the
loss of an individual older than age 1 results in a conversion rate
greater than 1.
Foregone fishery yield--pounds of commercial harvest and
numbers of recreational fish and shellfish that are not harvested due
to I&E mortality. EPA used the Thompson-Bell equilibrium yield model
(Ricker, 1975) to convert I&E mortality losses to forgone fishery yield
assuming that (1) I&E mortality losses reduce the future yield of
harvested adults, and (2) reductions in I&E mortality rates will lead
to an increase in harvested biomass. The general procedure involves
multiplying age-specific harvest rates by age-specific weights to
calculate an age-specific expected yield.
Biomass Production Foregone--biomass that would have been
produced had individuals not been impinged or entrained (Rago, 1984),
calculated for all forage species from species- and age-specific growth
rates and survival probabilities. It refers to the weight of impinged
and entrained forage species that are not commercial or recreational
fishery targets but serve as valuable components of aquatic food webs,
particularly as an important food supply to other aquatic species,
including commercial and recreational species.
Estimates of foregone fishery yield include direct and indirect
losses of impinged and entrained species that are harvested. Indirect
losses represent the yield of harvested species lost due to reductions
in prey availability based on a simple trophic transfer model (i.e.
forage species).\93\ A detailed methodology for these analyses is
provided in Chapter 3 of the EEBA document.
---------------------------------------------------------------------------
\93\ Indirect losses account for about 9 percent of commercial
and recreational harvest reductions at baseline.
---------------------------------------------------------------------------
Studies from individual facilities may under or overestimate I&E
mortality rates. For example, facility studies typically focus on a
subset of fish species impacted by I&E mortality, resulting in some
species being ignored, and thereby number of individuals lost to I&E
mortality being underestimated. Due to the low number of replicate
studies, estimating the magnitude of this underestimate is not
possible. Moreover, studies often do not count early life stages of
organisms that are difficult to identify. In addition, many of the I&E
mortality studies used by the Agency were conducted over 30 years ago,
prior to the improvement to aquatic conditions that have resulted from
implementation of the Clean Water Act. In locations where water quality
was degraded at the time of I&E mortality sampling relative to current
conditions, the abundance and diversity of fish populations may have
been depressed, resulting in low I&E mortality estimates. Therefore,
use of these data may underestimate the magnitude of current I&E
mortality losses. Alternatively, studies may have occurred in locations
where local fish populations are currently lower than they were when
the study occurred. Such a shift in fish populations may have occurred
due to natural variability in populations, because of other
anthropogenic effects (i.e., pollution, over-harvesting, etc.), or
because of competition from invasive species. In such cases, the use of
these data may overestimate the magnitude of current I&E mortality
losses.
The use of linear methods for projecting losses to fish and
shellfish in the waterbody may also overstate or understate impacts.
Nevertheless, EPA believes that the data from facility studies were
sufficient to estimate the relative magnitude of I&E mortality losses
nationwide. Exhibit VIII-2 presents EPA's estimates of baseline annual
I&E mortality losses, and reductions to annual I&E mortality losses
estimated to occur under various regulatory options. Option 3 results
in the greatest reduction in I&E mortality, followed by Option 2,
Option 1, and Option 4, respectively. EPA did not model the entrainment
reductions for Option 1 and Option 4 because these are based on site-
specific determinations of BTA, which are impossible to predict. While
EPA does estimate potential ranges of costs for these site-specific
determinations in section VII (though not as part of the primary cost
estimates), EPA cannot estimate comparable ranges of monetized benefits
because benefits are location specific and EPA has no way of predicting
what entrainment technology would be adopted at any specific facility.
However, EPA believes the entrainment reductions resulting from site-
specific BTA determinations could be significant, depending on the
technologies adopted.
VIII-2--Baseline I&E Mortality Losses and Reductions for All In-Scope Facilities by Regulatory Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction in losses by regulatory option
Loss mode Baseline I&E -----------------------------------------------------------------------
losses Option 1 Option 2 Option 3 Option 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individuals (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................ 517.46 421.62 500.44 504.14 413.70
EM............................................................ 527,968.21 0.00 400,351.83 407,417.58 0.00
E Mortality................................................... 528,485.67 421.62 400,852.27 407,921.72 413.70
--------------------------------------------------------------------------------------------------------------------------------------------------------
Age-One Equivalents (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................ 747.40 614.97 722.53 728.35 602.42
EM............................................................ 1,441.52 0.00 1,259.02 1,285.20 0.00
I&E Mortality................................................. 2,188.92 614.97 1,981.55 2,013.55 602.42
--------------------------------------------------------------------------------------------------------------------------------------------------------
Forgone Fishery Yield (million lbs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................ 15.21 11.99 14.86 14.93 11.86
EM............................................................ 56.30 0.00 43.66 44.31 0.00
I&E Mortality................................................. 71.50 11.99 58.52 59.24 11.86
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 22240]]
Production Forgone (million lbs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................ 152.71 126.44 148.09 149.32 123.81
EM............................................................ 485.07 0.00 393.39 406.88 0.00
I&E Mortality................................................. 637.78 126.44 541.48 556.20 123.81
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scenarios: Option 1 = IM limitations based on modified traveling screens for all facilities with flow greater than 2 million gallons per day (MGD);
Option 2 = Intake flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2 MGD and IM limitations
based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 3 = Intake flow commensurate with closed-cycle cooling for
all facilities and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based
on modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).
Exhibit VIII-3 presents EPA's estimates of annual I&E mortality
losses by option and by fish category. Estimates of annual forgone
fishery yield include both direct losses to harvested species as well
as indirect losses due to reductions in prey fish species. Because the
vast majority of the biomass moving through food webs is lost due to
low trophic transfer efficiency (i.e., does not reach the higher
trophic levels with direct use value to humans), the portion of I&E
mortality losses with direct human use values (i.e., those that
contribute to forgone harvest) represent only a small percentage of all
organisms suffering I&E mortality losses at CWIS. Neither forage
species nor the unlanded portion of recreational and commercial species
were assigned direct use values in this analysis, though losses in
forage species did contribute to the overall losses in recreational and
commercial species as noted above. Because the majority of annual I&E
mortality losses include unharvested recreational and commercial fish
and forage fish, considering nonuse values in the final Section 316(b)
rule benefits analysis is particularly important.
Exhibit VIII-3--Distribution of Annual Baseline I&E Mortality Losses and Reductions by Species Category and Regulatory Option, for Absolute Losses and
Age-1 Equivalents
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction in losses by regulatory option
I&E loss metric Baseline I&E -----------------------------------------------------------------------
losses Option 1 Option 2 Option 3 Option 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individuals (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Species................................................... 528,485.67 421.62 400,852.27 407,921.72 413.70
Forage Species................................................ 360,431.51 307.89 278,690.45 283,584.80 301.21
Commercial & Recreational Species............................. 168,054.16 113.73 122,161.82 124,336.91 111.49
Commercial & Recreational Harvest............................. 59.41 15.66 53.28 54.05 15.51
Lost Individuals with Direct Use Value (%).................... 0.01 3.71 0.01 0.01 3.75
--------------------------------------------------------------------------------------------------------------------------------------------------------
Age-One Equivalents (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Species................................................... 2,188.92 614.97 1,981.55 2,013.55 602.42
Forage Species................................................ 1,654.78 525.66 1,512.64 1,535.44 514.11
Commercial & Recreational Species............................. 534.15 89.31 468.91 478.11 88.31
Commercial & Recreational Harvest (million fish).............. 59.41 15.66 53.28 54.05 15.51
A1E Losses with Direct Use Value (%).......................... 2.71 2.55 2.69 2.68 2.57
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scenarios: Option 1 = IM limitations based on modified traveling screens for all facilities with flow greater than 2 million gallons per day (MGD);
Option 2 = Intake flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2 MGD and IM limitations
based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 3 = Intake flow commensurate with closed-cycle cooling for
all facilities and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based
on modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).
D. National Benefits of Today's Considered Options
1. Overview
Economic benefits of the proposed options for in-scope facilities
can be broadly defined into use and nonuse benefit categories of goods
and services.
Use values include benefits that pertain to the use (direct or
indirect) of affected fishery resources. Use value reflects the value
of all current direct and indirect uses of a good or service. Direct
use benefits can be further categorized according to whether or not
affected goods and services are traded in the market (e.g.
commercially-captured fish are traded, recreational catch is not).
Likewise, indirect use benefits can be linked to either market or
nonmarket goods and services. For example, reductions to I&E mortality
losses of forage fish will enhance the biomass of species targeted for
commercial (market) and recreational (nonmarket) uses.
Nonuse benefits are those benefits that are independent of any
current or anticipated use of a resource. Nonuse benefits reflect human
values associated with existence and bequest motives.
EPA estimated the economic benefits from national regulatory
options using a range of valuation methods. Commercial fishery benefits
were valued using market data. Recreational angling
[[Page 22241]]
benefits were valued using a benefits transfer approach. To estimate
indirect use benefits from reduced I&E mortality losses to forage
species, EPA used a simple trophic transfer model. This model
translated changes in I&E mortality losses of forage fish into changes
in the harvest of commercial and recreational species. All benefits for
fish saved under today's proposed rule are estimates based on projected
numbers of age-one equivalent fish, converted to harvestable age
equivalents on a species-by-species basis for those commercial species
analyzed.
EPA calculated the monetary value of use benefits of the national
categorical regulatory options for existing facilities using two
discount rate values: 3% and 7%. All dollar values presented are in
2009$. Because avoided fish deaths occur mainly in fish that are
younger than harvestable age (eggs, larvae, and juveniles), the
benefits from avoided I&E mortality would be realized typically 3-4
years after their avoided death. A detailed description of the
approaches used to address this can be found in Appendix C of the EEBA.
Neither forage species nor the unlanded portion of recreational and
commercial were assigned direct use values in this analysis. Their
potential value to the public is derived from several alternative
sources: Their indirect use as both food and breeding population for
those fish that are harvested, the willingness of individuals to pay
for the protection of fish based on a sense of altruism, stewardship,
bequest, or vicarious consumption, and their support of ecosystem
stability and function (nonuse benefits). To estimate a subset of
nonuse benefits from reducing losses to forage species, and landed and
unlanded commercial and recreational species, EPA explored benefits
transfer from nonmarket valuation studies of nonuse values of aquatic
ecosystem improvements. These efforts generated partial estimates of
nonuse values for resource changes expected to result in the North
Atlantic and Mid-Atlantic benefits regions from the proposed options,
but EPA was unable to estimate reliable nonuse valuations for changes
expected to result in other study regions. EPA is in the process of
developing a stated preference survey to estimate total willingness to
pay (WTP) for improvements to fishery resources affected by I&E
mortality from in-scope 316(b) facilities (75 FR 42,438). However EPA
did not have sufficient time to fully develop and implement this survey
for the proposed regulation. EPA will issue a Notice of Data
Availability pending completing survey implementation and data
analysis. As a consequence of the challenges associated with estimating
nonuse benefits, some non-monetized benefits are described only
qualitatively or quantitatively.
2. Timing of Benefits
Discounting refers to the economic conversion of future benefits
and costs to their present values, thereby accounting for the fact that
individuals value future outcomes less than comparable near-term
outcomes. Discounting enables a valid comparison of benefits and costs
that occur across different time periods. For the analysis of the
proposed options, monetized benefits are calculated in a manner that
makes the timing comparable to the annualized cost estimates. The
benefits of the proposed options are estimated as the typical benefits
expected once the rule takes effect. The need to discount arises from
two different delays in the realization of benefits.
First, facilities will not always achieve compliance in the same
year that costs are incurred. Facilities will face regulatory
requirements once the rule takes effect, but it will take time to make
the required changes. It is assumed that facilities installing
impingement technology will achieve compliance sooner than facilities
installing cooling towers. Facilities installing only impingement
technology are assumed to have an average compliance year of 2015, non-
nuclear electric generating facilities installing towers have an
average compliance year of 2020, and nuclear electric generating
facilities and manufacturing facilities installing towers have an
average compliance year of 2025. To account for the lag between the
incurrence of costs and the realization of benefits, benefits are
discounted to a greater extent compared to the costs.
Second, an additional time lag will result between technology
implementation and increased fishery yields. This lag occurs because
several years may pass between the time an organism is spared from I&E
mortality and the time of its potential harvest. For example, a larval
fish spared from entrainment (in effect, at age 0) may be caught by a
recreational angler at age 3, meaning that a 3-year time lag arises
between the incurred technology cost and the realization of the
estimated recreational benefit. Likewise, if a 1-year-old fish is
spared from impingement and is then harvested by a commercial waterman
at age 2, there is a 1-year lag between the incurred cost and the
subsequent commercial fishery benefit. To account for this growth
period, EPA applied discounting by species groups in each regional
study.
3. Recreational Fishing Valuation
a. Recreational Fishery Methods
To estimate recreational benefits of the proposed options, EPA
developed a benefits transfer approach based on a meta-analysis of
recreational fishing valuation studies designed to measure the various
factors that determine willingness to pay for catching an additional
fish per trip. Regional benefits are summarized as follows (see Chapter
7 of the EEBA document for details):
1. Estimate annual foregone catch of recreational fish (number of
fish) attributable to I&E mortality under current conditions.
2. Estimate the marginal value per fish.
3. Multiply forgone catch by the marginal value per fish to
estimate the total annual value of forgone catch.
4. Estimate the annual value of reductions in forgone catch
attributable to the regulatory analysis options.
5. Discount benefits at 3% and 7% to reflect the time lag between
I&E mortality reductions and increased harvests.
b. Estimated Benefits to Recreational Anglers
Decreasing I&E mortality increases the number of fish available to
be caught by recreational anglers, thereby increasing angler welfare.
Exhibit VIII-4 shows the estimated benefits resulting from reduced I&E
mortality under today's options. The total annualized recreational
fishing benefit for all regions, discounted at 3% (I&E mortality
combined), ranges from $15.3 to $44.9 million; and the total for all
regions, discounted at 7%, ranges from $13.9 to $33.3 million.
[[Page 22242]]
Exhibit VIII-4--Annual Recreational Fishing Benefits From Eliminating or Reducing I&E Mortality Losses at All In-
scope Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
Increased harvest 3% Discount rate 7% Discount rate
Regulatory Option (million fish) (million 2009$) (million 2009$)
----------------------------------------------------------------------------------------------------------------
Baseline......................................... 26.79 $76.89 $75.64
Option 1......................................... 5.77 15.62 14.21
Option 2......................................... 23.55 43.52 32.40
Option 3......................................... 24.06 44.94 33.30
Option 4......................................... 5.65 15.34 13.94
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on
modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).
4. Commercial Fishing Valuation
Reductions in I&E mortality at cooling water intake structures are
expected to benefit the commercial fishing industry. By reducing the
number of fish killed, the number of fish available for harvest is
expected to increase. The next section summarizes the methods EPA used
to estimate benefits to the commercial fishing sector. The following
section presents the estimated commercial fishing benefits.
a. Commercial Fishing Valuation Methods
The total loss to the economy from I&E mortality impacts on
commercially harvested fish species is determined by the sum of changes
in both producer and consumer surplus. EPA assumed a linear
relationship between stock and harvest, such that if 10% of the current
commercially targeted stock were harvested, then 10% of the
commercially targeted fish lost to I&E mortality would have been
harvested, absent I&E mortality. The percentage of fish harvested is
based on data of historical fishing mortality rates.
Producer surplus provides an estimate of the economic damages to
commercial fishers, but welfare changes can also be expected to accrue
to final consumers of fish and to commercial consumers (including
processors, wholesalers, retailers, and middlemen) if the projected
increase in harvest is accompanied by a change in price. The analysis
of market impacts involves the following steps (see Chapter 6 of the
EEBA for details):
1. Assessing the net welfare changes for fish consumers due to
changes in fish harvest and the corresponding change in fish price.
2. Assessing net welfare changes for fish harvesters due to the
change in total revenue, which could be positive or negative.
3. Calculating the increase in net social benefits when the fish
harvest changes by combining the welfare changes for consumers and
harvesters.
For a more detailed description of the methodology for commercial
fishing, see Chapter 6 of the EEBA.
b. Commercial Fishing Valuation Results
Exhibit VIII-5 presents the estimated annual commercial fishing
benefits attributable to the proposed options. The results reported
include the total reduction in losses in pounds of fish, and the value
of this reduction discounted at 3%, and 7%. With a 3% discount rate,
total estimated annualized commercial fishing benefits for the U.S.,
range from $1.0 to $4.5 million. Applying a 7% rate, these benefits
range from $0.9 to $3.3 million. EPA estimated the expected price
changes from eliminating baseline levels of I&E mortality losses and
found them to be small, ranging from 0.13 percent to 2.1 percent.
Exhibit VIII-5 Annual Commercial Fishing Benefits From Eliminating or Reducing I&E Mortality Losses at All In-
scope Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
Increased harvest 3% Discount rate 7% Discount rate
Regulatory Option (million fish) (million 2009$) (million 2009$)
----------------------------------------------------------------------------------------------------------------
Baseline......................................... 32.62 $8.05 $7.89
Option 1......................................... 9.89 0.99 0.89
Option 2......................................... 29.72 4.47 3.31
Option 3......................................... 29.99 4.52 3.34
Option 4......................................... 9.86 0.99 0.89
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on
modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).
5. Nonuse Benefits
Aquatic organisms without any direct uses account for the majority
of cooling water intake structure losses (Exhibit VIII-6.). Although
individuals do not use these resources directly, they may value changes
in their status or quality. To assess the public policy significance of
the ecological gains from the national categorical regulatory options
for existing facilities, EPA developed a benefit transfer approach to
partially monetize nonuse benefits associated with reductions in I&E
mortality of fish, shellfish, and other aquatic organisms under the
categorical regulatory options for the North Atlantic and Mid-Atlantic
benefits regions. EPA applied estimated values from a study occurring
in Rhode Island; these estimates are likely to be
[[Page 22243]]
representative of nonuse values held by individuals residing in the
Northeast US, and less accurate in other regions. EPA was unable to
identify comparable studies occurring in other regions which could be
used to estimate nonuse values. Chapter 8 of the EEBA provides further
detail on this analysis.
a. Nonuse Valuation Methods
The preferred techniques for estimating total resource values (use
plus nonuse) are to use values from the existing studies or conduct
original stated preference surveys. There are many studies in the
environmental economics literature that quantify benefits or
willingness to pay (WTP) associated with various types of water quality
and aquatic habitat changes. However, none of these studies allows the
isolation of non-market WTP associated with quantified reductions in
fish losses for forage fish. Most available studies estimate WTP for
broader, and sometimes ambiguously defined, policies that
simultaneously influence many different aspects of aquatic
environmental quality and ecosystem services, but for which WTP
associated with fish or aquatic life alone cannot be identified. Stated
preference methods rely on surveys which ask people to state their
willingness to pay (WTP) for particular ecological improvements, such
as increased protection of aquatic species or habitats with particular
attributes. EPA is in the process of developing a stated preferences
survey to estimate total willingness to pay (WTP) for improvements to
fishery resources affected by I&E mortality from in-scope 316(b)
facilities. The survey will provide estimates of total values, will
allow estimates of value associated with specific choice attributes
(following standard methods for choice experiments), and will also
allow the flexibility to provide insight into the relative importance
of use versus nonuse values in the 316(b) context. However EPA did not
have sufficient time to fully develop and deploy this survey and derive
reliable estimates of the monetary value of reducing those impacts at
the national level. Benefit transfer of values from existing stated
preference studies was used by EPA in the absence of an original study.
EPA identified a recent study conducted by Johnston et al., (2009)
that is closely related to the 316(b) policy context. Both Johnston et
al., (2009) and the present context address policy changes that
increase the number of forage fish in aquatic habitat with unknown
effects on overall fish populations. Originally developed for a case
study addressing Rhode Island residents' preferences for the
restoration of migratory fish passage over dams in the Pawtuxet and
Wood-Pawcatuck watersheds of Rhode Island, Johnston et al., (2009)
estimates nonuse values by asking respondents to consider changes in
ecological indicators reflecting quantity of habitat, abundance of
wildlife, ecological condition, and abundance of migratory fish
species. Within this study, estimated values were based on the relative
change in abundance of fish species impacted to the greatest extent by
restoration.
Estimated benefit functions from the Johnston et al., (2009) choice
experiment survey allows one to distinguish benefits associated with
resource uses from those associated primarily with nonuse motives.
Within the benefit transfer application, WTP is quantified for
increases in non-harvested fish alone, based on the implicit price for
migratory fish changes. This transfer holds all effects related to
identifiable human uses constant (e.g., effects on catchable fish,
public access, observable wildlife, etc.). The remaining welfare
effect--derived purely from effects on forage fish with little or no
direct human use--may therefore be most accurately characterized as a
nonuse benefit realized by households.
The estimation of nonuse values involved the following steps:
1. Use a variant of the Johnston et al., (2009) model (the survey
variant which characterizes effects on the number of migratory fish
passing upstream) to estimate household WTP per percent increase in the
number of fish in a given watershed.
2. Calculate the relative change in abundance for the fish species
impacted to the greatest extent by the regulation. By comparing
increases in age-1 equivalent fish to estimates of biomass at species'
carrying capacity, EPA found that of all species with habitats inside
the boundaries of the North Atlantic and Mid-Atlantic benefits regions,
winter flounder is likely to experience the largest percent change in
population. This species is harvested; however fish and commercial
species may be forage during early life-stages and have nonuse values.
3. Estimate total household WTP by applying model results for WTP
per percentage to estimated winter flounder losses. Total regional WTP
is the product of household WTP and the number of households within the
affected region (see Chapter 8 of the EEBA for details.)
b. Estimated Nonuse Benefits for the North Atlantic and Mid Atlantic
Regions
EPA expects that decreasing I&E mortality will lead to increased
fish abundance in affected waterbodies, thus increasing nonuse
benefits. Exhibit VIII-6 shows the benefits that would result from
reducing I&E mortality losses through today's proposed options.
Estimates of WTP were calculated based on the increase in age-1
equivalent winter flounder relative to estimated current biomass.
Discounted at 3%, the total annualized nonuse benefit for the North
Atlantic and Mid-Atlantic regions, ranges from $0.5 to $75.5 million.
When discounted at 7%, annualized nonuse benefits range from $0.5 to
$58.5 million.
Exhibit VIII-6--Annual Nonuse Benefits From Eliminating or Reducing I&E Mortality Losses at All In-scope
Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
Increased winter
flounder age-1
Winter flounder I&E equivalent 3% Discount rate 7% Discount rate
Regulatory option losses (million abundance relative (millions 2009$) (millions 2009$)
A1E) to virgin biomass
(%)
----------------------------------------------------------------------------------------------------------------
Baseline.................... 6.50 6.56 $128.64 $130.78
Option 1.................... 0.03 0.03 0.52 0.48
Option 2.................... 5.32 5.37 72.09 55.93
Option 3.................... 5.57 5.63 75.48 58.52
[[Page 22244]]
Option 4.................... 0.03 0.03 0.52 0.48
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on
modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).
6. Threatened and Endangered Species
This section summarizes methods and results of EPA's analysis of
benefits from improved protection of threatened and endangered (T&E)
species from the national categorical regulatory options considered in
today's Proposal. Chapter 5 of the EEBA provides further detail on this
analysis.
For T&E species, mortality due to I&E mortality from CWISs may
represent a substantial portion of annual reproduction because of the
reduced population levels that cause a species to be protected.
Consequently, I&E mortality may either lengthen recovery time, or
hasten the demise of these species. Adverse effects of CWIS on T&E
species may occur in several ways:
Populations of T&E species may suffer direct harm as a
consequence of I&E mortality
T&E species may suffer indirect harm if CWIS alters food
webs
CWIS may alter habitat critical to the long-term survival
of T&E species (e.g., thermal discharges associated with once through
cooling)
Consequently, EPA believes that 316(b) regulation may help preserve a
number of threatened and endangered species.
a. Qualitative Assessment of I&E Mortality Impacts to T&E Species
By definition, T&E species are characterized by low population
levels. As such, it is unlikely that these species are recorded in I&E
mortality monitoring studies which sample only a portion of all I&E
mortality losses. Thus, losses are difficult to identify and quantify
within a framework developed for common species. Consequently, EPA
developed a qualitative methodology to estimate the number of T&E
species affected by I&E mortality.
To qualitatively assess the potential for CWIS impacts on aquatic
T&E species, EPA constructed a database that assessed the geographical
overlap of CWIS and habitat used by aquatic T&E species. This database
identified the number of T&E species potentially impacted by each in-
scope 316(b) facility, and the number of facilities potentially
impacting each T&E species. Additional details can be found in Chapter
5 of the EEBA document.
Using this database, EPA found 89 federally-listed T&E species that
overlap with at least one in-scope 316(b) CWIS (Exhibit VIII-7) Species
included freshwater, marine, and anadromous fish, freshwater mussels,
and sea turtles. On average, the habitat of each T&E species overlapped
with 20 in-scope facilities (Exhibit VIII-7), suggesting that the
regulation of 316(b) facilities may have substantial positive benefits
on ensuring the long-term sustainability and recovery of T&E species.
Exhibit VIII-7--Number of In-Scope 316(b) CWIS Within T&E Species Habitat on a Per-Species Basis
----------------------------------------------------------------------------------------------------------------
Facilities per T&E species \4\
Subset of affected species \1\ \2\ Species Interactions \3\ -------------------------------------
Avg Max
----------------------------------------------------------------------------------------------------------------
All T&E Species..................... 88 1,734 19.70 135
Sea Turtles......................... 6 652 108.67 135
T&E Freshwater Mussels.............. 43 836 19.44 85
T&E Anadromous Fish................. 13 115 8.85 64
T&E Freshwater Fish................. 21 64 3.05 7
T&E Marine Fish..................... 3 17 5.67 11
----------------------------------------------------------------------------------------------------------------
\1\ T&E species included species of concern and species under review for listing by the US Fish and Wildlife
Service (freshwater) or NOAA National Marine Fisheries Service (marine). Only species overlapping with a
minimum of one CWIS are included.
\2\ Two species of coral are included in the `All Species' category, and not in any subcategory.
\3\ Each interaction represents an overlap between the range of a T&E species and CWIS.
\4\ Avg = average, Max = maximum.
b. Quantitative Assessment of I&E Mortality Impacts to T&E Species
Although difficult to observe and quantify, EPA identified 15 T&E
species with confirmed I&E mortality losses. In addition to documented
species-level instances of T&E mortality, EPA identified I&E mortality
losses at the level of genera \94\ when these genera contain a T&E
species whose habitat range overlapped the reporting facility's CWIS.
Although these are not confirmed I&E mortality losses of T&E species,
they provide evidence that additional T&E species are likely to be
directly affected by I&E mortality. A total of 19 genus-level matches
were reported, suggesting that the 15 T&E species suffering I&E
mortality losses may be an underestimate.
---------------------------------------------------------------------------
\94\ Genera is the plural of genus. Genus is the rank superior
to species in taxonomic biological classification. For example, the
genus of Atlantic salmon (Salmo falar) is Salmo.
---------------------------------------------------------------------------
[[Page 22245]]
Of the 15 federally-listed T&E species for which losses were
documented within I&E mortality studies, EPA was able to quantify
losses for 2 species. Data were either qualitative or of insufficient
quality to quantify regional losses for the remaining 13 federally-
listed T&E species. EPA also quantified losses for the American
Paddlefish (Polyodon spathula), listed as threatened or endangered on
several state lists, using facility I&E mortality loss studies. Exhibit
VIII-8 presents EPA's estimates of baseline annual I&E mortality
losses, and reductions to I&E mortality losses estimated to occur under
various regulatory options.
Exhibit VIII-8--Baseline Annual I&E Mortality Losses for T&E Species and Reductions for All In-Scope Facilities
by Regulatory Option (A1Es)
----------------------------------------------------------------------------------------------------------------
Species Value Baseline Option 1 Option 2 Option 3 Option 4
----------------------------------------------------------------------------------------------------------------
Pallid Sturgeon.............. Use, Nonuse..... 88 73 85 86 72
American Paddlefish.......... Use, Nonuse..... 17,628 8,631 15,946 16,317 8,420
Topeka Shiner................ Nonuse.......... 3,669 3,069 3,546 3,581 2,994
----------------------------------------------------------------------------------
Total.................... ................ 21,384 11,773 19,577 19,984 11,486
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified traveling
screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake flow
commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2 MGD and
IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 3 =
Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on modified
traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on modified
traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).
I&E mortality is only one of many factors that adversely affect T&E
species. Estimating total population impacts from changes in I&E losses
requires estimates of current populations of these fish and estimates
of other anthropogenic effects which were not readily available for all
T&E species with quantified I&E mortality losses at the time of this
analysis. Therefore, EPA was unable to quantify effects on T&E
population from the 316(b) regulation.
c. Valuation Methods of T&E Fish Species
EPA believes that for T&E species, the primary value is non-use
value. Harvest of these species is prohibited (or at least restricted),
reflecting a societal judgment that protection and preservation of
these species is of greater value than harvest. As noted above, EPA had
sufficient data from I&E mortality studies to quantify I&E mortality
loss estimates for three T&E species (Exhibit VIII-8). EPA applied
estimates from a Random Utility Model (RUM) analysis conducted for the
suspended 316(b) Phase II regulation to evaluate recreational fishing
benefits for I&E loss reductions for two of these species. EPA applied
transfer values from this analysis to monetize I&E mortality losses for
these species (see Chapter 5 for details). EPA emphasizes that nonuse
values for T&E fish species are likely to be significantly greater than
any use values, and these EPA was not able to quantify. With this
caveat, the results of the analysis of recreational fishing benefits
for two T&E species are shown below.
d. Estimated Monetary Benefits From Reduced Mortality of T&E Fish
Species
Using a 3% discount rate, total annualized use benefits for the two
T&E species with monetized I&E mortality losses are estimated to range
from $0.5 to $0.7 million. Applying a 7% discount rate, annualized
benefits range from $0.4 to $0.6 million.
Exhibit VIII-9--Annual Use Benefits From Eliminating or Reducing I&E Mortality Losses of T&E Species at All In-
Scope Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
Increased harvest 3% Discount rate 7% Discount rate
Regulatory option (number of fish) (million 2009$) (million 2009$)
----------------------------------------------------------------------------------------------------------------
Baseline......................................... 17,715.55 $1.14 $1.14
Option 1......................................... 8,704.08 0.50 0.45
Option 2......................................... 16,030.56 0.72 0.56
Option 3......................................... 16,403.11 0.72 0.55
Option 4......................................... 8,491.59 0.49 0.44
----------------------------------------------------------------------------------------------------------------
Note: Values are included for pallid sturgeon and paddlefish in the Inland region.
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
modified traveling screens for all facilities with flow greater than 2 MGD.; Option 4 = IM limitations based
on modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).
EPA notes that the benefit values presented in Exhibit VIII-9
represent only a fraction of values for T&E species potentially
affected by the proposed regulation: the Agency was able to obtain use
values for only a small subset of all affected T&E species. Moreover,
because of the nature of T&E species, even a small increase in
population may yield economic and ecological benefits (e.g., Richardson
and Loomis 2008, Huppert et al., 2004; Berrens et al., 1996)
e. Valuation Methods for T&E Sea Turtles
In addition to estimating values of T&E fish with quantitative
estimates of I&E mortality losses, EPA estimated the WTP for sea turtle
conservation. In this analysis, EPA applied estimates from a
[[Page 22246]]
study using a stated preference valuation approach to estimate total
economic value of a management program that reduces the risk of
extinction of loggerhead sea turtles (Whitehead 1993).
Although I&E mortality is relatively low compared to mortality from
shrimp trawling and other fisheries (Plotkin 1995), it is known that
low levels of turtle mortality during juvenile and subadult life stages
can have a substantial effect on population growth (Crouse et al.,
1987). EPA believes that the marginal decrease in extinction
probability of sea turtles due to 316(b) regulatory options is likely
to be at least 0.01, or a 1% decrease in the probability of extinction
over 25 years. This assessment is based upon reports that I&E mortality
may result in the loss of more than 100 turtles per year, and because
turtle population growth rates are known to be sensitive to changes in
juvenile and subadult life stages (Crouse et al., 1987).
f. Estimated Monetary Benefits From Reduced Mortality of T&E Sea
Turtles
The U.S. range of loggerhead sea turtles includes the Gulf of
Mexico, South Atlantic, Mid-Atlantic, and North Atlantic 316(b) regions
(USFWS 2010). To calculate national WTP for an increased 25-year
survival probability of loggerhead sea turtles, EPA assumed the
affected population to include households in states with in-scope
316(b) facilities that occur within loggerhead sea turtle habitat.
Using this assumption, EPA determined 53.4 million households would be
willing to pay for improved protection of loggerhead sea turtles.
Although incidences of mortality have been reported at facilities in
California, Texas, Florida, South Carolina, North Carolina, and New
Jersey EPA does not have sufficient information to quantify total sea
turtle losses due to intakes, or the reductions in such losses that
might occur from the various options. But as an illustrative example,
assuming that the survival probability of loggerhead sea turtles over
25 years was increased by 1%, and applying a mean household value of
$0.35 (2009$, see the EEBA Chapter 5), the monetized value would be
$16.6 million and $16.0 million using discount rates of 3% and 7%,
respectively. Because EPA does not currently have accurate national
estimates of I&E mortality for turtle species, nor are population
models available that estimate the effect of 316(b) regulation on
population size and extinction risk, these estimates are presented only
as an illustrative example, and are not included in national totals.
g. Other Indications of Society's WTP for Protection of T&E Species
Many sources provide information that indicates that society places
significant value on protecting T&E species. These include, but are not
limited to:
The Endangered Species Act of 1973 which provides for the
conservation of T&E species of fish and wildlife. To comply with this
law the federal government and state governments spent a total of
$467.6 million during fiscal year 2008 on protection of federally
listed T&E species with habitat overlapping CWIS.
Restrictions placed on the habitat occupied by T&E
species. For example, water diversions on the San Joaquin-Sacramento
River delta, in place to protect the Delta Smelt (Hypomesus
transpacificus), limit the extraction of water for drinking and
agriculture.
The willingness of individuals to volunteer their time to
conserve T&E species. For example, dozens of organizations recruit
thousands of volunteers every year to participate in sea turtle
conservation and research projects; volunteers are often required to
undergo substantial training and commit to long hours.
While costs to replace, protect or enhance stocks, and costs to
users affected by efforts to conserve stocks are not direct measures of
economic benefits, they indicate that society is willing to pay
significant sums to protect and restore populations of T&E species.
Although I&E mortality is only one of many stressors on these species,
reducing the magnitude of these losses may contribute to the recovery
of populations over time, thereby eliminating some costs associated
with conserving threatened and endangered species.
7. Assessment of Thermal Discharge Impacts
Since thermal discharges are a product of once-through cooling
water systems, the impacts of thermal discharges are a relevant
consideration when assessing appropriate technologies to reduce the
effects of cooling water intakes. Thermal pollution has long been
recognized to cause harm to the structure and function of aquatic
ecosystems. Concerns about the impacts of thermal discharges are
addressed by provisions of CWA Section 316(a) regulations. NPDES
permits are required to limit thermal discharges in order to ensure
that that there is no appreciable harm to a balanced, indigenous
population of shellfish, fish and wildlife. Permit requirements,
however, may not totally eliminate all adverse impacts in all cases. In
addition to reducing total I&E mortality, closed cycle cooling reduces
thermal pollution. Most retrofit installations of cooling towers at
electric generating facilities have been required by NPDES permits for
the sole purpose of reducing thermal discharges.
EPA did not quantify nationally the impacts of thermal discharges.
However, numerous studies have shown that thermal discharges may
substantially alter the structure of aquatic communities by modifying
photosynthetic, metabolic, and growth rates. Thermal discharges also
harm aquatic life by reducing levels of dissolved oxygen, altering the
location and timing of fish behavior such as spawning, aggregation, and
migration, and may cause thermal shock-induced mortality for some
species. Adverse temperature effects may also be more pronounced in
aquatic ecosystems that are already subject to other environmental
stressors such as high levels of biochemical oxygen demand, sediment
contamination, or pathogens. Within mixing zones, which often extend
several miles downstream from outfalls, thermal discharges may impair
efforts to restore and protect the waterbody. For example, permit
requirements to limit nitrogen discharges in a watershed, and thereby
reduce harmful algal blooms, may be counteracted by thermal discharges
which promote growth of harmful algae. Thermal discharges may have
indirect effects on fish and other vertebrate populations through
increasing pathogen growth and infection rates.
Thermal discharges may thus alter the ecological services, and
reduce the benefits, of aquatic ecosystems that receive heated
effluent. The magnitude of thermal effects on ecosystem services is
related to facility-specific factors, including the volume of the
waterbody from which cooling water is withdrawn and returned, other
heat loads, the rate of water exchange, the presence of nearby refugia,
and the assemblage of nearby fish species. Again, EPA emphasizes that
thermal impacts are supposed to be minimized through implementation of
Section 316(a), but to the extent that any impacts remain after the
requirements in 316(a) have been satisfied, replacing once-through
cooling with closed-cycle cooling may provide additional benefits.
8. National Monetized Benefits
Quantifying and monetizing reductions in I&E mortality losses due
to
[[Page 22247]]
the regulatory options is extremely challenging. National benefit
estimates are subject to uncertainties inherent in valuation approaches
used to assess the benefits categories (See Chapters 5, 6, 7, and 8 of
the EEBA document.). The combined effect of these uncertainties is of
unknown magnitude or direction--that is, the estimates may over- or
understate the anticipated national-level benefits. While EPA has no
data to indicate that the results for each benefit category are
atypical or unreasonable, EPA believes that some potentially
significant benefit categories have not been fully monetized, and thus
the national monetized benefits presented below likely underestimate
total benefits, challenging the Agency's ability to base BTA decision
making on the relationship of quantified costs and benefits alone.
Exhibit VIII-10 presents EPA's estimates of the partial monetized
benefits from I&E mortality reduction of the considered regulatory
options. These monetized values represent use values from increased
commercial and recreational catch, recreational fishing benefits from
increased catch of threatened and endangered species, and nonuse values
associated with an increase in fish abundance (those fish that are not
caught) in the North and Mid-Atlantic benefit regions. Partial
estimated benefits from reducing I&E mortality under the proposed rule
and alternative options range from $17.3 to $125.6 million (2009$) per
year, discounted at 3%, and from $15.8 to $95.7 million (2009$) per
year when discounted at 7%. EPA was not able to fully monetize the
benefits for this proposal. Thus, the estimates presented represent a
conservative (i.e. low) estimate of total regulatory benefits.
Exhibit VIII-10--Summary of National Benefits for All In-Scope Facilities by Regulatory Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized benefit categories
------------------------------------------------------------------------------------
Regulatory option Recreational Commercial
fishing fishing Nonuse T&E Species \a\ Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% Discount Rate (Millions 2009$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................................... 76.89 8.05 12.64 1.14 214.72
Option 1........................................................... 15.62 0.99 0.52 0.50 17.63
Option 2........................................................... 43.52 4.47 72.09 0.72 120.79
Option 3........................................................... 44.94 4.52 75.48 0.72 125.65
Option 4........................................................... 15.34 0.99 0.52 0.49 17.33
--------------------------------------------------------------------------------------------------------------------------------------------------------
7% Discount Rate (Millions 2009$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................................... 75.64 7.89 130.78 1.14 215.45
Option 1........................................................... 14.21 0.89 0.48 0.45 16.04
Option 2........................................................... 32.40 3.31 55.93 0.56 92.20
Option 3........................................................... 33.30 3.34 58.52 0.55 95.71
Option 4........................................................... 13.94 0.89 0.48 0.44 15.76
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Benefits estimates for T&E species are restricted to recreational fishing benefits from increased catch of T&E species. They do not include benefits
for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM Everywhere; Option 1 = IM limitations based on modified traveling screens
for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake flow commensurate with closed-cycle cooling for
facilities that have a design intake flow of greater than 2 MGD and IM limitations based on modified traveling screens for all facilities with flow
greater than 2 MGD; Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on modified traveling
screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on modified traveling screens for all facilities with flow
greater than 50 million gallons per day (MGD).
E. Uncertainty and Limitations
EPA recognizes that its estimates of ecological and economic
benefits projected to occur under regulation are impacted by
uncertainty at many levels (uncertainty and limitations are discussed
in detail in Chapters 2, 3, 4, 5, 6, 7, and 8). Moreover, due to
incomplete data availability, and limited resources, the Agency
recognizes that there are limitations to the analyses presented above
and in the EEBA. Examples of uncertainty and limitations include, but
are not limited to:
Not all ecological goods and services impacted by CWIS at
in-scope 316(b) facilities are modeled or monetized, suggesting that
the total benefits of regulation may be underestimated. For example,
potential increases to ecosystem stability that may occur as a result
of regulation is not explicitly estimated nor monetized, though it is
difficult to parse out what exactly is or is not included in WTP
estimates for non-use values, which were included for the North
Atlantic and Mid-Atlantic regions.
When particular ecological goods and services are
monetized, data is not always available at a national scale. For
example, EPA was able to estimate nonuse benefits of I&E mortality
reductions only within the North and Mid-Atlantic regions, suggesting
that nonuse values are significantly underestimated.
EPA makes simplifying assumptions that allow for I&E
mortality losses and benefits to be estimated on a national scale. For
example, EPA assumes that I&E mortality losses from model facilities
are representative of all facilities within a region. The effect of
these assumptions are unknown, and may lead to over- or under-estimates
of modeled losses and benefits. However, EPA notes that the age of the
studies and likely improvements to waters make them less representative
of current conditions.
EPA relies on biological and economic data of various
scope, duration, and date to estimate regional and national baseline
and benefits. The effect of these various differences on total regional
and national benefits is uncertain.
EPA developed methodologies to estimate regional and
national baselines and benefits of 316(b) regulation. As such,
location- and species-specific quantitative estimates may not be
precise. Overall, however, EPA believes its approach is valid for
regional and national-scale analyses that incorporate a large number of
facilities and species.
[[Page 22248]]
Overall, EPA recognizes many sources of uncertainty in its models,
and is aware of the limitations of analysis. However, EPA has used the
best available scientific and economic methodologies to partially
monetize benefits using available resources. As noted above, EPA
expects to improve its benefits estimates by incorporating the results
of a national survey of WTP to protect fish and aquatic resources into
the analysis for the final rule. Because EPA was only able to partially
monetize non-use benefits, EPA expects that true benefits are greater
than the estimates presented here.
IX. Implementation
The following sections describe how the Agency expects the proposed
rule requirements to be implemented.
A. How would the proposed requirements be applied?
The requirements of today's proposal would be applied to individual
facilities through NPDES permits issued by the EPA or authorized States
under Section 402 of the Clean Water Act. Today's proposed requirements
would apply to each cooling water intake structure located at a
facility subject to the requirements. In cases where a facility has
more than one cooling water intake structure, and each cooling water
intake structure provides cooling water to one or more generating or
manufacturing units, the proposed requirements would apply to each
cooling water intake structure individually and compliance would be
required at each cooling water intake structure.
B. When would affected facilities be required to comply?
These promulgated regulations would become effective sixty (60)
days after the date of publication in the Federal Register. After the
effective date of a regulation, permitting authorities often allow
facilities some time period to come into compliance. As proposed,
facilities would have to comply with the impingement mortality
requirements as soon as possible. Facilities may request additional
time (not to exceed eight years as described below) to comply with the
requirements for impingement mortality. With respect to entrainment
requirements, under the proposal, existing facilities must comply as
soon as possible under a schedule of compliance established by the
permitting authority.
EPA found during site visits that the vast majority of facilities
indicated they could comply with the impingement requirements of the
Phase II rule within a single permit term (5 years), with most sites
needing less time and some sites needing slightly more. For example,
facilities that already have traveling screens should be able to modify
the existing traveling screens, add fish return systems, conduct
necessary testing, and achieve the IM limits within a few years. On the
other hand, EPA identified certain technical and logistical issues at
some facilities that may warrant additional time, such as replacing
intake structures to utilize wedgewire screens, adding additional
intake bays to reduce intake velocity, or pilot testing of other
technologies. As discussed in section 6, the need for outages by
multiple facilities in one geographic area would need to be coordinated
so as to minimize any impacts on the consistency and reliability of
power generation; this could also result in the need for slightly more
time. In these circumstances EPA expects a facility could reasonably
require as long as 8 years to attain compliance.
For those existing facilities that will be subject to both
impingement mortality and entrainment mortality requirements, the
Director should take this into account when establishing a deadline for
compliance, which may also result in the facility needing more time to
comply with the IM requirements. For example, if a facility plans to
retrofit to wet cooling towers to both reduce entrainment mortality and
to use the resulting lower intake velocity to comply with requirements
for impingement mortality, the Director may be able to allow for
compliance with the IM requirements to extend to the same schedule as
the entrainment mortality requirements. However, where the Director
determines a facility would need longer than 8 years to comply with the
EM requirements established by the Director, the proposed rule would
not allow the compliance schedule for IM to extend beyond 8 years. EPA
recognizes that this limitation may penalize facilities that might
install cooling towers to meet both IM and EM requirements but are
unable to complete installation within 8 years. EPA requests comment on
this limitation.
The Director would have the discretion to implement a shorter
(i.e., more stringent) timeline for compliance, but in no event should
the Director allow a compliance schedule to extend beyond the dates
specified at Sec. 125.93. Furthermore, EPA expects today's proposal
gives advance notice to affected facilities what the Agency's
expectations are regarding compliance schedules.
The record demonstrates that biological organisms subject to
impingement and entrainment from cooling water intake structures may
vary considerably from site to site with respect to types of species,
quantity of organisms, distribution of life stages, feeding habits, and
other factors. As a result, EPA envisions that each facility subject to
today's proposal would study available technologies and operational
measures, and subsequently install, incorporate and optimize the
technology most appropriate for each site. EPA believes the proposed
Sec. 125.93 affords flexibility for a reasonable amount of time to
conduct biological studies, assess and select appropriate technologies,
apply for necessary permits, complete construction, and optimize the
technologies' performance. The permitting authority would establish any
additional interim milestones within these timelines in accordance with
the existing NPDES provisions at Sec. 122.47.
C. What are my requirements?
As proposed, all existing facilities subject to the proposed rule
that withdraw a DIF of greater than two MGD would be required to comply
with the impingement mortality requirements at Sec. 125.94(b). EPA
estimates that 1262 facilities would be subject to impingement
mortality requirements. As many as 93 percent of electric generators
and 73 percent of manufacturers already employ traveling or other
intake screens which could be modified to meet today's proposed
requirements. In addition, 374 facilities already have full or partial
cooling towers, and most of these facilities already have a maximum
intake velocity of less than 0.5 feet per second. As a result, half of
all manufacturers and more than three-fourths of all electric
generators may already meet some or all of today's proposed
requirements for impingement mortality.
To provide flexibility in meeting proposed rule IM requirements,
EPA is offering facilities two options for compliance with IM
requirements. Facilities may install technologies and demonstrate that
they are meeting the impingement mortality restrictions at Sec.
125.94(b)(1), or demonstrate compliance with the monthly and annual
intake velocity standards as described at Sec. 125.94(b)(2). As
discussed in Section VI, intake velocity is an important parameter for
minimizing impingement and therefore reducing impingement mortality.
Data in the record demonstrate that facilities with a maximum intake
velocity of 0.5 feet per second significantly reduce the potential for
impingement and impingement mortality to a level equal
[[Page 22249]]
to or better than the impingement mortality restrictions. EPA is
therefore proposing an alternative standard that would allow facilities
to demonstrate to the Director that either the maximum design intake
velocity, or the maximum actual intake velocity as it passes through
the structural components of a screen measured perpendicular to the
mesh (under Sec. 125.94(b)(2)(i)) or through the opening of the intake
(under Sec. 125.94(b)(2)(ii)), will not exceed 0.5 feet per second.
Under either option for compliance with the Impingement Mortality
standard, facilities that withdraw water from an ocean or estuary would
also be required to reduce IM of shellfish to a level commensurate with
properly deployed barrier nets. EPA expects passive screens would meet
or exceed this level of performance, and has identified passive screens
in the proposed regulations as being pre-approved for purposes of
meeting this requirement. Also, under either option, facilities would
be required to ensure that their intakes are structured so as to avoid
entrapment (i.e., organisms being trapped in an intake bay or canal and
unable to escape). Facilities with traveling screens located in a
forebay would be expected to install fish handling and return systems
to meet this requirement. EPA expects passive screens such as
cylindrical wedgewire would also meet this requirement.
In addition, facilities would be required to meet entrainment
mortality standards as determined by the Director on a case-by-case
basis. Under today's proposal, facilities with an actual intake flow of
125 MGD or greater would be required to submit with their application
studies as described in this section to assist the Director in
establishing appropriate entrainment mortality controls for that
facility. The Director would evaluate each facility's application
materials to make a site-specific determination of BTA for entrainment
mortality for the facility. In some cases, the Director may determine
that additional requirements are not necessary to satisfy BTA for
entrainment.
Cooling water intakes with flows totaling less than two MGD are not
subject to the proposed requirements. In addition, intakes where less
than 25% of flow is used for cooling are also not subject to these
requirements. Emergency back-up water flows would not be considered
cooling water for purposes of this calculation. Furthermore, EPA seeks
to promote water reuse in the proposed rule by specifically exempting
wastewater, process water, and other gray water (even when used for
cooling) from the definition of cooling water used in this calculation.
However, once an intake satisfies these threshold requirements, all
flow from the intake is subject to the impingement requirements. To the
extent that any entrainment requirements are based on flow commensurate
with closed cycle cooling, these would be applied to the non-contact
cooling portion of the intake only, and could be met, in full or in
part, by reusing water for non-cooling purposes. Intakes not subject to
the rule may still be subject to requirements under other Federal,
state, or local authorities.
New units at existing facilities would be required to meet the
impingement mortality requirements at Sec. 125.94(b) and entrainment
mortality requirements at Sec. 125.94(d). The impingement mortality
requirements would be the same as those identified for existing
facilities, i.e. either numerical restrictions on impingement mortality
or a maximum intake velocity. The entrainment mortality requirements
are based on the level of EM reductions achieved by closed-cycle
cooling. The proposed rule would allow facilities to demonstrate
performance commensurate with the closed-cycle cooling identical to the
Phase I rule provision for new facilities.
D. What information must I submit in my permit application?
All existing facilities would be required to complete and submit
application studies to describe the source water body, cooling water
intake structures, cooling water system; characterize the biological
community in the vicinity of the cooling water intake structure;
develop a plan for controlling impingement mortality; describe
biological survival studies that address technology efficacy and other
studies on impingement and entrainment at the facility; and, discuss
the operational status of the facility. The application studies would
be used by the Director to assess the impingement and entrainment
impacts of the cooling water intake structure and determine appropriate
technological and/or operational controls, as necessary. Facilities
withdrawing more than 125 MGD and existing facilities with new units
would also complete and submit studies to characterize entrainment
mortality and assess the costs and benefits of installing various
potential technological and operational controls. A list of the
proposed application materials is presented below. EPA request comment
on the practicability and burden for facilities to prepare and submit
this information. EPA is particularly interested in the burden to
facilities with DIF < 50 MGD. EPA also requests comment on the
practical utility of this information.
List of Proposed Application Materials
Facilities that already employ closed-cycle cooling and new units at
existing facilities that plan to employ closed cycle would submit:
122.21(r)(2) Source water physical data
122.21(r)(3) Cooling water intake structure data
122.21(r)(4) Source water baseline biological characterization
data
122.21(r)(6) Proposed Impingement Mortality Reduction Plan
All other existing facilities would submit:
122.21(r)(2) Source water physical data
122.21(r)(3) Cooling water intake structure data
122.21(r)(4) Source water baseline biological characterization
data
122.21(r)(5) Cooling water system data
122.21(r)(6) Proposed Impingement Mortality Reduction Plan
122.21(r)(7) Performance studies
122.21(r)(8) Operational status
Facilities withdrawing more than 125 MGD (except those with closed
cycle), and existing facilities with new units that plan to
demonstrate performance equivalent to closed cycle would also
submit:
122.21(r)(9) Entrainment characterization study
122.21(r)(10) Comprehensive technical feasibility and cost
evaluation study
122.21(r) (11) Benefits valuation study
122.21(r) (12) Non-water quality impacts assessment
A summary of each application requirement follows. The proposed
timeline for submittal of the application materials is outlined in the
next section.
Section 122.21(r)(2) Source Water Physical Data
This requirement is unchanged from the Phase I rule and the
suspended Phase II rule. The facility would be required to submit data
to characterize the facility and evaluate the type of waterbody and
species potentially affected by the cooling water intake structure. The
applicant would be required to submit: A narrative description and
scaled drawings showing the physical configuration of all source water
bodies used by the facility, including areal dimensions, depths,
salinity and temperature regimes, and other documentation that supports
the determination of the water body type where each cooling water
intake structure is located; identification and characterization of the
source waterbody's hydrological and geomorphological features, as well
as the methods used to conduct any physical studies to determine the
[[Page 22250]]
intake's area of influence within the waterbody and the results of such
studies; and locational maps. The Director would use this information
to evaluate the appropriateness of any design or technologies proposed
by the applicant.
Section 122.21(r)(3) Cooling Water Intake Structure Data
This requirement is unchanged from the Phase I rule and the
suspended Phase II rule. This data would be used to characterize the
cooling water intake structure and evaluate the potential for
impingement and entrainment of aquatic organisms. Information on the
design of the intake structure and its location in the water column
would allow evaluation of which species and life stages would
potentially be subject to impingement and entrainment. A diagram of the
facility's water balance would be used to identify the proportion of
intake water used for cooling, make-up, and process water. The water
balance diagram also provides a picture of the total flow in and out of
the facility, and would be used to evaluate gray water, waste water,
and other reuses within the facility. The applicant would be required
to submit: A narrative description of the configuration of each of
cooling water intake structure and where it is located in the water
body and in the water column; latitude and longitude in degrees,
minutes, and seconds for each cooling water intake structure; a
narrative description of the operation of each of cooling water intake
structure, including design intake flows, daily hours of operation,
number of days of the year in operation and seasonal changes, if
applicable; a flow distribution and water balance diagram that includes
all sources of water to the facility, recirculating flows, and
discharges; and engineering drawings of the cooling water intake
structure.
Section 122.21(r)(4) Source Water Baseline Biological Characterization
Data
This information would be required to characterize the biological
community in the vicinity of the cooling water intake structure and to
characterize the operation of the cooling water intake structures. This
supporting information must include existing data if they are
available. However, the facility may supplement the data using newly
conducted field studies if it chooses to do so. The information the
applicant would submit includes: Identification of data that are not
available and efforts made to identify sources of the data; a list of
species (or relevant taxa) for all life stages and their relative
abundance in the vicinity of the cooling water intake structure;
identification of the species and life stages that would be most
susceptible to impingement and entrainment. Species evaluated should
include the forage base as well as those most important in terms of
significance to commercial and recreational fisheries. In addition, the
applicant must provide identification and evaluation of the primary
period of reproduction, larval recruitment, and period of peak
abundance for relevant taxa; data representative of the seasonal and
daily activities (e.g., feeding and water column migration) of
biological organisms in the vicinity of the cooling water intake
structure; identification of all threatened, endangered, and other
protected species that might be susceptible to impingement and
entrainment at your cooling water intake structures; and documentation
of any public participation or consultation with Federal or State
agencies undertaken in development of the plan. If the applicant
supplements the information with data collected using field studies,
supporting documentation for the Source Water Baseline Biological
Characterization would include a description of all methods and quality
assurance procedures for sampling, and data analysis including a
description of the study area; taxonomic identification of sampled and
evaluated biological assemblages (including all life stages of fish and
shellfish); and sampling and data analysis methods. The sampling and/or
data analysis methods used must be appropriate for a quantitative
survey and based on consideration of methods used in other biological
studies performed within the same source water body. The study area
should include, at a minimum, the area of influence of the cooling
water intake structure. The applicant may also identify protective
measures and stabilization activities that have been implemented, and
describe how these measures and activities affected the baseline water
condition in the vicinity of the intake. Existing facilities with
closed-cycle cooling would not be required to submit this information
under the proposed rule.
Section 122.21(r)(5) Cooling Water System Data
This data would be used by the Director in determining the
appropriate standards that would be applied to the facility. Facilities
would be able to use this information, along with the water balance
diagram required by 122.21(r)(5), to demonstrate the extent to which
flow reductions have already been achieved. The applicant would provide
the following information for each cooling water intake structure they
use: A narrative description of the operation of the cooling water
system and its relationship to cooling water intake structures; the
proportion of the design intake flow that is used in the system
including a distribution of water used for contact cooling, non-contact
cooling, and process uses; a distribution of water reuse (to include
cooling water reused as process water, process water reused for
cooling, and the use of gray water for cooling); description of
reductions in total water withdrawals including cooling water intake
flow reductions already achieved through minimized process water
withdrawals; description of any cooling water that is used in a
manufacturing process either before or after it is used for cooling,
including other recycled process water flows; the proportion of the
source waterbody withdrawn (on a monthly basis); the number of days of
the year the cooling water system is in operation and seasonal changes
in the operation of the system, if applicable. The applicant would also
submit a description of existing impingement and entrainment
technologies or operational measures and a summary of their
performance, including but not limited to reductions in entrainment
mortality due to intake location and reductions in total water
withdrawals and usage, and efficiencies in energy production for each
producing unit that result in the use of less cooling water, including
but not limited to combined cycle and cogeneration. For example, the
applicant may provide comparative density data for the intake to
demonstrate the extent to which location of the intake has reduced
adverse environmental impact.
Section 122.21(r)(6) Proposed Impingement Mortality Reduction Plan
The facility's proposed Impingement Mortality Reduction Plan would
identify the approach the facility would use to meet proposed rule IM
requirements, i.e., direct measure of impingement mortality through
sampling, or demonstration that the maximum intake velocity is equal to
or less than 0.5 fps. For the former, the Plan would include the
duration and frequency of monitoring (which EPA assumes would generally
be conducted on a biweekly basis, although the exact frequency would be
determined case-by-case), the monitoring location, the organisms to be
monitored, and the method in which naturally moribund organisms would
be identified and taken into account. The Plan would also address the
impingement mortality of
[[Page 22251]]
shellfish, as appropriate, for intakes that withdraw from oceans and
tidal waters, e.g., seasonal deployment of barrier nets, passive
screens, or an appropriate handling and return system. The Plan would
document all methods and quality assurance/quality control procedures
for sampling and data analysis. The proposed sampling and data analysis
methods would be appropriate for a quantitative survey and include
consideration of the methods used in other studies performed in the
source waterbody. The Plan would include a description of the study
area (including the area of influence of the cooling water intake
structure(s)), and provide a taxonomic identification of the sampled or
evaluated biological assemblages (including all life stages of fish and
shellfish).
For facilities that plan to meet IM requirements by demonstrating
that the maximum intake velocity is equal to or less than 0.5 fps, the
Plan would provide for each intake either, (1) documentation that the
design intake velocity is equal to or less than 0.5 feet per second, as
described at Sec. 125.94(b)(2)(i-ii), or, (2) documentation of the
facility's proposed method for demonstrating the required maximum
intake velocity (equal to or less than 0.5 feet per second) in
accordance with Sec. 125.94(b)(2)(i-ii). This velocity must be
maintained while as much as 15 percent of the intake surface area is
blocked due to debris, ice, plant growth, or any other clogging
materials. EPA notes that its proposed definition of intake velocity at
Sec. 125.92 provides that this requirement would be applicable for
screen/mesh type intakes as well as offshore intakes. For facilities
with traveling screens, EPA believes the low cost and ease of
installing an effective fish handling and return system warrants the
retrofit of such controls, even if the maximum intake velocity is less
than 0.5 feet per second, however, this is not required by the proposed
rule. If intake velocity is not maintained at less than 0.5 feet per
second, the regulation requires modified traveling screens to include
collection buckets designed to minimize turbulence to aquatic life, the
addition of a guard rail or barrier to prevent loss of fish from the
collection bucket, replacement of screen panel materials with smooth
woven mesh, a low pressure wash to remove fish prior to any high
pressure spray to remove debris on the ascending side of the screens,
and a fish handling and return system with sufficient water flow to
return the fish to the source water in a manner that does not promote
predation or re-impingement of the fish.
Under the proposed impingement requirements, the owner or operator
of the facility must ensure that there is a means for impingeable fish
or shellfish to escape the cooling water intake system or be returned
to the waterbody through a fish return system. Thus, a facility would
need to demonstrate that their cooling water intake structure does not
lead to entrapment. This provision is intended to avoid the collection
of impingeable organisms into a cooling water intake system where there
is neither a fish handling and return system nor an opportunity for the
organisms to escape the cooling water intake system. For example, a
facility may have an offshore intake with a velocity cap that meets the
maximum velocity requirements for IM. The intake then leads to a pipe,
canal, or forebay for which there is no means to return the organisms
to the source water. In this example, this provision would require that
the facility implement a fish handling and return system. Note since
the facility would meet the maximum velocity requirements for IM, the
facility would not have to conduct biological monitoring to demonstrate
compliance with the IM limits. EPA anticipates facilities that already
employ closed-cycle cooling would document the maximum intake velocity
is equal to or less than 0.5 feet per second. EPA requests comment on
the additional controls to address entrapment at facilities that employ
closed-cycle cooling or other technologies with velocity equal to or
less than 0.5 feet per second.
Section 122.21(r)(7) Performance Studies
Under the proposal, the applicant would submit a description of any
biological survival studies conducted at the facility and a summary of
any conclusions or results, including: Site-specific studies addressing
technology efficacy, through-plant entrainment survival, and other
impingement and entrainment mortality studies; studies conducted at
other locations including a justification as to why the data is
relevant and representative of conditions at the facility. Due to
changes in the water body over time, studies older than 10 years should
include an explanation of why (or why not) the data is still relevant
and representative of conditions at the facility. The Director would
use such studies when assessing the facility's approach to IM and when
establishing technology based requirements for EM. Permit applicants
are not required to conduct new studies to fulfill this requirement.
This requirement is rather aimed at obtaining results for studies that
have already been conducted as part of past permit proceedings or for
other purposes.
Section 122.21(r)(8) Operational Status
Under the proposal, the applicant would submit a description of the
operational status of each unit including: Descriptions of each
individual unit's operating status including age of the unit, capacity
utilization for the previous 5 years, and any major upgrades completed
within the last 15 years (e.g., boiler or condenser replacement,
changes to fuel type); a description of completed, approved, or
scheduled uprates and NRC relicensing status for nuclear facilities; a
description of plans or schedules for decommissioning or replacement of
units; and a description of current and future production schedules for
manufacturing facilities. The Director would use such information in
determining compliance schedules. Further, such information would be
used to determine flow reductions due to unit closures, which may
affect a facility's DIF or AIF, and therefore may result in changes to
a facility's regulatory status and requirements. Where the remaining
useful plant life is considerably shorter than the useful life of an EM
technology, this information would also be used to support a discussion
of benefits for that EM technology.
Section 122.21(r)(9) Entrainment Characterization Study
Under the proposal, this study would include a plan for collecting
entrainment mortality data, requires a peer review process, and then
requires the owner or operator of the facility to carry out the data
collection. This study would provide data necessary to evaluate EM for
that facility. EPA envisions the information already collected to meet
122.21(r)(4) requirements would be used in developing the Entrainment
Characterization Study. For all species and life stages identified
under the requirements of 122.21(r)(4), the owner or operator of the
facility would develop and submit an entrainment mortality data
collection plan for review by the Director. The entrainment mortality
data collection plan would include: The duration and frequency of
monitoring; the monitoring location, including a description of the
study area and the area of influence of the cooling water intake
structure(s); a taxonomic identification of the sampled or
[[Page 22252]]
evaluated biological assemblages (including all life stages of fish and
shellfish); the organisms to be monitored, including species of concern
and threatened or endangered species; any other organisms identified by
the Director; the method in which latent mortality would be identified;
and documentation of all methods and quality assurance/quality control
procedures for sampling and data analysis. The proposed sampling and
data analysis methods must be appropriate for a quantitative survey.
The owner or operator of the facility must also provide for peer
review of the entrainment mortality data collection plan. The Director
may consult with Federal, State and Tribal fish and wildlife management
agencies with responsibility for fish and wildlife potentially affected
by the cooling water intake structure(s). Further, the Director may
require the owner or operator of the facility to include additional
peer reviewers of the plan. EPA expects peer reviewers would have
appropriate qualifications (e.g., in the fields of biology,
engineering, etc.) for the subject matter. An explanation for any
significant reviewer comments not accepted must be included in the
final plan submission. Additional guidance on conducting peer review
may be found in EPA's Peer Review handbook, available online at http://www.epa.gov/peerreview/pdfs/Peer%20Review%20HandbookMay06.pdf.
The Entrainment Characterization Study would include the following
components:
1. Taxonomic identifications of all life stages of fish, shellfish,
and any species protected under Federal, State, or Tribal Law
(including threatened or endangered species) that are in the vicinity
of the cooling water intake structure(s) and are susceptible to
entrainment;
2. Characterization of all life stages of fish, shellfish, and any
species protected under Federal, State, or Tribal Law (including
threatened or endangered species), including a description of the
abundance and temporal and spatial characteristics in the vicinity of
the cooling water intake structure(s), based on sufficient data to
characterize annual, seasonal, and diel variations in entrainment
(e.g., related to climate and weather differences, spawning, feeding
and water column migration). These may include historical data that are
representative of the current operation of your facility and of
biological conditions at the site; and,
3. Documentation of the current entrainment of all life stages of
fish, shellfish, and any species protected under Federal, State, or
Tribal Law (including threatened or endangered species). The
documentation may include historical data that are representative of
the current operation of your facility and of biological conditions at
the site. Entrainment samples to support the facility's calculations
would be collected during periods of representative operational flows
for the cooling water intake structure and the flows associated with
the samples would be documented.
EPA expects this information would be used to help determine the
site-specific BTA for EM. For facilities with no EM technologies, this
information would characterize the potential for EM. The information
would also be used to demonstrate that technologies and other measures
already in place, or site-specific factors such as intake location or
design, already reduce EM. For example, abundance data may demonstrate
lower comparative densities which can significantly lower entrainment
rates. The information could also be used by new units to demonstrate
that alternative technologies or a combination of technologies reduce
EM at that site to a level commensurate with closed-cycle cooling.
Section 122.21(r)(10) Comprehensive Technical Feasibility and Cost
Evaluation Study
Under the proposal, the owner or operator of the facility would
submit an engineering study of the technical feasibility and
incremental costs of candidate entrainment mortality control
technologies. The study would include an evaluation of technical
feasibility of closed-cycle cooling and fine mesh screens with a mesh
size of 2mm or smaller, as well as any other entrainment reduction
technologies identified by the applicant or requested by the Director.
This study would include: a description of all technologies and
operational measures considered (which could include alternative
designs of closed-cycle recirculating systems such as natural draft
cooling towers, hybrid designs, and compact or multi-cell
arrangements); documentation of factors that make a candidate
technology impractical or infeasible for further evaluation. For
example, a discussion of land availability might include an evaluation
of adjacent land and acres potentially available due to generating unit
retirements, production unit retirements, other buildings and equipment
retirements, ponds, coal piles, rail yards, transmission yards, and
parking lots; decommissioning of existing units; repurposing of
existing land uses; documentation that insufficient acres are available
on-site; and evidence that the purchase or other acquisition of
property adjacent to the facility is not feasible. EPA is exploring
providing guidance on assessing land availability that might suggest a
threshold ratio of acres/capcity that could serve as a guideline for
when sufficient land may not be available. EPA has not identified any
electric generating facilities with more than the 160 acres per GW
capacity that EPA believes would be unable to construct retrofit
cooling towers. EPA specifically solicits comment on this ratio, and
solicits data for determining whether alternative thresholds are more
appropriate.
The proposed rule would require that costs be presented as the net
present value (NPV) of the social costs and the corresponding annual
value. In addition to the required social costs, the owner or operator
may choose to provide facility level compliance costs, however such
costs must be provided and discussed separately from social costs. The
cost evaluation component of this study would include engineering cost
estimates of all technologies considered above and also discuss and
provide documentation of any outages, downtime, energy penalties or
other impacts to revenue. The cost evaluation should be based on least-
cost approaches to implementing each candidate technology while meeting
all regulatory and operational requirements of the plant. Depreciation
schedules, interest rates, further consideration of remaining useful
life of the facility as discussed in 122.21(r)(8), and any related
assumptions would be identified.
The owner or operator of the facility must obtain peer review of
the Comprehensive Technical Feasibility and Cost Evaluation Study, as
described above for the Entrainment Characterization Study. EPA expects
peer reviewers would have appropriate qualifications (e.g.,
engineering, hydrology, planning and design, etc.) for the subject
matter.
Section 122.21(r)(11) Benefits Valuation Study
Under the proposal, the owner or operator of the facility would
submit a detailed discussion of the magnitude of water quality
benefits, both monetized and non-monetized, of the candidate
entrainment mortality reduction technologies evaluated in 122.21(r)(8),
including incremental changes in the impingement mortality and
entrainment mortality of fish and shellfish; and
[[Page 22253]]
monetization of these changes to the extent appropriate and feasible
using the best available scientific, engineering, and economic
information. This may include monetization using market values, market
proxies (e.g., models based on travel costs or other methodologies),
and stated preference methods. Benefits that cannot be monetized should
be quantified where feasible and discussed qualitatively. The study
would also include discussion of recent mitigation efforts already
completed and how these have affected fish abundance and ecosystem
viability in the intake structure's area of influence. Finally, the
study would identify other benefits to the environment and the
community, including improvements for mammals, birds, and other
organisms and aquatic habitats. The owner or operator of the facility
must obtain peer review of the benefits evaluation study, as described
above for the Entrainment Characterization Study. EPA expects peer
reviewers would have appropriate qualifications (e.g., biologist,
hydrologist) for the subject matter.
Section 122.21(r)(12) Non-Water Quality Impacts Assessment
The owner or operator of the facility would submit a detailed
discussion of the changes in non-water quality factors attributed to
technologies and/or operational measures considered. These changes may
include, but are not limited to, increases or decreases in the
following: Energy consumption; thermal discharges including an estimate
of increased facility capacity, operations, and reliability due to
relaxed permitting constraints related to thermal discharges; air
pollutant emissions and their health and environmental impacts; noise;
safety such as the potential for plumes, icing, and availability of
emergency cooling water; grid reliability including an estimate of
changes to facility capacity, operations, and reliability due to
cooling water availability; consumptive water use, and facility
reliability such as production of steam and impacts to production based
on process unit heating or cooling. The owner or operator of the
facility would provide for peer review of the Non-water Quality Impacts
Assessment as described above for the Entrainment Characterization
Study. EPA expects peer reviewers would have appropriate qualifications
(e.g., biologist, safety engineer, power engineer, hydrologist) for the
subject matter. EPA recognizes that in some cases it may be efficient
for permit applicants to combine several of the required studies into a
single document and have them reviewed holistically by a single set of
peer reviewers. Such an approach is not precluded by the proposed rule
as long as the peer review panel has the background appropriate to
conduct the combined review and the permitting authority approves. EPA
requests comment on the peer review requirements and the level of
specificity regarding peer review in the draft rule text.
EPA is aware that specialized experience may be useful or
appropriate in assessing some of the factors indentified in 122.21(r).
EPA solicits comment on further guidance or rule language that could
assist in the consistent development of these studies and more uniform
review of these factors by the Director. For example, EPA could
establish modeling of plume drift as part of the assessment of icing
and safety. This requirement could also be included as part of the
technical feasibility and costs analysis required at 122.21 (r)(10).
Similarly, required emissions estimates could include more specific
criteria under 122.21(r)(11).
Facilities Demonstrating Flow Reduction Commensurate With Closed-Cycle
Recirculating System
Under Sec. 125.94(d), new units at existing facilities would be
subject to entrainment mortality requirements. These facilities may
choose to demonstrate that they have already reduced actual intake flow
(AIF) to a level commensurate with a closed-cycle recirculating system
in their permit application to meet rule requirements. In general, flow
reduction may be achieved through the use of a closed-cycle cooling
system such as a wet cooling tower (mechanical or natural draft), a dry
cooling system, variable speed pumps, or operational measures such as
seasonal reductions in flow. Under today's proposal, each facility
would have the flexibility to select the flow reduction technique or
combinations thereof that best meets their operational needs, so long
as the total reduction in flow is commensurate with that of a closed-
cycle cooling system.\95\
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\95\ The term ``commensurate'' is intended to be viewed in terms
of a reduction in the facility's actual intake flow. The facility's
DIF reflects the maximum volume of water that the facility can
withdraw (and would be the basis for applicability) but the AIF
(based on the facility's average flows over the previous 3 year
period) represents the impacts to aquatic communities. Reducing the
AIF is the most appropriate approach, as it represents actual
impacts and is most representative of a facility's actual
operational schedule. EPA fully expects, however, that many
facilities would construct a closed-cycle cooling system based on
its DIF to comply with the proposed rule, as this enables the
facility to utilize its full DIF at any given time, thereby
maintaining full operational flexibility. EPA's costs reflect the
costs for the entire DIF. See below for more information on how a
facility can demonstrate that it has achieved a reduction in flow
that is commensurate with closed-cycle cooling.
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For today's proposal, EPA is clarifying the term ``commensurate''
in the context of flow reductions. EPA examined its record to clarify
how a facility could demonstrate a reduced flow ``commensurate'' with a
closed-cycle recirculating system. EPA's record demonstrates that for
the traditional steam electric utility industry, facilities located in
freshwater areas (with a salinity of less than 0.5 parts per thousand)
that have closed-cycle recirculating cooling water systems typically
reduce water use by 97.5% percent from the amount they would use if
they had once-through cooling water systems.\96\ Similarly, facilities
that have closed-cycle recirculating cooling systems using salt (or
brackish) water \97\ typically reduce water usage by 94.9 percent.\98\
Therefore, if a facility selects to demonstrate flow reduction
commensurate with closed-cycle cooling using flow reduction
technologies and controls other than through closed-cycle cooling
(e.g., through seasonal flow reductions, unit retirements, and other
flow reductions), EPA is proposing that it would have to demonstrate
total flow reductions approximating 97.5% for freshwater withdrawals
and 94.9% for saltwater withdrawals. Today's proposal includes these
criteria in the definition of closed-cycle recirculating systems at
Sec. 125.92. EPA solicits comment on whether to establish these
metrics as a binding requirement, or whether the determination of what
flow measure is commensurate with closed-cycle cooling should be left
to the Director for each facility.
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\96\ Assuming a cycle of concentration of 3.0 and a condenser
delta T of 20[deg]F. See Section V for more information.
\97\ Saltwater also includes brackish water, tidal rivers, and
estuaries where the water has a salinity of equal to or greater than
0.5 parts per thousand (by mass) at a time of annual low flow.
\98\ Assuming a cycle of concentration of 1.5 and a condenser
delta T of 20[deg]F. See Section V for more information.
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EPA expects the Director to carefully consider the approach
proposed by the facility to ensure that it is reasonable. For example,
many facilities have two pumps installed per unit, but typically only
operate one pump at a time. The second pump may provide additional
pumping capacity (such as may be required in summer) or it may only
serve as a back-up or for use during maintenance of the main pump. In
the former case, the facility's intake flow
[[Page 22254]]
(both DIF and AIF) should properly account for the pumping capacity of
both pumps. In the latter, the true flow for the intake structure may
be equivalent to the pumping capacity of only a single pump.\99\ Also,
EPA is aware that some facilities may elect to retire units to
demonstrate a reduced flow and wants to ensure that such facilities
would qualify for this alternative provided they meet the applicable
requirements.\100\ EPA is proposing that these credits for unit
closures be valid for 10 years from the date of the closure.\101\ EPA
believes this approach reasonably allows facilities to get credit for
flow reductions attributable to unit closures, but also requires such
facilities to make future progress to ensure its operations reflect
best available technology to control entrainment. EPA is seeking
comment on this approach.
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\99\ In this scenario, EPA does not envision that a facility
would be able to remove the second pump to demonstrate a reduction
in flow, as the pump is simply redundant equipment and would not
reduce the overall water withdrawals.
\100\ As a point of clarification, EPA notes that flow reduction
credit would be available to a facility regardless of the rationale
for maintaining the reduced flow. In other words, a facility may
have ceased operation of a unit for reasons other than today's
proposed regulation, and as such, withdraws much less water than
before. Nevertheless, the net effect is that entrainment would be
reduced.
\101\ Some facilities have intake systems for units that have
not operated for an extended time period. These units have
essentially ceased operations; such facilities may include the
pumping capacity associated with these units in their DIF even
though it may not accurately represent their actual operations
(i.e., it may be inappropriate to consider these units under
125.94(c)(5)(ii)).
---------------------------------------------------------------------------
Under 125.94(d)(2), EPA would allow facilities to implement
technologies other than closed-cycle cooling systems that reduce
entrainment mortality by at least 90 percent of what would have been
obtained via flow reduction commensurate with closed-cycle cooling
under 125.94(d)(1). This compliance provision mirrors the Track II
provision of the Phase I rule, and is intended to provide opportunities
for facilities to consider technologies such intake relocation or fine
mesh screens, or operational measures such as the recyle and reuse of
cooling water for other purposes. Further, facilities could adopt a
combination of such technologies and practices, provided the facility
can demonstrate reductions in entrainment mortality of 90 percent or
better as compared to closed-cycle cooling. EPA seeks comment on this
provision.
E. When are application studies due?
EPA recognizes that facilities previously subject to the withdrawn
Phase II rule (existing electric generating facilities with a DIF
greater than 50 MGD) should have already compiled much of the proposed
application information and expects that these data would be used to
meet many of the requirements under today's proposal. In some cases the
information may have been collected, but reports may not have been
generated or finalized. EPA also understands that many other facilities
may not have collected this information, e.g., smaller power plants and
manufacturers, and in those cases facilities would have to initiate new
data collection efforts. For this reason, EPA is proposing two
different timelines for application submittal, as illustrated in
Exhibits IX-1 and IX-2. EPA is proposing that facilities previously
subject to the Phase II rule would be required to submit some
application studies six months after rule promulgation. Other studies
would follow in sequence over a period of time not to exceed five
years. Other existing facilities not previously subject to the
withdrawn Phase II rule (e.g., small power plants and all existing
manufacturers) would begin submitting application studies three years
after rule promulgation. Additional required studies would be submitted
over a period not to exceed seven years and six months. EPA believes
that these proposed schedules will afford facilities ample time to
plan, complete, and submit application materials as well as provide
Directors time to evaluate the submissions and develop appropriate
permit conditions. These schedules are linked to the effective date of
the rule in order to establish a level playing field and to avoid
delays implementing the rule regardless of a facility's current permit
status. EPA solicits comment on the proposed schedule, and specifically
seeks comment and data on the appropriate amount of time to collect
data, write reports, conduct peer reviews, obtain comment, provide for
public participation, and issue final permit conditions.
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BILLING CODE 6560-50-C
F. What are the monitoring requirements in today's proposal for
existing facilities?
1. Monitoring Requirements for Impingement Mortality
Today's proposed rule proposes impingement mortality requirements
for all existing facilities. As such, facilities would be required to
monitor to demonstrate compliance with the impingement mortality
restrictions at Sec. 125.94(b)(1), demonstrating a monthly average of
fish impingement mortality of 31% or less, and an annual average of 12%
or less. (Different monitoring requirements apply for compliance with
the alternative requirements at Sec. 125.94(b)(2) for design intake
velocity; these are discussed in a later section.) To demonstrate
compliance with the impingement mortality standards at Sec.
125.94(b)(1), the facility would be required to monitor at a frequency
specified by the Director. EPA assumes the facility would monitor no
less than
[[Page 22257]]
once per week during primary periods of impingement as determined by
the Director, and no less than biweekly during all other times. For
each monitoring event, the facility would determine the number of
organisms that are collected or retained on a \3/8\ inch sieve (i.e.,
that are impinged [I]), and the number that die within 24-48 hours of
impingement (i.e., impingement mortality [IM]). Fish that are included
in any carryover from a traveling screen or removed from a screen as
part of debris removal would be counted as fish impingement mortality.
Under the proposed definition at 125.92, naturally moribund fish and
invasive species would be excluded from the totals for both impingement
and impingement mortality. The percentage of impingement mortality is
defined by the following equation:
[GRAPHIC] [TIFF OMITTED] TP20AP11.002
For each calendar month, the facility would calculate the
arithmetic average of the percentage impingement mortalities observed
during each of the sampling events. For example, if a facility
conducted four sampling events in December, it would calculate the
monthly average from the weekly values. If a facility's calculated
monthly average is less than the monthly average limitation (31%), then
it would be in compliance that month. To demonstrate compliance with
the annual average limit, the facility would calculate the arithmetic
average of all of its sampling events during the year. If the
facility's calculated annual average percentage impingement mortality
is less than the annual average limitation, then it would be in
compliance.
EPA envisions that the permitting authority would review and
approve the Impingement Mortality Reduction Plan including the
frequency and duration of monitoring, the monitoring location, the
organisms to be monitored, and the method in which naturally moribund
organisms would be identified and taken into account. In establishing
the monitoring requirements, EPA expects facilities and permitting
authorities would consider whether data collection should cover the
entire daily and (where appropriate) tidal cycles. Typically,
facilities have collected impingement samples continuously for 6 or 8
hours, and repeated this cycle to cover an entire 24-hour period.
Stratifying collection in this manner allows an analysis of the diel
variation exhibited by many aquatic organisms. EPA expects that
facilities would continue to conduct sampling in such a manner to
account for diel variations, where appropriate. EPA also expects the
plan would ensure that sampling occurs during periods of representative
flow and not during periods of non-peak flow or scheduled outages. The
sampling plan would cover all five years of the permit term.
EPA is not proposing a list of the species to be monitored due to
the site-specific nature of the biological organisms impacted by an
intake structure. Rather, EPA is proposing that a facility provide data
on the composition of all species in its waterbody as part of its NPDES
permit application (information from the source water baseline
characterization data required at Sec. 122.21(r)(4) and impingement
plan at Sec. 125.95(b)) to help inform the Director's determination of
the species that would be monitored for compliance with the proposed
impingement mortality limitations. In addition, the permitting
authority may impose additional monitoring requirements such as
consideration of threatened or endangered species, as appropriate. EPA
is also not including provisions for reducing the monitoring frequency
in the future; given that the source waterbody may change over time
(including hosting different or increased numbers of individuals or
species), EPA believes that weekly monitoring at a minimum is
appropriate.
The ideal point to measure impingement mortality is the location
where organisms are returned to the waterbody. However, for ease of
sampling and access, EPA envisions most facilities would collect
samples from the fish return system(s) at some point prior to the fish
return discharge point.\102\ Based on the studies in EPA's database,
EPA envisions facilities would either (1) divert some or all of the
flow from the fish return into a fish collection and holding area or
(2) place a net or debris basket fitted with 3/8'' mesh spacing in the
fish return and collect and transfer the retained organisms to a
holding tank. Facilities would handle the organisms in the collection
device as little as possible and transfer them to a holding area with
conditions as close as practicable to the source water. Facilities
would count the number of living organisms in the holding area and
subsequently hold the sample using proper technique \103\ to maintain
the health of the collected organisms.\104\ At a time period of 48
hours after the initial collection, the facility would count the number
of dead organisms. The facility would then determine the percentage of
organisms that died after 48 hours in comparison to the total number of
living organisms measured initially. Any organisms not collected by the
fish handling and return system, such as organisms in the carryover of
a traveling screen or organisms collected by a high pressure wash and
sent to debris bins, would be counted as 100% mortality. Naturally
moribund organisms would be excluded from the calculation. The facility
would keep records of this information and subsequently compare its
result to today's proposed impingement mortality limitations.
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\102\ Based on EPA's site visits and other data, even facilities
with multiple intakes (and multiple screens, etc.) typically only
have one fish handling and return system. This is consistent with
EPA's proposed approach to determine compliance at the facility
level. For facilities with more than one return system (including
those that are bi-directional in tidal waters), compliance is still
determined at the facility level.
\103\ EPA recognizes that there are no standard methods for
conducting impingement and entrainment studies and that there can be
variability in designing a sampling plan between sites. However,
there are elements that should be incorporated into any sampling
plan, as outlined in DCN 10-6708.
\104\ Facilities that divert the flow directly would similarly
pass the flow through a net or debris basket fitted with 3/8'' mesh
spacing or would only count organisms that would have been collected
with such a basket or net.
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EPA requests comment on all aspects of these monitoring
requirements. In particular, EPA requests comment on whether EPA should
specific minimum sampling frequencies or leave this determination to
the Director. EPA also requests comment on methods for evaluating
latent mortality effects resulting from impingement. EPA's record
demonstrates that a holding time of no more than 48 hours is optimal
for evaluating the latent mortality associated with impingement while
at the same time minimizing mortality associated with holding the
organisms. In the majority of recent studies, 48 hours appears to be
the standard holding time. EPA specifically requests comment and
supporting data on whether it should: Specifically establish 48 hours
after initial impingement as the time at which to monitor impingement
mortality; allow a range such as 24 to 48 hours; establish 24 hours as
the standard holding time; or adopt some other technique for
standardizing results. EPA also requests comment on whether survival
under monitored holding conditions as discussed above is reflective of
survival in the wild and thus an appropriate measure of the impingement
mortality achieved by the facility.
As explained in Section VI, the impingement mortality restrictions
proposed today are based on the
[[Page 22258]]
operation of a modified coarse mesh traveling screen with a fish
return. Because EPA wants to ensure that a facility's monitoring plan
is consistent with the technical basis for today's restrictions, EPA is
proposing to require facilities to monitor impingement mortality using
a sample that has been passed through a sieve or net with a \3/8\''
mesh size, so that only organisms that do not pass through this mesh
size are counted.\105\ In doing so, facilities would only retain (and
therefore count) organisms that would have been impinged on a coarse
mesh screen, which was the technological basis used for developing the
proposed impingement mortality limits.\106\ Facilities could similarly
apply a ``hypothetical net'' in that they could elect to only count
organisms that would not have passed through a net with \3/8\'' mesh.
For example, a facility that uses a fine-mesh screen or diverts the
flow directly to a sampling bay would only need to count organisms that
would remain if the flow passed through a net, screen, or debris basket
fitted with 3/8'' mesh spacing. EPA further believes the IM
restrictions could be applied to other screen-based fish protection
technologies, and allows for future better performing technologies. EPA
solicits comment on this approach to measuring impingement mortality.
EPA specifically solicits comment on ways to ensure that the procedures
used to collect and analyze samples do not inadvertently lead to
greater mortality than would occur among organisms that were returned
to the water body without being sampled.
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\105\ See section 3 for a discussion of how EPA has changed its
view of screen mesh size. EPA recognizes that fine mesh screens may
simply ``convert'' smaller organisms that previously would have
passed through the screen to impinged organisms.
\106\ EPA's analysis of impingement survival rates is based on
data from facilities with coarse mesh screens; these limits may be
applied differently at facilities with smaller mesh size. Therefore,
these limits do not provide a disincentive to facilities from using
finer-meshed screens (i.e., screens with a mesh opening smaller than
3/8'') on their traveling screens. As long as the organisms that are
large enough to have been impinged upon a coarse mesh screen achieve
the required survival rates, the facility would be considered to
meet the impingement mortality requirements.
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If the Director has approved a plan for compliance with the
velocity requirements specified in Sec. 125.94(b)(2) and the facility
has documented a maximum design intake flow for the intake equal to or
less than 0.5 feet per second, there are no compliance monitoring
requirements. If the facility cannot document a design intake flow for
the intake equal to or less than 0.5 feet per second under all
conditions, including during minimum ambient source water surface
elevations (based on the Director's judgment using hydrological data)
and maximum head loss across the screens, the permit must require
compliance monitoring for intake velocity to demonstrate the intake
velocity is consistent with the requirements of Sec. 125.94(b)(2). The
frequency of monitoring would be no less than twice per week. In this
circumstance facilities would not be subject to the impingement
mortality monitoring requirements otherwise specified in Sec.
125.96(a)(1) and (2). EPA requests comment on whether it should specify
a minimum frequency for intake velocity monitoring or leave this
determination to the Director.
EPA notes the proposed rule does not specify the owner or operator
of a facility with a cooling water intake structure that supplies
cooling water exclusively for operation of a wet or dry cooling
tower(s) and that meets the definition of closed-cycle recirculating
system at Sec. 125.92 is deemed to meet this impingement mortality
standard. This is because the largest facilities with closed cycle
cooling still have the potential to withdraw 100 MGD or more in makeup
water. EPA's record shows virtually all facilities with wet cooling
towers have a maximum intake velocity of 0.5 feet per second. EPA
expects a facility that operates a cooling tower would be able to
demonstrate the maximum design intake velocity does exceed 0.5 feet per
second, and the proposed rule already provides that such facilities do
not have any additional monitoring requirements for impingement
mortality.
2. Monitoring Requirements for Entrainment Mortality
Existing Facilities
Whenever the Director is establishing entrainment control,
monitoring requirements must also be developed. As proposed, the permit
application studies at Sec. 122.21(r) would be required for each
permit renewal. EPA expects the Director would use these studies,
including the Entrainment Characterization Study at Sec. 122.21
(r)(9), as a basis for any additional monitoring requirements for
entrainment mortality.
New Units at Existing Facilities
Under Sec. 125.96(c), existing facilities with new units would be
required to conduct compliance monitoring to demonstrate flow
reductions consistent with the requirements of Sec. 125.94(d)(1) and
(2), or equivalent I&E reductions. For facilities required to
demonstrate flow reductions consistent with the requirements of Sec.
125.94(d)(1), the frequency of monitoring would be no less than once
per week and would be representative of normal operating conditions.
Flow monitoring would include measuring cooling water withdrawals,
make-up water, and blowdown volume. The Director may require additional
monitoring necessary to demonstrate compliance with both Sec.
125.94(d) as well as any more stringent standards under Sec.
125.94(f).
To meet requirements under Sec. 125.94(d)(1), EPA expects
facilities would first measure AIF in order to establish a site-
specific baseline prior to installing any new technologies or employing
new operational measures. EPA has defined AIF as the average volume of
water withdrawals on an annual basis over the past three calendar years
(see Sec. 125.92). Facilities would then conduct flow monitoring which
would include measuring cooling water withdrawals, make-up water, and
blowdown volume. The Director may require additional monitoring
necessary to demonstrate compliance with Sec. 125.94(d). These flows
would be used to document the facility has minimized make-up and
blowdown flows.
To meet requirements under Sec. 125.94(d)(2), facilities would
again measure AIF in order to establish a site-specific baseline prior
to installing any new technologies or employing new operational
measures. The facility would also measure the density of entrainable
organisms (ED) at a proximity to the intake that is
representative of the entrainable organisms present in the absence of
the cooling water intake structure and is representative of annual
average abundance. For the purpose of today's rule, entrainable is
defined as any organism that passes through a \3/8\ inch sieve. As
discussed in Section VI, this would avoid any confusion as to which
organisms would be subject to which standards. Facilities would also
monitor the latent entrainment mortality in front of the intake
structure. Entrainable organisms passing the cooling water intake
structure would be counted as 100 percent entrainment mortality unless
the facility demonstrates to the approval of the Director that the
mortality for each species of concern is less than 100 percent. Samples
would be collected at a minimum to monitor each species of concern or
other species as required by the Director over a 24-hour period.
Samples would be collected no less than biweekly during the primary
period of reproduction, larval recruitment, and peak abundance
identified during the source water
[[Page 22259]]
baseline characterization required under Sec. 122.21(r)(4). Samples
would be representative of the cooling water intake when the structure
is in operation. In addition, sufficient samples would be collected to
allow for calculation of annual average entrainment levels. The
sampling would measure the total count of entrainable organisms or
density of organisms, unless the Director approves of a different
metric for such measurements. In addition, facilities would monitor the
AIF for each intake. The AIF would be measured at the same time as the
samples of entrainable organisms are collected.
The following equation illustrates how to calculate a baseline
level of entrainment (EB):
EB = ED x AIF
Performance commensurate with a closed-cycle cooling system
(EBTA) can therefore be determined by reducing EB
by the percentage of flow reduced through the use of a closed-cycle
cooling system. For example, a facility withdrawing makeup water from a
freshwater source (as described above, would achieve a reduction of
97.5 percent) would calculate its performance as:
EBTA = (EB) x (100-97.5) / 100
The resulting value, EBTA, is the required level of
entrainment performance (as measured by entrainment mortality). The
facility could implement any combination of flow reduction,
technologies, and operational measures to meet the required level of
entrainment performance. For example, a facility withdraws 200 MGD AIF
from a freshwater river. The annual average entrainment density in the
proximity of the intake structure is 6,400 organisms per 100 cubic
meters withdrawn.
EB = ED x AIF
6,400 organisms/100m3 x (100m3/26,417 gallons) x
200,000,000 gallons per day = 48 million organisms per day
The maximum entrainment mortality for a closed-cycle cooling system
is thus
EBTA = (EB) x (100-97.5) / 100 = (48 x
106 organisms per day) x (100-97.5) / 100 = 1.2 x
106 organisms.
The minimum required level of performance for demonstrating
entrainment mortality at a comparable level (EC) to a
closed-cycle cooling system is the level corresponding to 90 percent
\107\ of the reduction that a facility with a closed-cycle cooling
system could achieve:
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\107\ Sec. 125.86 specifies ``reduced both impingement
mortality and entrainment of all life stages of fish and shellfish
to 90 percent or greater of the reduction that would be achieved
through Sec. 125.84(b)(1) and (2).''
EC = (EB) x (100 - (97.5 x .9)) / 100 = (48 x
106 organisms per day) x (100 - (97.5 x .9)) / 100 = 5.9 x
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106 organisms.
The Director may require additional monitoring necessary to
demonstrate compliance with both Sec. 125.94(d) as well as any more
stringent standards under Sec. 125.94(f).
EPA requests comment on all aspects of these monitoring
requirements. EPA specifically requests comment on whether it should
specify minimum monitoring frequencies or leave this to the
determination of the Director.
Visual or Remote Inspections--All Existing facilities
All facilities would either conduct visual inspections or employ
remote monitoring devices during the period the cooling water intake
structure is in operation. The facility would conduct such inspections
at least weekly to ensure that any technologies installed to comply
with Sec. 125.94 are maintained and operated to ensure that they will
continue to function as designed. EPA is aware that for some
facilities, this requirement could pose a feasibility challenge (i.e.,
ice cover during the winter season, inability of divers to see through
more than a few inches of water, or certain intakes located in deep
water during rough weather). The proposed rule therefore authorizes the
Director to establish alternative procedures during periods of
inclement weather. EPA solicits comment and data on this provision. EPA
specifically requests comment on whether it should establish minimum
frequencies for inspections, or leave this to the determination of the
Director.
G. What reports would I be required to submit?
1. Status Reports
Facilities that establish a compliance schedule (under Sec.
125.93) would submit (at a minimum) quarterly status reports as to the
progress of the facility towards meeting the terms of the compliance
schedule and the applicable limits. These reports may include updates
on biological monitoring, technology testing results, construction
schedules, or other appropriate topics.
2. Monitoring Reports
As described above, facilities would have ongoing impingement
mortality monitoring requirements; some facilities would also have
entrainment mortality monitoring requirements. The proposed monitoring
activities are similar to monitoring required for other effluent
discharges already included in NPDES permits. Facilities would be
required to include impingement mortality monitoring reports with their
Discharge Monitoring Reports (DMRs) (or equivalent) and their permit
annual report to the Director. As described at Sec. 125.97, those
reports would be required to include:
The compliance measurement location;
Identification of species of concern;
Counts and percentage mortality of organisms sampled, as
well as the average for all measurements taken during the preceding 12-
month period (i.e., a 12-month ``rolling'' average);
Time period for evaluating latent mortality effects;
Intake velocity measurements, as appropriate, to determine
compliance with the design intake velocity requirement of 0.5 fps or
less; and
Any other monitoring requirements specified in the permit.
The Director would evaluate these reports for compliance with
monthly and annual impingement mortality limits, velocity limits, and
other permit requirements where appropriate.
For facilities that require entrainment mortality controls, the
Director would require ongoing entrainment mortality flow monitoring.
Facilities would be required to include entrainment mortality flow
monitoring reports with their DMRs (or equivalent) and their annual
report to the Director. Those reports would be required to include:
The compliance measurement location;
A description of the flow monitoring procedure;
Documentation of flow reductions; and
Any other monitoring requirements specified in the permit.
The Director would evaluate these reports for compliance with monthly
entrainment mortality limits, flow reductions and flow monitoring, and
permit requirements as required.
3. Annual Certifications
Today's proposal would require a facility to submit an annual
certification statement signed by the responsible corporate officer.
This statement would indicate each technology is being maintained and
operated as set forth in its permit, or a justification to allow
modification of the practices listed in the facility's most recent
annual certification. If the Director has approved impingement
mortality or
[[Page 22260]]
entrainment mortality compliance alternatives, the statement would
specify the information submitted in the most recent annual
certification is still valid and appropriate, or provide a
justification to allow modification of the practices listed in the most
recent annual certification. For example, the statement would include
data and information documenting compliance with the requirement in
Sec. 124.94(d)(1) that flow commensurate with a closed-cycle
recirculating system is met. If the Director has approved the IM
maximum intake velocity compliance alternative and the facility cannot
document a design intake velocity for the intake equal to or less than
0.5 feet per second, the statement would include data and information
documenting compliance with the maximum allowable intake velocity.
If the information contained in the previous year's annual
certification is still applicable, the statement would simply state as
such and, along with any applicable data submission requirements
specified in this section, would constitute the annual certification.
However, if the facility has substantially modified its operation of
any unit that impacts cooling water withdrawals or operation of cooling
water intake structures, it would submit revisions to the information
required in the permit application.
H. What records would I be required to keep?
As described at Sec. 125.97(d), facilities would be required to
keep all application, status, monitoring, and annual reports and
related supporting information and materials for a minimum of 5 years,
but facilities may wish to keep records for a longer period to maintain
a complete regulatory history of the facility. For example, existing
source water biological studies submitted with a facility's permit
application may contain data that has been collected within the past 10
years. The proposed rule requires that records be kept from the
preceding permit term when the Director has approved a request for
reduced information collection in the permit application. The Director
may establish additional record keeping requirements in the permit,
such as additional records documenting the EM determination and related
compliance monitoring or data collection.
I. Are there other Federal statutes that could be incorporated into a
facility's permit?
EPA's NPDES permitting regulations at Sec. 122.49 contain a list
of Federal laws that might apply to Federally-issued NPDES permits.
These include the Wild and Scenic Rivers Act, 16 U.S.C. 1273 et seq.;
the National Historic Preservation Act of 1966, 16 U.S.C. 470 et seq.;
the Endangered Species Act, 16 U.S.C. 1531 et seq.; the Coastal Zone
Management Act, 16 U.S.C. 1451 et seq.; and the National Environmental
Policy Act, 42 U.S.C. 4321 et seq. See Sec. 122.49 for a brief
description of each of these laws. In addition, the provisions of the
Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C.
1801 et seq., relating to essential fish habitat might be relevant.
Nothing in this proposal would authorize activities that are not in
compliance with these or other applicable Federal laws (e.g., Marine
Mammal Protection Act, 16 U.S.C. 1361 et seq., and Migratory Bird
Treaty Act, 16 U.S.C. 703 et seq.).
J. What is the Director's role under today's proposal?
Under today's proposed rule, the Director would need to review all
materials submitted by an existing facility with its permit application
each permit term to determine appropriate NPDES permit requirements for
impingement mortality, entrainment mortality for new units at existing
facilities, and site-specific entrainment mortality, as necessary. The
Director is encouraged to provide any comments expeditiously on
submitted materials so the facility can make responsive modifications
to its information gathering activities. More specific responsibilities
are described below:
(1) The Director would review materials to determine compliance
with the applicable requirements. The proposed rule also provides some
discretion to the Director to waive the submittal requirements under
certain conditions. First, if the circumstances at the facility have
not changed after a five year permit cycle, the Director can reduce the
submission requirements. Second, if the Director has made a BTA
determination prior to the effective date of the rule, and
substantially the same information was already submitted and considered
by the Director in making that determination, the Director can reduce
the submission requirements. To clarify further, EPA has included a
``transition'' provision in the submission requirements of today's
proposed rule that makes it clear that for any facility that has
submitted a permit application before the effective date of the
regulation, the Director can select the best approach to permit
development and implementation. These provisions are further intended
to avoid any unnecessary delay in recently issued permits. EPA expects
facilities would continue with any monitoring requirements, study
requirements, and compliance schedules in recently issued permits.
(2) If the Director establishes an alternate schedule under Sec.
125.93, the Director would establish a schedule that is as expeditious
as possible, but does not extend beyond the dates specified in Sec.
125.93. In establishing the schedule, the Director is encouraged to
consider the extent to which those technologies proposed to be
implemented to meet the requirements of Sec. 125.95(c) and/or (d) will
be used, or may otherwise affect a facility's choice of
technology(ies), to meet the requirements of Sec. 125.95(b). Impacts
of thermal discharges, along with other stressors, may be a relevant
consideration when assessing benefits of technologies to reduce impacts
of cooling water intakes or discharges. See EEA for more information.
The Director is also encouraged to consider energy reliability and grid
requirements when establishing a schedule for electric power generating
facilities. The Director may consult with local and regional electric
power agencies when establishing a schedule for electric power
generating facilities. The Director may determine that extenuating
circumstances (e.g., lengthy scheduled outages, future production
schedules) warrant establishing a different compliance date for any
manufacturing facility.
(3) The Director would review and approve the species of fish and
shellfish identified as species of concern.
(4) The Director would review and approve the site-specific
impingement mortality plan including the duration and frequency of any
monitoring beyond the minimum specified by the rule, the monitoring
location, the organisms to be monitored, and the method in which
naturally moribund organisms would be identified and taken into
account. EPA solicits comment on whether the Director should review,
but not approve, the identified plans.
(5) The Director would review the permit application materials and
studies submitted under Sec. 122.21(r) on a case-by-case basis and
determine which entrainment requirements are necessary.
(6) The Director would review and approve the site-specific
entrainment mortality sampling plan for new units at existing
facilities (other than those employing closed cycle cooling) including
the duration and frequency of monitoring, the monitoring location, the
organisms to be monitored, and the method in which latent mortality
would
[[Page 22261]]
be identified. EPA solicits comment on whether the Director should
review, but not formally approve, the identified plans.
(7) The Director would issue a written explanation for the BTA
determination and make this determination, and any other information
submitted by third parties, available along with the draft permit for
public review. This determination is discussed in more detail in
Section VI above. In addition, the following discussion guides the
Director when considering cost-benefit analysis for permit
determinations.
Social Cost-Benefit Analysis for Permit Determinations
In deciding whether and which technology to require a permittee to
install to address entrainment mortality, the Director may undertake an
evaluation of social costs and benefits of implementing such
requirements. This analysis would be based on the information submitted
by the applicant, supplemented by information submitted by third
parties, and additional information as determined appropriate by the
Director. EPA recognizes the resource limitations faced by permitting
authorities and does not generally expect that the Director would
develop additional information on which to base the evaluation of
social benefits and costs, though the Director may opt to do so. This
analysis should evaluate benefits and costs from the perspective of
society as a whole.
A number of cost elements should be accounted for in assessing the
social cost of entrainment technology implementation. These are
summarized below.
Technology installation cost. These peer reviewed
engineering cost estimates of the physical construction of candidate
entrainment technologies at the facility are required in section
122.21(r)(10). These costs would be provided by the applicant under
122.21(r)(10).
Installation downtime cost. Installation of closed cycle
cooling systems will often require generating facilities to take
additional downtime beyond ordinary annual maintenance downtime. An
estimate of downtime cost to the facility is required under
122.21(r)(10). Downtime costs include the value of lost production
minus any variable cost savings, as well as any other costs to the
facility associated with downtime (shutdown and startup routines,
special maintenance protocols, etc) minus any savings associated with
downtime.
Energy penalty cost. Operation of closed cycle cooling
systems generally imposes an energy penalty, which means additional
energy input is required to generate the same quantity of electricity
otherwise available for sale to end-use consumers. Again, an assessment
of these costs to the facility would be determined under the section
122.21(r)(10) demonstration. The appropriate cost measure is the cost
of additional production costs to the facility, if the permittee's
facility has sufficient capacity to make up the lost electricity
production, or the net revenue loss to the permittee, if the
permittee's facility cannot make up the lost electricity production.
Operation and maintenance costs for the entrainment
technology equipment. The cost of energy to operate the entrainment
technology for electric generators would be accounted for in the
assessment of energy penalty costs and should not reappear in the O&M
costs. These cost which would be estimated as part of the 122.21(r)(10)
assessment would enter the social cost framework unchanged.
Other administrative expenses--e.g., additional permitting
and/or reporting expenses. Being a social cost concept the estimate
must include not only the costs to the facility but those expected to
be incurred by the permitting authority as well. Permitting costs would
generally be lower if a facility opts to install a closed cycle cooling
system without going through the BTA site-specific determination, as
this allows the facility to minimize the amount of permit application
information submitted.
For the assessment of social cost, the cost elements outlined above
would typically be accounted for on a real cost basis--that is, pre-tax
and excluding the effects of inflation. Costs are tallied over an
appropriate timeframe, which will typically be the expected useful life
of the technology installation or the remaining life of the facility,
if less. Costs should be calculated as both net present value and
annualized values, using an appropriate discount rate. The applicant
should document the basis for the discount rate chosen.
In assessing the benefits of entrainment technology installation,
the Director would assess the value to society from the reductions in
I&E mortality that would result from installation of a closed cycle
cooling system or alternative entrainment technology. All benefits,
including quantified and non-quantified benefits, should be considered
in this assessment. The benefits assessment would typically look at a
range of potential benefit mechanisms, including increased harvest for
commercial fisheries, increased use values for recreational fisheries,
and non-use values (existence and bequest values). The latter may be
difficult to quantify and/or monetize. If appropriate data are
available from stated preference studies or other sources that can be
applied to the site being evaluated, these should be used to monetize
non-use values. Otherwise, non-use values should be evaluated
qualitatively. Quantitative analysis, even in the absence of
monetization, can be quite useful in evaluating non-use benefits. For
example, quantifying impacts to forage and T&E species, and other
indirect impacts on the aquatic environment, may allow the permitting
authority to derive a more complete understanding of benefits.
Quantifying and valuing the benefit categories listed above
involves significant challenges, as described in the Environmental and
Economic Benefits Analysis report. For example, assessing the
productivity and value of commercial fisheries involves estimating the
expected increases in commercial yield of economically valued species
over time as a result of reduced I&E mortality, and valuing these at
market prices minus any incremental production costs associated with
the incremental catch. Similarly, the assessment of recreational use
benefits involves estimating the improvements in recreational fishing
opportunities resulting from reduced I&E mortality, and assigning a
value to these improvements. The assignment of value is based on the
estimated population profile--in particular, number and proximity to
affected water resources--of recreational users, the availability of
alternative competing water resources for recreational usage, and the
resulting estimated change in demand for use and value of the affected
water resources based on reduced I&E mortality and increased
recreational fishing performance. EPA acknowledges this may be hard to
do on a site-specific basis, and solicits comment on tools EPA could
consider producing to aid this process.
Non-use benefits, which encompass existence and bequest values,
include impacts in such areas as population resilience and support,
nutrient cycling, natural species assemblages, and ecosystem health and
integrity. These may be assessed on the basis of benefits transfer
analysis (using findings from prior analyses involving a similar study
context) or by performance of a peer reviewed stated preference survey
to assess the value assigned for the environmental improvements
resulting from the technology installation. Non-
[[Page 22262]]
use values include improving the survival probability of a threatened
or endangered species if present in the vicinity of the facility.
Benefits may also need to be assessed beyond the vicinity of the
facility's intake if migratory species are affected by the intake.
Residual impacts of thermal discharges may also be appropriate to
consider in the social benefits calculation.
In much the same way as described for the social cost assessment,
social benefits are tallied on a year-by-year basis over the expected
performance life of the compliance technology. If possible, this
tallying should account for the ``phase-in'' of benefits (e.g.,
benefits may build up over time as the I&E mortality reductions affect
commercial fisheries productivity) and ``phase-down'' of benefits at
the end of the technology equipment's performance life (e.g., the I&E
mortality reduction benefits may continue beyond the performance life
of the compliance technology). Benefits are computed on a present value
basis and annualized using an appropriate discount rate as described
above. The same discount rate should be used for benefits and costs.
Often, it is appropriate to calculate benefits and costs using more
than one discount rate. For example, for regulatory impact analysis,
the Office of Management and Budget recommends that costs and benefits
be annualized using both a 7% and a 3% rate. However, comparisons
between specific benefit and cost numbers should always involve values
computed using the same rate.
The resulting estimates of social cost and benefits must be taken
into account in reaching determinations on whether to require a
permittee to install entrainment technology and the specific level of
entrainment technology to be installed. The Director may reject an
otherwise available technology as BTA standards for entrainment
mortality if the social costs of compliance are not justified by the
social benefits, or if there are adverse impacts that cannot be
mitigated that the Director deems to be unacceptable. If all
technologies considered have social costs not justified by the social
benefits, or have unacceptable adverse impacts that cannot be
mitigated, the Director may determine that no additional control
requirements are necessary beyond what the facility is already doing.
The director should document the basis for this determination and
include it in the public notice for the draft permit. (8) The Director
would review I&E mortality monitoring reports. EPA is shifting towards
an electronic DMR system, and many of the IM and EM standards could be
incorporated into the DMR itself, rather than requiring a separate
report. EPA solicits comment on whether such reports should accompany
monthly Discharge Monitoring Reports (DMRs). EPA expects the more
detailed monitoring information would be submitted in annual reports
and as part of the facility's subsequent permit application submission.
X. Related Acts of Congress, Executive Orders, and Agency Initiatives
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
Under section 3(f)(1) of Executive Order (EO) 12866 (58 FR 51735,
October 4, 1993), this action is an ``economically significant
regulatory action'' because it is likely to have an annual effect on
the economy of $100 million or more. Accordingly, EPA submitted this
action to the Office of Management and Budget (OMB) for review under EO
12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in
response to OMB recommendations have been documented in the docket for
this action.
In addition, EPA prepared an analysis of the potential costs and
benefits associated with this action. This analysis is contained in
Chapter 12 of the EA report. A copy of the analysis is available in the
docket for this action and the analysis is briefly summarized here.
Exhibit X-1 (drawn from Table 12-2 of the EA) provides the results
of the benefit-cost analysis. Placeholders for nonmonetized benefits
are represented by B1, B2, B3, and
B4 which are expected to be option specific in value. EPA's
analysis using a habitat equivalence approach (see EEBA, Chapter 9)
suggests that B1, B2, B3, and
B4 have the potential to be significant, though EPA does not
have the same confidence in those estimates as in the monetized
estimates, and is therefore using placeholders.
Exhibit X-1--Total Annualized Benefits and Costs of the Regulatory
Options
[Millions; 2009 $] \a\
------------------------------------------------------------------------
Social costs
Option \b\ Benefits
------------------------------------------------------------------------
1. IM Everywhere................. $384 $18 + B1
2. IM Everywhere, EM for 4,463 121 + B2
Facilities with DIF > 125 MGD.
3. I&E Mortality Everywhere...... 4,632 126 + B3
4. IM for Facilities with DIF > 327 17 + B4
50 MGD.
------------------------------------------------------------------------
a All costs and benefits were annualized over 50 years and discounted
using 3 percent rate.
b Total Social Costs include compliance costs to facilities and
government administrative costs. Costs and benefits for Options 1, 2,
and 4 do not include costs or benefits associated site-specific BTA
determinations. In section VI.I, EPA presents several scenarios to
illustrate potential costs associated with these determinations for
Options 1 and 4. EPA believes the costs and benefits of these
determinations could be substantial, and could be significantly larger
than the costs and benefits shown for Options 1 and 4. For Option 2,
only facilities with AIF < 125 MGD would be subject to site-specific
BTA and additional costs and benefits for these facilities are likely
to be small relative to the costs and benefits already estimated for
this option.
B. Paperwork Reduction Act
The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The
Information Collection Request (ICR) document prepared by EPA has been
assigned EPA ICR number 2060.05.
Compliance with the applicable information collection requirements
imposed under a final rule based on this proposal would be mandatory.
Today's proposed rule would require several distinct types of
information collection as part of the NPDES permit application. In
general, the information will be used to identify how a 316(b) existing
facility would meet the impingement mortality and entrainment
requirements. Today's rule would also require other reporting and
recordkeeping requirements to demonstrate and document compliance with
the proposed requirements.
[[Page 22263]]
The OMB previously approved information collection requirements
contained in the 2004 Phase II final rule and assigned OMB control
number 2040-0257. The 2004 Phase II final rule required applicable
facilities to perform several data-gathering activities as part of the
permit renewal application process. It also required certain monitoring
and reporting after permit issuance. The previously-approved
information collection requirements included one-time burden associated
with the initial permit application and those activities associated
with monitoring and reporting once the permit was issued. The total
average annual burden associated with the 2004 Phase II rule
information collection requirements for the entire Phase II industry
was estimated at 1,700,392 hours. The annual average reporting and
record keeping burden associated with the 2004 Final Phase II rule for
a 316(b) existing facility was estimated to be 5,428 hours per
respondent (i.e., total annual average burden of 1,595,786 hours
divided by an anticipated 294 respondents). The Director's reporting
and record keeping burden for the review, oversight, and administration
of the 2004 final Phase II rule was estimated to average 2,615 hours
per respondent (i.e., a total annual average burden of 104,606 hours
divided by an anticipated 40 States).
Today's proposal streamlines some aspects of the permit application
and implementation process and would impose reduced information
collection requirements in comparison to the 2004 Phase II rule (for
existing power plants with DIF > 50 MGD). For example, under the 2004
Phase II rule, facilities would have been required to submit a
Technology Implementation and Operations Plan, which is not required as
part of today's proposed rule. Like the 2004 Phase II rule, today's
proposal would require facilities to collect and report impingement
mortality compliance monitoring data. Under certain alternatives
provided in today's proposed rule, design documentation and flow data
would be provided instead of biologically monitoring data. The
information reporting requirements under today's proposed compliance
alternatives, described at Sec. 125.95, include some additional
requirements such as submission of an initial certification statement
and annual certification statements thereafter, submission of
monitoring reports along with DMRs, and submission of annual reports,
as well as maintenance of various records.
Facilities that were not part of Phase II would have additional
reporting and recordkeeping requirements relative to the current BPJ
permitting approach. EPA is currently preparing a revised ICR that will
estimate the total burden of the proposed rule using the Phase II
burden estimates as a starting point. These will be adjusted to account
for differences in what is required under the proposed rule, as well as
the extension of new requirements to Phase III facilities. EPA will
announce in the Federal Register when this information has been placed
in the docket for today's rule and will allow a separate 60-day comment
period on the proposed paperwork requirements, including the revised
burden estimates.
Burden is defined at 5 CFR 1320.3(b).
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.
To comment on the Agency's need for this information, the accuracy
of the provided burden estimates, and any suggested methods for
minimizing respondent burden, EPA has established a public docket for
this rule, which includes this ICR, under Docket ID number EPA-HQ-OW-
2008-0667. Submit any comments related to the ICR to EPA and OMB. See
ADDRESSES section at the beginning of this proposed rule for where to
submit comments to EPA. Send comments to OMB at the Office of
Information and Regulatory Affairs, Office of Management and Budget,
725 17th Street, NW., Washington, DC 20503, Attention: Desk Office for
EPA. Since OMB is required to make a decision concerning the ICR
between 30 and 60 days after April 20, 2011, a comment to OMB is best
assured of having its full effect if OMB receives it by May 20, 2011.
The final rule will respond to any OMB or public comments on the
information collection requirements contained in this proposal.
C. Regulatory Flexibility Act (RFA)
The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
1. Definition of Small Entities and Estimation of the Number of Small
Entities Subject to Today's Proposed Regulation
For EPA's assessment of the impact of today's proposed rule on
small entities, small entity is defined as either a: (1) A small
business as defined by the Small Business Administration's (SBA)
regulations at 13 CFR 121.201; (2) a small governmental jurisdiction
that is a government of a city, county, town, school district or
special district with a population of less than 50,000; or (3) a small
organization that is any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.
Federal or State entities owning in-scope facilities are not small
entities.
a. Electric Generators
For assessing the impacts of today's rule on small Electric
Generator entities, small entity is defined in accordance with SBA
criteria for identifying small, non-government entities in the electric
power industry, as follows:
For non-government entities with electric power generation
as a primary business, small entities are those with total annual
electric output less than 4 million MWh; small governments are those
serving a population of less than 50,000.
For entities with a primary business other than electric
power generation, the relevant size criteria are based on revenue or
number of employees by NAICS sector (see Exhibit X-2).
Exhibit X-2--NAICS Codes and SBA Entity Size Standards for In-Scope
Electric Generators With a Primary Business Other Than Electric Power
Generation \108\
------------------------------------------------------------------------
SBA size
NAICS code NAICS description standard
------------------------------------------------------------------------
221112........................ Fossil Fuel Electric 4,000,000 MWh.
Power Generation.
221113........................ Nuclear Electric Power 4,000,000 MWh.
Generation.
221119........................ Other Electric Power 4,000,000 MWh.
Generation.
221122........................ Electric Power 4,000,000 MWh.
Distribution.
[[Page 22264]]
221210........................ Natural Gas 500 Employees.
Distribution.
238210........................ Electrical Contractors $14,000,000
Revenue.
331111........................ Iron and Steel Mills.. 1,000 Employees.
331315........................ Aluminum Sheet, Plate, 750 Employees.
and Foil
Manufacturing.
523910........................ Miscellaneous $7,000,000
Intermediation. Revenue.
486210........................ Pipeline $7,000,000
Transportation of Revenue.
Natural Gas.
523920........................ Portfolio Management.. $7,000,000
Revenue.
523930........................ Investment Advice..... $7,000,000
Revenue.
524126........................ Direct Property and 1,500 Employees.
Casualty Insurance
Carriers.
525990........................ Other Financial $7,000,000
Vehicles. Revenue.
525910........................ Open-End Investment $7,000,000
Funds. Revenue.
541990........................ All Other $7,000,000
Professional, Revenue.
Scientific, and
Technical Services.
551112........................ Offices of Other $7,000,000
Holding Companies. Revenue.
561499........................ All Other Business $7,000,000
Support Services. Revenue.
562212........................ Solid Waste Landfill.. $12,500,000
Revenue.
562219........................ Other Nonhazardous $12,500,000
Waste Treatment and Revenue.
Disposal.
562920........................ Materials Recovery $12,500,000
Facilities. Revenue.
611310........................ Colleges, $7,000,000
Universities, and Revenue.
Professional Schools.
------------------------------------------------------------------------
For this analysis, EPA identified the domestic parent entity of
each electric generating facility subject to today's proposed rule (for
a discussion on determination of parent entities of in-scope Electric
Generators see Chapter 5 of the EA report). To determine whether these
entities are small entities based on the size criteria outlined above,
EPA compared the relevant measure for the identified parent entities to
the appropriate SBA size criterion.
---------------------------------------------------------------------------
\108\ Certain in-scope facilities are owned by entities whose
primary business is not electric power generation.
---------------------------------------------------------------------------
From this analysis, EPA estimates that 33 small entities (out of a
total of 143 entities that own in-scope Electric Generators) own
Electric Generators that would be subject to today's proposed rule,
representing 1.6 percent of total estimated small entities in the
electric power industry (see Exhibit X-3). Municipalities make up the
largest number of small entities owning in-scope facilities (17 out of
33); these small entities represent 1.8 percent of all small entities
in that category. Small entities owning in-scope facilities as a
percentage of total small entities range, by ownership category, from
0.9 percent for rural electric cooperatives and other political
subdivisions, to 10.9 percent for the investor-owned utilities.\109\
---------------------------------------------------------------------------
\109\ The entity counts include entities owning known 316(b)
Electric Generators and are not weighted estimates.
Exhibit X-3--Number of Small Entities Owning In-Scope Electric Generating Facilities as a Percentage of the
Total Number of Small Entities in the Industry, by Ownership Type
----------------------------------------------------------------------------------------------------------------
Small entities owning in-scope
facilities
---------------------------------------
Total number of Small in-scope
Ownership type small entities in Number of in- entities as
the industry \a\ scope entities percentage of all
\b\ in-scope entities
in the industry
----------------------------------------------------------------------------------------------------------------
Investor-Owned Utilities............................. 18 2 10.9
Nonutilities......................................... 130 5 3.8
Rural Electric Cooperatives.......................... 848 8 0.9
Municipality......................................... 968 17 1.8
Other Political Subdivision.......................... 113 1 0.9
Federal.............................................. 0 0 0
State................................................ 0 0 0
All Entity Types..................................... 2,078 33 1.6
----------------------------------------------------------------------------------------------------------------
\a\ State and Federal entities are considered large.
\b\ The entity counts include entities owning known 316(b) Electric Generators and are not weighted estimates.
b. Manufacturers
For purposes of assessing the impacts of today's rule on small
Manufacturers, small entity is defined in accordance with SBA criteria.
Exhibit X-4 lists the SBA size threshold guidelines for entities owning
Manufacturers facilities.
[[Page 22265]]
Exhibit X-4--NAICS Codes and SBA Entity Size Standards for In-Scope
Entities in Manufacturers Sectors
------------------------------------------------------------------------
SBA Size
NAICS Code NAICS Description standard
------------------------------------------------------------------------
111930........................ Sugarcane Farming..... $750,000 in
Revenue
113110........................ Timber Tract $7,000,000 in
Operations. Revenue
211111........................ Crude Petroleum and 500 Employees
Natural Gas
Extraction.
212210........................ Iron Ore Mining....... 500 Employees
212391........................ Potash, Soda, and 500 Employees
Borate Mineral Mining.
221119........................ Other Electric Power 4,000,000 MWh of
Generation. Electric
Generation
311221........................ Wet Corn Milling...... 750 Employees
311311........................ Sugarcane Mills....... 500 Employees
311312........................ Cane Sugar Refining... 750 Employees
311313........................ Beet Sugar 750 Employees
Manufacturing.
311942........................ Spice and Extract 500 Employees
Manufacturing.
313210........................ Broadwoven Fabric 1,000 Employees
Mills.
321113........................ Sawmills.............. 500 Employees
322121........................ Paper (except 750 Employees
Newsprint) Mills.
322122........................ Newsprint Mills....... 750 Employees
322130........................ Paperboard Mills...... 750 Employees
322211........................ Corrugated and Solid 500 Employees
Fiber Box
Manufacturing.
322222........................ Coated and Laminated 500 Employees
Paper Manufacturing.
322291........................ Sanitary Paper Product 500 Employees
Manufacturing.
324110........................ Petroleum Refineries.. 1,500 Employees
324191........................ Petroleum Lubricating 500 Employees
Oil and Grease
Manufacturing.
325120........................ Industrial Gas 1,000 Employees
Manufacturing.
325181........................ Alkalis and Chlorine 1,000 Employees
Manufacturing.
325188........................ All Other Basic 1,000 Employees
Inorganic Chemical
Manufacturing.
325199........................ All Other Basic 1,000 Employees
Organic Chemical
Manufacturing.
325211........................ Plastics Material and 750 Employees
Resin Manufacturing.
325311........................ Nitrogenous Fertilizer 1,000 Employees
Manufacturing.
325320........................ Pesticide and Other 500 Employees
Agricultural Chemical
Manufacturing.
325412........................ Pharmaceutical 750 Employees
Preparation
Manufacturing.
325510........................ Paint and Coating 500 Employees
Manufacturing.
325992........................ Photographic Film, 500 Employees
Paper, Plate and
Chemical
Manufacturing.
325998........................ All Other 500 Employees
Miscellaneous
Chemical Product and
Preparation
Manufacturing.
331111........................ Iron and Steel Mills.. 1,000 Employees
331112........................ Electrometallurgical 750 Employees
Ferroalloy Product
Manufacturing.
331210........................ Iron and Steel Pipe 1,000 Employees
and Tube
Manufacturing from
Purchased Steel.
331221........................ Rolled Steel Shape 1,000 Employees
Manufacturing.
331222........................ Steel Wire Drawing.... 1,000 Employees
331312........................ Primary Aluminum 1,000 Employees
Production.
331315........................ Aluminum Sheet, Plate 750 Employees
and Foil
Manufacturing.
332312........................ Fabricated Structural 500 Employees
Metal Manufacturing.
337910........................ Mattress Manufacturing 500 Employees
339999........................ All Other 500 Employees
Miscellaneous
Manufacturing.
423310........................ Lumber, Plywood, 100 Employees
Millwork, and Wood
Panel Merchant
Wholesalers.
423930........................ Recyclable Material 100 Employees
Merchant Wholesalers.
424510........................ Grain and Field Bean 100 Employees
Merchant Wholesalers.
424690........................ Other Chemical and 100 Employees
Allied Products
Merchant Wholesalers.
424710........................ Petroleum Bulk 100 Employees
Stations and
Terminals.
447190........................ Other Gasoline $9,000,000 in
Stations. Revenue
522220........................ Sales Financing....... $7,000,000 in
Revenue
523910........................ Miscellaneous $7,000,000 in
Intermediation. Revenue
523930........................ Investment Advice..... $7,000,000 in
Revenue
524126........................ Direct Property and 1,500 Employees
Casualty Insurance
Carriers.
525990........................ Other Financial $7,000,000 in
Vehicles. Revenue
531110........................ Lessors of Residential $7,000,000 in
Buildings and Revenue
Dwellings.
551112........................ Offices of Other $7,000,000 in
Holding Companies. Revenue
561110........................ Office Administrative $7,000,000 in
Services. Revenue
------------------------------------------------------------------------
To determine entity size, EPA started with information reported in
the Detailed Industry Questionnaire and Industry Screener
Questionnaire, and updated information on each owner's primary NAICS,
current revenue, and employment size data from SEC filings, Dun &
Bradstreet (D&B, 2009), and corporate Web sites. For details of this
process, see Chapter 4 of the EA report. EPA compared the relevant
measure for the identified parent entities to the appropriate SBA size
criterion.
Because EPA undertook this assessment for the sample of
Manufacturers facilities and related owning entities responding to the
previous 316(b) questionnaires, it was necessary to estimate the number
of owning entities and to assess whether these entities are small,
based on application of sample weights. Because the sample weights are
based on facilities instead of entities, the facility-based weights do
not provide statistically precise estimates of the numbers of owning
entities. As a result, EPA applied alternative sample-weighting
assumptions that yield lower and upper bound estimates of the
[[Page 22266]]
numbers of small entities in the Primary Manufacturing Industries
owning in-scope Manufacturers facilities, as reported in Exhibit X-5.
Because the analysis of facilities in Other Industries is not based on
a statistically valid sample, EPA could not estimate the number of
entities in Other Industries that would be subject to the requirements
of the regulatory analysis options, or the percentage that are small
entities. However, based on a review of nationwide water withdrawals
and cooling water use, the Census of Manufacturers, and comments
received on the Phase III proposed rule, EPA does not expect a
significant number of additional small entities would be subject to
today's proposed regulatory requirements.
Exhibit X-5--Number and Percentage of Small Entities in Primary Manufacturing Industries Subject to the Proposed
Regulation, by Industry
----------------------------------------------------------------------------------------------------------------
Lower bound estimate of number Upper bound estimate of number
of entities of entities
Total sector ---------------------------------------------------------------
Sector small entities Percentage of Percentage of
\a\ Estimated small entities Estimated small entities
316(b) small subject to 316(b) small subject to
entities regulation entities regulation
----------------------------------------------------------------------------------------------------------------
Paper........................... 218 9 4.1 29 13.2
Chemicals....................... 2,506 4 0.2 18 0.7
Petroleum....................... 188 4 2.1 4 2.2
Steel........................... 1,149 3 0.3 8 0.7
Aluminum........................ 227 2 0.9 5 2.0
Food............................ 23,546 1 0.0 1 0.0
Total for primary manufacturing 27,834 23 0.1 64 0.2
industries \b\.................
----------------------------------------------------------------------------------------------------------------
\a\ Includes all firms with less than 500 employees from 2006 Statistics of U.S. Businesses (SUSB) of the U.S.
Department of Commerce (U.S. DOC). The Small Business Administration defines firms in nearly all profiled
NAICS codes according to the firm's number of employees; however, for some in-scope manufacturing NAICS codes
this threshold is 500 employees while for others this threshold is 750, 1,100, or 1,500 employees. Because the
SUSB employment size categories do not correspond to the SBA entity size classifications, EPA used the 500
employee threshold for all in-scope NAICS.
\b\ Due to rounding columns may not sum.
From this analysis, EPA estimates that 23 to 64 small entities own
Manufacturers facilities that are subject to today's proposed rule,
representing 0.1 to 0.2 percent of total estimated small entities in
the Primary Manufacturing Industries (see Exhibit X-5). Of the six
Primary Manufacturing Industries, Paper has the largest number of small
entities (9 to 29), and these small entities also account for the
largest percentage of total small entities in any of the six
industries--4.1 to 13.2 percent of estimated total small entities in
the Paper industry. The percentage of estimated total small entities
subject to regulation reaches 2 percent for two of the remaining
Primary Manufacturing Industries (Petroleum and Aluminum).
From the 316(b) survey data, EPA identified an additional 4
entities in the Other Industries that are also small entities; however,
as noted, EPA is unable to estimate the total number of small in-scope
entities in the Other Industries.
c. Total Estimate of Small In-Scope Entities
On a combined basis, EPA estimates that 56-96 small entities would
be within the scope of the existing facilities rule options. These
counts do not include the additional known 4 small entities in the
Other Industries.
2. Statement of Basis
As described above, EPA began its assessment of the impact of
today's proposed regulatory options on small entities by first
estimating the number of small entities within the two industry
segments subject to the proposed rule--Electric Generators and
Manufacturers--that would be expected to be within the scope of today's
proposed rule. EPA then assessed whether these small entities would be
expected to incur costs that constitute a significant impact; and
assessed whether the number of those small entities estimated to incur
a significant impact represent a substantial number of small entities.
To assess whether small entities' compliance costs might constitute
a significant impact, EPA summed annualized compliance costs \110\ for
the Electric Generators and Manufacturers facilities estimated to be
owned by a given small entity and calculated these costs as a
percentage of entity revenue (Cost-to-Revenue Test). EPA compared the
resulting percentages to impact criteria of 1 percent and 3 percent of
revenue. Small entities estimated to incur compliance costs exceeding
one or more of these impact thresholds were identified as potentially
incurring a significant impact.
---------------------------------------------------------------------------
\110\ Option 1 does not include an assessment of site-specific
entrainment costs. However, Option 3 includes EM based on closed-
cycle cooling at all existing facilities.
---------------------------------------------------------------------------
For both Electric Generators and Manufacturers, EPA used
alternative sample-weighting approaches, which provide a range of
estimates of the numbers of small entities and in-scope facilities
owned by these small entities.
The results of this analysis using both weighting approaches are
summarized below. In the following summary table (Exhibit X-6), the
estimated numbers of small entities incurring costs exceeding 1 percent
and 3 percent of revenue are presented as ranges, based on the
alternative sample weighting approaches. In addition, EPA compared the
estimated numbers of small entities with costs exceeding a given impact
threshold with the estimated number of small in-scope entities. The
resulting estimated numbers and percentages of small in-scope entities
that may incur a significant impact, as reported in Exhibit X-6,
provide a measure of the potential impact of the existing facilities
rule options on small in-scope entities.
From these analyses, EPA estimates under Option 1, the proposed
option, that 5 to 7 small entities will incur costs exceeding 1 percent
of revenue, and 3 small entities will incur costs exceeding 3 percent
of revenue. As percentages of the estimated total of 56 to 96 small in-
scope entities,\111\ these small entities
[[Page 22267]]
represent 5 to 13 percent of small in-scope entities at the 1 percent
of revenue threshold, and 3 to 5 percent of small in-scope entities at
the 3 percent of revenue threshold. Both the number of small in-scope
entities incurring a potential impact and the total of small in-scope
entities are estimated as ranges. EPA calculated the range of
percentage of total small in-scope entities incurring a potential
impact by comparing (1) the lower of the estimated number of small in-
scope entities incurring a potential impact with the higher of the
estimated total of small in-scope entities (yields the lower value of
the percentage range) and (2) the higher of the estimated number of
small in-scope entities incurring a potential impact with the lower of
the estimated total of small in-scope entities (yields the higher value
of the percentage range).
---------------------------------------------------------------------------
\111\ The estimated total of small in-scope entities does not
include the known 4 small Manufacturers entities in the Other
Industries. EPA assessed the potential impact of the regulatory
options on these 4 small entities; none were found to incur a
significant impact under any of the four regulatory options.
---------------------------------------------------------------------------
For Option 2, EPA estimates that 5 to 7 small entities will incur
costs exceeding 1 percent of revenue (5-13 percent of small in-scope
entities), and 3 to 7 small entities will incur costs exceeding 3
percent of revenue (3-13 percent of small in-scope entities). For
Option 3, EPA estimates that 10 to 22 small entities will incur costs
exceeding 1 percent of revenue (10-39 percent of small in-scope
entities), and 7 to 15 small entities will incur costs exceeding 3
percent of revenue (7-27 percent of small in-scope entities). For
Option 4, EPA estimates that 4 to 6 small entities will incur costs
exceeding 1 percent of revenue (4-11 percent of small in-scope
entities), and 2 small entities will incur costs exceeding 3 percent of
revenue (2-4 percent of small in-scope entities) (see Exhibit X-6).
For more details on this analysis see EA Chapter 7: Regulatory
Flexibility Act (RFA) Analysis.
Exhibit X-6--Estimated Cost-to-Revenue Impact for Small In-Scope Entities
----------------------------------------------------------------------------------------------------------------
Cost impact category
---------------------------------------------------------------
Cost > 1% of revenue Cost >3% of revenue
Regulatory option ---------------------------------------------------------------
% of small in- Number of % of small in-
Number of scope small scope
small entities entities \c\ entities a,c entities \b\
----------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere......................... 5-7 5%-13% \b\ 3 3%-5%
Option 2: IM Everywhere and EM for Facilities 5-7 5%-13% 3-7 3%-13%
with DIF>125 MGD...............................
Option 3: I&E Mortality Everywhere.............. 10-22 10%-39% 7-15 7%-27%
Option 4: IM for Facilities with DIF > 50 MGD... 4-6 4%-11% \b\ 2 2%-4%
----------------------------------------------------------------------------------------------------------------
\a\ The number of entities with cost-to-revenue ratios exceeding 3 percent is a subset of the number of entities
with such ratios exceeding 1 percent.
\b\ The estimated number of small entities exceeding the impact threshold is the same under both estimation
approaches; however, the total number of entities differs.
\c\ For both Electric Generators and Manufacturers, EPA used alternative sample-weighting approaches, which
provide a range of estimates of the numbers of small entities and in-scope facilities owned by these small
entities (see Section VII(D)(a)(iv) for manufacturers and see Section VII(D)(b)(1)(b) for electric generator
weighting approaches).
As described in the preamble above, EPA eliminated 115 facilities
from the analysis that are projected to close as a result of baseline
financial conditions. Of the 115 baseline closures, 18 are small
entities.
To summarize, for the Proposed Option \112\--Option 1, EPA
estimates that 5 to 7 small entities would incur costs exceeding 1
percent of revenue and 3 small entities would incur costs exceeding 3
percent of revenue. These numbers of adversely affected small entities
represent 5-13 percent of the estimated total of small in-scope
entities for the 1 percent of revenue threshold, and 3-5 percent of the
estimated total of small in-scope entities for the 3 percent of revenue
threshold. Given the small number and percentage of small in-scope
entities estimated to incur a potentially significant economic impact,
EPA judges that the Proposed Option, Option 1, will not cause a
significant economic impact on a substantial number of small entities
(SISNOSE).
---------------------------------------------------------------------------
\112\ Option 1 does not include an assessment of site-specific
entrainment costs.
---------------------------------------------------------------------------
3. Certification Statement
After considering the economic impacts of this proposed rule on
small entities, EPA certifies that this action will not have a
significant economic impact on a substantial number of small entities.
D. Unfunded Mandates Reform Act (UMRA)
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2
U.S.C. 1531-1538, requires Federal agencies, unless otherwise
prohibited by law, to assess the effects of their regulatory actions on
State, local, and tribal governments and the private sector. This rule
contains a Federal mandate that may result in expenditures of $100
million or more for State, local, and tribal governments, in the
aggregate, or the private sector in any one year. Accordingly, EPA has
prepared under section 202 of the UMRA a written statement which is
summarized below (see Chapter 8 of the EA report).
1. Summary of Written Statement
a. Authorizing Legislation
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 (CWA), 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342,
1361, and 1370. See section III of this preamble for detailed
information on the legal authority of this rule.
b. Cost-Benefit Analysis
Today's proposed options are expected to have total annualized pre-
tax (social) costs of $383.80 million (2009 $) under Option 1, of
$4,462.90 million under Option 2, $4,631.62 million under Option 3, and
of $326.55 under Option 4, including direct costs incurred by
facilities and implementation costs incurred by federal, State, and
local governments (annualized over 50 years and discounted at 3
percent).\113\ The total monetized use and non-use benefits of
[[Page 22268]]
today's proposed options are estimated to be $17.63 million under
Option 1, $120.79 million under Option 2, $125.65 million under Option
3, and $17.33 million under Option 4 (annualized over 50 years and
discounted at 3 percent).\114\ Thus, the total social costs exceed the
total monetized benefits of the proposed options by $366.17 million for
Option 1, by $4,342.11 million for Option 2, by $4,505.97 million for
Option 3, and by $309.22 under Option 4. EPA notes that these
differences are based on a comparison of a partial measure of benefits
with a more complete measure of costs; \115\ therefore, the results
must be interpreted with caution. After considering the monetized and
non-monetized benefits of the proposed option, EPA has determined that
the benefits of this option justify the costs. For a more detailed
comparison of the costs and benefits of today's proposed rule, see
Chapter 12 of the EA report.
---------------------------------------------------------------------------
\113\ These social cost estimates use a different estimate of
downtime than the private cost estimates cited above, and are thus
lower. For more details see Chapter 11 in the EA report.
\114\ EPA was able to estimate nonuse benefits for the North
Atlantic and Mid-Atlantic benefit regions.
\115\ The costs reflect the costs for facilities do comply with
the primary BTA requirements, and do not reflect any facilities with
reduced costs due to the available compliance alternatives and
flexibilities. Since EPA anticipates a facility would generally
participate in a compliance alternative if it was less burdensome or
less costly to do so, today's costs may be overstated.
---------------------------------------------------------------------------
EPA notes that States may be able to use existing sources of
financial assistance to revise and implement this proposed rule.
Section 106 of the Clean Water Act authorizes EPA to award grants to
States, Tribes, intertribal consortia, and interstate agencies for
administering programs for the prevention, reduction, and elimination
of water pollution. These grants may be used for various activities to
develop and carry out a water pollution control program, including
permitting, monitoring, and enforcement. Thus, State and Tribal NPDES
permit programs represent one type of State program that can be funded
by section 106 grants.
c. Summary of State, Local, and Tribal Government Input
EPA consulted with State governments and representatives of local
governments in developing the rule. The outreach activities are
discussed in section III.A.3 of this preamble.
d. Least Burdensome Option
EPA considered and analyzed several alternative regulatory options
to determine the best technology available for minimizing adverse
environmental impact. These regulatory options are discussed in today's
proposed rule at 67 FR 17154-17168, as well as in section VIII of this
preamble. These options included a range of technology-based approaches
including impingement mortality technology at all facilities with a DIF
greater than 50 MGD to additionally requiring impingement mortality
controls and intake flow commensurate with closed-cycle cooling for all
facilities.\116\ As discussed in detail in section VI, EPA did not
select options exclusively because they were the most cost-effective
among the options that fulfill the requirements of section 316(b). EPA
selected the preferred option because it meets the requirement of
section 316(b) of the CWA that the location, design, construction, and
capacity of CWIS reflect the best technology available for minimizing
adverse environmental impact. In addition, EPA has determined that the
benefits of this option justify the costs, taking quantified and non-
quantified costs and benefits into account. The preferred option
reflects a flexible approach among the options considered that allows
consideration of costs and benefits on a site-specific basis in
determining BTA.
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\116\ All options also require site-specific determinations of
BTA where uniform national controls are not included.
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2. Impact of Compliance Requirements on Small Governments
This rule is not subject to the requirements of section 203 of UMRA
because it contains no regulatory requirements that might significantly
or uniquely affect small governments (i.e., governments with a
population of less than 50,000). For its assessment of the impact of
compliance requirements on small governments, EPA compared total costs
and costs per facility as estimated to be incurred by small governments
with those values as estimated to be incurred by large governments. EPA
also compared costs for small government-owned facilities with those of
non-government-owned facilities. The Agency evaluated costs per
facility on the basis of both average and maximum annualized cost per
facility. In these comparisons, both for the cost totals and, in
particular, for the average and maximum cost per facility, the costs
for small government-owned facilities were less than those for large
government-owned facilities or for small non-government-owned
facilities. On this basis, EPA concluded that the compliance cost
requirements of the proposed 316(b) Existing Facilities Rule would not
significantly or uniquely affect small governments.
Because no Manufacturers facility is government-owned, EPA
conducted this analysis for Electric Generators only.
a. Government-Owned Electric Generator Facilities by Ownership and
Entity Size Category
Exhibit X-8 provides an estimate of the number of non-Federal
Government entities that operate Electric Generators subject to today's
proposed rule, by ownership type and size of government entity. As
reported in Exhibit X-8, 24 large government entities operate 41
Electric Generators subject to this proposed rule, and 18 small
government entities operate 18 Electric Generators subject to the rule.
Of the 59 facilities that are owned by government entities, 43 are
owned by Municipalities, 9 are owned by State Governments, and 7 are
owned by an Other Political Subdivision.
Exhibit X-8--Number of Government Entities and Government-Owned Electric Generator Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of government entities (by Size) \a\ Number of facilities (by government entity
------------------------------------------------ size) \b\
Ownership Type -----------------------------------------------
Large Small Total Large Small Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Municipality............................................ 18 17 35 26 17 43
State Government........................................ 4 0 4 9 0 9
Other Political Subdivision............................. 2 1 3 6 1 7
-----------------------------------------------------------------------------------------------
Total............................................... 24 18 42 41 18 59
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Counts of entities owning explicitly and implicitly analyzed Electric Generators; these are not weighted entity counts.
\b\ Counts of explicitly and implicitly analyzed Electric Generators; these are not weighted estimates.
[[Page 22269]]
b. Compliance Costs for Small Government-Owned Electric Generators
Facilities
EPA estimates that 10 of the 41 (24%) non-federal government-owned
Electric Generators facilities subject to today's proposed rule are
owned by small governments (Table X-9).\117,118\ Exhibit X-9 summarizes
total, average annualized compliance costs, and maximum annualized
compliance costs for government (State, local, and Tribal governments)
and non-government-owned facilities for the three regulatory options
and by size category of owning entity.
---------------------------------------------------------------------------
\117\ A small governmental jurisdiction is defined `` as the
government of a city, county, town, township, village, school
district, or special district with a population of less than 50,000
(5 U.S.C. 601(5)).
\118\ The entity counts described in this section were developed
on a weighted basis and differ from the values reported in the
preceding section, where were developed on an un-weighted basis. The
values in this section were developed on a weighted basis because
compliance costs were estimated only for explicitly analyzed
facilities and facility weights are used to extend these results to
the full set of in-scope facilities.
---------------------------------------------------------------------------
EPA first looked at the relationship between costs incurred by
small governments and small government-owned Electric Generators in
comparison to those incurred by large governments and large government-
owned facilities. As reported in Exhibit X-9, the estimated total
annualized compliance costs for all non-federal government-owned
Electric Generators are $10.8 million for Option 1, $102.3 million for
Option 2, $120.1 million for Option 3, and $9.5 million for Option 4.
The 31 facilities owned by large governments would incur costs of $9.2
million under Option 1, $100.7 million under Option 2, $107.6 million
under Option 3, and $8.1 million under Option 4. In comparison, the 10
facilities owned by small governments would incur costs of $1.5 million
under Options 1 and 2, $12.5 million under Option 3, and $1.4 million
under Option 4. On an average cost per facility basis, these costs are
$0.1 million under Options 1, 2, and 4, and $1.2 million under Option
3, for facilities owned by small governments, with large government-
owned facility costs of $0.3 million under Options 1 and 4, $3.2
million under Option 2, and $3.4 million under Option 3. In addition,
the maximum per facility costs owned by small governments are $0.2
million under Options 1, 2, and 4, and $2.1 million under Option 3. The
comparable values for large government-owned facilities are $1.0
million under Options 1 and 4, and $17.8 million under Options 2 and 3.
Accordingly, the costs for small government-owned facilities are
considerably lower than those for large governments on the basis of
total costs, average cost per-facility, and maximum cost per-facility.
EPA therefore concludes that the compliance requirements of today's
proposed rule do not significantly or uniquely affect small governments
in comparison to large governments.
Exhibit X-9--Electric Generators Facilities and Compliance Costs by Ownership Type and Size for 316(b) Existing Facilities Rule Options
[Millions; 2009$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
Ownership type Entity size facilities Total compliance Average cost per Maximum facility
(weighted) costs facility cost \c\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................ Small........................... 10 $1.5 $0.1 $0.2
Large........................... 31 9.2 0.3 1.0
Private....................................... Small........................... 16 7.7 0.5 2.5
Large........................... 485 354.4 0.7 7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities \b\ 559 394.2 0.7 7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2: IM Everywhere and EM for Facilities with DIF 125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................ Small........................... 10 $1.5 $0.1 $0.2
Large........................... 31 100.7 3.2 17.8
Private....................................... Small........................... 16 32.3 2.0 10.9
Large........................... 485 4,171.7 8.6 59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities \b\ 559 4,811.3 8.6 59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 3: I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................ Small........................... 10 $12.5 $1.2 $2.1
Large........................... 31 107.6 3.4 17.8
Private....................................... Small........................... 16 34.0 2.2 10.9
Large........................... 485 4,300.3 8.9 59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities \b\ 559 4,959.4 8.9 59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 4: IM for Facilities with DIF 50MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................ Small........................... 10 $1.4 $0.1 $0.2
Large........................... 31 8.1 0.3 1.0
Private....................................... Small........................... 16 6.0 0.4 2.5
Large........................... 485 346.1 0.7 7.2
[[Page 22270]]
Small........................... 559 383.0 0.7 7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
a. Facility counts are weighted estimates and differ from the values reported in Exhibit X-8, above, which are un-weighted counts. Sample weighted
values are needed in this table because costs were developed only for the explicitly analyzed Electric Generators facilities. See EA Appendix A.3:
Used of Sample Weights in the Proposed Existing Facilities Rule Analysis for more detail.
b. The All Facilities counts and cost values include 15 federal government-owned facilities and 10 private facilities owned by entities of unknown size.
The individual facility count and cost estimates for the small and large entity categories exclude the values for these 25 facilities.
c. Reflects maximum of un-weighted costs to explicitly analyzed facilities only.
EPA's analysis also considered whether this proposed rule may
significantly or uniquely affect small governments in relation to non-
government-owned Electric Generators. As reported in Exhibit X-9 the
total compliance cost for 10 small government-owned Electric Generators
incurring costs under today's proposed rule are $1.5 million under
Options 1 and 2, $12.5 million under Option 3, and $1.4 million under
Option 4, or on a per facility basis, approximately $0.1 million for
Options 1, 2, and 4, and $1.2 million for Option 3. In addition, the
highest annualized compliance cost for a small government-owned
facility is $0.2 million under Options 1, 2, and 4, and $2.1 million
under Option 3. In comparison, all small non-government-owned Electric
Generators subject to today's proposed rule are expected to incur
annualized compliance costs of $7.7 million under Option 1, $32.3
million under Option 2, $34.0 million under Option 3, and $6.0 million
under Option 4, or $0.5, $2.0, $2.2, and $0.4 million per facility,
respectively by regulatory option. The highest annualized cost for a
small non-government-owned facility is $2.5 million under Options 1 and
4, and $10.9 million under Options 2 and 3. On the basis of this
comparison, as well, EPA further concludes that the compliance
requirements of the proposed rule do not significantly or uniquely
affect small governments. The EA report provides more detail on EPA's
analysis of impacts on governments.
3. Administrative Costs
The requirements of Section 316(b) are implemented through the
NPDES (National Pollutant Discharge Elimination System) permit program.
Forty-six States and territories with NPDES permitting authority under
section 402(b) of the CWA are expected to incur costs to administer the
Existing Facilities Rule in their jurisdictions. EPA estimates that
States and territories will incur costs associated with five types of
activities for implementing the requirements of today's proposed rule:
(1) Start-Up activities to learn and understand the requirements of
today's regulation and to implement administrative structures and
procedures for administering the regulation; (2) first permit issuance
activities; (3) permit reissuance activities; (4) entrainment study
costs, and (5) annual activities. EPA estimates that the total
annualized cost for these activities will be $5.31 million for Option
1, $2.19 for Option 2, $1.28 million for Option 3, and $4.06 for Option
4. Monitoring costs comprise the largest share of administrative costs
under all three regulatory options. Exhibit X-10 presents the
annualized costs of the major administrative activities.
Exhibit X-10--Annualized Government Administrative Costs
[Millions; 2009$]
----------------------------------------------------------------------------------------------------------------
Cost
--------------------------------------------------------
Activity Electric
Generators Manufacturers Total In-Scope
----------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere
----------------------------------------------------------------------------------------------------------------
Start-up Activities.................................... $0.02 $0.02 $0.04
First Permit Issuance Activities....................... $0.23 $0.24 $0.45
Annual Monitoring Activities........................... $1.17 $1.12 $2.29
Entrainment Study...................................... $1.19 $0.97 $2.16
Permit Reissuance Activities........................... $0.18 $0.18 $0.36
--------------------------------------------------------
Total.............................................. $2.79 $2.52 $5.31
----------------------------------------------------------------------------------------------------------------
Option 2: IM Everywhere and EM for Facilities with DIF 125 MGD
----------------------------------------------------------------------------------------------------------------
Start-up Activities.................................... $0.02 $0.02 $0.04
First Permit Issuance Activities....................... $0.17 $0.23 $0.35
Annual Monitoring Activities........................... $0.36 $1.07 $1.37
Entrainment Study...................................... $0.00 $0.00 $0.00
Permit Reissuance Activities........................... $0.14 $0.17 $0.31
--------------------------------------------------------
Total.............................................. $0.69 $1.48 $2.19
----------------------------------------------------------------------------------------------------------------
[[Page 22271]]
Option 3: I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
Start-up Activities.................................... $0.02 $0.02 $0.04
First Permit Issuance Activities....................... $0.16 $0.13 $0.29
Annual Monitoring Activities........................... $0.20 $0.52 $0.72
Entrainment Study...................................... $0.00 $0.00 $0.00
Permit Reissuance Activities........................... $0.13 $0.10 $0.23
--------------------------------------------------------
Total.............................................. $0.51 $0.77 $1.28
----------------------------------------------------------------------------------------------------------------
Option 4: IM for Facilities with DIF 50MGD
----------------------------------------------------------------------------------------------------------------
Start-up Activities.................................... $0.02 $0.02 $0.04
First Permit Issuance Activities....................... $0.23 $0.06 $0.29
Annual Monitoring Activities........................... $1.04 $0.31 $1.35
Entrainment Study...................................... $1.19 $0.97 $2.16
Permit Reissuance Activities........................... $0.18 $0.05 $0.23
--------------------------------------------------------
Total.............................................. $2.65 $1.41 $4.06
----------------------------------------------------------------------------------------------------------------
E. Executive Order 13132: Federalism
Under Executive Order 13132, EPA may not issue an action that has
federalism implications, that imposes substantial direct compliance
costs on the State and local governments, and that is not required by
statute, unless the Federal government provides the funds necessary to
pay the direct compliance costs incurred by State and local
governments, or EPA consults with State and local officials early in
the process of developing the proposed action.
This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. This proposed rule would not
alter the basic State-federal scheme established in the Clean Water Act
under which EPA authorizes States to carry out the NPDES permitting
program. EPA expects today's proposed rule would have little effect on
the relationship between, or the distribution of power and
responsibilities among, the federal and State governments. EPA expects
an average annual burden of 21,785 hours with total average annual cost
of $1.1 million under Option 1, 6,538 hours and $346,000 under Option
2, and 20,395 hours and $1.0 million under Option 3, for States to
collectively administer this rule during the compliance period.\119\
After the initial compliance period, EPA expects an average annual
burden of 23,550 hours with an average annual cost of $1.2 million for
Option 1, 2,528 hours and $154,000 for Option 2, and 16,988 hours and
$841,000 for Option 3. EPA has identified 47 Phase II facilities that
are owned by State or local government entities. The estimated average
annual compliance cost incurred by these facilities is approximately
$452,000 per facility under Option 1, $4.5 million under Option 2, and
$1.1 million under Option 3. EPA does not expect Option 4 to impose
substantial direct compliance costs on the State and local governments
higher than Option 1, and therefore is not expected to pose Federalism
implications. Thus, Executive Order 13132 does not apply to this rule.
---------------------------------------------------------------------------
\119\ Because of late revisions to the Existing Facilities
Rule's administrative requirements, EPA was unable to update these
values from those developed earlier in the regulatory analysis. In
addition, EPA did not estimate administrative costs for Option 4,
but expects that these costs would be very similar to those
estimated for Option 1.
---------------------------------------------------------------------------
In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed rule
from State and local officials.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). It would not
have substantial direct effects on tribal governments, on the
relationship between the Federal government and the Indian tribes, or
the distribution of power and responsibilities between the Federal
government and Indian tribes as specified in Executive Order 13175. The
national cooling water intake structure requirements would be
implemented through permits issued under the NPDES program. No tribal
governments are currently authorized pursuant to section 402(b) of the
CWA to implement the NPDES program. In addition, EPA's analyses show
that no facility subject to today's proposed rule is owned by tribal
governments and thus this rule does not affect Tribes in any way in the
foreseeable future. Thus, Executive Order 13175 does not apply to this
action.
EPA specifically solicits additional comment on this proposed
action from tribal officials.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
This action is not subject to EO 13045 because it does not
establish an environmental standard intended to mitigate health or
safety risks. This rule establishes requirements for cooling
[[Page 22272]]
water intake structures to protect aquatic organisms.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
Executive Order 13211 (66 FR 28355 (May 22, 2001)) requires EPA to
prepare and submit a Statement of Energy Effects to the Administrator
of the Office of Information and Regulatory Affairs, Office of
Management and Budget, for actions identified as ``significant energy
actions.'' Based on the Office of Management and Budget's guidance for
assessing the potential energy impact of regulations (http://www.whitehouse.gov/omb/memoranda/m01_27.html), the Agency does not
anticipate that today's rule will have a significant adverse effect on
the supply, distribution, or use of energy and thus will not constitute
a significant regulatory action under Executive Order 13211.
The Agency analyzed the potential energy effects of today's rule
and other regulatory options considered for proposal. The potentially
significant effects of today's rule on energy supply, distribution or
use concern the electric power sector. This analysis found that the
rule's compliance requirements would not cause effects in the electric
power sector that would constitute a significant adverse effect under
Executive Order 13211. Namely, the Agency's analysis found that today's
rule would not reduce electricity production in excess of 1 billion
kilowatt hours per year or in excess of 500 megawatts of installed
capacity, and therefore would not constitute a significant regulatory
action under Executive Order 13211.
For more detail on the potential energy effects of this proposal,
see Section VII of this preamble or Chapter 9 in the EA report.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
This proposed rulemaking may involve technical standards, for
example in the measurement of impingement and entrainment. Nothing in
this proposed rule would prevent the use of voluntary consensus
standards for such measurement where available, and EPA encourages
permitting authorities and regulated entities to do so.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
EPA has determined that this proposed rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it increases the
level of environmental protection for all affected populations without
having any disproportionately high and adverse human health or
environmental effects on any population, including any minority or low-
income population. Because EPA expects that this proposed rule will
help to preserve the health of aquatic ecosystems located in reasonable
proximity to 316(b) Existing Facilities, EPA believes that all
populations, including minority and low-income populations, will
benefit from improved environmental conditions as a result of this
rule.\120\
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\120\ Affected populations include all individuals who live
within a 50-mile radius of the facility who will be receiving a non-
use benefit from the improved health of the aquatic ecosystem in the
area, and any additional anglers who live outside of the 50-mile
facility buffer and within a 50-mile radius of the reaches nearest
to 316(b) Existing Facilities, who will be receiving the use benefit
of improved catches as a result of the proposed rule.
---------------------------------------------------------------------------
To meet the objectives of Executive Order 12898, EPA assessed
whether today's proposed rule could distribute benefits among
population sub-groups in a way that is significantly unfavorable to
low-income and minority populations. EPA compared key demographic
characteristics of affected sub-state populations to those demographic
characteristics at the level of the state. If the demographic profile
of the sub-state ``benefit population'' were found to differ in a
statistically significant and unfavorable \121\ way from the
demographic profile of the state, generally, then the proposed rule
might be assessed as yielding an unfavorable distribution of benefits,
from the perspective of the public policy principles of Executive Order
12898. The two demographic variables of interest for this EJ analysis
are those within the Fish Consumption Pathway (FCP) Module that best
capture the minority and low-income aspects of the populations
affected, which are annual household income and race.122 123
Variable averages at the sub-state and state levels were compared to
determine whether or not the demographic profile of the affected
population was consistent with the state profile (for details see
Chapter 9 of the EA report).
---------------------------------------------------------------------------
\121\ That is, the estimated benefit population is comprised of
a significantly lower share of low-income and/or minority
populations than the general population of the state.
\122\ Annual household income data in the FCP Module is
available for the following categories: Less than $10,000; $10,000
to $19,999; $20,000 to $24,999; $25,000 to $29,999; $30,000 to
$34,999; $35,000 to $39,999; $40,000 to $49,999; $50,000 to $74,999;
$75,000 to $99,999; and more than $100,000. For this analysis as
well as previous 316(b) rule analyses, these categories were
combined into low- and not low-income groups based on the U.S.
Department of Health and Human Services' poverty guidelines for a
family of four living in the contiguous United States or D.C. The
current (2009) poverty guideline is $22,050, which falls within the
$20,000 to $24,999 income range (U.S. HHS, 2009). For the current
analysis, EPA used $20,000 as the threshold for separating
populations into low- and not low-income groups.
\123\ Race categories used in the analysis include white, black
or African American, Asian or Native Hawaiian or Other Pacific
Islander, American Indian or Alaska Native, and some other race.
---------------------------------------------------------------------------
The comparison of minority populations affected by the 316(b)
Existing Facilities to the affected states' overall populations found
no statistically significant difference between these groups. While
low-income populations were less present in the benefit population than
in the State's overall population in many states, the differences were
generally very small and the two groups were not found to be
significantly different. EPA thus believes that the proposed regulation
does not systematically discriminate against, or exclude or deny
participation of, the lower income population group or the minority
population group in the benefits of the proposed regulation in a way
that would be contrary to the intent of E.O. 12898. Because today's
proposed regulation requires all 316(b) Existing Facilities to achieve
compliance regardless of
[[Page 22273]]
location, there can be no systematic discrimination or exclusion of low
income or minority populations from participation in the rule's
benefits, based, for example, on selection of only specific facilities
to which the regulation would apply.\124\ EPA thus concludes, overall,
that the proposed regulation is consistent with the policy intent of
E.O. 12898. Anecdotally, minority (e.g., Native American) and low-
income populations may be more likely to include a larger proportion of
subsistence fishermen. Since this rule will increase abundance of all
fish species in the areas affected by cooling water intakes, it may
provide a particular benefit to subsistence fishermen. To the extent
that minority and low-income populations are over-represented in this
group, they may especially benefit from this rule.
---------------------------------------------------------------------------
\124\ Additionally, in states in which low-income populations
are less present in the benefits group than in the state population
overall, these populations are not subject to the environmental
damages today's rule seeks to ameliorate to the same extent as other
income groups.
---------------------------------------------------------------------------
K. Executive Order 13158: Marine Protected Areas
Executive Order 13158 (65 FR 34909, May 31, 2000) requires EPA to
``expeditiously propose new science-based regulations, as necessary, to
ensure appropriate levels of protection for the marine environment.''
EPA may take action to enhance or expand protection of existing marine
protected areas and to establish or recommend, as appropriate, new
marine protected areas. The purpose of the Executive Order is to
protect the significant natural and cultural resources within the
marine environment, which means ``those areas of coastal and ocean
waters, the Great Lakes and their connecting waters, and submerged
lands thereunder, over which the United States exercises jurisdiction,
consistent with international law.''
Today's proposed rule recognizes the biological sensitivity of
tidal rivers, estuaries, oceans, and the Great Lakes and their
susceptibility to adverse environmental impact from cooling water
intake structures. This rule provides requirements to minimize adverse
environmental impact for cooling water intake structures located on
these types of waterbodies.
EPA used GIS data of the locations of Marine Protected Areas (MPAs)
from the national MPA program (http://www.mpa.gov/helpful_resources/inventory.html) to locate 316(b) existing facilities with intakes
within MPAs. Under Option 1, 87 percent of in-scope facilities within
MPAs obtain reductions in impingement mortality, while reductions in
entrainment mortality cannot be estimated because they will be based on
site-specific determinations of BTA. Under Options 2 and 3, impingement
mortality is reduced at 92 and 97 percent of 316(b) facilities in MPAs,
while the addition of closed-cycle cooling towers results in reduced
entrainment mortality at 72 and 92 percent of in-scope facilities found
in MPAs, respectively. Therefore, EPA expects today's proposed
regulation would advance the objective of the Executive Order to
protect marine areas. For more details of the methodology used in this
analysis and the specific water bodies expected to be improved, see
Section 5 in Chapter 9 in the EA report.
XI. Solicitation of Data and Comments
A. General Solicitation of Comment
EPA encourages public participation in this rulemaking. EPA asks
that commenters address any perceived deficiencies in the record
supporting this proposal and that suggested revisions or corrections to
the rule, preamble or record be supported by data. EPA invites all
parties to coordinate their data collection activities with the Agency
to facilitate cost-effective data submissions. Please refer to the FOR
FURTHER INFORMATION CONTACT section at the beginning of this preamble
for technical contacts at EPA.
Requests for comment on specific issues are scattered throughout
this preamble in the sections where such issues are discussed. In
addition, EPA specifically requests comment on the issues discussed
below.
B. Specific Solicitation of Comments and Data
Definition of ``Design Intake Flow''
EPA requests comment on whether the definition of DIF should be
further revised to clarify that EPA intends for the design intake flow
to reflect the maximum volume of water that a plant can physically
withdraw from a source waterbody over a specific time period. This
would mean that a facility that has permanently taken a pump out of
service or has flow limited by piping or other physical limitations
should be able to consider such constraints when reporting its DIF. See
Section V.G.
2. National BTA Categorical Standards for Offshore Oil and Gas
Extraction and Seafood Processing Facilities
EPA requests comment and data on the appropriateness of a single
BTA categorical standards for offshore oil and gas extraction
facilities and seafood processing facilities. Today's rule would
continue to require that the BTA for existing offshore oil and gas
extraction facilities and seafood processing facilities be established
by NPDES permit directors on a case-by-case basis using best
professional judgment. See Section V.H.
3. Cost-cost Alternative From Phase II Rule
EPA does not have technical data for all existing facilities. EPA
concluded that the Phase II rule costs provided in Appendix A are not
appropriate for use in a facility-level cost-cost test. See Section
III. Moreover, under the national requirements EPA is proposing today,
EPA concluded that a specific cost-cost variance is not necessary
because the Director already has the discretion to consider such
factors. EPA requests comment on these conclusions.
4. Entrainment Survival
There are circumstances where certain species of eggs have been
shown to survive entrainment under certain conditions, however EPA has
not received any new data for either the most common species or the
species of concern most frequently identified in available studies. For
purposes of today's national rulemaking, entrainment is still presumed
to lead to 100 percent mortality. See Section VI. Today's proposed rule
would allow facilities to demonstrate, on a site-specific basis, that
entrainment mortality of one or more species of concern is not 100
percent. EPA requests comment on this approach.
5. Alternative Impingement Mortality Compliance Requirements
EPA requests comment and data on a provision that would require
facilities seeking to comply with the impingement mortality standard by
meeting an intake velocity requirement either to demonstrate that the
species of concern is adequately protected by the maximum intake
velocity requirements, or else to employ fish friendly protective
measures including a fish handling and return system. EPA is
considering this provision because the Agency is concerned that some
facilities that comply with the impingement mortality requirements by
reducing intake velocity to 0.5 fps or less, may still impact species
of concern. See Section VI.D.1.a.
6. Monthly and Annual Limits on Impingement Mortality
EPA requests comment on the need to tailor the impingement
mortality requirements of today's proposal to
[[Page 22274]]
account for site-specific circumstances and/or technologies, including
location of cooling water intakes that impinge relatively few fish or
other approaches that achieve impingement mortality reductions
equivalent to the proposed performance standards. For example, if EPA
were to consider number of fish killed as an alternative, it might
statistically model the data or select the minimum observed value.
Studies and information supporting these alternatives would be most
helpful. EPA also requests comment on the monthly and annual limits in
the proposed rule and way in which they were calculated.
7. Flow Basis for Option
EPA requests comment on both the threshold and the flow basis for a
variation of option 2 that would use 125 MGD Actual Intake Flow (AIF)
rather than a 125 MGD Design Intake Flow (DIF) as the threshold. See
Section VI.D.2.
8. Waterbody Type as a Basis for Different Standards
EPA's reanalysis of impingement and entrainment data does not
support the premise that the difference in the density of organisms
between marine and fresh waters justifies different standards. More
specifically, the average density of organisms in fresh waters may be
less than that found on average in marine waters, but the actual
density of aquatic organisms in some specific fresh water systems
exceeds that found in some marine waters. EPA also believes the
different reproduction strategies of freshwater versus marine species
make broad characterizations regarding the density less valid a
rationale for establishing different standards for minimizing adverse
environmental impact. EPA requests comment on its proposal not to
differentiate requirements by water body type.
9. Capacity Utilization Rating as a Basis for Different Standards
Electric generating facilities may still continue to withdraw
significant volumes of water when not generating electricity. Further,
EPA found that load-following and peaking plants operate at or near 100
percent capacity (and therefore 100 percent design intake flow) when
they are operating. Peaking facilities (those with a CUR of less than
15 percent, as defined in the 2004 Phase II rule) may withdraw
relatively small volumes on an annual basis, but if they operate during
biologically important periods such as spawning seasons or migrations,
then they may have nearly the same adverse impact as a facility that
operates year round. EPA requests comment on its decision not to
exclude facilities with a low capacity utilization rate. Comments who
believe that EPA should include a CUR threshold in the final rule
should provide a suggested threshold and explain the basis for it.
10. Flow Commensurate With Closed-Cycle Cooling
EPA requests comment on whether the demonstration that a facility's
flow reduction will be commensurate with closed-cycle cooling should be
based on a defined metric, or determined by the permitting authority on
a site-specific basis for each facility. EPA is proposing that a
facility seeking to demonstrate flow reduction commensurate with
closed-cycle cooling using flow reduction technologies and controls
other than through closed-cycle cooling (e.g., through seasonal flow
reductions, unit retirements, and other flow reductions) would have to
demonstrate total flow reductions approximating 97.5% for freshwater
withdrawals and 94.9% for saltwater withdrawals. See Section IX.D.
11. Credits for Unit Closures
EPA requests comments on the proposed approach to allow credits for
unit closures to be valid for 10 years from the date of the closure. In
EPA's current thinking this approach reasonably allows facilities to
get credit for flow reductions attributable to unit closures, but also
requires such facilities to make future progress to ensure its
operations reflect best available entrainment controls. See Section
IX.D.
12. Land Constraints
EPA requests comment on the use of a ratio for determining the land
constraint threshold for retrofit construction of cooling tower, as
well as data for determining alternative thresholds. EPA has not
identified any facilities with more than 160 acres/1000MWs that EPA
believes would be unable to construct retrofit cooling towers. EPA is
exploring the use of such a ratio to support determinations regarding
adequate land area to construct retrofit cooling towers. See Section
IX.D (footnote 1).
13. Proposed Implementation Schedule
EPA requests comment on its proposed schedule for implementing the
proposed rule. The proposed schedule uses a phased approach for
information submittal, requiring some facilities to submit application
materials as soon as six months after rule promulgation. The longest
timeframe for information submittal would not exceed seven years and
six months. EPA solicits comment on the proposed schedule, and
specifically seeks comment and data on the appropriate amount of time
to collect data, conduct reviews, obtain comment, provide for public
participation, and issue final permit conditions. See Section IX.E.
14. Methods for Evaluating Latent Mortality Effects Resulting From
Impingement
EPA requests comment on methods for evaluating latent mortality
effects resulting from impingement. EPA requests comment on whether it
should specifically establish 24 or 48 hours after initial impingement
as the time at which to monitor impingement mortality. EPA's record
demonstrates that a holding time of no more than 48 hours is optimal
for evaluating the latent mortality associated with impingement while
at the same time minimizing mortality associated with holding the
organisms. See Section IX.F.1.
15. Counting Impinged Organisms With the ``Hypothetical Net''
EPA requests comment on the ``hypothetical net'' approach to
measuring impingement mortality. Facilities could apply a
``hypothetical net'' in that they could elect to only count organisms
that would not have passed through a net with 3/8'' mesh. For example,
a facility that uses a fine-mesh screen or diverts the flow directly to
a sampling bay would only need to count organisms that could be
collected if the flow passed through a net, screen, or debris basket
fitted with 3/8'' mesh spacing. See Section IX.F.1. EPA further
solicits comment on alternative approaches that would not penalize
facilities for employing fine mesh screens.
16. Incentives for Reducing I&E by Reducing Water Withdrawals
EPA requests comment on incentives or alternative requirements for
exceptionally energy efficient or water efficient facilities. See
Section III. EPA also solicits comment on the regulatory provisions
that encourage the use of recycled water as cooling water, including
reclaimed water from wastewater treatment plants and process water from
manufacturing facilities, EPA solicits comment on other incentives to
encourage use of recycled water to supplement or replace marine,
estuarine, or freshwater intakes.
[[Page 22275]]
17. Options Which Provide Closed-Cycle Cooling as BTA
EPA solicits comment on regulatory options that establish closed-
cycle cooling as BTA. EPA specifically requests comment on the
regulatory options 2 and 3 included in today's proposal, which would
establish closed-cycle cooling as BTA for EM at a DIF of 2 MGD and 125
MGD, respectively. See Section VI and VII. EPA further solicits comment
and supporting data on alternative thresholds, including whether such
alternative thresholds should be based on DIF or AIF. EPA also solicits
comment and supporting data for alternative criteria that would
establish closed-cycle cooling as BTA for some facilities.
18. Costs of Controls To Eliminate Entrapment
EPA assumes facilities with modified traveling screens including a
fish handling and return system would meet the proposed requirements to
eliminate entrapment of fish and shellfish. EPA believes those
facilities with an offshore velocity cap leading to a forebay but
without a fish return system would incur costs to meet the proposed
requirements for entrapment. For facilities with closed-cycle cooling
systems, EPA does not have data on the number of facilities that also
have a fish handling and return system. Further, EPA does not have data
on the number of facilities that have less than 0.5 feet per second
intake velocity but have a cooling water intake system that may cause
entrapment. EPA solicits comment and data on the types and numbers of
facilities with a cooling water intake system that may cause
entrapment, and the costs to eliminate entrapment.
19. Analysis of New Capacity
EPA requests comment on the number of new units and the amount of
new capacity construction projected. See Section VII.
20. Monitoring Reports
EPA solicits comment on how frequently I&E mortality monitoring
reports should be submitted. EPA further solicits comment on
incorporating the monitoring reports into monthly DMRs, or whether less
frequent reporting is appropriate. EPA also requests comment on whether
minimum monitoring frequencies should be established in this rule or
left to the discretion of the Director. See Section IX.
21. Seasonal Operation of Cooling Towers
EPA solicits comment on an option that would require cooling towers
on some or all facilities but recognize the site-specific nature of EM
by allowing seasonal operation of cooling towers during peak
entrainment season. EPA also requests comment on including a similar
provision for new units at existing facilities, which are required to
achieve I&E reductions commensurate with closed cycle cooling in the
proposed rule.
22. New Unit Provision
EPA solicits comment on the new unit provision. Specifically, EPA
solicits comment on the clarity of the definition of new unit, and
whether it should be expanded to include other units such as those that
are repowered or rebuilt. EPA also solicits comment on whether the new
unit provision should be deleted, therefore subjecting these units to
the same site-specific entrainment BTA determination required of
existing units.
23. Review Criteria To Guide Evaluation of Entrainment Feasibility
Factors
EPA solicits comment on the criteria specified in the regulation
for guiding the evaluation of closed-cycle cooling as BTA for EM. EPA
further solicits comment on additional criteria that EPA should
address, and whether such criteria should be developed in the
regulation or provided in guidance.
24. Alternative Procedures for Visual or Remote Inspections
EPA requests comment on its proposal to permit the Director to
establish alternative procedures for conducting visual or remote
inspections during periods of inclement weather. EPA also requests
comment on whether the rule should specific minimum frequencies for
visual or remote inspections, or leave this to the determination of the
permitting authority. See Section IX.F.
25. Threshold for In-Scope Facilities
EPA requests comment on the threshold of DIF greater than 2 MGD for
identifying facilities in-scope of this rule.
26. Application Requirements
EPA requests comment on the burden and practical utility of all of
the proposed application requirements. EPA is particularly interested
in the burden of application requirements to facilities with DIF < 50
MGD. EPA also requests comment on its proposal to limit application
requirements for facilities that have already installed closed-cycle
cooling, or opt to do so without a site-specific assessment of BTA, and
whether there are additional requirements that could be relaxed for
this group.
27. Comment From State and Local Officials
EPA specifically requests comment on this proposed rule from State
and local officials. See Section X.E.
28. Comment From Tribal Officials
EPA specifically requests additional comment on this proposed
action from Tribal officials. See Section X.F.
List of Subjects
40 CFR Part 122
Environmental protection, Administrative practice and procedure,
Confidential business information, Hazardous substances, Reporting and
recordkeeping requirements, Water pollution control.
40 CFR Part 125
Environmental protection, Cooling water intake structure, Reporting
and recordkeeping requirements, Waste treatment and disposal, Water
pollution control.
Dated: March 28, 2011.
Lisa P. Jackson,
Administrator.
For reasons set out in the preamble, Chapter I of Title 40 of the
Code of Federal Regulations is proposed to be amended as follows:
PART 122--EPA ADMINISTERED PERMIT PROGRAMS: THE NATIONAL POLLUTANT
DISCHARGE ELIMINATION SYSTEM
1. The authority citation for part 122 continues to read as
follows:
Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.
2. The suspension of 40 CFR 122.21(r)(1)(ii) and (r)(5), published
on July 9, 2007 (72 FR 37109) is lifted.
3. Section 122.21 is amended as follows:
a. Revising paragraph (r)(1)(ii).
b. Revising paragraphs (r)(2) introductory text, (r)(2)(i) though
(iii), and (r)(3) through (5).
c. Adding paragraphs (r)(6) through (12).
Sec. 122.21 Application for a permit (applicable to State programs,
see Sec. 123.25)
* * * * *
(r) * * *
(1) * * *
(ii) Existing facilities. (A) The owner or operator of an existing
facility as
[[Page 22276]]
defined in 40 CFR part 125, subpart J, with a cooling water intake
structure that supplies cooling water exclusively for operation of a
wet or dry cooling system and that meets the definition of closed cycle
recirculating system at 40 CFR 125.92 must submit to the Director for
review the information required under paragraphs (r)(2), (3), and (6)
of this section. The owner or operator of all other existing facilities
as defined in part 125, subpart J, of this chapter must also submit to
the Director for review the information required under paragraphs (r)
(5), (7), and (8) of this section as part of its permit application.
(B) The owner or operator of an existing facility as defined in 40
CFR part 125, subpart J, of this chapter that withdraws greater than
125 MGD actual intake flows (AIF) of water for cooling purposes must
submit to the Director for review the information required under
paragraphs (r)(9), (10), (11), and (12) of this section.
(C) New units at existing facilities. New units at existing
facilities with cooling water intake structures as defined in part 125,
subpart J, of this chapter must provide an update to the information
required under paragraphs (r)(2), (3), and (6) of this section and
Sec. 125.95 of this chapter. Requests for alternative requirements
under Sec. 125.94(d)(4) of this chapter must be submitted with your
permit application.
* * * * *
(2) Source water physical data. The owner or operator of the
facility must submit:
(i) A narrative description and scaled drawings showing the
physical configuration of all source water bodies used by your
facility, including areal dimensions, depths, salinity and temperature
regimes, and other documentation that supports your determination of
the water body type where each cooling water intake structure is
located;
(ii) Identification and characterization of the source waterbody's
hydrological and geomorphological features, as well as the methods you
used to conduct any physical studies to determine your intake's area of
influence within the waterbody and the results of such studies;
(iii) Locational maps; and
* * * * *
(3) Cooling water intake structure data. The owner or operator of
the facility must submit:
(i) A narrative description of the configuration of each of your
cooling water intake structures and where it is located in the water
body and in the water column;
(ii) Latitude and longitude in degrees, minutes, and seconds for
each of your cooling water intake structures;
(iii) A narrative description of the operation of each of your
cooling water intake structures, including design intake flows, daily
hours of operation, number of days of the year in operation and
seasonal changes, if applicable;
(iv) A flow distribution and water balance diagram that includes
all sources of water to the facility, recirculating flows, and
discharges; and
(v) Engineering drawings of the cooling water intake structure.
(4) Source water baseline biological characterization data. The
owner or operator of each facility must submit the following
information in order to characterize the biological community in the
vicinity of the cooling water intake structure and to characterize the
operation of the cooling water intake structures. This supporting
information must include any available existing data. However, you may
also supplement the data using newly conducted field studies. In the
case of a new facility, the Director may also use this information in
subsequent permit renewal proceedings to determine if your Design and
Construction Technology Plan as required in Sec. 125.86(b)(4) of this
chapter should be revised. The information you submit must include:
(i) A list of the data in paragraphs (r)(4)(ii) through (vi) of
this section that are not available and efforts made to identify
sources of the data;
(ii) A list of species (or relevant taxa) for all life stages and
their relative abundance in the vicinity of the cooling water intake
structure;
(iii) Identification of the species and life stages that would be
most susceptible to impingement and entrainment. Species evaluated must
include the forage base as well as those most important in terms of
significance to commercial and recreational fisheries;
(iv) Identification and evaluation of the primary period of
reproduction, larval recruitment, and period of peak abundance for
relevant taxa;
(v) Data representative of the seasonal and daily activities (e.g.,
feeding and water column migration) of biological organisms in the
vicinity of the cooling water intake structure;
(vi) Identification of all threatened, endangered, and other
protected species that might be susceptible to impingement and
entrainment at your cooling water intake structures;
(vii) Documentation of any public participation or consultation
with Federal or State agencies undertaken in development of the plan;
and
(viii) If you supplement the information requested in paragraph
(r)(4)(i) of this section with data collected using field studies,
supporting documentation for the Source Water Baseline Biological
Characterization must include a description of all methods and quality
assurance procedures for sampling, and data analysis including a
description of the study area; taxonomic identification of sampled and
evaluated biological assemblages (including all life stages of fish and
shellfish); and sampling and data analysis methods. The sampling and/or
data analysis methods you use must be appropriate for a quantitative
survey and based on consideration of methods used in other biological
studies performed within the same source water body. The study area
should include, at a minimum, the area of influence of the cooling
water intake structure.
(ix) Identification of protective measures and stabilization
activities that have been implemented, and a description of how these
measures and activities affected the baseline water condition in the
vicinity of the intake.
(5) Cooling water system data. The owner or operator of the
facility must provide the following information for each cooling water
intake structure used:
(i) A narrative description of the operation of the cooling water
system and its relationship to cooling water intake structures; the
proportion of the design intake flow that is used in the system
including a distribution of water used for contact cooling, non-contact
cooling, and process uses; a distribution of water reuse (to include
cooling water reused as process water, process water reused for
cooling, and the use of gray water for cooling); description of
reductions in total water withdrawals including cooling water intake
flow reductions already achieved through minimized process water
withdrawals; description of any cooling water that is used in a
manufacturing process either before or after it is used for cooling,
including other recycled process water flows; the proportion of the
source waterbody withdrawn (on a monthly basis); the number of days of
the year the cooling water system is in operation and seasonal changes
in the operation of the system, if applicable;
(ii) Design and engineering calculations prepared by a qualified
professional and supporting data to support the description required by
paragraph (r)(5)(i) of this section;
(iii) Description of existing impingement and entrainment
[[Page 22277]]
technologies or operational measures and a summary of their
performance, including but not limited to reductions in entrainment
mortality due to intake location and reductions in total water
withdrawals and usage.
(6) Impingement Mortality Reduction Plan. The Impingement Mortality
Reduction Plan must identify the approach the owner or operator of the
facility will use to meet the BTA standards for impingement mortality
at 40 CFR 125.94(b), including:
(i) Identification of the method of intended compliance with the
BTA standards for impingement mortality for each intake by either
conducting a direct measure of impingement mortality through sampling,
by demonstrating that the maximum design intake velocity is equal to or
less than 0.5 feet per second, or by measuring the intake velocity and
demonstrating that the actual intake velocity is equal to or less than
0.5 feet per second.
(ii) If you plan to comply with the BTA standards for impingement
mortality requirements by conducting a direct measure of impingement
mortality through sampling, you must provide a description of the study
area including the area of influence of each cooling water intake
structure and a taxonomic identification of the sampled or evaluated
biological assemblages including all life stages of fish and shellfish
that may be susceptible to impingement.
(iii) If you plan to comply with the BTA standards for impingement
mortality requirements by conducting a direct measure of impingement
mortality through sampling, you must also provide a description of any
sampling or monitoring approach to be used in measuring impingement
mortality, including:
(A) The duration and frequency of monitoring, subject to the
minimum monitoring requirements established by the Director under 40
CFR 125.96 but in no case less frequently than a biweekly basis;
(B) The monitoring locations;
(C) The organisms to be monitored, and
(D) The method in which naturally moribund organisms are identified
and taken into account.
(iv) If you plan to comply with the BTA standards for impingement
mortality requirements by demonstrating that the design intake velocity
is equal to or less than 0.5 feet per second, documentation including:
(A) A demonstration that the maximum design intake velocity is
equal to or less than 0.5 feet per second;
(B) A description of technologies or operational measures to keep
any debris from blocking the intake at no more than 15 percent of the
opening of the intake; and
(C) A description of technologies or operational measures to
prevent entrapment of fish or shellfish by the cooling water intake
system.
(v) If you plan to comply with the BTA standards for impingement
mortality by measuring the intake velocity to demonstrate the intake
velocity is equal to or less than 0.5 feet per second, documentation
including:
(A) Velocity monitoring to demonstrate that the actual intake
velocity is equal to or less than 0.5 feet per second;
(B) Documentation of the technologies and operational measures
taken to ensure the actual intake velocity will not exceed 0.5 feet per
second; and,
(C) A description of technologies or operational measures to
prevent entrapment of impingeable fish or shellfish by the cooling
water intake system.
(vi) For intakes that withdraw from oceans and tidal waters, a
description of the measures and technologies to reduce impingement
mortality of shellfish to a level comparable to that achieved by
properly deployed and maintained barrier nets, including but not
limited to cylindrical wedgewire screens, seasonal deployment of
barrier nets, intake location, and/or an appropriate handling and
return system.
(vii) You must demonstrate that the cooling water intake structure
does not lead to entrapment. This demonstration must include
documentation that organisms are excluded from entering any portion of
the intake where there is not an opportunity for them to escape. If
your cooling water intake structure results in entrapment and the only
way for fish to escape is by being impinged upon the screens or to pass
through the facility (in the case of open intakes), you must document
that additional protective measures will be deployed such as, for
example, modification of traveling screens with collection buckets
designed to minimize turbulence to aquatic life, addition of a guard
rail or barrier to prevent loss of fish from the collection bucket,
replacement of screen panel materials with smooth woven mesh, a low
pressure wash to remove fish prior to any high pressure spray to remove
debris on the ascending side, and a fish return with adequate flow to
ensure fish return to the source water body. If you cannot document
these additional protective measures, you must count all entrapment of
organisms as mortality.
(viii) Documentation of all methods and quality assurance/quality
control procedures for sampling and data analysis. The proposed
sampling and data analysis methods must be appropriate for a
quantitative survey.
(7) Performance studies. If the owner or operator has conducted
studies, or chooses to use previously conducted studies obtained from
other facilities, you must submit a description of those biological
survival studies conducted, together with underlying data, and a
summary of any conclusions or results, including but not limited to:
(i) Site-specific studies addressing technology efficacy, through-
plant entrainment survival, and other impingement and entrainment
mortality studies;
(ii) Studies conducted at other locations including an explanation
as to why the data from other locations is relevant and representative
of conditions at your facility;
(iii) Studies older than 10 years must include an explanation of
why the data is still relevant and representative of conditions at your
facility.
(8) Operational status. The owner or operator of the facility must
submit a description of its operational status for each generating,
production, or process unit, including but not limited to:
(i) Descriptions of individual unit operating status including age
of each unit, capacity utilization (or equivalent) for the previous 5
years, and any major upgrades completed within the last 15 years,
including but not limited to boiler replacement, condenser replacement,
turbine replacement, or changes to fuel type;
(ii) Descriptions of completed, approved, or scheduled uprates and
NRC relicensing status of each unit at nuclear facilities;
(iii) Descriptions of plans or schedules for decommissioning or
replacement of units;
(iv) Descriptions of current and future production schedules at
manufacturing facilities; and
(v) Descriptions of plans or schedules for any new units planned
within the next 5 years.
(9) Entrainment characterization study. For all species and life
stages identified under the requirements of paragraph (r)(4) of this
section, the owner or operator of the facility must:
(i) Develop and submit an entrainment mortality data collection
plan for review and comment by the Director. The entrainment mortality
data collection plan must include, at a minimum:
(A) The duration and frequency of monitoring;
[[Page 22278]]
(B) The monitoring locations, including a description of the study
area and the area of influence of the cooling water intake
structure(s);
(C) A taxonomic identification of the sampled or evaluated
biological assemblages;
(D) Identification of all life stages of fish and shellfish,
including identification of any surrogate life stages used, and
identification of data representing both motile and non-motile life-
stages of organisms;
(E) The organisms to be monitored, including species of concern and
threatened or endangered species;
(F) Any other organisms identified by the Director;
(G) The method by which latent mortality would be identified;
(H) Documentation of all methods and quality assurance/quality
control procedures for sampling and data analysis. The proposed
sampling and data analysis methods must be appropriate for a
quantitative survey.
(ii) Obtain peer review of the entrainment mortality data
collection plan. You must select peer reviewers in consultation with
the Director, including that the Director may require additional peer
reviewers. The Director may consult with EPA and Federal, State and
Tribal fish and wildlife management agencies with responsibility for
fish and wildlife potentially affected by the cooling water intake
structure(s) to determine which peer review comments must be addressed
by the final plan. You must provide an explanation for any significant
reviewer comments not accepted. Peer reviewers must have appropriate
qualifications in biology, engineering, hydrology, or other fields and
their names and credentials must be included in the peer review report.
(iii) Implement the entrainment mortality data collection plan no
later than 6 months after submission of the entrainment mortality data
collection plan to the Director.
(iv) The Entrainment Characterization Study must include all of the
following components:
(A) Taxonomic identifications of all life stages of fish,
shellfish, and any species protected under Federal, State, or Tribal
Law (including threatened or endangered species) that are in the
vicinity of the cooling water intake structure(s) and are susceptible
to entrainment;
(B) Characterization of all life stages of fish, shellfish, and any
species protected under Federal, State, or Tribal Law (including
threatened or endangered species), including a description of the
abundance and temporal and spatial characteristics in the vicinity of
the cooling water intake structure(s), based on sufficient data to
characterize annual, seasonal, and diel variations in entrainment, and
including but not limited to variations related to climate and weather
differences, spawning, feeding and water column migration. These may
include historical data that are representative of the current
operation of your facility and of biological conditions at the site;
and,
(C) Documentation of the current entrainment of all life stages of
fish, shellfish, and any species protected under Federal, State, or
Tribal Law (including threatened or endangered species). The
documentation may include historical data that are representative of
the current operation of your facility and of biological conditions at
the site. Entrainment samples to support the facility's calculations
must be collected during periods of representative operational flows
for the cooling water intake structure and the flows associated with
the samples must be documented. Data for specific organism mortality or
survival that is applied to other life-stages or species must be
identified. The owner or operator of the facility must identify and
document all assumptions and calculations used to determine the total
entrainment and entrainment mortality for that facility.
(D) Information collected to meet paragraphs (r)(4) and (r)(7) of
this section may be used in developing the Entrainment Characterization
Study.
(10) Comprehensive technical feasibility and cost evaluation study.
The owner or operator of the facility must submit an engineering study
of the technical feasibility and incremental costs of candidate
entrainment mortality control technologies. The study must include the
following:
(i) Technical feasibility. At a minimum, the owner or operator of
the facility must conduct a study to evaluate the technical feasibility
of closed-cycle recirculating systems (cooling towers) and fine mesh
screens with a mesh size of 2mm or smaller. This study must include:
(A) A description of all technologies and operational measures
considered (including alternative designs of closed-cycle recirculating
systems--such as natural draft cooling towers, mechanical draft cooling
towers, hybrid designs, and compact or multi-cell arrangements);
(B) A discussion of land availability, including an evaluation of
adjacent land and acres potentially available due to generating unit
retirements, production unit retirements, other buildings and equipment
retirements, and ponds, coal piles, rail yards, transmission yards, and
parking lots, and
(C) Documentation of factors other than cost that may make a
candidate technology impractical or infeasible for further evaluation.
(ii) Other entrainment mortality control technologies. Following
submission of the engineering study, the Director may require
evaluation of additional technologies for reducing entrainment
mortality.
(iii) Cost evaluations. The study must include engineering cost
estimates of all technologies considered in paragraphs (r)(10)(i) and
(ii) of this section. All costs must be presented as the net present
value (NPV) of the social costs and the corresponding annual value. In
addition to the required social costs, you may choose to provide
facility level compliance costs, however you must separately discuss
facility level compliance costs and social costs. You must discuss and
provide documentation for:
(A) Any outages, downtime, or other impacts to facility revenue.
Depreciation schedules, interest rates and related assumptions must be
identified.
(B) Costs and explanation of any additional facility modifications
necessary to support construction and operation of technologies
considered in paragraphs (r)(10)(i) and (ii) of this section, including
but not limited to relocation of existing buildings or equipment,
reinforcement or upgrading of existing equipment, and additional
construction and operating permits. Depreciation schedules, interest
rates, useful life of the technology considered, and any related
assumptions must be identified.
(C) Costs and explanation for addressing any non-water quality
impacts identified in paragraph (r)(12) of this section. The cost
evaluation must include a discussion of all reasonable attempts to
mitigate each of these impacts.
(iv) Peer review. Obtain peer review of the comprehensive technical
feasibility and cost evaluation study. You must select peer reviewers
in consultation with the Director, including that the Director may
require additional peer reviewers. The Director may consult with EPA
and Federal, State and Tribal fish and wildlife management agencies
with responsibility for fish and wildlife potentially affected by the
cooling water intake structure(s) to determine which peer review
comments must be addressed by the final study. You must provide an
explanation for any significant reviewer comments not accepted. Peer
reviewers must have
[[Page 22279]]
appropriate qualifications in biology, engineering, hydrology, or other
fields and their names and credentials must be included in the peer
review report.
(11) Benefits valuation study. The owner or operator of the
facility must submit an evaluation of the magnitude of water quality
benefits, both monetized and non-monetized, of the candidate
entrainment mortality reduction technologies and operational measures
evaluated in paragraph (r)(10) of this section, including but not
limited to:
(i) Incremental changes in the numbers of fish and shellfish, for
all life stages, lost due to impingement mortality and entrainment
mortality as defined in 40 CFR 125.92;
(ii) Identification of basis for any monetized values you assigned
to changes in commercial and recreational species, forage fish, and
shellfish, and to any other ecosystem or non-use benefits;
(iii) Discussion of recent mitigation efforts already completed;
(iv) Identification of other benefits to the environment and local
communities, including but not limited to improvements for mammals,
birds, and other organisms and aquatic habitats.
(v) Peer review. Obtain peer review of the benefits valuation
study. You must select peer reviewers in consultation with the
Director, including that the Director may require additional peer
reviewers. The Director may consult with EPA and Federal, State and
Tribal fish and wildlife management agencies with responsibility for
fish and wildlife potentially affected by the cooling water intake
structure(s) to determine which peer review comments must be addressed
by the final study. You must provide an explanation for any significant
reviewer comments not accepted. Peer reviewers must have appropriate
qualifications in biology, engineering, hydrology, or other fields and
their names and credentials must be included in the peer review report.
(12) Non-water Quality and Other Environmental Impacts Study. The
owner or operator of the facility must submit a detailed site-specific
discussion of the changes in non-water quality factors and other
environmental impacts attributed to each technology and operational
measure considered in paragraph (r)(10) of this section, including but
not limited to both increases and decreases of each factor. The study
must include the following:
(i) Estimates of changes to energy consumption, including but not
limited to parasitic load and turbine backpressure energy penalties;
(ii) Estimates of changes to thermal discharges, including an
estimate of any increased facility capacity, operations, and
reliability that may be possible due to relaxed permitting constraints
related to thermal discharges;
(iii) Estimates of air pollutant emissions and of the human health
and environmental impacts associated with such emissions;
(iv) Estimates of changes in noise;
(v) Discussion of impacts to safety, including documentation of the
potential for plumes, icing, and availability of emergency cooling
water;
(vi) Impacts to grid reliability for the facility and for each
power generating unit, including an estimate of changes to facility
capacity, operations, and reliability due to cooling water
availability;
(vii) Facility reliability, including but not limited to facility
availability, production of steam, and impacts to production based on
process unit heating or cooling;
(viii) Significant changes in consumption of water, including a
site-specific comparison of the evaporative losses of both once-through
cooling and closed cycle recirculating systems, and documentation of
impacts attributable to changes in water consumption;
(ix) A discussion of all reasonable attempts to mitigate each of
these factors.
(x) Peer review. Obtain peer review of the non-water quality and
other environmental impacts study. You must select peer reviewers in
consultation with the Director, including that the Director may require
additional peer reviewers. The Director may consult with EPA and
Federal, State and Tribal fish and wildlife management agencies with
responsibility for fish and wildlife potentially affected by the
cooling water intake structure(s) to determine which peer review
comments must be addressed by the final study. You must provide an
explanation for any significant reviewer comments not accepted. Peer
reviewers must have appropriate qualifications in biology, engineering,
hydrology, or other fields and their names and credentials must be
included in the peer review report.
PART 125--CRITERIA AND STANDARDS FOR THE NATIONAL POLLUTANT
DISCHARGE ELIMINATION SYSTEM
4. The authority citation for part 125 continues to read as
follows:
Authority: Clean Water Act, 33 U.S.C. 1251 et seq.; unless
otherwise noted.
Subpart I--[Amended]
5. Section 125.84 is amended as follows:
a. In the heading of paragraph (c) by removing the words ``equal to
or greater than 2 MGD'' and adding in their place the words ``greater
than 2 MGD.''
b. By revising paragraph (d)(1).
Sec. 125.84 As an owner or operator of a new facility, what must I do
to comply with this subpart?
* * * * *
(d) * * *
(1) You must demonstrate to the Director that the technologies
employed will reduce the level of adverse environmental impact from
your cooling water intake structures to a comparable level to that
which you would achieve were you to implement the requirements of
paragraphs (b)(1) and (2) of this section. This demonstration must
include a showing that the impacts to fish and shellfish, including
important forage and predator species, within the watershed will be
comparable to those which would result if you were to implement the
requirements of paragraphs (b)(1) and (2) of this section. The Director
may consider information provided by any fishery management agency(ies)
along with data and information from other sources.
* * * * *
6. Section 125.86 is amended as follows:
a. Revise paragraph (b)(3) introductory text.
b. Revise paragraph (b)(4)(iii).
b. Remove and reserve paragraph (c)(2)(iv)(C).
c. Remove and reserve paragraph (c)(2)(iv)(D)(2).
Sec. 125.86 As an owner or operator of a new facility, what must I
collect and submit when I apply for my new or reissued NPDES permit?
* * * * *
(b) * * *
(3) Source waterbody flow information. You must submit to the
Director the following information to demonstrate that your cooling
water intake structure meets the flow requirements in Sec.
125.84(b)(3) or (c)(2).
* * * * *
(4) * * *
(iii) The owner or operator of a new facility required to install
design and construction technologies and/or operational measures must
develop a plan explaining the technologies and measures selected that
is based on information collected for the Source Water Biological
Baseline Characterization required by 40 CFR 122.21(r)(4). (Examples of
appropriate technologies include, but are not limited to, wedgewire
screens, fine mesh
[[Page 22280]]
screens, fish handling and return systems, barrier nets, aquatic filter
barrier systems, etc. Examples of appropriate operational measures
include, but are not limited to, seasonal shutdowns or reductions in
flow, continuous operations of screens, etc.) The plan must contain the
following information:
* * * * *
7. Section 125.87 is amended by revising paragraph (a) introductory
text and paragraph (a)(2) to read as follows:
Sec. 125.87 As an owner or operator of a new facility, must I perform
monitoring?
* * * * *
(a) Biological monitoring. You must monitor both impingement and
entrainment of the commercial, recreational, and forage base fish and
shellfish species identified in either the Source Water Baseline
Biological Characterization data required by 40 CFR 122.21(r)(4) or the
Comprehensive Demonstration Study required by Sec. 125.86(c)(2),
depending on whether you chose to comply with Track I or Track II. The
monitoring methods used must be consistent with those used for the
Source Water Baseline Biological Characterization data required in 40
CFR 122.21(r)(4) or the Comprehensive Demonstration Study required by
Sec. 125.86(c)(2). You must follow the monitoring frequencies
identified below for at least two (2) years after the initial permit
issuance. After that time, the Director may approve a request for less
frequent sampling in the remaining years of the permit term and when
the permit is reissued, if the Director determines the supporting data
show that less frequent monitoring would still allow for the detection
of any seasonal and daily variations in the species and numbers of
individuals that are impinged or entrained.
* * * * *
(2) Entrainment sampling. You must collect samples at least
biweekly to monitor entrainment rates (simple enumeration) for each
species over a 24-hour period during the primary period of
reproduction, larval recruitment, and peak abundance identified during
the Source Water Baseline Biological Characterization required by 40
CFR 122.21(r)(4) or the Comprehensive Demonstration Study required in
Sec. 125.86(c)(2). You must collect samples only when the cooling
water intake structure is in operation.
* * * * *
8. Section 125.89 is amended by revising paragraph (b)(1)(ii) to
read as follows:
Sec. 125.89 As the Director, what must I do to comply with the
requirements of this subpart?
* * * * *
(b) * * *
(1) * * *
(ii) For a facility that chooses Track II, you must review the
information submitted with the Comprehensive Demonstration Study
required in Sec. 125.86(c)(2), evaluate the suitability of the
proposed design and construction technologies and operational measures
to determine whether they will reduce both impingement mortality and
entrainment of all life stages of fish and shellfish to 90 percent or
greater of the reduction that could be achieved through Track I. In
addition, you must review the Verification Monitoring Plan in Sec.
125.86(c)(2)(iv)(D) and require that the proposed monitoring begin at
the start of operations of the cooling water intake structure and
continue for a sufficient period of time to demonstrate that the
technologies and operational measures meet the requirements in Sec.
125.84(d)(1). Under subsequent permits, the Director must review the
performance of the additional and/or different technologies or measures
used and determine that they reduce the level of adverse environmental
impact from the cooling water intake structures to a comparable level
that the facility would achieve were it to implement the requirements
of Sec. 125.84(b)(1) and (2).
* * * * *
9. The suspension of 40 CFR 125.90(a), (c), and (d), published on
July 9, 2007 (72 FR 37109) is lifted.
10. The suspension of 40 CFR 125.91 through 125.99, published on
July 9, 2007 (72 FR 37109) is lifted.
11. Subpart J to part 125 is revised to read as follows:
Subpart J--Requirements Applicable to Cooling Water Intake Structures
for Existing Facilities Under Section 316(b) of the Clean Water Act
Sec.
125.90 Purpose of this subpart.
125.91 Applicability.
125.92 Special definitions.
125.93 Compliance.
125.94 As an owner or operator of an existing facility, what must I
do to comply with this subpart?
125.95 Permit application and supporting information requirements.
125.96 Monitoring requirements.
125.97 Other permit reporting and recordkeeping requirements.
125.98 Director requirements.
125.99 [Reserved]
Subpart J--Requirements Applicable to Cooling Water Intake
Structures for Existing Facilities Under Section 316(b) of the
Clean Water Act
Sec. 125.90 Purpose of this subpart.
(a) This subpart establishes the section 316(b) requirements that
apply to cooling water intake structures at existing facilities that
are subject to this subpart. These requirements include a number of
components. These include standards for minimizing adverse
environmental impact associated with the use of cooling water intake
structures and required procedures (e.g., permit application
requirements, information submission requirements) for establishing the
appropriate technology requirements at certain specified facilities as
well as required monitoring, reporting, and recordkeeping requirements
to demonstrate compliance. In combination, these components represent
the best technology available for minimizing adverse environmental
impact associated with the use of cooling water intake structures.
These requirements are to be established and implemented in National
Pollutant Discharge Elimination System (NPDES) permits issued under
authority of sections 301, 308, and 402 of the Clean Water Act (CWA).
(b) Cooling water intake structures not subject to requirements
under this or another subpart of this part must meet requirements under
section 316(b) of the CWA established by the Director on a case-by-
case, best professional judgment (BPJ) basis.
(c) Nothing in this subpart shall be construed to preclude or deny
the right of any State or political subdivision of a State or any
interstate agency under section 510 of the CWA to adopt or enforce any
requirement with respect to control or abatement of pollution that is
more stringent than those required by Federal law.
Sec. 125.91 Applicability.
(a) An existing facility, as defined in Sec. 125.92, is subject to
this subpart if it meets each of the following criteria:
(1) It is a point source;
(2) It uses or proposes to use cooling water intake structures with
a total design intake flow (DIF) of greater than 2 million gallons per
day (MGD) to withdraw water from waters of the United States; and
(3) Twenty-five percent or more of the water it withdraws is used
exclusively for cooling purposes, measured on an average annual basis
for each calendar year.
[[Page 22281]]
(b) 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 independent supplier
withdraws water from waters of the United States but is not itself a
new or existing facility as defined in subparts I or J of this part,
except as provided in paragraph (d) of this section. An owner or
operator of an existing facility may not circumvent these requirements
by creating arrangements to receive cooling water from an entity that
is not itself a facility subject to subparts I or J of this part.
(c) Notwithstanding paragraph (b) of this section, obtaining
cooling water from a public water system, using reclaimed water from
wastewater treatment facilities or desalination plants, or recycling
treated effluent as cooling water does not constitute use of a cooling
water intake structure for purposes of this subpart.
(d) This subpart does not apply to seafood processing facilities,
offshore liquefied natural gas terminals, and offshore oil and gas
extraction facilities that are existing facilities as defined in Sec.
125.92. The owners and operators of such facilities must meet
requirements established by the Director on a case-by-case, best
professional judgment (BPJ) basis.
Sec. 125.92 Special definitions.
In addition to the definitions provided in Sec. 122.2 of this
chapter, the following special definitions apply to this subpart:
Actual Intake Flow (AIF) means the average volume of water
withdrawn on an annual basis by the cooling water intake structures
over the past three calendar years.
All life stages means eggs, larvae, juveniles, and adults. All life
stages of fish and shellfish does not include members of the infraclass
Cirripedia in the subphylum Crustacea (barnacles), green mussels (Perna
viridis), or zebra mussels (Dreissena polymorpha). The Director may
determine that all life stages of fish and shellfish does not include
specified invasive species and naturally moribund species.
Closed-cycle recirculating system means a system designed, using
minimized make-up and blowdown flows, to withdraw water from a natural
or other water source to support contact or noncontact cooling uses
within a facility, or a system designed to include cooling ponds that
are not themselves a waters of the U.S. and that does not rely upon
continuous intake flows of water. New source water (make-up water) is
added to the system to replenish losses that have occurred due to
blowdown, drift, and evaporation. Closed-cycle recirculating system
includes, but is not limited to, wet or dry cooling towers. For cooling
towers where the source for make-up water is freshwater or has a
salinity equal to or less than 0.5 parts per thousand, minimized make-
up and blow down means operating at a minimum cycles of concentration
of 3.0. For cooling towers where the source for make-up water is
saltwater, brackish water, or has a salinity of greater than 0.5 parts
per thousand, minimized make-up and blow down means operating at a
minimum cycles of concentration of 1.5. For facilities with a closed-
cycle recirculating system other than a cooling tower, minimized make-
up and blowdown flows means a reduction in actual intake flow of 97.5
percent for freshwater, and 94.9 percent for salt water or brackish
water.
Contact cooling water means water used for cooling which comes into
direct contact with any raw material, product, or byproduct. Examples
of contact cooling water may include but are not limited to quench
water at iron and steel plants, cooling water in a cracking unit, and
cooling water directly added to food and agricultural products
processing.
Cooling pond means a man-made canal, channel, lake, pond or other
impoundment designed and constructed to provide cooling for a nearby
electric generating or manufacturing unit. A cooling pond may comprise
a closed-cycle recirculating system when waters of the U.S. are
withdrawn only for the purpose of replenishing losses of cooling water
due to blowdown, drift, and evaporation.
Cooling water means water used for contact or noncontact cooling,
including water used for equipment cooling, evaporative cooling tower
makeup, and dilution of effluent heat content. The intended use of the
cooling water is to absorb waste heat rejected from the process or
processes used, or from auxiliary operations on the facility's
premises. Cooling water obtained from a public water system, reclaimed
water from wastewater treatment facilities or desalination plants,
treated effluent from a manufacturing facility, or cooling water that
is used in a manufacturing process either before or after it is used
for cooling as process water, is not considered cooling water for the
purposes of calculating the percentage of a facility's intake flow that
is used for cooling purposes in Sec. 125.91(a)(3).
Cooling water intake structure means the total physical structure
and any associated constructed waterways used to withdraw cooling water
from waters of the United States. The cooling water intake structure
extends from the point at which water is withdrawn from the surface
water source up to, and including, but not limited to, the intake
pumps.
Design intake flow (DIF) means the value assigned during the
cooling water intake structure design to the maximum volume of water
the cooling water intake system is capable of withdrawing from a source
waterbody over a specific time period. The facility's DIF may be
adjusted to reflect permanent changes to the maximum capabilities of
the cooling water intake system to withdraw cooling water, including
but not limited to pumps permanently removed from service, flow limit
devices, and physical limitations of the piping. DIF does not include
values associated with emergency and fire suppression capacity or
redundant pumps (i.e., back-up pumps).
Entrainment means the incorporation of any life stages of fish and
shellfish with the intake water flow entering and passing through a
cooling water intake structure and into a cooling water system.
Entrainable organisms includes any organisms potentially subject to
entrainment. For purposes of this subpart, entrainment includes those
organisms that pass through a \3/8\ inch sieve, and excludes those
organisms collected or retained on a \3/8\ inch sieve.
Entrainment mortality means death as a result of entrainment
through the cooling water intake structure, or death as a result of
exclusion from the cooling water intake structure by fine mesh screens
or other protective devices intended to prevent the passage of
entrainable organisms through the cooling water intake structure.
Entrapment means the condition where impingeable fish and shellfish
lack the means to escape the cooling water intake system. Entrapment
includes but is not limited to: organisms caught in the bucket of a
traveling screen and unable to reach a fish return; organisms caught in
the forebay of a cooling water intake system without any means of being
returned to the source waterbody without experiencing mortality; or
cooling water intake systems where the velocities in the intake pipes
or in any channels leading to the forebay prevent organisms from being
able to return to the source waterbody through the intake pipe or
channel.
Existing facility means any facility that commenced construction as
described in 40 CFR 122.29(b)(4) on or before January 17, 2002; and any
modification of, or any addition of a
[[Page 22282]]
unit at such a facility that is not a new facility at Sec. 125.83.
Flow reduction means any modification that serves to reduce the
volume of cooling water withdrawn. Examples include, but are not
limited to, variable speed pumps, seasonal flow reductions, wet cooling
towers, dry cooling towers, hybrid cooling towers, and unit closures.
Impingement means the entrapment of any life stages of fish and
shellfish on the outer part of an intake structure or against a
screening device during periods of intake water withdrawal. Impingement
includes those organisms collected or retained on a \3/8\ inch sieve,
and excludes those organisms that pass through a \3/8\ inch sieve.
Impingement mortality means death as a result of impingement.
Independent supplier means an entity, other than the regulated
facility, that owns and operates its own cooling water intake structure
and directly withdraws water from waters of the United States. The
supplier provides the cooling water to other facilities for their use,
but may also use a portion of the water itself. An entity that provides
potable water to residential populations (e.g., public water system) is
not a supplier for purposes of this subpart.
Moribund means dying; close to death.
New unit means any addition of an operating unit at an existing
facility where the construction begins after [effective date of the
final rule], including but not limited to a new unit added to a new or
existing facility for the same general industrial operation, but that
does not otherwise meet the definition of a new facility at Sec.
125.83. New unit includes any additional unit where that unit is not
subject to the requirements of Subpart I. For purposes of this subpart,
new unit refers to newly built units added to increase capacity at the
facility and does not include any rebuilt, repowered or replacement
unit, including any units where the generation capacity of the new unit
is equal to or greater than the unit it replaces.
Operational measure means a modification to any operation that
serves to minimize impact to all life stages of fish and shellfish from
the cooling water intake structure. Examples of operational measures
include, but are not limited to, more frequent rotation of traveling
screens, use of a low pressure wash to remove fish prior to any high
pressure spray to remove debris on the ascending side of a traveling
screen, maintaining adequate volume of water in a fish return, and
debris minimization measures such as air sparging of intake screens
and/or other measures taken to maintain the design intake velocity.
Sec. 125.93 Compliance.
(a) The owner or operator of a facility subject to this subpart
must comply with the applicable BTA standards for impingement mortality
in Sec. 125.94(b) as soon as possible based on the schedule of
requirements set by the Director, but in no event later than [date 8
years after the effective date of the final rule].
(b) The owner or operator of a facility subject to this subpart
must comply with the applicable BTA standards for entrainment mortality
in Sec. 125.94(c) as soon as possible, based on the schedule of
requirements set by the Director.
(c) The owner or operator of an existing facility subject to this
subpart that commences construction of a new unit after [effective date
of the final rule] must comply with the BTA standards with respect to
the new unit in Sec. 125.94(b) and Sec. 125.94(d) upon commencement
of the new unit's operation. With respect to the existing units at the
existing facility, the owner or operator must comply with paragraphs
(a) and (b) of this section.
Sec. 125.94 As an owner or operator of an existing facility, what
must I do to comply with this subpart?
(a) Applicable BTA standards. (1) The owner or operator of an
existing facility with a design intake flow (DIF) greater than 2 MGD is
subject to the impingement mortality standard under paragraph (b) of
this section.
(2) The owner or operator of an existing facility with a design
intake flow (DIF) greater than 2 MGD is subject to the BTA standards
for entrainment mortality under paragraph (c) of this section. The
owner or operator may choose instead to comply with the entrainment
mortality standard at paragraph (d) of this section.
(3) New units at an existing facility that are not a new facility
under Sec. 125.83 and that have a design intake flow (DIF) greater
than 2 MGD are subject to the BTA standards for impingement mortality
at paragraph (b) of this section and the entrainment mortality
standards at paragraph (d) of this section.
(b) BTA Standards for Impingement Mortality. By the dates specified
in Sec. 125.93, the owner or operator of an existing facility subject
to this subpart must achieve the impingement mortality standards
provided in paragraphs (b)(1), or (2), of this section:
(1) The owner or operator of an existing facility must:
(i) Achieve the following impingement mortality limitations for all
life stages of fish that are collected or retained in a \3/8\ inch
sieve and held for a period of 24 to 48 hours to assess latent
mortality. The annual average comprises the average for all
measurements taken during the preceding 12-month period. The compliance
period for the annual average will be established by the Director.
Impingement Mortality Not to Exceed
------------------------------------------------------------------------
Monthly
Regulated parameter Annual average average
(percent) (percent)
------------------------------------------------------------------------
Fish Impingement Mortality............ 12 31
------------------------------------------------------------------------
(ii) The owner or operator of a facility that withdraws water from
an ocean or tidal waters must also reduce impingement mortality of
shellfish at a minimum to a level comparable to that achieved by
properly deployed and maintained barrier nets. Passive screens such as
cylindrical wedgewire screens, and through-flow or carry-over free
intake screens such as dual-flow screens and drum screens, will meet
this requirement.
(iii) The owner or operator of a facility that employs traveling
screens or equivalent active screens must:
(A) Count any fish that are included in carryover from a screen or
removed from a screen as part of debris removal as fish impingement
mortality.
(B) Incorporate protective measures including but not limited to:
modified traveling screens with collection buckets designed to minimize
turbulence to aquatic life, addition of a guard rail or barrier to
prevent loss of fish from the collection bucket,
[[Page 22283]]
replacement of screen panel materials with smooth woven mesh, a low
pressure wash to remove fish prior to any high pressure spray to remove
debris on the ascending side of the screens, and a fish handling and
return system with sufficient water flow to return the fish to the
source water in a manner that does not promote predation or re-
impingement of the fish.
(iv) The owner or operator of the facility must ensure that there
is a means for impingeable fish or shellfish to escape the cooling
water intake system or be returned to the waterbody through a fish
return system. Passive screens such as cylindrical wedgewire screens,
and through-flow or carry-over free intake screens such as dual-flow
screens and drum screens, will meet this requirement;
(2) The owner or operator of an existing facility must demonstrate
to the Director that its cooling water intake system has a maximum
intake velocity of 0.5 feet per second. In addition, you must meet the
following criteria:
(i) The maximum velocity must be demonstrated as either the maximum
actual intake velocity or the maximum design intake velocity as water
passes through the structural components of a screen measured
perpendicular to the screen mesh;
(ii) The maximum velocity limit must be achieved under all
conditions, including during minimum ambient source water surface
elevations (based on BPJ using hydrological data) and during periods of
maximum head loss across the screens or other devices during normal
operation of the intake structure. If the intake does not have a
screen, the maximum intake velocity perpendicular to the opening of the
intake must not exceed 0.5 feet per second during minimum ambient
source water surface elevations.
(iii) Each intake must be operated and maintained to keep any
debris blocking the intake at no more than 15 percent of the opening of
the intake. A demonstration that the actual intake velocity is less
than 0.5 feet per second through velocity measurements will meet this
requirement;
(iv) The owner or operator of a facility that withdraws water from
the ocean or tidal waters must also reduce impingement mortality of
shellfish at a minimum to a level comparable to that achieved by
properly deployed and maintained barrier nets. Passive screens such as
cylindrical wedgewire screens, and through-flow or carry-over free
intake screens such as dual-flow screens and drum screens, will meet
this requirement.
(v) The owner or operator of a facility that employs traveling
screens or equivalent active screens must:
(A) Count any fish that are included in carryover from a screen or
removed from a screen as part of debris removal as fish impingement
mortality.
(B) Incorporate protective measures including but not limited to:
modified traveling screens with collection buckets designed to minimize
turbulence to aquatic life, addition of a guard rail or barrier to
prevent loss of fish from the collection bucket, replacement of screen
panel materials with smooth woven mesh, a low pressure wash to remove
fish prior to any high pressure spray to remove debris on the ascending
side of the screens, and a fish handling and return system with
sufficient water flow to return the fish to the source water in a
manner that does not promote predation or re-impingement of the fish.
(vi) The owner or operator of the facility must ensure that there
is a means for impingeable fish or shellfish to escape the cooling
water intake system or be returned to the waterbody through a fish
return system. Passive screens such as cylindrical wedgewire screens,
and through-flow or carry-over free intake screens such as dual-flow
screens and drum screens, will meet this requirement;
(c) BTA standards for entrainment mortality for existing
facilities. The Director must establish BTA standards for entrainment
mortality on a case-by-case basis. These standards must reflect the
Director's determination of the maximum reduction in entrainment
mortality warranted after consideration of all factors relevant for
determining the best technology available at each facility, including
the factors specified in Sec. 125.98.
(d) BTA standards for entrainment mortality for new units at
existing facilities. The owner or operator of a new unit at an existing
facility must achieve the entrainment standards provided in either
paragraph (d)(1) or (d)(2) of this section.
(1) The owner or operator of a facility must reduce actual intake
flow (AIF) at a new unit, at a minimum, to a level commensurate with
that which can be attained by the use of a closed-cycle recirculating
system for the same level of cooling. The owner or operator of a
facility with a cooling water intake structure that supplies cooling
water exclusively for operation of a wet or dry cooling tower(s) and
that meets the definition of closed cycle recirculating system at Sec.
125.92 meets this entrainment mortality standard.
(2) The owner or operator of a facility must demonstrate to the
Director that it has installed, and will operate and maintain,
technologies for each intake at the new unit that reduce entrainment
mortality of all stages of fish and shellfish that pass through a \3/8\
inch sieve. The owner or operator of a facility must demonstrate
entrainment mortality reductions equivalent to 90 percent or greater of
the reduction that could be achieved through compliance with paragraph
(d)(1) of this section.
(3) This standard does not apply to:
(i) Process water, gray water, waste water, reclaimed water, or
other waters reused as cooling water in lieu of water obtained by
marine, estuarine, or freshwater intakes;
(ii) Cooling water used by manufacturing facilities for contact
cooling purposes;
(iii) Portions of those water withdrawals for auxiliary plant
cooling uses totaling less than two MGD;
(iv) Any volume of cooling water withdrawals used exclusively for
make-up water at existing closed-cycle recirculating systems. For
facilities with a combination of closed-cycle recirculating systems and
other cooling water systems the entrainment mortality standard does not
apply to that portion of cooling water withdrawn as make-up water for
the closed-cycle recirculating system;
(v) Any quantity of emergency back-up water flows.
(4) The Director may establish alternative requirements if:
(i) The data specific to the facility indicate that compliance with
the requirements of paragraphs (d)(1) or (2) of this section for the
new unit would result in compliance costs wholly out of proportion to
the costs EPA considered in establishing the requirements at issue or
would result in significant adverse impacts on local air quality,
significant adverse impacts on local water resources other than
impingement or entrainment, or significant adverse impacts on local
energy markets;
(ii) The alternative requirements must achieve a level of
performance as close as practicable to the requirements of paragraphs
(d)(1) or (2) of this section;
(iii) The alternative requirements will ensure compliance with
other applicable provisions of the Clean Water Act and any applicable
requirement of state law;
(iv) The burden is on the owner or operator of the facility
requesting the alternative requirement to demonstrate that alternative
requirements should be authorized for the new unit.
(5) For cooling water flows specified in paragraph (d) of this
section that are
[[Page 22284]]
not subject to this standard, the Director may establish additional BTA
standards for entrainment mortality on a case by case basis.
(e) Nuclear facilities. If the owner or operator of a nuclear
facility demonstrates to the Director, upon the Director's consultation
with the Nuclear Regulatory Commission, that compliance with this
subpart would result in a conflict with a safety requirement
established by the Commission, the Director must make a site-specific
determination of best technology available for minimizing adverse
environmental impact that would not result in a conflict with the
Commission's safety requirement.
(f) More stringent standards. The Director may establish more
stringent requirements as best technology available for minimizing
adverse environmental impact if the Director determines that your
compliance with the applicable requirements of this section would not
meet the requirements of applicable State and Tribal law, or other
Federal law.
(g) The owner or operator of a facility subject to this subpart
must:
(1) Submit and retain permit application and supporting information
as specified in Sec. 125.95;
(2) Conduct compliance monitoring as specified in Sec. 125.96; and
(3) Report information and data and keep records as specified in
Sec. 125.97.
Sec. 125.95 Permit application and supporting information
requirements.
(a) The Director may waive some or all of the information
requirements of 40 CFR 122.21(r)(8), (9), (10), (11), and (12) in the
first permit application submitted after [effective date of the final
rule] if:
(1) The Director has already made a BTA determination requiring
operation commensurate with a closed-cycle recirculating system;
(2) The owner or operator of the facility uses cooling water
exclusively for operation of a wet or dry cooling system that meets the
definition of closed cycle recirculating system at 40 CFR 125.92; or
(3) The Director determines substantially all of the information
requirements specified at 40 CFR 122.21(r)(8), (9), (10), (11), and
(12) have already been submitted by the owner or operator.
(b) Permit application submittal timeframe for existing facilities.
The owner or operator of a facility subject to this subpart must submit
to the Director the following according the following schedule:
(1) For existing power producers with a DIF of 50 MGD or above:
(i) Information required in 40 CFR 122.21(r)(2), (r)(3), (r)(4),
(r)(5), (r)(6), (r)(7), and (r)(8) must be submitted to the Director no
later than six months after [effective date of the final rule].
(ii) Results of the Impingement Mortality Reduction Plan as
required in 40 CFR 122.21(r)(6) must be submitted to the Director no
later than 3 years and six months after [effective date of the final
rule].
(2) For existing power producers with an AIF of greater than 125
MGD:
(i) Information required in 40 CFR 122.21(r)(9)(i), including the
Entrainment Mortality Data Collection Plan with peer reviewers
identified must be submitted to the Director no later than six months
after [effective date of the final rule].
(ii) Information required in 40 CFR 122.21(r)(9)(ii), including the
peer reviewed Entrainment Mortality Data Collection Plan, must be
submitted to the Director no later than 12 months after [effective date
of the final rule].
(iii) Information required in 40 CFR 122.21(r)(9)(iii), including
the completed Entrainment Characterization Study, must be submitted to
the Director no later than 4 years after [effective date of the final
rule].
(iv) Information required in 40 CFR 122.21(r)(10), including the
Comprehensive Technical Feasibility and Cost Evaluation Study, 40 CFR
122.21(r)(11), including the Benefits Valuation Study, and 40 CFR
122.21(r)(12), including the Non-water Quality and Other Environmental
Impacts Study, must be submitted to the Director no later than 5 years
after [effective date of the final rule].
(3) For the owner or operator of all other existing facilities
subject to this subpart, with the exception of those facilities
identified in Sec. 125.95(b):
(i) Information required in 40 CFR 122.21(r)(2), (r)(3), (r)(4),
(r)(5), (r)(6), (r)(7), and (r)(8) must be submitted to the Director no
later than three years after [effective date of the final rule].
(ii) Results of the Impingement Mortality Reduction Plan as
required in 40 CFR 122.21(r)(6) must be submitted to the Director no
later than 6 years after [effective date of the final rule].
(4) For the owner or operator of all other existing facilities
subject to this subpart with an actual intake flow (AIF) of greater
than 125 MGD, with the exception of those facilities identified in
Sec. 125.95(b)(2):
(i) Information required in 40 CFR 122.21(r)(9)(i), including the
Entrainment Mortality Data Collection Plan, with peer reviewers
identified, must be submitted to the Director no later than three years
after [effective date of the final rule].
(ii) Information required in 40 CFR 122.21(r)(9)(ii), including the
peer reviewed Entrainment Mortality Data Collection Plan, must be
submitted to the Director no later than three years and six months
after [effective date of the final rule].
(iii) Information required in 40 CFR 122.21(r)(9)(iii), including
the completed Entrainment Characterization Study, must be submitted to
the Director no later than 6 years and six months after [effective date
of the final rule].
(iv) Information required in 40 CFR 122.21(r)(10), including the
Comprehensive Technical Feasibility and Cost Evaluation Study, 40 CFR
122.21(r)(11), including the Benefits Valuation Study, and 40 CFR
122.21(r)(12), including the Non-water Quality and Other Environmental
Impacts Study, must be submitted to the Director no later than 7 years
and six months after [effective date of the final rule].
(c) Permit application submittal timeframe for new units. For the
owner or operator of any new units at existing facilities subject to
this subpart:
(1) Information required in 40 CFR 122.21(r)(2), (r)(3), r(4)and
(r)(6) specific to the new unit must be submitted to the Director 6
months prior to the commencement of operation of the new unit.
(2) Application requirements. To demonstrate compliance of the new
unit with requirements in Sec. 125.94(b) and (d), you must collect and
submit to the Director the information in paragraphs (c)(2)(i), (ii),
(iii) and (iv) of this section 6 months prior to the start of facility
operations.
(i) Impingement information. If you choose to comply with the
impingement mortality requirements in Sec. 125.94(b)(1), you must
submit a plan to implement a monitoring program as specified in Sec.
125.96(a) upon the start of the new unit operation.
(ii) Velocity information. If you choose to comply with the
impingement mortality requirements in Sec. 125.94(b)(2), you must
submit the following information 6 months prior to the start of
facility operations:
(A) A narrative description of the design, structure, equipment,
and operation used to meet the velocity requirement; and
(B) Design calculations showing that the velocity requirement will
be met at minimum ambient source water surface elevations (based on
best professional judgment using available hydrological data) and
maximum head loss across the screens or other device.
[[Page 22285]]
(iii) Flow reduction information. If you choose to comply with the
flow reduction requirements in Sec. 125.94(d)(1), you must submit the
following information to the Director to demonstrate that you have
reduced your flow to a level commensurate with that which can be
attained by a closed-cycle recirculating cooling water system:
(A) A narrative description of your system that has been designed
to reduce your intake flow to a level commensurate with that which can
be attained by a closed-cycle recirculating cooling water system and
any engineering calculations, including documentation demonstrating
that your make-up and blowdown flows have been minimized consistent
with the definition of closed-cycle recirculating system at Sec.
125.92; and
(B) If the flow reduction requirement is met entirely, or in part,
by reusing or recycling water withdrawn for cooling purposes in
subsequent industrial processes, you must provide documentation that
the reused or recycled water, along with other technologies you employ,
including additional flow reductions, meets the flow reduction
requirement of Sec. 125.94(d)(1) or the entrainment mortality
reduction requirement of Sec. 125.94(d)(2).
(iv) Comprehensive Demonstration Study. If you choose to comply
with the entrainment mortality requirements in Sec. 125.94(d)(2), you
must perform and submit the results of a Comprehensive Demonstration
Study (Study). This information is required to characterize the source
water baseline in the vicinity of the cooling water intake
structure(s), characterize operation of the cooling water intake(s),
and to confirm that the technology(ies) proposed and/or implemented at
your cooling water intake structure reduce the impacts to fish and
shellfish to levels comparable to those you would achieve were you to
implement the requirements in Sec. 125.94(d)(1). To meet the
``comparable level'' requirement, you must demonstrate that:
(A) You have reduced entrainment mortality of all life stages of
fish and shellfish to 90 percent or greater of the reduction that would
be achieved through Sec. 125.94(d)(1); and
(B) You must develop and submit a plan to the Director containing a
proposal for how information will be collected to support the study.
The plan must include:
(1) A description of the proposed and/or implemented
technology(ies) to be evaluated in the Study;
(2) A list and description of any historical studies characterizing
the physical and biological conditions in the vicinity of the proposed
or actual intakes and their relevancy to the proposed Study. If you
propose to rely on existing source water body data, it must be no more
than 5 years old, you must demonstrate that the existing data are
sufficient to develop a scientifically valid estimate of potential
entrainment impacts, and provide documentation showing that the data
were collected using appropriate quality assurance/quality control
procedures;
(3) Any public participation or consultation with Federal or State
agencies undertaken in developing the plan; and
(4) A sampling plan for data that will be collected using actual
field studies in the source water body. The sampling plan must document
all methods and quality assurance procedures for sampling, and data
analysis. The sampling and data analysis methods you propose must be
appropriate for a quantitative survey and based on consideration of
methods used in other studies performed in the source water body. The
sampling plan must include a description of the study area (including
the area of influence of the cooling water intake structure and at
least 100 meters beyond); taxonomic identification of the sampled or
evaluated biological assemblages (including all life stages of fish and
shellfish); and sampling and data analysis methods.
(C) You must submit documentation of the results of the Study to
the Director. Documentation of the results of the Study must include:
(1) Source Water Biological Study. If your new unit will use a new
cooling water intake structure, you must update your Source Water
Biological Study to include:
(i) A taxonomic identification and characterization of aquatic
biological resources including: a summary of historical and
contemporary aquatic biological resources; determination and
description of the target populations of concern (those species of fish
and shellfish and all life stages that are most susceptible to
impingement and entrainment); and a description of the abundance and
temporal/spatial characterization of the target populations based on
the collection of multiple years of data to capture the seasonal and
daily activities (e.g., spawning, feeding and water column migration)
of all life stages of fish and shellfish found in the vicinity of the
cooling water intake structure;
(ii) An identification of all threatened or endangered species that
might be susceptible to entrainment by the proposed cooling water
intake structure(s); and
(iii) A description of additional chemical, water quality, and
other anthropogenic stresses on the source waterbody.
(2) Evaluation of potential cooling water intake structure effects.
This evaluation will include:
(i) Calculations of the reduction in entrainment mortality of all
life stages of fish and shellfish that would need to be achieved by the
technologies you have selected to implement to meet requirements under
Sec. 125.94(d)(1). To do this, you must determine the reduction in
entrainment mortality that would be achieved by implementing the
requirements of Sec. 125.94(d)(1) at your site.
(ii) An engineering estimate of efficacy for the proposed and/or
implemented technologies used to minimize entrainment mortality of all
life stages of fish and shellfish. You must demonstrate that the
technologies reduce entrainment mortality of all life stages of fish
and shellfish to a comparable level to that which you would achieve
were you to implement the requirements in Sec. 125.94(d)(1). The
efficacy projection must include a site-specific evaluation of
technology(ies) suitability for reducing impingement mortality and
entrainment based on the results of the Source Water Biological Study
of this section. Efficacy estimates may be determined based on case
studies that have been conducted in the vicinity of the cooling water
intake structure and/or site-specific technology prototype studies.
(3) Verification monitoring plan. You must include in the Study the
following: A plan to conduct, at a minimum, two years of monitoring to
verify the full-scale performance of the proposed or implemented
technologies, operational measures. The verification study must begin
at the start of operations of the cooling water intake structure and
continue for a sufficient period of time to demonstrate that the
facility is reducing the level of entrainment to the level documented
in paragraph (c)(2) of this section. The plan must describe the
frequency of monitoring and the parameters to be monitored. The
Director will use the verification monitoring to confirm that you are
meeting the level of entrainment mortality reduction required in Sec.
125.94(d), and that the operation of the technology has been optimized.
(d) After the initial submission of the 40 CFR 122.21(r)
application studies, the owner or operator of a facility may, in
subsequent permit applications, request to reduce the information
[[Page 22286]]
required, if conditions at the facility and in the waterbody remain
substantially unchanged since the previous application so long as the
relevant previously submitted information remains representative of
current source water, intake structure, cooling water system, and
operating conditions. The owner or operator of a facility must submit
its request for reduced cooling water intake structure and waterbody
application information to the Director at least one year prior to the
expiration of its NPDES permit. The owner or operator's request must
identify each element in this subsection that it determines has not
substantially changed since the previous permit application and the
basis for the determination. The Director has the discretion to accept
or reject any part of the request.
(e) After issuance of the first permit pursuant to this subpart,
the owner or operator of a facility must:
(1) Commence information collection activities pursuant to this
subsection no later than eighteen months prior to permit expiration;
(2) Submit all required 40 CFR 122.21(r) application studies, or
the reduced permit application studies if approved by the Director
under Sec. 125.95, to the Director no later than six months prior to
permit expiration.
(f) The Director has the discretion to request or determine
additional information to supplement the permit application process,
including inspection of the facility.
(g) Permit application records. The owner or operator of a facility
must keep records of all submissions that are part of its permit
application for a minimum of 5 years to document compliance with the
requirements of this section. If the Director approves a request for
reduced permit application studies under Sec. 125.95(d), the owner or
operator of a facility must keep records of all submissions that are
part of the previous permit application for an additional 5 years.
Sec. 125.96 Monitoring requirements.
(a) Monitoring requirements for impingement mortality. The owner or
operator of an existing facility subject to Sec. 125.94(b) must
monitor as follows:
(1) Permit compliance monitoring is required at each intake, or
where appropriate other points of compliance as approved by the
Director including but not limited to forebays, barrier nets, or fish
handling and return systems, to demonstrate compliance with the
impingement mortality limitations listed in Sec. 125.94(b).
(2) You must collect samples to monitor impingement rates (simple
enumeration) for each species over a 24-hour period and no less than
once per month when the cooling water intake structure is in operation.
(3) If the Director has approved a compliance alternative provided
under Sec. 125.94(b)(2), the monitoring requirement in paragraphs
(a)(1) and (a)(2) of this section is waived.
(4) Compliance monitoring for intake velocity. If your facility is
subject to Sec. 125.94(b)(2) and you cannot document a design intake
flow for the intake equal to or less than 0.5 feet per second under all
conditions, including during minimum ambient source water surface
elevations (based on BPJ using hydrological data) and maximum head loss
across the screens, compliance monitoring is required to demonstrate
the intake velocity is consistent with the requirements of Sec.
125.94(b)(2). The frequency of monitoring must be no less than twice
per week.
(b) Monitoring requirements for entrainment mortality for new
units. Monitoring is required to demonstrate compliance with the
requirements of Sec. 125.94(d).
(1) If you are required to demonstrate flow reductions consistent
with the requirements of Sec. 125.94(d)(1), the frequency of
monitoring must be no less than once per week and must be
representative of normal operating conditions. Flow monitoring must
include measuring cooling water withdrawals, make-up water, and
blowdown volume. The Director may require additional monitoring
necessary to demonstrate compliance with Sec. 125.94(d).
(2) If you are required to demonstrate reductions consistent with
the requirements of Sec. 125.94(d)(2), you must monitor entrainable
organisms that pass through a 3/8-inch sieve at a proximity to the
intake that is representative of the entrainable organisms in the
absence of the intake structure. You must also monitor the latent
entrainment mortality in front of the intake structure. Mortality after
passing the cooling water intake structure must be counted as 100
percent mortality unless you have demonstrated to the approval of the
Director that the mortality for each species of concern is less than
100 percent. Samples must be representative of the cooling water intake
when the structure is in operation. In addition, sufficient samples
must be collected to allow for calculation of annual average
entrainment levels of all life stages of fish and shellfish. Specific
sampling protocols and frequency of sampling will be determined by the
Director. The sampling must measure the total count of entrainable
organisms or density of organisms, unless the Director approves of a
different metric for such measurements. In addition, you must monitor
the AIF for each intake. The AIF must be measured at the same time as
the samples of entrainable organisms are collected. The Director may
require additional monitoring necessary to demonstrate compliance with
Sec. 125.94(d).
(c) Visual or remote inspections. You must either conduct visual
inspections or employ remote monitoring devices during the period the
cooling water intake structure is in operation. You must conduct such
inspections at least weekly to ensure that any technologies installed
to comply with Sec. 125.94 are maintained and operated to ensure that
they will continue to function as designed. The Director may establish
alternative procedures for use during periods of inclement weather.
Sec. 125.97 Other permit reporting and recordkeeping requirements.
The owner or operator of an existing facility subject to this
subpart is required to submit to the Director the following
information:
(a) Monitoring reports. You must include the applicable impingement
mortality and entrainment mortality monitoring reports with both your
Discharge Monitoring Reports (DMRs) (or equivalent State reports) and
your permit annual report to the Director.
(1) Impingement mortality. If you intend to comply with the
Impingement Mortality requirements by biological measurements, your
report must describe the compliance measurement location for each
intake, the species of concern, the counts and percentage mortality of
organisms sampled, the time period for evaluating latent mortality
effects, and other information specified in the permit. If you intend
to comply with the Impingement Mortality requirements by demonstrating
an intake velocity of less than 0.5 feet per second, your report must
describe the compliance measurement location for each intake, the
method for velocity measurements, the intake velocity measurements and
calculations, and other information specified in the permit.
(2) Impingement mortality compliance monitoring. Your report must
contain impingement mortality compliance monitoring data to document
compliance with the requirements of Sec. 125.94(b) for each intake. If
you intend to comply with the Impingement Mortality requirements by
biological measurements, you must also
[[Page 22287]]
update and submit your calculated annual average for each month covered
by the report. The annual average comprises the average for all
measurements taken during the preceding 12-month period.
(3) Entrainment mortality at existing facilities. The Director will
determine what (if any) other reporting requirements are necessary.
(4) Entrainment mortality for new units at existing facilities. The
owner or operator of a facility complying with Sec. 125.94(d) must
describe the compliance measurement location for the facility, the
species of concern, the counts and percentage mortality of organisms
sampled, and other information specified in the permit.
(5) Entrainment mortality compliance monitoring for new units at
existing facilities. The owner or operator of a facility must submit
monthly reports containing compliance monitoring data to document
compliance with the requirements of Sec. 125.94(d)(1) or (d)(2).
(i) For compliance with Sec. 125.94(d)(1), flow measurements of
water withdrawn for make-up and blowdown.
(ii) For compliance with Sec. 125.94(d)(2), measurements of
entrainment mortality, and your monthly actual intake flow. You must
also update and submit your calculated annual average of entrainment
mortality. The annual average comprises the average for all
measurements taken during the preceding 12-month period.
(b) Status reports. If you have a schedule established under Sec.
125.93 you must submit a quarterly status report as to the progress of
meeting the applicable standards. These reports may include updates on
pilot study results, construction schedules, maintenance outages, or
other appropriate topics.
(c) Annual certification statement and report. You must submit an
annual certification statement signed by the responsible corporate
officer as defined in 40 CFR 403.12(l) or 40 CFR 122.22. This statement
must include, at a minimum the following information:
(1) An annual certification statement which indicates that each
technology as approved by the Director is being maintained and operated
as set forth in its permit, or a justification to allow modification of
the practices listed in the facility's most recent annual
certification.
(2) If your facility is subject to BTA standards for impingement
mortality or entrainment mortality specified in Sec. 124.94(b)(2) or
(d)(2), you must include a statement in your annual certification that
specifies the information submitted in your most recent annual
certification is still valid and appropriate or a justification to
allow modification of the practices listed in the most recent annual
certification.
(i) If you cannot document that you are operating a closed-cycle
recirculating system, you must also submit data and information in the
annual certification statement documenting compliance with the
requirement in Sec. 124.94(d)(1) that flow commensurate with a closed-
cycle recirculating system is met.
(ii) If your facility is subject to the Impingement Mortality
Standard specified in Sec. 125.94(b)(2) and you cannot document a
design intake velocity for the intake equal to or less than 0.5 feet
per second, you must also submit data and information in the annual
certification documenting compliance with the intake velocity
requirements.
(3) If the information contained in the previous year's annual
certification is still applicable, you may simply state as such in a
letter to the Director, and the letter, along with any applicable data
submission requirements specified in this section shall constitute the
annual certification. However, if you have substantially modified
operation of any unit at your facility that impacts cooling water
withdrawals or operation of your cooling water intake structures, you
must submit revisions to the information required in the permit
application.
(d) Permit reporting records retention. You must keep records of
all submissions that are part of the permit reporting requirements of
this section for a period of at least five (5) years from the date of
permit issuance.
(e) The Director has the discretion to require additional
supplemental permit reporting when necessary to establish permit
compliance and may provide for periodic inspection of the facility.
Sec. 125.98 Director requirements.
(a) Permit application. The Director must review the materials
submitted on a timely basis by the applicant under Sec. 122.21(r)
before each permit renewal or reissuance to determine compliance with
all applicable requirements. The Director is encouraged to provide
comments expeditiously so that the permit applicant may modify its
information gathering activities and provide any necessary supplemental
materials.
(b) Alternate schedule. When the Director establishes an alternate
schedule under Sec. 125.93, the schedule must provide for compliance
as expeditiously as possible. In no event may the schedule provide for
compliance beyond the dates specified in Sec. 125.93. In establishing
the schedule, the Director is encouraged to consider the extent to
which those technologies proposed to be implemented to meet the
requirements of Sec. 125.94(c) and/or (d) will be used, or may
otherwise affect choice of technology(ies), to meet the requirements of
Sec. 125.94(b). When establishing a schedule for electric power
generating facilities, the Director should consider measures to
maintain adequate energy reliability and necessary grid reserve
capacity during any facility outage. These may include establishing a
staggered schedule for multiple facilities serving the same localities.
The Director may consult with local and regional electric power
agencies when establishing a schedule for electric power generating
facilities. The Director may determine that extenuating circumstances
(e.g., lengthy scheduled outages, future production schedules) warrant
establishing a different compliance date for any manufacturing
facility. In no event may the schedule provide for compliance beyond
the dates specified in Sec. 125.93.
(c) Species of concern. The Director must review and approve the
species of fish and shellfish identified as species of concern,
including but not limited to:
(1) Any species of concern identified using the source water
baseline biological characterization data submitted under 40 CFR
122.21(r)(4);
(2) Any fish and shellfish identified for evaluation under Sec.
125.94;
(3) Data submitted as part of the impingement mortality reduction
plan under 40 CFR 122.21(r)(6);
(4) Data submitted as part of the site-specific entrainment
mortality data collection plan under 40 CFR 122.21(r)(9);
(5) The Director may request additional information in determining
the site-specific species of concern and any additional fish and
shellfish to be included in the impingement mortality reduction plan
and, where applicable, the entrainment mortality data collection plan;
(6) The Director may determine invasive species, naturally moribund
species, and other specific species may be excluded from any
monitoring, sampling, or study requirements of 40 CFR 122.21 and Sec.
125.94.
(7) The Director may consider data submitted by other interested
parties.
(d) Site-specific impingement mortality reduction plan. The
Director must review and approve the site-specific Impingement
Mortality Reduction Plan required under 40 CFR 122.21(r)(6). The plan
must include, at a minimum, the duration and frequency
[[Page 22288]]
of required monitoring, the monitoring location, the organisms to be
monitored and, where appropriate, the method in which naturally
moribund organisms would be identified and taken into account.
(e) Site-specific entrainment mortality controls. The Director must
establish case-by-case BTA standards for entrainment mortality for any
facility subject to such requirements after reviewing the information
submitted under 40 CFR 122.21(r) and Sec. 125.95. These entrainment
mortality controls must reflect the Director's determination of the
maximum reduction in entrainment mortality warranted after
consideration of factors relevant for determining the best technology
available at each facility. Prior to any permit renewal, the Director
must review the performance of the entrainment mortality technologies
used and determine that they continue to meet the BTA requirements of
Sec. 125.94(c). The Director must provide a written explanation of the
proposed BTA determination in the fact sheet pursuant to 40 CFR 124.8
(or statement of basis pursuant to 40 CFR 124.7) for the proposed
permit. The written explanation must describe why the Director has
rejected any entrainment mortality control technologies or measures
that are better performing than the selected technologies or measures,
and must reflect consideration of all reasonable attempts to mitigate
any adverse impacts of otherwise available better performing
entrainment technologies. The Director may reject an otherwise
available technology as BTA standards for entrainment mortality if the
social costs of compliance are not justified by the social benefits, or
if there are adverse impacts that cannot be mitigated that the Director
deems to be unacceptable. If all technologies considered have social
costs not justified by the social benefit, or have unacceptable adverse
impacts that cannot be mitigated, the Director may determine that no
additional control requirements are necessary beyond what the facility
is already doing. At a minimum, the proposed determination in the fact
sheet or statement of basis must be based on consideration of the
following factors:
(1) Numbers and types of organisms entrained;
(2) Entrainment impacts on the waterbody;
(3) Quantified and qualitative social benefits and social costs of
available entrainment technologies, including ecological benefits and
benefits to any threatened or endangered species;
(4) Thermal discharge impacts;
(5) Impacts on the reliability of energy delivery within the
immediate area;
(6) Impact of changes in particulate emissions or other pollutants
associated with entrainment technologies;
(7) Land availability inasmuch as it relates to the feasibility of
entrainment technology; and
(8) Remaining useful plant life; and
(9) Impacts on water consumption.
(f) Ongoing permitting proceedings. Where ongoing permit
proceedings have begun prior to [effective date of the final rule] and
the Director has determined that the information already submitted by
the owner or operator of the facility is substantially the same as
required under 40 CFR 122.21(r)(9), (10), (11) and (12), the Director
may proceed with any site-specific determination of BTA standards for
entrainment mortality without requiring the owner or operator of the
facility to resubmit the information required in 40 CFR 122.21(r)(9),
(10), (11) and (12), and the Director may choose to address the factors
specified in Sec. 125.98(e). If the Director has received permit
application information from the owner or operator of the facility, and
the Director has determined that the information is substantially the
same as required under 40 CFR 122.21(r)(9), (10), (11) and (12) but the
Director has not yet made a BTA standards for entrainment mortality
determination, the Director must address the factors specified in Sec.
125.98 (e). In all subsequently issued permits for that facility the
Director must address the factors specified in Sec. 125.98 (e).
(g) Site-specific entrainment mortality data collection plan and
studies. The Director must review and approve the site-specific
entrainment mortality data collection plan for new units at existing
facilities. The plan must include, at a minimum, the duration and
frequency of monitoring, the monitoring location, the organisms to be
monitored, and the method in which latent mortality would be
identified. The Director may require the owner or operator of a
facility to include additional peer reviewers for the entrainment
mortality data collection plan, the comprehensive technical feasibility
and cost evaluation study, the benefits valuation study, and the non-
water quality and other environmental impacts assessment.
(h) Annual certification statement. The Director must review and
verify the Annual Certification Statement required under Sec.
125.97(c).
(i) Additional information. In implementing the Director's
responsibilities under this provision, the Director is authorized to
request additional necessary information and to inspect the facility.
Sec. 125.99 [Reserved]
[FR Doc. 2011-8033 Filed 4-19-11; 8:45 am]
BILLING CODE 6560-50-P