[Federal Register Volume 69, Number 226 (Wednesday, November 24, 2004)]
[Proposed Rules]
[Pages 68444-68565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24913]
[[Page 68443]]
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Part II
Environmental Protection Agency
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40 CFR Parts 9, 122 et al.
National Pollutant Discharge Elimination System--Proposed Regulations
To Establish Requirements for Cooling Water Intake Structures at Phase
III Facilities; Proposed Rule
Federal Register / Vol. 69, No. 226 / Wednesday, November 24, 2004 /
Proposed Rules
[[Page 68444]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 122, 123, 124, and 125
[OW-2004-0002, FRL-7834-7]
RIN 2040-AD70
National Pollutant Discharge Elimination System--Proposed
Regulations To Establish Requirements for Cooling Water Intake
Structures at Phase III Facilities
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: Today's proposed rule would establish national categorical
requirements under section 316(b) of the Clean Water Act for certain
existing facilities that employ a cooling water intake structure and
are designed to withdraw water above a certain design intake flow from
certain waters of the United States for cooling purposes. Today's
notice proposes three possible options for defining which existing
facilities would be subject to uniform national requirements, based on
design intake flow threshold and source waterbody type: The facility
has a total design intake flow of 50 million gallons per day (MGD) or
more, and withdraws from any waterbody; the facility has a total design
intake flow of 200 MGD or more, and withdraws from any waterbody; or
the facility has a total design intake flow of 100 MGD or more and
withdraws water specifically from an ocean, estuary, tidal river, or
one of the Great Lakes. Because the lowest co-proposed flow threshold
option is 50 MGD, the proposed requirements would only apply to
manufacturing facilities--as power producers with a flow greater than
50 MGD are regulated under the Phase II rule. This proposed rule would
constitute Phase III of EPA's section 316(b) regulation development and
would establish national requirements, and procedures for implementing
those requirements, applicable to the location, design, construction,
and capacity of cooling water intake structures at Phase III
facilities. Today's proposed rule would also establish categorical
section 316(b) requirements for new offshore oil and gas extraction
facilities, which were specifically excluded from the scope of the
Phase I new facility rule so that EPA could gather additional data on
these facilities. The proposed rule would apply to both existing
manufacturers and new offshore oil and gas extraction facilities that
withdraw at least 25 percent of the water exclusively for cooling
purposes.
The proposed national requirements, which would be implemented
through National Pollutant Discharge Elimination System (NPDES)
permits, are based on the best technology available to minimize the
adverse environmental impact associated with the use of cooling water
intake structures. For covered existing facilities, today's proposed
rule would establish performance standards for reducing impingement
mortality by 80 to 95 percent, or impingement mortality by 80 to 95
percent and entrainment by 60 to 90 percent. Today's proposal would
allow existing facilities to select from five compliance alternatives
consistent with those provided in the final Phase II rule for existing
large flow electric power generators. Once finalized and implemented,
the rule would minimize the adverse environmental impact of cooling
water intake structures by reducing the number of aquatic organisms
lost as a result of water withdrawals associated with these structures.
Today's proposed rule does not propose to alter the regulatory
requirements for facilities subject to the Phase I or Phase II
regulations, and EPA is not soliciting comment on those regulations.
EPA is only seeking comment on the proposed regulations for Phase III
existing facilities and new offshore oil and gas facilities, as
reflected in the proposed regulatory text for subparts K and N.
Depending on the options selected in the final section 316(b)
regulation for Phase III facilities, EPA may decide to integrate the
regulatory text for subparts K and N proposed today into the existing
subparts I and J, for purposes of streamlining the number of pages for
publication.
DATES: Comments must be received on or before March 24, 2005.
ADDRESSES: Submit your comments, identified by Docket ID No. OW-2004-
0002, by one of the following methods:
I. Federal eRulemaking Portal: http://www.regulations.gov. Follow
the on-line instructions for submitting comments.
II. Agency Web site: http://www.epa.gov/edocket. EDOCKET, EPA's
electronic public docket and comment system, is EPA's preferred method
for receiving comments. Follow the on-line instructions for submitting
comments.
III. E-mail: [email protected].
IV. Mail: Water Docket, Environmental Protection Agency, Mailcode:
4101T, 1200 Pennsylvania Ave., NW., Washington, DC 20460, Attention
Docket ID No. OW-2004-0002. Please include a total of 3 copies. In
addition, please mail a copy of your comments on the information
collection provisions to the Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for
EPA, 725 17th St. NW., Washington, DC 20503.
V. Hand Delivery: Water Docket, EPA Docket Center, EPA West, Room
B102, 1301 Constitution Ave., NW., Washington, DC, Attention Docket ID
No. OW-2004-0002. Such deliveries are only accepted during the Docket's
normal hours of operation, and special arrangements should be made for
deliveries of boxed information.
Instructions: Direct your comments to Docket ID No. OW-2004-0002.
EPA's policy is that all comments received will be included in the
public docket without change and may be made available online at http://www.epa.gov/edocket, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the regulations.gov websites are ``anonymous
access'' systems, which means EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send an e-mail comment directly to EPA without going through
EDOCKET or regulations.gov, your e-mail address will be automatically
captured and included as part of the comment that is placed in the
public docket and made available on the Internet. If you submit an
electronic comment, EPA recommends that you include your name and other
contact information in the body of your comment and with any disk or
CD-ROM you submit. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should avoid the use of
special characters, any form of encryption, and be free of any defects
or viruses. For additional information about EPA's public docket visit
EDOCKET on-line or see the Federal Register of May 31, 2002 (67 FR
38102). For additional instructions on submitting comments, go to
section B of the SUPPLEMENTARY INFORMATION section of this document.
Docket: All documents in the docket are listed in the EDOCKET index
at http://www.epa.gov/edocket. Although listed in the index, some
information is not publicly available, i.e., CBI or other
[[Page 68445]]
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically in
EDOCKET or in hard copy at the Water Docket, EPA/DC, EPA West, Room
B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The telephone number for the Public Reading
Room is (202) 566-1744, and the telephone number for the Water Docket
is (202) 566-2426.
FOR FURTHER INFORMATION CONTACT: For additional technical information
contact Martha Segall at (202) 566-1041 or Paul Shriner at (202) 566-
1076. For economic information, contact Erik Helm at (202) 566-1066.
For biological information contact Ashley Allen at (202) 566-1012. The
address for the above contacts is: Office of Science and Technology,
Engineering Analysis Division (Mailcode 4303T), Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
fax number: (202) 566-1053; e-mail address: [email protected].
SUPPLEMENTARY INFORMATION:
General Information
A. What Entities Are Regulated by This Action?
This proposed rule would apply to ``Phase III existing
facilities''--i.e., certain existing manufacturing and industrial
facilities that are: (1) Point sources; (2) use or propose to use one
or more cooling water intake structures; (3) are designed to withdraw
water above a certain threshold from certain waters of the U.S. (the
flow threshold would differ depending on the regulatory option selected
in the final rule); and (4) use at least 25 percent of water withdrawn
exclusively for cooling purposes. Depending on the regulatory option
selected, the facility would be subject to these national requirements
if it had a design intake flow of: (1) 50 MGD or more from any
waterbody; (2) 200 MGD or more from any waterbody; or (3) 100 MGD or
more from an ocean, estuary, tidal river, or one of the Great Lakes.
This proposed rule would define ``existing facility'' as any
manufacturing or industrial facility that commenced construction on or
before January 17, 2002 (or [60 days from publication of the final
rule] for an offshore oil and gas extraction facility), and any
modification of, or any addition of a unit at such a facility that does
not meet the definition of a new facility at Sec. 125.83.
This proposed rule would also apply to new offshore and coastal oil
and gas extraction facilities, which were specifically excluded from
the Phase I new facility rule. An offshore and coastal oil and gas
extraction facility is new if construction commenced after 60 days from
publication of the final rule. Exhibit 1 provides examples of
industrial facility types potentially regulated by this proposed rule.
Exhibit 1.--Examples of Industrial Facility Types Potentially Regulated by This Proposed Rule
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Examples of potentially regulated Standard industrial North American
Category entities classification codes industry codes (NAIC)
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Federal, State and local Operators of steam electric 4911 and 493.......... 221111, 221112,
government. generating point source 221113, 221119,
dischargers that employ cooling 221121, 221122
water intake structures.
Industry..................... Operators of industrial point See below............. See below
source dischargers that employ
cooling water intake structures..
Agricultural production.......... 0133.................. 111991, 11193
Metal mining..................... 1011.................. 21221
Oil and gas extraction........... 1311, 1321............ 211111, 211112
Mining and quarrying of 1474.................. 212391
nonmetallic minerals.
Food and kindred products........ 2046, 2061, 2062, 311221, 311311,
2063, 2075, 2085. 311312, 311313,
311222, 311225, 31214
Tobacco products................. 2141.................. 312229, 31221
Textile mill products............ 2211.................. 31321
Lumber and wood products, except 2415, 2421, 2436, 2493 321912,321113, 321918,
furniture. 321999, 321212,
321219
Paper and allied products........ 2611, 2621, 2631, 2676 3221, 322121, 32213,
322121, 322122,
32213, 322291
Chemical and allied products..... 28 (except 2895, 2893, 325 (except 325182,
2851, and 2879). 32591, 32551, 32532)
Petroleum refining and related 2911, 2999............ 32411, 324199
industries.
Rubber and miscellaneous plastics 3011, 3069............ 326211, 31332, 326192,
products. 326299
Stone, clay, glass, and concrete 3241.................. 32731
products.
Primary metal industries......... 3312, 3313, 3315, 324199, 331111,
3316, 3317, 3334, 331112, 331492,
3339, 3353, 3363, 331222, 332618,
3365, 3366. 331221, 22121,
331312, 331419,
331315, 331521,
331524, 331525
Fabricated metal products, except 3421, 3499............ 332211, 337215,
machinery and transportation 332117, 332439,
equipment. 33251, 332919,
339914, 332999
Industrial and commercial 3523, 3531............ 333111, 332323,
machinery and computer equipment. 332212, 333922,
22651, 333923, 33312
Transportation equipment......... 3724, 3743, 3764...... 336412, 333911, 33651,
336416
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Measuring, analyzing, and 3861.................. 333315, 325992
controlling instruments;
photographic, medical, and
optical goods; watches and
clocks.
Electric, gas, and sanitary 4911, 4931, 4939, 4961 221111, 221112,
services. 221113, 221119,
221121, 221122,
22121, 22133
Educational services............. 8221.................. 61131
Engineering, accounting, 8731.................. 54171
research, management and related
services.
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This exhibit is not intended to be exhaustive, but rather provides
a guide for readers regarding entities that may be regulated by this
action if they satisfy the final flow threshold and waterbody type
criteria. This exhibit lists the types of entities that EPA is now
aware could potentially be regulated by this action. Other types of
entities not listed in the exhibit could also be regulated. To
determine whether your facility is regulated by this action, you should
carefully examine the applicability criteria in Sec. 125.101 and Sec.
125.131 of this proposal. If you have questions regarding the
applicability of this action to a particular entity, consult the
persons listed for technical information in the FOR FURTHER INFORMATION
CONTACT section.
B. What Should I Consider as I Prepare My Comments for EPA?
1. Submitting Confidential Business Information (CBI). Do not
submit information that you consider to be CBI electronically through
EPA's electronic public docket or by e-mail. Send information claimed
as CBI by mail only to the following address, Office of Science and
Technology, Mailcode 4303T, U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460, Attention: Ahmar Siddiqui
/Docket ID No. OW-2004-0002. You may claim information that you submit
to EPA as CBI by marking any part or all of that information as CBI (if
you submit CBI on disk or CD ROM, mark the outside of the disk or CD
ROM as CBI and then identify electronically within the disk or CD ROM
the specific information that is CBI). Information so marked will not
be disclosed except in accordance with procedures set forth in 40 CFR
Part 2. In addition to one complete version of the comment that
includes any information claimed as CBI, a copy of the comment that
does not contain the information claimed as CBI must be submitted for
inclusion in the public docket and EPA's electronic public docket. If
you submit the copy that does not contain CBI on disk or CD ROM, mark
the outside of the disk or CD ROM clearly that it does not contain CBI.
Information not marked as CBI will be included in the public docket and
EPA's electronic public docket without prior notice. If you have any
questions about CBI or the procedures for claiming CBI, please consult
the person identified in the FOR FURTHER INFORMATION CONTACT section.
2. Tips for Preparing Your Comments. When submitting comments,
remember to:
I. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
II. Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
III. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
IV. Describe any assumptions and provide any technical information
and/or data that you used.
IV. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
V. Provide specific examples to illustrate your concerns, and
suggest alternatives.
VI. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
VII. Make sure to submit your comments by the comment period
deadline identified.
C. Supporting Documentation
The proposed regulation is supported by three major documents:
1. Economic Analysis for the Proposed Section 316(b) Rule for Phase
III Facilities (EPA-821-R-04-016), hereafter referred to as the
Economic Analysis (EA). This document presents the analysis of
compliance costs, closures, energy supply effects, and benefits
associated with the final rule.
2. Regional Benefits Assessment for the Proposed Section 316(b)
Rule for Phase III Facilities (EPA-821-R-04-017), hereafter referred to
as the Regional Analysis Document or the Regional Study(ies) Document.
This document examines cooling water intake structure impacts and
regulatory benefits at the regional level.
3. Technical Development Document for the Proposed Section 316(b)
Rule for Phase III Facilities (EPA-821-R-04-015), hereafter referred to
as the Technical Development Document. This document presents detailed
information on the methods used to develop unit costs and describes the
set of technologies that may be used to meet the final rule's
requirements.
D. Table of Contents
General Information
A. What Entities Are Regulated By This Action?
B. What Should I Consider as I Prepare My Comments for EPA?
C. Supporting Documentation
D. Table of Contents
I. Legal Authority, Purpose, and Background of Today's Regulation
A. Legal Authority
B. Purpose of Today's Proposed Regulation
C. Background
II. Scope and Applicability of the Proposed Rule
A. What is a ``New'' Offshore Oil and Gas Extraction Facility
for Purposes of the Section 316(b) Proposed Phase III Rule?
B. What is an ``Existing Facility'' for Purposes of the Section
316(b) Proposed Phase III Rule?
C. What is ``Cooling Water'' and What is a ``Cooling Water
Intake Structure?''
D. Would My Facility Be Covered if It Withdraws from Waters of
the United States?
E. Would My Facility Be Covered if It is a Point Source
Discharger?
F. What are the Cooling Water Use and Design Intake Flow
Thresholds in this Proposed Rule?
G. When Would a Phase III Existing Facility and New Offshore Oil
and Gas Extraction Facility Be Required to Comply With Any New
316(b) Requirements?
H. What Special Definitions Apply to This Proposal?
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III. Summary of Data Collection Activities
A. Survey Questionnaires
B. Existing Data Sources
C. Data Provided to EPA by Industrial, Trade, Consulting,
Scientific or Environmental Organizations or by the General Public
IV. Overview of Facility Characteristics (Cooling Water Systems &
Intake Structures) for Industries Potentially Subject to Proposed
Rule
A. Overview of Potentially Regulated Phase III Universe
B. Existing Manufacturers and Industrial Facilities Potentially
Subject to Proposed National Requirements
C. New Offshore Oil and Gas Facilities Subject to Proposed
National Requirements
V. Environmental Impacts Associated With Cooling Water Intake
Structures
VI. Basis for the Proposed Requirements
A. What is the Best Technology Available for Minimizing Adverse
Environmental Impact at Phase III Existing Facilities?
B. Economic Practicability
C. What is the Proposed Role of Restoration and Trading?
VII. Implementation
A. When Would the Proposed Rule Become Effective?
B. What General Information Would I Be Required to Submit to the
Director When I Apply for My Reissued NPDES Permit?
C. Phase III Existing Facility Implementation
D. New Offshore Oil and Gas Extraction Facilities
E. What Are the Respective Federal, State, and Tribal Roles?
F. Are Permits for Phase III Facilities Subject to Requirements
Under Other Federal Statutes?
VIII. Economic Impact Analysis
A. Existing Phase III Facilities: Manufacturers and Electric
Power Producers
B. New Offshore Oil and Gas Extraction Facilities
C. Summary of Total Social Costs and Impacts
IX. Benefits Analysis
A. Introduction
B. Study Design and Methods
C. Impingement and Entrainment
D. National Benefits
X. Comparison of Benefits and Costs
A. Benefit-Cost Analysis
B. Break-even Analysis
XI. Statutory and Executive Order Reviews
A. E.O. 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. E.O. 13175: Consultation and Coordination With Indian Tribal
Governments
G. E.O. 13045: Protection of Children From Environmental Health
Risks and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. E.O. 12898: Federal Actions to Address Environmental Justice
in Minority Populations and Low-Income Populations
K. E.O. 13158: Marine Protected Areas
L. Plain Language Directive
I. Legal Authority, Purpose, and Background of Today's Regulation
A. Legal Authority
Today's proposed rule is issued under the authority of sections
101, 301, 304, 306, 308, 316, 401, 402, 501, and 510 of the Clean Water
Act, 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342, 1361,
and 1370. Publication of this proposed rule fulfills an obligation of
the U.S. Environmental Protection Agency (EPA) under a consent decree
in Riverkeeper, Inc. v. Leavitt, No. 93 Civ. 0314, (S.D.N.Y).
B. Purpose of Today's Proposed Regulation
Section 316(b) of the Clean Water Act provides that any standard
established pursuant to section 301 or 306 of the Clean Water Act and
applicable to a point source must require that the location, design,
construction, and capacity of cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact. Today's proposed rule would establish requirements reflecting
the best technology available for minimizing adverse environmental
impact, applicable to the location, design, construction, and capacity
of cooling water intake structures at Phase III facilities (Phase I and
Phase II are described in section I. C of today's preamble). Today's
notice proposes the following three possible options for defining which
existing facilities would be subject to categorical national
requirements based on the design intake flow of cooling water intake
structures at a facility and waterbody type: (1) The facility has a
total design intake flow of 50 million gallons per day (MGD) or more
and withdraws from any waterbody; (2) the facility has a total design
intake flow of 200 MGD or more and withdraws from any waterbody; or (3)
the facility has a total design intake flow of 100 MGD or more and
withdraws water specifically from an ocean, estuary, tidal river, or
one of the Great Lakes. Today's notice also proposes a design intake
flow threshold of greater than 2 MGD for new offshore oil and gas
extraction facilities consistent with the design intake flow threshold
for new facilities in the Phase I rule. Under each of these co-proposed
regulatory options, a Phase III facility must use at least 25 percent
of the water withdrawn exclusively for cooling purposes and meet other
specified criteria in order to be within the scope of the rule (see
Section II--Scope and Applicability of Proposed Rule).
C. Background
1. The Clean Water Act
The Federal Water Pollution Control Act, also known as the Clean
Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to ``restore and
maintain the chemical, physical, and biological integrity of the
nation's waters.'' 33 U.S.C. 1251(a). The Clean Water Act establishes a
comprehensive regulatory program, key elements of which are: (1) A
prohibition on the discharge of pollutants from point sources to waters
of the United States, except as authorized by the statute; (2)
authority for EPA or authorized States or Tribes to issue National
Pollutant Discharge Elimination System (NPDES) permits that regulate
the discharge of pollutants; and, (3) requirements for limitations in
NPDES permits based on effluent limitations guidelines and standards
and water quality standards.
Section 316(b) addresses the adverse environmental impact caused by
the intake of cooling water, not discharges into water. Despite this
special focus, the requirements of section 316(b) are closely linked to
several of the core elements of the NPDES permit program established
under section 402 of the Clean Water Act to control discharges of
pollutants into navigable waters. For example, while effluent
limitations apply to the discharge of pollutants by NPDES-permitted
point sources to waters of the United States, section 316(b) applies to
facilities subject to NPDES requirements that withdraw water from
waters of the United States for cooling and that use a cooling water
intake structure to do so.
Section 402 of the Clean Water Act provides authority for EPA or an
authorized State or Tribe to issue an NPDES permit to any person
discharging any pollutant or combination of pollutants from a point
source into waters of the United States. Forty-five States and one U.S.
territory are currently authorized under section 402(b) to administer
the NPDES permitting program. NPDES permits restrict the types and
amounts of pollutants, including heat, that may be discharged from
various industrial, commercial, and other sources of wastewater. These
permits control the discharge of pollutants primarily by requiring
dischargers to meet effluent limitations established pursuant to
section 301 or section 306. Effluent
[[Page 68448]]
limitations may be based on Federal effluent limitations guidelines,
new source performance standards, or the best professional judgment of
the permit writer. Limitations based on these guidelines, standards, or
best professional judgment are known as technology-based effluent
limits. Where technology-based effluent limits are inadequate to ensure
attainment of water quality standards applicable to the receiving
water, section 301(b)(1)(C) of the Clean Water Act requires permits to
include more stringent limits based on applicable water quality
standards. NPDES permits also routinely include monitoring and
reporting requirements, standard conditions, and special conditions. In
addition, NPDES permits contain conditions to implement the
requirements of section 316(b). Section 301 of the Clean Water Act
prohibits the discharge of any pollutant by any person, except in
compliance with specified statutory requirements, including section
402.
Section 510 of the Clean Water Act provides that, except as
provided in the Clean Water Act, nothing in the Act shall preclude or
deny the right of any State or political subdivision thereof to adopt
or enforce any requirement respecting control or abatement of
pollution; except that if a limitation, prohibition or standard of
performance is in effect under the Clean Water Act, such State or
political subdivision may not adopt or enforce any other limitation,
prohibition or standard of performance which is less stringent than the
limitation, prohibition or standard of performance under the Act. EPA
interprets this to reserve for the States authority to implement
requirements that are more stringent than the Federal requirements
under State law. PUD No. 1 of Jefferson County. Washington Dep't of
Ecology, 511 U.S. 700, 705 (1994).
Sections 301, 304, and 306 of the Clean Water Act require that EPA
develop technology-based effluent limitations guidelines and new source
performance standards that are used as the basis for technology-based
minimum discharge requirements in wastewater discharge permits. EPA
issues these effluent limitations guidelines and standards for
categories of industrial dischargers based on the pollutants of concern
discharged by the industry, the degree of control that can be attained
using various levels of pollution control technology, consideration of
economics, as appropriate to each level of control, and other factors
identified in sections 304 and 306 of the Clean Water Act (such as non-
water quality environmental impacts including energy impacts). EPA has
promulgated regulations setting effluent limitations guidelines and
standards under sections 301, 304, and 306 of the Clean Water Act for
more than 50 industries. See 40 CFR 405 through 471. EPA has
established effluent limitations guidelines and standards that apply to
most of the industry categories that use cooling water intake
structures (e.g., steam electric power generation, iron and steel
manufacturing, pulp and paper manufacturing, petroleum refining, and
chemical manufacturing).
Section 316(b) states, in full:
Any standard established pursuant to section 301 or section 306
of [the Clean Water] Act and applicable to a point source shall
require that the location, design, construction, and capacity of
cooling water intake structures reflect the best technology
available for minimizing adverse environmental impact.
The phrase ``best technology available'' in Clean Water Act section
316(b) is not defined in the statute, but its meaning can be understood
in light of similar phrases used elsewhere in the Clean Water Act. See
Riverkeeper v. EPA, slip op. at 11 (2nd Cir. Feb. 3, 2004) (noting that
the cross-reference in Clean Water Act section 316(b) to Clean Water
Act section 306 ``is an invitation to look at section 306 for guidance
in determining what factors Congress intended the EPA to consider in
determining `best technology available' for new sources.'').
In sections 301 and 306, Congress directed EPA to set effluent
discharge standards for new sources based on the ``best available
demonstrated control technology'' and for existing sources based on the
``best available technology economically achievable.'' For new sources,
section 306(b)(1)(B) directs EPA to establish ``standards of
performance.'' The phrase ``standards of performance'' under section
306(a)(1) is defined as being the effluent reduction that is
``achievable through application of the best available demonstrated
control technology, processes, operating methods or other alternatives.
* * *'' This is commonly referred to as ``best available demonstrated
technology'' or ``BADT.'' For existing dischargers, section
301(b)(1)(A) requires the establishment of effluent limitations based
on ``the application of best practicable control technology currently
available.'' This is commonly referred to as ``best practicable
technology'' or ``BPT.'' Further, section 301(b)(2)(A) directs EPA to
establish effluent limitations for certain classes of pollutants
``which shall require the application of the best available technology
economically achievable.'' This is commonly referred to as ``best
available technology'' or ``BAT.'' Section 301 specifies that both BPT
and BAT limitations must reflect determinations made by EPA under Clean
Water Act section 304. Under these provisions, the limitations on the
discharge of pollutants from point sources are based upon the
capabilities of the equipment or ``control technologies'' available to
control those discharges.
The phrases ``best available demonstrated technology'' and ``best
available technology''--like ``best technology available'' in Clean
Water Act section 316(b)--are not defined in the statute. However,
section 304 of the Clean Water Act specifies factors to be considered
in establishing the best practicable control technology currently
available and best available technology.
For best practicable control technology currently available, the
Clean Water Act directs EPA to consider:
the total cost of application of technology in relation to the
effluent reduction benefits to be achieved from such application,
and shall also take into account the age of the equipment and
facilities involved, the process employed, the engineering aspects
of the application of various types of control techniques, process
changes, non-water quality environmental impact (including energy
requirements), and such other factors as [EPA] deems appropriate.
33 U.S.C. 1314(b)(1)(b).
For ``best available technology,'' the Clean Water Act directs EPA
to consider:
the age of equipment and facilities involved, the process employed,
the engineering aspects * * * of various types of control
techniques, process changes, the cost of achieving such effluent
reduction, non-water quality environmental impacts (including energy
requirements), and such other factors as [EPA] deems appropriate.
33 U.S.C. 1314(b)(2)(B).
Section 316(b) expressly refers to section 301, and the phrase
``best technology available'' is very similar to ``best available
technology'' in that section. These facts, coupled with the brevity of
section 316(b) itself, prompted EPA to look to section 301 and,
ultimately, section 304 for guidance in determining the ``best
technology available to minimize adverse environmental impact'' of
cooling water intake structures for existing Phase II facilities.
By the same token, however, there are significant differences
between section 316(b) and sections 301 and 304. See Riverkeeper, Inc.
v. United States Environmental Protection Agency, slip op. at 13 (2nd
Cir. Feb. 3, 2004) (``not every statutory directive contained [in
[[Page 68449]]
sections 301 and 306] is applicable'' to a section 316(b) rulemaking).
Section 316(b) requires that cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact. In contrast to the effluent limitations provisions, the object
of the ``best technology available'' is explicitly articulated by
reference to the receiving water: To minimize adverse environmental
impact in the waters from which cooling water is withdrawn. This
difference is reflected in EPA's past practices in implementing
sections 301, 304, and 316(b). While EPA has established effluent
limitations guidelines based on the efficacy of one or more
technologies to reduce pollutants in wastewater, considering costs, but
without necessarily considering the impact on the receiving waters, EPA
has previously considered the costs of technologies in relation to the
benefits of minimizing adverse environmental impact in establishing
section 316(b) limits. In Re Public Service Co. of New Hampshire, 10
ERC 1257 (June 17, 1977); In Re Public Service Co. of New Hampshire, 1
EAD 455 (Aug. 4, 1978); Seacoast Anti-Pollution League v. Costle, 597
F. 2d 306 (1st Cir. 1979).
For this Phase III rulemaking, EPA therefore interprets Clean Water
Act section 316(b) as authorizing EPA to consider not only technologies
but also their effects on and benefits to the water from which the
cooling water is withdrawn. Based on these two considerations, today's
proposed rule establishes national requirements for facilities to
install technology, as appropriate, that is technically available,
economically practicable, cost-effective, and justified by the benefits
to the source waterbody.
At this time, EPA is co-proposing all three options discussed above
because it sees advantages to each. EPA is also considering an
alternative under which EPA would not promulgate, at this time,
categorical requirements under section 316(b) for cooling water intake
structures unregulated by Phase I and Phase II. Rather, EPA would
continue to rely on the best professional judgment of the permitting
authority to determine the best technology available to minimize
adverse environmental impact, in order to allow these requirements to
be better tailored to local conditions.
2. Consent Decree
Publication of this proposal fulfills one of EPA's obligations to
comply with a consent decree, as amended. The Second Amended Consent
Decree, which is relevant to today's proposed rule, was filed on
November 25, 2002, in the United States District Court, Southern
District of New York, in Riverkeeper, Inc. v. Leavitt, No. 93 Civ 0314
(AGS). That case was brought against EPA by a coalition of individuals
and environmental groups. The original Consent Decree, filed on October
10, 1995, provided that EPA was to propose regulations implementing
section 316(b) by July 2, 1999, and take final action with respect to
those regulations by August 13, 2001. Under subsequent interim orders,
the Amended Consent Decree filed on November 22, 2000, and the Second
Amended Consent Decree, EPA divided the rulemaking into three phases.
EPA took final action on a rule governing cooling water intake
structures used by new facilities (Phase I) on November 9, 2001 (66 FR
65255, December 18, 2001). EPA took final action on a rule governing
cooling water intake structures used by large existing power producers
(Phase II) on February 16, 2004 (69 FR 41576, July 9, 2004). The
consent decree further requires that EPA propose regulations applicable
to, at a minimum, existing facilities using cooling water intake
structures with intake flows above a minimum threshold to be determined
by EPA, in the following categories: power producers not covered by the
Phase II regulations, pulp and paper manufacturing, petroleum and coal
products manufacturing, chemical and allied products manufacturing, and
primary metal manufacturing (Phase III). EPA is required to propose
regulations for Phase III facilities by November 1, 2004, and take
final action by June 1, 2006.
3. What Other EPA Rulemakings and Guidance Address Cooling Water Intake
Structures?
In April 1976, EPA published a final rule under section 316(b) that
addressed cooling water intake structures. 41 FR 17387 (April 26,
1976), see also the proposed rule at 38 FR 34410 (December 13, 1973).
The rule added a new Sec. 401.14 to 40 CFR Chapter I that reiterated
the requirements of Clean Water Act section 316(b). It also added a new
part 402, which included three sections: (1) Section 402.10
(Applicability), (2) Sec. 402.11 (Specialized definitions), and (3)
Sec. 402.12 (Best technology available for cooling water intake
structures). Section 402.10 stated that the provisions of part 402
applied to ``cooling water intake structures for point sources for
which effluent limitations are established pursuant to section 301 or
standards of performance are established pursuant to section 306 of the
Act.'' Section 402.11 defined the terms ``cooling water intake
structure,'' ``location,'' ``design,'' ``construction,'' ``capacity,''
and ``Development Document.'' Section 402.12 included the following
language:
The information contained in the Development Document shall be
considered in determining whether the location, design,
construction, and capacity of a cooling water intake structure of a
point source subject to standards established under section 301 or
306 reflect the best technology available for minimizing adverse
environmental impact.
In 1977, fifty-eight electric utility companies challenged those
regulations, arguing that EPA had failed to comply with the
requirements of the Administrative Procedure Act (APA) in promulgating
the rule. Specifically, the utilities argued that EPA had neither
published the Development Document in the Federal Register nor properly
incorporated the document into the rule by reference. The United States
Court of Appeals for the Fourth Circuit agreed and, without reaching
the merits of the regulations themselves, remanded the rule.
Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later
withdrew part 402. 44 FR 32956 (June 7, 1979). The regulation at 40 CFR
401.14, which reiterates the statutory requirement, remains in effect.
Since the Fourth Circuit remanded EPA's section 316(b) regulations
in 1977, NPDES permit authorities have made decisions implementing
section 316(b) on a case-by-case, site-specific basis. EPA published
draft guidance addressing section 316(b) implementation in 1977. See
Draft Guidance for Evaluating the Adverse Impact of Cooling Water
Intake Structures on the Aquatic Environment: Section 316(b) Pub. L.
92-500 (U.S. EPA, 1977). This draft guidance described the studies
recommended for evaluating the impact of cooling water intake
structures on the aquatic environment and recommended a basis for
determining the best technology available for minimizing adverse
environmental impact. The 1977 section 316(b) draft guidance states,
``The environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake
design, location, construction, and capacity must be made on a case-by-
case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4).
This case-by-case approach was also consistent with the approach
described in the 1976 Development Document referenced in the remanded
regulation.
The 1977 section 316(b) draft guidance suggested a general process
for developing information needed to
[[Page 68450]]
support section 316(b) decisions and presenting that information to the
permitting authority. The process involved the development of a site-
specific study of the environmental effects associated with each
facility that uses one or more cooling water intake structures, as well
as consideration of that study by the permitting authority in
determining whether the facility must make any changes for minimizing
adverse environmental impact. Where adverse environmental impact is
present, the 1977 draft guidance suggested a stepwise approach that
considers screening systems, size, location, capacity, and other
factors.
Although the draft guidance described the information that should
be developed, key factors that should be considered, and a process for
supporting section 316(b) determinations, it did not establish uniform
technology-based national standards for best technology available for
minimizing adverse environmental impact. Rather, the guidance left the
decisions on the appropriate location, design, capacity, and
construction of cooling water intake structures to the permitting
authority. Under this framework, the Director determined whether
appropriate studies have been performed, whether a given facility has
minimized adverse environmental impact, and what, if any, technologies
may be required.
4. Phase I New Facility Rule
On November 9, 2001, EPA took final action on regulations governing
cooling water intake structures at new facilities. 66 FR 65255
(December 18, 2001). On December 26, 2002, EPA made minor changes to
the Phase I regulations. 67 FR 78947. The final Phase I new facility
rule (40 CFR 125, Subpart I) establishes requirements applicable to the
location, design, construction, and capacity of cooling water intake
structures at new facilities that withdraw greater than two (2) million
gallons per day (MGD) and use at least twenty-five (25) percent of the
water they withdraw solely for cooling purposes. In the new facility
rule, EPA adopted a two-track approach. Under Track I, for facilities
with a design intake flow more than 10 MGD, the intake flow of the
cooling water intake structure is restricted, at a minimum, to a level
commensurate with that which could be attained by use of a closed-
cycle, recirculating cooling system. For facilities with a design
intake flow greater than 2 MGD, the design through-screen intake
velocity is restricted to 0.5 feet per second and the total quantity of
intake is restricted to a proportion of the mean annual flow of a
freshwater river or stream, or to maintain the natural thermal
stratification or turnover patterns (where present) of a lake or
reservoir except in cases where the disruption is beneficial, or to a
percentage of the tidal excursions of a tidal river or estuary. If
certain environmental conditions exist, an applicant with intake
capacity greater than 10 MGD must select and implement appropriate
design and construction technologies for minimizing impingement
mortality and entrainment. (Applicants with 2 to 10 MGD flows are not
required to reduce intake flow to a level commensurate with a closed-
cycle, recirculating cooling system, but must install technologies for
reducing entrainment at all locations.) Under Track II, the applicant
has the opportunity to demonstrate to the Director that the
technologies he employs will reduce the level of adverse environmental
impact to a comparable level to what would be achieved by meeting the
Track I requirements for restricting intake flow and velocity. As part
of this demonstration, EPA initially had allowed the applicant to
employ control measures other than reducing impingement mortality and
entrainment, including restoration measures that would result in
increases in fish and shellfish, comparable to the reduction in
impingement mortality and entrainment it would achieve were it to
implement the Track I intake flow and velocity requirements. However,
in February 2004, the 2nd Circuit Court of Appeals issued a decision in
response to several petitions challenging the final Phase I rule. The
Court found that EPA exceeded its authority by allowing new facilities
to comply with section 316(b) through restoration methods, and remanded
that aspect of the rule to EPA. Riverkeeper, Inc. v. EPA, 358 F.3d 174,
191 (2nd Cir., 2004).
Directors may establish less stringent alternative requirements for
a facility if compliance with the Phase I standards would result in
compliance costs wholly out of proportion to those EPA considered in
establishing the requirements at issue or would result in significant
adverse impacts on local air quality, water resources, or local energy
markets.
With the new facility rule, EPA promulgated national minimum
requirements for the location, design, capacity, and construction of
cooling water intake structures at new facilities. The final new
facility rule establishes a reasonable framework that creates certainty
for permitting of new facilities, while providing significant
flexibility to take site-specific factors into account.
EPA specifically excluded new offshore oil and gas extraction
facilities from the Phase I new facility rule, but committed to
consider establishing requirements for such facilities in the Phase III
rulemaking. 66 FR 65338 (December 18, 2001).
5. Phase II Existing Facility Rule
On February 16, 2004, EPA took final action on regulations
governing cooling water intake structures at certain existing power
producing facilities. 69 FR 41576 (July 9, 2004). The final Phase II
rule applies to existing facilities that are point sources; that, as
their primary activity, both generate and transmit electric power or
generate electric power for sale or transmission; that use or propose
to use a cooling water intake structure with a total design intake flow
of 50 MGD or more to withdraw water from waters of the United States;
and that use at least 25 percent of the withdrawn water exclusively for
cooling purposes.
Under the Phase II rule, EPA established performance standards for
the reduction of impingement mortality and, when appropriate,
entrainment (see 40 CFR 125.94). The performance standards consist of
ranges of reductions in impingement mortality and/or entrainment (e.g.,
reduce impingement mortality by 80 to 95 percent and/or entrainment by
60 to 90 percent). These performance standards reflect the best
technology available for minimizing adverse environmental impacts. The
type of performance standard applicable to a particular facility (i.e.,
reductions in impingement mortality only or impingement mortality and
entrainment) is based on several factors, including the facility's
location (i.e., source waterbody), rate of use (capacity utilization
rate), and the proportion of the waterbody withdrawn. In most cases,
EPA believes that these performance standards can be met using design
and construction technologies or operational measures. The performance
standards also can be met, in whole or in part, by using restoration
measures, following consideration of design and construction
technologies or operational measures, and provided such measures meet
certain specified requirements. (See 40 CFR 125.94(c)).
The Phase II rule identifies five alternatives to achieve
compliance with the requirements for best technology available for
minimizing adverse environmental impacts associated with cooling water
intake structures. A facility must demonstrate to the Director one of
the following: (1) That it has already reduced its flow commensurate
with a closed-cycle recirculating system
[[Page 68451]]
(to meet performance standards for impingement and entrainment), or
that it has already reduced its design intake velocity to 0.5 feet per
second or less (to meet the impingement performance standard only); (2)
that its current cooling water intake structure configuration meets the
applicable performance standards; (3) that it has selected design and
construction technologies, operational measures, and/or restoration
measures that, in combination with any existing design and construction
technologies, operational measures, and/or restoration measures, meet
the applicable performance standards; (4) that it meets the
applicability criteria and has installed and is properly operating and
maintaining a rule-specified and/or State-specified approved design and
construction technology (i.e., submerged cylindrical wedgewire screen)
in accordance with 40 CFR 125.99(a) or an alternative technology that
meets the appropriate performance standards and is approved by the
Director in accordance with 40 CFR 125.99(b); or (5) that its costs of
compliance would be significantly greater than the costs considered by
the Administrator for a like facility to meet the applicable
performance standards, or than the benefits of meeting the applicable
performance standards at the facility. A discussion of the legal
authority and basis for the use of the cost test is found in section VI
of this preamble.
During the first permit term and subsequent permit terms, a
facility that chooses compliance alternatives two (2) through five (5),
as described above, may request that compliance with the requirements
of the rule be determined based on the implementation of a Technology
Installation and Operation Plan (TIOP), indicating how the facility
will install and ensure the efficacy, to the extent practicable, of
design and construction technologies and/or operational measures, and/
or a Restoration Plan. Adaptive management practices must be employed
to ensure compliance during subsequent permit terms. The TIOP must be
developed and submitted to the Director in accordance with 40 CFR
125.95(b)(4)(ii). The Restoration Plan must be developed in accordance
with 40 CFR 125.95(b)(5).
6. Public Participation
EPA worked extensively with stakeholders from the industry, public
interest groups, State agencies, and other Federal agencies in the
development of this proposed rule. EPA included industry groups,
environmental groups, and other government entities in the development,
testing, refinement, and completion of the section 316(b) survey, which
was used as a primary source of data for the Phase III proposed rule.
As discussed in section III of today's preamble, the survey,
``Information Collection Request, Detailed Industry Questionnaires:
Phase II Cooling Water Intake Structures & Watershed Case Study Short
Questionnaire,'' was initiated in 1997, and was used to collect data
during 1998. EPA conducted two public meetings on section 316(b)
issues. In June of 1998, EPA conducted a public meeting focused on a
draft regulatory framework for assessing potential adverse
environmental impact from impingement mortality and entrainment. 63 FR
27958 (May 21, 1998). A second public meeting was held in September of
1998, and focused on technology, cost, and mitigation issues. 63 FR
40683 (July 30, 1998). In addition, in September of 1998, and April of
1999, EPA participated in technical workshops sponsored by the Electric
Power Research Institute on issues relating to the definition and
assessment of adverse environmental impact. EPA also participated in
other industry conferences, and has met with representatives of
industry and environmental groups.
In the months leading up to publication of the proposed Phase I
rule, EPA conducted a series of stakeholder meetings to review the
draft regulatory framework for the proposed rule and invited
stakeholders to provide their recommendations. Participants included
representatives of the electric power industry, as well as the
petroleum refining, pulp and paper, and iron and steel industries. EPA
also met with environmental groups, States, and interstate groups.
After publication of the proposed Phase I rule, EPA continued to meet
with stakeholders. Summaries of these meetings are in the docket. EPA
also received many comments on the Phase I proposed rule (65 FR 49059,
August 10, 2000) and Notice of Data Availability (NODA). (66 FR 28853,
May 25, 2001). These comments informed the development of the Phase II
rule and this Phase III proposed rule.
In January 2001, EPA attended technical workshops organized by the
Electric Power Research Institute and the Utilities Water Act Group.
These workshops focused on key issues associated with different
regulatory approaches considered under the Phase I proposed rule and
alternatives for addressing section 316(b) requirements.
On May 23, 2001, EPA held a day-long forum to discuss specific
issues associated with the development of regulations under section
316(b) of the Clean Water Act. 66 FR 20658 (April 24, 2001). At the
meeting, 17 experts from industry, public interest groups, States, and
academia reviewed and discussed the Agency's preliminary data on
cooling water intake structure technologies that are in place at
existing facilities and the costs associated with the use of available
technologies for reducing impingement mortality and entrainment. Over
120 people attended the meeting.
On August 21, 2001, EPA participated in a technical symposium
sponsored by the Electric Power Research Institute in association with
the American Fisheries Society on issues relating to the definition and
assessment of adverse environmental impact under section 316(b) of the
Clean Water Act.
During development of the Phase I and Phase II rules, EPA
coordinated with the Nuclear Regulatory Commission (NRC) to ensure that
there would not be a conflict with NRC safety requirements. NRC
reviewed the proposed Phase II rule and did not identify any apparent
conflict with nuclear plant safety. NRC licensees would continue to be
obligated to meet NRC requirements for design and reliable operation of
cooling systems. NRC recommended that EPA consider adding language
which states that in cases of conflict between an EPA requirement and
an NRC safety requirement, the NRC safety requirement takes precedence.
EPA added language to address this concern in the Phase II final rule
and this proposed rule.
EPA sponsored a Symposium on Cooling Water Intake Technologies to
Protect Aquatic Organisms, on May 6-7, 2003. This symposium brought
together professionals from Federal, State, and Tribal regulatory
agencies; industry; environmental organizations; engineering consulting
firms; science and research organizations; academia; and others
concerned with mitigating harm to the aquatic environment by cooling
water intake structures. Efficacy and costs of various technologies to
mitigate impacts to aquatic organisms from cooling water intake
structures, as well as research and other future needs, were discussed.
During the development of this proposed regulation, EPA met several
times with trade associations whose members would be subject to the
Phase III requirements. EPA also conducted Phase III-specific data
collection activities, including a study of entrainment at
manufacturing facilities, contacting Phase III facilities to request
[[Page 68452]]
biological studies and conducted an industry survey of offshore oil and
gas extraction facilities and seafood processing vessels.
Finally, EPA convened a Small Business Advocacy Review (SBAR) panel
(in accordance with the Regulatory Flexibility Act section 609(b) as
amended by the Small Business Regulatory and Enforcement Fairness Act)
to provide information to small entities and receive feedback during
the Phase III rulemaking process. EPA hosted a pre-panel outreach
meeting for small entities potentially subject to Phase III on January
22, 2004. The SBAR panel held an outreach meeting with small entity
representatives (SERs) on March 16, 2004. Based on the information
gathered from the participating small entities during these outreach
meetings and subsequent correspondence, the SBAR panel produced a final
report to the EPA Administrator on April 27, 2004. Results of the final
report were considered in the development of this proposed Phase III
rule.
These coordination efforts and all of the meetings described in
this section, as well as the comments submitted on the Phase I and II
section 316(b) rules and EPA's response to these comments, are
documented or summarized in the dockets for these three rules. The
Administrative Record for today's proposal includes all materials from
the Phase I, Phase II, and Phase III section 316(b) rule dockets.
II. Scope and Applicability of the Proposed Rule
Based on the co-proposed flow thresholds based options in today's
proposed rule, the proposed national categorical requirements would
apply to two groups of facilities: (1) Existing manufacturing
facilities (including but not limited to chemical, metal, pulp and
paper, and petroleum refining facilities), and (2) new offshore oil and
gas extraction facilities. In today's proposed rule, the term ``new
offshore oil and gas extraction facility'' is defined to include
facilities in both the offshore and the coastal subcategories of EPA's
Oil and Gas Extraction Point Source Category for which effluent
limitations are established at 40 CFR part 435. Although the term
``offshore'' denotes only one of these two subcategories for purposes
of the effluent guidelines, EPA decided that it was more efficient to
use the term ``offshore'' to denote facilities in either subcategory
for purposes of today's rule because the proposed requirements are the
same for both offshore and coastal facilities and the term ``offshore''
is commonly understood to include any facilities not located on land.
EPA requests comment on whether this definition is likely to cause
confusion over the scope of covered facilities. In order to be covered
by today's proposed rule, these facilities would need to use cooling
water intake structures to withdraw water from waters of the U.S. and
meet all other applicability criteria, described below.
Existing facilities that meet all of the following criteria would
be subject to today's proposed rule, if promulgated as proposed (see
Sec. 125.101).
The facility is a point source that has or is required to
have an NPDES permit under section 402 of the Clean Water Act;
The facility is an existing facility not subject to the
Phase II regulation;
The facility uses at least 25 percent of water withdrawn
exclusively for cooling purposes, measured on an average annual basis;
and
The facility uses, or proposes to use, cooling water
intake structures, including a cooling water intake structure operated
by an independent supplier (other than a public water system), with a
total design intake flow equal to or greater than a certain threshold
to withdraw cooling water from waters of the United States.
Today's proposed rule co-proposes three options based on design
intake flow and source waterbody type for defining which existing
facilities are Phase III existing facilities subject to categorical
national requirements:
The facility has a total design intake flow of 50 MGD or
more, and withdraws from any waterbody type (``50 MGD All
Waterbodies'');
The facility has a total design intake flow of 200 MGD or
more, and withdraws from any waterbody type (``200 MGD All
Waterbodies'');
The facility has a total design intake flow of 100 MGD or
more and withdraws water from an ocean, estuary, tidal river, or one of
the Great Lakes (``100 MGD Certain Waterbodies'').
A facility meeting the above criteria, including any flow threshold
EPA adopts after considering comments on the three co-proposed options,
would be referred to as a ``Phase III existing facility.'' If an
existing facility does not meet the relevant Phase II or Phase III
cooling water use and intake flow thresholds by itself, and is co-
located with an existing facility that is not subject to the Phase II
regulation (e.g., a power producing facility below the Phase II flow
threshold, or a manufacturing facility), both facilities would still be
subject to Phase III requirements if the cooling water used
collectively by the co-located facilities meets the applicable
thresholds (and the facilities meet the other requisite Phase III
criteria). Co-located facilities adjoin each other and are under common
ownership, operation, or management. If a facility is a point source
that uses a cooling water intake structure and has, or is required to
have, an NPDES permit, but does not meet the proposed applicable design
intake flow/source waterbody threshold or the 25 percent cooling water
use threshold, it would continue to be subject to permit conditions
implementing CWA section 316(b) set by the permit director on a case-
by-case, best professional judgment basis.
Today's notice also proposes requirements for new offshore oil and
gas extraction facilities, which were specifically excluded from the
Phase I new facility rule. (40 CFR 125 Subpart I). Section II.B of the
preamble discusses what constitutes a ``new'' offshore oil and gas
extraction facility for purposes of the section 316(b) proposed Phase
III rule. Requirements for new offshore oil and gas extraction
facilities are proposed in 40 CFR Subpart N. EPA is seeking comment on
the requirements contained in this subpart. EPA is not seeking comment
on the Phase I rule that EPA promulgated in 2001.
Finally, under today's proposed rule a seafood processing vessel or
an offshore liquefied natural gas import terminal would not be subject
to national categorical requirements. Such a facility could be subject
to permit conditions implementing CWA section 316(b) set by the permit
director on a case-by-case, best professional judgment basis where the
facility is a point source that uses a cooling water intake structure
and has, or is required to have, an NPDES permit.
A. What Is a ``New'' Offshore Oil and Gas Extraction Facility for
Purposes of the Section 316(b) Proposed Phase III Rule?
For purposes of this proposed rule, new offshore oil and gas
extraction facilities are those facilities that are subject to the Oil
and Gas Extraction Point Source Category Effluent Guidelines (i.e., 40
CFR 435.10 Offshore Subcategory or 40 CFR 435.40 Coastal Subcategory);
that commence construction more than 60 days after publication of the
final rule; and that meet all other aspects of the ``new facility''
definition in Sec. 125.83 (other than the date for commencing
construction). In other words, in order to be covered by today's
proposed rule, a new offshore oil and gas extraction facility would
have to be a new source or new discharger per 40 CFR 122.2 and 122.29,
a greenfield or stand-alone
[[Page 68453]]
facility, and use either a newly constructed cooling water intake
structure, or an existing cooling water intake structure whose design
capacity is increased to accommodate the intake of additional cooling
water.
B. What Is an ``Existing Facility'' for Purposes of the Section 316(b)
Proposed Phase III Rule?
In today's proposed rule, the definition of ``existing facility''
is the same as in the Phase II rule except for additional language
addressing new offshore oil and gas extraction facilities: any facility
that commenced construction on or before January 17, 2002 (or 60 days
after publication of the final rule for an offshore oil and gas
extraction facility), as described in 40 CFR 122.29(b)(4).\1\ January
17, 2002 is the effective date of the Phase I new facility rule and,
therefore, the date for distinguishing new facilities from existing
ones. However, offshore oil and gas extraction facilities were not
subject to the Phase I new facility rule, but rather, would be subject
to requirements under this proposed Phase III rule. Therefore, the
effective date of the final Phase III rule would be the date for
distinguishing new offshore oil and gas extraction facilities from
existing ones. An ``existing facility'' under this proposed rule would
include modifications and additions to existing facilities, that do not
meet the definition of a new facility under the Phase I rule (40 CFR
125.83). That definition states:
---------------------------------------------------------------------------
\1\ Construction is commenced if the owner or operator has
undertaken certain installation and site preparation activities that
are part of a continuous on-site construction program, and it
includes entering into certain specified binding contractual
obligations as one criterion (40 CFR 122.29(b)(4)).
New facility means any building, structure, facility, or
installation that meets the definition of a ``new source'' or ``new
discharger'' in [other NPDES regulations] and is a greenfield or
stand-alone facility; commences construction after January 17, 2002;
and uses either a newly constructed cooling water intake structure,
or an existing cooling water intake structure whose design capacity
is increased to accommodate the intake of additional cooling water.
New facilities include only ``greenfield'' and ``stand-alone''
facilities. A greenfield facility is a facility that is constructed
at a site at which no other source is located or that totally
replaces the process or production equipment at an existing facility
(see 40 CFR 122.29(b)(1)(i) and (ii)). A stand-alone facility is a
new, separate facility that is constructed on property where an
existing facility is located and whose processes are substantially
independent of the existing facility at the same site (see 40 CFR
122.29(b)(1)(iii). New facility does not include new units that are
added to a facility for purposes of the same general industrial
operation (for example, a new peaking unit at an electrical
generating station).\2\
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\2\ The Phase I rule also listed examples of facilities that
would be ``new'' facilities and facilities that would ``not be
considered a `new facility' '' in two numbered paragraphs. These
read as follows:
``(1) Examples of `new facilities' include, but are not limited
to: the following scenarios:
``(i) A new facility is constructed on a site that has never
been used for industrial or commercial activity. It has a new
cooling water intake structure for its own use.
``(ii) A facility is demolished and another facility is
constructed in its place. The newly-constructed facility uses the
original facility's cooling water intake structure, but modifies it
to increase the design capacity to accommodate the intake of
additional cooling water.
``(iii) A facility is constructed on the same property as an
existing facility, but is a separate and independent industrial
operation. The cooling water intake structure used by the original
facility is modified by constructing a new intake bay for the use of
the newly constructed facility or is otherwise modified to increase
the intake capacity for the new facility.
``(2) Examples of facilities that would not be considered a `new
facility' include, but are not limited to, the following scenarios:
``(i) A facility in commercial or industrial operation is
modified and either continues to use its original cooling water
intake structure or uses a new or modified cooling water intake
structure.
``(ii) A facility has an existing intake structure. Another
facility (a separate and independent industrial operation), is
constructed on the same property and connects to the facility's
cooling water intake structure behind the intake pumps, and the
design capacity of the cooling water intake structure has not been
increased. This facility would not be considered a `new facility'
even if routine maintenance or repairs that do not increase the
design capacity were performed on the intake structure.''
The definition in today's proposed regulation is intended to be
consistent with EPA's definition of new facility in the Phase I rule
(Sec. 125.83) and to ensure that sources excluded from the definition
of new facility in the Phase I rule are captured by the definition of
existing facility.
The determination of whether a facility is ``new'' or ``existing''
is focused on the point source discharger--not on the cooling water
intake structure. In other words, modifications or additions to the
cooling water intake structure (or even the total replacement of an
existing cooling water intake structure with a new one) does not
convert an otherwise unchanged existing facility into a new facility,
regardless of the purpose of such changes. Rather, the determination as
to whether a facility is new or existing focuses on the point source
itself, i.e., whether it is a greenfield facility or a stand-alone
facility.
Under this proposed rule, an existing manufacturing facility that
replaces or modifies an existing generating or manufacturing unit would
remain subject to regulation as a Phase III existing facility, unless
(1) the existing facility were completely demolished and another
facility constructed in its place (a ``greenfield'' facility), or a
separate facility with substantially independent processes were
constructed on the property (a ``stand-alone'' facility) and (2) the
new facility used either a new intake structure or the existing
structure with an increased design capacity. To illustrate, an existing
facility that undertook the following facility modifications or
additions would continue to be characterized as an existing facility--
not a new facility--under today's proposed rule:
An existing manufacturing facility undergoes a
modification of its process short of total replacement of the process
and concurrently increases the design capacity of its existing cooling
water intake structures;
An existing manufacturing facility builds a new process at
its site for purposes of the same industrial operation and concurrently
increases the design capacity of its existing cooling water intake
structures;
An existing manufacturing facility completely rebuilds its
process but uses the existing cooling water intake structure with no
increase in design capacity.
Phase III existing facilities subject to today's proposed rule
would also include point sources that are new users of cooling water
intake structures, but do not meet the definition of new facility under
Sec. 125.83. For example, an existing facility may have historically
withdrawn its cooling water from a municipal or other source, but then
begins to withdraw cooling water from a water of the United States.
This facility would be considered an existing facility because it is
not a ``greenfield'' or ``stand alone'' facility within the meaning of
the new facility rule. Similarly, a facility that previously relied on
unit processes that do not require cooling water, and then adds or
modifies a unit process for purposes of the same industrial operation
such that cooling water is subsequently required, would also be
regulated as an existing facility, not a new facility, under 316(b).
C. What Is ``Cooling Water'' and What Is a ``Cooling Water Intake
Structure?'
Today's proposed rule would adopt for Phase III facilities the same
definition of a ``cooling water intake structure'' that applies to new
facilities under the final Phase I rule and existing facilities under
the final Phase II rule. A cooling water intake structure would be
defined as the total physical structure and any associated constructed
waterways used to withdraw cooling
[[Page 68454]]
water from waters of the Unites States. Under this definition, the
cooling water intake structure extends from the point at which water is
withdrawn from the surface water source up to and including the intake
pumps. Today's proposed rule also would adopt the definition of
``cooling water'' used in the Phase I and Phase II rules: water used
for contact or noncontact cooling, including water used for equipment
cooling, evaporative cooling tower makeup, and dilution of effluent
heat content. The definition specifies that the intended use of cooling
water is to absorb waste heat rejected from the processes used or
auxiliary operations on the facility's premises. The definition also
indicates that water used in a manufacturing process either before or
after it is used for cooling is process water and would not be
considered cooling water for purposes of determining whether the
facility was using 25 percent or more of the water withdrawn for
cooling purposes. This clarification is necessary because cooling water
intake structures typically bring water into a facility for numerous
purposes, including use in industrial processes; use as circulating
water, service water, or evaporative cooling tower makeup water;
dilution of effluent heat content; equipment cooling; and air
conditioning. This is particularly true for manufacturers addressed
under this proposed rule, who often seek to reduce water use and
increase efficiency through water reuse. EPA does not wish to create a
disincentive to such improved efficiency and recognizes that to do so
could result in other forms of environmental impacts. Consequently, and
consistent with the Phase I and Phase II rules, only the water used
exclusively for cooling purposes would be counted when determining
whether the 25 percent threshold in Sec. 125.101(a)(4) or Sec.
125.131(a)(2) is met.
This proposed definition of ``cooling water intake structure''
differs from the definition provided in the 1977 Draft Guidance for
Evaluating the Adverse Impact of Cooling Water Intake Structures on the
Aquatic Environment: Section 316(b) Pub. L. 92-500 (U.S. EPA, 1977).
The proposed rule definition would clarify that the cooling water
intake structure includes the physical structure that extends from the
point at which water is withdrawn from the surface water up to and
including the intake pumps. Inclusion of the term ``associated
constructed waterways'' in today's proposed rule is intended to clarify
that the definition includes those canals, channels, connecting
waterways, and similar structures that may be built or modified to
facilitate the withdrawal of cooling water. The explicit inclusion of
the intake pumps in the definition reflects the key role pumps play in
determining the capacity (i.e., dynamic capacity) of the intake. These
pumps, which bring in water, are an essential component of the cooling
water intake structure since without them the intake structure could
not work as designed.
D. Would My Facility Be Covered if It Withdraws From Waters of the
United States?
The requirements proposed today would apply to cooling water intake
structures that have the design capacity to withdraw amounts of water
equal to or greater than the specified proposed intake flow thresholds
from ``waters of the United States.'' Waters of the United States
include the broad range of surface waters that meet the regulatory
definition at 40 CFR 122.2, which includes lakes, ponds, reservoirs,
nontidal rivers or streams, tidal rivers, estuaries, fjords, oceans,
bays, and coves. These potential sources of cooling water may be
adversely affected by impingement mortality and entrainment.
Some facilities discharge heated water to cooling ponds, then
withdraw water from the ponds for cooling purposes. EPA recognizes that
cooling ponds may, in certain circumstances, constitute part of a
closed-cycled cooling system. See, e.g., Sec. 125.102. However, EPA
does not intend that this proposed rule would change the regulatory
status of cooling ponds. Cooling ponds are neither categorically
included nor categorically excluded from the definition of ``waters of
the United States'' at 40 CFR 122.2. EPA interprets 40 CFR 122.2 to
give permit writers discretion to regulate cooling ponds as ``waters of
the United States'' where cooling ponds meet the definition of ``waters
of the United States.'' The determination of whether a particular
cooling pond is a water of the United States is to be made by the
permit writer on a case-by-case basis, informed by the discussions in
Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps
of Engineers, 531 U.S. 159 (2001), and subsequent case law. Therefore,
facilities that withdraw cooling water from cooling ponds that are
waters of the United States and that would meet today's other proposed
criteria for coverage (including the requirement that the facility has
or will be required to obtain an NPDES permit) would be subject to
today's proposed rule. The EPA and the U.S. Army Corps of Engineers
have jointly issued jurisdictional guidance concerning the term
``waters of the United States'' in light of the Supreme Court's
decision in Solid Waste Agency of Northern Cook County v. U.S. Army
Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). A copy of that
guidance was published as an Appendix to an Advanced Notice of Proposed
Rulemaking on the definition of the phrase ``waters of the U.S.,'' see
68 FR 1991 (January 15, 2003), and may be obtained at http://www.epa.gov/owow/wetlands/ANPRM-FR.pdf. Proposed Sec. 125.101(d) also
provides, similar to the Phase I and Phase II rules, that facilities
that obtain cooling water from a public water system or use treated
effluent are not deemed to be using a cooling water intake structure
for purposes of this proposed rule.
E. Would My Facility Be Covered if It Is a Point Source Discharger?
Today's proposed rule would apply only to facilities that are point
sources (i.e., have an NPDES permit or are required to obtain one)
because they discharge or might discharge pollutants, including storm
water, from a point source to waters of the United States. This is the
same requirement EPA included in the Phase I and Phase II final rules
(see, 40 CFR 125.81(a)(1), and 40 CFR 125.91(a)(1), respectively).
Requirements for complying with section 316(b) will continue to be
applied through NPDES permits.
Based on the Agency's review of potential Phase III facilities that
employ cooling water intake structures, the Agency anticipates that
most Phase III facilities that would be subject to this proposed rule
control the intake structure that supplies them with cooling water, and
discharge some combination of their cooling water, wastewater, and
storm water to a water of the United States through a point source
regulated by an NPDES permit. In this scenario, the requirements for
the cooling water intake structure would be specified in the facility's
NPDES permit. In the event that a Phase III facility's only NPDES
permit is a general permit (e.g., for oil and gas production) or a
general permit for storm water discharges, the Agency anticipates that
the Director may want to write an individual NPDES permit containing
requirements for the facility's cooling water intake structure.
Alternatively, requirements applicable to cooling water intake
structures could be incorporated into general permits. If requirements
are placed into a general permit, they must meet the criteria set out
at 40 CFR 122.28.
The Agency also recognizes that some facilities that have or are
required to have an NPDES permit might not own
[[Page 68455]]
and operate the intake structure that supplies their facility with
cooling water. For example, manufacturing facilities operated by
separate entities might be located on the same, adjacent, or nearby
property(ies); one of these facilities might take in cooling water and
then transfer it to other facilities prior to discharge of the cooling
water to a water of the United States. Proposed Sec. 125.101(c) of
today's proposed rule would address such a situation. It provides that
use of a cooling water intake structure includes obtaining cooling
water by any sort of contract or arrangement with one or more
independent suppliers of cooling water if the supplier withdraws water
from waters of the United States but is not itself subject to
regulations under 316(b). This provision is intended to prevent
facilities from circumventing the requirements of today's proposed rule
by creating arrangements to receive cooling water from an entity that
is not itself subject to national categorical requirements (e.g., a
facility that is not a point source).
For facilities that have or are required to have NPDES permits that
do not directly control the intake structures that supply their
facilities with cooling water, proposed Sec. 125.101(d) also provides,
similar to the Phase I and II rules, that facilities that obtain
cooling water from a public water system or use treated effluent are
not deemed to be using a cooling water intake structure for purposes of
this proposed rule.
As stated in the preamble to the final Phase I rule (66 FR 65256,
December 18, 2001), the Agency would encourage the Director to closely
examine scenarios in which a facility withdraws significant amounts of
cooling water from waters of the United States but is not required to
obtain an NPDES permit. As appropriate, under this proposed rule, the
Director would apply other legal requirements, such as section 404 or
401 of the Clean Water Act, the Coastal Zone Management Act, the
National Environmental Policy Act, the Endangered Species Act, or
similar State or Tribal authorities to address adverse environmental
impact caused by cooling water intake structures at those facilities.
F. What Are the Cooling Water Use and Design Intake Flow Thresholds in
This Proposed Rule?
This proposed rule would apply to existing facilities that meet the
following thresholds: (1) Use at least twenty-five (25) percent of the
water withdrawn exclusively for cooling purposes (measured on an
average annual basis), and (2) have a total design intake flow equal to
or greater than one of the three proposed thresholds , but are not
subject to the Phase II rule. As previously discussed, EPA is proposing
three possible flow threshold-based options in today's proposed rule
(i.e., 50 MGD, 200 MGD, and 100 MGD \3\). The facility would also have
to meet the other applicability criteria defined in Sec. 125.101.
---------------------------------------------------------------------------
\3\ Note: the 100 MGD flow threshold also specifies withdrawal
from certain source waterbody types. The other proposed flow
thresholds are not linked to source waterbody types.
---------------------------------------------------------------------------
The 25 percent exclusive cooling use threshold is the same as
employed in the Phase I and II regulations. As in the Phase I and Phase
II rules, water used for both cooling and non-cooling purposes would
not count towards the 25 percent threshold. Thus, the proposed rule
would not discourage the reuse of cooling water as process water or
vice versa. Water that serves as cooling water but is either previously
or subsequently used as process water would not be considered cooling
water for purposes of determining whether the 25 percent threshold is
met. Water withdrawn for non-cooling purposes would include water
withdrawn for warming by liquified natural gas facilities, water used
to power hydro-electric plants, and water withdrawn for public water
systems by desalinization facilities.
Today's notice proposes three different options for defining which
existing facilities are Phase III existing facilities subject to
categorical national requirements. These options include existing
facilities having a total design intake flow of: 50 MGD or more; 200
MGD or more; or 100 MGD or more if the facility withdraws water from an
ocean, tidal river, estuary, or Great Lake. EPA is co-proposing these
options because EPA believes that all three reflect potentially viable
alternatives for balancing the many factors EPA considers in
establishing best technology available for minimizing adverse
environmental impact. These factors include the percentage of cooling
water flow subject to national requirements, costs, benefits, cost-
effectiveness, permitting burden and the need for flexibility in
implementation, projected closures, and potential impacts on small
businesses. Each of these factors are permissible for consideration
under the CWA and each of these co-proposed options will fulfill CWA
requirements. For example, considerations of costs, benefits,
economically practicability and cost-effectiveness are appropriate
factors under CWA sections 301 and 304 (e.g., see discussion of Agency
authority in section I). In addition, EPA is required to consider small
business impacts under the Regulatory Flexibility Act as amended by the
Small Business Regulatory Enforcement Fairness Act. Accordingly, the
discussion below focuses on the relative advantages and disadvantages
of these co-proposed options and the proposed regulatory language
reflects all three options.
i. Total Design Intake Flow of 50 MGD or More
Under this co-proposed option, facilities with a design intake flow
of 50 MGD or greater, and that meet the other criteria in Sec.
125.101, would be subject to the performance standards and compliance
alternatives proposed in today's rule discussed below. Under this
option, section 316(b) permit conditions for existing facilities with a
design intake flow of less than 50 MGD would continue to be established
on a case-by-case, best professional judgment basis.
EPA is co-proposing the 50 MGD threshold based on several factors.
With a 50 MGD flow threshold, the proposed rule would regulate 75
percent of the design intake capacity, and 23 percent of the facilities
(155 facilities) potentially covered by the Phase III rule,\4\ thus
subjecting the majority of design intake flows potentially included
within the scope of the Phase III existing facility rule to national
performance requirements. Use of a 50 MGD threshold would focus
national section 316(b) requirements on those Phase III existing
facilities with moderate to large design intake flows. These facilities
pose a greater potential for causing significant adverse environmental
impacts than those withdrawing less than 50 MGD. Assuming full
implementation of the Phase II rule and today's proposed rule, at the
co-proposed 50 MGD threshold, section 316(b) program requirements would
regulate more than 97 percent of the total cooling water withdrawals
associated with existing facilities. In addition, EPA estimates that
use of a 50 MGD threshold would avoid facility closures under this
proposed rule, and would reduce the cost of the proposed rule to
permittees compared with the costs of a lower threshold.
---------------------------------------------------------------------------
\4\ Facilities ``potentially covered by the Phase III rule''
include all existing manufacturing and power producing facilities
greater than 2 MGD that were not covered by the Phase II rule. There
are an estimated 683 manufacturing and electric generating
facilities (survey weighted) potentially covered by the Phase III
rule, with a total design intake flow of 40,441 MGD.
---------------------------------------------------------------------------
[[Page 68456]]
EPA estimates this option would cost $47.3 to $50.1 million \5\ or
$348,000 to $368,000 on average annually per facility. Quantified
benefits are $1.5 million to $1.9 million (annualized use value).
Because this option covers the most facilities, it may also have the
greatest ecological protection benefits, which EPA was not able to
quantify. EPA estimates that this option would provide the highest
quantified and monetized benefits of the co-proposed options but would
also have the highest annualized costs, resulting in the lowest
quantified benefits-to-cost ratio and the lowest (greatest negative)
quantified net benefits among these options. See section X of this
preamble for further discussion of benefits and costs.
---------------------------------------------------------------------------
\5\ Unless otherwise noted, cost and benefit ranges reflect the
use of alternative discount rates (3% and 7%) in annualized 2003
dollars.
---------------------------------------------------------------------------
Finally, the co-proposed 50 MGD threshold would exclude small
businesses from national rule requirements. This is consistent with the
recommendations of the Small Business Advocacy Review Panel final
report that EPA analyze a range of potential thresholds, particularly
those between 20 MGD and 50 MGD, as a means of reducing potential
economic impacts on small businesses while still achieving desired
environmental benefits under the rule. See section XI.C for additional
information. EPA estimates that setting an applicability threshold at
50 MGD would exclude all existing small entities potentially subject to
the Phase III rule.
ii. Total Design Intake Flow of 200 MGD or More
Under this co-proposed option, facilities with a design intake flow
of 200 MGD or greater and that meet the other criteria in Sec.
125.101, would be subject to the performance standards and compliance
alternatives proposed in today's notice and discussed above. Under this
option, section 316(b) permit conditions for existing facilities not
covered under the Phase II rule, with a design intake flow of less than
200 MGD, would continue to be established on a case-by-case, best
professional judgment basis.
EPA is co-proposing the 200 MGD threshold based on several factors.
With a 200 MGD flow threshold, the proposed rule would regulate 45
percent of the design intake capacity and approximately 5% of the
facilities potentially covered by the Phase III rule. Assuming full
implementation of the Phase II rule and today's proposed rule, at the
co-proposed 200 MGD threshold, section 316(b) program requirements
would regulate more than 94 percent of the total cooling water
withdrawals associated with existing facilities withdrawing greater
than 2 MGD.
EPA estimates this option would cost $22.8 to $24.1 million or
$912,000 to $964,000 on average annually per facility. Quantified
benefits are $0.98 to $1.26 million (annualized use value). The option
would have a higher benefit-to-cost ratio yielding 66 percent of the
quantified benefits at 48% of the costs and greater (lower negative)
quantified net benefits compared to the 50 MGD option.
EPA estimates that use of a 200 MGD threshold would avoid facility
closures under this proposed rule and would exclude all existing small
entities.
iii. Facility Has a Total Design Intake Flow of 100 MGD or More and
Withdraws Water From an Ocean, Tidal River, Estuary, or Great Lake
Under this co-proposed option, facilities located on estuaries,
oceans, tidal rivers or streams, or one of the Great Lakes, with a
design intake flow of 100 MGD or greater, and that meet the other
criteria in Sec. 125.101, would be subject to the performance
standards and compliance alternatives proposed in today's rule and
discussed below. Under this regulatory option, section 316(b) permit
conditions for all existing facilities not covered under the Phase II
rule, and located on freshwater rivers and streams or lakes and
reservoirs, or with a design intake flow of less than 100 MGD would
continue to be established on a case-by-case, best professional
judgment basis.
Under this co-proposed option, 4 percent of the facilities
potentially subject to regulation under Phase III would be subject to
national requirements, and 18 percent of total design intake capacity
associated with potential Phase III facilities would be addressed by
such national requirements. Assuming full implementation of the Phase
II rule and today's proposed rule, at the co-proposed 100 MGD
threshold, section 316(b) program requirements would regulate more than
91 percent of the total cooling water withdrawals associated with
existing facilities.
EPA estimates this option would cost $17.6 to $18.2 million or
$926,000 to $958,000 on average annually per facility. Quantified
benefits are $1.1 to 1.4 million (annualized use value). EPA estimates
that this option would provide the second highest quantified benefits
of the co-proposed options, and would have the lowest annualized costs
when compared with the other two options, resulting in the highest
quantified benefits-to-costs ratio and highest (least negative)
quantified net benefits among the three options. This option would
provide about 75 percent of the quantified benefits of the 50 MGD flow
threshold option at about 36 percent of the cost by focusing the rule
requirements on the most sensitive waterbodies.
EPA estimates that use of a 100 MGD threshold would avoid facility
closures under this proposed rule and would exclude all existing small
entities.
EPA requests comment on all aspects of each of these co-proposed
options, including whether lower (e.g., 20 MGD) or higher (e.g., 250
MGD) thresholds should be considered, as well as whether different
conditions (e.g., related to waterbody type) should be combined with
these or other thresholds. EPA also solicits comment on the resource
implications for State permitting agencies associated with each of
these options.
G. When Would a Phase III Existing Facility and New Offshore Oil and
Gas Extraction Facility Be Required To Comply With Any New 316(b)
Requirements?
If EPA were to promulgate today's proposed rule, the final rule
would become effective sixty (60) days after the date of publication in
the Federal Register. After the effective date of any such final
regulation, existing manufacturers and new offshore oil and gas
extraction Phase III facilities, including existing facilities not
currently subject to cooling water intake requirements under 40 CFR
125, would need to comply when an NPDES permit containing requirements
consistent with the final rule is issued to the facility (see Sec.
125.100 and Sec. 125.132). Under current NPDES program regulations,
this will occur when a new NPDES permit is issued or when an existing
NPDES permit is issued, reissued, or modified or revoked and reissued.
As in Phase II, the proposed rule for Phase III existing facilities
includes special provisions to allow sufficient time to complete a
Comprehensive Demonstration Study during the first permit renewal
following promulgation of the Phase III rule (see Sec.
125.104(a)(2)(ii)).
A discussion of the timing of implementation of this proposed rule,
if promulgated, is provided in section VII.
H. What Special Definitions Apply to This Proposal?
EPA is proposing specialized definitions to clarify which
facilities are subject to national categorical requirements. For the
new oil and gas extraction facility requirements in
[[Page 68457]]
Subpart N, EPA is proposing five new definitions to clarify those
facilities subject to the requirements. These definitions are set forth
in the proposed regulations at Sec. 125.133 and include ``new offshore
oil and gas extraction facilities,'' ``offshore liquified natural gas
import terminals,'' ``seafood processing vessels,'' ``sea chest'' and
``fixed facility''). The remainder of the proposed definitions are the
same as those found in the final Phase I regulations; however, not all
of the definitions from Phase I regulations have been used as they are
not all applicable to these proposed Subpart N regulations.
EPA is also proposing definitions for Phase III existing facilities
in Subpart K at Sec. 125.102. All of these definitions are borrowed
from both Phase I and Phase II and remain unchanged, except for the
cutoff date in the definition of ``existing facility'' for new versus
existing offshore oil and gas extraction facilities. Similar to the
definitions for subpart N described above, not all of the definitions
from Phase II regulations have been used as they are not all applicable
to these proposed Subpart K regulations.
EPA solicits comment on these regulatory definitions.
III. Summary of Data Collection Activities
For the Phase III proposed rule, EPA focused its data collection
activities on section 316(b) survey data supplemented by available
existing data sources including the data developed for the Phase I and
Phase II rules.
A. Survey Questionnaires
As discussed in the preamble to the Phase II final rule (69 FR
41576), EPA's industry survey effort consisted of a two-phase process.
EPA administered a screener questionnaire focused on nonutility and
manufacturing facilities as the first phase of this data collection
process. The screener questionnaire provides information on cooling
water intake capacity, sources of the water, intake structure types,
and technologies used to minimize adverse environmental impacts. It
also provides data on facility and parent firm employee numbers and
revenues. This information was used to design a sampling plan for the
subsequent detailed questionnaire. Following the screener survey, the
Agency administered either a short technical or a detailed
questionnaire to utility, nonutility, and manufacturing facilities, as
described below. The two-phase survey was designed to collect
representative data from a sample group of those categories of
facilities potentially subject to section 316(b) regulation for use in
rule development.
In 1997, EPA estimated that over 400,000 facilities could
potentially be subject to a cooling water intake regulation. Given the
large number of facilities potentially subject to regulation, EPA
decided to focus its data collection efforts on six industrial
categories that, as a whole, were estimated to account for over 99
percent of all cooling water withdrawals. These six sectors were:
Utility Steam Electric, Nonutility Steam Electric, Chemicals & Allied
Products, Primary Metals Industries, Petroleum & Coal Products, and
Paper & Allied Products. At the time of the survey, there were about
48,500 facilities in these six categories. EPA believes that this
approach provided a sound basis for assessing best technologies
available for minimizing adverse environmental impacts.
The screener survey focused on nonutility and manufacturing
facilities. EPA developed the sample frame (list of facilities) for the
screener questionnaire using public data sources as described in the
Information Collection Request (DCN 3-3084-R2 in Docket W-00-03).
Facilities chosen for the screener questionnaire represented a
statistical sample of the entire universe of nonutility and
manufacturing facilities potentially subject to cooling water intake
regulations. EPA did not conduct a census of all facilities (i.e. send
a survey to all facilities) for the screener questionnaire because of
the burden associated with surveying a large number of facilities.
Rather, EPA refined the industry data using industry-specific sources
to develop sample frames and mailing lists. EPA believes the sample
frame was sufficient to characterize the operations of each industrial
category. EPA sent the screener questionnaire to 2600 facilities
identified in the sample frame as follows: (1) All identified steam
electric nonutility power producers, both industrial self-generators
and nonindustrial generators (1050 facilities, of which 853 responded);
and (2) a sample of manufacturers from the four non-steam electric
industrial categories: paper and allied products, chemical and allied
products, petroleum and coal products, and primary metals (1550
facilities, of which 1217 responded). EPA adjusted the sample frame for
the screener questionnaire to account for several categories of non-
respondents, including facilities with incorrect address information,
facilities no longer in operation, and duplicate mailings. Through
follow-up phone calls and mailings, EPA increased the response rate for
the screener questionnaire to 95 percent. The screener questionnaire
was not sent to utilities, all of which were believed to be identified
accurately using the publicly-available data described above.
A sample of manufacturing and nonutility facilities identified as
in-scope (subject to regulation) by the screener questionnaire and all
utilities then were sent either a short technical or a detailed
questionnaire. A total of 878 utility facilities, 343 nonutility
facilities and 191 manufacturing facilities received one of the two
questionnaires (short technical or detailed) during the second phase of
the survey. For utilities, nonutilities, and other manufacturing
facilities, EPA selected a random sample of these eligible facilities
to receive a detailed questionnaire. The sample included 282 utility
facilities and 181 nonutility facilities. All 191 manufacturing
facilities received a detailed questionnaire. For nonutilities and
utilities, those facilities not selected to receive a detailed
questionnaire were sent a Short Technical Questionnaire. EPA's approach
in selecting a sample involved the identification of population strata,
the calculation of sample sizes based on desired levels of precision,
and the random selection of sites given the sample size calculations
within each stratum. More detail is provided in the report entitled
``Statistical Summary for Cooling Water Intakes Structures Surveys''
(See DCN 3-3077 in Docket W-00-03).
Five questionnaires were distributed to different industrial
groups. They were: (1) Detailed Industry Questionnaire: Phase II
Cooling Water Intake Structures--Traditional Steam Electric Utilities;
(2) Short Technical Industry Questionnaire: Phase II Cooling Water
Intake Structures--Traditional Steam Electric Utilities (sent to both
utilities and nonutilities); (3) Detailed Industry Questionnaire: Phase
II Cooling Water Intake Structures--Steam Electric Nonutility Power
Producers; (4) Detailed Industry Questionnaire: Phase III Cooling Water
Intake Structures--Manufacturers; and, (5) Watershed Case Study Short
Questionnaire. The questionnaires provided EPA with technical and
financial data necessary for developing this proposed regulation.
Specific details about the questions may be found in EPA's Information
Collection Request (DCN 3-3084-R2 in Docket W-00-03) and in the
questionnaires (see DCN 3-0030 and 3-0031 in Docket W-00-03 and Docket
for today's proposal); these documents are also available on EPA's Web
site
[[Page 68458]]
(http://www.epa.gov/waterscience/316b/question/).
EPA also conducted outreach to industry groups, environmental
groups, and other government entities in the development, testing, and
refinement of a second round of surveys, the section 316(b) Phase III
Industry Technical and Economic Questionnaires, which have been used as
an additional source of data for the Phase III rule. The Phase III
surveys, published in September 2003, were sent to offshore oil and gas
extraction facilities and seafood processing vessels. Specific details
about the questions may be found in EPA's Information Collection
Request (DCN 7-0007) and in the questionnaires (see DCN 7-0008) in the
Docket for today's proposal); these documents are also available on
EPA's Web site (http://www.epa.gov/waterscience/316b/question/). In
addition, EPA utilized a survey conducted by the International
Association of Drilling Contractors (IADC) in 2003 to access technical
data on cooling water use by offshore oil and gas extraction
facilities, including fixed platforms and mobile units.
B. Existing Data Sources
EPA collected data from multiple sources, both public and
proprietary, in order to compile an accurate profile of the potentially
regulated community. EPA reviewed information collected by other
Federal agencies, as well as data compiled by private companies. In
those instances where databases are considered confidential, or where
raw data was unavailable for review, EPA did not consider the
information. Summaries of the reviewed data sources are listed below.
1. Electric Generators
EPA collected a substantial amount of data on the electric power
generating industry in the course of the Phase I, II, and III
rulemakings. For example, EPA used data from the Federal Energy
Regulatory Commission (FERC) (Forms 1 and 1-F), the Energy Information
Administration (EIA) (Forms EIA-412, -767, -860, -861, -867), the Rural
Utility Service (RUS) (Form 12), as well as information from the U.S.
Nuclear Regulatory Commission (NRC), the Utility Data Institute (UDI),
and the Edison Electric Institute (EEI). For detailed information about
these data sources, refer to the proposed rule for Phase II (67 FR
17131).
While electric power generators do not meet the proposed flow
thresholds and are therefore not subject to Phase III national
requirements (refer to section VI for further details), EPA did use the
aforementioned data on electric power generators in reaching this
decision. Data was used to assess, for example, the cooling water
intake flows and the amount of electricity generated, and as part of
the determination of economic impacts of the various compliance
alternatives that EPA considered in developing the proposed rule.
2. Manufacturers
In order to identify potential entrainment impacts at facilities
with a design intake flow below 50 MGD, EPA conducted a field study of
six manufacturers in the Spring of 2002. This study was conducted in
the mid-Atlantic region, with particular focus on the Delaware River
and its tributaries. Sampling sites were selected for three freshwater
and three tidal river facilities. EPA conducted two 4-day sampling
events at each facility and conducted measurements of the following
variables: site location and sampling point, facility intake flow rate,
sampling pump volume, sampling time and duration and sample chain of
custody. Additional physicochemical variables were measured, including
the following: temperature, dissolved oxygen (DO), pH, and
conductivity. Taxonomic identification was conducted for all organisms
collected and results are provided in the Data Report for Small
Facility Ichthyoplankton Entrainment Sampling for the Development of
the 316(b) Phase III Rule for Cooling Water Intake Structures (EPA,
2003) (DCN 7-0009).
In mid-June 2003, in order to supplement the biological data used
for estimating baseline impingement mortality and entrainment rates,
EPA compiled a list of facilities who had responded in their industry
questionnaire that they had conducted a biological study. Some of these
facilities were then requested to provide EPA with copies of these
studies. The first data collection effort focused on facilities that
are located on an inland waterbody and have a high average daily intake
flow. Preference was given to facilities located on Lake Michigan and
the Columbia River, as these waterbodies (and more broadly, these
regions of the country) were identified as having inadequate data for
future analysis of Phase III impingement mortality and entrainment
rates. The second data collection effort focused on facilities located
in particular U.S. Fish and Wildlife Service fish regions to be used by
EPA in calculation of benefits for the rule. The last data collection
effort focused specifically on Phase III facilities. In total, 90
facilities were contacted and these contacts resulted in collection of
63 biological studies (33 of which were from Phase III facilities) for
use in estimation of baseline impingement mortality and entrainment
rates.
3. Offshore Oil and Gas Extraction Facilities and Seafood Processing
Vessels
EPA conducted extensive research on the use of cooling water by
offshore oil and gas extraction facilities and seafood processing
vessels to determine whether these industry sectors would be subject to
regulation under the Phase III rule. Information sources included
industry surveys (one administered by EPA in conjunction with the
International Association of Drilling Contractors (IADC) and another
solely by EPA); industry databases and other publicly available
information, and meetings with government and industry representatives.
The survey efforts are described in section III.A above.
In April and May of 2003, EPA conducted site visits and field
interviews at offshore oil and gas extraction facilities and seafood
processing vessels to evaluate technologies in use for reducing
impingement mortality and/or entrainment at these facilities. EPA
employed the services of a specialized naval engineer to conduct these
site visits and field interviews. Site visits were conducted at
platforms and vessels. In addition, field interviews were conducted
with industry personnel. The data collected from these visits and
interviews included geographic data, intake design and impingement and
entrainment technologies in place, impingement and entrainment problems
encountered as well as any methods utilized in resolving such problems
(See DCN 7-0010).
Sources used by EPA to characterize the offshore seafood processing
industry included the following:
U.S. Food and Drug Administration (FDA), Center for Food
Safety and Applied Nutrition, January 2003, which included a list of
U.S. FDA-European Union (EU) Exporters, Processing Vessels.
Alaska Department of Fish and Game 2002 Intent to Operate
Listing.
Water Discharge Permits (PCS) database searches by SIC
codes 2091, 2092 and 2077.
Department of Transportation Maritime Administration
(MARAD) Web site: http://www.marad.dot.gov/publications/index.html and
http://www.marad.dot.gov/Marad_Statistics/index.html.
U.S. Coast Guard Merchant Vessels of the United States
database.
[[Page 68459]]
U.S. Coast Guard PSIX/MSIS databases.
National Transportation Safety Board database.
U.S. Army Corps of Engineers, Navigation Data Center,
Waterborne Commerce Statistics Center.
The Alaska Department of Fish and Game Division of
Commercial Fisheries Web site: http://www.cf.adfg.state.ak.us.
The At-Sea Processors Association Web site: http://www.atsea.org/.
EPA Region 10 Database of seafood processors permitted in
Alaska.
Technical Development Document (TDD) for the Uniform
National Discharge Standards (UNDS) program (found at http://unds.bah.com/TDD.pdf) (Appendix A: Seawater Cooling Overboard Discharge
Report).
National Marine Fisheries Service Web site, Restricted
Access Management Program, http://www.fakr.noaa.gov/ram/default.htm.
National Marine Fisheries Services Web site, link to
American Fisheries Act (AFA) permits: http://www.fakr.noaa.gov/ram/afa.htm#list.
Several vessel operators, naval architects, engineers and
regulators.
C. Data Provided to EPA by Industrial, Trade, Consulting, Scientific or
Environmental Organizations or by the General Public
Since 1993, EPA has been developing cooling water regulations as
part of a collaborative effort with industry and environmental
stakeholders, other Federal agencies, the academic and scientific
communities, and the general public. As a result, EPA has reviewed and
considered the many documents, demonstration studies, scientific
analyses, and historical perspectives offered in support of each phase
of the regulatory process. For example, during the early stages of data
gathering, EPA created an internal library of reference documents
addressing cooling water intake structure issues. This library
currently holds over 2,800 documents, many of which were referenced in
the rulemaking process and are contained in the record (see the
following paragraph for further information on the record). The library
contains a thorough collection of a wide variety of documents,
including over 80 section 316(b) demonstration documents, over 300
impingement and entrainment studies, over 100 population modeling
studies, over 500 fish biology and stock assessment documents, over 350
biological studies commissioned by power generators, over 80 NPDES
decisions and NPDES or SPDES-related documents, over 120 intake
technology reports, over 10 databases on the electric power industry,
and documents from interagency committees such as the Ohio River Valley
Water Sanitation Commission (ORSANCO).
In addition, the record for the Phase I new facility rule contains
nearly 1,000 documents (research articles, databases, legal references,
memorandums, meeting notes, and other documents), consisting of
approximately 47,000 pages of supporting material available for public
review. And the record for the Phase II existing facility rule contains
over 2600 additional documents, comprising approximately 125,000 pages
of supporting material.
Finally, EPA has worked extensively with stakeholders from
industry, public interest groups, State agencies, and other Federal
agencies in the development of this proposed rule. These public
participation activities have focused on various section 316(b) issues,
including general issues, as well as issues relevant to development of
the Phase II rule and issues relevant to this proposed Phase III rule.
See section I.C.6 of this preamble for a discussion of key public
participation activities.
IV. Overview of Facility Characteristics (Cooling Water Systems &
Intake Structures) for Industries Potentially Subject to Proposed Rule
Today's proposed rule would apply national categorical requirements
to two groups of facilities that use cooling water intake structures to
withdraw water from waters of the U.S.: existing manufacturing and
industrial facilities and new offshore oil and gas extraction
facilities.
A. Overview of Potentially Regulated Phase III Universe
EPA's data collection efforts largely focused on five industrial
sectors: small flow electric power generators (both utilities and
nonutilities withdrawing less than 50 MGD); chemicals and allied
products (SIC Major Group 28); primary metals industries (SIC Major
Group 33); paper and allied products (SIC Major Group 26); and
petroleum and coal products (SIC Major Group 29). The latter four
sectors use a significant portion of the cooling water withdrawn among
all manufacturing industries. EPA also identified other industry
sectors that use cooling water including: transportation equipment (SIC
Major Group 37); lumber and wood products (SIC Major Group 24); rubber
and plastics products (SIC Major Group 30); food and kindred products
(SIC Major Group 20); tobacco products (SIC Major Group 21); and
machinery (SIC Major Group 35) (see DCN 7-0011). A more comprehensive
list of industries that use cooling water and their NAICS and SIC Codes
can be found in section A of the Supplementary Information. Although
EPA's survey data collection efforts were not designed to collect data
from industries other than the five listed above, data were collected
from the following industries: food processing; aircraft engines and
engine parts; cutlery; sawmills and planing mills; finishers of broad
woven fabrics of cotton; potash, soda and borate minerals; iron ores;
and sugarcane and sugar beets. These data from other industries, while
not a statistically derived sample, confirm that the five primary
industry sectors discussed above account for the vast majority of Phase
III cooling water use. The data also suggest that the intake structure
design and construction at these industries were substantially similar
to the industries for which EPA did collect data.
Of the estimated 683 manufacturing and electric generator
facilities (survey weighted estimate, as described in the Technical
Development Document EPA-821-R-04-015, DCN 7-0004) within the Phase III
universe,\6\ approximately 225 (33 percent) belong to the pulp and
paper sector, 185 (27 percent) belong to the chemical sector, 88 (13
percent) belong to the metals sector, and 39 (6 percent) belong to the
petroleum sector. EPA also surveyed 29 facilities in other industry
sectors (discussed above, all of which are potentially subject to the
Phase III rule) in the detailed questionnaire, and those data are also
being considered in today's proposed rule. In addition, an estimated
117 (17 percent) electric generating facilities are included within the
Phase III universe.
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\6\ The entire Phase III universe includes facilities with a
design intake flow greater than 2 MGD which use at least 25 percent
of the water withdrawn exclusively for cooling, and are not covered
by Phase II. Offshore oil and gas extraction facilities are not
included in this estimate.
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The information below is generally based on data collected from the
Short Technical Industry Questionnaire, the Detailed Industry
Questionnaire, and the Phase III Industry Technical and Economic
Questionnaires. Additional detail discussing the entire Phase III
universe as well as facilities subject to the uniform national
standards and facilities subject to permitting based on best
professional judgment can be found in the Technical Development
Document.
As explained in section V of this preamble, there are five main
categories of surface water used as sources of cooling water. The
source of surface water withdrawn for cooling is an
[[Page 68460]]
important factor in determining potential environmental impacts. An
estimated 11 (2 percent) facilities withdraw cooling water from an
ocean; an estimated 39 (6 percent) facilities withdraw cooling water
from an estuary or tidal river; an estimated 496 (73 percent)
facilities withdraw cooling water from a freshwater stream or river; an
estimated 60 (9 percent) facilities withdraw cooling water from a lake
or reservoir; and an estimated 77 (11 percent) facilities withdraw
cooling water from one of the Great Lakes. EPA estimates a total design
intake flow of 40,441 MGD and total actual intake flow of 21,624 MGD
for the Phase III universe.
Of the facilities within the Phase III universe, 303 (44 percent)
employ once-through cooling systems, 198 (29 percent) use closed-cycle
recirculating cooling systems, 121 (18 percent) use ``combination''
systems, and 61 (9 percent) use an ``other'' type of system. An
estimated 286 (42 percent) facilities have installed a cooling tower.
Note that not all facilities that have installed a cooling tower are
classified as using closed-cycle recirculating cooling systems, as some
facilities with multiple cooling water systems may be ``combination''
systems that employ both closed-cycle and once-through cooling.
Facilities may also list ``helper'' cooling towers, which are generally
used to mitigate discharge temperatures and do not affect intake flows.
Since facilities may have more than one cooling water system, these
estimates are based on the predominant cooling water system at each
facility.
Facilities within this universe also may have more than one cooling
water intake structure configuration. Therefore, in providing the
information on intake structures, a facility may be counted multiple
times (as many times as it has distinct cooling water intake structure
configurations). Thus, of the facilities within the Phase III universe,
683 facilities represent an estimated 747 total cooling water intake
structure configurations. Of these, an estimated 359 (48 percent) have
a shoreline intake, 216 (29 percent) have a submerged offshore intake,
123 (16 percent) withdraw cooling water through a canal or channel, 49
(7 percent) have an intake situated in a bay or cove, and 47 (6
percent) are estimated to have some other type of intake or provided no
information.
B. Existing Manufacturers and Industrial Facilities Potentially Subject
to Proposed National Requirements
This section presents the number of facilities that would be
potentially subject to uniform national performance standards under
each of the three co-proposed options. See section VI of this preamble
and Chapter 4 of the Technical Development Document for details on the
other options considered but not presented as part of today's proposal.
Exhibit IV-1 provides the number of existing facilities by design
intake flow and waterbody type. Throughout the rest of this section,
tabulations of less than five facilities are combined to prevent
disclosure of an individual facility's information.
Exhibit IV-1.--Total Number of Phase III Manufacturing Facilities Potentially Subject to the Regulations by
Design Intake Flow and Waterbody Type
----------------------------------------------------------------------------------------------------------------
Waterbody
--------------------------------------------------------
Oceans,
Facility design intake flow Freshwater rivers estuaries, tidal
and streams, rivers and All waterbodies
lakes, and streams, and
reservoirs Great Lakes
----------------------------------------------------------------------------------------------------------------
2 MGD or greater \1\................................... 556 127 683
20 MGD or greater \1\.................................. 302 92 394
50 MGD or greater \2\.................................. 103 52 155
100 MGD or greater \2\................................. 47 26 73
200 MGD or greater \2\................................. 16 15 31
----------------------------------------------------------------------------------------------------------------
\1\ Includes those electric generating facilities defined as part of the Phase III universe.
\2\ Only includes manufacturing facilities.
1. National Requirements for Facilities With a Design Intake Flow of 50
MGD and Above
EPA's 50 MGD option would require an estimated 155 facilities to
meet the uniform national standards that implement section 316(b)
(facilities with a design intake flow of 50 MGD and above and meeting
applicability criteria at Sec. 125.101). These facilities are
comprised of an estimated 56 (36 percent) within the chemical sector,
42 (27 percent) within the pulp and paper sector, 30 (19 percent)
within the metals sector, 17 (11 percent) within the petroleum sector,
and an estimated total of 10 facilities (7 percent) within the
``other'' category; no seafood processing vessels would meet the
applicability criteria at Sec. 125.101.
An estimated 6 (4 percent) facilities withdraw cooling water from
an ocean; an estimated 15 (10 percent) facilities withdraw cooling
water from an estuary or tidal river; an estimated 93 (60 percent)
facilities withdraw cooling water from a freshwater stream or river; an
estimated 10 (6 percent) facilities withdraw cooling water from a lake
or reservoir; and an estimated 31 (20 percent) facilities withdraw from
one of the Great Lakes.
EPA has estimated that these 155 facilities possess a total design
intake flow of 30,136 MGD and an actual intake flow of 16,582 MGD.
Further, of the cooling water system types in use at these 155
facilities, 68 (44 percent) of these systems are once-through cooling
systems, 6 (4 percent) are closed-cycle recirculating cooling systems,
56 (36 percent) are ``combination'' systems, and 25 (16 percent) use an
``other'' type of system. An estimated 52 (33 percent) facilities have
installed a cooling tower. As noted above, not all facilities that have
installed a cooling tower are classified as closed-cycle recirculating
cooling system.
These 155 facilities possess an estimated 211 total cooling water
intake structure configurations. Of these, an estimated 46 (23 percent)
facilities withdraw cooling water through a canal or channel, 17 (11
percent) have an intake situated in a bay or cove, 89 (59 percent) have
a shoreline intake, 31 (20 percent) have a submerged offshore intake,
and 28 (5 percent) are estimated to have some other type of intake or
provide no information.
[[Page 68461]]
2. National Requirements for Facilities With a Design Intake Flow of
200 MGD and Above
EPA's 200 MGD option would require an estimated 31 facilities to
meet the uniform national standards that implement section 316(b)
(facilities with a design intake flow of 200 MGD and above and meeting
applicability criteria at Sec. 125.101). These facilities are
comprised of an estimated 15 (48 percent) within the metals sector, 7
(23 percent) within the chemical sector, and 9 (29 percent) within the
petroleum sector, the pulp and paper sector, or the ``other''
industries category.
An estimated 5 (16 percent) facilities withdraw cooling water from
an estuary or tidal river; an estimated 16 (50 percent) facilities
withdraw cooling water from a freshwater stream or river, lake, or
reservoir; and an estimated 10 (32 percent) facilities withdraw from
one of the Great Lakes. EPA estimates that there are no manufacturing
facilities with a design intake flow of 200 MGD or greater that
withdraw from an ocean.
EPA has estimated that these 31 facilities possess a total design
intake flow of 18,340 MGD and an actual intake flow of 11,472 MGD.
Further, of the cooling water system types in use at these 31
facilities, 17 (55 percent) of these systems are once-through cooling
systems, and 14 (45 percent) are ``combination'' or ``other'' systems.
An estimated 10 (32 percent) facilities have installed a cooling tower
or closed-cycle recirculating system.
These 31 facilities possess an estimated 70 total cooling water
intake structure configurations. Of these, an estimated 16 (23 percent)
facilities withdraw cooling water through a canal or channel, 24 (34
percent) have a shoreline intake, and 30 (43 percent) have a submerged
offshore intake.
3. National Requirements for Coastal and Great Lakes Facilities With a
Design Intake Flow of 100 MGD and Above
EPA's third proposed option would establish national requirements
for facilities with 100 MGD or more design intake flows when the intake
is on coastal waters (including oceans, tidal rivers and streams, and
estuaries) or one of the Great Lakes. This option would require an
estimated 26 facilities to meet the uniform national standards. These
facilities are comprised of an estimated 12 (46 percent) within the
metals sector, 7 (27 percent) within the chemical sector, and the
remaining 7 (27 percent) within the pulp and paper sector, the
petroleum sector, or the ``other'' industries. EPA estimated that these
26 facilities possess a total design intake flow of 7,661 MGD and
actual intake flow of 4,753 MGD.
Further, of the predominant system types in use at these 26
facilities, 13 (50 percent) of these systems are once-through cooling
systems. The other estimated 13 facilities use a combination cooling
system and have installed a cooling tower. These 26 facilities possess
an estimated 47 total cooling water intake structure configurations. Of
these, an estimated 11 (23.4 percent) facilities withdraw cooling water
through a canal or channel, 21 (44.7 percent) have a shoreline intake,
and 15 (31.9 percent) have a submerged offshore intake.
C. New Offshore Oil and Gas Extraction Facilities Subject to Proposed
National Requirements
Today's proposed rule would also apply national requirements to new
offshore (offshore includes coastal) oil and gas extraction facilities.
EPA is presently considering new facilities within the offshore oil and
gas extraction industry as classified under SIC Major Group 13. EPA
projects that there will be an estimated 124 new offshore oil and gas
extraction facilities over the next 20 years. Most of these facilities
will withdraw less than 50 MGD estimated design intake flow and will
include both mobile offshore drilling units (MODUs) and deepwater
platforms in the Gulf of Mexico and Alaska. Only three new MODUs are
projected to have a design intake flow of greater than 50 MGD within
the period of analysis. EPA's projection of new oil and gas extraction
facilities is based on historical refurbishment of old rigs including
MMS data on new platform installations over the last 10 years. See Part
C of the EA for more information. Note most new offshore and coastal
oil and gas extraction facilities to which today's proposed rule would
apply would not be operating in estuaries, except for those operating
in Cook Inlet.
V. Environmental Impacts Associated With Cooling Water Intake
Structures
Through the Phase III rulemaking, EPA intends to minimize the
adverse environmental impacts of cooling water intake structures by
reducing the number of aquatic organisms lost as a result of water
withdrawals associated with these structures or through restoration
measures that compensate for these losses. In the Phase I rule for new
facilities and in the Phase II rule for certain existing facilities,
EPA provided an overview of the magnitude and type of environmental
impacts associated with cooling water intake structures, including
several illustrative examples of documented environmental impacts at
existing facilities (see 65 FR 49071-4; 66 FR 65262-5; 67 FR 17136-40;
and 69 FR 41587-88).
For the same reasons set forth in the preamble to the rules for
Phase I and Phase II facilities (66 FR 65256, 65291-65297 and 69 FR
41586-90), EPA has determined that there are multiple types of
undesirable and unacceptable environmental impacts that may be
associated with Phase III facilities, depending on conditions at the
individual site. These types of impacts include entrainment and
impingement which can contribute to reductions of threatened and
endangered species; and ecologically critical aquatic organisms,
including important elements of the food chain; diminishment of a
population's compensatory reserve; losses to populations, including
reductions of indigenous species populations, commercial and
recreational fisheries; and stresses to overall communities and
ecosystems as evidenced by reductions in diversity or other changes in
system structure and function. Based on the analyses in and for the
same reasons set forth in the preambles to the Phase I rule (66 FR
65256, 65291-65297) and Phase II rule (69 FR 41598-41601), EPA has
selected reductions in impingement mortality and entrainment as a
quick, certain, and consistent metric for comparing facility
performance to applicable requirements for Phase III facilities.
Further, EPA considered the non-water quality environmental impacts for
this rule (e.g., impacts on energy use and associated increases in
emissions) and found them to be acceptable at a national level. This
section describes the environmental impacts associated with cooling
water withdrawals and why they are of concern to the Agency.
Impingement takes place when organisms are trapped against cooling
water intake screens by the force of the water being drawn through the
cooling water intake structure. The velocity of the water withdrawal by
the cooling water intake structure may prevent proper gill movement,
remove fish scales, and cause other physical harm or death of affected
organisms through exhaustion, starvation, asphyxiation, and descaling.
Death from impingement (``impingement mortality'') can occur
immediately or subsequently as an individual succumbs to physical
damage upon its return to the waterbody.
Entrainment occurs when organisms are drawn through the cooling
water intake structure into the cooling system.
[[Page 68462]]
Organisms that become entrained are typically relatively small, aquatic
organisms, including early life stages of fish and shellfish. Many of
these small fragile organisms serve as prey for larger organisms higher
on the food chain which are commercially and recreationally desirable
species. As entrained organisms pass through a facility's cooling
system they may be subject to mechanical, thermal, and at times,
chemical stress. Sources of such stress include physical impacts in the
pumps and condenser tubing, pressure changes caused by diversion of the
cooling water into the plant or by the hydraulic effects of the
condensers, sheer stress, thermal shock in the condenser and discharge
tunnel, and chemical toxic effects from antifouling agents such as
chlorine. Similar to impingement mortality, death from entrainment can
occur immediately or subsequently as the individual succumbs to the
damage from the stresses encountered as it passed through the cooling
water system once it is discharged back into the waterbody.
EPA estimates that existing Phase III facilities withdraw, on
average, approximately 23,000 million gallons a day from waters of the
United States.7 8 The withdrawal of such large quantities of
water has the potential to affect large quantities of aquatic organisms
including phytoplankton (tiny, freefloating photosynthetic organisms
suspended in the water column), zooplankton (small aquatic animals,
including fish eggs and larvae, that may consume phytoplankton and
other zooplankton), fish, and shellfish. Aquatic organisms drawn into
cooling water intake structures are either impinged on components of
the cooling water intake structure or entrained in the cooling water
system itself. Other organisms, including reptiles, birds, and mammals
are also sometimes drawn into cooling water intake structures.
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\7\ EPA 1999. Detailed Industry Questionnaires: Phase II Cooling
Water Intake Structures & Watershed Case Study Short Questionnaire.
U.S. Environmental Protection Agency, Office of Wastewater
Management, Washington, DC. OMB Control No. 2040-0213.
\8\ EPA 2003. Industry Technical Questionnaire: Phase III
Cooling Water Intake Structures. Offshore and Coastal Oil and Gas
Extraction Facilities. U.S. Environmental Protection Agency, Office
of Science and Technology, Washington DC. OMB Control No. 2030-0213.
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The environmental impacts attributable to impingement mortality and
entrainment at individual facilities include losses of early life
stages of fish and shellfish, reductions in forage species, and
decreased recreational and commercial fishery landings. EPA estimates
that cooling water intake structures potentially within the scope of
today's rule and with a cooling water intake designed to take in
greater than 2 MGD of water kill more than 120 million age 1 equivalent
fish annually through impingement and entrainment. Expressing
impingement mortality and entrainment losses as age 1 equivalents is an
accepted method for converting losses of all life stages into
individuals of an equivalent age and provides a standard metric for
comparing losses among species, years, and facilities. Although the
number of age 1 equivalent fish killed by impingement and entrainment
is large, precise quantification of the nature and extent of impacts to
populations and ecosystems is difficult due in part to the complexity
of population dynamics and the physical, chemical, and biological
processes of ecosystems. While it is generally accepted as a simple and
transparent method for modeling losses, the proportional methodology
that EPA uses to estimate impingement mortality and entrainment
nationwide involves uncertainties that may result in under or over
estimating actual impingement mortality and entrainment rates.\9\
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\9\ For more information, please see Chapter A2 of Part A of the
Regional Analysis Document.
---------------------------------------------------------------------------
Decreased numbers of aquatic organisms can disrupt aquatic food
webs and alter species composition and overall levels of biodiversity.
For example, a model that examined the effect of large entrainment
losses of forage fish, such as bay anchovy, predicted subsequent
reductions in predator populations (including commercially and
recreationally important species such as striped bass, weakfish, and
blue fish) as high as 25 percent.\10\ This is because forage species,
which comprise a majority of entrainment losses at many facilities, are
often a primary food source for predator species.
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\10\ Summers, J.K. 1989. Simulating the indirect effects of
power plant entrainment losses on an estuarine ecosystem. Ecological
Modeling, 49: 31-47.
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EPA is also concerned about the potential impacts of cooling water
intake structures located in or near habitat areas that support
threatened, endangered, or other species of concern (those species that
might be in need of conservation actions, but are not currently listed
as threatened or endangered under State or Federal law).\11\ In the San
Francisco Bay-Delta Estuary, California, in the vicinity of the
Pittsburg and Contra Costa Power Plants several fish species (e.g.,
Delta smelt, Sacramento splittail, chinook salmon, and steelhead) are
now considered threatened or endangered by State and/or Federal
authorities. EPA evaluated facility data on impingement mortality and
entrainment rates for these species and estimated that potential losses
of special status fish species at the two facilities may average 8,386
age 1 equivalents per year resulting from impingement and 169 age 1
equivalents per year due to entrainment.\12\ In another example, EPA is
aware that from 1976 to 1994, approximately 3,200 threatened or
endangered sea turtles entered enclosed cooling water intake canals at
the St. Lucie Nuclear Generating Plant in Florida.\13\ The facility
developed a capture-and-release program in response to these events.
Most of the entrapped turtles were captured and released alive;
however, approximately 160 turtles did not survive. An incidental take
limit established by NOAA Fisheries in a 2001 biological opinion for
this facility has been set at no more than 1,000 sea turtles captured
in the intake, with less than one percent killed or injured as a result
of plant operations.\14\ Although the extent to which threatened,
endangered, and other special status species are taken by cooling water
intake structures more generally is yet to be determined, EPA is
concerned about potential impacts to such species.
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\11\ For more information, please see Chapter A9 of Part A of
the Regional Analysis Document.
\12\ Impingement and entrainment data were obtained from the
2000 Draft Habitat Conservation Plan for the Pittsburg and Contra
Costa facilities. Please see EPA's Regional Studies for the Final
Section 316(b) Phase II Existing Facilities Rule for detailed
information on EPA's evaluation of impingement and entrainment at
these facilities.
\13\ Florida Power and Light Company. 1995. Assessment of the
impacts at the St. Lucie Nuclear Generating Plant on sea turtle
species found in the inshore waters of Florida.
\14\ Florida Power and Light Company. 2002. Florida Power &
Light Company St. Lucie Plant Annual Environmental Operating Report
2002.
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EPA is addressing the universe of existing facilities through two
separate rulemakings. The Phase II final rule addressed power
generation facilities with cooling water intake structures designed to
take in water flows greater than or equal to 50 million gallons a day
(MGD). For today's proposed rulemaking, EPA evaluated impacts from the
remaining power generation facilities (those with cooling water intake
structures designed to withdraw greater than 2 MGD and less than 50
MGD) and from manufacturing facilities withdrawing greater than 2 MGD.
EPA divided the universe of existing facilities in this way in part
because EPA initially had limited data on Phase III facilities with
design capacities less than 50 MGD. Dividing the universe of existing
facilities provided EPA with an
[[Page 68463]]
opportunity to gather more information on Phase III facilities.
Though the magnitude of impacts EPA has quantified from the
universe of Phase III facilities is substantially smaller than the
magnitude of impacts EPA has quantified from the universe of Phase II
facilities, the information EPA has gathered on individual Phase III
facilities indicates that the types of impacts that large individual
facilities have on aquatic organisms can be similar to individual Phase
II facilities' impacts.\15\ Like Phase II facilities, Phase III
facilities withdraw water from all waterbody types: lake, reservoir,
Great Lake, freshwater river and stream, tidal river, estuary, and
ocean environments. A smaller percentage of the overall cooling water
flow withdrawn by Phase III facilities comes from tidal river, estuary
and ocean environments, however, which are some of the most sensitive
waterbodies. Phase III facilities also reside in many of the same
geographic areas of the country and on many of the same waterbodies as
Phase II facilities.
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\15\ EPA 1999. Detailed Industry Questionnaires: Phase II
Cooling Water Intake Structures & Watershed Case Study Short
Questionnaire. U.S. Environmental Protection Agency, Office of
Wastewater Management, Washington, DC. OMB Control No. 2040-0213.
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Information available to the Agency also indicates that the range
of configurations of Phase III cooling water intake structures is
similar to that of Phase II intakes (see section VI), and that their
size ranges broadly overlap (in terms of both design capacity and
actual intake flow). The majority of facilities evaluated as part of
the Phase III rulemaking, have cooling water intake structures designed
to take in less than 50 MGD. However, the majority of total cooling
water intake volume at Phase III facilities is associated with
facilities designed to withdraw 50 MGD or more. The ten largest Phase
III facilities have intakes designed to take in more than 500 MGD. Two
of these facilities have cooling water intakes designed to take in more
than 1,000 MGD. In Phase II, there were 257 facilities with cooling
water intakes designed to take in more than 500 MGD and 112 cooling
water intakes designed to take in more than 1,000 MGD.
The universe of Phase III facilities also differs from that of
Phase II facilities in that it includes oil and gas extraction
facilities operating in offshore marine environments. EPA knows of no
studies that examine actual impingement mortality and entrainment by
offshore oil and gas extraction facilities. However, offshore marine
environments provide habitat for a number of species of fish,
shellfish, and other aquatic organisms. Many species have life stages
that are small and planktonic or of minimal swimming ability and are
therefore vulnerable to entrainment by cooling water intake structures.
Larger life stages are potentially vulnerable to impingement. Both
types of organisms are found in the offshore marine environment and
thus may be susceptible to impingement mortality and entrainment by
offshore oil and gas extraction facilities. The densities of organisms
in the vicinity of these facilities relative to densities in estuaries
and other nearshore areas is not well characterized.
Offshore oil and gas extraction facilities have also been shown to
attract and concentrate aquatic organisms in the immediate vicinity of
the underwater portions of their structure. A variety of species of
pelagic fish have been found to gather within relatively short time
frames around the underwater portion of offshore oil and gas extraction
facilities. If a facility remains in one place for a sufficient length
of time, other species of aquatic organisms take up residence directly
upon the underwater structure and form reef-like communities that
support additional species of fish and shellfish. The increased number
of organisms near the underwater portion of facilities where cooling
water intake structures are located increases the potential for
impingement mortality and entrainment of those organisms. The extent to
which the increased numbers of aquatic organisms represents an overall
increase in organism populations, rather than a simple concentration of
organisms from surrounding areas, is not known. (For additional
information, see DCN 7-0013.)
The Minerals Management Service (MMS) did attempt to estimate
potential population level impacts from impingement mortality and
entrainment associated with the future operation of the Liberty Island
project located in the Beaufort Sea in Alaska. The final Environmental
Impact Statement for the project states that the proposed seawater
intake structure will likely harm or kill some young-of-the-year arctic
cisco during the summer migration period and some eggs and fry of other
species living in the immediate vicinity of the intake. MMS estimated
that less than 1% of all arctic cisco in the Liberty Island area were
likely to be harmed or killed by the intake structure and that there
would not be a measurable effect on the young-of-the-year cisco in the
migration corridor. However, MMS also did not expect measurable effects
on populations of other fish species, including salmon, because of the
widespread and low density distribution of those species' eggs and fry.
Essential fish habitat for salmon will be adversely affected according
to MMS because it is expected that prey species of zooplankton and fish
in their early life stages (juveniles, eggs, and larvae) could be
killed in the intake (see Section A of the Regional Study report).
EPA's analyses indicate that, on a national basis, Phase II
existing facilities have a total actual cooling water intake flow
(214,000 million gallons a day) greater than that of Phase III existing
facilities (23,000 million gallons a day). As discussed in the preamble
to the Phase II final rule (69 FR 41612), information in the record
contains evidence to support the proposition that, in a given aquatic
environment, entrainment is related to flow (see DCN 2-013L-R15 and 2-
013) while impingement is related to a combination of flow, intake
velocity, and fish swim speed (see DCN 2-029). Larger withdrawals of
water may result in commensurately greater levels of entrainment
because the eggs and larvae of some aquatic species are free-floating
and may be drawn with the flow of cooling water into an intake
structure. Impingement rates are also influenced by swim speeds of
affected species and intake velocity. As described in section IX, the
Agency estimates that 120 million age 1 equivalent fish are impinged
and entrained annually by the universe of Phase III facilities. This
number is lower than the 3.4 billion age 1 equivalent fish the Agency
estimated to be impinged and entrained annually by Phase II facilities
(69 FR 41656). The lower total flow partially explains why the impacts
EPA quantified for Phase III facilities are lower than those EPA
quantified for Phase II facilities. In addition, based on the studies
EPA was able to collect from Phase II and Phase III facilities, even on
a flow-weighted basis the number of organisms impinged and entrained by
Phase III facilities is approximately one third of the number of
organisms impinged and entrained by Phase II facilities.
The following discussion refers to studies from Phase II facilities
which have been extensively studied in order to illustrate
environmental impacts associated with cooling water intake structures.
Because of the basic similarities in nature among Phase II and Phase
III facilities, the Agency believes these case studies are useful for
understanding the types of environmental impacts that may result from
cooling water intake structures at Phase III facilities. EPA notes that
Phase II facilities as a group withdraw more
[[Page 68464]]
cooling water than the Phase III facilities as a group and requests
comment on the relevance of these Phase II facility studies for the
Phase III rulemaking. EPA also requests any case studies or other
available data on environmental impacts from Phase III facilities.
Examples of Environmental Impacts Caused by Phase II Cooling Water
Intake Structures
1. Hudson River
The power generation facilities on the Hudson River in New York are
some of the most extensively studied in the nation. The fish
populations in the Hudson River have also been studied extensively to
measure the impacts of these power plants. Studies of entrainment at
five Hudson River power plants during the 1980s predicted year-class
reductions ranging from six percent to 79 percent, depending on the
fish species.\16\ The combined design intake flow capacity of these
five facilities is greater than 6,500 million gallons per day. The New
York State Department of Environmental Conservation (NYSDEC) concluded
that any ``compensatory responses to this level of power plant
mortality could seriously deplete any resilience or compensatory
capacity of the species needed to survive unfavorable environmental
conditions.''\17\
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\16\ Boreman J. and P. Goodyear. 1988. Estimates of entrainment
mortality for striped bass and other fish species inhabiting the
Hudson River Estuary. American Fisheries Society Monograph 4:152-
160.
\17\ New York State Department of Environmental Conservation
(NYSDEC). 2000. Internal memorandum provided to the U.S. EPA on
NYDECs position on SPDES permit renewals for Roseton, Bowline Point
1 & 2, and Indian Point 2 & 3 generating stations.
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The Final Environmental Impact Statement (FEIS) prepared for these
three of these five facilities concludes that impacts are associated
with the power plants and notes that these impacts are more like
habitat degradation than the ``selective cropping'' of fish that occurs
during regulated fishing because the entire community is impacted
rather than specific species higher on the food chain.\18\ The FEIS
estimates, from samples collected between 1981 and 1987, that the
average annual entrainment losses from these three facilities includes
16.9 million American shad, 303.4 million striped bass, 409.6 million
bay anchovy, 468 million white perch, and 826.2 million river
herring.\19\ In addition, related studies have found a small long-term
decline in both species richness and diversity within the resident fish
community.\20\
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\18\ New York State Department of Environmental Conservation
(NYSDEC). 2003. Final Environmental Impact Statement: Concerning the
Applications to Renew NYSPDES Permits for the Roseton 1 & 2, Bowling
1 & 2 and Indian Point 2 & 3 Steam Electric Generating Stations,
Orange, Rockland and Westchester Counties.
\19\ Ibid.
\20\ Henderson, P.A. and R.M. Seaby. 2000. Technical comments on
the Draft Environmental Impact Statement for the State Pollution
Discharge Elimination System Permit Renewal for Bowline Point 1 & 2,
Indian Point 2 & 3, and Roseton 1 & 2 Steam Generating Stations.
Pisces Conservation Ltd.
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The Hudson River, like many waterbodies in the nation, has
undergone many changes in the past few decades. These changes, which
have affected fish populations either positively or negatively, include
improvements to water quality as a result of upgrades to sewage
treatment plants, invasions by exotic species such as zebra mussels,
chemical contamination by toxins such as PCBs and heavy metals, global
climate shifts such as increases in annual mean temperatures and higher
frequencies of extreme weather events (e.g., the El Ni[ntilde]o-
Southern Oscillation), and strict management of individual species
stocks such as striped bass.\21\ In addition, there are dramatic
natural changes in fish populations on an annual basis and in the long
term due to natural phenomena because the Hudson River, like many
waterbodies, is a dynamic system with many fundamental, fluctuating
environmental parameters-such as flow, temperature, salinity, dissolved
oxygen, nutrients, and disease-that cause natural variation in fish
populations each year.\22\ The existence of these interacting variables
makes it difficult to determine the impact of impingement and
entrainment losses on a population's relative health. Nonetheless, as
described later in this section, EPA is concerned about the potential
for cumulative impacts resulting from multiple facility intakes that
collectively impinge and/or entrain aquatic organisms within a specific
waterbody.
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\21\ Ibid.
\22\ New York State Department of Environmental Conservation
(NYSDEC). 2003. Final Environmental Impact Statement: Concerning the
Applications to Renew NYSPDES Permits for the Roseton 1 & 2, Bowling
1 & 2 and Indian Point 2 & 3 Steam Electric Generating Stations,
Orange, Rockland and Westchester Counties.
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2. Mount Hope Bay
Environmental impacts were also studied in another recent permit
reissuance for the Brayton Point Station in Somerset, Massachusetts,
where EPA is the permitting authority. EPA determined that, among other
things, the facility's cooling water system had contributed to the
collapse of the fishery and inhibited its recovery despite stricter
commercial and recreational fishing limits and improved water quality
due to sewage treatment upgrades. The facility currently withdraws
nearly one billion gallons of water each day (1,000 MGD) and the
average annual losses of aquatic organisms due to impingement and
entrainment are estimated in the billions, including, among other
species, 251 million winter flounder, 375 million windowpane flounder,
3.5 billion tautog and 11.8 billion bay anchovy.\23\ A dramatic change
in the fish populations in Mount Hope Bay is apparent after 1984 with
finfish abundance decline by more than 87 percent, which coincides with
a 45 percent increase in cooling water withdrawal from the bay due to
the modification of Unit 4 from a closed-cycle recirculating system to
a once-through cooling water system and a similar increase in the
facility's thermal discharge.24 25 The relative
contributions of cooling water withdrawal and increased thermal
discharge to the observed population decline is not known, and some of
decline may be due to factors other than cooling water. However, the
downward trend of several species of finfish abundance in Mount Hope
Bay is significantly greater than declines for the same species in
adjacent Narragansett Bay that is not influenced by the operation of
Brayton Point Station.\26\ Despite fishing restrictions, fish stocks
have not recovered.
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\23\ Brayton Point Station, Somerset, MA. Final National
Pollutant Discharge Elimination System (NPDES) Permit: Fact Sheet.
October 2003.
\24\ Ibid.
\25\ Gibson, M. 1995 (revised 1996). Comparison of trends in the
finfish assemblages of Mt. Hope Bay and Narragansett Bay in relation
to operations fo the New England Power Brayton Point station. Rhode
Island Division of Fish and Wildlife, Marine Fisheries Office.
\26\ EPA-New England. 2002. Clean Water Act NPDES Permitting
Determinations for Thermal Discharge and Cooling Water Intake from
Brayton Point Station in Somerset, MA (NPDES Permit No. MA 0003654),
July 22, 2002.
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3. Southern California Bight
At the San Onofre Nuclear Generating Station (SONGS) (3,300 MGD
design intake capacity), in a normal (non-El Ni[ntilde]o) year, an
estimated 57 tons of fish were killed per year when all units were in
operation.\27\ The amount lost per year included approximately 350,000
juveniles of white croaker, a popular
[[Page 68465]]
sport fish; this number represents 33,000 adult equivalents or 3.5 tons
of adult fish. In shallow water, densities of queenfish and white
croaker decreased 60 percent within one kilometer of SONGS and 35
percent within three kilometers from SONGS as compared to densities
prior to facility operations. Densities of local midwater fish
decreased 50 to 70 percent within three kilometers of the facility. In
contrast, relative abundances of some bottom-dwelling species in the
same areas were higher because of the enriched nature of the SONGS
discharge, which in turn supported elevated numbers of prey items for
bottom-dwelling fish.
---------------------------------------------------------------------------
\27\ Murdoch, W.W., R.C. Fay, and B.J. Mechalas. 1989. Final
Report of the Marine Review Committee to the California Coastal
Commission. August 1989, MRC Document No. 89-02.
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4. Missouri River
Facilities sited on waterbodies previously impaired by
anthropogenic activities such as channelization can demonstrate the
potential for reduced entrainment and impingement losses associated
with cooling water intake structures. The Neal Generating Complex
facility, located near Sioux City, Iowa, on the Missouri River is coal-
fired and utilizes once-through cooling systems. According to a ten
year study conducted from 1972-82, the Missouri River aquatic
environment near the Neal complex was previously heavily impacted by
channelization and very high flow rates meant to enhance barge traffic
and navigation.\28\ These anthropogenic changes to the natural river
system resulted in significant losses of fish habitat. At this
facility, there was found to be little impingement mortality and
entrainment by cooling water intake structures.
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\28\ Tondreau, R., J. Hey and E. Shane, Morningside College.
1982. Missouri River Aquatic Ecology Studies: Ten Year Summary
(1972--1982). Prepared for Iowa Public Service Company, Sioux City,
Iowa.
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Studies like those described in this section provide only a partial
picture of the range of environmental impacts associated with cooling
water intake structures. Although numerous studies were conducted to
determine the environmental impacts caused by impingement mortality and
entrainment at existing facilities, many of them are based on limited
data that were collected more than 25 years ago. EPA's review of
available facility impingement and entrainment studies identified a
substantial number of serious study design limitations, including data
collections for only one to two years or limited to one season or for a
subset of the affected species; limited taxonomic detail (i.e., egg and
larval losses not identified to the species level); a general lack of
statistical information such as inclusion of variance measures for
impingement and entrainment estimates; and the lack of standard methods
and metrics for quantifying impingement mortality and entrainment,
which limits the potential for comparing impacts among species, years,
sites, and technologies and for evaluating cumulative impacts across
multiple facilities. Further, in many cases it is likely that facility
operating conditions and/or the state of the waterbody itself has
changed since these studies were conducted. Finally, the methods for
monitoring impingement and entrainment used in the 1970s and 1980s,
when most section 316(b) evaluations were performed, were often
inconsistent or incomplete, making quantification of impacts difficult.
Recent advances in environmental assessment techniques provide new and,
in some cases, better tools for monitoring impingement and entrainment
and quantifying the current magnitude of the impacts.29 30
It is difficult to predict the effects of these study limitations on
the impacts estimates, specifically whether they have led to an
overestimate or underestimate of impacts. The studies do show, however,
that the nature and magnitude of impacts are highly case specific.
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\29\ Schmitt, R.J. and C.W. Osenberg. 1996. Detecting Ecological
Impacts. Academic Press, San Diego, CA.
\30\ EPRI 1999. Catalog of Assessment Methods for Evaluating the
Effects of Power Plant Operations on Aquatic Communities. TR-112013,
EPRI, Palo Alto, CA.
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EPA is also concerned about the potential for cumulative impacts
related to cooling water withdrawal. Cumulative impacts may result
from: (1) Multiple facility intakes impinging and/or entraining aquatic
organisms within a specific waterbody, watershed, or along the
migratory pathway of specific species; (2) the existence of multiple
stressors within a waterbody/watershed, including cooling water intake
structures withdrawals; and (3) repeated, long-term occurrences of
impingement and/or entrainment losses that may result in the
diminishment of the compensatory reserve of a particular fishery stock.
Historically, environmental impacts related to cooling water intake
structures have been evaluated on a facility-by-facility basis. These
historical evaluations do not consider the potential for a fish or
shellfish species to be concomitantly impacted by cooling water intake
structures belonging to other facilities that are located within the
same waterbody or watershed in which the species resides or along the
coastal migratory route of a particular species. Based on EPA's
estimation of national impacts from Phase II and Phase III facilities,
Phase II facilities would contribute a greater level of stress to a
national measurement of cumulative stress than would the universe of
Phase III facilities. However, the potential cumulative effects on a
species or ecosystem of multiple intakes located within a specific
waterbody or along a coastal segment are difficult to quantify and are
not typically assessed. Thus, EPA is concerned that this type of
cumulative impact is largely unknown and has not adequately been
accounted for in evaluating impacts.
A total of 408,000 million gallons of water per day were withdrawn
from waters of the United States in 2000 for cooling, irrigation,
manufacturing processes, drinking, livestock watering and other
purposes,\31\ of which cooling water intake from Phase III facilities
constitutes 23,000 million gallons of water per day, or approximately
6% of total water withdrawal. Additional stresses on aquatic systems
include, but are not limited to, nutrient, toxics, and sediment
loadings; low dissolved oxygen; habitat loss; and stormwater runoff.
Although EPA recognizes that a nexus between a particular stressor and
adverse environmental impact may be difficult to establish with
certainty, EPA believes stressors that cause or contribute to the loss
of aquatic organisms and habitat, such as those described above, may
incrementally impact the health and long-term viability of aquatic
resources. EPA analyses suggest that over 99 percent of all existing
facilities with cooling water withdrawals that EPA surveyed in its
section 316(b) survey of existing facilities are located within two
miles of waters that are identified as impaired by a State or Tribe
(see 66 FR 65256, 65297). Thus, the Agency is concerned that to the
extent that many of the aquatic organisms subject to the effects of
cooling water withdrawals reside in impaired waterbodies, they are
potentially more vulnerable to cumulative impacts from an array of
physical and chemical anthropogenic stressors.
---------------------------------------------------------------------------
\31\ Hutson, S.S., N.L. Barber, J.F. Kenny, K.S. Linsey, D.S.
Lumia, and M.A. Maupin. 2004. Estimated Use of Water in the United
States in 2000. U.S. Geological Survey Circular 1268.
---------------------------------------------------------------------------
Finally, EPA believes that an aquatic population's potential
compensatory ability--the capacity for a species to increase its
survival, growth, or reproduction in response to reductions sustained
to its overall population size--may be compromised by impingement and
entrainment losses in
[[Page 68466]]
conjunction with all the other stressors encountered within a
population's natural range, as well as impingement and entrainment
losses occurring consistently over extended periods of time. As
discussed in the Phase I new facility rule (see 66 FR 65294), EPA is
concerned that even if there is uncertainty about the extent to which
cooling water intake structures alone reduce a population's
compensatory reserve, this stressor, in combination with the multitude
of other stressors acting upon a species, can potentially adversely
affect population sustainability.\32\ Moreover, EPA notes that the
opposite effect or ``depensation'' (decreases in recruitment as stock
size declines) \33\ may occur if a population's size is reduced beyond
a critical threshold. Depensation can lead to further decreases in
population abundances that are already seriously depleted and, in some
cases, recovery of the population may not be possible even if the
stressors are removed.34 35 36
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\32\ Hutchings, J.A. and R.A. Myers. 1994. What can be learned
from the collapse of a renewable resource? Atlantic cod, Gadus
morhus, of New Foundland and Labrador. Canadian Journal of Fisheries
and Aquatic Sciences 51:2126-2146.
\33\ Goodyear, C.P. 1977. Assessing the impact of power plant
mortality on the compensatory reserve of fish populations. Pages
186-195 in W. Van Winkle, ed., Proceedings of the Conference on
Assessing the Effects of Power Plant Induced Mortality on Fish
Populations. Pergamon Press, New York, NY.
\34\ Myers, R.A., N.J. Barrowman, J.A. Hutchings, and A.A.
Rosenburg. 1995. Population dynamics of exploited fish stocks at low
population levels. Science 26:1106-1108.
\35\ Hutchings, J.A. and R.A. Myers. 1994. What can be learned
from the collapse of a renewable resource? Atlantic cod, Gadus
morhus, of New Foundland and Labrador. Canadian Journal of Fisheries
and Aquatic Sciences 51:2126-2146.
\36\ Liermann, M. and R. Hilborn. 1997. Depensation in fish
stocks: A hierarchic Bayesian metaanalysis. Can. J. Fish. Aquatic.
Sci. 54:1976-1985.
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In conclusion, EPA believes that there are multiple types of
undesirable and unacceptable environmental impacts that may be
associated with Phase III facilities, depending on conditions at the
individual site. EPA solicits comment and additional data
characterizing the type and extent of these impacts.
VI. Basis for the Proposed Requirements
A. What Is the Best Technology Available for Minimizing Adverse
Environmental Impact at Phase III Existing Facilities?
Under today's proposed rule, existing Phase III facilities would be
subject to the same national performance standards as Phase II existing
facilities, and would be authorized to meet these requirements through
the same five compliance alternatives provided in the Phase II rule.
EPA is proposing to codify Phase III requirements in 40 CFR 125,
subpart K. See section II for a discussion of the three co-proposed
thresholds that in part determine which facilities would constitute a
Phase III existing facility. Requirements for facilities that have, or
are required to have, an NPDES permit and withdraw cooling water from
waters of the United States, but do not meet the applicable flow
threshold of today's proposed rule, or use less than 25 percent of the
water withdrawn exclusively for cooling purposes, would continue to be
established by permit writers on a case-by-case, best professional
judgment basis. Today's proposed rule also would establish requirements
for new offshore oil and gas extraction facilities. See section VI.A.5
for a discussion of proposed requirements for new offshore oil and gas
extraction facilities. As with EPA's Phase I and II rules, States and
authorized Tribes retain the authority to impose additional
requirements as authorized by their laws and regulations.
EPA is proposing national performance standards for the reduction
of impingement mortality and, when appropriate, entrainment. EPA
developed these proposed performance standards in part based on a
variety of technologies, but the proposed rule would not mandate the
use of any specific technology. Rather, the proposed performance
standards consist of ranges of reductions in impingement mortality and/
or entrainment (e.g., reduce impingement mortality by 80 to 95 percent
and/or entrainment by 60 to 90 percent) based on the effectiveness of
commercially available, economically practicable technologies operating
in a range of aquatic environments. These proposed performance
standards reflect the best technology available for minimizing adverse
environmental impact determined on a national categorical basis. The
type of performance standard applicable to a particular facility (i.e.,
reductions in impingement mortality only or reductions in both
impingement mortality and entrainment) would vary by the source
waterbody type (i.e., freshwater river/stream, estuary/tidal river,
ocean, Great Lake, or lake/reservoir) and the proportion of the
waterbody withdrawn.
Under this proposal, a Phase III existing facility could select
among the same compliance alternatives available under the Phase II
rule: (1) Demonstrate that it has reduced or will reduce its cooling
water intake flow commensurate with a closed-cycle recirculating
system, or that it has reduced, or will reduce, the maximum through-
screen design intake velocity to 0.5 feet per second or less (the
through-screen design intake velocity criteria meets the performance
standards to reduce impingement mortality only; the facility may still
be subject to performance standards for entrainment); (2) demonstrate
that its existing design and construction technologies, operational
measures, and/or restoration measures meet the applicable performance
standards and restoration requirements; (3) demonstrate that it has
selected design and construction technologies, operational measures,
and/or restoration measures that will, in combination with any existing
design and construction technologies, operational measures, and/or
restoration measures, meet the applicable performance standards and
restoration requirements; (4) demonstrate that it will install or has
installed and properly operates and maintains an approved design and
construction technology; or (5) demonstrate that it has selected,
installed, and is properly operating and maintaining, or will install
and properly operate and maintain, design and construction
technologies, operational measures, and/or restoration measures that
the Director has determined to be the best technology available for the
facility based on application of a specified cost-to-cost test or a
cost-to-benefit test.
EPA is proposing this regulatory scheme based on its assessment
that Phase III existing facilities (existing facilities not covered
under the Phase II rule with a design intake flow that meets or exceeds
one of the co-proposed thresholds) and Phase II facilities (existing
power producers with a design intake flow of 50 MGD or greater) can
employ similar technologies to minimize adverse environmental impacts,
specifically impingement mortality and entrainment. EPA found no
significant differences in either the types of cooling water intake
structures or types of fish protection technologies used by proposed
Phase III existing facilities and Phase II facilities. Moreover, EPA
found that these technologies are economically practicable at the Phase
III existing facilities proposed for coverage under the three proposed
options.
Existing facilities that do not meet one of the co-proposed design
intake flow thresholds (but meet the other applicability criteria)
would continue to be subject to requirements established by permit
writers on a case-by-case, best
[[Page 68467]]
professional judgment basis, rather than to national categorical
standards.
EPA notes that under its current regulations at 125.90(b), any
existing facility that is a point source, that uses or proposes to use
cooling water intake structures to withdraw cooling water from waters
of the United States, and that is not subject to Subpart J or any other
section 316(b)-related subpart in Part 125 must meet the requirements
of CWA section 316(b) as determined by the Director on a case-by-case,
best professional judgment (BPJ) basis. In today's Notice, EPA is
proposing national categorical requirements for some of the facilities
that, under Sec. 125.90(b), would otherwise be subject to section
316(b) requirements established on a BPJ basis. Those facilities
outside the scope of today's proposed rule would continue to be
regulated on a case by case, BPJ basis, under Part 125 pursuant to
Sec. 125.90(b). After considering public comment on today's proposed
regulation and any additional information developed as part of this
rulemaking, EPA may decide to continue to rely on Sec. 125.90(b) for
all existing facilities not subject to Subpart J or any other section
316(b)-related subpart in Part 125 in lieu of today's proposed national
categorical requirements.
1. Basis for Proposed Performance Standards
Under today's proposal, Phase III existing facilities would be
subject to the same performance standards promulgated in the final
Phase II cooling water intake structure rule (Sec. 125.103(b)). The
basis for these performance standards is discussed in detail in the
preamble to the final Phase II rule (69 FR 41576, July 9, 2004).
Under two of the three options proposed today, Phase III existing
facilities are subject either to performance standards to reduce
impingement mortality only, or performance standards to reduce both
impingement mortality and entrainment. EPA believes that impingement
mortality and entrainment are appropriate metrics for performance
because these are primary and distinct types of harmful impacts
associated with the use of cooling water intake structures.
All Phase III existing facilities demonstrating compliance under
alternatives two, three, and four described above (proposed Sec.
125.103(a)(2), (3), and (4)) would be subject to performance standards
for impingement mortality. The impingement mortality performance
standard would require a Phase III existing facility that complies
under Sec. 125.103(a)(2), (3), and (4)) to reduce impingement
mortality for all life stages of fish and shellfish by 80 to 95 percent
from the calculation baseline. The impingement mortality and
entrainment performance standards under Sec. 125.103(b) would also be
used for determining eligibility and site-specific requirements for
facilities choosing to comply under compliance alternative five (see
proposed Sec. 125.103(b)).
Both impingement mortality and entrainment performance standards
would apply to Phase III existing facilities that withdraw cooling
water from a tidal river, estuary, ocean, or one of the Great Lakes.
Under the proposed options that would establish a design intake flow
threshold at 50 MGD or higher or 200 MGD or higher, both standards
would also apply to facilities that use cooling water from a freshwater
river or stream and have a design intake flow greater than five percent
of the mean annual flow. EPA is proposing to apply both standards
because these facilities have the potential to cause more significant
entrainment impacts. The entrainment standard, where applicable, would
require a Phase III existing facility to reduce entrainment of all life
stages of fish and shellfish by 60 to 90 percent from the calculation
baseline. Performance standards for entrainment would not apply to
Phase III existing facilities with design intake flows of five percent
or less of the mean annual flow of a freshwater river or stream, and
those that withdraw cooling water from a reservoir or lake (other than
one of the Great Lakes). EPA believes such facilities have a lower
propensity for causing significant entrainment impacts due to lower
proportional intake flow or general waterbody characteristics.
Although facilities that withdraw from lakes (other than the Great
Lakes) and reservoirs would not be subject to entrainment performance
standards, they would be subject to other specific performance
standards under the 50 MGD or higher proposed option, or 200 MGD or
higher proposed option. If such a facility proposes to increase the
design intake flow of the cooling water intake structure, the increase
in total design intake flow must not disrupt the natural thermal
stratification or turnover pattern of the source water except in cases
where the disruption does not adversely affect the management of
fisheries (see proposed Sec. 125.103(b)(3)).
The performance standards applicable to Phase III existing
facilities are not based on a single technology but, rather, are based
on consideration of a range of technologies that EPA has determined to
be commercially available for the Phase III industries affected as a
whole and to have acceptable non-water quality environmental impacts.
Because the proposed requirements implementing section 316(b) would be
applied in a variety of settings and to Phase III existing facilities
of different types and sizes, no single technology is most effective at
all such facilities. A range of available technologies has therefore
been used as the basis for the performance standards.
EPA developed the performance standards for impingement mortality
reduction based on an analysis of the efficacy of the following
technologies: (1) Fine and wide-mesh wedgewire screens, as well as
aquatic filter barrier systems, that can reduce mortality from
impingement by up to 99 percent or greater compared with conventional
once-through systems; (2) barrier nets that may achieve reductions of
80 to 90 percent; and (3) modified screens and fish return systems,
fish diversion systems, and fine mesh traveling screens and fish return
systems that have achieved reductions in impingement mortality ranging
from 60 to 90 percent as compared to conventional once-through systems
with no impingement mortality controls. Data available to EPA indicate
that these technologies can be used to achieve the reductions in
impingement mortality and/or entrainment specified in the performance
standards. EPA estimates that 35 percent of potential Phase III
existing facilities (i.e. with an intake greater than 2 MGD) currently
use passive intake technology (e.g., wedgewire screens, etc.), 12
percent use fine mesh screens, 6 percent use fish diversion
technologies, and 5 percent use fish handling technologies. Available
performance data for entrainment reduction are not as comprehensive as
impingement data. However, aquatic filter barrier systems, fine mesh
wedgewire screens, and fine mesh traveling screens with fish return
systems have been shown to achieve 80 to 90 percent or greater
reduction in entrainment compared with conventional once-through
systems without entrainment controls. EPA notes that screening to
prevent organism entrainment may cause impingement of those organisms
instead.
The performance standards proposed at Sec. 125.103(b) are based on
the type of waterbody in which the intake structure is located, the
volume of water withdrawn by a facility, and the facility capacity
utilization rate. Under the final Phase II rule, EPA grouped
waterbodies into five categories: (1) Freshwater rivers or streams, (2)
lakes or reservoirs,
[[Page 68468]]
(3) Great Lakes, (4) tidal rivers and estuaries, and (5) oceans. This
proposal would apply these same categories to Phase III existing
facilities. The Agency considers location, one aspect of which is
waterbody type, to be an important factor in addressing adverse
environmental impact caused by cooling water intake structures. Because
different waterbody types have the potential for different adverse
environmental impacts, the requirements to minimize adverse
environmental impact would vary by waterbody type.
The performance standards for Phase III existing facilities with
cooling water intake structures located in a tidal river or estuary are
a reduction of impingement mortality by 80 to 95 percent and
entrainment by 60 to 90 percent for fish and shellfish. Data available
to EPA indicate that estuaries and tidal rivers are among the more
susceptible waterbodies to adverse impacts from impingement mortality
and entrainment. The reproductive strategies of tidal river and
estuarine species, together with other physical and biological
characteristics of those waters, make them more susceptible to impacts
from cooling water intake structures (66 FR 28857-28859; 68 FR 17140).
In contrast, many aquatic organisms found in non-tidal freshwater
rivers and streams are less susceptible to entrainment due to their
demersal (bottom-dwelling) nature and the fact that they do not
typically have planktonic (free-floating) egg and larval stages (66 FR
28857; 68 FR 17140).
Absent entrainment control technologies, entrainment at a
particular site is generally proportional to intake flow at that site.
EPA believes it is reasonable to vary performance standards by the
potential for adverse environmental impact associated with flow levels
and a waterbody type. Under two of the three proposed options, EPA
would limit the requirement for entrainment controls in fresh waters to
those facilities that withdraw the largest proportion of water from
freshwater rivers or streams because they have a greater potential to
impinge and entrain larger numbers of fish and shellfish. EPA is not
requiring entrainment reductions in freshwater rivers or streams where
facilities withdraw 5 percent or less of the source water annual mean
flow because such facilities generally have a lower propensity for
causing significant entrainment impacts due to the lower proportion of
intake flow in combination with the characteristics of the waterbody.
This proposed rule would also establish a specific performance
standard for lakes (other than a Great Lake) or reservoirs, in order to
protect the thermal stratification of the waterbody. The natural
thermal stratification or turnover pattern of a lake is a key
characteristic that is potentially affected by the intake flow (which
can alter temperature and/or mixing of cold and warm water layers) and
location of cooling water intake structures within such waterbodies.
The Great Lakes are subject to more stringent standards than other
lakes or reservoirs, and must meet performance standards for reduction
in both impingement mortality and entrainment. As described in the
Phase I proposed rule (65 FR 49086) and Notice of Data Availability
(NODA) (66 FR 28858), and the Phase II final rule (69 FR 41576), EPA
believes that the Great Lakes have areas of high productivity and
sensitive critical habitats that would require a greater level of
protection.
The performance standards for Phase III existing facilities with
cooling water intake structures located in an ocean are a reduction of
impingement mortality by 80 to 95 percent and entrainment by 60 to 90
percent for fish and shellfish. EPA is establishing requirements for
facilities withdrawing from oceans that are similar to those for tidal
rivers and estuaries because the coastal zone of oceans (where coastal
cooling water intake structures withdraw water from) are highly
productive areas for fish and shellfish. (See the Phase I proposed rule
(65 FR 45060) and documents in the record for the Phase I new facility
rule (Docket W-00-03) such as 2-013A through O, 2-019A-R11, 2-019A-R12,
2-019A-R33, 2-019A-R44, 2-020A, 3-0059. EPA is also concerned about the
extent to which fishery stocks that rely upon tidal rivers, estuaries
and oceans for habitat are over utilized and seeks to minimize the
impact that cooling water intake structures may have on these species
or forage species on which these fishery stocks may depend. See 69 FR
41600.
As in the Phase I and Phase II rules, EPA would apply performance
standards for minimizing adverse environmental impact based on a
relatively easy to measure and certain metric-reduction of impingement
mortality and entrainment. Although adverse environmental impact
associated with cooling water intake structures can extend beyond
impingement mortality and entrainment, EPA is proposing this approach
because impingement mortality and entrainment are primary, harmful
environmental effects that can be reduced through the use of specific
technologies. In addition, those impacts that exist at the population,
community, and ecosystem levels will also be reduced by reducing
impingement mortality and entrainment. Using impingement mortality and
entrainment as metrics provide certainty about performance standards
and streamlines and thus speeds the issuance of permits.
The performance standards are expressed in the form of ranges
rather than a single performance benchmark because of the uncertainty
inherent in predicting the efficacy of any one of these technologies,
or a combination of these technologies, across the spectrum of
facilities operating in a range of aquatic environments subject to
today's proposed rule. See 69 FR 41600. In specifying a range, EPA
anticipates that facilities will select the most cost-effective
technologies or operational measures to achieve the performance level
(within the stated range) based on conditions found at their site, and
that Directors will review the facilities' applications to ensure that
appropriate alternatives were considered. Proper selection, operation,
and maintenance of these technologies would serve to increase potential
efficiencies of the technologies. EPA also expects that some facilities
may be able to meet these performance requirements by selecting and
implementing a suite (i.e., more than one) of technologies and
operational measures and/or, as discussed in this section, by
undertaking restoration measures.
Several additional factors support EPA's expectation that the
impingement mortality and entrainment reduction reflected in the
performance standards can eventually be achieved by all facilities
using the design and construction technologies on which the standards
were based. First, a significant amount of the data available to EPA
(e.g., section 316(b) permitting studies) were developed during early
section 316(b) permitting and do not reflect recent developments or
experience using these technologies. Second, many conventional barrier
and return system technologies have not been optimized as would be
encouraged by this rule. Finally, some facilities could achieve further
reductions (estimated at 15-30 percent) in impingement mortality and
entrainment by providing for seasonal flow restrictions, variable speed
pumps, and other operational measures and innovative flow reduction
alternatives that can achieve greater reductions.
The calculation baseline used to determine compliance with
performance standards is defined in proposed Sec. 125.102 as an
estimate of
[[Page 68469]]
impingement mortality and entrainment that would occur at a site
assuming: (1) The cooling water system had been designed as a once-
through system; (2) 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 (3) the baseline practices and procedures are
those that the facility would maintain in the absence of any
operational controls, including flow or velocity reductions,
implemented in whole or in part for the purposes of reducing
impingement mortality and entrainment. Alternatively, the facility
could choose to use the current level of impingement mortality and
entrainment as the calculation baseline. The calculation baseline could
be estimated using: historical impingement mortality and entrainment
data from the facility or from another facility with comparable design,
operational, and environmental conditions; current biological data
collected in the waterbody in the vicinity of the facility's cooling
water intake structure; or current impingement mortality and
entrainment data collected at the facility. Further, a facility could
request that the calculation baseline be modified to be based on a
location of the opening of the cooling water intake structure at a
depth other than at or near the surface if it can demonstrate to the
Director that the other depth would correspond to a higher baseline
level of impingement mortality and/or entrainment. EPA is proposing to
use this definition because it represents the most common default
conditions the Agency could identify to give facilities credit for
design and construction technologies, operational measures, and/or
restoration measures that they have already implemented to minimize
adverse environmental impact, while providing a clear and relatively
simple definition. In many cases, existing technologies at the site
show some reductions in impingement mortality and entrainment when
compared to this baseline. In such cases, impingement mortality and
entrainment reductions (relative to the calculated baseline) achieved
by these existing technologies should be counted toward compliance with
the performance standards. In addition, operational measures such as
operation of traveling screens that exceed the baseline (e.g., screens
finer than \3/8\ inch mesh, or with fish handling capacity), employment
of more efficient return systems, and even location choices should be
credited for any corresponding reduction in impingement mortality and
entrainment. See section VII of this preamble for a discussion of how
the calculation baseline is used to compare facility performance with
the proposed rule's performance standards.
In the Phase II final regulations (see 69 FR 41578), EPA considered
the rate of use of the electric power generation facility in setting
performance requirements. Under the Phase II rule, power producing
facilities with a capacity utilization rate of less than 15 percent are
only required to meet the impingement mortality reduction requirements,
based on EPA's determination that entrainment impacts below this
threshold would be minimal. Today's proposed rule does not contain an
analogous provision for manufacturing facilities, as EPA has been
unable to identify a similar threshold of operations below which
impacts would be considered minimal. EPA requests comment on the
availability of such a threshold that would result in lesser
requirements for facilities that do not operate full time, thus
minimizing burdens to these facilities while still protecting the
source waterbody.
2. Basis for Five Proposed Compliance Alternatives
Today's proposed rule would authorize a Phase III existing facility
with a total design intake flow that exceeds the specified threshold to
choose one of five alternatives for establishing the best technology
available for minimizing adverse environmental impact at the facility.
These compliance alternatives (proposed Sec. 125.103(a)) would be
consistent with those promulgated in the final Phase II rule (40 CFR
125.94(a)). Each proposed alternative is described below.
This proposed approach provides a high degree of flexibility for
Phase III existing facilities to select the most effective and
efficient approach and technologies for minimizing adverse
environmental impact associated with their cooling water intake
structures. This proposed approach also reflects EPA's judgment that,
given the wide range of various factors that affect the environmental
impact posed by Phase III existing facilities, different technologies
or different combinations of technologies can be used and optimized to
achieve the performance standards. EPA requests comment on all aspects
of this proposed approach.
a. Meeting Performance Standards Through Reducing Intake Flow
Commensurate With a Closed Cycle Recirculating System or Reduced Design
Intake Velocity
EPA is proposing that a Phase III existing facility could meet
applicable performance standards through complying with Sec.
125.103(a)(1)(i) or (ii). Under proposed Sec. 125.103(a)(1)(i), any
Phase III existing facility that reduces its flow to a level
commensurate with a closed-cycle, recirculating cooling system would be
deemed to satisfy the applicable impingement mortality and entrainment
performance standards for all waterbodies under Sec. 125.103(b). Such
facilities may still be subject to requirements under Sec. 125.103(e).
Facilities that select this compliance alternative either through the
use of existing closed-cycle recirculating system technology at the
plant, or by retrofitting their facility, would not be required to
further demonstrate that they meet the applicable performance
standards.
Available data described in Chapter 3 of the Phase II Existing
Facility Technical Development Document (DCN 7-0004) suggest that
closed-cycle, recirculating cooling systems (e.g., cooling towers or
ponds) can reduce mortality from impingement by up to 98 percent and
entrainment by up to 98 percent when compared with conventional once-
through systems.\37\ Although closed-cycle, recirculating cooling is
not one of the technologies on which the performance standards are
based, use of a closed-cycle, recirculating cooling system would
achieve the performance standards, and therefore, facilities that
reduce their flow commensurate with closed-cycle, recirculating cooling
systems would be deemed to have met the performance standards for both
impingement mortality and entrainment. Under this proposal, Sec.
125.103(a)(1)(i) would thus constitute a compliance alternative for
[[Page 68470]]
Phase III existing facilities based on the use of a closed-cycle,
recirculating cooling system. While EPA based the requirements of the
Phase I new facility rule on the efficacy of closed-cycle recirculating
systems (66 FR 65273--65274), EPA has determined that this technology
is not economically practicable for some Phase III existing facilities.
EPA is nonetheless aware that approximately 6 percent of Phase III
manufacturers with a design intake flow of 50 MGD or greater, and 3
percent of Phase III manufacturers with a design intake flow of 200 MGD
or greater, have installed this highly effective technology and should
meet this streamlined alternative.
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\37\ Reducing the cooling water intake structure's capacity is
one of the most effective means of reducing entrainment (and
impingement mortality). For the traditional steam electric utility
industry, facilities located in freshwater areas that have closed-
cycle, recirculating cooling water systems can, depending on the
quality of the make-up water, reduce water use by 96 to 98 percent
from the amount they would use if they had once-through cooling
water systems. Steam electric generating facilities that have
closed-cycle, recirculating cooling systems using salt water can
reduce water usage by 70 to 96 percent when make-up and blowdown
flows are minimized. The lower range of water usage would be
expected where State water quality standards limit chloride to a
maximum increase of 10 percent over background and therefore require
a 1.1 cycle of concentration. The higher range should be attainable
where cycles of concentration up to 2.0 are used for the design.
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Similarly, under proposed Sec. 125.103(a)(1)(ii), any Phase III
existing facility that reduces its design intake velocity to 0.5 feet
per second or less would be deemed to have met the performance
standards for impingement mortality and would not be required to
demonstrate further that it meets the performance standards for
impingement mortality. However, if the facility is subject to
performance standards for entrainment, it would need to otherwise
demonstrate compliance with entrainment performance standards.
As EPA discussed in the Phase II proposed rule at 67 FR 17151 and
Phase I final rule at 66 FR 65274, intake velocity is one of the key
factors that can affect the impingement of fish and other aquatic
biota, since in the immediate area of the intake it exerts a direct
physical force against which fish and other organisms must act to avoid
impingement and entrainment. As discussed in those notices, EPA
compiled data from three swim speed studies (University of Washington
study, Turnpenny, and EPRI) (DCN 2-28A-C) and these data indicated that
a 0.5 feet per second velocity would protect at least 96 percent of the
tested fish. As further discussed, EPA also identified Federal
documents (Boreman, DCN 1-5003-PR; Bell (1990); National Marine
Fisheries Service (NMFS), (1997); an early swim speed and endurance
study performed by Sonnichsen et al. (1973); and fish screen velocity
criteria that support this approach (DCN 2-29).
b. Meeting Performance Standards Through the Use of Design and
Construction Technologies, Operational Measures, and/or Restoration
Measures
Under the second and third proposed Phase III compliance
alternatives, a facility could either demonstrate to the Director that
the facility's existing design and construction technologies,
operational measures, and/or restoration measures already meet the
minimum performance standards specified under Sec. 125.103(b) and (c),
or that it has selected design and construction technologies,
operational measures, and/or restoration measures or some combination
thereof that will meet these performance standards (see proposed Sec.
125.103(a)(2) and (3)).
Available data indicate that barrier and/or fish handling
technologies are available on a national basis for use by Phase III
existing facilities.\38\ These technologies exist and are in use at
various Phase III existing facilities and, thus, EPA considers them
collectively technologically available. Many Phase III existing
facilities that do not already have closed-cycle cooling systems have
these or other technologies in place that reduce impingement mortality
or entrainment to levels that would meet the proposed rule requirements
(e.g., EPA estimates this is the case for 23 percent of manufacturers
with a design intake flow of 50 MGD or greater, see the TDD for more
details). The fact that these technologies are collectively utilized
means that, in general, one or more technologies within the suite would
be available to each Phase III existing facility to meet the applicable
performance standards. (If this is not the case for a specific
facility, it can utilize compliance alternative five below.)
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\38\ As previously noted, as an example of technologies in use
EPA estimates that 35 percent of Phase III existing facilities
currently use passive intake technology (e.g., wedgewire screens,
etc.), 12 percent use fine mesh screens, 6 percent use fish
diversion technologies, and 5 percent use fish handling
technologies.
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EPA believes that the design and construction technologies
necessary to meet the requirements are commercially available and
economically practicable for existing facilities, because facilities
can and have installed many of these technologies years after a
facility began operation. Typically, additional design and construction
technologies such as fine mesh screens, wedgewire screens, fish
handling and return systems, and aquatic filter fabric barrier systems
can be installed during a scheduled outage (operational shutdown).
In addition, EPA's survey data shows that the types of intakes,
technologies currently employed, or technologies that may be
retrofitted at proposed Phase III existing facilities are no different
than those at Phase II facilities. For example, EPA identified one
Phase III facility that retrofitted ten 36-inch wedgewire T-screens.
Another retrofit example is an electric generator that is below the
Phase II threshold that replaced its perforated plate with wedgewire T-
screens. Examples of Phase II facilities that installed these
technologies after they initially started operating may be found at 69
FR 641602.
c. Meeting Performance Standards Through Use of a Pre-Approved Design
and Construction Technology
Under the fourth compliance alternative in today's proposed
regulation, a Phase III existing facility would be able to demonstrate
that it meets specified conditions and has installed and properly
operates and maintains a pre-approved technology (see proposed Sec.
125.103(a)(4)). EPA has identified one pre-approved technology:
Submerged cylindrical wedgewire screen technology to treat the total
cooling water intake flow. This pre-approved technology was identified
in the Phase II rule, and is proposed as a compliance option for Phase
III existing facilities (see proposed Sec. 125.108). There are five
conditions that would need to be met in order to use this technology to
comply with the proposed rule: (1) The cooling water intake structure
is located in a freshwater river or stream; (2) the cooling water
intake structure is situated such that sufficient ambient counter
currents exist to promote cleaning of the screen face; (3) the through
screen design intake velocity is 0.5 feet per second or less; (4) the
slot size is appropriate for the size of eggs, larvae, and juveniles of
any fish and shellfish to be protected at the site; and (5) the entire
main cooling water flow is directed through the technology (small flows
totaling less than two MGD for auxiliary plant cooling uses are
excluded). Under this proposal, Directors would be explicitly
authorized under Sec. 125.108 to pre-approve other technologies for
use at facilities with other specified characteristics within their
respective jurisdiction after providing the public with notice and an
opportunity to comment on the request for approval of the technology.
The Director's authority to pre-approve other technologies would not be
limited to technologies for use by facilities located on freshwater
rivers and streams.
EPA has proposed this compliance alternative in response to Phase
II proposed rule comments and Phase III small entity comments (provided
pursuant to consultations mandated by the Small Business Regulatory
Enforcement Fairness Act) that suggested that EPA provide an
additional, more streamlined compliance option that would allow a
facility to implement certain specified technologies that are deemed
highly protective in exchange for reducing the implementation burden,
including reducing the scope of the
[[Page 68471]]
Comprehensive Demonstration Study. (See, 68 FR 13522, 13539; March 19,
2003 and DCN 7-0006). EPA evaluated the effectiveness of specific
technologies using the impingement mortality and entrainment reduction
performance standards as assessment criteria. The approved cylindrical
wedgewire screen technology has a demonstrated ability to reduce
impingement mortality by 80 to 95 percent for fish and shellfish and,
if required, reduce entrainment by 60 to 90 percent for any stages of
fish and shellfish at facilities that meet the conditions specified in
proposed Sec. 125.108(a)(1). Thus, the technology has a demonstrated
ability to meet the most stringent performance standards that would
apply to any facility situated on a freshwater river or stream. (See
DCN 1-3075, 1-5069, 1-5070, 3-0002, and 4-4002B. Also, see DCN 6-5000
and Chapter 3 of the Phase II Technical Development Document (DCN 6-
0004)). Because cylindrical wedgewire screens are believed to be
effective when deployed under the specified conditions and properly
maintained, facilities that select this compliance option are provided
substantially streamlined requirements for completing the Comprehensive
Demonstration Study. However, facilities that select this option would
still be required to prepare a Technology Installation and Operation
Plan and a Verification Monitoring Plan to monitor the effectiveness of
the technology at their sites in meeting the performance standards.
Referenced below are examples of Phase III facilities that
installed this technology after they initially started operating.
Sherburne County Generating Plant. A Phase III electric generator,
Sherburne County is located on the upper Mississippi River in
Minnesota. The facility began operations in 1976 and operates one
cooling water intake structure. The facility also uses a closed-cycle,
recirculating cooling system. In 1986, Sherburne County replaced its
existing intake technology (a perforated plate) with cylindrical
wedgewire screens.
Tosco Refinery. Oil refineries are one of the industry sectors
examined in the Phase III rule. Located in Rodeo, California, the Tosco
Refinery replaced its traveling screens with cylindrical wedgewire
screens in 2000.
To date, EPA has not identified new data or information that could
be used to establish other technologies as pre-approved on a nationwide
basis. Several stakeholders suggested EPA continue to evaluate whether
other technologies could qualify as pre-approved technologies. EPA
solicits comment and new data, including appropriate site conditions,
on other candidate technologies for pre-approval.
d. Site-Specific Determination of Best Technology Available To Minimize
Adverse Environmental Impact
Under this proposed compliance alternative, a Phase III existing
facility also could comply with the proposed rule by seeking a site-
specific determination of the best technology available to minimize
adverse environmental impact by demonstrating to the Director that its
cost of complying with the applicable performance standards would be
significantly greater than the costs considered by EPA for a like
facility when establishing such performance standards, or that its
costs would be significantly greater than the benefits of complying
with such performance standards at the facility. (See proposed Sec.
125.103(a)(5)(i) and (ii)). If a facility satisfies one of the two
proposed cost tests in Sec. 125.103(a)(5), then the Director would
have to establish site-specific alternative requirements based on
design and construction technologies, operational measures, and/or
restoration measures that achieve an efficacy that is, in the judgment
of the Director, as close as practicable to the applicable performance
standards without resulting in costs that are significantly greater
than either the costs considered by the Administrator in establishing
the applicable performance standards, or the benefits at the facility.
As discussed in the Phase II rule, in developing the proposed
standards in Sec. 125.103(b) and the proposed compliance alternatives
in Sec. 125.103(a)(2)-(4), EPA considered several factors, including
efficacy, availability, ease of implementation, indirect effects, the
costs that EPA expects all existing facilities to incur (national
costs) and the benefits if all existing facilities meet the performance
standards (national benefits). These proposed site-specific compliance
options would give Phase III existing facilities flexibility to
demonstrate that the best technology available to minimize adverse
environmental impact at their particular sites may be less stringent
than would otherwise be required if the facility selected one of the
compliance alternatives in Sec. 125.103(a)(2), (3) or (4).
i. Basis of the Cost-Cost Test
For a number of related reasons discussed below, EPA chose to use a
comparison of a facility's actual costs to the costs EPA estimated that
a like facility would incur to meet the national performance standards
(a ``cost-cost test'') as a basis for obtaining a site-specific
determination of best technology available to minimize adverse
environmental impact. EPA's record for this proposed rule shows that
for Phase III existing facilities withdrawing greater than the three
co-proposed thresholds, the requirements in today's proposed rule would
be technically available and generally economically practicable.
However, EPA recognizes that it may not have anticipated all site-
specific costs that a facility would incur, or that the costs for
retrofitting may significantly exceed those EPA considered. For
example, detailed information on some factors important to the
effectiveness and costs of the technologies, such as debris loading and
the presence of navigational channels within the waterbody at which
cooling water intakes are sited, were not available. Moreover, the
information EPA used to develop its costs was in some cases limited by
the fact that, while EPA sent surveys to all known electric generators
and a sample of manufacturing facilities covered under today's proposed
rule, only 42 percent of the total potential Phase II and Phase III
universes were sent detailed questionnaires. The remaining 58 percent
only received a short technical questionnaire which requested minimal
characterization information. Also, EPA may not have elicited
information regarding characteristics of a particular facility that, if
known, would have either significantly changed EPA's cost estimates or
demonstrated that none of the technologies on which the categorical
requirements are based are economically achievable by the facility.
Similarly, existing facilities have less flexibility than new
facilities in selecting the location of their intakes and technologies
for minimizing adverse environmental impact, and therefore it may be
difficult for some facilities to avoid costs much higher than those EPA
considered when establishing the performance standards. The cost-cost
site-specific alternative ensures that the overall rule remains
economically practicable for all facilities that would be subject to
today's proposed rule. Despite EPA's best effort, site-specific costs
are difficult to estimate in a national rule. For all of these reasons,
EPA believes that the cost-cost site-specific compliance alternative is
necessary to ensure that the proposed rule would be economically
practicable for all Phase III existing facilities. In order to ensure
that this alternative provides only the
[[Page 68472]]
minimum relaxation of performance standards that is needed to make the
proposed rule economically practicable, proposed Sec. 125.103(a)(5)(i)
requires that the site-specific requirements achieve an efficacy that
is as close as practicable to the applicable performance standards
without resulting in costs that are significantly greater than those
considered by the Administrator for a like facility when establishing
the performance standards.
EPA is proposing at Sec. 125.103(a)(5) to limit the comparison of
like facilities to Phase III existing facilities within the scope of
the rule. EPA believes this provision is necessary and appropriate
because different cost assumptions were used in estimating costs for
the Phase II and Phase III existing facilities. (These differences are
discussed in detail in the relevant Technical Development Documents
(DCN 6-0004 and DCN 7-0002.)
Legal Authority for the Cost-Cost Test
CWA section 316(b) authorizes a site-specific determination of best
technology available. Although, CWA section 316(b) authorizes EPA to
promulgate national categorical requirements, the variety of factors to
be considered in determining these requirements--such as location and
design--indicate that site-specific conditions can be highly relevant
to the determination of best technology available to minimize adverse
environmental impact. In addition to specifying best technology
available in relation to a national categorical performance standard,
today's proposed rule also authorizes a site-specific determination of
best technology available when conditions at the site lead to a more
costly array of controls than EPA had expected would be necessary to
achieve the applicable performance standards.
This site-specific compliance option is similar to the
``fundamentally different factors'' provision in CWA section 301(n),
which authorizes alternative requirements for sources subject to
national technology-based standards for effluent discharges, if the
facility can establish that it is fundamentally different with respect
to factors considered by EPA in promulgating the national standard. The
fundamentally different factors provision was added to the CWA in 1987,
but prior to the amendment, both the Second Circuit and the Supreme
Court upheld EPA's rules containing provisions for alternative
requirements as reasonable interpretations of the statute. NRDC v. EPA,
537 F.2d 642, 647 (2d Cir. 1976) (``the establishment of the variance
clause is a valid exercise of the EPA's rulemaking authority pursuant
to section 501(a) which authorizes the Administrator to promulgate
regulations which are necessary and proper to implement the Act''); EPA
v. National Crushed Stone Ass'n, 449 U.S. 64 (1980) (approving EPA's
alternative requirements provision in a standard adopted pursuant to
CWA section 301(b)(1), even though the statute did not expressly permit
a variance.) EPA's alternative site-specific compliance option in this
proposed rule is similarly a reasonable interpretation of section
316(b) and a valid exercise of its rulemaking authority under CWA
section 501.
Based on this interpretation, EPA and State permitting authorities
have been implementing CWA section 316(b) on a case-by-case basis for
over 25 years. Such a case-by-case determination of best technology
available has been recognized by courts as being consistent with the
statute. See Hudson Riverkeeper Fund v. Orange and Rockland Util, 835
F. Supp. 160, 165 (S.D.N.Y. 1993) (``This leaves to the permit writer
an opportunity to impose conditions on a case by case basis, consistent
with the statute'').
EPA reasonably interprets CWA section 316(b) to authorize it to
consider costs of compliance in determining best technology
``available.'' (See section I.) Therefore, where EPA fails to consider
a facility's unusual or disproportionate costs in setting the national
requirements for best technology available, it reasonably authorizes
permit authorities to set site-specific alternative limits to account
for these costs. See Riverkeeper v. EPA, slip op. at 25 (2nd Cir. Feb.
3, 2004) (upholding site-specific alternative limits under the Phase I
rule for new facilities where a particular facility faces
disproportionate compliance costs).
ii. Basis of the Cost-Benefit Test
Under today's proposal, EPA would allow a facility to use a
comparison of its costs to the benefits of meeting the performance
standards at its site (a ``cost-benefit test'') as another basis for
obtaining a site-specific determination of best technology available to
minimize adverse environmental impact. Section 316(b) authorizes
consideration of the environmental benefit to be gained by requiring
that the location, design, construction, and capacity of cooling water
intake structures reflect the best technology available for the purpose
of minimizing adverse environmental impact. Accordingly, in proposing
the technologies on which EPA based the compliance alternatives and
performance standards as the best technologies available for existing
facilities to minimize adverse environmental impact, EPA considered the
national cost of those technologies in comparison to the national
benefits--i.e., the reduction in impingement mortality and entrainment
that EPA estimated would occur nationally if all Phase III existing
facilities withdrawing greater than any of the co-proposed thresholds
selected one of the compliance options in Sec. 125.103(a)(2) through
(4). While EPA believes that there is considerable value in
promulgating national performance standards under section 316(b) based
on what EPA determines, on a national basis, to be the best technology
available to minimize adverse environmental impact, EPA also recognizes
that, at times, determining what is necessary to minimize adverse
environmental impact can necessitate a site-specific inquiry. EPA's
balance of the national costs and national benefits may not be similar
to the comparison of costs and benefits at a specific site due to
variations in: (1) The performance of intake technologies, and (2)
characteristics of the waterbody in which the intake(s) are sited,
including the resident aquatic biota. For example, there may be some
facilities where the absolute numbers of fish and shellfish impinged
and entrained is so minimal that the cost to achieve the required
percentage reductions would be significantly greater than the benefits
of achieving the required reductions at that particular site. More
specifically, because of the characteristics of a particular waterbody,
or the behavioral patterns of the fish or shellfish in that particular
waterbody, there may be little or no impingement mortality or
entrainment occurring at the site. For such a facility, the cost of
reducing an already small amount of impingement mortality and
entrainment by 80 to 95 percent and 60 to 90 percent, respectively, may
be significantly greater than the benefits. In short, it may not be
cost-effective and, therefore may be economically impracticable for a
facility to achieve percentage reductions when attempting to save a
small number of fish or shellfish. For example, in a waterbody that is
already degraded, very few aquatic organisms may be subject to
impingement or entrainment, and the costs of retrofitting an existing
cooling water intake structure may be significantly greater than the
benefits of doing so. By requiring best technology available to
minimize adverse environmental impact, section 316(b) invites a
consideration of both technology and environmental
[[Page 68473]]
conditions, including the potential for adverse impacts, in the
receiving waterbody. EPA believes it is a reasonable interpretation of
the statute to allow the Director to consider the results of meeting
the performance standards in terms of reducing environmental impact
(i.e., the benefits) in cases where the costs of installing the
technology are significantly greater than the reduction in
environmental impacts would seem to warrant. As with the cost-cost
site-specific provision, EPA also wants to ensure that any relaxation
of the performance standards be the minimum necessary to ensure that
the costs are not significantly greater than the benefits. Proposed
Sec. 125.103(a)(5)(ii) thus provides that alternative site-specific
requirements must achieve an efficacy that is as close as practicable
to the applicable performance standards without resulting in costs that
are significantly greater than the benefits of meeting the performance
standards at the facility.
Legal Authority for the Cost-Benefit Test
EPA believes that the Clean Water Act authorizes a site-specific
determination of the best technology available to minimize adverse
environmental impact where the costs of compliance with the rule's
performance standards are significantly greater than its benefits. This
authority stems from the statutory language of CWA section 316(b).
Section 316(b) requires that cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact. 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. In contrast, under section 301, the goal of BAT is
explicitly articulated by reference to a different purpose, to make
reasonable further progress toward the national goal of eliminating the
discharge of all pollutants (section 301(b)(2)(A)). Similarly, under
section 304, the goal of BPT and BCT is explicitly articulated by
reference to the degree of effluent reduction attainable. (Section
304(b)(1)(A) and section 304(b)(4)(A))
EPA has previously considered the costs of technologies in relation
to the benefits of minimizing adverse environmental impact in
establishing section 316(b) limits, which historically have been done
on a case-by-case basis. See, e.g., In Re Public Service Co. of New
Hampshire, 10 ERC 1257 (June 17, 1977); In Re Public Service Co. of New
Hampshire, 1 EAD 455 (Aug. 4, 1978); Seacoast Anti-Pollution League v.
Costle, 597 F. 2d 306 (1st Cir. 1979). Under CWA section 316(b), EPA
may consider the benefits that the technology-based standard would
produce in a particular waterbody, to ensure that it will ``minimize
adverse environmental impact.'' EPA believes that the technology-based
standards established in this proposed rule will, as a national matter,
``minimize adverse environmental impact.'' However, the degree of
minimization contemplated by the national performance standards may not
be justified by site-specific conditions. In other words, depending on
the circumstances of the receiving water, it may be that application of
less stringent controls than those that would otherwise be required by
the performance standards will achieve the statutory requirement to
``minimize'' adverse environmental impact, when considered in light of
economic practicability. An extreme example is a highly degraded ship
channel with few fish and shellfish, but such situations can only be
identified and addressed through a site-specific assessment.
For these reasons, EPA reasonably interprets the phrase ``minimize
adverse environmental impact'' in section 316(b) to authorize a site-
specific consideration of the benefits of the technology-based standard
on the receiving water. EPA continues to believe that any impingement
or entrainment would be an adverse environmental impact, but has
determined that section 316(b) does not require minimization of adverse
environmental impact beyond that which can be achieved at a cost that
is economically practicable. EPA believes that the relationship between
costs and benefits is one component of economic practicability for
purposes of section 316(b) and the legislative history indicates that
economic practicability may be considered in determining what is best
technology available for purposes of section 316(b). The legislative
history of section 316(b) indicates that the term ``best technology
available'' should be interpreted as ``best technology available
commercially at an economically practicable cost.'' \39\ EPA believes
that allowing a relaxation of the performance standards when costs
significantly exceed benefits, but only to the extent justified by the
significantly greater costs, is a reasonable way of ensuring that
adverse environmental impact be minimized at an economically
practicable cost. This does not mean that there is a need to make a
finding of ``adverse environmental impact'' before performance
standards based CWA section 316(b) requirements would apply. Rather,
EPA is authorizing an exception to national performance standards based
requirements on a site-specific basis in limited circumstances: when
the costs of complying with the national performance standards are
significantly greater than the benefits of compliance at a particular
site.
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\39\ See 118 Cong. Rec 33,762 (1972), reprinted in 1 Legislative
History of the Water Pollution Control Act Amendments of 1972, at
264 (1973)(Statement of Representative Don H. Clausen).
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3. Why Is EPA Proposing National Requirements for New Offshore and
Coastal Oil and Gas Extraction Facilities?
After EPA proposed the Phase I rule for new facilities (65 FR
49060, August 10, 2000), the Agency received adverse comment from
operators of mobile offshore and coastal drilling units concerning the
limited information about their cooling water intakes, associated
impingement mortality and entrainment, costs of technologies, or
achievability of the controls proposed by EPA. On May 25, 2001, EPA
published a Notice of Data Availability (NODA) for Phase I that, in
part, sought additional data and information about mobile offshore and
coastal drilling units (see 66 FR 28857). In the Phase I final rule,
EPA committed to ``propose and take final action on regulations for new
offshore oil and gas extraction facilities, as defined at 40 CFR 435.10
and 40 CFR 435.40, in the Phase III section 316(b) rule.'' See 66 FR
65256. Today's proposed regulation would establish national
requirements for new offshore oil and gas extraction facilities that
use a cooling water intake structure to withdraw water from waters of
the U.S.
Requirements for new offshore oil and gas extraction facilities are
proposed in a new subpart N. New onshore oil and gas extraction
facilities are already potentially covered under section 316(b) Phase I
requirements; new offshore oil and gas extraction facilities that would
be subject to subpart N include new coastal and offshore oil and gas
extraction facilities. The proposed requirements for these facilities
are similar to some, but not all, of the requirements contained in the
Phase I rule applicable to other new facilities. For example, the Phase
I requirement to reduce intake flow commensurate with a closed-cycle,
recirculating cooling system would not apply to these facilities. EPA
is seeking comment only on the new facility requirements contained in
proposed Subpart N, which would be applicable to new offshore oil and
gas extraction facilities.
Under today's proposed rule, new offshore oil and gas extraction
facilities
[[Page 68474]]
that withdraw greater than 2 MGD and that employ sea chests as cooling
water intake structures, and are fixed facilities would have to comply
with the requirements in Sec. 125.134(b)(1)(ii). These requirements
address intake flow velocity, specific impact concerns (e.g.,
threatened or endangered species, critical habitat, migratory or sport
or commercial species), required information submission, monitoring,
and recordkeeping. Under this proposal, new offshore oil and gas
extraction facilities that withdraw greater than 2 MGD that do not
employ sea chests as cooling water intake structures, and are fixed
facilities would have to comply with the requirements in Sec.
125.134(b)(1)(i). The one additional requirement for these facilities
is Sec. 125.134(b)(5), which requires the selection and implementation
of design and construction technologies or operational measures to
minimize entrainment of entrainable life stages of fish or shellfish.
Fixed facilities can also choose to comply through Track II, which
allows a site-specific demonstration that alternative requirements
would produce comparable levels of impingement mortality and
entrainment reduction. New offshore oil and gas facilities that are not
fixed facilities would have to comply with the regulations at Sec.
125.134(b)(1)(iii). Track II is not available to non-fixed (mobile)
facilities because non-fixed facilities, which are expected to operate
at multiple locations, would not be able to perform a site-specific
demonstration. For this same reason, EPA has dropped some of the other
site-dependent requirements for non-fixed facilities (e.g., baseline
biological assessment). EPA requests comment on the practicability of
Track II demonstrations and other site-dependent requirements for non-
fixed facilities.
EPA has limited information on environmental impacts associated
with the use of cooling water intake structures at new offshore oil and
gas extraction facilities but believes the potential for such impacts
is sufficient to warrant including requirements for new offshore oil
and gas extraction facilities in this proposed rule (see section V for
more detailed discussion). In addition, although such technologies are
not generally in use at existing offshore oil and gas extraction
facilities, EPA believes that technologies are available for use by new
facilities in this subcategory to meet the proposed requirements as
described below. EPA requests comment, including data, on environmental
impacts from, and availability of technologies for, cooling water
intake structures at new offshore oil and gas extraction facilities.
Some offshore oil and gas extraction facilities employ an
underwater compartment within the facility or vessel hull or pontoon
through which sea water is drawn in or discharged, often called a ``sea
chest.'' A passive screen (strainer) is often set along the flush line
of the sea chest. Pumps draw seawater from open pipes in the sea chest
cavity for a variety of purposes (e.g., cooling water, fire water, and
ballast water). These intakes are normally the only source of cooling
water for the facility; therefore, it is crucial to the operation of
these facilities that the intake structures be kept clean and clear of
fish, jellyfish, plastic bags, and other debris. To accomplish this
these intake structures can, and have been, designed for low intake
velocity (i.e., less than 0.5 feet per second) and/or include fish
protection equipment; see the Technical Development Document for
details.
As outlined in Alaska's oil and gas leasing requirements, oil and
gas extraction facilities in Alaskan State waters are currently subject
to an impingement control velocity limit of 0.1 feet per second (i.e.,
more stringent than EPA's design requirement of 0.5 feet per second in
the Phase I new facility rule to minimize impingement mortality of
aquatic organism). These State regulations suggest that impingement
controls that would meet the velocity requirements of this proposed
rule are available for new offshore oil and gas extraction facilities
in Alaskan or similar waters.
However, facilities using sea chests may have limited opportunities
to meet the entrainment control requirements applicable to facilities
subject to the Phase I rule. A 2003 literature survey by Mineral
Management Services (DCN 7-0012) identified no evidence of entrainment
controls successfully fitted to offshore oil and gas extraction vessels
with sea chests such as drill ships, jack-ups, MODUs, and barges. EPA's
data suggests that the only physical technology controls for
entrainment at facilities with sea chests would entail installation of
equipment projecting beyond the hull of the vessel. Such controls may
not be feasible due to facility design requirements, even for new
facilities that could avoid the challenges of retrofitting control
technologies.
EPA does have limited information showing the entrainment reduction
benefits of planar wedgewire screens. EPA is considering, and requests
comment on, whether entrainment technologies, such as planar wedgewire
screens, are available for use by facilities using sea chests and
whether based on such technologies it would be appropriate to apply
Sec. 125.134(b)(5) (requiring design and construction technologies or
operational measures to minimize entrainment of entrainable life stages
of fish or shellfish) to such facilities.
EPA also considered whether all new offshore vessels could be
constructed without employing sea chests. A technology must prove to be
practicable to be a viable alternative to current technology. In this
case, EPA treats a viable alternative to sea chests as any practical
alternative configuration/technology successfully implemented at
existing facilities, including those in other manufacturing industries,
with similar seawater intake structures. EPA data suggests the only
demonstrated design for drill ships and semi-submersible MODUs is to
use sea chests because they allow the vessel to maintain appropriate
fluid dynamics, overall optimal vessel shape, and a safe seaworthy
profile. Therefore, EPA does not believe entrainment controls are
feasible at such facilities.
For new offshore oil and gas extraction facilities with intake
structures other than sea chests, EPA believes the proposed entrainment
controls are feasible. For example, a caisson intake (as referred to
here) is simply a steel pipe attached to a fixed structure that extends
from an operating area down some distance into the water. It is used to
provide a protective shroud around another process pipe or pump that is
lowered into the caisson from the operating area. The most likely
technologies to reduce impingement mortality and entrainment of marine
life in this type of structure would be passive intake screens or
velocity caps. Air sparges and copper nickel alloys can be used to
control biofouling. Other technologies such as acoustic barriers,
electro barriers or intake relocation may also be used.
In summary, EPA is proposing to apply requirements that are
consistent with some--but not all--of the Phase I provisions to new
offshore oil and gas extraction facilities, because of differences in
technological availability between such facilities and those covered in
the Phase I rule. Because available information indicates that it is
not feasible for all new offshore oil and gas extraction facilities to
employ closed-cycle recirculating cooling systems, new offshore oil and
gas extraction facilities would not be subject to Phase I requirements
based on closed-cycle recirculating cooling systems.
[[Page 68475]]
Specifically, new offshore oil and gas extraction facilities would not
have to meet requirements equivalent to Sec. 125.84(b)(1) (requiring
that a facility reduce intake flow to a level commensurate with a
closed-cycle recirculating cooling system) and Sec. 125.84(d)(1)
(Track II requirements using closed-cycle recirculating cooling systems
as a baseline).
EPA is proposing to exclude new seafood processing vessels from the
proposed national requirements. Data available to the Agency indicate
that given the relatively low cooling water flows used by these
vessels, the propensity for reduced intake of fish or debris due to the
vessel's speed in relation to the intake's orientation and intake
velocity, and their highly mobile character, these vessels are not
likely to cause significant adverse environmental impacts. Further,
data available to the Agency has not clearly identified available
technologies that would reduce entrainment for such vessels. In
addition, EPA is proposing to exclude new offshore liquified natural
gas import terminals from the proposed national requirements. Such
facilities withdraw water primarily for warming (not cooling) purposes,
to heat liquified natural gas to temperatures at which it becomes a gas
and can enter the natural gas distribution pipelines. Thus, it appears
that these facilities would not meet the 25 percent exclusive cooling
water use threshold, and would therefore be beyond the scope of section
316(b). Seafood processing vessels and new offshore liquified natural
gas import terminals would continue to be subject to any requirements
for their cooling water intake structures established by permit
Directors on a case-by-case basis using best professional judgment.
EPA requests comment on all aspects of this proposed approach.
B. Economic Practicability
The legislative history of section 316(b) indicates that the term
``best technology available'' should be interpreted as ``best
technology available commercially at an economically practicable
cost.'' \40\ This interpretation reflects congressional concern that
the application of best technology available should not impose an
impracticable and unbearable economic burden. Thus, EPA has conducted
extensive analyses of the economic impacts of this proposed rule and
the co-proposed options discussed above, using an integrated energy
market model (the IPM) and an analysis of market costs and residential
rates for the energy sector, and a discounted cash flow analysis model
for the facility, firm, and market levels for manufacturers. For a
complete discussion of these analyses, please refer to section VIII of
this preamble or the Economic Analysis in support of this proposed rule
(DCN 7-0002).
---------------------------------------------------------------------------
\40\ See 118 Cong. Rec 33,762 (1972), reprinted in 1 Legislative
History of the Water Pollution Control Act Amendments of 1972, at
264 (1973)(Statement of Representative Don H. Clausen).
---------------------------------------------------------------------------
EPA believes that the requirements of this proposed rule reflect
the best technology available at an economically practicable cost. EPA
examined the effects of the proposed rule's compliance costs on
capacity, generation, variable production costs, prices, net income,
and other measures, both at the market and facility levels. In
addition, the other economic analyses conducted by EPA showed that the
costs for this proposed rule would be economically practicable.
EPA believes that a consideration of the relationship of costs to
environmental benefits is an important component of economic
practicability. As discussed in section VIII.C of the proposed Phase I
rule (65 FR 49094), EPA has long recognized that there should be some
reasonable relationship between the cost of cooling water intake
structure control technology and the environmental benefits associated
with its use. EPA requests comment on the relationship of costs to
environmental benefits of this proposed rule.
C. What Is the Proposed Role of Restoration and Trading?
1. What Is the Proposed Role of Restoration?
Under today's proposed rule, consistent with the Phase II
regulation, EPA would provide Phase III existing facilities with the
option to use restoration under compliance alternatives Sec.
125.103(a)(2), (3), and (5) where the performance of the restoration
measures (the production and increase of fish and shellfish in the
facility's waterbody or watershed, including maintenance of community
structure and function), would be substantially similar to that which
would have been achieved if the facility reduced its impingement
mortality and entrainment through the use of design and construction
technologies and/or operational measures, to meet the applicable
performance standards. The role of restoration under this proposed rule
is to provide additional flexibility to facilities in complying with
the rule by eliminating or significantly offsetting the adverse
environmental impact caused by the operation of a cooling water intake
structure. Restoration measures that increase fish and shellfish in an
impacted waterbody or watershed and would result in performance
substantially similar to that which would otherwise be achieved through
reductions in impingement mortality and entrainment further the goal of
minimizing adverse environmental impact while offering additional
flexibility to both permitting authorities and facilities. Restoration
measures may include such activities as removal of barriers to fish
migration, reclamation of degraded aquatic organism habitat, or
stocking of aquatic organisms.
Restoration measures have been used at existing facilities as one
of many tools to implement section 316(b) on a case-by-case, best
professional judgment basis to compensate for the death and injury of
fish and other aquatic organisms caused by the cooling water intake
structure. Under today's proposed rule, a Phase III existing facility
could utilize restoration measures either in lieu of or as a supplement
to design and construction technologies and/or operational measures.
For example, a facility could demonstrate to the Director that velocity
controls are the most feasible technology choice for the facility but
that, when used on their own, the velocity controls are insufficient to
meet the applicable performance standards at Sec. 125.103(b). The
facility could then, in conjunction with the use of velocity controls,
implement restoration measures to increase the fish and shellfish
productivity of the waterbody in order to meet the performance
standards at Sec. 125.103(b). Another facility could demonstrate to
the Director that restoration measures alone achieve the greatest
compliance with the performance standards. A facility could
alternatively request a site-specific determination of best technology
available under Sec. 125.103(a)(5) and use restoration measures to
meet the alternate requirements. Facilities that are currently
utilizing restoration measures to comply with their existing section
316(b) requirements may use these measures to comply with the
performance standards at Sec. 125.103(b) or site-specific requirements
at Sec. 125.103(a)(5). However, restoration measures that are required
under other statutory provisions or regulations (e.g., CWA section 404)
could not be used to comply with today's proposed rule.
Facilities that propose to use restoration measures would need to
demonstrate to the Director that they evaluated the use of design and
[[Page 68476]]
construction technologies and operational measures and determined that
the use of restoration measures is appropriate because meeting the
applicable performance standards or requirements through the use of
other technologies is less feasible, less cost-effective, or less
environmentally desirable than meeting the standards in whole or in
part through the use of restoration measures. Facilities also would
need to demonstrate that the restoration measures they plan to
implement, alone, or in combination with design and construction
technologies and/or operational measures, would produce ecological
benefits (production of fish and shellfish) at a level that is
substantially similar to the level that would be achieved through
compliance with the applicable impingement mortality and/or entrainment
performance standards under Sec. 125.103(b), or alternative site-
specific requirements under Sec. 125.103(a)(5). In other words,
restoration measures would have to replace the fish and shellfish lost
to impingement mortality and entrainment to the extent the loss would
have been reduced by otherwise applicable requirements, either as a
substitute or as a supplement to reducing impingement mortality and
entrainment through design and control technologies and/or operational
measures. While the species makeup of the replacement fish and
shellfish would not have to be exactly the same as that of the
impingement mortality and entrainment losses, the Director would have
to make a determination that the net effect is to produce a level of
fish and shellfish in the waterbody that is ``substantially similar''
to that which would result from meeting the performance standards
through design and construction technologies and/or operational
measures alone. The proposed rule would require that a facility use an
adaptive management method for implementing restoration measures
because the performance of restoration projects must be regularly
monitored and potentially adjusted to ensure the projects achieve their
objectives (see 67 FR 17146-17148 and 68 FR 13542).
The proposed rule also would require that restoration projects
which replace the lost fish and shellfish with a different species mix
(``out of kind'' restoration) be based on a watershed approach to
restoration planning. The boundaries of a ``watershed'' should be
guided by the cataloging unit of the ``Hydrologic Unit Map of the
United States'' (USGS, 1980), although it may be appropriate to use
another watershed or waterbody classification system developed at the
State or local level if such a system compares favorably in level of
detail. For example, in coastal systems that support migratory fish, a
coastal waterbody that transects a number of watersheds may be the most
appropriate unit for planning restoration.
Legal Authority for Restoration
While the Phase I rule also authorized use of restoration measures,
today's proposed rule includes additional regulatory controls on the
use of restoration measures to ensure that they are used appropriately
by existing facilities to comply with the applicable performance
requirements or site specific alternative requirements. For example, as
described above, restoration measures are authorized only after a
facility demonstrates to the permitting authority that it has evaluated
other design and construction technologies and operational measures and
determined that they are less feasible, less cost effective, or less
environmentally desirable than meeting the performance standards or
alternative site-specific requirements in whole or in part through the
use of restoration measures. The facility must also demonstrate that
the proposed restoration measures will produce ecological benefits
(i.e., the production of fish and shellfish for the facility's
waterbody or watershed, including maintenance of community structure
and function) at a level that is substantially similar to the level a
facility would achieve through compliance with the applicable
performance standards or alternative site-specific requirements.
Further, the permitting authority must review and approve the
restoration plan to determine whether the proposed restoration measures
will meet the applicable performance standards or site specific
alternative requirements. Consequently, the restoration provisions of
today's proposed rule are designed to minimize adverse environmental
impact to a degree that is comparable to the other technologies on
which the rule is based.
The use of restoration to meet the requirements of section 316(b)
is consistent with the goals of the Clean Water Act; measures that
restore fish and shellfish to compensate for those that are impinged
and entrained further the objective of the Clean Water Act ``'to
restore, maintain, and protect the biological integrity of the nation's
waters.'' 33 U.S.C. 1251(a) (emphasis added). It is also consistent
with EPA's and States' past practices in implementing section 316(b) in
individual permit decisions. For at least twenty years, EPA and States
have authorized existing facilities to comply with section 316(b)
requirements, at least in part, through the use of restoration
measures. For example, the Chalk Point Generating Station, located on
the Patuxent River in Prince George's County, Maryland constructed a
fish rearing facility in partial compliance of its section 316(b)
obligations (DCN 1-5023-PR).
Although the United States Court of Appeals for the Second Circuit
recently remanded the portion of EPA's Phase I new facility rule that
authorized restoration measures to meet that rule's requirements, EPA
believes that portion of the decision should not apply to this Phase
III proposed rulemaking. Indeed, the Second Circuit explicitly stated
that ``[i]n no way [does it] mean to predetermine the factors and
standard applicable to Phase II and III of the rulemaking.''
Riverkeeper v. EPA, slip op. at 12, note 13 (2nd Cir. Feb. 3, 2004).
This is probably because there are important differences between new
and existing facilities that warrant interpreting section 316(b) more
broadly to give existing facilities additional flexibility to comply
with section 316(b). As noted above, restoration measures have been
used to comply with section 316(b) limits at existing facilities for
several years because of the more limited availability of other
technologies for existing facilities. Costs to retrofit an existing
facility to install a ``hard'' technology can be much higher than costs
to install one at the time a facility is constructed, and those costs
can vary considerably from site to site. Thus, the range of
technologies that are ``available'' to existing facilities to meet the
performance standards is narrower than the range of technologies
available to new facilities.
In recognition of the vast differences between existing and new
facilities, Congress established separate sections in the Clean Water
Act for establishing discharge limitations on existing and new
facilities. Effluent limitations guidelines for existing facilities are
established under sections 301 and 304, whereas new source performance
standards are established under section 306. Those sections set out two
distinct sets of factors for developing effluent limitations guidelines
for existing facilities and new source performance standards for new
facilities. Notably, there are only two factors explicitly stated in
section 306 for the Administrator to consider in establishing new
source performance standards--cost and non-water quality
[[Page 68477]]
impacts, whereas for existing facilities Congress calls upon EPA to
consider a much broader range of factors in section 304(b)(2)(b): 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. This list reflects
the wide range of facility characteristics and circumstances that can
influence the feasibility and availability of a particular technology
across a particular industry. Existing facilities generally face more
and different problems than new facilities because of the technological
challenges and high costs associated with retrofitting as compared to
building a new facility. Indeed, by including the phrase ``and such
other factors as [EPA] deems appropriate,'' Congress made certain that
EPA would have sufficient flexibility in establishing limitations for
existing facilities to consider all relevant factors. For several other
reasons, EPA believes the Second Circuit decision is not binding on
this Phase III proposed rule. First, section 316(b) requires the design
of a cooling water intake structure to reflect the best technology
available to ``minimize adverse environmental impact.'' The phrase
``minimize adverse environmental impact'' is not defined in section
316(b). For the Phase III proposed rule, EPA interprets this phrase to
allow facilities to minimize adverse environmental impact by reducing
impingement mortality and entrainment, or to minimize adverse
environmental impact by compensating for those impacts after the fact.
Section 316(b) does not explicitly state when the adverse environmental
impact of cooling water structures must be minimized--that is whether
they must be prevented from occurring in the first place or compensated
for after the fact or where the minimization most occurs--at the point
of intake or at some other location in the same watershed. Therefore,
under Chevron, EPA is authorized to define ``minimize'' to authorize
restoration at existing facilities to minimize the effects of adverse
environmental impact.
In another context under the Clean Water Act, EPA has interpreted
authority to ``minimize adverse effects'' as including authority to
require environmental restoration. Section 404 of the CWA authorizes
the Army Corps of Engineers to issue permits for discharges of dredged
or fill material into waters of the United States. EPA was granted
authority to establish regulations containing environmental guidelines
to be met by the Corps in issuing section 404 permits. See CWA section
404(b)(1). Current regulations, in place since 1980, prohibit a
discharge unless, among other requirements, all practicable steps are
taken to avoid, minimize and mitigate for the environmental effects of
a discharge. See 40 CFR 230.10. Of particular relevance here, the
regulations require that steps be taken to ``minimize potential adverse
effects of the discharge on the aquatic ecosystem'' (40 CFR 230.10(d)).
EPA has specifically defined minimization steps to include
environmental restoration. See 40 CFR 230.75(d) (``Habitat development
and restoration techniques can be used to minimize adverse impacts and
to compensate for destroyed habitat'').
Moreover, at the time of the Phase I litigation, EPA had not
interpreted the term ``reflect'' in section 316(b), and therefore, the
Second Circuit did not consider its meaning in determining whether
restoration could be used as a design technology to meet the Phase I
rule requirements. Section 316(b) requires that ``the location, design,
construction, and capacity of cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact.'' The term ``reflect'' is significant in two respects. First,
it indicates that the design, location, construction and capacity of
the cooling water intake structure itself must be based on the best
technology available for such structures. This authorizes EPA to
identify technologies that can be incorporated into the physical
structure of the intake equipment. It also indicates that the choice of
what actually is the best physical configuration of a particular
cooling water intake structure can take into account, i.e., reflect,
other technologies--and their effects--that are not incorporated into
the structure itself. For example, barrier nets are not incorporated
into the physical design of the cooling water intake structure, but
their use--and effectiveness--influences the physical design of the
cooling water intake structure. Another relevant example is the
technology known as ``closed-cycle'' cooling. Although this technology
is physically independent of the cooling water intake structure, it
directly influences decisions regarding the design capacity of the
cooling water intake structure: as more cooling water is recycled, less
needs to be withdrawn.
Both barrier nets and closed-cycle cooling are considered
``design'' technologies.'' Similarly, properly designed restoration
measures can be best technologies available that can influence the
design of the physical cooling water intake structure. To put it
another way, for purposes of minimizing adverse environmental impact,
requirements for cooling water intake structures reflect a variety of
best technologies available, which EPA construes to include restoration
measures. A dry cooling system is another example of a technology that
although physically independent of the cooling water intake structure
is nonetheless considered an acceptable method to minimize adverse
environmental impacts. In fact, since a dry cooling system uses air as
a cooling medium, it uses little or no water, dispensing altogether
with the need for a cooling water intake structure.
EPA has discretion to characterize restoration measures as
technologies for purposes of section 316(b). Section 316(b) does not
define either the phrase ``cooling water intake structure'' or the term
``technology'' and, therefore, leaves their interpretation to EPA. EPA
has defined the phrase cooling water intake structure in today's rule
to mean the total physical structure and any associated waterways used
to withdraw cooling water from waters of the United States. This
definition embraces elements both internal and external to the intake
equipment. EPA did not define the term technology in today's proposed
rule, but looked for guidance to section 304(b), which the Second
Circuit has recognized can help illuminate section 316(b). Section
301(b)(2) best available technology limitations are based on factors
set forth in section 304(b). Section 304(b), while not using the term
technology, discusses the ``application of the best control measures
and practices achievable including treatment techniques, process and
procedure innovations, operating methods, and other alternatives.''
This is a broad, nonexclusive list. Indeed, BAT effluent limitations
guidelines under this authority have been based on a vast array of
treatment techniques, operation practices (including chemical
substitution), and management practices. See 40 CFR part 420 (effluent
guidelines for concentrated animal feeding operations); 40 CFR part
430, subparts B & E (effluent guideline for pulp and paper industry).
See also 62 FR 18504 (April 15, 1998).
Employing this broad concept of technology, in today's proposed
rule EPA has determined that the design of cooling water intake
structures may reflect technologies relating to the restoration of fish
and shellfish in the
[[Page 68478]]
waters from which cooling water is withdrawn. Restoration is not
included in the definition of ``design and construction technology'' in
today's proposed rule so as to distinguish restoration from ``hard''
technologies for purposes of the proposed rule. Under the regulatory
scheme of the proposed rule, restoration is treated differently than
other technologies in several respects, all of which are to help ensure
that restoration projects achieve substantially similar performance as
design and construction technologies and/or operational measures. When
these restoration technologies are used they must produce ecological
benefits (the production of fish and shellfish for a facility's
waterbody or watershed, including maintenance of community structure
and function) at a level that is substantially similar to the level the
facility would achieve by using other design and construction
technologies and/or operational measures to achieve the applicable
performance standards or alternative site-specific performance
requirements in Sec. 125.103. In other words, the operation of the
cooling water intake structure together with these restoration
technologies will achieve the overall performance objective of the
statute: To minimize the adverse environmental impact of withdrawing
cooling water. For facilities using this authority, their hardware
decisions for the cooling water intake structure thus take into
account--or reflect--the effects of restoration technology, as well as
other technologies external to the intake structure itself.
EPA acknowledges that in 1982, when Congress was considering
substantial amendments to the Clean Water Act, EPA testified in support
of a proposed amendment to CWA section 316(b) that would have expressly
authorized the use of restoration measures as a compliance option.
According to the Second Circuit, this suggested that EPA may have
interpreted section 316(b) at that time as not authorizing restoration
measures to minimize the adverse environmental impact of cooling water
intake structures. In EPA's view, the Second Circuit gave undue weight
to that testimony, particularly because it was provided before the
Supreme Court's decision in Chevron U.S.A. v. Natural Resources Defense
Council, 467 U.S. 837 (1984), which gave administrative agencies
latitude to fill in the gaps created by ambiguities in statutes the
agencies have been charged by Congress to implement. For at least
twenty years, EPA and States have authorized existing facilities to
comply with section 316(b) requirements, at least in part, through the
use of restoration measures. Additionally, since 1982 EPA has gathered
substantially more data to inform its judgment regarding cooling water
intake structures, the environmental impact resulting from them, and
various technologies available to reduce impingement mortality and
entrainment. Finally, EPA notes that, in contrast to water quality
based effluent limitations that are included in NPDES permits to meet
water quality standards, the required performance of restoration
measures under this proposed rule is not tied to conditions in the
waterbody. Rather it is tied directly to the performance standards,
just as is the performance of the other technologies that facilities
may use to meet the standards. While the design and operation of
restoration measures will necessarily be linked to conditions in the
waterbody (as is also the case for ``hard'' technologies) the
performance standards that restoration measures must meet are not.
2. What Is the Role of Trading in Today's Proposed Rule?
Under today's proposed rule, if a State demonstrates to the
Administrator that it has adopted alternative regulatory requirements
in its NPDES program that will result in environmental performance
within a watershed that is comparable to the reductions of impingement
mortality and entrainment that would otherwise be achieved under Sec.
125.103, the Administrator must approve such alternative requirements
(see Sec. 125.100(c)). A trading program could be a part of these
alternative regulatory requirements.
Trading under other EPA programs has been shown to provide
opportunities for regulatory compliance at reduced costs. EPA's Office
of Water's Water Quality Trading Policy, published in January 2003 (see
DCN 6-5002), fully supports trading nutrients and sediment and adopts a
case-by-case approach to evaluating proposals to trade other
pollutants. Trading in the context of section 316(b) raises many
complex issues, for example, how to establish appropriate units of
trade and how to measure these units effectively given the dynamic
nature of the populations of aquatic organisms subject to impingement
mortality and entrainment. Should a State choose to propose a trading
program under Sec. 125.100(c), EPA would evaluate the State's proposal
on a case-by-case basis to ensure the program complies with the
regulatory requirement--that it will result in environmental
performance within a watershed that is comparable to the reductions of
impingement mortality and entrainment that would otherwise be achieved
under the requirements established at Sec. 125.103. For more
information on approaches to trading under section 316(b) and
considerations, see the Phase II proposed rule at 67 FR 17170-17173;
April 9, 2002.
As in Phase II, questions have been raised by stakeholders in the
context of EPA's section 316(b) rulemakings as to whether these
proposed requirements would allow for trading of aquatic organisms for
pollutant discharges. EPA is concerned that such a program may
introduce comparability and implementation challenges that would be
difficult to overcome, and therefore, EPA does not expect that such a
program would work within the framework of today's proposed rule. In
addition, EPA does not believe that it is possible at this time to
quantify with adequate certainty the potential effects on ecosystem
function, community structure, biodiversity, and genetic diversity of
such trades, especially when threatened and/or endangered species are
present. Based on the current state of the science in aquatic community
ecology and ecological risk assessment, States wishing to develop
trading programs in the context of section 316(b) would be better off
focusing on programs based on metrics of comparability between fish and
shellfish gains and losses among trading facilities, rather than the
much more complex metrics that would be necessary for comparability
among fish and shellfish losses on the one hand, and pollutant
reductions on the other hand (69 FR 41609). EPA requests comment on the
potential role of trading in the context of today's proposed rulemaking
and possible approaches for developing a trading program.
VII. Implementation
As in Phase I and II, proposed section 316(b) requirements for
Phase III existing facilities and new offshore oil and gas extraction
facilities would be implemented through the NPDES permit program.
Today's proposal would establish implementation requirements consistent
with the Phase II final rule for Phase III existing facilities. This
proposed rule would also establish implementation requirements for new
offshore oil and gas extraction facilities that are generally
consistent with Phase I requirements. Today's proposal would establish
application requirements for Phase III existing facilities under 40 CFR
122.21 and proposed Sec. 125.104, monitoring requirements under
[[Page 68479]]
proposed Sec. 125.105, and record keeping and reporting requirements
under proposed Sec. 125.106. For new offshore oil and gas extraction
facilities, today's proposal would establish application requirements
consistent with 40 CFR 122.21 and proposed Sec. 125.136, monitoring
requirements under proposed Sec. 125.137, and record keeping and
reporting requirements consistent with proposed Sec. 125.138. The
proposed regulations also require the Director to review application
materials submitted by each regulated facility and include monitoring
and record keeping requirements in the permit (Sec. 125.107, Sec.
125.139).
A. When Would the Proposed Rule Become Effective?
If promulgated as proposed, this proposed rule would become
effective 60 days after the final rule is published in the Federal
Register. Phase III existing facilities subject to today's proposed
rule would need to comply with the Subpart K requirements when an NPDES
permit containing requirements consistent with Subpart K is issued to
the facility. Under existing NPDES program regulations, this would
occur when an existing NPDES permit is reissued or, when an existing
permit is modified or revoked and reissued. For facilities whose
permits are expiring, EPA recognizes that facilities will need a
reasonable time period to conduct baseline studies and develop and
implement an appropriate suite of control technologies and this is
provided for in Sec. 125.104(a)(2)(ii). Under today's proposed rule,
new offshore oil and gas extraction facilities would need to comply
with the Subpart N requirements when an NPDES permit containing
requirements consistent with Subpart N is issued to the facility (Sec.
125.132).
B. What General Information Would I Be Required To Submit to the
Director When I Apply for My Reissued NPDES Permit?
The NPDES regulations that establish the application process at
Sec. 122.21 generally require that facilities currently holding a
permit submit information and data 180 days prior to the end of the
permit term, which is five years. Under today's proposed rule, Phase
III existing facilities and new offshore oil and gas extraction
facilities would be required to submit the information that is required
under Sec. 122.21 of today's proposed rule with their application for
permit issuance or reissuance.
Today's proposed rule would modify regulations at Sec. 122.21 to
require existing Phase III facilities and new offshore oil and gas
extraction facilities to prepare and submit some of the same
information required for new Phase I and existing Phase II facilities.
The proposed application requirements would require owners or operators
of all Phase III existing facilities to submit two general categories
of information when they apply for a reissued NPDES permit. The general
categories of information would include (1) physical data to
characterize the source waterbody in the vicinity where the cooling
water intake structure(s) is/are located, and (2) data to characterize
the design and operation of the cooling water intake structures. As in
Phase II, Phase III existing facilities would not be required to submit
the Source Water Baseline Biological Characterization Data required
under Sec. 122.21(r)(4). However, new offshore oil and gas extraction
facilities may be required to submit the Source Water Baseline
Biological Characterization Data depending on whether they are fixed or
non-fixed facilities. Non-fixed facilities would be exempt from the
requirement. Specific data requirements for the Source Water Baseline
Biological Characterization Data are described later in this section.
Studies to be submitted by both Phase III existing facilities and new
offshore oil and gas extraction facilities are described below.
1. Source Water Physical Data (Sec. 122.21(r)(2))
Under the requirements at Sec. 122.21, Phase III existing
facilities and new offshore oil and gas extraction facilities subject
to this proposed rule are required to provide the source water physical
data specified at Sec. 122.21(r)(2) in their application for a
reissued permit. These data are needed to characterize the facility and
evaluate the type of waterbody and species potentially affected by the
cooling water intake structure. The Director would use this information
to evaluate the appropriateness of the design and construction
technologies proposed by the applicant.
The applicant for an existing facility or a new fixed offshore oil
and gas extraction facility would be required to submit the following
specific data: (1) A narrative description and scale drawings showing
the physical configuration of all source waterbodies used by the
facility, including areal dimensions, depths, salinity and temperature
regimes, and other documentation; (2) an 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 intake's zone of influence and the
results of such studies; and (3) locational maps. For new non-fixed
(mobile) offshore oil and gas extraction facilities this provision
requires only some of the location information and not the source water
physical data required for Phase III existing facilities and new fixed
offshore oil and gas extraction facilities.
EPA recognizes that mobile facilities may not always know where
they will be operating during the permit term, and the requirement in
(r)(2)(iv) is not meant to restrict them only to locations identified
in the permit application. However, EPA expects that permit applicants
will provide, based on available information, their best estimate as to
where they will be operating during the permit term, at whatever level
of detail they can. EPA requests comment on this requirement.
2. Cooling Water Intake Structure Data (Sec. 122.21(r)(3))
Phase III existing facilities and new offshore oil and gas
extraction facilities would be required to submit the cooling water
intake structure data specified at Sec. 122.21(r)(3) to characterize
the cooling water intake structure and evaluate the potential for
impingement and entrainment of aquatic organisms. Note that Sec.
122.21(r)(3)(ii)--latitude and longitude of each intake structure--
would not be applicable to non-fixed (mobile) offshore oil and gas
extraction facilities. Information on the design of the intake
structure and its location in the water column would allow the permit
writer to evaluate which species or life stages would potentially be
subject to impingement mortality 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, allowing the permit writer to evaluate compliance with
the performance standards or requirements.
The applicant would be required to submit the following specific
data: (1) A narrative description of the configuration of each of its
cooling water intake structures and where they are located in the
waterbody and in the water column; (2) latitude and longitude in
degrees, minutes, and seconds for each of its cooling water intake
structures (not applicable to new non-fixed (mobile) offshore oil and
gas extraction facilities); (3) a narrative description of the
operation of each of the cooling water intake structures, including
design intake flows, daily
[[Page 68480]]
hours of operation, number of days of the year in operation, and
seasonal operation schedules, if applicable; (4) a flow distribution
and water balance diagram that includes all sources of water to the
facility, recirculating flows, and discharges; and (5) engineering
drawings of the cooling water intake structure.
3. Cooling Water System Description (Sec. 122.21(r)(5)) (Phase III
Existing Facilities Only)
Phase III existing facilities would be required to submit the
cooling water system data specified at Sec. 122.21(r)(5) to
characterize the operation of cooling water systems and their
relationship to the cooling water intake structure(s) at the facility.
They would also be required to submit a narrative description of the
proportion of design intake flow that is used in the system, the number
of days of the year that the cooling water system is in operation, and
any seasonal changes in the operation of the system, if applicable. The
facility would also submit design and engineering calculations prepared
by a qualified expert, such as a professional engineer, and supporting
data to support the narrative description. This information would be
expected to be used by the applicant and the Director in determining
the appropriate standards that can be applied to the Phase III
facility.
C. Phase III Existing Facility Implementation
In this proposed rule, a Phase III existing facility as defined by
any of the three co-proposed options would choose one of the following
five compliance alternatives for establishing best technology available
for minimizing adverse environmental impact at the site (see Sec.
125.103(a)(1-5)):
(1) Demonstrate that it has reduced its flow commensurate with a
closed-cycle recirculating system and therefore already meets the
performance standards to reduce impingement mortality and entrainment.
Or, a facility may demonstrate that it has already reduced its design
intake velocity to 0.5 feet per second and therefore meets the
performance standards to reduce impingement mortality only;
(2) Demonstrate that existing design and construction technologies,
operational measures, and/or restoration measures already meet the
performance requirements specified under Sec. 125.103(b) and the
restoration requirements in (c), as applicable;
(3) Demonstrate that it has selected and installed design and
construction technologies, operational measures, and/or restoration
measures that will, in combination with any existing design and
construction technologies, operational measures, and/or restoration
measures, meet the performance standards specified under Sec.
125.103(b) and the restoration requirements specified in Sec.
125.103(c), as applicable;
(4) Demonstrate that it has installed and properly operates and
maintains an approved design and construction technology in accordance
with Sec. 125.108(a); or propose a technology for approval in
accordance with Sec. 125.108(b); or,
(5) Demonstrate that a site-specific determination of best
technology available for minimizing adverse environmental impact is
appropriate for its site in accordance with Sec. 125.103(a)(5).
The application, monitoring, record keeping, and reporting
requirements for each of these compliance alternatives are detailed in
the following sections.
1. As an Existing Phase III Facility, What Additional Information Would
I Submit to the Director When I Apply for My Reissued NPDES Permit?
In addition to Sec. 122.21 described above, the facility would be
required to submit the information required under Sec. 125.104, as
appropriate. This information includes the Comprehensive Demonstration
Study and its seven components as discussed in this section. The seven
components include the following: Proposal for Information Collection;
Source Waterbody Flow Information; Impingement Mortality and/or
Entrainment Characterization Study; Technology Compliance and
Assessment Information; Restoration Plan; Information to Support Site-
specific Determination of Best Technology Available for Minimizing
Adverse Environmental Impact; and Verification Monitoring Plan.
Under today's proposed rule, if a Phase III existing facility's
permit expires before 4 years after the publication date of the final
rule, the facility may request that the Director establish a schedule
for the facility to submit the information required as expeditiously as
practicable, but not later than 3 years and 180 days after publication
of the final rule. Between the time the facility's existing permit
expires and the time an NPDES permit containing requirements consistent
with Subpart K is issued to the facility, the best technology available
to minimize adverse environmental impact would continue to be based on
the Director's best professional judgment.
The Proposal for Information Collection component of Sec. 125.104
should be submitted to the Director for review and comment prior to the
start of information collection activities. For a typical facility that
plans to install a new technology, it is estimated that a facility
would need to submit this Proposal for Information Collection about
fifteen (15) months prior to the submission of the remainder of the
required information, which in turn would need to be submitted about
twenty-one (21) months prior to the expiration of its current permit.
This approximate timing is based on the sequential Comprehensive
Demonstration Study requirements and the estimated level of effort
required to complete the studies and allow time for the Director's
review and approval. The timing provided in this section is for
illustrative purposes only and represents a schedule that the average
facility may need to follow to meet the deadlines established in
today's proposed rule. Some facilities may require more, or less time
to perform the studies and prepare the application requirements. All
facilities, except those that choose to comply with the proposed rule
by reducing intake capacity to a level commensurate with a closed-cycle
recirculating system in accordance with Sec. 125.103(a)(1)(i), or by
adopting an approved technology in accordance with Sec. 125.103(a)(4)
would submit a Proposal for Information Collection for review and
comment by the Director (Sec. 125.104(a)(1)). Facilities that comply
with impingement mortality requirements by reducing intake velocity to
0.5 feet per second or less in accordance with Sec. 125.103(a)(1)(ii)
will only need to submit a Comprehensive Demonstration Study, including
a Proposal for Information Collection, for entrainment reduction
requirements, if applicable. The Proposal for Information Collection
requirements are detailed later in this section. Figure 1 presents an
example of a possible time frame a facility may follow in preparing and
submitting application components.
Following submission of the Proposal for Information Collection,
the Director will review and provide comments on the proposal. During
this time, the facility may proceed with planning, assessment, and data
collection activities in fulfillment of Comprehensive Demonstration
Study requirements. The Director is encouraged to provide comments
expeditiously (i.e., within 60 days) so the permit applicant can make
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responsive modifications to its information gathering activities.
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It is assumed that most facilities would need approximately one
year to complete the studies outlined in the Proposal for Information
Collection. These would be completed at least 180 days prior to the end
of the current permit term, by which time the remainder of required
application information would be submitted. If the facility believed it
would require more than one year to complete studies described in the
Proposal for Information Collection, the facility would be encouraged
to consult with the Director.
After the first permit containing requirements consistent with
Subpart K is issued, facilities may submit a request to their Director
soliciting a reduced information collection effort for subsequent
permit applications in accordance with Sec. 125.104(a)(3), which
allows facilities to demonstrate that the conditions at their facility
and within the waterbody in which their intake is located remain
substantially unchanged since their previous permit application. The
request for reduced cooling water intake structure and waterbody
application information would contain a list of and justification for
each information item in Sec. 122.21(r) and Sec. 125.104(b) that has
not changed since the previous permit application. The applicant would
submit this request at least one year prior to the expiration of the
current permit term and the Director is required to act on the request
within 60 days.
The Director would review the information provided in the
application including the information submitted in compliance with
Sec. 122.21 and Sec. 125.104 and would confirm whether the facility
should be regulated as an existing facility under these proposed
regulations or as a new facility under regulations that were published
on December 19, 2001 (66 FR 65256), and establish the appropriate
requirements to be applied to the cooling water intake structure(s).
Following review and approval of the permit application, the Director
would develop a draft permit for public notice and comment. The comment
period would allow the facility and other interested parties to review
the draft permit conditions and provide comments to the Director. The
Director would consider all public comments received on the draft
permit and would develop a final permit based upon the application
studies submitted and other information submitted during the comment
period, as appropriate. The Director would incorporate the relevant
requirements for the facility's cooling water intake structure(s) into
the final permit.
The information required under Sec. 125.104 would be identical
under each of the three co-proposed regulatory options, with one
exception. Under the regulatory option which defines facilities with
design intakes flows 100 MGD or more located on tidal rivers,
estuaries, or oceans or one of the Great Lakes as existing Phase III
facilities, there would not be a requirement to collect the Source
Waterbody Flow information described below, because this information is
only relevant for facilities withdrawing water from freshwater rivers
and streams or lakes and reservoirs. In addition, under this regulatory
option there would not be any facilities required to meet only
impingement mortality performance standards. Therefore, under this
regulatory option all facilities except those that have met the
applicable requirements in accordance with Sec. 125.103(a)(1)(i) or
Sec. 125.103(a)(4) would be required to submit a Study for both the
impingement mortality and entrainment reduction requirements, unless
the facility had met the applicable requirements in Sec.
125.103(a)(1)(ii), in which case it would be required to submit a Study
for entrainment only. The following describes the proposed application
requirements in more detail.
a. Comprehensive Demonstration Study (Sec. 125.104(b))
Proposed application requirements at Sec. 125.104 would require
all existing facilities except those deemed to have met the performance
standard in Sec. 125.103(a)(1) (reduced intake capacity to a level
commensurate with the use of a closed-cycle, recirculating cooling
water system, or for facilities with impingement requirements only,
reduce intake velocity to 0.5 feet per second or less) to perform and
submit to the Director the results of a Comprehensive Demonstration
Study, including data and detailed analyses to demonstrate that the
facility will meet applicable requirements contained in Sec.
125.103(b) or established pursuant to Sec. 125.103(a)(5).
The proposed Comprehensive Demonstration Study has seven
components.
Proposal for Information Collection;
Source Waterbody Flow Information;
Impingement Mortality and/or Entrainment Characterization
Study;
Technology and Compliance Assessment Information;
Restoration Plan;
Information to Support Site-specific Determination of Best
Technology Available for Minimizing Adverse Environmental Impact; and
Verification Monitoring Plan.
All Phase III existing facilities would not be required to submit
each of these components of the Comprehensive Demonstration Study.
Rather, required submittals for a facility would depend on the
compliance alternative selected. All Phase III existing facilities,
except those deemed to have met the performance standard in accordance
with Sec. 125.103(a)(1) or Sec. 125.103(a)(4), would be required to
submit a Proposal for Information Collection; Source Waterbody Flow
Information whenever the intake is on a freshwater river or stream or a
lake or reservoir; an Impingement Mortality and/or Entrainment
Characterization Study; Technology and Compliance Assessment
Information; and a Verification Monitoring Plan. Facilities complying
in accordance with Sec. 125.103(a)(4) would be required to submit
Technology and Compliance Assessment Information and a Verification
Monitoring Plan. Only those Phase III existing facilities that propose
to use restoration measures in whole or in part to meet the performance
standards in Sec. 125.103(b) or site-specific requirements in Sec.
125.103(a)(5) would be required to submit a Restoration Plan. Only
those facilities that choose to demonstrate that a site-specific
standard is appropriate for their site would be required to submit
Information to Support Site-specific Determination of Best Technology
Available for Minimizing Adverse Environmental Impact.
Proposal for Information Collection (Sec. 125.104(a))
Before conducting any studies, the facility would be required to
submit to the Director for review and approval, a proposal stating what
information would be collected to support the Comprehensive
Demonstration Study (see Sec. 125.104(b)(1)). This proposal would
provide: (1) A description of the proposed and/or implemented
technology(ies) and/or supplemental restoration measures to be
evaluated; (2) a list and description of any historical studies
characterizing impingement mortality and entrainment and/or the
physical and biological conditions in the vicinity of the cooling water
intake structures and their relevance to this proposed study. If the
facility proposes to use existing data, it would demonstrate the extent
to which the data are representative of current conditions and that the
data were collected using appropriate quality assurance/quality control
procedures;
[[Page 68483]]
(3) a summary of any past or ongoing (including voluntary)
consultations with appropriate Federal, State, and Tribal fish and
wildlife agencies that are relevant to this study and a copy of written
comments received as a result of such consultation; and (4) a sampling
plan for any new field studies proposed to be conducted in order to
ensure that the facility has sufficient data to develop a
scientifically valid estimate of impingement mortality and entrainment
at the site. The sampling plan would document all methods and quality
assurance/quality control procedures for sampling and data analysis.
The sampling and data analysis methods proposed would be appropriate
for a quantitative survey and would take into account the methods used
in other studies performed in the source waterbody. The sampling plan
would include a description of the study area (including the area of
influence of the cooling water intake structure), and provide taxonomic
identifications of the sampled or evaluated biological assemblages
(including all life stages of fish and shellfish).
The proposed rule does not specify particular timing requirements
for the information collection proposal, but does require review of the
proposal by the Director. In general, EPA expects that it would be
submitted well in advance of the other permit application materials, so
that if the Director determined that additional information was needed
to support the application, the facility would have time to collect
this information, including additional monitoring as appropriate. In
some cases, however, where the facility intends to rely on existing
data and there has been no change in conditions at the site since the
last permit renewal, a long lead time might not be necessary. This
would most likely be the case for subsequent permit renewals following
the first renewal after the Phase III requirements go into effect.
Source Waterbody Flow Information
Facilities under the co-proposed regulatory option that defines
existing Phase III facilities as those with design intakes flows 100
MGD or more located on tidal rivers, estuaries, or oceans, or one of
the Great Lakes would not have a requirement to submit Source Waterbody
Flow Information. Under either of the other co-proposed options, Phase
III existing facilities with cooling water intake structures that
withdraw cooling water from freshwater rivers or streams, except those
deemed to have met the performance standard in Sec. 125.103(b) (in
accordance with 125.103(a)(1)(i)), would be required to provide the
mean annual flow of the waterbody and any supporting documentation and
engineering calculations that allow a determination of whether they are
withdrawing less than or greater than five (5) percent of the annual
mean flow. This would provide information needed to determine which
requirements would apply to the facility (see Sec. 125.103(b)(1) and
(2)). Facilities seeking compliance in accordance with Sec.
125.103(a)(1)(ii) would need this information to determine whether they
have impingement mortality and entrainment requirements, or impingement
mortality requirements only. The documentation might include either
publicly available flow data from a nearby U.S. Geological Survey
(USGS) gauging station or actual instream flow monitoring data
collected by the facility. The waterbody flow should be compared with
the total design flow of all cooling water intake structures at the
regulated facility.
Under the proposed requirements at Sec. 125.103(b)(3), Phase III
existing facilities with cooling water intake structures that withdraw
cooling water from a lake or reservoir and that propose to increase the
facility's design intake flow would be required to submit a narrative
description of the waterbody's thermal stratification and any
supporting documentation and engineering calculations to show that the
increased flow meets the requirement not to disrupt the natural thermal
stratification or turnover pattern (where present) of the source water
except in cases where the disruption is determined, in consultation
with Federal, State or Tribal fish and wildlife management agencies, to
not adversely affect the management of fisheries. Typically, this
natural thermal stratification would be defined by the thermocline,
which may be affected to a certain extent by the withdrawal of cooler
water and the discharge of heated water into the system. In cases where
the lake or reservoir remains stratified, the Director may also
consider changes in the relative size of the water layers due to the
changes in withdrawals and any subsequent impacts (e.g., change in
dissolved oxygen, change in available habitat).
Impingement Mortality and/or Entrainment Characterization Study
The proposed regulations would require that the facility submit the
results of an Impingement Mortality and/or Entrainment Characterization
Study in accordance with Sec. 125.104(b). This study would include:
(1) Taxonomic identifications of those species of fish and shellfish
and their life stages that are in the vicinity of the cooling water
intake structure and are most susceptible to impingement and
entrainment; (2) a characterization of these species of fish and
shellfish and life stages, including a description of the abundance and
temporal/spatial characteristics in the vicinity of the cooling water
intake structure, based on the collection of a sufficient number of
years of data to characterize annual, seasonal, and diel variations in
impingement mortality and entrainment (e.g., related to climate/weather
differences, spawning, feeding and water column migration); and (3)
documentation of the current impingement mortality and entrainment of
all life stages of fish and shellfish at the facility and an estimate
of impingement mortality and entrainment under the calculation
baseline.
This documentation would include historical data that are
representative of the current operation of the facility and of
biological conditions at the site. Impingement mortality and
entrainment samples to support the calculations required 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. In addition, this study would include an
identification of species that are protected under Federal, State, or
Tribal law (including threatened or endangered species) that might be
susceptible to impingement and entrainment by the cooling water intake
structure(s). The Director might coordinate a review of the list of
threatened, endangered, or other protected species with the U.S. Fish
and Wildlife Service, National Marine Fisheries Service, or other
relevant agencies to ensure that potential impacts to these species
have been addressed.
The calculation baseline is defined at Sec. 125.102 as an estimate
of impingement mortality and entrainment that would occur at the site
assuming: (1) The cooling water intake system has been designed as a
once-through system; (2) 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 (3) the baseline practices,
procedures, and structural configuration are those that the 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 of reducing impingement mortality and
entrainment. The facility
[[Page 68484]]
may also choose to use its current level of impingement mortality and
entrainment as the calculation baseline. EPA has previously referred to
this as the ``as-built approach'' (69 FR 41576).
Reductions in impingement mortality and entrainment from the
calculation baseline as a result of any design and construction
technologies and/or operational measures already implemented at the
facility should be added to the reductions expected to be achieved by
any additional design and construction technologies and operational
measures that will be implemented in order to meet the applicable
performance standards or site-specific requirements. In this case, the
calculation baseline could be estimated by evaluating existing data
from a facility nearby without impingement and/or entrainment control
technology (if relevant) or by evaluating the abundance of organisms in
the source waterbody in the vicinity of the intake structure that may
be susceptible to impingement and/or entrainment. Additionally, if a
portion of the total design intake flow is water withdrawn for a
closed-cycle, recirculating cooling system (but flow is not
sufficiently reduced to satisfy the compliance option in Sec.
125.103(a)(1)(i)), such facilities would be able to use the reduction
in impingement mortality and entrainment that is attributed to the
reduction in flow in meeting the performance requirements in Sec.
125.103.
The calculation baseline may be estimated using: historical
impingement mortality and entrainment data from the facility or from
another facility with comparable design, operational, and environmental
conditions; current biological data collected in the waterbody in the
vicinity of the cooling water intake structure; or current impingement
mortality and entrainment data collected at the facility. A facility
could also request that the calculation baseline be modified to be
based on a location of the opening of the cooling water intake
structure at a depth other than at or near the surface if it can
demonstrate to the Director that the other depth would correspond to a
higher baseline level of impingement mortality and/or entrainment.
Technology and Compliance Assessment Information
The Technology and Compliance Assessment Information required under
Sec. 125.104(b)(4) consists of two parts: (1) The Design and
Construction Technology Plan; and (2) the Technology Installation and
Operation Plan. If a facility plans to utilize the compliance
alternative in Sec. 125.103(a)(4), it need only submit the Technology
Installation and Operation Plan (and the Verification Monitoring Plan
under Sec. 125.104(b).) If the facility plans to utilize the
compliance alternative in Sec. 125.103(a)(2) or (3) using design and
construction technologies and/or operational measures (either existing
or new), it would submit both the Design and Construction Technology
Plan and the Technology Installation and Operation Plan. Note that
facilities seeking a site-specific determination of best technology
available in accordance with Sec. 125.103(a)(5), would submit a Site-
Specific Technology Plan in accordance with Sec. 125.104(b) rather
than a Design and Construction Technology Plan, as well as a Technology
Installation and Operation Plan and the other studies discussed later
in section VII.C.5, Alternative Site-Specific Requirements.
The Design and Construction Technology Plan would explain the
technologies or operational measures selected by a facility to meet the
requirements in Sec. 125.103(a)(2) or (3). The Agency recognizes that
selection of the specific technology or group of technologies for the
site will depend on individual facility and waterbody conditions.
Examples of appropriate technologies may include, but are not limited
to, wedgewire screens, fine mesh screens, fish handling and return
systems, barrier nets, aquatic filter barrier systems, and enlargement
of the cooling water intake structure to reduce velocity. Examples of
operational measures include, but are not limited to, seasonal
shutdowns or reductions in flow, and continuous or more frequent
rotation of traveling screens.
Information required as part of the Design and Construction
Technology Plan would include the following: (1) A narrative
description of the design and operation of all design and construction
technologies and/or operational measures that have been or will be put
into place to meet the performance standards for reduction of
impingement mortality of those species most susceptible to impingement,
and information that demonstrates the efficacy of those technologies
and/or operational measures for those species; (2) a description of the
design and operation of all design and construction technologies or
operational measures that have been or will be put into place, to meet
the performance standards for reduction of entrainment for those
species most susceptible to entrainment, if applicable to the facility,
and information that demonstrates the efficacy of those technologies
and/or operational measures for those species; (3) calculations of the
reduction in impingement mortality and/or entrainment of all life
stages of fish and shellfish that would be achieved by the technologies
and/or operational measures selected based on the Impingement Mortality
and/or Entrainment Characterization Study in Sec. 125.104(b); and (4)
design and engineering calculations, drawings, and estimates to support
the narrative descriptions required in the Design and Construction
Technology Plan prepared by a qualified expert such as a professional
engineer.
In determining compliance with any requirements to reduce
impingement mortality or entrainment, the facility would assess the
total reduction in impingement mortality and entrainment against the
calculation baseline developed under the Impingement Mortality and/or
Entrainment Characterization Study.
Under the Phase II final rule, power producing facilities with a
capacity utilization rate of less than 15 percent are only required to
meet the impingement mortality reduction requirements, based on EPA's
determination that entrainment impacts below this threshold would be
minimal. EPA defined the capacity utilization rate as the ratio between
the average annual net generation of the power by the facility (in MW)
and the total net capability of the facility to generate power (in MW)
multiplied by the number of available hours during a year. Today's
proposed rule does not contain an analogous provision for manufacturing
facilities, as EPA has been unable to identify a similar threshold of
operations below which impacts would be considered minimal. EPA
requests comment on the availability of such a threshold that would
result in lesser requirements for facilities that do not operate full
time, thus minimizing burdens to these facilities while still
protecting the source waterbody.
The Technology Installation and Operation Plan is required for all
facilities that choose the compliance alternatives in Sec.
125.103(a)(2), (3), (4), or (5), and propose to use design and
construction technologies and/or operational measures (either existing
or new) to meet performance standards or site specific requirements.
Such facilities would submit the following information to the Director
for review and approval: (1) A schedule for the installation and
maintenance of any new design and construction technologies; (2) a list
of the operational parameters that will be monitored, including the
location and the
[[Page 68485]]
frequency at which they will be monitored; (3) a list of activities to
be undertaken to ensure to the degree practicable the efficacy of the
installed design and construction technologies and operational
measures, and the schedule for implementing them; (4) a schedule and
methodology for assessing the efficacy of any installed design and
construction technologies and operational measures in achieving
applicable performance standards, including an adaptive management plan
for revising design and construction technologies and/or operational
technologies if the assessment indicates that applicable performance
standards are not being met; and (5) for facilities that select an
approved technology in accordance with Sec. 125.103(a)(4),
documentation that appropriate site conditions (as specified by EPA or
the Director in accordance with Sec. 125.108) exist at the facility.
In developing the schedule for installation and maintenance of any new
design and construction technologies in item 1, the facility should
schedule any downtime to coincide with otherwise necessary downtime
(e.g., for repair, overhaul, or routine maintenance of the) to the
extent practicable. The Director should approve any reasonable
scheduling provision included for this purpose. Those facilities that
propose to use restoration measures in whole or in part would submit
the Restoration Plan required at Sec. 125.104(b)(5).
Today's proposed rule would require the Director to evaluate, using
information submitted in the application, biennial status reports, and
any other available information, the performance of any technologies,
operational measures, and/or restoration measures the facility may have
implemented in previous permit terms. Additional or different design
and construction technologies, operational measures, and/or restoration
measures may be required if the Director determines that the initial
technologies, operational measures, and/or restoration measures
selected and implemented will not meet the requirements of Sec.
125.103, as provided in Sec. 125.107. The proposed rule also requires
that the permit contain a condition requiring the facility to reduce
impingement mortality and entrainment (if applicable) commensurate with
the efficacy of the installed design and construction technologies and/
or operational measures. This is designed to ensure that technologies
are operated and maintained to ensure their efficacy to the degree
practicable, and not merely to meet the low end of the applicable
performance standard range, if better performance is practicable.
The Technology Installation and Operation Plan is one of the most
important pieces of documentation for implementing the requirements of
this proposed rule. It serves to: (1) Guide facilities in the
installation, operation, maintenance, monitoring, and adaptive
management of selected design and construction technologies and/or
operational measures; (2) provide a schedule and methodology for
assessing success in meeting applicable performance standards and site-
specific requirements; and (3) provide a basis for determining
compliance with the requirements of Sec. 125.103(a)(2)-(5). Facilities
and Directors are encouraged to take appropriate care in developing,
reviewing and approving the plan. Note that for facilities employing
restoration measures, the Restoration Plan serves the same required
functions.
Restoration Plan
EPA proposes restoration measures as one of several technologies
that may be employed, alone or in combination with others, to minimize
adverse environmental impact at existing facilities. The consideration
of restoration measures is relevant to the section 316(b) determination
of the requisite design of cooling water intake structures because
restoration measures help minimize the adverse environmental impact
attributable to such structures. Phase III existing facilities may use
restoration measures that produce and/or result in levels of fish and
shellfish in the facility's waterbody or watershed that are
substantially similar to those that would result through compliance
with the applicable performance standards or alternative site-specific
requirements. In order to employ restoration measures, the facility
would demonstrate to the Director that it has evaluated the use of
design and construction technologies and/or operational measures and
determined that the use of restoration measures is appropriate because
meeting the applicable performance standards or site-specific
requirements through the use of design and construction technologies
and/or operational measures alone is less feasible, less cost-effective
or less environmentally desirable than meeting the standards in whole
or in part through the use of restoration measures. Facilities would
also demonstrate to the Director that the restoration measures, alone
or in combination with any selected design and construction
technologies and/or operational measures, will produce ecological
benefits and maintain fish and shellfish in the waterbody, including
community structure and function, at a substantially similar level to
that which would be achieved by meeting the applicable performance
standards at Sec. 125.103(b) or the site-specific requirements
developed pursuant to Sec. 125.103(a)(5).
To help all parties review the proposed or existing restoration
measures and to help ensure adequate performance of those measures,
Sec. 125.104(b) would require facilities proposing to use restoration
measures to submit the following information in a Restoration Plan with
their applications to the Director for review and approval. In the
submittal, the facility would address species identified, in
consultation with Federal, State, and Tribal fish and wildlife
management agencies with responsibility for fisheries and wildlife
potentially affected by the facility's cooling water intake structures,
as species of concern. The level of complexity of the Restoration Plan
likely will be commensurate with the restoration measures considered or
proposed.
First, the facility would be required to demonstrate that it has
evaluated the use of design and construction technologies and/or
operational measures and explain how it determined that the use of
restoration measures would be more feasible, cost-effective, or
environmentally desirable than meeting the applicable performance
standards or site-specific requirements wholly through the use of
design and construction technologies, and/or operational measures.
Second, the facility would be required to submit a narrative
description of the design and operation of all restoration measures the
facility has in place or has selected and proposes to implement to
produce fish and shellfish. If the ecological benefits from an existing
restoration project are required to compensate for some environmental
impact other than the impact from impingement and entrainment by the
cooling water intake structure (e.g., a wetland created to satisfy
section 404 of the Clean Water Act requirements), those ecological
benefits should not be counted towards meeting the applicable
performance standards or site-specific requirements. The narrative
description should identify the species targeted under any restoration
measures.
Third, the facility would be required to submit a quantification of
the ecological benefits of the existing and/or proposed restoration
measures. The facility would estimate the reduction in fish and
shellfish impingement mortality and entrainment that would
[[Page 68486]]
be necessary to comply with applicable performance standards or site-
specific requirements, using information from the Impingement Mortality
and/or Entrainment Characterization Study and any other available and
appropriate information. The facility would then calculate the
production of fish and shellfish from existing and proposed restoration
measures. The quantification would also include a discussion of the
nature and magnitude of uncertainty associated with the performance of
the restoration measures and a discussion of the time frame within
which ecological benefits are expected to accrue from the restoration
project.
Fourth, the facility would be required to provide design
calculations, drawings, and estimates documenting that the proposed
restoration measures, in combination with design and construction
technologies and/or operational measures, or alone, will meet the
requirements for production of fish and shellfish. Production of fish
and shellfish as a result of relevant restoration measures already
implemented at the facility should be added to the production expected
to be achieved by the additional restoration measures. If the
restoration measures address the same fish and shellfish species
identified in the Impingement Mortality and/or Entrainment
Characterization Study (in-kind restoration), the facility would be
required to demonstrate that the restoration measures will produce a
level of these fish and shellfish substantially similar to that which
would result from meeting applicable performance standards or site-
specific requirements. In this case, the calculations should include a
site-specific evaluation of the suitability of the restoration measures
based on the species that are found at the site. If the restoration
measures address fish and shellfish species different from those
identified in the Impingement Mortality and/or Entrainment
Characterization Study (out-of-kind restoration), the facility would be
required to demonstrate that the restoration measures produce
ecological benefits substantially similar to or greater than those that
would be realized through in-kind restoration. Such a demonstration
should be based on a watershed approach to restoration planning and
consider applicable multi-agency watershed restoration plans, site-
specific peer-reviewed ecological studies, and/or consultation with
appropriate Federal, State, and Tribal natural resource agencies. While
both in-kind and out-of-kind restoration require a quantification of
the levels of fish and shellfish the restoration measures are expected
to produce, out-of-kind restoration could include a qualitative
demonstration that these ecological benefits are substantially similar
to or greater than those that would be realized through in-kind
restoration, because different species are being produced that may not
be directly comparable to those identified in the Impingement Mortality
and/or Entrainment Characterization Study. The Director could require
additional information from the facility in order to assess the results
of the out-of-kind restoration (e.g., biological data on species
present, function of species in the community, etc.).
Fifth, the facility would be required to submit a plan utilizing an
adaptive management method for implementing, maintaining, and
demonstrating the efficacy of the restoration measures it has selected
and for determining the extent to which restoration measures, or the
restoration measures in combination with design and construction
technologies and operational measures, have met the applicable
performance standards or site-specific requirements. Adaptive
management is a process in which a facility chooses an approach for
meeting a project goal, monitors the effectiveness of that approach,
and then, based on monitoring and any other available information,
makes any adjustments necessary to ensure continued progress toward the
project's goal. This cycle is repeated as necessary until the goal is
met.
The adaptive management plan would include: (1) A monitoring plan
that includes a list of the restoration parameters that the facility
will monitor, the frequency at which they will be monitored, and the
success criteria for each parameter; (2) a list of activities the
facility will undertake to ensure the efficacy of the restoration
measures, a description of the linkages between these activities and
the items described in the monitoring plan, and an implementation
schedule for the activities; and (3) a process for revising the
restoration plan as new information, including monitoring data, becomes
available, and if the applicable performance standards or site-specific
requirements are not being met.
Sixth, the facility would be required to submit a summary of any
past or ongoing consultation with Federal, State, and Tribal fish and
wildlife management agencies on its use of restoration measures,
including any written comments received as a result of such
consultations.
Seventh, if requested by the Director, the facility would be
required to conduct a peer review of items to be submitted as part of
the Restoration Plan. Written comments from peer reviewers would be
submitted to the Director and made available to the public as part of
the permit application. Peer reviewers would be selected in
consultation with the Director who may consult with EPA, and with
Federal, State and Tribal fish and wildlife management agencies with
responsibility for fish and wildlife potentially affected by the
facility's cooling water intake structure(s). Peer reviewers would be
required to have appropriate qualifications (e.g., in the fields of
geology, engineering and/or biology) depending upon the materials to be
reviewed.
Finally, the facility would be required to include in the Plan a
description of information to be included in a status report to the
Director every two years. The proposed regulations at Sec. 125.107(b)
would require that this information be reviewed by the Director to
determine whether the proposed restoration measures, in conjunction
with (or in lieu of) design and construction technologies and/or
operational measures, would meet the applicable performance standards
or site-specific requirements, or, if the restoration is out-of-kind,
would produce substantially similar ecological benefits (fish and
shellfish) including maintenance or protection of community structure
and function in the facility's waterbody or watershed.
Compliance Using an Approved Technology
Today's proposed rule would offer facilities the choice of adopting
a protective, pre-approved design and construction technology, which
would allow them to submit a significantly streamlined Comprehensive
Demonstration Study. Section 125.108 lists one approved technology
(wedgewire screens) and provides an opportunity for the Director to
pre-approve other technologies.
If the facility chooses to comply with this compliance alternative,
the facility would submit documentation to the Director that the
facility meets the appropriate site conditions and the facility has
installed and will properly operate and maintain submerged cylindrical
wedgewire screen technology (as described in Sec. 125.108(a)(1)) or
other technologies as approved by the Director under Sec. 125.108(b)).
If the facility is subject to impingement mortality performance
standards only, and plans to install
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wedgewire screens with a maximum through-screen design intake velocity
of 0.5 feet per second or less, the facility should choose the
compliance alternative in Sec. 125.103(a)(1)(i), and does not need to
demonstrate that it meets the other criteria in Sec. 125.104(a)(1) or
prepare a Technology Installation and Operation Plan or Verification
Monitoring Plan.
Facilities subject to entrainment performance standards seeking
compliance under this alternative would submit a Technology
Installation and Operation Plan and a Verification Monitoring Plan that
address entrainment reduction, and document that all of the appropriate
site conditions in Sec. 125.108(a)(1) exist at their facility. To
qualify for compliance using the cylindrical wedgewire screen
technology, the facility would have to meet the following conditions:
(1) The cooling water intake structure is located in a freshwater river
or stream; (2) the cooling water intake structure is situated such that
sufficient ambient counter-currents exist to promote cleaning of the
screen face; (3) the maximum through-screen design intake velocity is
0.5 feet per second or less; (4) the slot size is appropriate for the
size of eggs, larvae, and juveniles of all fish and shellfish to be
protected at the site; and (5) the entire main cooling water intake
flow is directed through the technology. Facilities should demonstrate
that they meet these criteria in the Technology Installation and
Operation Plan. Note the submerged cylindrical wedgewire screen
technology is only pre-approved if the cooling water intake structure
is, among other things, located in a freshwater river or stream (see
Sec. 125.108(a)). Therefore, this particular pre-approved technology
would not apply under the co-proposed regulatory option that defines
Phase III existing facilities as those with design intakes flows 100
MGD or more located on tidal rivers, estuaries, or oceans, or one of
the Great Lakes.
In addition, any interested person could submit a request that a
technology be approved for use in accordance with the compliance
alternative in Sec. 125.103(a)(4). If the Director approves, the
technology may be used by all facilities that have similar site
conditions under the Director's jurisdiction. To do this, the
interested person would submit the following as required by Sec.
125.108(b): (1) A detailed description of the technology; (2) a list of
design criteria for the technology and site characteristics and
conditions that each facility would need to have in order to ensure
that the technology can consistently meet the appropriate impingement
mortality and entrainment performance standards in Sec. 125.103(b);
and (3) information and data sufficient to demonstrate that all
facilities under the jurisdiction of the Director can meet the
applicable impingement mortality and entrainment performance standards
in Sec. 125.103(b) if the applicable design criteria and site
characteristics and conditions are present at the facility.
EPA is proposing this compliance alternative in response to
comments received under the Phase II proposed rule suggesting that EPA
provide an additional, more streamlined compliance option under which a
facility could implement certain specified technologies that are deemed
highly protective in exchange for reducing the scope of the
Comprehensive Demonstration Study. (See, 68 FR 13522, 13539; March 19,
2003). This approach was also endorsed by small entity representatives
and the Final Report of the Small Business Advocacy Review Panel on
EPA's Planned Proposed Rule for Cooling Water Intake Structures at
Section 316(b) Phase III Facilities (DCN 7-0006). EPA is soliciting
comments on other technologies that are equally protective and may be
used to meet the performance requirements.
Information To Support Site-Specific Determination of Best Technology
Available for Minimizing Adverse Environmental Impact
If a facility selects compliance alternative 5 (Sec.
125.103(a)(5)), it would be required to demonstrate that its costs of
compliance under the compliance alternatives 3 or 4 (Sec.
125.103(a)(3) or (4)) would be significantly greater than the costs
considered by the Administrator for a similar facility in establishing
the applicable performance standards, or that its cost of compliance
under alternatives 3 and 4 would be significantly greater than the
benefits of complying with the applicable performance requirements.
Depending on the approach taken, a facility would be required to
complete the Site-Specific Technology Plan, the Comprehensive Cost
Evaluation Study, and possibly the Benefits Valuation Study. These
study requirements are discussed later in section VII.C.5, Alternative
Site-Specific Requirements.
Verification Monitoring Plan
Section 125.104(b) would require all Phase III existing facilities,
except those deemed to have met the performance standard in Sec.
125.103(a)(1), to submit a Verification Monitoring Plan to measure the
efficacy of the implemented design and construction technologies and/or
operational measures. The plan would include a monitoring study lasting
at least two years to verify the full-scale performance of the proposed
or already implemented technologies and of any additional operational
measures. The plan would be required to describe the frequency of
monitoring and the parameters to be monitored and the bases for
determining these. The Director would use the verification monitoring
results to confirm that the facility is meeting the level of
impingement mortality and/or entrainment reduction expected and that
fish and shellfish are being maintained at the level expected (as
required in Sec. 125.105). Verification monitoring would be required
to begin once the technologies and/or operational measures are
implemented and continue for a sufficient period of time (but at least
two years) to demonstrate that the facility is reducing impingement
mortality and/or entrainment to the level of reduction required.
2. How Would the Director Determine the Appropriate Cooling Water
Intake Structure Requirements?
The Director's first step would be to determine whether the
facility is covered by this proposed rule. If the answer to all the
following questions is yes, the facility would be required to comply
with the requirements of this proposed rule.
(1) Is the facility a point source?
(2) Is the facility an existing facility other than a Phase II
existing facility?
(3) Does the facility use at least 25 percent of water withdrawn
exclusively for cooling purposes, measured on an average annual basis?
and
(4) Does the facility use, or propose to use, a cooling water
intake structure (including a cooling water intake structure operated
by an independent supplier) that meets the total design intake flow/
source waterbody threshold as specified under each of the three co-
proposed regulatory options to withdraw cooling water from waters of
the United States?
If a facility is a point source that uses a cooling water intake
structure and has or is required to have an NPDES permit, but does not
meet the applicability requirements in today's proposed rule, it would
continue to be subject to permit conditions implementing section 316(b)
of the Clean Water Act set by the Director on a case-by-case basis,
using best professional judgment.
The Director's second step would be to determine whether the
facility proposes to comply: By demonstrating
[[Page 68488]]
that its existing design and construction technologies, operational
measures, or restoration measures meet the proposed performance
standards; by implementing design and construction technologies,
operational measures, or restoration measures that, in combination with
existing technologies and operational measures, meet the proposed
performance standards; by using an approved technology; or by seeking a
site-specific determination of best technology available to minimize
adverse environmental impact (see Sec. 125.103(a)).
If a facility selects compliance alternative 1 (Sec.
125.103(a)(1)), and it demonstrates that it has reduced its flow
commensurate with a closed-cycle recirculating system and therefore
already meets the performance standards to reduce impingement mortality
and entrainment, the Director would only have to verify that this is
indeed true; no additional requirements are necessary. Under compliance
alternative 1, a facility may demonstrate that it has already reduced
its design intake velocity to 0.5 feet per second and therefore meets
the performance standards to reduce impingement mortality only. Again
the Director would only need to verify the design intake velocity and
no further requirements would be necessary.
Under compliance alternative 2 (Sec. 125.103(a)(2)), in which a
Phase III existing facility chooses to demonstrate that its existing
design and construction technologies, operational measures, or
restoration measures meet the proposed performance standards, the
Director would need to verify that the existing facility meets the
impingement mortality and entrainment reduction requirements.
To verify that existing controls meet the impingement mortality and
entrainment reduction requirements in the proposed rule, the Director
would need to: (1) Verify the facility's baseline calculation; (2)
confirm the location of the facility's cooling water intake
structure(s); (3) verify the withdrawal percentage of mean annual flow
if applicable; (4) review impingement mortality and/or entrainment
rates or estimates; and (5) consider any use of restoration. These same
steps also would be part of determining requirements under other
compliance alternatives as discussed below.
The Director would initially review and verify the calculation
baseline estimate submitted by the facility under Sec. 125.104(b).
This estimate would need to be consistent with the proposed definition
of the term ``calculation baseline'' and be representative of current
biological conditions at the facility. The Director would then review
the information that the facility provides to validate the source
waterbody type in which the cooling water intake structure is located
(freshwater river or stream; lake or reservoir; or estuary, tidal
river, ocean, or Great Lake). The Director would review the supporting
material the applicant provided in the permit application to document
the physical placement of the cooling water intake structure. For
existing facilities with one or more cooling water intake structures
located in a freshwater river or stream, the Director would need to
determine whether the facility withdraws more or less than five percent
of the mean annual flow, which determines whether impingement
mortality, or impingement mortality and entrainment controls would
apply. For facilities with cooling water intake structures located on
lakes or reservoirs, other than a Great Lake, for which the facility
seeks to increase the design flow, the Director would need to determine
whether the increased intake flow would disrupt the natural thermal
stratification or turnover pattern of the source waterbody. In making
this determination, the Director would need to consider anthropogenic
factors that can influence the occurrence and location of a
thermocline, and would need to coordinate with appropriate Federal,
State, or Tribal fish and wildlife agencies to determine if any
disruption adversely impacts the management of the fisheries. Both of
these determinations would be based on the source waterbody flow
information required under Sec. 125.104(b).
For Phase III existing facilities that have in place existing
restoration measures that meet the requirements of Sec. 125.103(b),
the Director would review the evaluation of the current restoration
measures submitted under Sec. 125.104(b). The Director could gather
additional information and solicit input for the review from
appropriate fishery management agencies as necessary. The Director
would need to determine whether the current measures would maintain the
fish and shellfish in the waterbody at comparable levels to those that
would be achieved under Sec. 125.103, as well as review and approve
the proposed Restoration Plan required in Sec. 125.104(b).
Finally, the Director would need to review impingement and/or
entrainment data or estimates to determine whether in-place controls
achieve the performance standards proposed for the different categories
of source waterbodies. This step would involve comparing the
calculation baseline with the impingement and/or entrainment data or
estimates provided as part of the Comprehensive Demonstration Study and
the Impingement Mortality and/or Entrainment Characterization Study
requirements under Sec. 125.104(b).
If the Director determines that the existing technologies,
operational measures, or supplemental restoration measures employed do
not achieve compliance with the applicable performance standards, the
Director would issue a permit requiring additional measures to achieve
such compliance, based on the information submitted in the
Comprehensive Demonstration Study (Sec. 125.107(b)(1)). If such
studies are approved and a permit is issued on that basis, but the
Director later determines, based on the results of subsequent
monitoring, that the technologies, operational measures, and
supplemental restoration measures did not meet the performance
standards, the Director would require the existing facility to
implement additional technologies and operational measures as necessary
to meet the rule requirements. In general, this would occur at the next
renewal of the permit. The Director would also review the facility's
Verification Monitoring Plan and/or Restoration Plan (as appropriate)
for post-operational monitoring to demonstrate that the technologies
and/or restoration measures are performing as predicted.
Under compliance alternative 3 (Sec. 125.103(a)(3)), the same
general steps would be followed as described above to assess compliance
of existing controls with applicable performance standards except that
under this alternative, the Phase III existing facility would be
required to demonstrate that the technologies and measures identified
would meet (rather than currently meet) the applicable performance
standards. This review would also be based on data submitted in the
Comprehensive Demonstration Study required under Sec. 125.104(b).
For facilities seeking compliance under compliance alternative 4
(Sec. 125.103(a)(4)), through the use of an approved technology, the
Director would review the Technology Installation and Operation Plan
and Verification Monitoring Plan.
These same basic steps described under compliance alternatives 2
and 3 would also apply to facilities seeking to comply under compliance
alternative 5 (Sec. 125.103(a)(5)); however, the Director would be
required to make two additional determinations under this option,
including whether the facility meets one of the applicable cost tests
[[Page 68489]]
and what alternative requirements are justified in light of the
significantly greater costs. Phase III existing facilities seeking to
comply under this option would be required to submit a Comprehensive
Cost Evaluation Study under Sec. 125.104(b), which includes data that
document the cost of implementing design and construction technologies,
operational measures, and/or restoration measures to meet the otherwise
applicable performance standards in Sec. 125.103(b). The Director
would need to review these data, including detailed engineering cost
estimates, and compare these with the costs the Agency considered in
establishing these requirements for a like Phase III facility. Where
the Director finds that the facility's cost of implementation is
significantly greater than those considered during rule development, he
or she would approve site-specific requirements and could approve
alternative technologies or operational measures. Such alternative
technologies or operational measures could be those proposed by the
facility in the Site-Specific Technology Plan or Restoration Plan, but
less protective requirements would have to be justified by the
significantly greater costs.
Where a Phase III existing facility seeks site-specific
requirements based on facility costs that are significantly greater
than the environmental benefits of compliance, the facility would also
be required to submit a Benefits Valuation Study (along with the
Comprehensive Cost Evaluation Study). The Director would review the
benefits valuation, including a narrative description of non-quantified
benefits, to determine whether it fully values the benefits of meeting
the applicable performance standards, as required in Sec. 125.104(b),
and whether the facility's cost of implementation is significantly
greater than the environmental benefits of complying with the
requirements of Sec. 125.103(b). If the Director determines that the
compliance costs are significantly greater than the environmental
benefits, the Director would approve site-specific requirements and
could approve alternative technologies or operational measures. Such
alternative technologies or operational measures could be those
proposed by the facility in the Site-Specific Technology Plan and/or
Restoration Plan, but less protective requirements would have to be
justified by the significantly greater costs. EPA is interested in ways
to decrease application review time and is requesting comments on how
to make this process both efficient and effective.
3. What Would I Be Required To Monitor?
Section 125.105 of today's proposed rule provides that Phase III
existing facilities would perform monitoring in accordance with the
Verification Monitoring Plan, the Technology Installation and Operation
Plan, and/or the Restoration Plan, all required by Sec. 125.104(b),
and any additional monitoring specified by the Director to demonstrate
compliance with the applicable requirements of Sec. 125.103(e). In
developing biological monitoring conditions, the Director should
consider the need for the data, and only collect data sufficient to
assess the presence, abundance, life stages (including eggs, larvae,
juveniles, and adults), and mortality of aquatic organisms (fish and
shellfish or other organisms required to be monitored by the Director)
impinged or entrained during operation of the cooling water intake
structure. This type of data may be used to develop permit conditions
to implement the requirements of this rule. The Director should ensure,
where appropriate, that any required monitoring will allow for the
detection of any annual, seasonal, and diel variations in the species
and numbers of individuals that are impinged or entrained.
The Director may modify the monitoring program based on changes in
physical, chemical, or biological conditions in the vicinity of the
cooling water intake structure. The Director may also require
monitoring of operational parameters for facilities that employ a
Technology Installation and Operation Plan or Restoration Plan to
comply with the requirements of Sec. 125.103. The Director would be
required to specify what monitoring or other data is to be included in
a status report every two years.
4. How Would Compliance Be Determined?
This proposed rule would be implemented by the Director placing
conditions consistent with the requirements of this part in NPDES
permits. The application information, including components of the
Comprehensive Demonstration Study, as appropriate, should demonstrate
that the facility is already meeting the performance standards, or that
it will install and properly operate and maintain design and
construction technologies, operational measures, and/or restoration
measures to meet the performance standards, or that a site-specific
determination of best technology available is necessary. To support
this demonstration, the facility should submit the following
information to the Director:
Data submitted with the NPDES permit application to show
that the facility meets location, design, construction, and capacity
requirements consistent with the compliance alternative selected;
Data to demonstrate that the facility is meeting the
performance standards or requirements consistent with the compliance
alternative selected; and
Compliance monitoring data and records as prescribed by
the Director.
Facilities complying using compliance alternatives in Sec. 125.103
(a)(2)-(5) would be required to submit a Technology Installation and
Operation Plan and Verification Monitoring Plan (or Restoration Plan,
which includes comparable information), regardless of how the facility
wants to measure compliance. The specifics of how success in meeting
the performance standards may be measured (i.e, the number of species,
whether critical species or all species) and the method of measurement
(e.g., total biomass, total counts, etc.) would be determined by the
Director based on review of the proposed methodology submitted by the
facility in its Verification Monitoring Plan and/or Restoration Plan,
and any other methods the Director considers appropriate.
The facility may request that compliance be determined based on
whether it has complied with the construction, operational,
maintenance, monitoring, and adaptive management requirements of its
Technology Installation and Operation Plan (for design and construction
technologies and/or operational measures) or Restoration Plan (for
restoration measures). In this case, the facility would still assess
success in meeting applicable performance standards or restoration
requirements but this assessment serves to guide the adaptive
management process rather than as a basis for determining compliance.
After the first permit term following promulgation of this rule,
facilities are only eligible for this compliance determination
alternative if they have been in compliance with the terms of their
Technology Installation and Operation Plan and/or Restoration Plan
during the preceding permit term.
Under this compliance determination alternative, the Technology
Installation and Operation Plan or Restoration Plan would specify
construction, operational, maintenance, monitoring, and adaptive
management requirements that can reasonably be expected to achieve
success in meeting the applicable performance standards, restoration
[[Page 68490]]
requirements and/or site-specific requirements. These construction,
operational, maintenance, monitoring, and adaptive management
requirements would also be approved by the Director, who would be
required to specify what verification monitoring, monitoring data and
other information would be included in the facility's biennial status
report.
The required elements of the Technology Installation and Operation
Plan include: (1) A schedule for installation and maintenance of any
new technologies; (2) operational parameters to be monitored; (3)
activities to ensure the efficacy of technologies and measures; (4) a
schedule and methodology for assessing the efficacy of installed
technologies and measures in meeting the performance standards; (5) an
adaptive management plan; and (6) for facilities using an approved
compliance technology, documentation that they meet the conditions for
its use. The Restoration Plan requires corresponding information as
appropriate for restoration measures.
EPA believes that it is important for facilities to consider and
document each of the components of the Technology Installation and
Operation Plan, regardless of which compliance determination approach
is used. However, the level of detail appropriate for some of the
components may be different for the two different approaches. For
facilities that comply by demonstrating success in meeting performance
standards, particularly in cases where they are already meeting the
standards and no significant changes in technologies or operations are
needed, brief summaries may be sufficient for most components, though
they would still need detailed documentation of their schedule and
methodology for assessing efficacy of installed technologies and
measures for meeting the standards. Conversely, for facilities where
compliance is determined based on whether they have complied with the
construction, operation, maintenance, monitoring, and adaptive
management approaches required in the Technology Installation and
Operation Plan or Restoration Plan, a fairly detailed specification of
these requirements would be appropriate. The Director should ensure
that the level of detail in the Technology Installation and Operation
Plan or Restoration Plan is sufficient to support whichever compliance
determination approach is selected.
Section 125.106 requires existing facilities to keep records and
report monitoring data and other information specified by the Director
in a biennial status report, although Directors may require more
frequent reports. Facilities would also keep records of all data used
to complete the permit application and show compliance with the
requirements of Sec. 125.103, any supplemental information developed
under Sec. 125.104, and any compliance monitoring data submitted under
Sec. 125.105, for a period of at least three (3) years from date of
permit issuance. The Director may require that these records be kept
for a longer period.
5. Alternative Site-Specific Requirements
Under Sec. 125.103(a)(5), an existing facility may demonstrate to
the Director that it has selected, installed, and is properly operating
and maintaining, or will install and properly operate and maintain,
design and construction technologies, operational measures, and/or
restoration measures that the Director determines to be the best
technology available to minimize adverse environmental impact for the
facility based on the cost-cost test specified in Sec.
125.103(a)(5)(i) or the cost-benefit test specified in Sec.
125.103(a)(5)(ii) of the proposed rule.
Section 125.103(a)(5)(i) provides that an existing facility may
demonstrate that the costs of compliance under the compliance
alternatives in Sec. 125.103(a)(3) and (4) of the rule would be
significantly greater than the costs considered by the Administrator
for a like facility in establishing the applicable performance
standards. In such cases, the Director would make a site-specific
determination of the best technology available for minimizing adverse
environmental impact. The Director would establish site-specific
alternative requirements based on new and/or existing design and
construction technologies, operational measures, and/or restoration
measures that achieve an efficacy that is, in the judgment of the
Director, as close as practicable to the applicable performance
standards in Sec. 125.103(b) of the rule without resulting in
significantly greater costs than those considered by the Administrator
for a like facility. Section 125.103(a)(5)(ii) provides that an
existing facility may demonstrate that the costs of compliance under
alternatives in Sec. 125.103(a)(3) and (4) of the rule would be
significantly greater than the benefits of complying with the
applicable performance standards at that facility. In such cases, the
Director would make a site-specific determination of best technology
available for minimizing adverse environmental impact. The Director
would establish site-specific alternative requirements based on new
and/or existing design and construction technologies, operational
measures, and/or restoration measures that achieve an efficacy that, in
the judgment of the Director, is as close as practicable to the
applicable performance standards in Sec. 125.103(b) of the rule
without resulting in costs significantly greater than the benefits of
meeting the performance standards.
Facility's Costs Significantly Greater Than Costs Considered by EPA
If the Director determines that data specific to the facility
indicate that the costs of compliance under Sec. 125.103(a)(3) and (4)
would be significantly greater than the costs considered by the
Administrator for a like facility in establishing the applicable
performance standards in Sec. 125.103(b), a facility may request a
site-specific determination of best technology available for minimizing
adverse environmental impacts. A facility requesting this determination
would submit a Comprehensive Cost Evaluation Study and a Site Specific
Technology Plan (Sec. 125.104(b)). The Comprehensive Cost Evaluation
Study would include: engineering cost estimates in sufficient detail to
document the costs of implementing design and construction
technologies, operational measures, and/or restoration measures at the
facility that would be needed to meet the applicable performance
standards of Sec. 125.103(b); a demonstration that the documented
costs significantly exceed the costs considered by EPA for a like
facility in establishing the applicable performance standards; and
engineering cost estimates in sufficient detail to document the costs
of implementing alternative design and construction technologies,
operational measures, and/or restoration measures in the facility's
Site-Specific Technology Plan developed in accordance with Sec.
125.104(b).
To make the demonstration that compliance costs are significantly
greater than those considered by EPA, the facility would first
determine its actual compliance costs. To do this, the facility first
should determine the costs for any new design and construction
technologies, operational measures, and/or restoration measures that
would be needed to meet the applicable performance standards in Sec.
125.103(b), which may include the following cost categories: the
installed capital cost of the technologies or measures; the net
operation and maintenance (O&M) costs for the technologies or measures
(that is,
[[Page 68491]]
the O&M costs for the final suite of technologies and measures once all
new technologies and measures have been installed less the O&M costs of
any existing technologies and measures); the net revenue losses (lost
revenues minus saved variable costs) associated with net construction
downtime (actual construction downtime minus that portion which would
have been needed anyway for repair, overhaul or maintenance); and any
pilot study costs associated with on-site verification and/or
optimization of the technologies or measures. Costs should be
annualized using a 7 percent discount rate, with an amortization period
of 10 years for capital costs and 30 years for pilot study costs and
construction downtime net revenue losses. Annualized costs should be
converted to 2002 dollars ($2002), using the engineering news record
construction cost index (see Engineering News-Record. New York: McGraw
Hill). The annual average index value is 6538 for year 2002). Costs for
permitting and post-construction monitoring should not be included in
this estimate, as these are not included in the EPA-estimated costs
against which they would be compared, as described below. Because
existing facilities already incur monitoring and permitting costs and
will continue to do so regardless of the compliance option selected,
and these are largely independent of the specific performance standards
adopted and technologies selected to meet them, EPA believes it is both
simpler and more appropriate to conduct the cost comparison required in
this provision using direct compliance costs (capital, net O&M, net
construction downtime, and pilot study) only. Adding permitting and
monitoring costs to both sides of the comparison would complicate the
analysis without substantially changing the results.
To facilitate the comparison of the facility-derived costs with
those considered by the Agency in establishing the proposed
requirements, EPA has developed an automated cost estimating tool. This
cost test tool estimates the costs using all of the same assumptions
that EPA considered in developing costs for the proposed rule and would
be made available to both the facility and the permitting authority. In
fact, EPA used this same algorithm to estimate the incremental cost
impact for this proposed rulemaking. This approach differs from the
approach used in the Phase II regulations; however, EPA believes that
this will provide an easier, more exact methodology for estimating
those costs. In particular, EPA believes that this tool is appropriate
because of the type of data on each facility that was available for
this rulemaking. EPA surveyed only a segment of the Phase III universe
and, therefore had data on a limited number of facilities, which
required EPA to extrapolate costs for the universe of facilities
potentially covered by this proposed rule. EPA therefore used a model
facility approach in costing manufacturing facilities, which is the
same methodology that is used in the development of most of EPA's
technology-based effluent guidelines. This does not allow for providing
a table that would give EPA's cost estimates for every Phase III
existing facility as was done for Phase II. EPA requests comments on
the use of this Cost Test Algorithm and has provided a version for
review in DCN 7-0004. For more details on the cost-test algorithm, see
the cost-test tool in section VIII and the Technical Development
Document.
Facilities requesting site-specific performance requirements would
be required to submit a Site-Specific Technology Plan. This plan is
developed based on the results of the Comprehensive Cost Evaluation
Study and would be required to contain the following information:
A narrative description of the design and operation of all
existing and proposed design and construction technologies, operational
measures, and/or restoration measures selected in accordance with Sec.
125.103(a)(5);
An engineering estimate of the efficacy of the proposed
and/or implemented design and construction technologies or operational
measures, and/or restoration measures. This estimate would include a
site-specific evaluation of the suitability of the technologies or
operational measures for reducing impingement mortality and/or
entrainment (as applicable) of all life stages of fish and shellfish
based on representative studies (e.g., studies that have been conducted
at cooling water intake structures located in the same waterbody type
with similar biological characteristics) and, if applicable, site-
specific technology prototype or pilot studies. If restoration measures
will be used, a Restoration Plan that includes the elements described
in Sec. 125.104(b) would be provided;
A demonstration that the proposed and/or implemented
design and construction technologies, operational measures, and/or
restoration measures achieve an efficacy that is as close as
practicable to the applicable performance standards of Sec. 125.103(b)
without resulting in costs significantly greater than either the costs
considered by the Administrator for a facility like yours in
establishing the applicable performance standards, or, if employing the
cost-benefit test described in B below, the benefits of complying with
the applicable performance standards at your facility; and,
Design and engineering calculations, drawings, and
estimates prepared by a qualified professional to support the elements
of the Plan.
Facility's Costs Significantly Greater Than the Benefits of Complying
With Performance Standards
A facility demonstrating that its costs are significantly greater
than the benefits of complying with performance standards would produce
and submit a Comprehensive Cost Evaluation Study, a Benefits Valuation
Study, and a Site-Specific Technology Plan.
The Comprehensive Cost Evaluation Study is discussed in the
previous section. It would require the same information for a cost-
benefit site-specific determination as for a cost-cost site-specific
determination, except that the demonstration in Sec. 125.104(b) would
show that the facility's actual compliance costs significantly exceed
the benefits of meeting the applicable performance standards at the
facility.
The Benefits Valuation Study would require that a facility use a
comprehensive methodology to fully value the impacts of impingement
mortality and entrainment at its site and the benefits of complying
with the applicable performance standards. In addition to the valuation
estimates, the benefit study would include the following:
A description of the methodology(ies) used to value
commercial, recreational, and ecological benefits (including any non-
use benefits, if applicable);
Documentation of the basis for any assumptions and
quantitative estimates. If the facility plans to use an entrainment
survival rate other than zero, they would submit a determination of
entrainment survival at the facility based on a study approved by the
Director;
An analysis of the effects of significant sources of
uncertainty on the results of the study;
If requested by the Director, a peer review of the items
submitted in the Benefits Valuation Study. The facility would be
required to choose the peer reviewers 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. Peer
reviewers would be required to have appropriate
[[Page 68492]]
qualifications depending upon the materials to be reviewed.
A narrative description of any non-monetized benefits that
would be realized at the site if they were to meet the applicable
performance standards and a qualitative assessment of their magnitude
and significance.
All benefits, whether expressed qualitatively or quantitatively,
should be addressed in the Benefits Valuation Study and considered by
the Director in determining whether the costs of compliance would
significantly exceed benefits.
The benefits assessment should begin with an impingement mortality
and entrainment study, which quantifies both the baseline mortality as
well as the expected change from rule compliance. The benefits
assessment should include a qualitative and/or quantitative description
of the benefits that would be produced by compliance with the
applicable performance standards at the facility site and, to the
extent feasible, monetized (dollar) estimates of all significant
benefits categories using well established and generally accepted
valuation methodologies. The first benefit category that would be
considered is use benefits, which includes such benefits as those to
commercial and recreational fishermen. Well-established revealed
preference and market proxy methods exist for valuing use benefits, and
these should be used in all cases where the impingement mortality and
entrainment study identifies substantial impacts to harvested or other
relevant species.
The second benefit category that would be considered is non-use
benefits. Non-use benefits may arise from reduced impacts to ecological
resources that the public considers important, such as threatened and
endangered species. Non-use benefits can generally only be monetized
through the use of stated preference methods. When determining whether
to monetize non-use benefits, permittees and permit writers should
consider the magnitude and character of the ecological impacts implied
by the results of the impingement mortality and entrainment study and
any other relevant information.
In cases where an impingement mortality and entrainment
characterization study identifies substantial harm to a threatened or
endangered species, to the sustainability of populations of important
species of fish, shellfish or wildlife, or to the maintenance of
community structure and function in a facility's waterbody or
watershed, non-use benefits should be monetized.\41\
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\41\ In cases where harm cannot be clearly explained to the
public, monetization is not feasible because stated preference
methods are not reliable when the environmental improvement being
valued cannot be characterized in a meaningful way for survey
respondents.
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In cases where an impingement mortality and entrainment
characterization study does not identify substantial harm to a
threatened or endangered species, to the sustainability of populations
of important species of fish, shellfish or wildlife, or to the
maintenance of community structure and function in a facility's
waterbody or watershed, monetization is not necessary.
Permittees should consult with their permitting authority regarding
their plans for assessing ecological and non-use benefits, including
whether they plan to conduct a stated preference study and if so, the
basic design of the study, including such items as target population,
sampling strategy, approximate sample size, general survey design, and
other relevant information. When conducting quantitative benefits
assessments, permittees should carefully review and follow accepted
best practices for such studies. A discussion of best practices
regarding valuation can be found in EPA's Guidelines for Preparing
Economic Analyses (EPA 2000, EPA 240-R-00-003, September 2000) and OMB
Circular A-4: Regulatory Analysis (September 17, 2003, http://www.whitehouse.gov/omb/inforeg/circular_a4.pdf). In the benefits
assessment, permittees should present the results, as well as clearly
describe the methods used, the assumptions made, and the associated
uncertainties.
It is recommended that the permittee and Director seek peer review
of the major biological and economic aspects of the final benefits
assessment. The goal of the peer review process is to ensure that
scientific and technical work products receive appropriate levels of
critical scrutiny from independent scientific and technical experts as
part of the overall decision-making process. In designing and
implementing peer reviews, permittees and permit writers could look to
EPA's Science Policy Council Handbook--Peer Review (EPA 100-B-98-00,
January 1998, http://www.epa.gov/osa/spc/index.htm) for guidance.
The Site Specific Technology Plan, as described in the previous
section, would require the same information for a cost-benefit site-
specific determination as for a cost-cost site-specific determination,
except that the demonstration in Sec. 125.104(b) would show that the
proposed and/or implemented technologies and measures achieve an
efficacy that is as close as practicable to the applicable performance
standards without resulting in costs significantly greater than the
benefits of complying with the applicable performance standards at your
facility.
D. New Offshore Oil and Gas Extraction Facilities
Under today's proposed rule, new offshore oil and gas extraction
facilities would be required to submit the application requirements
consistent with Sec. 122.21(r)(2), (3), and (4) and Sec. 125.136 of
Subpart N if they are fixed facilities and choose to comply with the
Track I or II requirements in Sec. 125.134(b) or (c). A fixed facility
is defined as a bottom founded offshore oil and gas extraction facility
permanently attached to the seabed or subsoil of the outer continental
shelf (e.g., platforms, guyed towers, articulated gravity platforms) or
a buoyant facility securely and substantially moored so that it cannot
be moved without a special effort (e.g., tension leg platforms,
permanently moored semi-submersibles) and which is not intended to be
moved during the production life of the well. This definition does not
include mobile offshore drilling units (MODUs) (e.g., drill ships,
temporarily moored semi-submersibles, jack-ups, submersibles, tender-
assisted rigs, and drill barges). The Track I and Track II requirements
are generally consistent with the Phase I requirements for new
facilities (66 FR 65256). Under Track I, this includes source water
baseline biological characterization data, velocity information, source
waterbody flow information, and a design and construction technology
plan. Track II requirements include source waterbody flow information
and Track II comprehensive demonstration study (including source water
biological study, evaluation of potential cooling water intake
structure effects, and verification monitoring plan). These
requirements are detailed later in this section.
As described in Sec. 125.135, fixed facilities would also have the
opportunity to conduct a cost-to-cost test and provide data to
determine if compliance with the Subpart N requirements would result in
compliance costs wholly out of proportion to those EPA considered in
establishing the requirement, or would result in significant adverse
impacts on local water resources other than
[[Page 68493]]
impingement or entrainment, or significant adverse impacts on energy
markets. In this case, alternative requirements may be imposed in the
permit. See the Phase I final preamble for a more detailed explanation
of this cost-cost test which is different than the cost-cost test for
existing sources (66 FR 65256).
Fixed facilities with seachests and all non-fixed (or ``mobile'')
facilities would not be required to comply with standards for
entrainment. Fixed facilities with seachests may choose either Track I
or Track II to comply with impingement mortality performance standards.
Non-fixed facilities must comply with the 0.5 feet per second through-
screen design intake flow velocity performance standard for impingement
mortality of Track I. In addition, the Director may determine
additional design and construction technologies to minimize impingement
mortality are necessary where there are either protected species of
concern within the hydrologic zone of influence of the cooling water
intake structure, or based on other information from fishery management
services or agencies. The new mobile facility, when applying to operate
under a general permit, would identify where it expects to be
operating. The Director consults with the fishery management agencies,
considers their data as well as any other relevant data, and decides
whether to propose additional requirements based on any concerns the
Director identifies (see Sec. 125.134(b)(4)). For example, Region 10
has established a general permit for Cooks Inlet that established a 0.1
feet per second through-screen design intake flow velocity performance
standard. However, non-fixed facilities would not be required to submit
the source water baseline biological characterization data and some
aspects of the source water physical data requirements. Requirements
for non-fixed facilities are described later in this section.
EPA notes that some mobile facilities (e.g. some jack-ups) may not
have seachests and therefore could feasibly install entrainment
controls. EPA proposes not to require entrainment controls for these
mobile facilities due to the transient nature of their operations and
an expectation that they are not likely to cause significant impacts.
EPA took a similar approach in its Phase II rule when the Agency did
not require entrainment controls at power plants that operate less than
15 percent of the year. EPA solicits comment and data on its proposal
to only require impingement controls at mobile facilities that do not
have seachests.
1. For New Offshore Oil and Gas Extraction Fixed Facilities, What
Information Is Required To Be Collected for the NPDES Application?
Source Water Baseline Biological Characterization Data (Sec.
122.21(r)(4)) (Both Track I and II)
Under today's proposed rule, new offshore oil and gas extraction
fixed facilities would be required to submit source water baseline
biological characterization data as required under Phase I. The data
would be used to characterize the biological community in the vicinity
of the cooling water intake structure and to characterize the operation
of the cooling water intake structure. The data would include existing
data (if available) supplemented with new field studies as necessary.
Detailed data requirements are at Sec. 122.21(r)(4). Under today's
proposed rule, a group of fixed facilities may choose to conduct a
regional study to collect this information as approved by the Director.
EPA recognizes that many offshore oil and gas extraction facilities are
regulated under NPDES general permits and that regional studies are
typically conducted as part of the general permit requirements. EPA
anticipates the regional studies would be conducted once each permit
cycle. Under today's proposed rule, the regional study would also
include annual monitoring requirements.
Velocity Information (Track I)
Today's proposed rule would require that new offshore oil and gas
extraction fixed facilities submit velocity information consistent with
Sec. 125.136(b)(2). The information would be used to demonstrate to
the Director that the facility is complying with the requirement to
meet a maximum through-screen design intake velocity of no more than
0.5 feet per second at the cooling water intake structure. The
following information would be required to be submitted: (1) A
narrative description of the design, structure, equipment, and
operation used to meet the velocity requirement; and (2) design
calculations showing that the velocity requirement would 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 or, if the facility uses
devices other than a surface intake screen, at the point of entry to
the device.
Source Waterbody Flow Information (Track I and II)
Today's proposed rule would also require that new offshore oil and
gas extraction fixed facilities submit source waterbody flow
information in accordance with Sec. 125.136(b)(2) or (c)(1). The
information would be used to demonstrate to the Director that the
facility's cooling water intake structure meets the proportional flow
requirements at Sec. 125.134(b)(3) or (c)(2). These requirements would
include specific provisions for fixed facilities located on estuaries
or tidal rivers to provide greater protection for these sensitive
waters. Specifically, the proposed rule would require that the total
design intake flow over one tidal cycle of ebb and flow must be no
greater than one (1) percent of the volume of the water column within
the area centered about the opening of the intake with a diameter
defined by the distance of one tidal excursion at the mean low water
level. Calculations and guidance on determining the tidal excursion is
found in the preamble to the final Phase I rule at section VII.B.1.d.
Design and Construction Technology Plan (Track I)
Today's proposed rule would also require that new offshore oil and
gas extraction fixed facilities submit a design and construction
technology plan consistent with Subpart N requirements at Sec.
125.136(b)(3). The design and construction technology plan would
demonstrate that the facility has selected and will implement the
design and construction technologies necessary to minimize impingement
mortality and/or entrainment in accordance with Sec. 125.134(b)(4)
and/or (5). The design and construction technology plan would require
delineation of the hydrologic zone of influence for the cooling water
intake structure; a description of the technologies implemented (or to
be implemented) at the facility; the basis for the selection of that
technology; the expected performance of the technology, and design
calculations, drawings and estimates to support the technology
description and performance. The Agency recognizes that the selection
of a specific technology or a group of technologies would depend on the
individual facility and waterbody conditions.
Track II Comprehensive Demonstration Study (Track II)
If a fixed facility chooses to comply under the Track II approach,
the facility would perform and submit the results of
[[Page 68494]]
a Comprehensive Demonstration Study (Study). This information would be
used 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 the cooling water intake structure
reduce the impacts to fish and shellfish to levels comparable to those
the facility would achieve were it to implement the applicable
requirements in Sec. 125.134(b)(2) and, for facilities without
seachests, Sec. 125.134(b)(5). To meet the ``comparable level''
requirement, the facility would demonstrate that it has 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 the applicable requirements in Sec. 125.134(b)(2)
and, for facilities without seachests, Sec. 125.134(b)(5).
Similar to the Proposal for Information Collection required in
Phase II, the facility would develop and submit a plan to the Director
containing a proposal for how information will be collected to support
the study. The plan would include:
A description of the proposed and/or implemented
technology(ies) to be evaluated in the Study;
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 the facility proposes to rely on existing source waterbody
data, the data must be no more than 5 years old, and the facility would
demonstrate that the existing data are sufficient to develop a
scientifically valid estimate of potential impingement mortality and
entrainment impacts, and provide documentation showing that the data
were collected using appropriate quality assurance/quality control
procedures;
Any public participation or consultation with Federal or
State agencies undertaken in developing the plan; and
A sampling plan for data that will be collected using
actual field studies in the source waterbody. The sampling plan would
document all methods and quality assurance procedures for sampling, and
data analysis. The sampling and data analysis methods proposed would be
appropriate for a quantitative survey and based on consideration of
methods used in other studies performed in the source waterbody. The
sampling plan would 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.
The facility would submit documentation of the results of the Study
to the Director. Documentation of the results of the Study would
include: Source Water Biological Study, an evaluation of potential
cooling water intake structure effects, and a verification monitoring
plan as described below.
Source Water Biological Study. The Source Water Biological Study
would include:
(1) 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;
(2) An identification of all threatened or endangered species that
might be susceptible to impingement and entrainment by the proposed
cooling water intake structure(s); and
(3) A description of additional chemical, water quality, and other
anthropogenic stresses on the source waterbody.
Evaluation of potential cooling water intake structure effects.
This evaluation would include:
(1) Calculations of the reduction in impingement mortality and, if
applicable, entrainment of all life stages of fish and shellfish that
would need to be achieved by the technologies selected to implement to
meet requirements under Track II. To do this, the facility would
determine the reduction in impingement mortality and entrainment that
would be achieved by implementing the requirements of Sec.
125.134(b)(2) and, for facilities without seachests, Sec.
125.134(b)(5).
(2) An engineering estimate of efficacy for the proposed and/or
implemented technologies used to minimize impingement mortality and, if
applicable, entrainment of all life stages of fish and shellfish and
maximize survival of impinged life stages of fish and shellfish. The
facility would demonstrate that the technologies reduce impingement
mortality and, if applicable, entrainment of all life stages of fish
and shellfish to a comparable level to that which would be achieved if
the facility were to implement the requirements in Sec. 125.134(b)(2)
and, for facilities without seachests, Sec. 125.134(b)(5). The
efficacy projection would 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.
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.
Verification monitoring plan. The fixed facility would include in
the Study a plan to conduct, at a minimum, two years of monitoring to
verify the full-scale performance of the proposed or implemented
technologies, and/or operational measures. The verification study would
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 impingement mortality and entrainment
to the level documented under the evaluation of potential cooling water
intake structure effects. The plan would describe the frequency of
monitoring and the parameters to be monitored. The Director would use
the verification monitoring to confirm that the facility is meeting the
level of impingement mortality and entrainment reduction required in
Sec. 125.134(c), and that the operation of the technology has been
optimized.
2. As an Owner or Operator of a New Offshore Oil and Gas Extraction
Fixed Facility, What Monitoring Is Required?
Monitoring requirements for new offshore oil and gas extraction
fixed facilities include impingement mortality and entrainment if the
facility does not have a seachest. If the fixed facility has a
seachest, monitoring requirements include impingement mortality only.
Under today's proposal, monitoring would characterize the
impingement and, if applicable, entrainment rates of 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)(3) or the Comprehensive Demonstration
Study required by Sec. 125.136(c)(2), depending on whether the
facility has a seachest.
[[Page 68495]]
The monitoring methods used would 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. 125.136(c)(2).
The fixed facility would be required to 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 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.
Impingement sampling. The facility would 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.
Entrainment sampling. If the fixed facility does not use a
seachest, it would collect samples to monitor entrainment rates (simple
enumeration) for each species over a 24-hour period and no less than
biweekly 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. 125.136(c)(2).
Samples would be collected only when the cooling water intake structure
is in operation.
Velocity monitoring. If the facility uses a surface intake screen
system, it would be required to monitor head loss across the screens
and correlate the measured value with the design intake velocity. The
head loss across the intake screen would be measured at the minimum
ambient source water surface elevation (using best professional
judgment based on available hydrological data). The maximum head loss
across the screen for each cooling water intake structure would be used
to determine compliance with the velocity requirement in Sec.
125.134(b)(2). If the facility uses devices other than surface intake
screens, it would monitor velocity at the point of entry through the
device. Head loss or velocity would be monitored during initial
facility startup, and thereafter, at the frequency specified in the
NPDES permit, but no less than once per quarter.
Visual or remote inspections. The facility would conduct visual
inspections or employ remote monitoring devices during the period the
cooling water intake structure is in operation. Visual inspections
would be conducted at least weekly to ensure that any design and
construction technologies required in Sec. 125.134(b)(4), (b)(5), (c),
and/or (d) are maintained and operated to ensure that they will
continue to function as designed. Alternatively, the facility would be
required to inspect via remote monitoring devices to ensure that the
impingement and entrainment technologies are functioning as designed.
3. What Recordkeeping and Reporting Is Required for New Offshore Oil
and Gas Extraction Fixed Facilities?
Owners and operators of new offshore oil and gas extraction fixed
facilities would be required to keep records of all the data used to
complete the permit application and show compliance with the
requirements, any supplemental information developed under Sec.
125.136, and any compliance monitoring data submitted under Sec.
125.137, for a period of at least three years from the date of permit
issuance. The Director may require that these records be kept for a
longer period.
Additionally, today's proposal would require that new offshore oil
and gas extraction fixed facilities submit the following in a yearly
status report:
Biological monitoring records for each cooling water
intake structure as required by Sec. 125.137(a);
Velocity and head loss monitoring records for each cooling
water intake structure as required by Sec. 125.137(b); and
Records of visual or remote inspections as required in
Sec. 125.137(c).
4. For New Non-Fixed (Mobile) Offshore Oil and Gas Extraction
Facilities, What Information Is Required To Be Collected for the NPDES
Application?
Velocity Information (Track I)
Today's proposed rule would require that new nonfixed (mobile)
offshore oil and gas extraction facilities submit velocity information
consistent with Sec. 125.136(b)(1). The information would be used to
demonstrate to the Director that the facility is complying with the
requirement to meet a maximum through-screen design intake velocity of
no more than 0.5 feet per second at the cooling water intake structure.
The following information would be required to be submitted: (1) A
narrative description of the design, structure, equipment, and
operation used to meet the velocity requirement; and (2) design
calculations showing that the velocity requirement would 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.
Design and Construction Technology Plan (Track I)
Today's proposed rule would require that new nonfixed (mobile)
offshore oil and gas extraction facilities submit a design and
construction technology plan only when required by the Director
consistent with Sec. 125.134(b)(4). The design and construction
technology plan would demonstrate that the facility has selected and
will implement the design and construction technologies necessary to
minimize impingement mortality in accordance with Sec. 125.134(b)(4).
The design and construction technology plan would require delineation
of the hydrologic zone of influence for the cooling water intake
structure; a description of the technologies implemented (or to be
implemented) at the facility; the basis for the selection of that
technology; the expected performance of the technology, and design
calculations, drawings and estimates to support the technology
description and performance. The Agency recognizes that the selection
of a specific technology or a group of technologies would depend on the
individual facility and waterbody conditions.
5. As an Owner or Operator of a New Non-Fixed (Mobile) Offshore Oil and
Gas Extraction Facility, What Monitoring Is Required?
Under today's proposal, the Director may require monitoring to
characterize the impingement of commercial, recreational, and forage
base fish and shellfish species as specified by the Director in
accordance with Sec. 125.134(b)(4) or Sec. 125.134(d).
Velocity monitoring. If the mobile facility uses a surface intake
screen system, it would be required to monitor head loss across the
screens and correlate the measured value with the design intake
velocity. The head loss across the intake screen would be measured at
the minimum ambient source water surface elevation (using best
professional judgment based on available hydrological data). The
maximum head loss across the screen for each cooling water intake
structure would be used to determine compliance with the velocity
requirement in Sec. 125.134(b)(2). If the facility uses devices other
than surface intake screens, it would monitor velocity at the
[[Page 68496]]
point of entry through the device. Head loss or velocity would be
monitored during initial facility startup, and thereafter, at the
frequency specified in the NPDES permit, but no less than once per
quarter.
Visual or remote inspections. The facility would conduct visual
inspections or employ remote monitoring devices during the period the
cooling water intake structure is in operation. Visual inspections
would be conducted at least weekly to ensure that any design and
construction technologies required in Sec. 125.134(b)(4), (b)(5), (c),
and/or (d) are maintained and operated to ensure that they will
continue to function as designed. Alternatively, the facility would be
required to inspect via remote monitoring devices to ensure that the
impingement technologies are functioning as designed.
6. What Recordkeeping and Reporting Is Required for New Non-Fixed
(Mobile) Offshore Oil and Gas Extraction Facilities?
Owners and operators of new mobile offshore oil and gas extraction
facilities would be required to keep records of all the data used to
complete the permit application and show compliance with the
requirements, any supplemental information developed under Sec.
125.136, and any compliance monitoring data submitted under Sec.
125.137, for a period of at least three years from the date of permit
issuance. The Director may require that these records be kept for a
longer period.
Additionally, today's proposal would require that new mobile
offshore oil and gas extraction facilities submit the following in a
yearly status report:
Velocity and head loss monitoring records for each cooling
water intake structure as required by Sec. 125.137(b); and
Records of visual or remote inspections as required in
Sec. 125.137(c).
E. What Are the Respective Federal, State, and Tribal Roles?
Section 316(b) requirements are implemented through NPDES permits.
Under 40 CFR 123.62(e), any existing approved State or Tribal section
402 permitting program would be revised to be consistent with new
program requirements within one year from the date of promulgation,
unless the NPDES-authorized State or Tribe amends or enacts a statute
to make the required revisions. If a State or Tribe amends or enacts a
statute to conform with any promulgated Phase III rule, the revision
would be required to be made within two years of promulgation. States
and Tribes seeking new EPA authorization to implement the NPDES program
would be required to comply with the requirements when authorization is
requested.
This proposed regulation would not alter State authority under
section 510 of the Clean Water Act. EPA recognizes that some States
have invested considerable effort in developing section 316(b)
regulations and implementing programs. EPA is proposing regulations
that would allow States to continue to use these programs by including
in this national rule a provision that allows States to use their
existing program if the State establishes that such programs would
achieve comparable environmental performance. Specifically, the
proposed rule would allow any State to demonstrate to the Administrator
that it has adopted alternative regulatory requirements that would
result in environmental performance within each relevant watershed that
is comparable to the reductions in impingement mortality and
entrainment that would be achieved under Sec. 125.103.
In addition to updating their programs to be consistent with
today's proposed rule, States and Tribes authorized to implement the
NPDES program would be required to implement the cooling water intake
structure requirements following promulgation of the proposed
regulations. The requirements would have to be implemented upon the
issuance or reissuance of permits containing the requirements of
Subpart K or N. Duties of an authorized State or Tribe under this
regulation may include:
Review and verification of permit application materials,
including a permit applicant's determination of source waterbody
classification and the flow or volume of certain waterbodies at the
point of the intake;
Determination of the standards in Sec. 125.103(b) or
Sec. 125.134 that apply to the facility, or authorize alternative
requirements in Sec. 125.135;
Verification of a permit applicant's determination of
whether it meets or exceeds the applicable performance standards or
requirements;
Verification that a permit applicant's Design and
Construction Technology Plan demonstrates that the proposed alternative
technologies would reduce the impacts to fish and shellfish to levels
required;
Verification that a permit applicant meets the cost test
and that permit conditions developed on a site-specific basis are
justified based on documented costs, and, if applicable, benefits;
Verification that a permit applicant's proposed
restoration measures would meet regulatory standards (existing
facilities only);
Development of draft and final NPDES permit conditions for
the applicant implementing applicable section 316(b) requirements
pursuant to this rule; and
Ensuring compliance with permit conditions based on
section 316(b) requirements.
EPA also will implement these requirements where States or Tribes
are authorized to implement the NPDES program but do not have
sufficient authority to implement these requirements.
In the discussion of Federal, State and Tribal roles in the
preamble to the Phase II final regulations (69 FR 41643, 3rd col.), EPA
stated that ``EPA will implement these requirements where States or
Tribes are not authorized to implement the NPDES program. EPA also will
implement these requirements where States or Tribes are authorized to
implement the NPDES program but do not have sufficient authority to
implement these requirements.'' EPA notes that the second sentence in
this quote incorrectly stated EPA's authority. In fact, EPA does not
have authority to issue NPDES permits where States or Tribes are
authorized to administer the NPDES program except after EPA vetoes a
permit. (See Sec. 123.61(c) and Sec. 123.44(h).) Today's preamble
correctly states that States and Tribes authorized to implement the
NPDES program would need to have or obtain sufficient authority to
implement final Phase III regulations. EPA intends to issue guidance to
clarify that, pursuant to Sec. 123.25(a)(36), States and Tribes
authorized to implement the NPDES program must have or obtain
sufficient authority to implement the Phase II regulations.
F. Are Permits for Phase III Facilities Subject to Requirements Under
Other Federal Statutes?
EPA's NPDES permitting regulations at 40 CFR 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 40 CFR 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
[[Page 68497]]
fish habitat might be relevant. Nothing in this proposed rulemaking
would authorize activities that are not in compliance with these or
other applicable Federal laws.
VIII. Economic Impact Analysis
The discussion in this section summarizes EPA's analysis of total
social cost and economic impacts for three co-proposed options for
existing facilities: the ``50 MGD for All Waterbodies'' option, the
``200 MGD for All Waterbodies'' option, and the ``100 MGD for Certain
Waterbodies'' option. These options are described more fully in section
VI. EPA also conducted analyses for other potential regulatory
definitions, including applying requirements to all facilities with
design intake flow of at least 2 MGD. This definition would have
included all 683 potentially regulated Phase III facilities. This and
other potential regulatory specifications are not being proposed
because of economic practicability concerns, but analyses for them can
be found in ``Economic Analysis for the Proposed Section 316(b) Rule
for Phase III Facilities'' (hereafter referred to as the ``EA''; DCN 7-
0002). This section also presents EPA's estimates of total social cost
and economic impacts for new offshore oil and gas extraction
facilities. EPA's assessment of costs and economic impacts, including
results for all analyzed regulatory definitions, can be found in the
EA.
A. Existing Phase III Facilities: Manufacturers and Electric Power
Producers
1. Overview of Affected Industry Sectors
For the economic analyses, EPA distinguished between the types of
facilities as follows:
Manufacturing and Other Industries (``Manufacturers'')--
facilities in the paper, aluminum, steel, chemicals, petroleum 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 non-utilities.
Within the Manufacturers group, EPA focused its analysis on five
manufacturing industries--Paper, Chemicals, Petroleum, Aluminum, and
Steel (the ``Primary Manufacturing Industries'')--as the industries
using the largest amounts of cooling water outside of the electric
power generating industry. EPA's economic analysis for these industries
is based on a statistically-valid survey sample of facilities in these
five industries. This analysis also considers the effect of the
regulation on facilities in other industries (``Other Industries'')
that use cooling water to a lesser extent than the five Primary
Manufacturing Industries and that are also covered by the proposal. The
analysis for Other Industries is restricted to a limited sample of
facilities for which EPA received detailed surveys but which are not
part of the statistically valid sample. As a result, EPA's analysis of
facilities in the Other Industries group is limited to the known
facilities in this group. EPA has not specifically estimated the total
number of facilities in the Other Industries group that may be subject
to the regulation because EPA does not believe that this number can be
reliably extrapolated from the number of known facilities in this
group. However, because the six surveyed industries (including electric
power) account for 99% of total cooling water withdrawals, EPA believes
that few additional facilities in the Other Industries group are
potentially subject to today's proposed regulation. EPA seeks comment
and data on the number of facilities in the Other Industries group that
may be subject to today's proposal.
EPA's analysis also reflects a limited number facilities in the
Virgin Islands and Puerto Rico for which EPA received detailed survey
responses. These facilities have also been included in EPA's economic
analysis. EPA is clarifying today's proposal would apply to any
facility meeting the applicability criteria in Sec. 125.101. EPA seeks
comment and data on the total number of facilities that may be subject
to today's proposal.
EPA's review of the engineering characteristics of cooling water
intake and use in the Other Industries group indicates that cooling
water intake and use in these industries do not differ materially from
cooling water intake and use in the Primary Manufacturing Industries
and the electric power industry. In addition, EPA specifically analyzed
the economic impacts of the proposed options on known facilities in the
Other Industries group. EPA believes that its findings of no economic
impact to the known facilities in Other Industries and the
practicability of the proposed options are generally applicable to the
full breadth of industries within the regulation's scope. EPA is
seeking comment and data on the economic impact and practicability of
the proposed options on facilities in the Other Industries group.
EPA estimates that as many as 566 facilities in the Manufacturers
segment (including 537 facilities in the Primary Manufacturing
Industries and 29 known facilities in Other Industries), and 117
Electric Generators are potentially subject to this rulemaking, based
on a design intake flow applicability threshold of greater than 2 MGD.
EPA excluded from the analysis for each option those facilities that
are below the option's design intake flow applicability threshold and
would therefore not incur compliance costs. In addition, EPA's analyses
identified existing facilities that are in severe financial distress
independent of regulation. These facilities, referred to as ``baseline
closures,'' were determined as likely to terminate business operations
independent of the proposed options and were also excluded from the
analyses presented in this section.
Exhibit VIII-1 presents, by waterbody type and industry, EPA's
estimates of (1) the number of existing facilities potentially subject
to this rulemaking, (2) the number of baseline closures, and (3) the
number of existing facilities subject to national requirements under
five different design intake flow applicability thresholds.
Exhibit VIII-1.--Phase III Existing Facility Counts, by Waterbody Type and Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facilities subject to national requirements with DIF
Potentially applicability threshold of greater than or equal to (in MGD),
Industry subject to Baseline excluding baseline closures
regulation closure ----------------------------------------------------------------
2 20 50 100 200
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Waterbodies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Man. Industries...................................... 537 73 464 290 127 58 23
Other Industries............................................. 29 4 25 12 9 5 2
[[Page 68498]]
Electric Generators.......................................... 117 3 114 51 0 0 0
--------------
Total.................................................... 683 80 603 353 136 63 25
==============
Total DIF (MGD).......................................... 40,441 4,440 36,001 33,683 26,714 21,587 16,144
--------------------------------------------------------------
Coastal and Great Lakes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Man. Industries...................................... 110 17 94 67 35 17 10
Other Industries............................................. 9 3 6 5 4 2 1
Electric Generators.......................................... 11 0 11 4 0 0 0
--------------
Total.................................................... 130 20 111 76 39 19 11
==============
Total DIF (MGD).......................................... 11,010 2,423 8,587 8,179 7,190 5,747 4,418
--------------------------------------------------------------
Inland
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Man. Industries...................................... 427 56 371 223 92 41 13
Other Industries............................................. 20 1 19 7 5 3 1
Electric Generators.......................................... 106 3 103 47 0 0 0
--------------
Total.................................................... 553 60 493 277 97 44 14
==============
Total DIF (MGD).......................................... 29,431 2,017 27,414 25,504 19,524 15,841 11,726
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Method for Estimating Costs to Manufacturers and Electric Generators
EPA estimated capital costs of technologies, annual operation and
maintenance costs, installation downtime costs, and permitting costs.
The cost estimates reflect the incremental costs attributed only to
today's proposal. For example, facilities with closed-cycle
recirculating systems already meet the proposed performance standards,
and therefore would not incur costs for new technologies, additional
annual operational costs, or downtime costs (though such facilities
would still incur some components of permitting costs).
For estimating the incremental compliance costs attributable to the
proposed options, EPA developed both facility-specific and model
facility costs. Facility-specific compliance costs require detailed
process information about many, if not all, facilities in the industry.
These data typically include production, capacity, water use,
wastewater generation, monitoring results, geographic location,
financial conditions, technologies and practices already in place, and
other facility-specific data. EPA used a detailed technical survey of
Electric Generators and Manufacturers to collect these data (see
section III for more information on EPA's detailed survey). These data
and detailed process information were used to determine whether new
controls would be necessary to meet the standards of the proposed rule,
and to estimate the cost of installing any new or additional controls.
While the Agency is confident that the suite of available technologies
can achieve compliance with the proposed performance requirements (60-
90 percent reduction in entrainment and 80-95 percent reduction in
impingement mortality relative to the calculation baseline), EPA lacks
sufficient data and resources to determine the precise cost and
performance of each technology on a site-specific basis. Therefore, EPA
first calculated the facility-specific costs for 348 facilities for
which detailed information was available, and applied the model
facility approach to the remaining facilities to calculate the
industry-level costs for the approximately 700 existing Manufacturers
and Electric Generators.
In costing each model facility, EPA, to a degree, departed from its
traditional least-cost approach. The least-cost approach relies on the
principle that the complying facility will choose the most cost-
effective compliance alternative to meet the regulatory requirements.
In most cases, this means the facility will install the least-cost
technology that meets the minimum standard. Instead of selecting the
least-cost compliance alternative (see section VI for a description of
the compliance alternatives), a best-performing technology was assigned
to a model facility utilizing a spreadsheet program called the ``cost-
test tool.'' The cost-test tool determines one of two possible
performance expectations: (1) Impingement requirements only or (2) both
impingement and entrainment requirements. The cost-test tool then
determines a compliance response for the facility/intake by accounting
for existing technologies (such as wedgewire screens) and conditions
(such as a shoreline intake location or the through-screen velocity).
Next, the cost-test tool applies EPA's decision tree for assigning one
of 12 technology modules as the best-performing technology to a site
(see Figure 2-1 of the Phase III TDD for a schematic of this decision
tree). This should not be construed to mean today's proposed options
would require facilities to install the technologies selected by the
cost-test tool. Under today's proposal, facilities could choose any
technology, combination of technologies, or operational measures that
would meet the requirements of the selected compliance alternative
along with any other additional permit requirements. Finally, cost
estimates are derived through a combination of calculations and
functions that apply facility-specific data to the selected technology
module. The cost outputs include capital costs, incremental operating
and maintenance (O&M) costs, and installation downtime (in weeks).
[[Page 68499]]
Based on data from EPA's detailed technical survey, EPA believes
that cooling water intake structures at Electric Generators are, in
general, no different from those intake structures employed by
Manufacturers. Therefore, the Phase II costs attributed to control
technologies were used to calculate costs for potentially regulated
existing Phase III Manufacturers and Electric Generators. EPA generally
utilized the original methodology published in the Phase II NODA (68 FR
13522; March 19, 2003), accounting for comments received from the
public. EPA also used the costing equations it developed for the final
Phase II rule, along with the site-specific data obtained from the
detailed surveys. EPA requests comment, including supporting data, on
the use of technologies and costing equations from the Phase II rule in
the Phase III analysis.
Permit costs, including costs for permitting, monitoring, permit
reissuance, and recordkeeping, are not included in the cost-test tool.
Costs for these activities were developed separately as part of the
Information Collection Request (ICR) for Cooling Water Intake
Structures Phase III Proposed Rule (``ICR''; DCN 7-0001). The per
facility permit costs were added to the incremental compliance costs,
along with installation downtime costs (where appropriate), in
developing the total model facility cost. The per facility permit costs
may be found in Chapter B1 of the EA.
In addition to the capital and annual operating costs of the
selected technology module, 16 facilities (sample-weighted, with more
than 50 MGD intake, and excluding baseline closures) incur downtime
costs. Downtime costs generally reflect decreased revenues due to lost
production or costs of supplemental power purchases during the retrofit
of existing cooling water intake structures. EPA determined that an
additional four facilities with multiple intakes could shut off any one
intake and still meet their average intake flow without exceeding the
total design intake flow of the remaining intakes. Furthermore, these
facilities all have shoreline intakes, negating the need to maintain
costly offshore equipment necessary to retrofit one intake at a time.
EPA assumes these four facilities could retrofit one intake at a time,
thereby avoiding downtime costs. In all other cases, the length of
downtime (in weeks) and the general approach to estimating the cost of
downtime are the same as used for the Phase II analysis. See chapter 5
of the TDD for more details. EPA solicits comment and supporting data
on this approach to estimating downtime costs.
Total social costs are presented in section VIII.C of this
preamble.
Under today's proposal, facilities have five compliance
alternatives for meeting the performance standards. Not all of these
compliance alternatives are addressed by the cost-test tool. The cost-
test tool, and therefore total national costs, do not specifically
adjust for site-specific requirements developed in accordance with
compliance alternative 5 (see also section VI of this preamble). While
costs for facilities requesting alternative requirements based on the
cost-cost test should be comparable to EPA's estimated costs, costs for
facilities requesting alternative requirements based on the cost-
benefit test may be less. In addition, each model facility was costed
for a single best-performing technology module, which does not
necessarily reflect the most cost-effective compliance alternative.
Thus, although EPA's costs for each model facility to install a
specified compliance technology are believed to be accurate, the total
national costs of today's proposal may be overstated.
EPA solicits comment on all aspects of this costing approach.
3. Social Cost for Manufacturers and Electric Generators
EPA calculated the social cost of the three co-proposed options for
existing Manufacturers and Electric Generators using two discount rate
values: 3 percent and 7 percent. All dollar values presented in this
preamble are in 2003 dollars (average or mid-year). For the analysis of
social costs, EPA discounted all costs to the beginning of 2007, the
date at which this proposal is assumed to become effective. EPA assumed
that all facilities subject to the regulation would achieve compliance
between 2010 and 2014, and estimated the time profile of compliance and
related costs over 30 years from the year of compliance for each
complying facility.\42\ Costs incurred by governments for administering
the regulation were analyzed over the same time frame. The last year
for which costs were tallied is 2043. At a 3 percent rate, EPA
estimated total annualized social costs of $47.3 million for the ``50
MGD for All Waterbodies'' option, $22.8 million for the ``200 MGD for
All Waterbodies'' option, and $17.6 million for the ``100 MGD for
Certain Water bodies'' option. At a 7 percent rate, these values are
$50.1 million for the 50 MGD option, $24.1 million for the 200 MGD
option, and $18.3 million for the 100 MGD option. The largest component
of social cost is the pre-tax cost of regulatory compliance incurred by
complying facilities; these costs include pilot study costs, one-time
technology costs of complying with the rule, one-time costs of
installation downtime, annual operating and maintenance costs, and
permitting costs (initial permit costs, annual monitoring costs, and
permit reissuance costs). Social cost also includes implementation
costs incurred by Federal and State governments. Exhibit VIII-2
presents the social cost of the proposed options, by type of cost and
type of facility, using 3 percent and 7 percent discount rates.
---------------------------------------------------------------------------
\42\ Benefits are tallied and discounted in the same way,
although the total time profile for recognition of benefits is
longer than the profile for recognition of costs.
Exhibit VIII-2.--Annualized Social Cost
[In millions, 2003 $]
----------------------------------------------------------------------------------------------------------------
100 MGD
50 MGD all 200 MGD all certain
waterbodies waterbodies waterbodies
----------------------------------------------------------------------------------------------------------------
3% Discount Rate
----------------------------------------------------------------------------------------------------------------
Direct Compliance Cost:
Primary Manufacturing Industries............................... $42.7 $21.7 $16.7
Other Industries............................................... 4.1 1.0 0.7
Electric Generators............................................ 0.0 0.0 0.0
-----------------
[[Page 68500]]
Total Direct Compliance Cost............................... 46.8 22.6 17.5
State and Federal Administrative Cost.............................. 0.6 0.1 0.2
-----------------
Total Social Cost.............................................. 47.3 22.8 17.6
--------------------------------------------------------------------
7% Discount Rate
----------------------------------------------------------------------------------------------------------------
Direct Compliance Cost:
Primary Manufacturing Industries............................... 45.1 23.1 17.4
Other Industries............................................... 4.4 0.9 0.7
Electric Generators............................................ 0.0 0.0 0.0
-----------------
Total Direct Compliance Cost............................... 49.5 24.0 18.1
State and Federal Administrative Cost.............................. 0.6 0.1 0.2
-----------------
Total Social Cost.............................................. 50.1 24.1 18.3
----------------------------------------------------------------------------------------------------------------
As shown in Exhibit VIII-2, compliance cost in the Manufacturers
segment accounts for the substantial majority of total social cost and
direct compliance cost under all three options. No Electric Generators
would be subject to the national requirements under any of the three
co-proposed options. On a per facility basis and at a 3 percent
discount rate, annualized pre-tax costs in the Manufacturers segment
amount to $349,000 under the ``50 MGD for All Waterbodies'' option,
$920,000 under the ``200 MGD for All Waterbodies'' option, and $929,000
under the ``100 MGD for Certain Waterbodies'' option. The corresponding
values using a 7 percent discount rate are $369,000 under the ``50 MGD
for All Waterbodies'' option, $974,000 under the ``200 MGD for All
Waterbodies'' option, and $962,000 under the ``100 MGD for Certain
Waterbodies'' option. Because the 200 MGD option and the 100 MGD option
apply national categorical requirements to a smaller number of higher
flow facilities than the 50 MGD option, they result in a lower total
national cost but a higher cost per regulated facility. Individual
facilities that are subject to the requirements of the 200 MGD option
or the 100 MGD option incur the same compliance costs as under the 50
MGD option (in which they are also included); however, the average
costs per regulated facility are higher under the 200 MGD and 100 MGD
options because only the higher flow, and therefore higher cost,
facilities incur costs under these options.
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 of approximately $0.6 million
(50 MGD option), $0.1 million (200 MGD option), and $0.2 million (100
MGD option) under both discount rates.
4. Economic Impacts for Manufacturers and Electric Generators
The economic impact analyses assess how facilities, and the firms
that own them, are expected to be affected financially by the analyzed
options. The facility impact analysis starts with compliance cost
estimates (see section VIII.A.2) and then calculates how these
compliance costs would affect financial performance and other economic
conditions.
a. Manufacturers (Primary Manufacturing Industries and Other
Industries)
This section presents EPA's estimated economic impacts on
Manufacturers for the three co-proposed options. Measures of economic
impact include facility closures and associated losses in employment,
financial stress short of closure (``moderate impacts''), and firm-
level impacts. EPA eliminated from the analysis those facilities
showing materially inadequate financial performance in the baseline,
that is, in the absence of the rule. EPA judges these facilities, which
are referred to as baseline closures, to be at substantial risk of
financial failure regardless of any additional financial burden that
might result from the proposed Phase III regulation.
For the remaining facilities, 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. 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.
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. For this calculation, EPA used
the three-year average of cash flow as reported in each facility's
survey response and adjusted to constant 2003 dollars. In addition to
adjusting facility cash flow values for inflation to 2003, EPA adjusted
facility baseline cash flow to reflect the estimated real change (i.e.,
independent of inflation) in business performance in the manufacturing
industries from the time of the facility survey, 1996-1998, to the
present. EPA also estimated an ongoing outlay for replacement of the
facility's capital equipment and included this as an adjustment to
baseline cash flow. EPA included an allowance of ongoing capital
outlays in
[[Page 68501]]
the calculation of cash flow because such outlays for replacement and
refurbishment of capital equipment occur in the ordinary course of
business and represent a cash outlay for the business. EPA estimated
these outlays based on an econometric analysis of actual capital
outlays over an 11-year period by businesses in the five Manufacturers
industry segments. This analysis accounted for national economic
conditions, business conditions in the specific industry segments, and
financial performance of the individual businesses (see EA, Chapter B3
for details of this analysis and the details of the cash flow
calculation). Using this adjusted baseline cash flow, 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 analysis.
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. For this analysis,
EPA assumed that none of the facility's compliance costs could be
passed on to its customers as price and revenue increase--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 proposed rule. EPA established thresholds for two measures of
financial performance and condition--interest coverage ratio (ICR) and
pre-tax return on assets (PTRA)--and compared the facilities'
performance before and after compliance under each regulatory option
with these thresholds. EPA calculated ICR as pre-tax operating cash
flow--earnings before interest, taxes, and depreciation--divided by
interest expense. This measure provides insight into a business'
ability to service its debt on the basis of current, ongoing financial
performance and to borrow for capital investments. EPA calculated PTRA
as the ratio of pre-tax operating income--earnings before interest and
taxes--to assets. This ratio measures the operating performance and
profitability of a business' assets independent of financial structure
and tax circumstances. For this analysis, EPA developed industry-
specific thresholds from data compiled by Risk Management Association,
Inc. (RMA). The threshold values represent the 25th percentile values
of PTRA and ICR for statements received by RMA for the eight years from
1994 to 2001 within relevant industries. Thresholds by sector ranged
from 1.8% to 2.9% for PTRA and from 2.0 to 2.4 for ICR (see EA Chapter
B3 for additional information). 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 VIII-3 presents projected baseline closures for the
estimated facilities in the Primary Manufacturing Industries and
additional known facilities in Other Industries.\43\ From the analysis
as outlined above, EPA determined that 76 facilities (or 14 percent) of
the estimated 532 regulated facilities in the five Primary
Manufacturing Industries are baseline closures. The highest percentages
of baseline closures occur in the Steel industry sector (43 percent)
and Aluminum industry sector (33 percent). An additional four
facilities (or 18 percent) of the 22 known facilities in Other
Industries are projected to be baseline closures. These facilities were
excluded from the post-compliance analysis of regulatory impacts.
---------------------------------------------------------------------------
\43\ The estimated number of Manufacturers considered in the
impact analysis (554) differs from the number reported in the
broader analyses (566) because of the exclusion of some sample
surveys with missing data and the rescaling of the remaining surveys
to extrapolate national impacts. 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 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. The removal of
specific sample facilities from the analysis universe and
simultaneous adjustment of sample weights to account for their
removal yields the same estimate of the total combined population of
Manufacturers and Electric Generators for the analysis. However, as
a result of the sample stratification methodology, the estimates of
the total facility populations for Manufacturers only differ
slightly between the two sample facility cases. Both values are
valid statistical estimates of the same, but unknown, value of the
Manufacturers facility population.
Exhibit VIII-3.--Summary of Baseline Closures for Manufacturers
----------------------------------------------------------------------------------------------------------------
Number of Percentage of
Sector Total number baseline baseline Operating in
of facilities closures closures baseline
----------------------------------------------------------------------------------------------------------------
Paper........................................... 230 32 13.9 198
Chemicals....................................... 178 4 2.2 173
Petroleum....................................... 36 5 13.9 30
Steel........................................... 68 29 42.6 40
Aluminum........................................ 21 7 33.3 14
-----------------
Total Facilities in Primary Manufacturing 532 76 14.3 456
Industries.................................
Additional known facilities in Other Industries. 22 4 18.2 18
-----------------
Total Manufacturers......................... 554 80 14.4 474
----------------------------------------------------------------------------------------------------------------
[[Page 68502]]
ii. Number of Facilities Passing the Baseline Closure Analysis and
Subject to National Categorical Requirements
As described above, the number of Manufacturers subject to national
categorical requirements differs according to (1) the options' design
intake flow (DIF) applicability thresholds, and (2) the type of
waterbodies to which they would apply. Of the three co-proposed options
presented here, the ``100 MGD for Certain Waterbodies'' option would
apply to the smallest number of the facilities that passed the baseline
closure analysis (``baseline-pass facilities'')--20 facilities, or 18
facilities in the Primary Manufacturing Industries and two known
facilities in Other Industries (see Exhibit VIII-4). The ``200 MGD for
All Waterbodies'' option would apply to 24 baseline-pass facilities, or
22 facilities in the Primary Manufacturing Industries and two known
facilities in Other Industries. The ``50 MGD for All Waterbodies''
would apply to 133 baseline-pass facilities, or 127 facilities in the
Primary Manufacturing Industries and 6 known facilities in Other
Industries.
Exhibit VIII-4.--Number of Baseline-Pass Manufacturing Facilities Subject to National Categorical Requirements by Option and Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of facilities subject to national categorical requirements
-----------------------------------------------------------------------------
Total 50 MGD all waterbodies 200 MGD all waterbodies 100 MGD certain
Sector operating ---------------------------------------------------- waterbodies
in baseline -------------------------
Number Percent Number Percent Number Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Paper........................................................ 198 37 18.7 3 1.5 0 0.0
Chemicals.................................................... 173 52 30.1 5 2.9 7 4.0
Petroleum.................................................... 30 13 43.3 3 10.0 5 16.7
Steel........................................................ 40 22 55.0 9 22.5 6 15.0
Aluminum..................................................... 14 5 35.7 1 7.1 0 0.0
--------------
Total Facilities in Primary Manufacturing Industries..... 456 127 27.9 22 4.8 18 3.9
Additional known facilities in Other Industries.............. 18 6 33.3 2 11.1 2 11.1
--------------
Total Manufacturers...................................... 474 133 28.1 24 5.1 20 4.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: May not sum to totals due to independent rounding.
iii. Post-Compliance Impact Analysis; Summary of Impacts
Of the 474 Manufacturers potentially subject to regulation after
baseline closures, EPA estimated that no facilities would close or
incur employment losses as a result of the three co-proposed options
considered here. EPA also found that none of the 474 baseline-pass
facilities would incur a moderate economic impact as a result of the
three co-proposed options.
Exhibit VIII-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
include no compliance costs for facilities assessed as baseline
closures. The total annualized, after-tax compliance cost reported in
Exhibit VIII-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 in concept from the
calculation of compliance costs as included in the calculation of the
total social costs of the regulation. For the social cost calculation,
which is presented in section VIII.A.2, the year-by-year stream of
total pre-tax compliance costs for all facilities is discounted to the
assumed effectiveness date of the 316(b) Phase III final rule--
beginning of year 2007--and then annualized. Two social discount rate
values, 3 percent and 7 percent, are used in the social cost analysis.
Exhibit VIII-5.--Facility Impacts for Manufacturers
----------------------------------------------------------------------------------------------------------------
100 MGD
50 MGD all 200 MGD all certain
waterbodies waterbodies waterbodies
----------------------------------------------------------------------------------------------------------------
Primary Manufacturing Industries
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in Baseline................... 456 456 456
Number of Facilities Subject to National Requirements........ 127 22 18
Percentage of Facilities Subject to National Requirements.... 27.9 4.8 3.9
Number of Closures (Severe Impacts).......................... 0 0 0
Percentage of Facilities Closing............................. 0.0 0.0 0.0
Number of Facilities with Moderate Impacts................... 0 0 0
Percentage of Facilities with Moderate Impacts............... 0.0 0.0 0.0
Annualized Compliance Costs (after tax, million $2003)....... $32.8 $13.7 $15.8
--------------------------------------------------------------
[[Page 68503]]
Additional Known Facilities in Other Industries
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in Baseline................... 18 18 18
Number of Facilities Subject to National Requirements........ 6 2 2
Percentage of Facilities Subject to National Requirements.... 33.3 11.1 11.1
Number of Closures (Severe Impacts).......................... 0 0 0
Percentage of Facilities Closing............................. 0.0 0.0 0.0
Number of Facilities with Moderate Impacts................... 0 0 0
Percentage of Facilities with Moderate Impacts............... 0.0 0.0 0.0
Annualized Compliance Costs (after tax, million $2003)....... $5.2 $0.7 $0.6
----------------------------------------------------------------------------------------------------------------
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. EPA also used the firm-level analysis to compare
impacts on small versus large firms, as required by the Regulatory
Flexibility Act as amended by the Small Business Regulatory Enforcement
Fairness Act. Section XI.C of this preamble discusses RFA/SBREFA
issues. 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.
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. 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 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.
2. 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 inverted the
prior assumption and 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 EA Chapter B3 for information on the
analysis of firm-level impacts).
EPA included the additional known facilities in Other Industries in
these analyses but since these facilities have no sample weight (i.e.,
they are not modeled to represent facilities other than themselves),
the upper and lower bound estimates were not applicable to them.
Exhibit VIII-6 summarizes the results of the firm-level analysis
for these two analytic cases.
Exhibit VIII-6.--Firm-Level After-Tax Annual Compliance Costs as a Percentage of Revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
No costs Number and percentage with after tax annual compliance costs/
---------------------- annual revenue of
-----------------------------------------------------------------
Number of firms in the analysis Pot. reg. Less than 1% 1-3% At Least 3%
Number Percent -----------------------------------------------------------------
Number Percent Number Percent Number Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Manufacturing Industries
--------------------------------------------------------------------------------------------------------------------------------------------------------
Case 1: 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
50 MGD All Waterbodies............................... 313 208 66 105 34 0 0 0 0
200 MGD All Waterbodies.............................. 313 292 93 21 7 0 0 0 0
100 MGD Certain Waterbodies.......................... 313 293 94 21 7 0 0 0 0
------------------------------------------------------
[[Page 68504]]
Case 2: 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
50 MGD All Waterbodies............................... 100 54 54 46 46 0 0 0 0
200 MGD All Waterbodies.............................. 100 86 86 14 14 0 0 0 0
100 MGD Certain Waterbodies.......................... 100 88 88 12 12 0 0 0 0
------------------------------------------------------
Other Industries
--------------------------------------------------------------------------------------------------------------------------------------------------------
50 MGD All Waterbodies............................... 14 10 71 4 29 0 0 0 0
200 MGD All Waterbodies.............................. 14 13 93 1 7 0 0 0 0
100 MGD Certain Waterbodies.......................... 14 13 93 1 7 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
As presented in Exhibit VIII-6, EPA estimated that the number of
firms owning regulated facilities in the Primary Manufacturing
Industries range from 100 (Case 2 estimate) to 313 (Case 1 estimate),
depending on the assumed ownership cases outlined above. An additional
14 firms are known to own facilities in Other Industries. No firms are
estimated to incur total compliance costs equal to or exceeding 1
percent of revenue under any of the regulatory options.
b. Electric Generators
All Electric Generators with a design intake flow of 50 MGD or
greater were already covered by the final Phase II regulation. As a
result, no Electric Generators are subject to the national categorical
requirements of the three co-proposed options.
B. New Offshore Oil and Gas Extraction Facilities
1. Overview of Affected Industry Sectors
The proposed rule establishes requirements for new facilities that
would apply to new offshore oil and gas extraction facilities that
employ a cooling water intake structure (CWIS) and are designed to
withdraw greater than 2 million gallons per day (MGD) from waters of
the United States.\44\ Offshore oil and gas extraction facilities
(``Oil and Gas Facilities'') are facilities primarily engaged in oil
and gas production and drilling activities. This analysis includes oil
and gas production platforms/structures and mobile offshore drilling
units (MODUs). EPA estimates that 21 new oil and gas extraction
platforms and 103 new MODUs would be subject to the national
requirements of the proposed option, assuming a 20-year period of
construction from 2007 (the assumed effective date of the rule) to
2026. Each newly-constructed facility is assumed to operate for 30
years, extending the entire analysis period over 49 years (2007 to
2055). Different methods of discounting over time are used for the
social cost and impact analyses. Social costs are discounted to 2007,
the assumed effective date of the rule, and then annualized over 30
years using 3% and 7% discount rates. For the impact analysis,
compliance costs are discounted for each individual facility to the
year of compliance (the year the vessel is launched or the platform/
structure comes on line, which ranges from 2007 to 2026) and then
summed to produce an aggregate present value of compliance costs. This
aggregate present value is then annualized over 30 years using 3% and
7% discount rates.
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\44\ See section II.B for a definition of a new offshore oil and
gas extraction facility for the purposes of this proposal.
---------------------------------------------------------------------------
2. Social Cost for New Offshore Oil and Gas Extraction Facilities
The total annualized social cost of the proposed option for new Oil
and Gas facilities is estimated at $3.7 million using a 3 percent
discount rate, and $3.0 million using a 7 percent discount rate. 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, annual operating and
maintenance costs, and permitting costs (initial permit costs, annual
monitoring costs, and permit reissuance costs). Social cost also
includes implementation costs incurred by the Federal government. EPA
expects that for the most part, the proposed regulation would be
implemented under general permits, two in the Gulf of Mexico, and one
in Cook Inlet Alaska.\45\ States are thus not likely to be involved in
administering the permits for new regulated offshore oil and gas
facilities because the facilities in the Gulf of Mexico operate in non-
State waters (beyond the 3-mile limit) and Alaska does not have NPDES
authority. EPA requests comment on its projections about the operating
locations of new facilities.
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\45\ Because individual permits are not issued, costs for pre-
permitting and re-permitting studies are assumed to be shared among
groups of new facilities expected to be covered by the general
permits (see DCN 7-4036 for detailed information on how permitting
costs are assumed to be shared under the general permits).
---------------------------------------------------------------------------
EPA estimates that direct compliance costs would be $3.2 million
and $2.7 million, using a 3 percent and 7 percent discount rate,
respectively. The estimated Federal government cost for administering
the rule for new facilities is comparatively minor in relation to the
estimated direct cost of regulatory compliance. Federal administrative
costs are estimated to be $0.4 million and $0.3 million per year under
the 3 percent and 7 percent discount rates, respectively.
3. Economic Impacts for New Offshore Oil and Gas Extraction Facilities
The following two subsections present economic impacts for MODUs
and production platforms/structures, respectively. Certain aspects of
the methodology differ between the two segments. Oil and gas production
operations involve production of a finite resource, which limits the
potential life of a production platform. Thus, the analysis for
production platforms/structures must account for the production and
resulting exhaustion of the finite oil and gas resource. Key
considerations in the platforms analysis are: (1) When does production
[[Page 68505]]
terminate? and (2) would the year of termination change due to
regulation? The economic life of a MODU is not limited by such
considerations and the analysis for MODUs is accordingly simpler. The
EA and the rulemaking record contain additional data and details on the
methodology and assumptions used in these analyses.
a. MODUs
EPA projects that 80 new jackups, 20 new semi-submersibles, and
three new drill ships will be constructed over the 20 years for which
new facility additions are analyzed. The economic impact analysis for
these new MODUs is conducted at two levels: the vessel level and the
firm level. EPA conducted two vessel-level analyses and one firm-level
analysis:
The first vessel-level analysis is a closure analysis,
which assesses changes in vessel cash flow and net income. Because the
financial condition of new vessels is unknown, EPA used financial
information from representative existing vessels, collected in EPA's
316(b) survey of MODUs (DCN 7-0008), to represent the financial
characteristics of new facilities. The financial information from these
representative vessels is used for a general assessment of how well
these vessels would perform financially if costs of the proposed option
applied. This analysis is used as an alternative assessment of the
potential for a barrier to entry.
The second vessel-level analysis is a standard barrier-to-
entry analysis for new facilities. This analysis computes the present
value of estimated initial permitting costs, which are assumed to be
incurred over five years prior to the incorporation of section 316(b)
permit requirements in the applicable general permits (see DCN 7-4036)
and are discounted to the year of compliance (the year the vessel is
assumed to be launched). The one-time capital costs of compliance
(assumed to be incurred in the year of compliance) are then added to
this figure. These summed compliance costs are then compared to the
baseline construction costs for each type of MODU. Neither recurring
costs of compliance (e.g., repermitting costs or recurring capital
costs of CWIS controls) nor recurring baseline costs (e.g., O&M,
refitting costs) are considered in this analysis. The analysis compares
baseline start-up costs and incremental start-up costs associated with
the proposed rule.
The firm-level analysis is a cost-to-revenue test which
compares the annualized compliance costs for representative new vessels
to the revenues of firms likely to construct MODUs, assuming each of
these firms builds a share of the 103 new MODUs expected to be
constructed over the 20-year construction time frame. This analysis was
conducted on a pre-tax and after-tax basis.
i. Vessel-Level Closure Analysis
To estimate potential closures (or more precisely, decisions not to
proceed with constructing and placing a vessel into service) as a
result of today's proposal for new MODUs, EPA used two models: (1) A
net income model, which computes the estimated present value of
baseline after-tax net income (i.e., without compliance costs) for
representative MODUs (based on survey data from existing MODUs) over a
30-year operating period for each new facility,\46\ and (2) an after-
tax cost calculation model, which estimates the present value of after-
tax compliance costs using engineering and permitting cost inputs.
Comparing the results of these two models shows the potential effect of
costs on vessel net income.
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\46\ Consistent with generally accepted methods of business
value analysis, EPA would have preferred to use the present value of
after-tax cash flow instead of net income as the basis for this
analysis. However, because it could not reliably estimate all of the
elements of cash flow, the Agency instead used the present value of
net income for its closure test. In particular, EPA was unable to
estimate the ongoing capital outlays (apart from those resulting
from regulatory compliance) that MODUs would need to make as part of
their ordinary business operations. In performing the analysis in
this way, the Agency essentially used the facility's reported
depreciation and amortization--which, being non-cash items, are
normally excluded from cash flow accounting--as an approximation of
ongoing capital outlays. How use of reported depreciation and
amortization, instead of a reliable estimate of capital outlays,
affects the findings from this analysis cannot be precisely known.
For some businesses--in particular those with relatively strong
financial performance--depreciation and amortization may be less
than ongoing capital outlays; for these businesses, the analysis
will tend to overstate business value and understate the potential
effect of compliance outlays on financial performance and business
value. On the other hand, for some businesses--in particular those
with relatively weak financial performance--depreciation and
amortization may exceed ongoing capital outlays; for these
businesses, the analysis will tend to understate business value and
overstate the potential effect of compliance outlays on financial
performance and business value.
---------------------------------------------------------------------------
EPA estimated after-tax net income for eight MODUs, using data
provided by surveyed operators of existing MODUs (EPA received economic
surveys for three semi-submersibles, three jackups, and two drill
ships). EPA was only able to undertake financial analysis for those
MODUs with a positive net income for the three years of financial
information provided in the survey (2000 to 2002). EPA assumed that any
MODU whose net income is negative over the three years is unlikely to
be a viable operation in the baseline and cannot be analyzed with
respect to compliance costs.
EPA used the net income over the three years of survey data to
create a moving cycle of net income over the period of analysis. Among
the years of data collected (2000 to 2002), 2002 was generally a poor
year of financial condition for the industry as a whole. EPA was thus
able to represent industry financials in both good and bad years. The
three-year cycle simulates the effect of volatility in oil and gas
prices and other business conditions (e.g., rig utilization rates) over
each facility's 30-year operating period. Future operating periods are
likely to include major swings in the prices of oil and gas, the
driving force behind the level of operations, rig pricing, and, thus,
financial performance of the newly constructed vessels. EPA assumed
that net income will be flat, on a three-year average basis, over the
30 years of analysis and thus did not apply any factors to increase or
decrease net income over the years of analysis. The net income figures
from the survey, therefore, repeat every three years for 30 years. EPA
then computed the present value of that stream of net income and
compared it to the present value of after-tax compliance costs for the
proposed option.
EPA used the estimated compliance cost elements--capital, O&M, and
permitting costs--for each new MODU to calculate the present value of
the after-tax cost of compliance with today's proposed requirements.
Each compliance-related cost was accounted for in the year it is
assumed to be incurred. Tax effects of compliance outlays were based on
the owner company's marginal tax rate as determined from the firm's
average taxable earnings over the three years of survey data (converted
to a mid-year 2003 basis). EPA calculated depreciation for the
compliance capital outlay using the modified accelerated cost recovery
system (MACRS) and included it in the pre-tax compliance cost stream.
The compliance cost stream was then reduced by the amount of avoided
tax liability, based on the estimated marginal tax rate, to yield the
after-tax compliance cost stream (for more information on these
calculations, see DCN 7-4016). The final result of these calculations
is the present value of after-tax compliance costs.
The present value of after-tax compliance costs was then subtracted
from the present value of baseline net income for the vessel. If the
present value of net income remained positive
[[Page 68506]]
after accounting for compliance costs, EPA assumed that the MODU would
operate post-compliance. If the present value of net income became
negative, EPA assumed that the new MODU would not be a financially
viable project and was counted as a potential ``regulatory closure.''
The analysis is based on the assumption that costs cannot be passed
through to customers. Because existing MODUs will not have to meet the
requirements of the proposal, and new MODUs must compete with these
existing MODUs, assuming zero cost pass-through provides a realistic
estimate of potential economic impacts on new MODUs.
This analysis found that no new MODUs (based on an assumption that
finances for new MODUs will look like those for existing MODUs) would
be a regulatory closure as a result of the incremental compliance costs
associated with the proposed option (detailed results are provided in
the CBI portion of today's record; DCN 7-4020).
ii.Vessel-Level Barrier-to-Entry Analysis
The barrier-to-entry analysis compares the present value of
compliance costs (including the present value of initial permitting
costs discounted to the compliance year and first-time capital/
installation costs, excluding recurring costs), to the costs of
constructing a new MODU. If compliance costs comprised a small fraction
of construction costs, EPA assumed that compliance costs would have no
effect on the decision to build a new MODU.
EPA developed incremental compliance costs for new MODUs using
estimated initial permitting costs and technology cost estimates. The
initial permitting costs are based on each new MODU's share of regional
permitting costs (EPA expects that facilities in a particular
geographic region would collect data from representative facilities in
that region) and individual administrative start-up and permit
application costs. The technology costs are based on the weighted
average cost of installing controls at existing MODUs, by type of MODU,
for all existing MODUs with technical data. The estimated present value
of the initial permitting cost stream, plus the first-time capital/
installation costs of compliance costs, sum to $127,000 for semi-
submersibles, $258,000 for jackups, and $247,000 for drill ships.
According to IADC (May/June, 2003), the cost of new MODUs planned to be
built in the next few years averages $250 million for semi-submersibles
and $125 million for jackups. A drill ship completed in 1998 cost
approximately $275 million (R&B Falcon's Pathfinder). The present value
of initial permitting costs plus one-time capital/installation
compliance costs is therefore estimated to range from 0.05 percent to
0.21 percent of construction costs for the three types of MODU. Because
total up-front costs represent a very small fraction of total costs of
construction (and even of contingency costs, which typically range from
10 percent to 20 percent of capital costs), EPA believes that these
costs would not have a material effect on decisions to build new MODUs.
iii. Firm-Level Cost-to-Revenue Analysis
EPA's research showed that firms likeliest to build MODUs with a
design intake flow of greater than 2 MGD are those that currently own
such MODUs. EPA identified seven firms owning jackups, semi-
submersibles, or drill ships that would be subject to the proposed
requirements for new facilities if newly constructed. They also are
among the largest firms in the industry and are thus likely to be
involved in new construction. EPA estimates that these seven firms
would own the 103 new MODUs subject to the proposed national
requirements for new facilities. To determine the potential impact of
the proposed option on the seven firms determined likely to build new
MODUs subject to regulation, EPA used a cost-to-revenue test, which
compares the annualized pre-tax and after-tax costs of compliance
(calculated for representative new MODUs), with 2002 revenues reported
by these firms. Because nearly all of the firms (other than foreign-
owned) are publicly owned, EPA relied on revenue data compiled from
corporate 10K reports (see Chapter C2 of the EA). EPA then assigned a
number of MODUs potentially subject to regulation to each of the firms
and used the average per-MODU compliance costs multiplied by the number
of these MODUs to calculate the total compliance costs that might be
faced by these firms.
Estimated total annual pre-tax compliance costs are approximately
$15,000 for a semi-submersible, $33,000 for a jackup, and $37,000 for a
drill ship. Estimated after-tax costs are approximately $10,000,
$21,000, and $24,000, respectively, based on a 35 percent marginal
corporate tax rate assumption. These annualized costs are very small
compared to the revenues a MODU might receive for drilling even one
exploratory well in deepwater, which could approach $25 to $30 million
(DCN 7-4017). They are also small compared to the typical day rates
(daily charges) paid to MODUs while drilling wells. These rates can
range from $150,000 to $250,000 per day (DCN 7-4042). Five firms are
assumed to build 12 jackups or semi-submersibles over the time frame of
the analysis (approximately one MODU every other year). The two
additional firms, GlobalSantaFe and Transocean, are the dominant firms
in the industry. These two firms are each assumed to build 20 jackup or
semi-submersibles, plus one drill ship and two drill ships,
respectively, over the time frame of the analysis for a total of 21 or
22 MODUs in total. EPA used the higher cost of a jackup rig to
represent the cost of compliance for both jackups and semi-
submersibles. For simplicity, and to be conservative, EPA assumed that
the annualized costs of compliance for all MODUs constructed over the
period of analysis by each firm are incurred in one year for comparison
to one year's revenues.
Using these assumptions, EPA estimates that the annualized pre-tax
costs per firm range from $0.4 to $0.7 million, and the after-tax costs
range from $0.3 to $0.5 million. The pre-tax cost-to-revenue ratio
ranges from 0.03 percent to 0.06 percent, while the after-tax ratios
range from 0.02 percent to 0.04 percent. Given that the highest
estimated ratio is 0.06 percent, EPA concludes that firm-level impacts
would not pose a barrier to entry.
b. Oil and Gas Production Platforms
EPA projects that 20 deepwater platforms and one Alaska platform
will be constructed over the 20 years over which new facility additions
are analyzed. The economic impact analysis for these new platforms is
conducted at two levels: the platform level and the firm level. EPA
conducted two platform-level analyses and one firm-level analysis:
The first platform-level analysis assesses the potential
effects of compliance costs on platform operation. Two effects of the
proposed option are considered: (1) A reduction in the expected
economic value of the platform, driven by all costs of compliance,
which could prevent oil and gas resources from being brought into
production, and (2) earlier production shut-in, driven by the increase
in O&M costs. The baseline operating and financial profile for this
analysis is based on data from existing platforms whose cooling water
intake rates would cause them to be subject to the proposed rule if
they were being newly constructed after rule promulgation. These
existing platforms serve as a baseline model of the
[[Page 68507]]
operating and financial conditions of new platforms that would be
regulated under the proposal. Estimated compliance costs are added to
the baseline cost profile in the analysis of compliance costs on
platform operations.
The second platform-level analysis is a barrier-to-entry
analysis for new facilities. This analysis compares the present value
of estimated initial permitting costs plus the one-time capital costs
of compliance (excluding any recurring costs) to the construction costs
for each type of platform.
The firm-level analysis is a cost-to-revenue test, which
compares the annualized compliance costs for representative new
platforms to the revenues of firms likely to construct new platforms/
structures. This analysis assumes that each firm likely to build a
deepwater platform/structure subject to regulation would bring four
platforms/structures on line over the time frame of the analysis; and
that only one firm will build an Alaska platform during the analysis
period. For simplicity and to be conservative, firms assumed to bring
four deepwater structures on line are assigned the annualized costs of
compliance for four platforms in one year for comparison against one
year's revenues. This analysis was conducted on a pre-tax and after-tax
basis.
i. Platform-Level Production/Shut-In Analysis
Compliance costs resulting from the proposed option may affect a
platform's financial performance and related operating decisions in two
ways. First, increased costs from regulatory compliance will reduce the
expected economic value of an oil and gas production project, and may
prevent an otherwise financially viable project from being undertaken.
Second, even if a project overall remains financially viable, increased
operating costs may lead to an earlier production shut-in than would
occur in the baseline. Details of the analysis of these effects are
provided below.
For the analysis of these effects, EPA constructed a general
platform analysis model, which simulates the operations and economics
of oil and gas development and production. The platform model analyzes
production over a period extending as long as 30 years. Pre-tax costs
(including costs incurred in pre-production years, O&M, monitoring
costs, and repermitting costs) are input into the model in the year in
which they occur, until the model shows the platform is uneconomical to
operate. To determine the shut-in year, projected net revenue is
compared to operating costs in each production year. Net revenue is
based on an assumed price of oil, current and projected production of
oil and gas, well production decline rates, and severance and royalty
rates. Operating costs are based on a calculated cost per barrel of oil
equivalent (BOE) produced. The model simulates operations for the
lesser of 30 years or to the year when operating costs exceed
production revenue, at which point the operator is assumed to terminate
production. The model calculates the lifetime of the project, total
production, and the net present value of the operation (net income of
the operation over the life of the project in terms of today's
dollars). A comparison of the baseline model outputs to the post-
compliance model outputs yields any losses of production and project
lifetimes and the net present value of the operation. If the net
present value of the operation is positive in the baseline but negative
post-compliance, the project is considered nonviable post-compliance.
It is assumed the platform would not be built.
The model uses as baseline data, financial information from
representative existing platforms, collected in EPA's 316(b) survey of
production platforms (DCN 7-0008) to represent the financial
characteristics of future platforms that would be subject to this
proposed regulation. EPA received an economic survey from only one
deepwater platform with cooling water intake structure flows meeting
the proposed regulatory criteria. EPA used data from this survey and
from other sources of publicly available information, such as the
Minerals Management Service, to develop a model new deepwater oil and
gas production platform. EPA also received a survey from a platform in
Alaska but did not include it in the analysis because the surveyed
platform is a very old structure and at the end of its productive life.
It is likely that it would not be representative of new platforms being
built after the Phase III rule is finalized. The Alaska platform is
therefore analyzed only in the barrier to entry analysis.
Analysis of Project Viability
As noted above, any increase in costs, whether operating, capital,
or permitting, will reduce the expected economic value of an oil and
gas project, as represented by the present value of project net income,
and may cause an otherwise economic oil and gas production project to
never be undertaken. In this case, the entire economic value of the
project and its otherwise recoverable oil and gas production are
assumed to be lost (note: this loss need not be permanent but may only
be delayed until higher product prices, or reduced development and
production costs allow the project to become financially viable). For
this potential impact, EPA analyzed whether the reduction in value from
all regulatory compliance outlays would be sufficient to cause the
expected discounted net income of an otherwise economically viable oil
and gas production project to be negative--at the outset. In this case,
the operator is assumed not to proceed with development and production.
If the platform has a positive net present value under baseline
conditions but a negative net present value in the post-compliance
scenario, EPA notes an impact on the platform and estimates the lost
production resulting from the costs of regulatory compliance.
Analysis of Production Shut-In Effects
Although a project overall remains financially viable, the
increased operating costs from regulatory compliance may lead to an
earlier production shut-in than would occur in the baseline. Shut-in
refers to lost production from non-production of producible reserves
for reasons such as tests, repairs, or to await construction of
gathering lines. Apart from the financial impact, an earlier shut-in
will also lead to reduced production of otherwise economically
recoverable oil and gas. For this analysis, projected net revenue is
compared to operating costs at each year for the model project.\47\ Net
revenue (after subtracting royalties and severance, which are payments
to the lease owner and a State, if relevant) is based on an assumed
price of oil, current and projected production of oil and gas, well
production decline rates, and severance and royalty rates. Operating
costs are based on a calculated cost per barrel of oil equivalent (BOE)
produced. The model simulates operations for the lesser of 30 years or
to the year when operating costs exceed production revenue, at which
point the operator is assumed to terminate production. A comparison of
total production and total project lifetime in the baseline vs. post-
compliance shows any differences in these variables following the
imposition of compliance costs.
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\47\ Following engineering review of surveyed deepwater
platforms/structures, only one was determined to have a total design
CWIS intake flow rate meeting the proposed 316(b) thresholds for
regulation of oil and gas facilities, had the structure been newly
constructed, so only one model of deepwater structures was
developed.
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[[Page 68508]]
This analysis found no impacts on deepwater oil and gas development
or production as a result of the incremental compliance costs
associated with the proposed option for the one platform that was
analyzed. Impacts on net present value were very small. (Detailed
results are included in the CBI portion of today's record; DCN 7-4038.)
ii. Platform-Level Barrier-to-Entry Analysis
The barrier-to-entry analysis compares the present value of the
initial permitting cost stream (discounted to the year of compliance)
plus one-time capital/installation costs to the costs of constructing a
new platform. If compliance costs comprise a small fraction of
construction costs, EPA assumes that compliance costs would not have an
effect on the decision to build a new platform.
The estimated total present values of incremental compliance costs
are $291,000 for deepwater projects and $685,000 for Alaska projects.
Costs for constructing new deepwater platforms are estimated to range
from $114 million to $2.3 billion (see EA for the Synthetic Drilling
Fluid Effluent Limitations Guidelines in the rulemaking record, DCN 7-
4017). For Alaska, EPA used a value of $120 million (DCN 7-4028). The
ratio of incremental compliance costs to current total construction
costs therefore ranges from 0.01 percent to 0.3 percent for deepwater
projects and 0.6 percent for an Alaska project. Because this represents
a small fraction of total construction costs (and even of contingency
costs), EPA believes that these costs would not have a material effect
on decisions to build new platforms.
iii. Firm-Level Cost-to-Revenue Analysis
To determine the potential impact of the proposed option on firms,
EPA used a cost-to-revenue test, which compares the annualized pre-tax
and after-tax costs of compliance (calculated for a representative new
platform times the maximum number of platforms assumed built by each
firm in any one year), with 2002 revenues reported by all firms
determined likely to be affected by this regulation. The firms that are
considered affected are (1) those identified as currently having
existing deepwater platforms or structures that would be subject to
regulation if they were newly constructed and (2) the likeliest type of
firm to build a new Alaska platform during the time frame of the
analysis. EPA assumed each of the five firms operating in the deepwater
Gulf would bring on-line four platforms during the period of analysis
(for a total of 20 platforms). For simplicity and to be conservative,
EPA assumes the four platforms come on line in one year for comparison
with one year's revenues at each firm. One small firm is assumed to
build the one Alaska platform over the period of analysis, and the
annualized compliance cost is also compared to one year's revenues at
that firm.
Using these assumptions, EPA estimates that the annualized pre-tax
costs per firm are about $0.3 million, and the after-tax costs are
about $0.2 million. The pre-tax cost-to-revenue ratio ranges from
<0.001 percent to 0.01 percent, while the after-tax ratios range from
<0.001 percent to 0.007 percent. Given that the highest estimated ratio
is 0.01 percent, EPA concludes that firm-level impacts would not pose a
barrier to entry.
c. Total Facility Compliance Costs and Impacts for All New Offshore Oil
and Gas Extraction Facilities
Exhibit VIII-7 summarizes the total facility compliance costs and
impacts associated with the proposed option for Phase III new offshore
oil and gas extraction facilities. Annualized after-tax costs total
$1.8 million per year for MODUs and $1.2 million per year for
platforms, or a total of $3.1 million per year for all affected new oil
and gas operations estimated to be constructed over the period of the
analysis (using a 7 percent discount rate).\48\
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\48\ Costs are incurred assuming 20 years of new facility
construction, with each facility incurring costs over a 30-year
operating period, discounted to the year the facility is launched or
comes on-line. The present value of private after-tax costs is less
than the previously described present value of social costs, which
are based on pre-tax costs, because of differences in the
discounting for private costs and social costs. Private costs are
discounted, for each analysis, only to the first year of compliance.
In contrast, for the social cost calculation, all costs are
discounted to the beginning of 2007, regardless of when new
facilities come into operations. Because new facilities are
scheduled to begin operation for a 20 year period following rule
promulgation, the total effect of discounting is much greater for
the present value of social cost calculation than for the private
cost calculation. As a result, the present value of social costs,
even though based on pre-tax costs, is less than the present value
of private, after-tax cost.
Exhibit VIII-7.--Summary of Private Costs and Impacts for New Oil and Gas Facilities
----------------------------------------------------------------------------------------------------------------
Annualized
private after-
Number of new tax compliance Facility
Type of O&G facility facilities costs (in impacts Firm impacts
millions, 2003
$)
----------------------------------------------------------------------------------------------------------------
MODUs........................................... 103 $1.8 0 0
Platforms....................................... 21 1.2 0 0
-----------------
Total....................................... 124 3.1 0 0
----------------------------------------------------------------------------------------------------------------
Note: Component values may not sum to the reported total due to independent rounding.
C. Summary of Total Social Costs and Impacts
As discussed earlier, EPA is proposing national categorical
requirements for existing Phase III facilities, as defined by one of
the three co-proposed flow-threshold-based options, and is proposing
requirements similar to certain provisions of the rule for new offshore
oil and gas extraction facilities. EPA estimated a total annualized
social cost for the ``50 MGD for All Waterbodies'' option for existing
facilities and the proposed option for new oil and gas extraction
facilities of $51.0 million at a 3 percent discount rate, and $53.1
million, at a 7 percent discount rate. EPA estimates that 260
facilities would be subject to national requirements and that none of
these facilities would experience adverse impacts. Exhibit VIII-8
summarizes these findings.
[[Page 68509]]
Exhibit VIII-8.--Summary of Economic Analysis: ``50 MGD for All Waterbodies'' Option for Existing Facilities
Plus New Offshore Oil and Gas Facilities > 2 MGD
----------------------------------------------------------------------------------------------------------------
Annualized social cost (in Number of
millions, 2003 $) facilities Number of
-------------------------------- subject to facilities
3% Discount 7% Discount national with impacts*
rate rate requirements
----------------------------------------------------------------------------------------------------------------
Direct Compliance Cost:
Manufacturing Industries.................... $42.7 $45.1 127 0
Other Industries............................ 4.1 4.4 9 0
Electric Generators......................... N/A N/A N/A N/A
New O&G Facilities.......................... 3.2 2.7 124 0
-----------------
Total................................... 50.0 52.2 260 0
State and Federal Administrative Cost........... 1.0 0.9 .............. ..............
-----------------
Total Social Cost........................... 51.0 53.1 .............. ..............
----------------------------------------------------------------------------------------------------------------
* The impact measures for existing Manufacturers are facility closure and moderate financial impact (see also
section VIII.A.3.a). The two impact measures for new Oil and Gas facilities are facility closures and barrier
to entry (see also section VIII.B.3). Numbers may not add up to totals due to independent rounding.
EPA estimated a total annualized social cost for the ``200 MGD for
All Waterbodies'' option for existing facilities and the proposed
option for new oil and gas extraction facilities of $26.4 million at a
3 percent discount rate, and $27.2 million, at a 7 percent discount
rate. EPA estimates that 149 facilities would be subject to national
requirements and that none of these facilities would experience adverse
impacts. Exhibit VIII-9 summarizes these findings.
Exhibit VIII-9.--Summary of Economic Analysis: ``200 MGD for All Waterbodies'' Option for Existing Facilities
Plus New Offshore Oil and Gas Extraction Facilities
----------------------------------------------------------------------------------------------------------------
Annualized social cost (in Number of
millions, 2003 $) facilities Number of
-------------------------------- subject to facilities
3% Discount 7% Discount national with impacts*
rate rate requirements
----------------------------------------------------------------------------------------------------------------
Direct Compliance Cost:
Manufacturing Industries.................... $21.7 $23.1 23 0
Other Industries............................ 1.0 0.9 2 0
Electric Generators......................... N/A N/A N/A N/A
New O&G Facilities.......................... 3.2 2.7 124 0
-----------------
Total................................... 25.9 26.7 149 0
State and Federal Administrative Cost........... 0.5 0.4 .............. ..............
-----------------
Total Social Cost........................... 26.4 27.2 .............. ..............
----------------------------------------------------------------------------------------------------------------
* The impact measures for existing Manufacturers are facility closure and moderate financial impact (see also
section VIII.A.3.a). The two impact measures for new Oil and Gas facilities are facility closures and barrier
to entry (see also section VIII.B.3). Numbers may not add up to totals due to independent rounding.
EPA estimated a total annualized social cost for the ``100 MGD for
Certain Waterbodies'' option for existing facilities and the proposed
option for new oil and gas extraction facilities of $21.3 million at
both a 3 percent and 7 percent discount rate. EPA estimates that 143
facilities would be subject to national requirements and that none of
these facilities would experience adverse impacts. Exhibit VIII-10
summarizes these findings.
Exhibit VIII-10.--Summary of Economic Analysis: ``100 MGD for Certain Waterbodies'' Option for Existing
Facilities Plus New Offshore Oil and Gas Extraction Facilities
----------------------------------------------------------------------------------------------------------------
Annualized social cost (in Number of
millions, 2003 $) facilities Number of
-------------------------------- subject to facilities
3% Discount 7% Discount national with impacts*
rate rate requirements
----------------------------------------------------------------------------------------------------------------
Direct Compliance Cost:
Manufacturing Industries.................... $16.7 $17.4 17 0
Other Industries............................ 0.7 0.7 2 0
Electric Generators......................... N/A N/A N/A N/A
New O&G Facilities.......................... 3.2 2.7 124 0
-----------------
[[Page 68510]]
Total................................... 20.7 20.8 143 0
State and Federal Administrative Cost........... 0.6 0.5 .............. ..............
-----------------
Total Social Cost........................... 21.3 21.3 .............. ..............
----------------------------------------------------------------------------------------------------------------
* The impact measures for existing Manufacturers are facility closure and moderate financial impact (see also
section VIII.A.3.a). The two impact measures for new Oil and Gas facilities are facility closures and barrier
to entry (see also section VIII.B.3). Numbers may not add up to totals due to independent rounding.
IX. Benefits Analysis
A. Introduction
This section presents EPA's estimates of the national economic
benefits of the three co-proposed regulatory options for the section
316(b) regulation for Phase III existing facilities: The ``50 MGD for
All Waterbodies'' option, the ``200 MGD for All Waterbodies'' option,
and the ``100 MGD for Certain Waterbodies'' option. The benefits occur
due to the reduction in impingement mortality and entrainment at
cooling water intake structures affected by this rulemaking (see
section II for a description of the facilities to which this rulemaking
potentially applies). By reducing impingement mortality and
entrainment, the co-proposed options would increase the number of fish,
shellfish, and other aquatic life in local aquatic ecosystems. This, in
turn, will directly and indirectly generate use benefits such as those
associated with recreational and commercial fishing. Other types of
benefits that are independent of any current or anticipated uses of the
resource could also be realized; these are known as non-use values.
Section IX.D provides an overview of types and sources of benefits
anticipated, how these benefits were estimated, and what level of
benefits have been estimated for each of the three co-proposed options.
For a comparison of social benefits and total social costs, refer to
Section X.
To estimate the economic benefits of reducing impingement mortality
and entrainment at cooling water intake structures, all the beneficial
outcomes need to be identified and, where possible, quantified and
assigned appropriate monetary values. Estimating economic benefits can
be challenging because of the many steps of analysis that are necessary
to link a reduction in impingement mortality and entrainment to changes
in impacted fisheries and other aspects of relevant aquatic ecosystems,
and then to link these ecosystem changes to the resulting changes in
quantities and values for the associated environmental goods and
services that ultimately are linked to human welfare. The methodologies
used in the estimation of benefits of the proposed regulatory options
are largely built upon those used for estimating benefits of the final
rule for Phase II facilities (see 69 FR 41576). The Regional Benefits
Assessment for the Proposed Section 316(b) Rule for Phase III
Facilities (see DCN 7-0003), hereafter known as the Regional Analysis
Document, provides EPA's analyses for the benefit assessment for the
proposed options.
The benefit estimates for this rule are derived from a series of
regional studies for a range of waterbody types throughout the U.S.
Section IX.B provides detail on the regional study design. Sections
IX.C and IX.D describe the methods EPA used to estimate impingement
mortality and entrainment impacts at potentially regulated existing
facilities and to derive an economic value of such losses. National
benefits were estimated using a set of statistical weights for each
potentially regulated facility. The weights were developed as part of
EPA's design of the survey of the industries.
The benefit estimates presented in the following sections reflect
changes in impingement mortality and entrainment reductions at existing
facilities only. EPA was unable to assess benefits of reducing
impingement and entrainment at new offshore oil and gas extraction
facilities due to significant data gaps at the time of proposal.
Therefore, the benefits estimates presented in this section should be
compared only to the cost estimates for existing Phase III facilities.
EPA solicits submission of data on impingement mortality and
entrainment impacts at offshore oil and gas extraction facilities.
B. Study Design and Methods
EPA's evaluation of impingement mortality and entrainment data had
four main objectives: (1) To develop a national estimate of the
magnitude of impingement and entrainment at potentially regulated
facilities; (2) to standardize impingement and entrainment rates using
common biological metrics so that rates could be compared across
species, years, facilities, and geographical regions; (3) to estimate
changes in these metrics as a result of projected reductions in
impingement and entrainment under the proposed rule options; and (4) to
obtain data that can be used to estimate the national economic benefits
of reduced impingement and entrainment.
Harvested species were the main focus of EPA's analysis, primarily
because of the availability of economic methods for valuing these
species. EPA's approach to estimating changes in harvest assumed that
impingement and entrainment losses result in a reduction in the number
of harvestable adults in the years following the time that individual
fish are killed by impingement and entrainment and that future
reductions in impingement and entrainment will lead to future increases
in fish harvest. This approach only estimates the incremental yield
that is foregone because of the number of deaths due to impingement and
entrainment and is not intended to provide an estimate of absolute
population levels. EPA intends to investigate the feasibility of
applying a population modeling approach to estimate expected changes in
harvest levels and fish population sizes. Such an approach would use
available data and life-stage specific estimates of natural mortality,
impingement and entrainment mortality, and fishing mortality, plus an
explicit function describing density-dependent reproductive success to
attempt to estimate long-term changes in average
[[Page 68511]]
harvest levels and stock sizes. A population model could serve as a
supplement or as an alternative to the current modeling approach based
on age one equivalent losses. EPA invites comment on ways that it might
develop a population model to support an estimate of the national
benefits of this rulemaking.
1. Extrapolation of Impingement and Entrainment Rates
To obtain a national estimate of losses at all potentially
regulated facilities, it was necessary to extrapolate impingement and
entrainment rates from facilities with data (model facilities) to
facilities without data. Extrapolation of impingement and entrainment
rates was necessary because not all potentially regulated facilities
within a given region have conducted impingement and entrainment
studies. Model facilities included both Phase II facilities and
potentially regulated Phase III facilities,\49\ based on the assumption
that impingement and entrainment rates at Phase II and Phase III
facilities are similar after normalization by intake flow. Phase II
facilities were included to make use of the largest possible data set
and to accommodate the lack of impingement and entrainment data from
potentially regulated Phase III facilities in some regions. Impingement
and entrainment data from 72 Phase II facilities and 16 potentially
regulated Phase III facilities were evaluated.
---------------------------------------------------------------------------
\49\ ``Potentially regulated Phase III facilities'' refers to
all existing facilities with design intake flows greater than 2 MGD,
not regulated in the Phase II rule.
---------------------------------------------------------------------------
Impingement and entrainment data were extrapolated on the basis of
operational intake flow in millions of gallons per day (MGD), where MGD
is the average operational flow over the period 1996-1998 as reported
by facilities in response to EPA's survey of the industry. Operational
flow at each facility was rescaled using factors reflecting the
relative effectiveness of currently in-place technologies for reducing
impingement and entrainment. The extrapolation procedure is described
in Chapter A1 of Part A of the Regional Analysis Document. While there
may be variations from these estimates in the actual losses (and
benefits) per MGD across individual facilities, EPA believes that this
method of extrapolation is a reasonable basis for developing an
estimate of national-level benefits.
2. Study Regions and Facilities
EPA's analysis examined cooling water intake structure impacts and
regulatory benefits at the regional scale, and then combined regional
results to develop national estimates. The Agency evaluated the
benefits of the proposed regulatory options in six study regions based
on the locations of potentially regulated Phase III facilities and
similarities in the affected ecosystems, aquatic species present, and
characteristics of commercial and recreational fishing activities
within each region. The four coastal regions (California, North
Atlantic, Mid-Atlantic, and Gulf of Mexico) correspond to those of the
National Oceanographic and Atmospheric Association (NOAA) Fisheries
agency (formerly the National Marine Fisheries Service). The Great
Lakes region includes all potentially regulated Phase III facilities
that withdraw water from Lakes Ontario, Erie, Michigan, Huron, and
Superior, or are located on a waterway with open fish passage to a
Great Lake and within 30 miles of the lake. The Inland region includes
the remaining facilities that withdraw water from freshwater lakes,
rivers, and reservoirs. Exhibit IX-1 indicates the number of
potentially regulated Phase III facilities in each study region. The
exhibit also shows the number of facilities subject to national
technology requirements under each of the co-proposed regulatory
options.
Exhibit IX-1.--Phase III Facilities in Each Region
----------------------------------------------------------------------------------------------------------------
Number of Number of facilities subject to national
potentially technology requirements under proposed
regulated regulatory options \b\ (weighted)
Region existing phase -----------------------------------------------
III 100 MGD
facilities \a\ 50 MGD all 200 MGD all certain
(weighted) waterbodies waterbodies waterbodies
----------------------------------------------------------------------------------------------------------------
California...................................... 9 1 0 0
North Atlantic.................................. 5 4 1 3
Mid-Atlantic.................................... 13 3 2 2
South Atlantic.................................. 4 0 0 0
Gulf of Mexico.................................. 11 7 2 7
Great Lakes..................................... 68 19 5 6
Inland.......................................... 493 69 12 0
-----------------
Total, Study Regions........................ 599 103 22 18
-----------------
National total \c\.......................... 603 103 22 18
----------------------------------------------------------------------------------------------------------------
\a\ Potentially regulated existing Phase III facilities include electric generators with CWIS that withdraw more
than 2 MGD but less than 50 MGD and manufacturers with CWIS that withdraw more than 2 MGD, that use at least
25% of the water for cooling purposes.
\b\ Numbers of facilities reflect only those that are subject to technology requirements; those facilities that
only have permitting costs are excluded.
\c\ Eighty potentially regulated facilities estimated to close under the baseline scenario are excluded from
this analysis.
3. Species Groups
Life history data are very limited for many of the species that are
impinged and entrained, and as a result, there are many data gaps for
individual species. To overcome this limitation in its national benefit
analysis, EPA used available life history data to construct
representative life histories for groups of closely related species.
Aggregation of species into groups of similar species with a common
life history type facilitated parameterization of the fisheries models
used by EPA to evaluate facility impingement and entrainment monitoring
data. Groups were based on family groups and groups used by NOAA
Fisheries for landings
[[Page 68512]]
data. For example, bay goby, blackeye goby, yellowfin goby, and other
gobies were grouped together as ``gobies.'' An exception was made for
species of exceptionally high commercial or recreational value (e.g.,
striped bass), which were evaluated as single species.
C. Impingement and Entrainment
EPA's analysis is based on facility-provided biological monitoring
data. As discussed in Chapter A2 of Part A of the Regional Analysis
Document, there are several types of uncertainty associated with these
data. Major sources of uncertainty are the imperfect precision and
accuracy of impingement and entrainment data reported by facilities and
of growth and mortality rates obtained from the scientific literature.
This results from unavoidable sampling and measurement errors. While
these uncertainties may lead to imprecision in impingement and
entrainment estimates, EPA found no evidence of statistical bias. Given
the goal of its benefit analysis, EPA believes that the data available
from facility studies are sufficiently robust for developing estimates
of the relative magnitude of impingement and entrainment nationwide.
Using standard fishery modeling techniques,\50\ EPA constructed
models that combined facility-derived impingement and entrainment
counts with relevant life history data to derive estimates of (1) age-
one equivalent losses (the number of individuals of different ages
impinged and entrained by facility intakes expressed as an equivalent
number of age-one fish), and (2) foregone fishery yield (pounds of
commercial harvest and numbers of recreational fish and shellfish that
are not harvested due to impingement and entrainment). In addition to
direct losses of harvested species, estimates of foregone fishery yield
include the yield of harvested species that is lost due to losses of
forage species, which provide food for harvested species. Details of
the methods used to calculate these metrics are provided in Chapter A1
of Part A of the Regional Analysis Document. For all analyses, EPA used
the impingement and entrainment estimates provided by the facility and
assumed 100 percent entrainment mortality based on the analysis of
entrainment survival studies presented in Chapter A7 of Part A of the
Regional Analysis Document. If there is some entrainment survival, this
last assumption may lead to some overestimate of baseline entrainment
losses.
---------------------------------------------------------------------------
\50\ Ricker, W.E. 1975. Computation and interpretation of
biological statistics of fish populations. Fisheries Research Board
of Canada, Bulletin 191; Hilbourn, 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.
---------------------------------------------------------------------------
1. Summary of Current Annual Impingement and Entrainment by Region
Exhibit IX-2 presents EPA's estimates of current annual impingement
and entrainment (I&E) in the study regions.
Exhibit IX-2.--Current Annual Impingement and Entrainment, by Region
--------------------------------------------------------------------------------------------------------------------------------------------------------
Impingement Entrainment Total I & E
-----------------------------------------------------------------------------------------------
Region Foregone Foregone Foregone
Age-1 fishery yield Age-1 fishery yield Age-1 fishery yield
equivalents (lbs) equivalents (lbs) equivalents (lbs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
California.............................................. 21,000 701 1,290,000 95,100 1,310,000 95,800
North Atlantic.......................................... 20,100 141 2,320,000 44,800 2,340,000 45,000
Mid-Atlantic............................................ 3,890,000 540,000 19,400,000 381,000 23,200,000 920,000
South Atlantic.......................................... 423,000 49,100 1,090,000 73,700 1,520,000 123,000
Gulf of Mexico.......................................... 6,140,000 623,000 6,580,000 1,370,000 12,700,000 1,990,000
Great Lakes............................................. 31,800,000 413,000 2,570,000 76,400 34,400,000 489,000
Inland.................................................. 28,600,000 232,000 15,700,000 263,000 44,200,000 495,000
-----------------
National total a.................................... 70,900,000 1,860,000 48,900,000 2,300,000 120,000,000 4,160,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
The estimates in Exhibit IX-2 make use of data from available
impingement and entrainment studies conducted at both Phase II and
Phase III facilities. Using data solely from the limited number of
Phase III studies available (4 studies for the Great Lakes region and
11 studies for the Inland region), estimates of loss of age-1
equivalents to impingement and entrainment are 5,160,000 at Great Lakes
facilities and 14,700,000 at Inland facilities. Estimates of foregone
fishery yield are 16,500 pounds at Great Lakes facilities and 250,000
pounds at Inland facilities.
2. Summary of Annual Reductions in Impingement and Entrainment for
Three Options
Exhibit IX-3 presents EPA's estimates of annual impingement and
entrainment reductions under the ``50 MGD for All Waterbodies'' option.
Exhibit IX-4 presents EPA's estimates of annual impingement and
entrainment reductions under the ``200 MGD for All Waterbodies''
option. Exhibit IX-5 presents results for the ``100 MGD for Certain
Waterbodies'' option.
a. Reductions in Annual Impingement and Entrainment for the ``50 MGD
for All Waterbodies'' Option
See Exhibit IX-3 for reductions in annual impingement and
entrainment for the ``50 MGD for All Waterbodies'' option.
[[Page 68513]]
Exhibit IX-3.--Reductions In Annual Impingement and Entrainment for the
``50 MGD for All Waterbodies'' Option, by Region
------------------------------------------------------------------------
Foregone
Region Age-1 fishery yield
equivalents (lbs)
------------------------------------------------------------------------
California.............................. 383,000 28,000
North Atlantic.......................... 930,000 17,900
Mid-Atlantic............................ 13,400,000 600,000
Gulf of Mexico.......................... 8,380,000 1,250,000
Great Lakes............................. 11,600,000 169,000
Inland.................................. 14,800,000 157,000
-----------------
National total...................... 49,500,000 2,220,000
------------------------------------------------------------------------
The estimates in Exhibit IX-3 make use of data from available
impingement and entrainment studies conducted at both Phase II and
Phase III facilities. Using data solely from the limited number of
Phase III studies available (4 studies for the Great Lakes region and
11 studies for the Inland region), estimates of reductions in loss of
age-1 equivalents to impingement and entrainment are 1,700,000 at Great
Lakes facilities and 5,450,000 at Inland facilities. Estimates of
reductions of foregone fishery yield are 5,570 pounds at Great Lakes
facilities and 93,000 pounds at Inland facilities.
b. Reductions in Annual Impingement and Entrainment for the ``200
MGD for All Waterbodies'' Option
See Exhibit IX-4 for reductions in annual impingement and
entrainment for the ``200 MGD for All Waterbodies'' option.
Exhibit IX-4.--Reductions In Annual Impingement and Entrainment for the
``200 MGD for All Waterbodies'' Option, by Region
------------------------------------------------------------------------
Foregone
Region Age-1 fishery yield
equivalents (lbs)
------------------------------------------------------------------------
California.............................. 0 0
North Atlantic.......................... 198,000 3,800
Mid Atlantic............................ 11,900,000 534,000
Gulf of Mexico.......................... 4,580,000 682,000
Great Lakes............................. 7,710,000 116,000
Inland.................................. 9,650,000 107,000
-----------------
National total...................... 34,000,000 1,440,000
------------------------------------------------------------------------
The estimates in Exhibit IX-4 make use of data from available
impingement and entrainment studies conducted at both Phase II and
Phase III facilities. Using data solely from the limited number of
Phase III studies available (4 studies for the Great Lakes region and
11 studies for the Inland region), estimates of reductions in loss of
age-1 equivalents to impingement and entrainment are 1,100,000 at Great
Lakes facilities and 3,270,000 at Inland facilities. Estimates of
reductions in foregone fishery yield are 3,690 pounds at Great Lakes
facilities and 55,700 pounds at Inland facilities.
c. Reductions in Annual Impingement and Entrainment for the ``100 MGD
for Certain Waterbodies'' Option
See Exhibit IX-5 for reductions in annual impingement and
entrainment for the ``100 MGD for Certain Waterbodies'' option.
Exhibit IX-5.--Reductions In Annual Impingement and Entrainment for the
``100 MGD for Certain Waterbodies'' Option, by Region
------------------------------------------------------------------------
Foregone
Region Age-1 fishery yield
equivalents (lbs)
------------------------------------------------------------------------
California.............................. 0 0
North Atlantic.......................... 754,000 14,500
Mid Atlantic............................ 11,900,000 534,000
Gulf of Mexico.......................... 8,380,000 1,250,000
Great Lakes............................. 8,740,000 130,000
-----------------
National total...................... 29,800,000 1,930,000
------------------------------------------------------------------------
The estimates in Exhibit IX-5 make use of data from available
impingement and entrainment studies conducted at both Phase II and
Phase III facilities. Using data solely from the limited number of
Phase III studies available (4 studies for the Great Lakes region), the
estimate of reductions in loss of age-1 equivalents to impingement and
[[Page 68514]]
entrainment is 1,260,000 and the estimate of reductions in foregone
fishery yield is 4,190 pounds at Great Lakes facilities.
d. Reductions in Annual Impingement and Entrainment for Other Policy
Options
EPA considered a wide range of policy options in developing the
proposed section 316(b) regulation for the Phase III facilities. The
Regional Analysis Document provides results for all evaluated options
considered in this rulemaking.
D. National Benefits
1. Overview
Economic benefits of the co-proposed options for the section 316(b)
regulation for Phase III existing facilities can be broadly defined
according to categories of goods and services provided by the species
affected by impingement and entrainment by cooling water intake
structures.
The first category includes benefits that pertain to the use
(direct or indirect) of the affected fishery resources. Use value
reflects the value of all current direct and indirect physical uses of
a good or service (Mitchell and Carson, 1989; DCN 5-1287). The direct
use benefits can be further categorized according to whether or not
affected goods and services are traded in the market. The ``direct
use'' benefits of the section 316(b) regulation stem both
from''market'' commodities (e.g., commercial fisheries) and from
``nonmarket'' goods (e.g., recreational angling). Indirect use benefits
also can be linked to either market or nonmarket goods and services--
for example, the manner in which reduced impingement and entrainment-
related losses of forage species leads through the aquatic ecosystem
food web to enhance the biomass of species targeted for commercial
(market) and recreational (nonmarket) uses.
The second category includes benefits that are independent of any
current or anticipated use of the resource; these are known as ``non-
use'' or ``passive use'' values.\51\ Non-use values include
``nonmarketed'' goods and services, which reflect human values
associated with existence, bequest, and altruistic motives. Existence
value is the value that individuals may hold for simply knowing that a
particular good exists regardless of their present or expected use. For
example, ecological goods and services such as diversity of aquatic and
terrestrial species and habitat for threatened and endangered species
are often valued for their existence. Bequest value exists when someone
gains utility through the knowledge that an amenity will be available
for others (family or future generations) in the future (Fisher and
Raucher, 1984; DCN 4-0043). Altruistic values arise from interpersonal
concerns (valuing the happiness that others get from enjoying the
resource).
---------------------------------------------------------------------------
\51\ The benefits analysis of the proposed options for
potentially regulated Phase III facilities does not assess option
value as a distinct component of value because it is increasingly
recognized that option value ``cannot be a separate component of
value'' (Freeman, 2003; p. 249).
---------------------------------------------------------------------------
The economic value of benefits from the proposed options for Phase
III facilities is estimated using a range of valuation methods, with
the specific approach being dependent on the type of benefit category,
data availability, and other suitable factors. Commercial fishery
benefits are valued using market data. Recreational angling benefits
are valued using a combination of primary and secondary research
methods. Methodologies for estimating use values for recreational (non-
market values) and commercial (market values) species are well
developed, and some of these species have been extensively studied. As
a result, these values are relatively easy to estimate. A detailed
description of the approaches used for valuing commercial and
recreational benefits of the proposed options can be found in Chapters
A4 and A5 of the Regional Analysis Document.
Estimating benefits from reduced impingement and entrainment of
forage species is more challenging because these species are not
targeted directly by commercial or recreational anglers and have no
direct use values that can be observed in markets or inferred from
revealed actions of anglers. To estimate a portion of the indirect use
benefits from reducing impingement and entrainment losses to forage
species, EPA used a trophic transfer model that translates changes in
impingement and entrainment losses of forage fish into changes in the
harvest of commercial and recreational species that are subject to
impingement and entrainment (i.e., not the whole food web). This method
is described in Chapter A1 of Part A of the Regional Analysis Document.
Stated preference methods, or benefit transfer based on stated
preference studies, are the generally accepted techniques for
estimating non-use values.
Stated preference methods rely on carefully designed surveys, which
ask people either to state their willingness to pay for particular
ecological improvements, such as increased protection of aquatic
species or habitats with particular attributes; or to choose between
competing hypothetical ``packages'' of ecological improvements and
household cost. In either case, analysis of survey responses allows
estimation of values.
Economists generally consider non-use values more difficult to
assess than use values for several reasons:
a. Non-use values are not associated with easily observable
behavioral trails;
b. Non-use values may be held by both users and non-users of a
resource, and non-users may be less familiar with particular services
provided by affected resources;
c. The development of a defensible stated preference survey that
meets the NOAA blue ribbon panel requirements is often a time and
resource intensive process,\52\ and
---------------------------------------------------------------------------
\52\ The NOAA blue ribbon panel provided an extensive set of
guidelines for survey construction, administration, and analysis to
ensure that ``* * * CV produces estimates reliable enough to be the
starting point of a judicial process of damage assessment, including
passive-use values [i.e. non-use values]'' (see FR 58:10 pp.4601-
4614, 1993).
---------------------------------------------------------------------------
d. Even carefully designed surveys may be subject to certain biases
associated with the hypothetical nature of survey responses (Mitchell
and Carson 1989).
Reducing impingement and entrainment losses of fish and shellfish
may result in both use and non-use benefits. Of the organisms which are
anticipated to be protected by the proposed options for the section
316(b) regulation for Phase III facilities, approximately 3.3 percent
will eventually be harvested by commercial and recreational fishers and
therefore can be valued with direct use valuation techniques.
Unharvested fish, which have no direct use value, represent 96.7
percent of the total loss. These unlanded fish include forage fish and
the unlanded portion of the stock of harvested species. Because
unlanded fish contribute to the yield of harvested fish, they have an
indirect use value that is captured by the direct use value of the fish
that are caught. However, this indirect use value represents only a
portion of the total value of unlanded fish. In fact, society may value
both landed and unlanded fish for reasons unrelated to their use value.
Such non-use values include the value that people may hold simply for
knowing these fish exist. While non-use values are difficult to
quantify, EPA believes it is important to consider such values,
particularly since 96.7 percent of impinged and entrained organisms
have no direct use value.
EPA considered several approaches to quantifying non-use values for
the
[[Page 68515]]
proposed rule, including a stated preference study and meta-analysis of
surface water valuation studies. The Agency has begun exploring the
development of a stated preference survey that would measure non-use
benefits from reduced impingement and entrainment attributable to the
proposed options for the section 316(b) regulation for Phase III
facilities. Although this primary study effort could not be completed
in time for the publication of the proposed regulation, EPA expects to
complete the study in time to rely on its findings for the final
regulation. A number of studies have found that meta-analysis has
considerable promise in benefits transfer and that meta-analysis can
produce more reliable results than other benefit transfer methods
(Bergstrom and De Civita, 1999, DCN 6-3109; Florax et al., 2002, pp.
117-135, DCN 7-5132). However, the usefulness of meta-analysis results
is dependent on both the quality of the underlying studies and their
applicability to the policy question at hand. Given the difficulties in
estimating non-use benefits at the national level using benefit
transfer methods and the small number of studies that have attempted to
value fish losses, particularly those related to impingement and
entrainment at cooling water intake sites, EPA has not included
monetary measures of non-use values in the benefit analysis for the
proposed options. Instead, the Agency analyzed potential non-use
benefits of the proposed options qualitatively.
2. Timing of Benefits
Discounting is the economic conversion of future benefits and costs
to their present values, accounting for the fact that individuals tend
to value future outcomes less than comparable near-term outcomes.
Discounting is important when the value of benefits (or costs) may vary
from year to year and when the time profiles of benefits and costs are
not the same. Discounting enables a consistent comparison of benefits
to costs across time periods.
For the section 316(b) rulemaking, the difference in timing in
costs and benefits arises from two sources. First, facilities are not
expected to achieve compliance with the regulation until several years
after its promulgation. Benefits are equal to zero from the
promulgation of the rule (i.e., beginning of 2007) until facilities
reach compliance. Thus, EPA discounted the benefits from each facility
by the number of years between the year in which the rule is
promulgated and the year in which the facility complies. Since benefits
were estimated on a regional basis, EPA estimated benefits from each
facility by multiplying total regional benefits by the percentage of
total regional flow that is attributable to each facility. EPA used
current permit expiration information for model facilities to identify
the projected year of compliance for each facility in the analysis.
The second difference in timing in costs and benefits arises from
the fact that additional time will pass between implementation of best
technology available and resulting increased fishery yields. This is
because one or more years may pass between the time an organism is
spared impingement and entrainment and the time of its ultimate
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 installation of best technology
available 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 fisherman at age 2, there is a 1-year lag
between the installation of best technology available and the
subsequent commercial fishery benefit.
Recognizing that avoided fish deaths occur mainly in fish that are
younger than harvestable age (eggs, larvae and juveniles), and that the
benefits from avoided impingement and entrainment of these fish would
be realized typically 3-4 years after their avoided death, EPA
developed a benefits recognition schedule for facilities in each
region. The benefits schedule is based on an estimate of benefit delay
that reflects the estimated age and species composition of impingement
and entrainment losses, by region. Following achievement of compliance,
benefits from facilities in most regions are assumed to increase over a
7-year period to a long-term, steady State average, equal to the
approximated per-facility benefit value discussed above, according to a
numerical profile of < 0.0, 0.1, 0.2, 0.8, 0.9, 0.95, 1.0 >. This
profile indicates the fraction of the steady State benefit value that
is realized in each of the first seven years following the achievement
of compliance at a facility. After seven years, this fraction remains
1.0 for 23 additional years. After these combined 30 years the facility
is assumed to cease compliance, which is consistent with the time
period over which costs are evaluated. In the same way that the
benefits profile builds up over time following compliance, the benefits
profile declines at the end of the compliance period. Specifically, in
the seven years following the end of compliance, the fraction of the
steady State benefit value achieved follows the profile of < 1.0, 0.9,
0.8, 0.2, 0.1, 0.05, 0.0 >. Therefore, the analysis of benefits
encompasses a 37-year period starting with the first year of
compliance. There are 35 years when benefits do not equal zero for a
facility; 25 years when benefits are 100%; 10 years when benefits are a
percentage of the total. These profile values are approximations based
on a review of the age-specific fishing mortality rates that were used
in the impingement and entrainment analysis and best professional
judgment. Although EPA believes this approach is sufficient for this
analysis, EPA could potentially refine these profile values through the
use of a population model and will consider the feasibility of doing
so.
For regions with a relatively high contribution of impingement to
total impingement and entrainment (Inland, Great Lakes, and the Gulf of
Mexico regions), EPA used an adjusted benefits profile of < 0.1, 0.2,
0.8, 0.9, 0.95, 1.0 >. This adjusted profile reflects that impinged
fish are usually larger and older than entrained fish and thus benefits
will be realized sooner in these regions.
EPA used these profiles of benefits to calculate a total present
value of benefits and then to calculate a constant annual equivalent
value (annualized value) of the present value. EPA performed the
calculations of present value and annualized value using two discount
rate values: a rate of 3% and a rate of 7%. As described above, the
time profile of benefits, and therefore the discounting analysis,
varies by facility. For all facilities, the first year of the analysis
is 2007 (the promulgation of the rule). However, the first year in
which benefits are realized varies by facility. Following this year, as
outlined above, benefits increase over a six-or seven-year period,
remain constant until the 30th year, and then decline over a six-or
seven-year period. For a detailed discussion of the discounting
methodology, refer to Chapter A8, ``Discounting Benefits'' and for a
discussion of the time line of benefits, refer to Chapter H1, ``Total
National Benefits'' in the Regional Analysis Document (DCN 7-0003).
3. Recreational Fishing Valuation
The recreational fishing benefits of the proposed options for the
section 316(b) rule for Phase III facilities were estimated for six
study regions (North Atlantic, Mid-Atlantic, Gulf of Mexico,
California, Great Lakes, Inland) based on similarities in the affected
ecosystems, aquatic species present, and characteristics of
recreational fishing
[[Page 68516]]
activities within each of the six regions. To estimate recreational
benefits of the proposed options for Phase III facilities, EPA
developed a benefit 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. To validate the meta-analysis results, EPA also used
regional models of recreational fishing behavior developed for the
Phase II analysis (DCN 6-0003) to estimate benefits from reduced
impingement and entrainment at potentially regulated Phase III
facilities for the four coastal regions and the Great Lakes region.\53\
---------------------------------------------------------------------------
\53\ No RUM model was generated in the Phase II analysis for the
Inland region because of a lack of data for that region so we could
not verify the meta-analysis results for the Inland region.
---------------------------------------------------------------------------
a. Valuation Methods for Recreational Fishing
As the first step in its recreational fishing analysis, EPA
conducted a comprehensive review of recreational fishing valuation
literature to identify prior estimates of recreational use benefits
that may be applicable to the section 316(b) regulation. Based on this
review, EPA identified 48 studies that use established economic
estimation techniques to measure the value of changes in marine or
freshwater recreational catch (DCN 7-0003). All of these studies
provide estimates of the marginal value to fishermen of catching an
additional fish, or provide enough information for EPA to calculate
such a value.
To examine the relative influence of methodology, sample, and
fishery characteristics on the marginal value of catching an additional
fish, EPA conducted a regression-based meta-analysis of these 48
studies. Although the valuation studies include estimates for a large
number of different species, for the purposes of the model these
species were aggregated into groups of similar species, including four
saltwater species groups (big game, small game, flatfish, and other
saltwater), two anadromous species groups (salmon and steelhead trout),
and six freshwater species groups (panfish, bass, walleye/pike,
muskellunge, rainbow trout, and other trout). The other saltwater group
includes bottom fish species, species caught by anglers not targeting
any particular species, and species that did not clearly fit in one of
the other groups. The panfish group includes freshwater species such as
yellow perch, catfish, and other warm water species. For the meta-
analysis, some species groups were modeled interactively with regional
variables to allow for variation in species value across different
geographic regions.
The regression results from this analysis reveal both statistically
significant and intuitively correct patterns in the way that factors
influence the value to fishermen of catching an additional fish. These
results allow for calculation of the marginal value per fish for
different species based on resource and policy context characteristics.
Additional detail on the methods EPA used in this analysis can be found
in Chapter A5 of the Regional Analysis Document.
b. Validating the Recreational Analysis Based on the Region-Specific
RUM Models
EPA also analyzed recreational fishing benefits from reduced
impingement and entrainment based on region-specific random utility
models (RUM) of recreational anglers' behavior for the four coastal
regions and the Great Lakes region. These models were initially
developed by the Agency for analysis of the final section 316(b)
regulation for Phase II facilities.\54\ For that regulation, EPA
developed original RUM models for three of the four coastal regions
(California, the Mid-Atlantic, and the Gulf of Mexico) and the Great
Lakes region. For the North Atlantic region, EPA used a model developed
by the National Marine Fisheries Service (NMFS) by Hicks et al. (Hicks,
Steinback, Gautam, and Thunberg, 1999. Volume II: The Economic Value of
New England and Mid-Atlantic Sportfishing in 1994--DCN 5-1271). Chapter
A11 of the Phase II Regional Analysis Document provide more detailed
discussion of the methodology used in EPA's RUM analysis (DCN 7-0003).
---------------------------------------------------------------------------
\54\ The RUM models for the North Atlantic, Mid-Atlantic, Gulf
of Mexico, and California have not changed from the Phase II
analysis. The Great Lakes RUM model was slightly refined for the
Phase III analysis. The main differences between the Phase III and
Phase II models include: (1) The ability to estimate separate values
for yellow perch and bass and (2) the inclusion of site amenity
effects in the site choice model (Besedin et al., 2004: DCN 7-5000).
---------------------------------------------------------------------------
The regional recreational fishing studies used information on
recreational anglers' behavior to infer anglers' economic value for the
quality of fishing in the case study areas. The models' main assumption
is that anglers will get greater satisfaction, and thus greater
economic value, from sites where the catch rate is higher due to
reduced impingement and entrainment, all else being equal. This benefit
may occur in two ways: first, an angler may get greater enjoyment from
a given fishing trip when catch rates are higher, and thus get a
greater value per trip; second, anglers may take more fishing trips
when catch rates are higher, resulting in greater overall value for
fishing in the region. EPA modeled an angler's decision to visit a site
as a function of site-specific cost, fishing trip quality, and
additional site attributes such as presence of boat launching
facilities or fish stocking at the site.
The Agency used 5-year historical catch rates per hour of fishing
as a measure of baseline fishing quality in the regional studies. Catch
rate is a policy variable of concern because catch rate is a function
of fish abundance, which is affected by fish mortality caused by
impingement and entrainment.
The Agency used the estimated model coefficients in conjunction
with the estimated changes in impingement and entrainment in a given
region to estimate per-day welfare gain to recreational anglers due to
the proposed regulatory options for Phase III facilities. For the North
Atlantic region, EPA used model coefficients estimated by Hicks et al.
(1999) (DCN 5-1271).
To estimate the total economic value to recreational anglers for
changes in catch rates resulting from changes in impingement and
entrainment in a given region, EPA multiplied the total number of
fishing days for a given region by the estimated per-day welfare gain
due to the regulation. EPA estimated that the proposed regulatory
options for Phase III facilities would cause only negligible changes in
recreational fishing participation due to the improved quality of the
fishing sites. Therefore, the welfare estimates for the four coastal
regions and the Great Lakes are based on estimates of baseline
recreational fishing participation provided by NOAA Fisheries and the
Fish and Wildlife Service's Annual Survey of Fishing, Hunting, and
Wildlife-Related Recreation (U.S. Department of the Interior, 2001, DCN
6-3231).
Results of the RUM models are presented in Chapter B4 through F4 of
the Regional Analysis Document. In general, the RUM-based results fall
within the range of values estimated based on the meta-model.\55\ That
the values from the two independent analyses are relatively close
corroborates the use of meta-analysis in
[[Page 68517]]
estimating the value of incremental recreational fishing improvments
resulting from the proposed section 316(b) regulation for Phase III
facilities.
---------------------------------------------------------------------------
\55\ The RUM models produced lower estimated recreational
benefits in the Gulf of Mexico, Mid-Atlantic, and California
regions, and higher estimates in the Great Lakes and North Atlantic
regions. But no RUM estimates were outside of the lower and upper
bound meta analysis values computed using the Krinksy and Robb
approach.
---------------------------------------------------------------------------
c. Application of the Meta-Analysis Results to the Analysis of
Recreational Benefits of the Proposed 316(b) Rule
This section briefly discusses the use of the meta-analysis results
to estimate the recreational benefits of the regulatory options
evaluated for the proposed rule. Additional detail on this analysis,
including EPA's treatment of uncertainty in per fish values, can be
found in the Regional Analysis Document in Chapter A5. EPA began by
calculating per fish values from the meta-analysis regression
coefficients, based on regional and species specific values of the
input variables. Because estimates from regression meta-models are
subject to uncertainty, EPA used the Krinksy and Robb approach to
estimate lower and upper bound marginal values for each species (DCN 6-
3160). EPA also conducted a sensitivity analysis to determine how per
fish values could change based on different selections for the
independent variables. The per fish values and bounds used in this
analysis of the recreational benefits of the regulatory options are
based on EPA's best estimates of values for independent variables. The
resulting per fish values are presented in Exhibit IX-6.
Exhibit IX-6.--Estimated Marginal Value per Fish to Recreational Anglers
----------------------------------------------------------------------------------------------------------------
Marginal value per fish caught, by region: saltwater fish \a\ (June 2003 $)
-----------------------------------------------------------------------------
Region Other
Small game Flatfish saltwater
\b\
----------------------------------------------------------------------------------------------------------------
California........................ $12.57 $15.61 $4.52
North Atlantic.................... 7.64 8.06 4.20
Mid-Atlantic...................... 6.87 6.91 3.73
Gulf of Mexico.................... 5.32 ........... 2.88
-----------------------------------
Marginal value per fish caught, by region: freshwater fish \a\ (June 2003 $)
--------------
Region Small game Walleye/ Bass Panfish Salmon Trout \d\
\c\ Pike
-----------------------------------
Great Lakes....................... ........... $4.58 $5.90 $1.06 $11.19 $7.99
Inland............................ $7.38 5.15 6.96 0.97 ........... 2.79
----------------------------------------------------------------------------------------------------------------
\a\ Marginal values per fish are presented only for species in regions in which they are affected by one of the
regulatory options evaluated for the proposed rule.
\b\ Other saltwater species include bottom fish and other miscellaneous species.
\c\ Anadromous species such as striped bass and American shad can be found in freshwater coastal rivers as well
as in saltwater.
\d\ The trout category includes all trout species except rainbow trout and lake trout.
To estimate the benefits of the alternative regulatory options, EPA
multiplied the per fish values from Exhibit IX-6 by the number of
additional fish that would be caught by anglers under each regulatory
option due to reductions in impingement and entrainment, compared to
current levels of recreational catch. Exhibits IX-7, IX-8, and IX-9
present the results of these calculations for the ``50 MGD for All
Waterbodies,'' ``200 MGD for All Waterbodies,'' and ``100 MGD for
Certain Waterbodies'' options. The proportion of impingement and
entrainment losses of fishery species that were valued as lost
recreational catch was determined from stock-specific fishing mortality
rates, which indicate the fraction of a stock that is harvested by
recreational anglers. Because fishing mortality rates are typically
less than 20 percent, a proportion of the losses of fishery species
were not valued in the recreational benefits analysis.
Exhibit IX-7 shows the annual increase in total recreational catch
and resulting monetized benefits resulting from the ``50 MGD for All
Waterbodies'' option. The exhibit shows that compared to the current
national level of recreational catch, anglers would catch 620,000
additional fish per year under this option, resulting in total
undiscounted benefits of $2.12 million per year. The annualized value
of these additional fish is $1.77 million and $1.39 million, evaluated
at 3 percent and 7 percent discount rates, respectively. Increased
recreational catch is largest in the Gulf of Mexico region, where the
rule would increase annual recreational catch by 183,000 fish,
resulting in an undiscounted recreational welfare gain of $0.67
million.
Exhibit IX-7 also presents lower and upper confidence bounds for
the benefits of the ``50 MGD for All Waterbodies'' option. These bounds
are based on using the Krinsky and Robb technique to estimate the 95th
and 5th confidence limits on the marginal value per fish predicted by
the meta-analysis. Undiscounted national benefits of this option range
from $1.02 million to $4.47 million per year, and benefits in the Gulf
of Mexico region range from $0.30 million to $1.50 million per year,
based on 90 percent confidence limits on the marginal value per fish
predicted by the meta-analysis.
Exhibit IX-7.--Recreational Benefits Under the ``50 MGD for All Waterbodies'' Option
----------------------------------------------------------------------------------------------------------------
Increase in Annualized benefits (thousands, 2003 $) \a\
annual -----------------------------------------------
recreational
catch compared
Region to current
recreational Low Mean High
catch
(thousands of
fish)
----------------------------------------------------------------------------------------------------------------
California...................................... 5 $12 $28 $66
[[Page 68518]]
North Atlantic.................................. 13 36 77 169
Mid-Atlantic.................................... 159 290 612 1,301
Gulf of Mexico.................................. 183 298 667 1,499
Great Lakes..................................... 92 192 385 756
Inland.......................................... 167 189 358 675
National total (evaluated at 3%) \c\............ 620 843 1,765 3,704
National total (evaluated at 7%) \c\............ 620 665 1,391 2,919
----------------------------------------------------------------------------------------------------------------
\a\ Lower and upper bounds are calculated using the Krinsky and Robb technique to estimate the 95th and 5th
percentile limits on the marginal value per fish predicted by the meta-analysis.
\b\ Undiscounted benefits are calculated from the annual increase in recreational catch, evaluated at a steady
State condition. All regional results presented in this table are undiscounted. Undiscounted benefits are not
directly comparable to cost.
\c\ Annualized benefits represent the value of all recreational benefits generated over the time frame of the
analysis, discounted to 2007, and then annualized over a thirty year period. For a more detailed discussion of
the discounting methodology, refer to section IX.D.2 of this preamble.
Exhibit IX-8 shows the annual increase in recreational catch and
resulting monetized benefits resulting from the ``200 MGD for All
Waterbodies'' option. The exhibit shows that compared to the current
national level of recreational catch, anglers would catch 419,000
additional fish per year under this option, resulting in total
undiscounted benefits of $1.43 million per year. The annualized value
of these additional fish is $1.18 million and $0.92 million, evaluated
at 3 percent and 7 percent, respectively. Increased recreational catch
is largest in the Mid-Atlantic region, where this option would increase
annual recreational catch by 141,000 fish, resulting in an undiscounted
welfare gain of $0.55 million.
The exhibit also presents lower and upper confidence bounds for the
benefits of the ``200 MGD for All Waterbodies'' option. Undiscounted
national benefits of this option range from $0.69 million to $2.99
million per year, and benefits in the Mid-Atlantic region range from
$0.26 million to $1.16 million per year, based on 90 percent confidence
limits on the marginal value per fish predicted by the meta-analysis.
Exhibit IX-8.--Recreational Benefits Under the ``200 MGD for All Waterbodies'' Option
----------------------------------------------------------------------------------------------------------------
Increase in Annualized benefits (thousands, 2003 $) \a\
annual -----------------------------------------------
recreational
catch compared
Region to current
recreational Low Mean High
catch
(thousands of
fish)
----------------------------------------------------------------------------------------------------------------
California...................................... 0 $0 $0 $0
North Atlantic.................................. 3 8 16 36
Mid-Atlantic.................................... 141 258 545 1,158
Gulf of Mexico.................................. 100 163 364 819
Great Lakes..................................... 64 132 266 523
Inland.......................................... 111 128 242 456
National total (evaluated at 3%) \c\............ 419 567 1,181 2,463
National total (evaluated at 7%) \c\............ 419 443 922 1,922
----------------------------------------------------------------------------------------------------------------
\a\ Lower and upper bounds are calculated using the Krinsky and Robb technique to estimate the 95th and 5th
percentile limits on the marginal value per fish predicted by the meta-analysis.
\b\ Undiscounted benefits are calculated from the annual increase in recreational catch, evaluated at a steady
State condition. All regional results presented in this table are undiscounted. Undiscounted benefits are not
directly comparable to cost.
\c\ Annualized benefits represent the value of all recreational benefits generated over the time frame of the
analysis, discounted to 2007, and then annualized over a thirty year period. For a more detailed discussion of
the discounting methodology, refer to section IX.D.2 of this preamble.
Exhibit IX-9 shows the annual increase in recreational catch and
resulting monetized benefits resulting from the ``100 MGD for Certain
Waterbodies'' option. The exhibit shows that compared to the current
national level of recreational catch, anglers would catch 407,000
additional fish per year under this option, resulting in total
undiscounted benefits of $1.57 million per year. The annualized value
of these additional fish is $1.29 million and $1.01 million, evaluated
at 3 percent and 7 percent, respectively. Increased recreational catch
is largest in the Gulf of Mexico, where this option would increase
annual recreational catch by 183,000 fish, resulting in an
[[Page 68519]]
undiscounted welfare gain of $0.67 million.
The exhibit also presents lower and upper confidence bounds for the
benefits of the ``100 MGD for Certain Waterbodies'' option.
Undiscounted national benefits of this option range from $0.73 million
to $3.38 million per year, and benefits in the Gulf of Mexico region
range from $0.30 million to $1.50 million per year, based on 90 percent
confidence limits on the marginal value per fish predicted by the meta-
analysis.
Exhibit IX-9.--Recreational Benefits Under the ``100 MGD for Certain Waterbodies'' Option
----------------------------------------------------------------------------------------------------------------
Increase in Annualized benefits (thousands, 2003 $) \a\
annual -----------------------------------------------
recreational
catch compared
Region to current
recreational Low Mean High
catch
(thousands of
fish)
----------------------------------------------------------------------------------------------------------------
California...................................... 0 $0 $0 $0
North Atlantic.................................. 11 29 63 137
Mid-Atlantic.................................... 141 258 545 1,158
Gulf of Mexico.................................. 183 298 667 1,499
Great Lakes..................................... 72 148 299 586
Inland.......................................... 0 0 0 0
-----------------
National total (undiscounted) \b\............... 407 733 1,573 3,380
National total (evaluated at 3%) \c\............ 407 602 1,292 2,779
National total (evaluated at 7%) \c\............ 407 468 1,006 2,164
----------------------------------------------------------------------------------------------------------------
\a\ Lower and upper bounds are calculated using the Krinsky and Robb technique to estimate the 95th and 5th
percentile limits on the marginal value per fish predicted by the meta-analysis.
\b\ Undiscounted benefits are calculated from the annual increase in recreational catch, evaluated at a steady
State condition. All regional results presented in this table are undiscounted. Undiscounted benefits are not
directly comparable to cost.
\c\ Annualized benefits represent the value of all recreational benefits generated over the time frame of the
analysis, discounted to 2007, and then annualized over a thirty year period. For a more detailed discussion of
the discounting methodology, refer to section IX.D.2 of this preamble.
d. Limits and Uncertainties
Benefit transfers by definition are characterized by a difference
between the context in which resource values are estimated and that in
which benefit estimates are desired. The ability of meta-analysis to
adjust for the influence of study, economic, and resource
characteristics on recreational values can minimize, but not eliminate,
potential biases. The meta-analysis model presented here provides a
close but not perfect match to the context in which values are desired.
Some of the key limitations inherent to the meta-model and the
subsequent benefit transfer are the following:
A. The per fish values estimated from the model depend on the
values of the input variables in the meta-analysis. EPA assigned values
to the input variables based on established economic theory and
characteristics of the affected species and regions. However, because
the input values for some variables are uncertain, the resulting per
fish values and benefits estimates are also uncertain.
B. As mentioned above, the economic and resource characteristics of
the 48 studies used in the meta-analysis are not perfectly matched to
the economic and resource characteristics of sites affected by the
regulatory options evaluated for the proposed rule. In particular,
although most of the Inland studies take place in the Great Lakes
region, the regulatory options affect sites all across the Inland
region. However, EPA believes that regional differences in per fish
values for specific Inland species are relatively small.
C. By aggregating species into categories, EPA was able to improve
the fit of the meta-analysis model. However, this aggregation results
in a lower level of detail in the values that can be predicted. In
particular, the panfish category and other saltwater category include
relatively diverse species.
D. Projected changes in recreational catch may be overestimated
because potential compensatory effects in affected species'
reproduction or survival rates were not taken into account.
E. In estimating recreational fishery losses, EPA used impingement
and entrainment data provided by the facilities. While EPA used the
most current data available, in some cases these data are 20 years old
or older. Thus, they may not reflect current conditions. Also, data
from Phase II facilities may not be representative of Phase III
facilities.
F. Impingement and entrainment estimates include only individuals
directly lost to impingement and entrainment, not their progeny, and
may therefore be underestimates.
G. In estimating the benefits of improved recreational angling, the
Agency only assigned a monetary benefit to the increases in consumer
surplus for the baseline number of fishing days. Thus, benefits will be
understated if participation increases in response to increased
availability of fishery species as a result of reduced impingement and
entrainment. This approach omits the portion of recreational fishing
benefits that arise when improved conditions lead to higher levels of
participation. Empirical evidence suggests that the omission of
increased angling days can lead to an underestimate of total
recreational fishing benefits. However, the magnitude of this error is
likely to be small.
4. Commercial Fishing Valuation
Reductions in impingement and entrainment at cooling water intake
structures are expected to benefit the commercial fishing industry. The
effect is straightforward: Reducing the number of fish killed will
probably increase the number of fish available for harvest. Measuring
the benefits of this effect is less straightforward. This section
presents the methods EPA used to estimate commercial benefits, as well
as the resulting benefits estimates.
a. Methods
EPA estimated commercial benefits by first estimating the value of
total losses under current impingement and entrainment conditions (or
the total
[[Page 68520]]
benefits of eliminating all impingement and entrainment). Then, based
on review of the empirical literature, EPA assumed that producer
surplus is equal to 40 percent of baseline losses. Finally, EPA
estimated benefits under different options for the proposed section
316(b) rule for Phase III facilities by applying the estimated
percentage reduction in impingement and entrainment to the estimated
producer surplus to obtain the estimated increase in producer surplus
attributable to the option. This methodology was applied in each region
except the Inland region (which does not include any significant
commercial fishing). See Chapter A4 of the Regional Analysis Document
for details about EPA's methodology.
To determine regional losses and benefits, EPA conducted several
analyses. EPA estimated losses to commercial harvest (in pounds of
fish) attributable to impingement and entrainment under current
conditions by modeling these fish losses by applying a linear stock-to-
harvest assumption (i.e., a 10 percent change in the stock would result
in a 10 percent change in harvest). The percentage of fish harvested is
based on data on historical fishing mortality rates. EPA estimated
gross revenue of lost commercial catch (i.e., the increase in gross
revenue that would be expected if all current impingement and
entrainment were eliminated) by using landings and dockside prices ($/
lb) as reported by the NOAA Fisheries for the period 1991-2001. The
conceptually suitable measure of benefits is the sum of any changes in
producer and consumer surplus. The methods used for estimating the
change in surplus depend on whether the physical impact on the
commercial fishery market appears sufficiently small such that it is
reasonable to assume there will be no appreciable price changes in the
markets for the impacted fisheries.
For the regions and magnitude of losses included in this analysis,
it is reasonable to assume no change in price, which implies that the
welfare change is limited to changes in producer surplus. This change
in producer surplus is assumed to be equivalent to a portion of the
change in gross revenues. EPA assumes a range of 0 percent to 40
percent of the estimated gross revenue losses as a means of estimating
the change in producer surplus. This is based on a review of empirical
literature and is consistent with recommendations made in comments on
the Phase II proposal.
EPA believes this is a reasonable approach to estimating producer
surplus when there are no anticipated price changes. EPA's (2000)
Guidelines for Preparing Economic Analyses (EPA 240-R-00-003) describes
options for estimating ecological benefits for fisheries, and notes
that ``if changes in service flows are small, current market prices can
be used as a proxy for expected benefit * * * a change in the
commercial fish catch might be valued using the market price for the
affected species.'' In EPA's review of the commercial fishing
literature two alterative methods for computing producer surplus as a
percentage of gross revenues also came to the fore. The more common
approach to calculating benefits relies on estimating normal profit as
a percentage of gross revenue. In the surveyed studies this percentage
of gross review ranges from -5 percent to 91.2 percent. The second
approach to estimating commercial benefits, which may produce the more
appropriate measure of welfare, computes the producer surplus as a
percentage of gross revenue. The studies that use this method return
percentages that range from 0 to 37, due to reduced profit estimates
that include a return to the owners as part of costs. In light of these
findings EPA has chosen to use 0 percent to 40 percent as the estimated
range of percent of gross revenue that best captures the additional
benefit that will accrue to commercial fishers.
Once the commercial surplus losses associated with impingement and
entrainment under baseline conditions have been estimated, EPA
estimates the percentage reduction in impingement and entrainment at
each facility under each regulatory option. This analysis is conducted
for each region.
b. Results
Exhibit IX-10 presents the estimated annualized commercial fishing
benefits attributable to three co-proposed options: The ``50 MGD for
All Waterbodies'' option (50 MGD All); the ``200 MGD for All
Waterbodies'' option (200 MGD All); and the ``100 MGD for Certain
Waterbodies'' option (100 MGD oceans, estuaries, tidal rivers, or one
of the Great Lakes). The results reported include the total reduction
in losses in pounds of fish and the value of this reduction discounted
at 0 percent, 3 percent, and 7 percent. Total annualized commercial
fishing benefits, applying a 3 percent discount rate, are estimated to
be $0 to $132,000 per year for the 50 MGD option, $0 to $79,000 per
year for the 200 MGD option, and $0 to $118,000 per year for the 100
MGD for certain waterbodies option. When a 7 percent discount rate is
applied, the total annualized commercial fishing benefits for the 50
MGD option are estimated to be $0 to $104,000, under the 200 MGD option
benefits equal $0 to $79,000, and for the 100 MGD for certain
waterbodies option the discounted benefits are $0 to $93,000.
Exhibit IX-10.--Annualized Commercial Fishing Benefits for Impinged and Entrained Fish Expected Under the Co-
Proposed Options a
----------------------------------------------------------------------------------------------------------------
Reduction in lost yield (thousands of Benefits (thousands; $ 2003) c d
lbs) --------------------------------------
---------------------------------------
Region \b\ 100 MGD 100 MGD
50 MGD all 200 MGD all certain 50 MGD all 200 MGD all certain
waterbodies waterbodies
----------------------------------------------------------------------------------------------------------------
California........................ 16 0 0 $6 $0 $0
North Atlantic.................... 8 2 6 4 1 3
Mid-Atlantic...................... 459 408 408 31 27 27
Gulf of Mexico.................... 313 171 313 93 51 93
Great Lakes....................... 86 59 66 25 17 19
--------------
National total,\e\ (undiscounted). 882 640 794 159 96 143
National total, (evaluated at 3%). 882 640 794 132 79 118
National total, (evaluated at 7%). 882 640 794 104 62 93
----------------------------------------------------------------------------------------------------------------
\a\ Benefits are upper bound benefits based on 40% of gross revenue. The lower bound is $0.
\b\ No significant commercial fishing takes place in the Inland region, and thus this region is excluded from
this analysis.
\c\ Discounted to account for lag in implementation and lag in time required for fish lost to I&E to reach a
harvestable age.
[[Page 68521]]
\d\ Annualized benefits represent the value of all commercial benefits generated over the time frame of the
analysis, discounted to 2007, and then annualized over a thirty year period. For a more detailed discussion of
the discounting methodology, refer to Section IX.D.2 of this preamble.
\e\ Undiscounted benefits are not comparable to costs.
c. Limitations and Uncertainties
Some of the major uncertainties and assumptions of EPA's commercial
fishing analysis include:
A. The analysis only includes individuals that are directly killed
by impingement and entrainment, not their progeny and may therefore
underestimate projected changes in harvest.
B. Projected changes in commercial catch may be overestimated
because potential compensatory effects in affected species'
reproduction or survival rates were not taken into account.
C. Projected changes in harvest may be too high or too low because
interactions with other stressors are not considered.
D. EPA used impingement and entrainment data provided by the
facilities. While EPA used the most current data available, in some
cases these data are 20 years old or older. Thus, they may not reflect
current conditions. Also data from Phase II facilities may not be
representative of Phase III facilities.
E. EPA assumes a linear stock to harvest relationship (i.e., a 10
percent change in stock would have a 10 percent change in landings);
this may be low or high, depending on the condition of the stocks.
Region-specific fisheries regulations also will affect the validity of
the linear assumption.
F. EPA assumes that NOAA Fisheries landings data are accurate and
complete. However, in some cases prices and/or quantities may be
reported incorrectly.
G. EPA currently estimates that the increase in producer surplus as
a result of the rule will be between 0 percent and 40 percent of the
estimated change in gross revenues. The research used to develop this
range is not region-specific; thus the true value may fall outside this
range for some regions and species.
5. Non-Use Benefits
To assess public policy significance or importance of the
ecological gains from the proposed regulation for Phase III facilities,
EPA developed the relevant information and considered non-use benefits
of the proposed options qualitatively. This assessment is discussed
below.
a. Qualitative Assessment
EPA is able to assign direct use value to only a very small
fraction of the fish lost to impingement and entrainment. As shown in
Exhibit IX-11, fish with a direct use value, which include only those
fish that are harvested, account for only 3.3 percent of the total age-
1 equivalent impingement and entrainment loss. Unharvested fish (i.e.,
forage fish and the unlanded portion of the stock of harvested
species), which have no direct use value, represent 96.7 percent of the
total loss. A portion of the total benefits of these unharvested
commercial, recreational, and forage species, can be derived indirectly
from the estimated use values of the harvested animals. As noted in
section IX.D.1, society may value both landed and unlanded fish for
reasons unrelated to their use value. Such non-use values include the
value that people may hold simply for knowing these fish exist. EPA
believes it is important to consider such values, at least
qualitatively, particularly since such a large percentage of impinged
and entrained organisms have no direct use value.
Exhibit IX-11.--Number and Percentage of Baseline Impingement and Entrainment Losses by Species Category
----------------------------------------------------------------------------------------------------------------
Age-1 adult equivalents (millions)
------------------------------------------------------------------
I&E of
Commercial Harvested harvested
Region Forage and commercial species as
All species species recreational and percentage
species recreational of total
species I&E
----------------------------------------------------------------------------------------------------------------
California................................... 1.31 0.666 0.642 0.0594 4.54
North Atlantic............................... 2.34 1.77 0.572 0.0542 2.32
Mid-Atlantic................................. 23.2 14.8 8.47 1.46 6.29
South Atlantic............................... 1.52 0.78 0.74 .011 7.41
Gulf of Mexico............................... 12.7 3.71 9.01 1.2 9.43
Great Lakes.................................. 34.4 32.8 1.54 0.543 1.58
Inland....................................... 44.2 35.6 8.6 0.511 1.15
--------------
National total \a\....................... 120 90.2 29.6 3.94 3.29
----------------------------------------------------------------------------------------------------------------
\a\ The national total includes baseline impingement and entrainment losses at four sample-weighted potentially
regulated facilities in the South Atlantic region.
Changes in cooling water intake system design or operations
resulting from the proposed section 316(b) regulations for Phase III
facilities are expected to reduce impingement and entrainment losses of
fish, shellfish, and other aquatic organisms and, as a result, are
expected to increase the numbers of individuals present and benefit
local and regional fishery populations. Depending on the nature and
magnitude of the reduced losses and of conditions at a given site, this
may ultimately contribute to the enhanced environmental functioning of
affected waterbodies (rivers, lakes, estuaries, and oceans) and
associated ecosystems. EPA does not have the data to determine whether
reducing impingement and entrainment losses at Phase III facilities
will have significant ecological benefits. However, the discussion that
follows describes benefits that may result from reducing impingement
and entrainment losses generally.
EPA believes that reducing fish mortality from impingement and
[[Page 68522]]
entrainment would contribute to the health and sustainability of the
affected fish populations by reducing the overall level of mortality
for those populations. Fish populations suffer from numerous sources of
mortality; some are natural and others are anthropogenic. Natural
sources include weather, predation by other fish, and the availability
of food. Human impacts that affect fish populations include fishing,
pollution, habitat changes, and impingement and entrainment losses at
cooling water intake structures. Fish populations decline when they are
unable to sufficiently compensate for their overall level of mortality.
Lowering the overall mortality level increases the probability that a
population will be able to compensate for mortality at a level
sufficient to maintain the long-term health of the population.
In addition to their importance in providing food and other goods
of direct use to humans, the organisms lost to impingement and
entrainment may be critical to the continued functioning of the
ecosystems of which they are a part depending on the magnitude of the
actual impingement and mortality losses attributable to Phase III
facilities. The discussion that follows describes the kinds of impacts
that EPA believes may be due to impingement mortality and entrainment
losses generally, not necessarily those at Phase III facilities. Fish
are essential for energy transfer in aquatic food webs, regulation of
food web structure, nutrient cycling, maintenance of sediment
processes, redistribution of bottom substrates, the regulation of
carbon fluxes from water to the atmosphere, and the maintenance of
aquatic biodiversity (Peterson and Lubchenco, 1997; Postel and
Carpenter, 1997; Holmlund and Hammer, 1999; Wilson and Carpenter,
1999). Examples of impacts on ecological conditions, functions and
services that may result from impingement and entrainment include: (1)
Decreased numbers of ecological keystone, rare, sensitive, or
threatened and endangered species; (2) decreased numbers of popular
commercial and recreational fish species that are not fished, perhaps
because the fishery is closed; (3) increased numbers of exotic or
disruptive species that compete well in the absence of species lost to
impingement and entrainment (impingement and entrainment may also help
remove some exotic or disruptive organisms); (4) disruption of
ecological niches and ecological strategies used by aquatic species;
(5) disruption of energy transfer through the food web; (6) decreased
local biodiversity; (7) disruption of predator-prey relationships; (8)
disruption of age class structures of species; (9) disruption of
natural succession processes. Many of these functions and services can
only be maintained by the continued presence of all life stages of fish
and other aquatic species in their natural habitats. While some
ecological services of aquatic species have been studied, other
ecosystems services, relationships, and interrelationships are unknown
or poorly understood. To the extent that the latter are not captured in
the benefits analyses, total benefits may be underestimated.
Scientific and public interest in protecting ecosystem services is
increasing with the recognition that these services are vulnerable to a
wide range of human activities and are difficult, if not impossible, to
replace with human technologies (Meffe, 1992; DCN 7-5250). Reducing
impingement and entrainment losses could contribute to restoring (or
preserving) the biological integrity of the ecosystems of substantial
national importance.
In the 1987 amendments to the CWA, Congress established the
National Estuary Program because the ``Nation's estuaries are of great
importance to fish and wildlife resources and recreation and economic
opportunity * * * [, and] maintaining the health and ecological
integrity of these estuaries is in the national interest (Water Quality
Act of 1987 (Pub. L. 100-4), Sec. 317(a)(1)(A) and (B) adding Sec.
320 to the CWA, 33 US.C. 1330). So far, there are 28 estuaries
designated under the National Estuary Program (NEP). In addition, the
largest estuary in the United States, Chesapeake Bay, is protected
under its own Federally mandated program, separate but related to NEP.
Of the 15 estuaries from which the potentially regulated Phase III
facilities withdraw cooling water, 12 are nationally significant
estuaries designated under NEP or the Chesapeake Bay Program.
Substantial Federal and State resources have been directed to NEP
to enhance conservation and knowledge about the estuaries designated
under this program. Since 1998, more than $95 million dollars has been
devoted to NEP to benefit the health of the nationally significant
estuaries (NEP, 2004, DCN 7-5125).
Reducing impingement and entrainment at potentially regulated Phase
III facilities may also benefit freshwater ecosystems of national
significance, including the Great Lakes Basin, Mississippi River, and
Columbia River. These waterbodies are subject to large-scale ecosystem
restoration efforts that are good indicators of great public interest
in restoring the ecological health of these ecosystems (U.S. Fish and
Wildlife Service, 2004, DCN 7-5126; U.S. Department of the Interior,
2004, DCN 7-5127; Northeast Midwest Institute, 2004, DCN 7-5128; The
Upper Mississippi River Basin Association, 2004, DCN 7-5129). The
ecosystem restoration efforts focus on many issues, including coastal
habitat restoration, protection of fish species, conservation of
migratory birds and endangered species. For example, between 1992 and
2001, more than $17 million was devoted to projects to restore and
conserve the Great Lakes ecosystem, and $102 million was spent on
improving the Mississippi River ecosystem (U.S. EPA, 2004, DCN 7-5130;
and Brescia, 2002, DCN 7-5131). Reducing impingement and entrainment of
aquatic organisms may improve the quality of aquatic habitat and
contribute to improvement of the biological integrity and health of
these ecosystems.
Finally, reducing impingement and entrainment in waterbodies that
do not have national significance may contribute to restoration or
protection of ecosystems of regional or local importance.
Today's proposed rule may also help preserve threatened and
endangered species by reducing the number of individuals lost to
impingement and entrainment. Threatened and endangered (T&E) and other
special status species directly affected by impingement and entrainment
include, pallid sturgeon, delta smelt, Sacramento splittail, and
longfin smelt. Threatened and endangered species can also suffer
indirect impacts if impingement and entrainment at cooling water intake
structures disrupts their food source or their critical habitat. The
loss of individuals of listed species from impingement and entrainment
is particularly important because, by definition, these species are
already rare and at risk of irreversible decline because of other
stressors. EPA explored several methods for valuing reductions in
threatened and endangered species losses. However, EPA has not included
quantitative measures of non-use values associated with protection of
threatened and endangered species in the proposed section 316(b) rule
for Phase III facilities benefit analysis due to current uncertainty
about the extent of Phase III facilities' impact on threatened and
endangered species at the national level and EPA's inability to
monetize such benefits given the available economic valuation
literature. Details about possible non-use benefits valuation
approaches are presented in Chapter A9
[[Page 68523]]
of the 316(b) Regional Analysis Document (DCN 7-0003).
6. National Benefits
Quantifying and monetizing reduction in impingement and entrainment
losses due to today's proposed rule is challenging, and the preceding
sections discuss specific limitations and uncertainties associated with
estimation of commercial, recreational, and non-use benefit categories.
National benefit estimates are subject to uncertainties inherent in
valuation approaches used for assessing the three benefits categories.
The combined effect of these uncertainties is of unknown magnitude or
direction (i.e., the estimates may over or under state the anticipated
national-level benefits); however, EPA has no data to indicate that the
results for each benefit category are atypical or unreasonable. Since
the Agency was unable to monetize non-use benefits, the estimates of
total benefits reflect use values only.
Exhibit IX-13 presents EPA's estimates of the total monetized
benefits from impingement and entrainment reduction under the ``50 MGD
for All Waterbodies'' option. The annualized use benefits from
impingement and entrainment reduction post regulation are $1.90 million
per year (2003$), with lower and upper bounds of $0.98 million and
$3.84 million, discounted at three percent. Discounted at seven
percent, annualized use benefits are $1.50 million per year, with lower
and upper bounds of $0.77 million and $3.02 million.
Exhibit IX-13.--Summary of Monetized Social Benefits ``50 MGD for All Waterbodies'' Option
[Thousands; 2003 $] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized recreational fishing Total annualized value of monetizable
Annualized benefits impingement and entrainment
Region commercial --------------------------------------- reductions \b\
fishing --------------------------------------
benefits Low Mean High Low Mean High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Evaluated at a 3 percent discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California................................................... $0-$5 $10 $24 $57 $16 $29 $62
North Atlantic............................................... 0-3 29 63 138 32 66 141
Mid-Atlantic................................................. 0-25 235 497 1,057 260 522 1,082
Gulf of Mexico............................................... 0-78 249 558 1,254 327 636 1,332
Great Lakes.................................................. 0-20 157 316 621 178 337 641
Inland \c\................................................... 0 162 306 577 162 306 577
--------------
National total........................................... 0-132 843 1,765 3,704 975 1,897 3,836
--------------------------------------------------------------
Evaluated at a 7 percent discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California................................................... 0-4 9 20 47 13 24 51
North Atlantic............................................... 0-2 22 49 107 25 51 109
Mid-Atlantic................................................. 0-19 181 382 811 200 401 830
Gulf of Mexico............................................... 0-62 198 444 998 260 506 1,061
Great Lakes.................................................. 0-16 122 246 483 138 262 499
Inland \c\................................................... 0 133 251 473 133 251 473
--------------
National total........................................... 0-104 665 1,391 2,919 769 1,495 3,023
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ All benefits presented in this exhibit are annualized. These annualized benefits represent the value of all benefits generated over the time frame
of the analysis, discounted to 2007, and then annualized over a thirty year period. For a more detailed discussion of the discounting methodology,
refer to section IX.D.2 of this preamble.
\b\ The total monetizable value of impingement and entrainment reductions includes use benefits only. EPA evaluated non-use benefits only
qualitatively. A range of recreational fishing benefits is provided, based on the Krinsky and Robb technique to estimate the 95th and 5th percentile
limits on the marginal value per fish predicted by the meta-analysis. Commercial fishing benefits are computed based on a range from 0 percent to 40
percent of the change in gross revenue, as explained in the text. To calculate the total monetizable value columns (low, mean, and high), the high end
value for commercial fishing benefits is added to the low, medium and high values for recreational fishing benefits respectively.
\c\ There are no commercial fishing benefits in the Inland region.
Exhibit IX-14 presents EPA's estimates of the total monetized
benefits from impingement and entrainment reduction under the ``200 MGD
for All Waterholes'' option. The annualized use benefits from
impingement and entrainment reduction post regulation are $1.26 million
per year (2003$), with lower and upper bounds of $0.65 million and
$2.54 million, discounted at three percent. Discounted at seven
percent, annualized use benefits are $0.98 million per year, with lower
and upper bounds of $0.51 million and $1.98 million.
[[Page 68524]]
Exhibit IX-14.--Summary of Monetized Social Benefits ``200 MGD for All Waterbodies'' Option
[Thousands; 2003 $] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized recreational fishing Total annualized value of monetizable
Annualized benefits impingement and entrainment
Region commercial --------------------------------------- reductions \b\
fishing --------------------------------------
benefits Low Mean High Low Mean High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Evaluated at a 3 percent discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California................................................... $0 $0 $0 $0 $0 $0 $0
North Atlantic............................................... 0-1 6 13 28 7 14 29
Mid-Atlantic................................................. 0-22 208 440 934 230 462 956
Gulf of Mexico............................................... 0-43 136 305 685 179 347 728
Great Lakes.................................................. 0-14 108 216 425 122 230 439
Inland \c\................................................... 0 110 207 390 110 207 390
--------------
National total........................................... 0-79 567 1,181 2,463 647 1,260 2,542
--------------------------------------------------------------
Evaluated at a 7 percent discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California................................................... 0 0 0 0 0 0 0
North Atlantic............................................... 0 4 10 21 5 10 21
Mid-Atlantic................................................. 0-17 158 334 709 175 350 726
Gulf of Mexico............................................... 0-34 108 243 545 142 277 579
Great Lakes.................................................. 0-11 83 166 326 93 177 337
Inland \c\................................................... 0 90 170 321 90 170 321
--------------
National total........................................... 62 443 922 1,922 505 984 1,984
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ All benefits presented in this exhibit are annualized. These annualized benefits represent the value of all benefits generated over the time frame
of the analysis, discounted to 2007, and then annualized over a thirty year period. For a more detailed discussion of the discounting methodology,
refer to section IX.D.2 of this preamble.
\b\ The estimate of the total monetizable value of impingement and entrainment reductions includes use benefits only.
\c\ There are no commercial fishing benefits in the Inland region.
Exhibit IX-15 presents EPA's estimates of the total monetized
benefits from impingement and entrainment reduction under the ``100 MGD
for Certain Waterbodies'' option. The annualized use benefits from
impingement and entrainment reduction post regulation are $1.41 million
per year (2003$), with lower and upper bounds of $0.72 million and
$2.90 million, discounted at three percent. Discounted at seven
percent, annualized use benefits are $1.10 million per year, with lower
and upper bounds of $0.56 million and $2.26 million.
Exhibit IX-15.--Summary of Monetized Social Benefits ``100 MGD for Certain Waterbodies'' Option
[Thousands; 2003 $] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized recreational fishing Total annualized value of monetizable
Annualized benefits impingement and entrainment
Region commercial --------------------------------------- reductions \b\
fishing --------------------------------------
benefits Low Mean High Low Mean High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Evaluated at a 3 percent discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California................................................... $0 $0 $0 $0 $0 $0 $0
North Atlantic............................................... 0-2 24 52 113 26 54 115
Mid-Atlantic................................................. 0-22 208 440 934 230 462 956
Gulf of Mexico............................................... 0-78 249 558 1,254 327 636 1,332
Great Lakes.................................................. 0-16 121 243 478 137 259 494
Inland \c\................................................... 0 0 0 0 0 0 0
--------------
National total........................................... 0-118 602 1,292 2,779 720 1,411 2,897
--------------------------------------------------------------
Evaluated at a 7 percent discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California................................................... 0 0 0 0 0 0 0
North Atlantic............................................... 0-2 19 40 88 20 42 90
Mid-Atlantic................................................. 0-17 158 334 709 175 350 726
Gulf of Mexico............................................... 0-62 198 444 998 260 506 1,061
Great Lakes.................................................. 0-12 93 188 368 105 200 381
Inland \c\................................................... 0 0 0 0 0 0 0
--------------
[[Page 68525]]
National total........................................... 0-93 468 1,006 2,164 561 1,099 2,257
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ All benefits presented in this exhibit are annualized. These annualized benefits represent the value of all benefits generated over the time frame
of the analysis, discounted to 2007, and then annualized over a thirty year period. For a more detailed discussion of the discounting methodology,
refer to section IX.D.2 of this preamble.
\b\ The estimate of the total monetizable value of impingement and entrainment reductions includes use benefits only.
\c\ There are no commercial fishing benefits in the Inland region.
EPA considered a wide range of policy options in developing the
proposed section 316(b) regulation for the Phase III facilities. The
Regional Analysis Document provides EPA's complete benefit assessment
for the alternative policy options considered in this rulemaking.
X. Comparison of Benefits and Costs
This section presents two measures that compare the benefits and
costs of the regulatory options: (1) A benefit-cost analysis, and (2) a
break-even analysis of the minimum non-use benefits required for total
annualized benefits to equal total annualized costs, on a per household
basis. Each measure is presented by study region.
A. Benefit-Cost Analysis
The benefit-cost analysis for each of the co-proposed regulatory
options compares total annualized use benefits to total annualized pre-
tax costs (social costs) at existing facilities that remain open in the
baseline.\56\ Benefits and costs were discounted using both a 3 percent
and 7 percent discount rate. The cost estimates include costs of
compliance to facilities subject to the proposed rule as well as
administrative costs incurred by State and local governments and by the
Federal government. The benefits estimates include monetized benefits
to commercial and recreational fishing. The total monetizable benefits
include only use benefits. The non-use benefits were evaluated
qualitatively. Thus, the benefit-cost analysis compares a generally
complete measure of social costs with an incomplete measure of social
benefits and should be interpreted bearing in mind this inconsistency.
---------------------------------------------------------------------------
\56\ This section only includes benefits and costs for existing
facilities because EPA was unable to assess benefits of reducing
impringement mortality and entrainment at new offshore oil and gas
facilities.
---------------------------------------------------------------------------
1. Benefit-Cost Analysis Results
Exhibit X-1 presents a summary of total annualized use benefits,
total annualized costs, and net benefits for the ``50 MGD for All
Waterbodies'' option. Under this option, 136 facilities (excluding
baseline closures) are subject to the regulation. Of those facilities,
it is assumed that 103 are required to install technologies to reduce
impingement mortality and entrainment, and 32 will incur permitting
costs only. The exhibit shows that the use benefits of the 50 MGD
option are not projected to exceed the costs in any of the study
regions. In the California region, costs exceed use benefits by $0.8
million or $0.9 million when discounted at 3 percent and 7 percent
respectively. In the Inland region, costs are $19.4 million or $20.4
million greater than the use benefits. At the national level, EPA
projects the costs of this option to exceed its use benefits by $45.4
million per year, discounted at 3 percent, or by $48.6 million per
year, discounted at 7 percent.
Exhibit X-1.--Summary of Social Benefits and Costs ``50 Mgd for All Waterbodies'' Option
[Millions; $ 2003]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Total annualized use value Net benefits \c\
Number of facilities of I&E reductions \a\ Total -----------------------------
Study region facilities ------------------------------ annualized
subject to installing costs \b\ Low Mean High
option technology Low Mean High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Evaluated at a 3% discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California.............................................. 1 1 $0.02 $0.03 $0.06 $0.8 -$0.8 -$0.8 -$0.8
North Atlantic.......................................... 5 4 0.03 0.07 0.14 4.6 -4.5 -4.5 -4.5
Mid-Atlantic............................................ 3 3 0.26 0.52 1.08 2.6 -2.3 -2.0 -1.5
Gulf of Mexico.......................................... 7 7 0.33 0.64 1.33 9.1 -8.7 -8.4 -7.7
Great Lakes............................................. 23 19 0.18 0.34 0.64 10.1 -9.9 -9.7 -9.4
Inland.................................................. 97 69 0.16 0.31 0.58 19.7 -19.5 -19.4 -19.1
-------------
National total...................................... 136 103 0.97 1.90 3.84 47.3 -46.4 -45.4 -43.5
---------------------------------------------------------
Evaluated at a 7% discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California.............................................. 1 1 0.01 0.02 0.05 1.0 -1.0 -0.9 -0.9
North Atlantic.......................................... 5 4 0.02 0.05 0.11 5.0 -5.0 -5.0 -4.9
Mid-Atlantic............................................ 3 3 0.20 0.40 0.83 2.4 -2.2 -2.0 -1.6
[[Page 68526]]
Gulf of Mexico.......................................... 7 7 0.26 0.51 1.06 10.2 -9.9 -9.7 -9.1
Great Lakes............................................. 23 19 0.14 0.26 0.50 10.2 -10.1 -9.9 -9.7
Inland.................................................. 97 69 0.13 0.25 0.47 20.6 -20.5 -20.4 -20.2
-------------
National total...................................... 136 103 0.77 1.50 3.02 50.1 -49.3 -48.6 -47.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. The ranges (low,
medium, and high) for annualized use value is computed by adding the high end value for commercial fishing benefits (based on assumed producer surplus
of 40% of gross revenue) to the low, mean, and high values for recreational fishing benefits respectively (see Section IX).
\b\ Total costs are based on pre-tax facility costs. National total costs also include State, local, and Federal administrative costs of $0.6 million
that cannot be attributed to individual study regions.
\c\ Net benefits are computed by subtracting total annualized costs from total annual use values. The net benefits presented here are based on the
comparison of a generally complete measure of social costs with an incomplete measure of social benefits, and should be interpreted with caution.
Exhibit X-2 presents a summary of total annualized benefits, total
annualized costs, and net benefits for the ``200 MGD for All
Waterbodies'' option. Under this option, 25 facilities (excluding
baseline closures) are subject to the regulation. Of those facilities,
it is assumed that 22 are required to install technologies to reduce
impingement mortality and entrainment. The exhibit shows that the use
benefits of the 200 MGD option are not projected to exceed the costs in
any of the study regions. In the North Atlantic region, costs exceed
use benefits by $0.5 million, evaluated at both the 3 percent and 7
percent discount rates. In the Inland region, costs are $12.1 million
or $13.5 million greater than the use benefits. At the national level,
EPA projects the costs of this option to exceed its use benefits by
$21.5 million per year, discounted at 3 percent, or by $23.1 million
per year, discounted at 7 percent.
Exhibit X-2.--Summary of Social Benefits and Costs ``200 MGD for All Waterbodies'' Option
[Millions; $2003]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Number of Total annualized use value of Net benefits \c\
facilities facilities I&E reductions \a\ Total --------------------------------
Study region subject to installing --------------------------------- annualized
option technology Low Mean High costs \b\ Low Mean High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Evaluated at a 3% discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California........................................ 0 0 $0.00 $0.00 $0.00 $0.0 $0.0 $0.0 $0.0
North Atlantic.................................... 1 1 0.01 0.01 0.03 0.5 -0.5 -0.5 -0.5
Mid-Atlantic...................................... 2 2 0.23 0.46 0.96 2.0 -1.7 -1.5 -1.0
Gulf of Mexico.................................... 2 2 0.18 0.35 0.73 3.8 -3.6 -3.5 -3.1
Great Lakes....................................... 5 5 0.12 0.23 0.44 4.1 -3.9 -3.8 -3.6
Inland............................................ 14 12 0.11 0.21 0.39 12.3 -12.2 -12.1 -11.9
-------------
National total................................ 25 22 0.65 1.26 2.54 22.8 -22.1 -21.5 -20.2
---------------------------------------------------
Evaluated at a 7% discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California........................................ 0 0 $0.00 $0.00 $0.00 $0.0 $0.0 $0.0 $0.0
North Atlantic.................................... 1 1 0.00 0.01 0.02 0.5 -0.5 -0.5 -0.4
Mid-Atlantic...................................... 2 2 0.17 0.35 0.73 1.8 -1.6 -1.4 -1.1
Gulf of Mexico.................................... 2 2 0.14 0.28 0.58 4.4 -4.2 -4.1 -3.8
Great Lakes....................................... 5 5 0.09 0.18 0.34 3.7 -3.6 -3.5 -3.3
Inland............................................ 14 12 0.09 0.17 0.32 13.7 -13.6 -13.5 -13.4
-------------
National total................................ 25 22 0.51 0.98 1.98 24.1 -23.6 -23.1 -22.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The total monetizable value of I&E reductions includes use benefits only. EPA did not estimate non-use benefits quantitatively. The low and high use
values reflect the range of recreational fishing values presented in Section 9 of the preamble. They were calculated using the Krinsky and Robb
technique to estimate the 95th and 5th percentile limits on the marginal value per fish predicted by the meta-analysis.
\b\ Total costs are based on pre-tax facility costs. National total costs also include State, local, and Federal administrative costs of $0.1 million
that cannot be attributed to individual study regions.
\c\ The net benefits presented here are based on the comparison of a generally complete measure of social costs with an incomplete measure of social
benefits, and should be interpreted with caution.
[[Page 68527]]
Exhibit X-3 presents a summary of total annualized benefits, total
annualized costs, and net benefits for the regulatory option with a
design intake flow of 100 MGD or more for facilities withdrawing from
oceans, estuaries, and tidal rivers, or the Great Lakes (``100 MGD for
Certain Waterbodies''). Under this option, 19 facilities (excluding
baseline closures) are subject to the regulation. Of those facilities,
it is assumed that 18 are required to install technologies to reduce
impingement mortality and entrainment, and one will incur permitting
costs only. The exhibit shows that the use benefits of the 100 MGD for
certain waterbodies option are not projected to exceed the costs in any
of the study regions. In the Mid-Atlantic region, costs exceed use
benefits by $1.5 million or $1.4 million, evaluated at 3 percent and 7
percent discount rates. In the Gulf of Mexico region, costs are $8.4
million or $9.7 million greater than the use benefits. At the national
level, EPA projects the costs of this option to exceed its use benefits
by $16.2 million per year, discounted at 3 percent, or by $17.2 million
per year, discounted at 7 percent.
Exhibit X-3.--Summary of Social Benefits and Costs 100 MGD for Certain Waterbodies'' Option
[millions; $2003]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Number of Total annualized use value of Net benefits c
facilities facilities I&E reductions a Total --------------------------------
Study region subject to installing --------------------------------- annualize
option technology Low Mean High d Costs b Low Mean High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Evaluated at a 3% discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California......................................... 0 0 $0.00 $0.00 $0.00 $0.0 $0.0 $0.0 $0.0
North Atlantic..................................... 3 3 0.03 0.05 0.12 2.0 -2.0 -1.9 -1.9
Mid Atlantic....................................... 2 2 0.23 0.46 0.96 2.0 -1.7 -1.5 -1.0
Gulf of Mexico..................................... 7 7 0.33 0.64 1.33 9.1 -8.7 -8.4 -7.7
Great Lakes........................................ 8 6 0.14 0.26 0.49 4.5 -4.3 -4.2 -4.0
Inland............................................. 0 0 0.00 0.00 0.00 0.0 0.0 0.0 0.0
-------------
National total................................. 19 18 0.72 1.41 2.90 17.6 -16.9 -16.2 -14.7
----------------------------------------------------
Evaluated at a 7% discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
California......................................... 0 0 $0.00 $0.00 $0.00 $0.0 $0.0 $0.0 $0.0
North Atlantic..................................... 3 3 0.02 0.04 0.09 2.0 -2.0 -2.0 -1.9
Mid Atlantic....................................... 2 2 0.17 0.35 0.73 1.8 -1.6 -1.4 -1.1
Gulf of Mexico..................................... 7 7 0.26 0.51 1.06 10.2 -9.9 -9.7 -9.1
Great Lakes........................................ 8 6 0.11 0.20 0.38 4.1 -4.0 -3.9 -3.7
Inland............................................. 0 0 0.00 0.00 0.00 0.0 0.0 0.0 0.0
-------------
National total................................. 19 18 0.56 1.10 2.26 18.3 -17.7 -17.2 -16.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The total monetizable value of I&E reductions includes use benefits only. EPA did not estimate non-use benefits quantitatively. The low and high use
values reflect the range of recreational fishing values presented in Section 9 of the preamble. They were calculated using the Krinsky and Robb
technique to estimate the 95th and 5th percentile limits on the marginal value per fish predicted by the meta-analysis.
\b\ Total costs are based on pre-tax facility costs. National total costs also include State, local, and Federal administrative costs of $0.2 million
that cannot be attributed to individual study regions.
\c\ The net benefits presented here are based on the comparison of a generally complete measure of social costs with an incomplete measure of social
benefits, and should be interpreted with caution.
B. Break-even Analysis
Estimating non-use values is an extremely challenging and uncertain
exercise, particularly when, due to time and resource constraints,
primary research using stated preference methods was not a feasible
option for this proposed rule. In Section IX.D.5 above, EPA described
possible alternative approaches for developing non-use benefit
estimates based on benefits transfer and associated methods. Due to the
uncertainties of providing estimates of the magnitude of non-use values
associated with the regulatory options considered for this proposal,
this section provides an alternative approach for evaluating the
significance of non-use values. The approach used here applies a
``break-even'' analysis to identify what non-use values would have to
be in order for the options to have monetized benefits that are equal
to costs.
The break-even approach uses EPA's estimated commercial and
recreational use benefits for the regulatory options and subtracts them
from the estimated annual compliance costs incurred by existing
facilities subject to the regulatory options. The resulting ``net
cost'' enables one to work backwards to estimate what non-use values
would need to be in order for total annual benefits to equal annualized
costs. EPA computed the per household willingness-to-pay for all three
options proposed today and found that the non-use values necessary to
equate total annual benefits with total annual social cost ranged from
$1.43 per household, for the ``100 MGD for Certain Waterbodies'' option
discounted at 3 percent, to $2.13 per household for the ``50 MDG for
All Water bodies'' option discounted at 7 percent. EPA also calculated
the break-even non-use value per (age-1 equivalent) fish saved. The per
fish value necessary to have the total annual costs and benefits of the
proposed options equate range from $0.54 for the ``100 MGD for Certain
Waterbodies'' option, discounted at 3 percent, to $0.98 for the ``50
MDG for All Water bodies'' option, discounted at 7 percent. For a
detailed discussion of the estimation and results of both the per
household and per fish break-even values see the Regional Analysis
Document.
[[Page 68528]]
XI. Statutory and Executive Order Reviews
A. E.O. 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The order defines a
``significant regulatory action'' as one that is likely to result in a
rule that may:
Have an annual effect on the economy of $100 million or
more or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or
communities;
Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that this proposed rule is a ``significant regulatory
action.'' As such, this action was submitted to OMB for review. Changes
made in response to OMB suggestions or recommendations will be
documented in the public record.
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 2169.01.
The information collected under today's proposed rule would assist
EPA in regulating environmental impacts, namely impingement mortality
and entrainment, at cooling water intake structures at Phase III
facilities and new offshore oil and gas extraction facilities. This
information would be used by these parties to prepare comprehensive
demonstration studies, monitor impingement mortality and entrainment,
verify compliance, and prepare annual/biennial reports as required
under today's proposal. The information collected would be reviewed by
EPA and State Directors to ensure that appropriate National Pollutant
Discharge Elimination System (NPDES) permit conditions regulating
cooling water intake structures would be developed. Compliance with the
applicable information collection requirements imposed under this
proposed rule is mandatory (see Sec. Sec. 122.21(r), 125.136, 125.137,
125.138, 125.104, 125.105, 125.106, 125.107, 125.108).
EPA does not consider the specific data that would be collected
under this proposed rule to be confidential business information.
However, if a respondent does consider this information to be
confidential, the respondent may request that such information be
treated as confidential. All confidential data will be handled in
accordance with 40 CFR 122.7, 40 CFR Part 2, and EPA's Security Manual
Part III, Chapter 9, dated August 9, 1976.
Today's proposed rule would modify regulations at Sec. 122.21 to
require existing Phase III facilities and new offshore oil and gas
extraction facilities to prepare and submit some of the same
information required for Phase I and Phase II facilities. The proposed
application requirements would require owners or operators of Phase III
existing facilities to submit two general categories of information
when they apply for a reissued NPDES permit. The general categories of
information would include (1) permit application information, and (2)
verification monitoring data. A detailed list of required data items is
provided below.
As discussed in section II of the preamble, EPA is proposing three
regulatory options for existing facilities in today's proposed rule
based on design intake flow including: (1) A 50 MGD option for
facilities withdrawing water from all waterbody types; (2) a 200 MGD
option for facilities withdrawing water from all waterbody types; and
(3) a 100 MGD option for facilities which withdraw water specifically
from an ocean, estuary, tidal river, or one of the Great Lakes. Under
the co-proposed 50 MGD threshold-based option, the total average annual
burden, during the first three years after promulgation of the rule, of
the information collection requirements associated with today's
proposed rule is estimated at 215,885 hours. The corresponding
estimates of average annual cost other than labor (labor and non-labor
costs are included in the total cost of the proposed rule discussed in
section VIII of this preamble) is $2.81 million for 87 facilities (56
existing manufacturers and 31 new offshore oil and gas facilities) and
45 States and one Territory during the first three years after
promulgation of the rule. Under the co-proposed 200 MGD threshold-based
option, the total average annual burden, during the first three years
after promulgation of the rule, of the information collection
requirements is estimated at 62,280 hours. The corresponding average
annual non-labor cost is $1.46 million for 44 facilities (13 existing
manufacturers and 31 new offshore oil and gas facilities), and 45
States and one Territory during the first three years after
promulgation of the rule. Under the co-proposed 100 MGD threshold-based
option, the total average annual burden, during the first three years
after promulgation of the rule, of the information collection
requirements is estimated at 85,622 hours. The corresponding average
annual non-labor cost is $1.62 million for 42 facilities (11 existing
manufacturers and 31 new offshore oil and gas facilities), and 45
States and one Territory during the first three years after
promulgation of the rule.
Non-labor costs include activities such as capital costs for remote
monitoring devices, laboratory services, photocopying, and the purchase
of supplies. The burden and costs are for the information collection,
reporting, and recordkeeping requirements for the three-year period
beginning with the assumed effective date of today's rule. Additional
information collection requirements will occur after this initial
three-year period as existing facilities continue to be issued permit
renewals, new offshore oil and gas extraction facilities are issued
permits, and such requirements will be counted in a subsequent
information collection request.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
Studies to be submitted by both Phase III existing facilities and
new offshore oil and gas extraction facilities under today's proposed
rule are listed below. Both Phase III existing facilities and
[[Page 68529]]
new offshore oil and gas fixed platforms would be required to collect
the general information listed below.
Source Water Physical Data (Sec. 122.21(r)(2)) (both
Phase III existing facilities and new offshore oil and gas facilities)
Cooling Water Intake Structure Data (Sec. 122.21(r)(3))
((both Phase III existing facilities and new offshore oil and gas
facilities)
Cooling Water System Description (Sec. 122.21(r)(5))
(Phase III existing facilities only)
Depending on the compliance alternative selected by the individual
facility, Phase III existing facilities may be required to submit the
following information:
Proposal for Information Collection (Sec. 125.104(b)(1))
Source Waterbody Flow Information (Sec. 125.104(b)(2))
Impingement Mortality and/or Entrainment Characterization
Study (Sec. 125.104(b)(3))
Technology Compliance and Assessment Information (Sec.
125.104(b)(4))
Restoration Plan (Sec. 125.104(b)(5))
Information to Support Site-specific Determination of Best
Technology Available for Minimizing Adverse Environmental Impact (Sec.
125.104(b)(6))
Verification Monitoring Plan (Sec. 125.104(b)(7))
New offshore oil and gas extraction facilities would be required to
submit the following information under Track I:
Source Water Baseline Biological Characterization Data
(Sec. 122.21(r)(4)) (not required for non-fixed facilities)
Velocity Information (Sec. 125.136(b)(2))
Source Waterbody Flow Information (Sec. 125.136(b)(3))
(not required for non-fixed facilities)
Design and Construction Technology Plan (Sec.
125.136(b)(4))
In addition to the information requirements of the permit renewal
application, NPDES permits normally specify monitoring and reporting
requirements to be met by the permitted entity. Existing facilities
that fall within the scope of this proposed rule would be required to
perform biological monitoring as required by the Director to
demonstrate compliance. New offshore oil and gas extraction fixed
facilities would be required to perform monitoring as determined by the
Track I or Track II requirements in Sec. 125.136. Additional ambient
water quality monitoring may also be required of facilities depending
on the specifications of their permits. New offshore oil and gas
extraction facilities would be expected to analyze the results from
their monitoring efforts and provide these results in an annual status
report to the permitting authority. Existing Phase III facilities would
be required to submit a status report every two years that included
appropriate monitoring data and any other information specified by the
Director. Finally, facilities would be required to maintain records of
all submitted documents, supporting materials, and monitoring results
for at least three years. (Note that the Director may require that
records be kept for a longer period to coincide with the life of the
NPDES permit.)
All impacted facilities would carry out the specific activities
necessary to fulfill the general information collection requirements.
The estimated burden includes developing a water balance diagram that
can be used to identify the proportion of intake water used for
cooling, make-up, and process water. Facilities would also gather data
to calculate the reduction in impingement mortality and entrainment of
all life stages of fish and shellfish that would be achieved by the
technologies and operational measures they select. The burden estimates
include sampling, assessing the source waterbody, estimating the
magnitude of impingement mortality and entrainment, and reporting
results in a comprehensive demonstration study. The burden may also
include conducting a pilot study to evaluate the suitability of the
technologies and operational measures based on the species that are
found at the site.
Some of the Phase III existing facilities (those choosing to use
restoration measures to maintain fish and shellfish) would need to
prepare a plan documenting the restoration measures they would
implement and how they would demonstrate that the restoration measures
were effective. However, for purposes of this paperwork burden
analysis, EPA assumed all facilities would comply using design and
construction technologies.
Some facilities may choose to request a site-specific determination
of best technology available because of costs significantly greater
than those EPA considered in establishing the performance standards or
because costs are significantly greater than the benefits of complying
with the performance standards. These facilities would be required to
perform a comprehensive cost evaluation study and, if applicable, a
valuation of the monetized benefits of reducing impingement mortality
and entrainment, as well as submitting a site-specific technology plan
characterizing the design and construction technologies, operational
measures and restoration measures they have selected. However, for
purposes of this paperwork burden estimate, EPA assumed all facilities
would comply by meeting the applicable performance standards.
The assumption that facilities will not use restoration or request
a site-specific determination of best technology available may lead to
an underestimate of paperwork burden, since there are additional
documentation requirements associated with both of these approaches.
However, since both are optional, EPA assumes that facilities would not
choose them unless total burden, including both paperwork burden and
compliance costs is less than the total burden under the approach EPA
assumed for its PRA analysis.
Exhibits XI-1 through 3 present a summary of the average burden
estimates for a facility to prepare a permit application and monitor
and report on cooling water intake structure operations for the three
options for existing manufacturers as required by this proposed rule.
Exhibit XI-4 presents a summary of the average burden estimates for a
facility to prepare a permit application and monitor and report on
cooling water intake structure operations for new offshore oil and gas
extraction facilities as required by this proposed rule. For the
purpose of estimating the average burden for new offshore oil and gas
extraction facilities, EPA assumed all facilities would pursue Track I
of today's proposed rule. It is unknown how many facilities would
select Track I versus Track II so the actual burden estimate may be
slightly higher or lower than that presented in this section.
[[Page 68530]]
Exhibit XI-1.--Average Annual Reporting Burden and Costs per Facility for NPDES Permit Application and Monitoring and Reporting Activities
[50 MGD all waterbodies option]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
Annual Annual Annual Annual O&M Three year annual Average Average
Activities hours per labor cost capital cost per respondent frequency annual annual cost
facility per cost per facility a total of hours b
facility facility responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Start-up Activities............................. 43 2,121 0 50 56 19 803 40,527
Permit Application Activities................... 247 9,951 0 510 56 19 4,611 195,279
Proposal for Collection of Information for 272 12,344 0 770 43 14 3,899 187,964
Comprehensive Demonstration Study..............
FW River/Stream Source Water Body Flow 100 3,381 0 200 15 5 500 17,904
Information....................................
FW Lake/Reservoir Source Water Body Flow 112 3,946 0 200 2 1 75 2,764
Information....................................
Design and Construction Technology Plan 31 1,368 0 0 31 10 320 14,132
(Impingement)..................................
Design and Construction Technology Plan 31 1,368 0 0 20 7 207 9,117
(Entrainment)..................................
Design and Construction Technology Plan (All)... 30 922 0 380 33 11 330 14,322
Freshwater Baseline Monitoring for Impingement 2,210 102,549 0 1,538 23 13 29,460 1,387,834
Mortality and/or Entrainment Study.............
Freshwater Monitoring for Impingement Mortality 1,105 51,544 0 773 23 13 14,727 697,560
Study..........................................
Freshwater Monitoring for Entrainment Study..... 845 39,727 0 39,596 4 3 2,252 211,527
Marine Baseline Monitoring for Impingement 2,841 131,350 0 1,970 20 19 53,041 2,488,651
Mortality and/or Entrainment Study.............
Marine Monitoring for Impingement Mortality 1,414 65,430 0 981 16 15 21,680 1,018,309
Study..........................................
Marine Monitoring for Entrainment Study......... 1,076 50,083 0 51,451 20 19 20,090 1,895,311
Impingement Mortality & Entrainment 373 22,042 0 0 43 14 5,346 315,931
Characterization Study Initial Analysis........
Impingement Mortality & Entrainment 399 18,875 0 614 33 11 4,389 214,381
Characterization Study Final Report............
Pilot Study Impingement Monitoring (Freshwater) 661 33,927 804,252 0 1 0 220 279,393
for Pilot Study................................
Pilot Study Entrainment Monitoring (Freshwater) 541 28,473 0 6,000 1 0 180 11,491
for Pilot Study................................
Pilot Study Impingement Monitoring (Marine) for 831 41,572 189,062 0 10 3 2,768 768,781
Pilot Study....................................
Pilot Study Entrainment Monitoring (Marine) for 675 34,482 0 7,800 10 3 2,248 140,941
Pilot Study....................................
Pilot Study Entrainment Monitoring (All) for 354 17,487 0 1,020 11 4 1,298 67,858
Pilot Study....................................
Technology Installation and Operation Plan...... 52 2,372 0 80 35 12 607 28,611
[[Page 68531]]
Verification Monitoring Plan.................... 128 5,918 0 410 35 12 1,493 73,827
--------------
Total for NPDES Permit Application ........... ........... ........... ........... 56 227 170,544 10,082,416
Activities.................................
-------------------------------------------------
Average Burden and Costs per Facility for Annual Monitoring and Reporting Activities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Monitoring for Impingement (Freshwater).. 379 18,504 0 510 11 5 2,021 101,406
Annual Monitoring for Impingement (Marine)...... 482 23,564 0 660 12 5 2,569 129,193
Annual Monitoring for Entrainment (Freshwater).. 614 30,376 0 8,310 4 2 1,228 77,371
Annual Monitoring for Entrainment (Marine)...... 776 38,069 0 10,800 14 7 5,173 325,790
Biannual Status Report Activities............... 324 16,618 0 770 27 9 2,916 156,492
Verification Study.............................. 118 6,772 0 510 27 9 1,062 65,540
--------------
Total for Annual Activities................. ........... ........... ........... ........... 27 37 14,969 855,792
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Cost of supplies, filing cabinets, photocopying, boat renting, etc.
b Costs for restoration activities and site-specific studies were not estimated as EPA cannot determine how many facilities would choose to select this
option and the option is voluntary.
Exhibit XI-2.--Average Annual Reporting Burden and Costs per Facility for NPDES Permit Application and Monitoring and Reporting Activities
[200 MGD all waterbodies option]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
Annual Annual Annual Annual O&M Three year annual Average
Activity hours per labor cost capital cost per respondent frequency annual Average
facility per cost per facilitya total of hours annual cost
facility facility responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Start-up Activities............................. 43 $2,121 $0 $50 13 4 186 $9,408
Permit Application Activities................... 247 9,951 0 510 13 4 1,070 45,333
Proposal for Collection of Information for 272 12,344 0 770 9 3 816 39,341
Comprehensive Demonstration Study..............
FW River/Stream Source Water Body Flow 100 3,381 0 200 1 0 33 1,194
Information....................................
FW Lake/Reservoir Source Water Body Flow ........... 0 0 200 ........... 0 0 0
Information....................................
Design and Construction Technology Plan 31 1,368 0 0 5 2 52 2,279
(Impingement)..................................
Design and Construction Technology Plan 31 1,368 0 0 4 1 41 1,823
(Entrainment)..................................
Design and Construction Technology Plan (All)... 30 922 0 380 5 2 50 2,170
Freshwater Baseline Monitoring for Impingement 2,210 102,549 0 1,538 2 1 2,210 104,088
Mortality and/or Entrainment Study.............
Freshwater Monitoring for Impingement Mortality 1,105 51,544 0 773 2 1 1,105 52,317
Study..........................................
Freshwater Monitoring for Entrainment Study..... ........... 0 0 39,596 ........... 0 0 0
[[Page 68532]]
Marine Baseline Monitoring for Impingement 2,841 131,350 0 1,970 7 6 17,049 799,923
Mortality and/or Entrainment Study.............
Marine Monitoring for Impingement Mortality 1,414 65,430 0 981 6 5 7,541 354,194
Study..........................................
Marine Monitoring for Entrainment Study......... 1,076 50,083 0 51,451 7 6 6,458 609,207
Impingement Mortality & Entrainment 373 22,042 0 0 9 3 1,119 66,125
Characterization Study Initial Analysis........
Impingement Mortality & Entrainment 399 18,875 0 614 5 2 665 32,482
Characterization Study Final Report............
Pilot Study Impingement Monitoring (Freshwater) 661 33,927 804,252 0 1 0 220 279,393
for Pilot Study................................
Pilot Study Entrainment Monitoring (Freshwater) 541 28,473 0 6,000 1 0 180 11,491
for Pilot Study................................
Pilot Study Impingement Monitoring (Marine) for 831 41,572 183,241 0 4 1 1,107 299,751
Pilot Study....................................
Pilot Study Entrainment Monitoring (Marine) for 675 34,482 0 7,800 4 1 899 56,376
Pilot Study....................................
Pilot Study Entrainment Monitoring (All) for 354 17,487 0 1,020 5 2 590 30,845
Pilot Study....................................
Technology Installation and Operation Plan...... 52 2,372 0 80 6 2 104 4,905
Verification Monitoring Plan.................... 128 5,918 0 410 6 2 256 12,656
--------------
Total for NPDES Permit Application ........... ........... ........... ........... 13 50 41,752 2,815,302
Activities.................................
-------------------------------------------------
Average Burden and Costs per Facility for Annual Monitoring and Reporting Activities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Monitoring for Impingement (Freshwater).. 379 18,504 0 510 1 1 253 12,676
Annual Monitoring for Impingement (Marine)...... 482 23,564 0 660 3 1 482 24,224
Annual Monitoring for Entrainment (Freshwater).. 614 30,376 0 8,310 1 0 205 12,895
Annual Monitoring for Entrainment (Marine)...... 776 38,069 0 10,800 3 1 776 48,869
Biannual Status Report Activities............... 324 16,618 0 770 5 2 540 28,980
Verification Study.............................. 118 6,772 0 510 5 2 197 12,137
--------------
Total for Annual Activities................. ........... ........... ........... ........... 5 7 2,452 139,780
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Cost of supplies, filing cabinets, photocopying, boat renting, etc.
[[Page 68533]]
Exhibit XI-3.--Average Annual Reporting Burden and Costs per Facility for NPDES Permit Application and Monitoring and Reporting Activities
[100 MGD certain waterbodies option]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
Annual Annual Annual Annual O&M Three year annual Aveage
Activity hours per labor cost capital cost per respondent frequency annual Average
facility per cost per facility total of hours annual cost
facility facility \a\ responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Start-up Activities............................. 43 $2,121 $0 $50 11 4 158 $7,961
Permit Application Activities................... 247 9,951 0 510 11 4 906 38,358
Proposal for Collection of Information for 272 12,344 0 770 11 4 997 48,084
Comprehensive Demonstration Study..............
FW River/Stream Source Water Body Flow -- 0 0 0 -- 0 0 0
Information....................................
FW Lake/Reservoir Source Water Body Flow -- 0 0 0 -- 0 0 0
Information....................................
Design and Construction Technology Plan 31 1,368 0 0 8 3 83 3,647
(Impingement)..................................
Design and Construction Technology Plan 31 1,368 0 0 8 3 83 3,647
(Entrainment)..................................
Design and Construction Technology Plan (All)... 30 922 0 380 8 3 80 3,472
Freshwater Baseline Monitoring for Impingement -- 0 0 1,538 -- 0 0 0
Mortality and/or Entrainment Study.............
Freshwater Monitoring for Impingement Mortality -- 0 0 773 -- 0 0 0
Study..........................................
Freshwater Monitoring for Entrainment Study..... -- 0 0 039,596 -- 0 0 0
Marine Baseline Monitoring for Impingement 2,841 131,350 0 1,970 11 10 28,415 1,333,206
Mortality and/or Entrainment Study.............
Marine Monitoring for Impingement Mortality 1,414 65,430 0 981 10 9 13,1976 19,840
Study..........................................
Marine Monitoring for Entrainment Study......... 1,076 50,083 0 051,451 11 10 10,763 1,015,345
Impingement Mortality & Entrainment 373 22,042 0 0 11 4 1,368 80,820
Characterization Study Initial Analysis........
Impingement Mortality & Entrainment 399 18,875 0 614 8 3 1,064 51,971
Characterization Study Final Report............
Pilot Study Impingement Monitoring (Freshwater) -- 0 0 0 -- 0 0 0
for Pilot Study................................
Pilot Study Entrainment Monitoring (Freshwater) -- 0 0 6,000 -- 0 0 0
for Pilot Study................................
Pilot Study Impingement Monitoring (Marine) for 831 41,572 221,548 0 6 2 1,661 526,240
Pilot Study....................................
Pilot Study Entrainment Monitoring (Marine) for 675 34,482 0 7,800 6 2 1,349 84,564
Pilot Study....................................
Pilot Study Entrainment Monitoring (All) for 354 17,487 0 1,020 6 2 708 37,014
Pilot Study....................................
Technology Installation and Operation Plan...... 52 2,372 0 80 8 3 139 6,540
[[Page 68534]]
Verification Monitoring Plan.................... 128 5,918 0 410 8 3 341 16,875
--------------
Total for NPDES Permit Application ........... ........... ........... ........... 11 66 61,310 3,877,583
Activities.................................
-------------------------------------------------
Average Burden and Costs per Facility for Annual Monitoring and Reporting Activities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Monitoring for Impingement (Freshwater).. -- 0 0 510 -- 0 0 0
Annual Monitoring for Impingement (Marine)...... 482 23,564 0 660 7 3 1,284 64,596
Annual Monitoring for Entrainment (Freshwater).. -- 0 0 8,310 -- 0 0 0
Annual Monitoring for Entrainment (Marine)...... 776 38,069 0 10,800 7 3 2,069 130,316
Biannual Status Report Activities............... 324 16,618 0 770 7 2 756 40,572
Verification Study.............................. 118 6,772 0 510 7 2 275 16,992
--------------
Total for Annual Activities................. ........... ........... ........... ........... 7 10 4,385 252,476
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Cost of supplies, filing cabinets, photocopying, boat renting, etc.
Exhibit XI-4.--Average Annual Reporting Burden and Costs per Facility for NPDES Permit Application and Monitoring and Reporting Activities
[New offshore oil and gas extraction facilities \a\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
Annual Annual Annuallized Annual O&M Three year annual Average
Activity hours per labor cost capital cost per respondent frequency annual Average
facility per cost per facilitya b total of hours annual cost
facility facility responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Start-up Activities............................. 43 $2,121 $0 $50 31 10 444 $22,435
Permit Application Activities................... 25 795 0 130 19 6 158 5,857
Source Water Body Flow Information.............. 38 1,341 0 75 19 6 241 8,968
CWIS Velocity Information....................... -- 0 0 0 -- 0 0 0
Design and Construction Technology Plan 35 1,021 0 120 15 5 175 5,706
(Impingement Only).............................
Design and Construction Technology Plan 35 1,021 0 120 1 0 12 380
(Entrainment Only).............................
Design and Construction Technology Plan 38 1,162 0 120 3 1 38 1,282
(Impingement & Entrainment)....................
Develop Regional Study Design and Submit to 78 5,007 0 0 2 1 52 3,338
Director.......................................
Deep Water Baseline Monitoring for Source Water 309 17,260 0 43,200 9 9 2,778 544,137
Baseline Biological Characterization Study.....
Deep Water Impingement Monitoring for Source 144 7,987 7,621 667 9 9 1,296 146,473
Water Baseline Biological Characterization
Study..........................................
[[Page 68535]]
Deep Water Entrainment Monitoring for Source 144 7,987 0 3,120 3 3 432 33,321
Water Baseline Biological Characterization
Study..........................................
Alaska Basline Monitoring for Source Water 384 20,337 0 49,200 1 1 384 69,537
Baseline Biological Characterization Study.....
Alaska Entrainment Monitoring for Source Water 192 10,169 0 3,120 1 1 192 13,289
Baseline Biological Characterization Study.....
Initial Sourcewater Baseline Biological 366 20,584 0 0 10 3 1,220 68,613
Characterization Data..........................
Sourcewater Baseline Biological Characterization 288 18,389 0 0 2 1 192 12,259
Data Study Final Regional Report...............
Use Regional Study Results for Individual 166 7,591 0 0 19 6 1,051 48,079
Facility Studies...............................
Source Water Baseline Biological -- 0 0 13,270 9 3 0 39,810
Characterization Study Other Direct Costs for
Deep Water.....................................
Source Water Baseline Biological -- 0 0 19,910 1 0 0 6,637
Characterization Study Other Direct Costs for
Alaska.........................................
--------------
Total for NPDES Permit Application ........... ........... ........... ........... 31 67 8,665 1,030,123
Activities.................................
-------------------------------------------------
Average Burden and Costs per Facility for Annual Monitoring and Reporting Activities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Biological Monitoring for Impingement........... 530 25,823 0 1,660 -- 0 0 0
Biological Monitoring for Entrainment........... 370 17,647 0 15,780 -- 0 0 0
Biological Monitoring for Entrainment (Alaska).. 516 24,298 0 21,780 -- 0 0 0
Velocity Monitoring............................. 163 5,692 0 500 13 7 1,087 41,283
Yearly Status Report Activities................. 223 11,304 0 770 13 7 1,487 80,495
--------------
Total for Annual Activities................. ........... ........... ........... ........... 13 14 2,573 121,778
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Track I requirements only estimated.
\b\ Cost of supplies, filing cabinets, photocopying, boat renting, etc.
EPA believes that all 45 States and one Territory with NPDES
permitting authority would undergo start-up activities in preparation
for administering the provisions of the proposed rule. As part of these
start-up activities, States and Territories would be expected to train
junior technical staff to review materials submitted by facilities, and
then use these materials to evaluate compliance with the specific
conditions of each facility's NPDES permit.
Each State's/Territory's actual burden associated with reviewing
submitted materials, writing permits, and tracking compliance would
depend on the number of in-scope facilities that would come up for
permit renewal in the State/Territory during the ICR approval period
and which flow threshold-based option EPA selects for Phase III
existing facilities. EPA expects that State and Territory technical and
clerical staff will spend time gathering, preparing, and submitting the
various documents. EPA's burden estimates reflect the general staffing
and level of expertise that is typical in States/Territories that
administer the NPDES permitting program. EPA considered the time and
qualifications necessary to complete various tasks such as reviewing
[[Page 68536]]
submitted documents and supporting materials, verifying data sources,
planning responses, determining specific permit requirements, writing
the actual permit, and conferring with facilities and the interested
public. Exhibits XI-5 through 7 provide a summary of the average burden
estimates for States/Territories performing various activities for
existing manufacturing facilities required by the proposed rule.
States/Territories are not involved in administering the permits for
new offshore oil and gas extraction facilities since the offshore oil
and gas industry is currently permitted under general permits at the
regional EPA level. This practice is likely to continue in the
forseeable future.
Exhibit XI-5.--Estimating State/Territory Average Burden and Costs for Activities
[50 MGD all waterbodies option]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
Average Annual Annual Annual O&M Three year annual Average
Activity annual labor cost capital cost per respondent frequency annual Average
hours per per cost per facility total of hours annual cost
facility facility facility \a\ responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Director Start-up Activities.................... 100 $3,894 $0 $50 46 15 1,533 $60,475
Director Permit Issuance Activities............. 803 35,979 0 310 56 19 14,989 677,398
Verification Study Review....................... -- 0 0 10 -- 0 0 0
Annual Director Activities...................... 50 1,851 0 30 27 9 450 16,932
--------------
Total for Director Activities............... ........... ........... ........... ........... 46 43 16,972 754,804
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Cost of supplies, filing cabinets, photocopying, boat renting, etc.
Exhibit XI-6.--Estimating State/Territory Average Burden and Costs for Activities
[200 MGD all waterbodies option]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
Average Annual Annual Annual O&M Three year annual Average
Activity annual labor cost capital cost per respondent frequency annual Average
hours per per cost per facility total of hours annual cost
facility facility facility \a\ responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Director Start-up Activities.................... 100 $3,894 $0 $50 46 15 1,533 $60,475
Director Permit Issuance Activities............. 706 31,417 0 310 13 ........... 43,060 137,482
Verification Study Review....................... -- 0 0 10 -- 0 0 0
Annual Director Activities...................... 50 1,851 0 30 5 2 83 3,136
--------------
Total for Director Activities............... ........... ........... ........... ........... 46 21 4,677 201,092
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Cost of supplies, filing cabinets, photocopying, boat renting, etc.
Exhibit XI-7.--Estimating State/Territory Average Burden and Costs for Activities
[100 MGD All Waterbodies Option]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
Average Annual Annual Annual O&M Three year annual Average
Activity annual labor cost capital cost per respondent frequency annual Average
hours per per cost per facility total of hours annual cost
facility facility facility \a\ responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Director Start-up Activities.................... 100 $3,894 $0 $50 46 15 1,533 $60,475
Director Permit Issuance Activities............. 1330 60,163 0 310 11 4 4,878 221,733
Verification Study Review....................... -- 0 0 10 -- 0 0 0
Annual Director Activities...................... 50 1,851 0 30 7 2 117 4,390
--------------
Total for Director Activities............... ........... ........... ........... ........... 46 21 6,528 286,598
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Cost of supplies, filing cabinets, photocopying, boat renting, etc.
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, including the use of automated collection
techniques, EPA has established a public docket for this rule, which
includes this ICR, under Docket ID number OW-2003-0005. Submit any
comments related to the ICR for this proposed rule to EPA and OMB. See
``Addresses'' section at the beginning of this notice for where to
submit comments to EPA. Send comments to OMB at the Office of
Information and Regulatory Affairs,
[[Page 68537]]
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 November 24,
2004, a comment to OMB is best assured of having its full effect if OMB
receives it by December 27, 2004. The final rule will respond to any
OMB or public comments on the information collection requirements
contained in this proposal.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) as amended by the Small
Business Regulatory Flexibility Act 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. This section summarizes EPA's analyses in compliance with the
RFA.
1. Definition of Small Entity
Small entities include small businesses, small organizations, and
small governmental jurisdictions. For assessing the impacts of today's
proposal on small entities, a small entity is defined as: (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; and (3) a small
organization that is any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.
The SBA small business size standards changed from a SIC code-based
system to a NAICS code-based system on October 1, 2000. Since EPA
conducted its data collection effort for existing facilities before
this change, EPA performed the small entity analysis for existing
facilities based on SIC codes. EPA then conducted a subsequent analysis
to determine if the size standards based on NAICS codes would have any
effect on the results of the small entity analysis. This analysis
showed that for the three co-proposed options, there would be no
changes to the small entity determination, and therefore to small
entity impacts, as a result of switching from SIC-based size standards
to NAICS-based size standards.
2. Certification Statement
After considering the economic impacts of today's proposal on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. This
proposal applies to existing facilities that employ a cooling water
intake structure and are designed to withdraw either (1) 50 MGD or more
from all waterbodies, (2) 100 MGD or more from certain waterbodies, or
(3) 200 MGD or more from all waterbodies that are waters of the United
States. It also applies to new offshore oil and gas extraction
facilities that withdraw greater than 2 MGD from waters of the United
States.
3. Statement of Basis
EPA estimates that this proposal will not apply national
categorical standards to any small entities in the Manufacturers or
Electric Generators industry segments (entities that operate facilities
subject to permitting based on best professional judgement are excluded
from this analysis). In the new offshore oil and gas extraction
industry segment, EPA estimates that the proposed option will apply
national standards to only one small entity, a new offshore oil and gas
platform. EPA estimates that this entity would incur annualized, after-
tax compliance costs of less than 0.1 percent of annual revenue. EPA
does not know precisely which firms would be undertaking construction
of new offshore oil and gas extraction facilities. However, based on
the firms that are currently active in building the types of facilities
representative of those covered by the rulemaking, EPA believes that
the small firm analyzed represents the smallest firm that would be
involved in such activities over the period of the analysis.
4. Summary of Small Business Advocacy Review Panel
Although the RFA does not require a Small Business Advocacy Review
(SBAR) Panel for this rule (because EPA has determined that this
proposal would not have a significant economic impact on a substantial
number of small entities), EPA convened a panel to obtain advice and
recommendations from small entity representatives (SERs) potentially
subject to this proposed rule's requirements because at the time EPA
had not yet determined the scope of the proposed rule and thus the
potential for small entity impacts. This section summarizes EPA's small
entity outreach and information on the composition, process, and
findings of the SBAR panel.
a. Summary of Small Entity Outreach
EPA actively involved stakeholders, including small entities, in
the development of the proposed rule in order to ensure the quality of
information, identify and understand potential implementation and
compliance issues, and explore regulatory alternatives. EPA conducted
numerous meetings with the electric power industry over the past six
years and met twice with manufacturing industry representatives in the
past two years; during these meetings, EPA received direct input about
the impacts of the proposed rule on the industry.
In the past three years, EPA held two conference calls with small
entity representatives from the manufacturing and electric power
industries to improve the Agency's understanding of cooling water
intakes in these industries, and of the potential impacts of new
requirements from an economic and business perspective. Before
convening the Panel, EPA held a conference call/meeting on October 1,
2002, and another on January 22, 2004, to receive information from
prospective SERs about plans for convening the Panel and their early
concerns about the planned proposed regulation.
b. Panel Members
The Panel consisted of EPA's Small Business Advocacy Chairperson,
the Director of the Engineering and Analysis Division of the Office of
Science and Technology (EPA/OW), the Administrator of the Office of
Information and Regulatory Affairs within the Office of Management and
Budget (OMB), and the Chief Counsel for Advocacy of the Small Business
Administration (SBA).
c. SERs
After consultation with the Small Business Administration Office of
Advocacy, EPA invited six municipal power plant representatives and six
representatives from manufacturing industries to serve as potential
SERs during the pre-panel outreach process. Ultimately, three municipal
power plant representatives and four representatives from manufacturing
industries provided comments to the Panel.
d. Summary of Panel Process
The Panel convened on February 27, 2004. The Panel held an outreach
meeting and telephone conference for SERs on March 16, 2004. Materials
were provided to SERs in advance of the meeting and additional
materials on specific topics of interest to SERs were provided during
the Panel process. SERs provided comments to the Panel on (1)
[[Page 68538]]
the number and types of small entities affected; (2) potential
reporting, record keeping, and compliance requirements; (3) related
Federal rules; (4) regulatory flexibility alternatives; and (5)
methodological issues.
The Panel evaluated the assembled materials and small entity
comments on issues related to the elements of the initial regulatory
flexibility analysis (IRFA). A copy of the Panel report, ``Final Report
of the Small Business Advocacy Review Panel on EPA's Planned Proposed
Rule for Cooling Water Intake Structures at Section 316(b) Phase III
Facilities,'' is included in the docket for this proposed rule (DCN 7-
0006).
e. Panel Recommendations
The Panel provided several recommendations pertaining to reporting,
record keeping, and compliance requirements; regulatory flexibility
alternatives; and methodological issues relevant to the assessment of
the impacts of a Phase III rule on small entities. The following is a
summary of the Panel's recommendations and EPA's responses:
Recommendation: The Panel noted that significant
implementation flexibility was included in the Phase II rule. For
example, facilities were allowed up to three and one half years
following rule promulgation to submit their initial demonstration study
and related application materials. The Panel recommended that this
level of flexibility be provided for Phase III requirements. The Panel
also recommended that EPA consider the availability of contractor
resources as it develops the implementation schedule for Phase III.
Response: EPA has provided in the proposed rule the same
implementation flexibility contained in the Phase II rule. EPA will
consider the availability of contractor resources and would like to
receive comments on this issue.
Recommendation: The Panel recommended that EPA analyze a
range of potential applicability thresholds, particularly those between
20 MGD and 50 MGD. The Panel believed that an effective way to
substantially reduce potential economic impacts on small entities would
be to set an applicability threshold of 20 MGD. Facilities below 20 MGD
represent a small proportion of the total flow associated with the
Phase III rulemaking.
Response: In response to the Panel's recommendations, EPA analyzed
several policy options with different regulatory requirements and
applicability thresholds based on flow range categories. As a result of
these analyses, EPA is co-proposing three options with minimum
applicability thresholds of 50 MGD, 100 MGD, and 200 MGD, respectively.
Under these thresholds, no Phase III existing facilities owned by small
entities would be subject to national categorical requirements.
Recommendation: The Panel recognized the implementation
challenges associated with using actual flows instead of design flows
to structure regulatory requirements. However, the Panel believed that
this approach merits further consideration.
Response: EPA notes that since the proposed thresholds exclude
existing small entities, no implementation challenges to small entities
would result. With regard to facilities within the scope of the
proposed rule, EPA believes that it would be most appropriate to be
consistent with the regulatory approach taken in Phase II.
Recommendation: The American Public Power Association
(APPA) raised several methodological issues regarding EPA's analysis of
the impacts of a Phase III rule on small entities, including alternate
estimates of the number of regulated small electric utilities and
issues concerning the downtime required for retrofitting. The Panel
recommended that EPA seek further information from APPA to identify any
necessary modifications to the assumptions used for its cost and
economic impact analyses. The Panel also recommended that EPA review
its assumptions used to develop costs and economic impacts to ensure
that these assumptions are appropriate for facilities with smaller
budgets and staffs.
Response: Because of the choice EPA made to propose larger design
intake flow thresholds (i.e., 50 MGD, 100 MGD, and 200 MGD), all
electric power producers not covered by Phase II will be exempt from
the national categorical requirements of this proposed rule, but will
continue to be subject to site-specific 316(b) requirements based on
the best professional judgment of the permit writer.
5. Small Entity Flexibility Analysis
Despite the determination that this rule would not have a
significant economic impact on a substantial number of small entities,
EPA prepared a Small Entity Flexibility Analysis that has all the
components of an Initial Regulatory Flexibility Analysis (IRFA). An
IRFA examines the impact of a proposed rule on small entities along
with regulatory alternatives that could reduce that impact. The Small
Entity Flexibility Analysis (which is described in detail in the
Economic Analysis document) is available for review in the docket.
Under the three co-proposed options, EPA estimates that only one
small entity (a new offshore oil and gas extraction facility) would be
subject to the national categorical requirements. Under these
thresholds, no Phase III existing facilities owned by small entities
would be subject to national categorical requirements. This facility is
estimated to have a cost-to-revenue ratio of less than 0.1 percent.
EPA continues to be interested in the potential impacts of this
proposal on small entities and welcomes comments on issues related to
such impacts.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and Tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective, or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including Tribal governments, it must have developed under
section 203 of the UMRA, a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with regulatory requirements.
[[Page 68539]]
The following subsections present a brief summary of UMRA
considerations for the proposed rule. Each subsection includes the
results of the proposed option for new offshore oil and gas extraction
facilities together with one of the three co-proposed options for
existing facilities.\57\
---------------------------------------------------------------------------
\57\ These sections exclude facilities estimated to be baseline
closures and their costs (see discussion in section VIII.B.2) and
administrative costs for Federal agencies.
---------------------------------------------------------------------------
2 MGD Option for new facilities and 50 MGD All Waterbodies
Option for existing facilities: EPA estimates the total annualized
after-tax costs of compliance to be $44.8 million (2003$). All of these
direct facility costs are incurred by the private sector (including 136
manufacturing facilities and 124 offshore oil and gas extraction
facilities). No facility owned by State or local governments is subject
to the national requirements under this proposed option. Additionally,
State and local permitting authorities are estimated to incur $0.5
million annually to administer this option, including labor costs to
write permits and to conduct compliance monitoring and enforcement
activities. As required per section 202 of the UMRA, EPA estimates that
the highest undiscounted after-tax cost incurred by the private sector
in any one year is approximately $280 million in 2011.
2 MGD Option for new facilities and 200 MGD All
Waterbodies Option for existing facilities: EPA estimates the total
annualized after-tax costs of compliance to be $21.4 million (2003$).
All of these direct facility costs are incurred by the private sector
(including 25 manufacturing facilities and 124 offshore oil and gas
extraction facilities). No facility owned by State or local governments
is subject to the national requirements under this proposed option.
Additionally, State and local permitting authorities are estimated to
incur $0.1 million annually to administer this option, including labor
costs to write permits and to conduct compliance monitoring and
enforcement activities. As required per section 202 of the UMRA, EPA
estimates that the highest undiscounted after-tax cost incurred by the
private sector in any one year is approximately $91 million in 2010.
2 MGD Option for new facilities and 100 MGD for Certain
Waterbodies Option for existing facilities: EPA estimates the total
annualized after-tax costs of compliance to be $17.4 million (2003$).
All of these direct facility costs are incurred by the private sector
(including 19 manufacturing facilities and 124 offshore oil and gas
extraction facilities). No facility owned by State or local governments
is subject to the national requirements under this proposed option.
Additionally, State and local permitting authorities are estimated to
incur $0.1 million annually to administer this option, including labor
costs to write permits and to conduct compliance monitoring and
enforcement activities. As required per section 202 of the UMRA, EPA
estimates that the highest undiscounted after-tax cost incurred by the
private sector in any one year is approximately $236 million in 2011.
Thus, EPA has determined that this proposal 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 prepared a written statement
under section 202 of the UMRA, which is summarized below. (See Economic
Analysis, Chapter D2: UMRA Analysis, for more detailed information.)
1. Summary of Written Statement
a. Authorizing Legislation
This proposal 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. This proposal fulfills an obligation of the U.S.
Environmental Protection Agency (EPA) under a consent decree in
Riverkeeper, Inc. et al. v. Leavitt, United States District Court,
Southern District of New York, No. 93 Civ. 0314 (AGS). See section II
of this preamble for detailed information on the legal authority of
this regulation.
b. Cost-Benefit Analysis
For the analysis of costs and benefits to society of this proposal,
the Agency calculated a total present value of estimated costs and
benefits and then calculated the constant annual equivalent value
(annualized value) of these present values. The Agency calculated these
present values and annualized values using two social discount rate
values: 3 percent and 7 percent. Since benefits for new offshore oil
and gas extraction facilities could not be estimated, EPA's comparison
of costs and benefits includes only costs associated with Phase III
existing facilities (i.e., the Manufacturers industry segments--no
Electric Generators are subject to the national requirements under any
of the co-proposed options).\58\ Benefit-cost relationships for Phase
III existing facilities under the three co-proposed options are as
follows:\59\
---------------------------------------------------------------------------
\58\ Total social costs of this proposal, including existing and
new facilities, are presented in section VIII.C of this preamble.
\59\ Benefits include only use benefits from commercial and
recreational fishing. EPA was unable to monetize non-use benefits.
---------------------------------------------------------------------------
50 MGD All Waterbodies Option: Total annualized social
costs are estimated at $47.3 (3 percent discount rate) and $50.1
million (7 percent discount rate). Total mean value of annualized use
benefits are estimated at $1.9 million (3 percent discount rate) and
$1.5 million (7 percent discount rate). Thus, social costs exceed total
use benefits by $45.4 million (3 percent discount rate) and $48.6
million (7 percent discount rate).
200 MGD All Waterbodies Option: Total annualized social
costs are estimated at $22.8 (3 percent discount rate) and $24.1
million (7 percent discount rate). Total mean value of annualized use
benefits are estimated at $1.3 million (3 percent discount rate) and
$1.0 million (7 percent discount rate). Thus, social costs exceed total
use benefits by $21.5 million (3 percent discount rate) and $23.1
million (7 percent discount rate)
100 MGD for Certain Waterbodies Option: Total annualized
social costs are estimated at $17.6 (3 percent discount rate) and $18.3
million (7 percent discount rate). Total mean value of annualized use
benefits are estimated at $1.4 million (3 percent discount rate) and
$1.1 million (7 percent discount rate). Thus, social costs exceed total
use benefits by $16.2 million (3 percent discount rate) and $17.2
million (7 percent discount rate).
It should be noted that this cost-benefit analysis compares a
relatively complete measure of social costs with an incomplete measure
of benefits, and should be interpreted with caution. For a more
detailed comparison of the costs and benefits of the proposed rule,
including a qualitative discussion and ``break-even'' analysis of non-
use benefits, refer to section X of this preamble.
EPA notes that States may be able to use existing sources of
financial assistance to revise permits and implement the proposed
options, when promulgated. 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
[[Page 68540]]
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. Macro-Economic Effects
EPA estimates that this proposal would not measurably affect the
national economy, including productivity, economic growth, employment
and job creation, and international competitiveness of U.S. goods and
services. Macroeconomic effects on the economy are generally not
considered to be measurable unless the total economic impact of a rule
reaches at least 0.25 percent to 0.5 percent of Gross Domestic Product
(GDP). In 2003, the Bureau of Economic Analysis reported the nominal
U.S. GDP at $11.0 trillion. Thus, in order to be considered measurable,
this proposal would have to generate annualized costs of at least $27
billion to $55 billion. Since EPA estimates that total social costs
(including existing and new facilities) under the most costly of the
three proposed options for existing facilities, the 50 MGD All
Waterbodies option, would be $51 million at a 3 percent discount rate
and $53 million at a 7 percent discount rate, the Agency believes that
this proposal would not perceptibly affect the national economy.
d. Summary of State, Local, and Tribal Government Input
EPA consulted with State governments and representatives of local
governments in developing the regulation. The outreach activities are
discussed in section III of this preamble.
e. Least Burdensome Option
EPA considered and analyzed several alternative regulatory options
for existing facilities to determine the best technology available for
minimizing adverse environmental impact. These regulatory options are
discussed in section VI of this preamble. EPA is co-proposing these
three options because they would meet the requirement of section 316(b)
of the CWA--that the location, design, construction, and capacity of
cooling water intake structures reflect the best technology available
for minimizing adverse environmental impact--and because they are
economically achievable, address a large percentage of flow (in
combination with the Phase II rule), are highly flexible, and impact a
minimal number of small businesses. EPA believes the three co-proposed
options would reflect the most cost-effective and flexible approaches
among the options considered. They regulate 74 percent (50 MGD All
Waterbodies Option), 45 percent (200 MGD All Waterbodies Option), and
16 percent (100 MGD for Certain Waterbodies Option), respectively, of
total design intake flow potentially covered under Phase III, result in
no closures, and affect only one small entity (a new offshore oil and
gas facility). By providing five compliance alternatives, this proposal
would offer Phase III existing facilities a high degree of flexibility
in selecting the most cost-effective approach to meeting section 316(b)
requirements. Under the proposal, these facilities would be able to
demonstrate that existing flow or cooling water intake structure
technologies fulfill section 316(b), by identifying impingement and
entrainment design and control technologies, and/or use operational
measures or restoration measures to fulfill the proposal's
requirements. The proposal would also ensure that any applicable
requirements are economically practicable through the inclusion of the
site-specific compliance alternative at Sec. 125.103(a)(5). EPA
further notes that the compliance alternative specified in Sec.
125.103(a)(4) and 125.108(a) and (b) would be included in part to
provide additional flexibility to Phase III existing facilities, as
well as to reduce the burden of determining, implementing, and
administering section 316(b) requirements among all relevant parties.
Finally, the Agency believes that the three co-proposed options would
extend additional flexibility to States by providing that where a State
has adopted alternative regulatory requirements that achieve
environmental performance comparable to that required under the rule,
the Administrator would approve such alternative requirements.
2. Impact on Small Governments
EPA has determined that this proposal would contain no regulatory
requirements that might significantly or uniquely affect small
governments. No government-owned facility would be subject to the
national categorical requirements of the three co-proposed options.
E. Executive Order 13132: Federalism
Executive Order 13132 (64 FR 43255, August 10, 1999) requires EPA
to develop an accountable process to ensure ``meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications.'' ``Policies that have
federalism implications'' are defined in the Executive Order to include
regulations that 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.''
Under section 6 of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, 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 regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law, unless
the Agency consults with State and local officials early in the process
of developing the proposed regulation.
This proposed rule would not have federalism implications. It would
not have substantial direct effects on the States, on the relationship
between the Federal government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. Rather, this proposed rule would
result in minimal administrative costs to States that have an
authorized NPDES program. Under the co-proposed 50 MGD All Waterbodies
Option, EPA expects an annual burden of 16,972 hours with an annual
cost of $6,823 (non-labor costs) for States to collectively administer
this proposed rule. Under the co-proposed 200 MGD All Waterbodies
Option, EPA expects an annual burden of 4,677 hours with an annual cost
of $2,160 (non-labor costs) for States to collectively administer this
proposed rule. Under the co-proposed 100 MGD Certain Waterbodies
Option, EPA expects an annual burden of 6,528 hours with an annual cost
of $1,973 (non-labor costs) for States to collectively administer this
proposed rule. It is noted that States do not incur any burden hours
and non-labor costs to administer the proposed rule for new offshore
oil and gas extraction facilities since these facilities are outside of
the jurisdiction of the States. EPA has identified zero Phase III
existing facilities that are owned by federal, state or local
government entities; therefore, the annual impacts on these facilities
is zero.
The proposed national cooling water intake structure requirements
would be implemented through permits issued under the NPDES program.
Forty-five
[[Page 68541]]
States and the Virgin Islands are currently authorized pursuant to
section 402(b) of the Clean Water Act to implement the NPDES program.
In States not authorized to implement the NPDES program, EPA issues
NPDES permits. Under the Clean Water Act, States are not required to
become authorized to administer the NPDES program. Rather, such
authorization is available to States if they operate their programs in
a manner consistent with section 402(b) and applicable regulations.
Generally, these provisions require that State NPDES programs include
requirements that are as stringent as Federal program requirements.
States retain the ability to implement requirements that are broader in
scope or more stringent than Federal requirements. (See section 510 of
the Clean Water Act.)
Today's proposed rule would not have substantial direct effects on
either authorized or nonauthorized States or on local governments
because it would not change how EPA and the States and local
governments interact or their respective authority or responsibilities
for implementing the NPDES program. Today's proposed rule would
establish national requirements for Phase III facilities with cooling
water intake structures. NPDES-authorized States that currently do not
comply with the regulations based on today's proposal might need to
amend their regulations or statutes to ensure that their NPDES programs
are consistent with Federal section 316(b) requirements. See 40 CFR
123.62(e). For purposes of this proposed rule, the relationship and
distribution of power and responsibilities between the Federal
government and the States and local governments are established under
the Clean Water Act (e.g., sections 402(b) and 510); nothing in this
proposed rule would alter that. Thus, the requirements of section 6 of
the Executive Order do not apply to this rule.
Although section 6 of Executive Order 13132 does not apply to this
rule, EPA did consult with State governments and representatives of
local governments in developing the proposed rule. During the
development of the proposed and final Phase I and Phase II section
316(b) rules, EPA conducted several outreach activities through which
State and local officials were informed about this proposal and they
provided information and comments to the Agency. The outreach
activities were intended to provide EPA with feedback on issues such as
adverse environmental impact, best technology available, and the
potential cost associated with various regulatory alternatives. These
outreach activities are discussed in section I.C of the preamble to
today's proposed rule.
In the spirit of this Executive Order 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. E.O. 13175: Consultation and Coordination With Indian Tribal
Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' ``Policies that have tribal
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on one or more Indian Tribes, on
the relationship between the Federal government and the Indian Tribes,
or on the distribution of power and responsibilities between the
Federal government and Indian Tribes.''
This proposed rule would not have tribal implications. It would not
have substantial direct effects on tribal governments, on the
relationship between the Federal government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
government and Indian Tribes, as specified in Executive Order 13175.
EPA's analyses show that no facility subject to this proposed rule is
owned by tribal governments. This proposed rule would not affect Tribes
in any way in the foreseeable future. Accordingly, the requirements of
Executive Order 13175 do not apply to this rule.
G. E.O. 13045: Protection of Children From Environmental Health Risks
and Safety Risks
Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any
rule that (1) is determined to be ``economically significant'' as
defined under Executive Order 12866, and (2) concerns an environmental
health or safety risk that EPA has reason to believe might have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health and
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency. This
proposed rule is not an economically significant rule as defined under
Executive Order 12866 ($100 million threshold). Further, it does not
concern an environmental health or safety risk that would have a
disproportionate effect on children. Therefore, it is not subject to
Executive Order 13045.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This proposal is not a ``significant energy action'' as defined in
Executive Order 13211, (``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR
28355, May 22, 2001)) because it is not likely to have a significant
adverse effect on the supply, distribution, or use of energy. Based on
our analysis (see section VIII), EPA has determined that the proposal
contains no compliance requirements that would:
Reduce crude oil supply in excess of 10,000 barrels per
day;
Reduce fuel production in excess of 4,000 barrels per day;
Reduce coal production in excess of 5 million tons per
day;
Reduce electricity production in excess of 1 billion
kilowatt hours per day or in excess of 500 megawatts of installed
capacity;
Increase energy prices in excess of 10 percent;
Increase the cost of energy distribution in excess of 10
percent;
Significantly increase dependence on foreign supplies of
energy; or
Have other similar adverse outcomes, particularly
unintended ones.
EPA analyzed the potential for impacts of the three co-proposed
options and the proposed rule for new offshore oil and gas extraction
facilities and found that none of them would lead to adverse outcomes.
From these analyses, EPA concludes that this proposal would have
minimal energy effects at a national and regional level. As a result,
EPA did not prepare a Statement of Energy Effects. For more detail on
the potential energy effects of this proposal, see the ``Economic
Analysis for the Proposed Section 316(b) Rule for Phase III
Facilities'' (DCN 7-0002). EPA requests comments on these
determinations.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) of 1995, Public Law 104-113, Sec. 12(d) 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
[[Page 68542]]
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standard bodies. The NTTAA directs EPA to provide
Congress, through the Office of Management and Budget (OMB),
explanations when the Agency decides not to use available and
applicable voluntary consensus standards.
This proposed rule does not involve such technical standards.
Therefore, EPA is not considering the use of any voluntary consensus
standards. EPA welcomes comments on this aspect of the proposed rule
and, specifically, invites the public to identify potentially
applicable voluntary consensus standards and to explain why such
standards should be used in this proposed rule.
J. E.O. 12898: Federal Actions To Address Environmental Justice in
Minority Populations and Low-Income Populations
Executive Order 12898 requires that, to the greatest extent
practicable and permitted by law, each Federal agency must make
achieving environmental justice part of its mission. E.O. 12898
provides that each Federal agency must conduct its programs, policies,
and activities that substantially affect human health or the
environment in a manner that ensures such programs, policies, and
activities do not have the effect of excluding persons (including
populations) from participation in, denying persons (including
populations) the benefits of, or subjecting persons (including
populations) to discrimination under such programs, policies, and
activities because of their race, color, or national origin.
Today's proposed rule would require that the location, design,
construction, and capacity of cooling water intake structures at Phase
III existing facilities reflect the best technology available for
minimizing adverse environmental impact. For several reasons, EPA does
not expect that this proposed rule would have an exclusionary effect,
deny persons the benefits of the participating in a program, or subject
persons to discrimination because of their race, color, or national
origin.
To assess the impact of the rule on low-income and minority
populations, EPA calculated the poverty rate and the percentage of the
population classified as non-white for populations living within a 50-
mile radius of each of the 348 (unweighted) facilities in the Phase III
universe. The results of the analysis, presented in the Economic
Analysis, show that the populations affected by the in-scope facilities
have poverty levels and racial compositions that are quite similar to
the U.S. population as a whole. Based on these results, EPA does not
believe that this rule would have an exclusionary effect, deny persons
the benefits of the NPDES program, or subject persons to discrimination
because of their race, color, or national origin.
In fact, because EPA expects that this proposed rule would help to
preserve the health of aquatic ecosystems located in reasonable
proximity to Phase III existing facilities, it believes that all
populations, including minority and low-income populations, would
benefit from improved environmental conditions as a result of this
rule.
K. E.O. 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.''
This 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 proposal provides requirements for reducing both impingement and
entrainment using technologies to minimize adverse environmental impact
for cooling water intake structures located on these types of
waterbodies.
EPA expects that this proposed rule would reduce impingement and
entrainment at Phase III existing facilities. The rule would afford
protection of aquatic organisms at individual, population, community,
or ecosystem levels of ecological structures. Therefore, EPA expects
today's proposed rule would advance the objective of the Executive
Order to protect marine areas.
L. Plain Language Directive
Executive Order 12866 and the President's memorandum of June 1,
1998, require each agency to write all rules in plain language. We
invite your comments on how to make this proposed rule easier to
understand. For example: Have we organized the material to suit your
needs? Are the requirements in the rule clearly stated? Does the rule
contain technical language or jargon that is not clear? Would a
different format (grouping and order of sections, use of headings,
paragraphing) make the rule easier to understand? Would more (but
shorter) sections be better? Could we improve clarity by adding tables,
lists, or diagrams? What else could we do to make the rule easier to
understand?
List of Subjects
40 CFR Part 9
Environmental protection, Reporting and recordkeeping requirements.
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 123
Environmental protection, Administrative practice and procedure,
Confidential business information, Hazardous substances, Indians-lands,
Intergovernmental relations, Penalties, Reporting and recordkeeping
requirements, Water pollution control.
40 CFR Part 124
Environmental protection, Administrative practice and procedure,
Air pollution control, Hazardous waste, Indians-lands, Reporting and
recordkeeping requirements, Water pollution control, Water supply.
40 CFR Part 125
Environmental protection, Cooling water intake structure, Reporting
and recordkeeping requirements, Waste treatment and disposal, Water
pollution control.
Dated: November 1, 2004.
Michael O. Leavitt,
Administrator.
For the reasons set forth in the preamble, chapter I of title 40 of
the Code of Federal Regulations is proposed to be amended as follows:
PART 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT
1. The authority citation for part 9 continues to read as follows:
Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003,
2005, 2006, 2601-2671,
[[Page 68543]]
21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 U.S.C. 1251 et seq.,
1311, 1313d, 1314, 1318, 1321, 1326, 1330, 1342, 1344, 1345 (d) and
(e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp. p. 973;
42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-1, 300g-2, 300g-3,
300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 300j-4, 300j-9, 1857
et seq., 6901-6992k, 7401-7671q, 7542, 9601-9657, 11023, 11048.
2. In Sec. 9.1 the table is amended by revising the entry for
``122.21(r)'' and by adding entries in numerical order under the
indicated heading to read as follows:
Sec. 9.1 OMB approvals under the Paperwork Reduction Act.
* * * * *
------------------------------------------------------------------------
40 CFR citation OMB Control No.
------------------------------------------------------------------------
* * * * * * *
-------------------------------------
EPA Administered Permit Programs: The National Pollutant Discharge
Elimination System
------------------------------------------------------------------------
* * * * * * *
122.21(r)........................... 2040-0241, 2040-0257, xxxx-xxxx
* * * * * * *
-------------------------------------
Criteria and Standards for the National Pollutant Discharge Elimination
System
------------------------------------------------------------------------
* * * * * * *
125.103............................. xxxx-xxxx
125.104............................. xxxx-xxxx
125.106............................. xxxx-xxxx
125.107............................. xxxx-xxxx
125.108............................. xxxx-xxxx
* * * * * * *
------------------------------------------------------------------------
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. Section 122.21 is amended as follows:
a. Revising paragraph (r)(1).
b. Adding a new paragraph (r)(2)(iv).
c. Revising paragraph (r)(4) introductory text.
d. Revising paragraph (r)(5) introductory text.
Sec. 122.21 Application for a permit (applicable to State programs,
see Sec. 123.25)
* * * * *
(r) Application requirements for facilities with cooling water
intake structures--(1)(i) New facilities with new or modified cooling
water intake structures. New facilities (other than offshore oil and
gas extraction facilities) with cooling water intake structures as
defined in part 125, subpart I, of this chapter must submit to the
Director for review the information required under paragraphs (r)(2)
(except (r)(2)(iv)), (3), and (4) of this section and Sec. 125.86 of
this chapter as part of their application. New offshore oil and gas
extraction facilities with cooling water intake structures as defined
in part 125, subpart N, of this chapter that are fixed facilities must
submit to the Director for review the information required under
paragraphs (r)(2) (except (r)(2)(iv)), (3), and (4) of this section and
Sec. 125.136 of this chapter as part of their application. New
offshore oil and gas extraction facilities that are not fixed
facilities must submit to the Director for review only the information
required under paragraphs (r)(2)(iv), (r)(3) (except (r)(3)(ii)), and
Sec. 125.136 of this chapter as part of their application. Requests
for alternative requirements under Sec. 125.85 or Sec. 125.135 of
this chapter must be submitted with your permit application.
(ii) Phase II existing facilities. Phase II existing facilities as
defined in part 125, subpart J, of this chapter must submit to the
Director for review the information required under paragraphs (r)(2)
(except (r)(2)(iv)), (3), and (5) of this section and all applicable
provisions of Sec. 125.95 of this chapter as part of their application
except for the Proposal for Information Collection which must be
provided in accordance with Sec. 125.95(b)(1).
(iii) Phase III existing facilities. Phase III existing facilities
as defined in part 125, subpart K, of this chapter must submit to the
Director for review the information required under paragraphs (r)(2)
(except (r)(2)(iv)), (3), and (5) of this section and all applicable
provisions of Sec. 125.104 of this chapter as part of their
application except for the Proposal for Information Collection which
must be provided in accordance with Sec. 125.104(b)(1) of this
chapter.
(2) * * *
(iv) For new offshore oil and gas facilities that are not fixed
facilities, a narrative description and/or locational maps providing
information on predicted locations within the waterbody during the
permit term in sufficient detail for the Director to determine the
appropriateness of additional impingement requirements under Sec.
125.134(b)(4) of this chapter.
* * * * *
(4) Source water baseline biological characterization data. This
information is 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. 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) or Sec. 125.136(b)(3) of this chapter should be
revised. This supporting information must include existing data (if
they are available). However, you may supplement the data using newly
conducted field studies if you choose to do so. The information you
submit must include:
* * * * *
(5) Cooling water system data. Phase II and III existing facilities
as defined in part 125, subparts J and K, respectively, of this chapter
must provide the
[[Page 68544]]
following information for each cooling water intake structure they use:
* * * * *
3. Section 122.44 is amended by revising paragraph (b)(3) to read
as follows:
Sec. 122.44 Establishing limitations, standards, and other permit
conditions (applicable to State NPDES programs, see Sec. 123.25).
* * * * *
(b) * * *
(3) Requirements applicable to cooling water intake structures
under section 316(b) of the CWA, in accordance with part 125, subparts
I, J, K, and N of this chapter.
* * * * *
PART 123--STATE PROGRAM REQUIREMENTS
1. The authority citation for part 123 continues to read as
follows:
Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
2. Section 123.25 is amended by revising paragraph (a)(36) to read
as follows:
Sec. 123.25 Requirements for permitting.
(a) * * *
(36) Subparts A, B, D, H, I, J, K, and N of part 125 of this
chapter;
* * * * *
PART 124--PROCEDURES FOR DECISIONMAKING
1. The authority citation for part 124 continues to read as
follows:
Authority: Resource Conservation and Recovery Act, 42 U.S.C.
6901 et seq.; Safe Drinking Water Act, 42 U.S.C. 300f et seq.; Clean
Water Act, 33 U.S.C. 1251 et seq.; Clean Air Act, 42 U.S.C. 7401 et
seq.
2. Section 124.10 is amended by revising paragraph (d)(1)(ix) to
read as follows:
Sec. 124.10 Public notice of permit actions and public comment
period.
* * * * *
(d) * * *
(1) * * *
(ix) Requirements applicable to cooling water intake structures
under section 316(b) of the CWA, in accordance with part 125, subparts
I , J, K, and N of this chapter.
* * * * *
PART 125--CRITERIA AND STANDARDS FOR THE NATIONAL POLLUTANT
DISCHARGE ELIMINATION SYSTEM
1. 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.
2. Add subpart K to part 125 to read as follows:
Subpart K--Requirements Applicable to Cooling Water Intake Structures
for Phase III Existing Facilities Under Section 316(b) of the Act
Sec.
125.100 What are the purpose and scope of this subpart?
125.101 What is a ``Phase III existing facility''?
125.102 What special definitions apply to this subpart?
125.103 How will requirements reflecting best technology available
for minimizing adverse environmental impact be established for my
Phase III existing facility?
125.104 As an owner or operator of a Phase III existing facility,
what must I collect and submit when I apply for my reissued NPDES
permit?
125.105 As an owner or operator of a Phase III existing facility,
what monitoring must I perform?
125.106 As an owner or operator of a Phase III existing facility,
what records must I keep and what information must I report?
125.107 As the Director, what must I do to comply with the
requirements of this subpart?
125.108 What are Approved Design and Construction Technologies?
Subpart K--Requirements Applicable to Cooling Water Intake
Structures for Phase III Existing Facilities Under Section 316(b)
of the Act
Sec. 125.100 What are the purpose and scope of this subpart?
(a) This subpart establishes requirements that apply to the
location, design, construction, and capacity of cooling water intake
structures at existing facilities that are subject to this subpart
(i.e., Phase III existing facilities). The purpose of these
requirements is to establish the best technology available for
minimizing adverse environmental impact associated with the use of
cooling water intake structures. These requirements are implemented
through National Pollutant Discharge Elimination System (NPDES) permits
issued under section 402 of the Clean Water Act (CWA).
(b) Existing facilities that are not subject to requirements under
this or another subpart of this Part must meet requirements under
section 316(b) of the CWA determined by the Director on a case-by-case,
best professional judgment (BPJ) basis.
(c) Alternative regulatory requirements. Notwithstanding any other
provision of this subpart, if a State demonstrates to the Administrator
that it has adopted alternative regulatory requirements in its NPDES
program that will result in environmental performance within a
watershed that is comparable to the reductions of impingement mortality
and entrainment that would otherwise be achieved under Sec. 125.103,
the Administrator must approve such alternative regulatory
requirements.
(d) 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
not less stringent than those required by Federal law.
Sec. 125.101 What is a ``Phase III existing facility''?
OPTION A FOR PARAGRAPH (a)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 50 MGD or more, located on any waterbody type]:
(a) An existing facility, as defined in Sec. 125.102, is a Phase
III existing facility 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 of 50 million gallons per day (MGD) or more
to withdraw cooling water from waters of the United States;
(3) It is an existing facility other than a Phase II existing
facility as defined in Sec. 125.91 and Sec. 125.93; and
(4) It uses at least 25 percent of water withdrawn exclusively for
cooling purposes, measured on an average annual basis.
OPTION B FOR PARAGRAPH (a)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 200 MGD or more, located on any waterbody type]:
(a) An existing facility, as defined in Sec. 125.102, is a Phase
III existing facility 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 of 200 million gallons per day (MGD) or more
to withdraw cooling water from waters of the United States;
(3) It is an existing facility other than a Phase II existing
facility as defined in Sec. 125.91 and Sec. 125.93; and
(4) It uses at least 25 percent of water withdrawn exclusively for
cooling
[[Page 68545]]
purposes, measured on an average annual basis.
OPTION C FOR PARAGRAPH (a)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 100 MGD or more, located on oceans, estuaries, tidal
rivers, or one of the Great Lakes]:
(a) An existing facility, as defined in Sec. 125.102, is a Phase
III existing facility 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 of 100 million gallons per day (MGD) or more
to withdraw cooling water from waters of the United States;
(3) It withdraws cooling water from an ocean, estuary, tidal river,
or one of the Great Lakes;
(4) It is an existing facility other than a Phase II existing
facility as defined in Sec. 125.91 and Sec. 125.93; and
(5) It uses at least 25 percent of water withdrawn exclusively for
cooling purposes, measured on an average annual basis.
(b) If an existing manufacturing facility is co-located with one or
more existing facilities (that are not Phase II existing facilities as
defined in Sec. 125.91 and Sec. 125.93), each of the co-located
facilities would be considered a Phase III existing facility if the
combined total design intake flow of the co-located facilities is
greater than the flow threshold established in paragraph (a)(2) of this
section and each of the facilities meets the remaining applicability
criteria in paragraph (a) of this section.
(c) Use of a cooling water intake structure includes obtaining
cooling water by any sort of contract or arrangement with one or more
independent suppliers of cooling water if the supplier withdraws water
from waters of the United States but is not itself a Phase II existing
facility (as defined in Sec. 125.91 and Sec. 125.93) or Phase III
existing facility, except as provided in paragraph (d) of this section.
This provision is intended to prevent circumvention of these
requirements by creating arrangements to receive cooling water from an
entity that is not itself a Phase II or Phase III existing facility.
(d) Notwithstanding paragraph (c) of this section, obtaining
cooling water from a public water system or using treated effluent as
cooling water at a Phase III existing facility does not constitute use
of a cooling water intake structure for purposes of this subpart.
Sec. 125.102 What special definitions apply to this subpart?
In addition to the definitions provided in Sec. 122.3 of this
chapter, the following special definitions apply to this subpart:
Adaptive management method is a type of project management method
where a facility chooses an approach to meeting the project goal,
monitors the effectiveness of that approach, and then based on
monitoring and any other relevant information, makes any adjustments
necessary to ensure continued progress toward the project's goal. This
cycle of activity is repeated as necessary to reach the project's goal.
All life stages means eggs, larvae, juveniles, and adults.
Annual mean flow means the average of daily flows over a calendar
year.
Calculation baseline means 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 your
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 of reducing impingement mortality and
entrainment. You may also choose to use the current level of
impingement mortality and entrainment as the calculation baseline. The
calculation baseline may be estimated using: historical impingement
mortality and entrainment data from your facility or from another
facility with comparable design, operational, and environmental
conditions; current biological data collected in the waterbody in the
vicinity of your cooling water intake structure; or current impingement
mortality and entrainment data collected at your facility. You may
request that the calculation baseline be modified to be based on a
location of the opening of the cooling water intake structure at a
depth other than at or near the surface if you can demonstrate to the
Director that the other depth would correspond to a higher baseline
level of impingement mortality and/or entrainment.
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 and/or noncontact cooling uses
within a facility. The water is usually sent to a cooling canal or
channel, lake, pond, or tower to allow waste heat to be dissipated to
the atmosphere and then is returned to the system. (Some facilities
divert the waste heat to other process operations.) New source water
(make-up water) is added to the system to replenish losses that have
occurred 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 that is 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 in Sec. 125.101(a)(4).
Cooling water intake structure means the total physical structure
and any associated constructed waterways used to withdraw cooling water
from waters of the U.S. 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.
Design and construction technology means any physical configuration
of the cooling water intake structure, or a technology that is placed
in the water body in front of the cooling water intake structure, to
reduce impingement mortality and/or entrainment. Design and
construction technologies include, but are not limited to, location of
the intake structure, intake screen systems, passive intake systems,
fish diversion and/or avoidance systems, and fish handling and return
systems. Restoration measures are not design and construction
technologies for purposes of this definition.
Design intake flow means the value assigned (during the cooling
water intake structure design) to the total volume of water withdrawn
from a source waterbody over a specific time period.
Design intake velocity means the value assigned (during the design
of a cooling water intake structure) to the average speed at which
intake water passes through the open area of the intake screen (or
other device) against which organisms might be impinged or through
which they might be entrained.
Diel means daily and refers to variation in organism abundance and
density over a 24-hour period due to the
[[Page 68546]]
influence of water movement, physical or chemical changes, and changes
in light intensity.
Entrainment means the incorporation of any life stages of fish and
shellfish with intake water flow entering and passing through a cooling
water intake structure and into a cooling water system.
Estuary means a semi-enclosed body of water that has a free
connection with open seas and within which the seawater is measurably
diluted with fresh water derived from land drainage. The salinity of an
estuary exceeds 0.5 parts per thousand (by mass) but is typically less
than 30 parts per thousand (by mass).
Existing facility means any facility that commenced construction as
described in 40 CFR 122.29(b)(4) on or before January 17, 2002 ( or [60
days from publication of the final rule] for an offshore oil and gas
extraction facility); and any modification of, or any addition of a
unit at such a facility that does not meet the definition of a new
facility at Sec. 125.83.
Freshwater river or stream means a lotic (free-flowing) system that
does not receive significant inflows of water from oceans or bays due
to tidal action. For the purposes of this rule, a flow-through
reservoir with a retention time of 7 days or less will be considered a
freshwater river or stream.
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.
Lake or reservoir means any inland body of open water with some
minimum surface area free of rooted vegetation and with an average
hydraulic retention time of more than 7 days. Lakes or reservoirs might
be natural water bodies or impounded streams, usually fresh, surrounded
by land or by land and a man-made retainer (e.g., a dam). Lakes or
reservoirs might be fed by rivers, streams, springs, and/or local
precipitation.
Moribund means dying; close to death.
Natural thermal stratification means the naturally occurring and/or
existing division of a waterbody into horizontal layers of differing
densities as a result of variations in temperature at different depths.
Ocean means marine open coastal waters with a salinity greater than
or equal to 30 parts per thousand (by mass).
Once-through cooling water system means a system designed to
withdraw water from a natural or other water source, use it at the
facility to support contact and/or noncontact cooling uses, and then
discharge it to a waterbody without recirculation. Once-through cooling
systems sometimes employ canals/channels, ponds, or non-recirculating
cooling towers to dissipate waste heat from the water before it is
discharged.
Operational measure means a modification to any operation at a
facility that serves to minimize impact to fish and shellfish from the
cooling water intake structure. Examples of operational measures
include, but are not limited to: reductions in cooling water intake
flow through the use of variable speed pumps and seasonal flow
reductions or shutdowns; and more frequent rotation of traveling
screens.
Source water means the waters of the U.S. from which the cooling
water is withdrawn.
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 sells
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.
Thermocline means the middle layer of a thermally stratified lake
or a reservoir. In this layer, there is a rapid change in temperatures
between the top and bottom of the layer.
Tidal river means the most seaward reach of a river or stream where
the salinity is typically less than or equal to 0.5 parts per thousand
(by mass) at a time of annual low flow and whose surface elevation
responds to the effects of coastal lunar tides.
Sec. 125.103 How will requirements reflecting best technology
available for minimizing adverse environmental impact be established
for my Phase III existing facility?
(a) Compliance Alternatives. You must select and implement one of
the following five alternatives for establishing best technology
available for minimizing adverse environmental impact at your facility:
(1)(i) You may demonstrate to the Director that you have reduced,
or will reduce, your flow commensurate with a closed-cycle
recirculating system. In this case, you are deemed to have met the
applicable performance standards and will not be required to
demonstrate further that your facility meets the impingement mortality
and entrainment performance standards specified in paragraph (b) of
this section. In addition, you are not subject to the requirements in
Sec. Sec. 125.104, 125.105, 125.106, or 125.107. However, you may
still be subject to any more stringent requirements established under
paragraph (e) of this section; or
(ii) You may demonstrate to the Director that you have reduced, or
will reduce, your maximum through-screen design intake velocity to 0.5
ft/s or less. In this case, you are deemed to have met the impingement
mortality performance standards and will not be required to demonstrate
further that your facility meets the performance standards for
impingement mortality specified in paragraph (b) of this section and
you are not subject to the requirements in Sec. Sec. 125.104, 125.105,
125.106, or 125.107 as they apply to impingement mortality. However,
you are still subject to any applicable requirements for entrainment
reduction and may still be subject to any more stringent requirements
established under paragraph (e) of this section.
(2) You may demonstrate to the Director that your existing design
and construction technologies, operational measures, and/or restoration
measures meet the performance standards specified in paragraph (b) of
this section and/or the restoration requirements in paragraph (c) of
this section;
(3) You may demonstrate to the Director that you have selected, and
will install and properly operate and maintain, design and construction
technologies, operational measures, and/or restoration measures that
will, in combination with any existing design and construction
technologies, operational measures, and/or restoration measures, meet
the performance standards specified in paragraph (b) of this section
and/or the restoration requirements in paragraph (c) of this section;
(4) You may demonstrate to the Director that you have installed, or
will install, and properly operate and maintain an approved design and
construction technology in accordance with Sec. 125.108(a) or (b); or
(5) You may demonstrate to the Director that you have selected,
installed, and are properly operating and maintaining, or will install
and properly operate and maintain design and construction technologies,
operational measures, and/or restoration measures that the Director has
determined to be the best technology available to minimize adverse
environmental impact for your facility in accordance with paragraphs
(a)(5)(i) or (a)(5)(ii) of this section.
(i) If the Director determines that data specific to your facility
demonstrate that the costs of compliance under
[[Page 68547]]
alternatives in paragraphs (a)(2) through (4) of this section would be
significantly greater than the costs considered by the Administrator
for a facility like yours in establishing the applicable performance
standards in paragraph (b) of this section, the Director must make a
site-specific determination of the best technology available for
minimizing adverse environmental impact. This determination must be
based on reliable, scientifically valid cost and performance data
submitted by you and any other information that the Director deems
appropriate. The Director must establish site-specific alternative
requirements based on new and/or existing design and construction
technologies, operational measures, and/or restoration measures that
achieve an efficacy that is, in the judgment of the Director, as close
as practicable to the applicable performance standards in paragraph (b)
of this section, without resulting in costs that are significantly
greater than the costs considered by the Administrator for a facility
like yours in establishing the applicable performance standards. The
Director's site-specific determination may conclude that design and
construction technologies, operational measures, and/or restoration
measures in addition to those already in place are not justified
because of the significantly greater costs. To calculate the costs
considered by the Administrator for a facility like yours in
establishing the applicable performance standards you must:
(A) Determine which technology the Administrator modeled as the
most appropriate compliance technology for your facility;
(B) Using the Administrator's costing equations, calculate the
annualized capital and net operation and maintenance (O&M) costs for a
facility with your design intake flow using this technology;
(C) Determine the annualized net revenue loss associated with net
construction downtime that the Administrator modeled for your facility
to install this technology;
(D) Determine the annualized pilot study costs that the
Administrator modeled for your facility to test and optimize this
technology;
(E) Sum the cost items in paragraphs (a)(5)(i)(B), (a)(5)(i)(C),
and (a)(5)(i)(D) of this section; and
(F) Determine if the performance standards that form the basis of
these estimates (i.e., impingement mortality reduction only or
impingement mortality and entrainment reduction) are applicable to your
facility, and if necessary, adjust the estimates to correspond to the
applicable performance standards.
(ii) If the Director determines that data specific to your facility
demonstrate that the costs of compliance under alternatives in
paragraphs (a)(2) through (4) of this section would be significantly
greater than the benefits of complying with the applicable performance
standards at your facility, the Director must make a site-specific
determination of best technology available for minimizing adverse
environmental impact. This determination must be based on reliable,
scientifically valid cost and performance data submitted by you and any
other information the Director deems appropriate. The Director must
establish site-specific alternative requirements based on new and/or
existing design and construction technologies, operational measures,
and/or restoration measures that achieve an efficacy that, in the
judgment of the Director, is as close as practicable to the applicable
performance standards in paragraph (b) of this section without
resulting in costs that are significantly greater than the benefits at
your facility. The Director's site-specific determination may conclude
that design and construction technologies, operational measures, and/or
restoration measures in addition to those already in place are not
justified because the costs would be significantly greater than the
benefits at your facility.
OPTION A FOR PARAGRAPH (b)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 50 MGD or more, located on any waterbody type or the
regulatory option that defines a Phase III existing facility as one
with design intake flows 200 MGD or more, located on any waterbody
type]:
(b) National Performance Standards--(1) Impingement Mortality
Performance Standards. If you choose compliance alternatives in
paragraphs (a)(2), (a)(3), or (a)(4) of this section, you must reduce
impingement mortality for all life stages of fish and shellfish by 80
to 95 percent from the calculation baseline.
(2) Entrainment Performance Standards. If you choose compliance
alternatives in paragraphs (a)(1)(ii), (a)(2), (a)(3), or (a)(4) of
this section, you must also reduce entrainment of all life stages of
fish and shellfish by 60 to 90 percent from the calculation baseline
if:
(i) Your facility is a Phase III existing facility; and
(ii)(A) Your facility uses cooling water withdrawn from a tidal
river, estuary, ocean, or one of the Great Lakes; or
(B) Your facility uses cooling water withdrawn from a freshwater
river or stream and the design intake flow of your cooling water intake
structures is greater than five percent of the mean annual flow.
(3) Additional Performance Standards for Facilities Withdrawing
from a Lake (Other Than One of the Great Lakes) or a Reservoir. If your
facility withdraws cooling water from a lake (other than one of the
Great Lakes) or a reservoir and you propose to increase the design
intake flow of cooling water intake structures it uses, your increased
design intake flow must not disrupt the natural thermal stratification
or turnover pattern (where present) of the source water, except in
cases where the disruption does not adversely affect the management of
fisheries. In determining whether any such disruption does not
adversely affect the management of fisheries, you must consult with
Federal, State, or Tribal fish and wildlife management agencies.
(4) Use of Performance Standards for Site-Specific Determinations
of Best Technology Available. The performance standards in paragraphs
(b)(1) and (2) of this section must also be used for determining
eligibility for site-specific determinations of best technology
available for minimizing adverse environmental impact and establishing
site-specific requirements that achieve an efficacy as close as
practicable to the applicable performance standards without resulting
in costs that are significantly greater than those considered by the
Administrator for a facility like yours in establishing the performance
standards or costs that are significantly greater than the benefits at
your facility, pursuant to paragraph (a)(5) of this section.
OPTION B FOR PARAGRAPH (b)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 100 MGD or more, located on oceans, estuaries, tidal
rivers, or one of the Great Lakes]:
(b) National Performance Standards--(1) Impingement Mortality
Performance Standards. If you choose compliance alternatives in
paragraphs (a)(2), (a)(3), or (a)(4) of this section, you must reduce
impingement mortality for all life stages of fish and shellfish by 80
to 95 percent from the calculation baseline.
(2) Entrainment Performance Standards. If you choose compliance
alternatives in paragraphs (a)(1)(ii), (a)(2), (a)(3), or (a)(4) of
this section, you must also reduce entrainment of all life stages of
fish and shellfish by 60 to 90 percent from the calculation baseline.
[[Page 68548]]
(3) Use of Performance Standards for Site-Specific Determinations
of Best Technology Available. The performance standards in paragraphs
(b)(1) and (2) of this section must also be used for determining
eligibility for site-specific determinations of best technology
available for minimizing adverse environmental impact and establishing
site specific requirements that achieve an efficacy as close as
practicable to the applicable performance standards without resulting
in costs that are significantly greater than those considered by the
Administrator for a facility like yours in establishing the performance
standards or costs that are significantly greater than the benefits at
your facility, pursuant to paragraph (a)(5) of this section.
(c) Requirements for Restoration Measures. With the approval of the
Director, you may implement and adaptively manage restoration measures
that produce and result in increases of fish and shellfish in your
facility's watershed in place of or as a supplement to installing
design and control technologies and/or adopting operational measures
that reduce impingement mortality and entrainment. You must demonstrate
to the Director that:
(1) You have evaluated the use of design and construction
technologies and operational measures for your facility and determined
that the use of restoration measures is appropriate because meeting the
applicable performance standards or site-specific requirements through
the use of design and construction technologies and/or operational
measures alone is less feasible, less cost-effective, or less
environmentally desirable than meeting the standards or requirements in
whole or in part through the use of restoration measures; and
(2) The restoration measures you will implement, alone or in
combination with design and construction technologies and/or
operational measures, will produce ecological benefits (fish and
shellfish), including maintenance or protection of community structure
and function in your facility's waterbody or watershed, at a level that
is substantially similar to the level you would achieve by meeting the
applicable performance standards under paragraph (b) of this section,
or that satisfies alternative site-specific requirements established
pursuant to paragraph (a)(5) of this section.
(d)(1) Compliance Using a Technology Installation and Operation
Plan or Restoration Plan. If you choose one of the compliance
alternatives in paragraphs (a)(2), (3), (4), or (5) of this section,
you may request that compliance with the requirements of paragraphs
(a)(5) and (b) of this section during the first permit containing
requirements consistent with this subpart be determined based on
whether you have complied with the construction, operational,
maintenance, monitoring, and adaptive management requirements of a
Technology Installation and Operation Plan developed in accordance with
Sec. 125.104(b)(4)(ii) (for any design and construction technologies
and/or operational measures) and/or a Restoration Plan developed in
accordance with Sec. 125.104(b)(5) (for any restoration measures). The
Technology Installation and Operation Plan must be designed to meet
applicable performance standards in paragraph (b) of this section or
alternative site-specific requirements developed pursuant to paragraph
(a)(5) of this section. The Restoration Plan must be designed to
achieve compliance with the applicable requirements in paragraph (c) of
this section.
(2) During subsequent permit terms, if you selected and installed
design and construction technologies and/or operational measures and
have been in compliance with the construction, operational,
maintenance, monitoring, and adaptive management requirements of your
Technology Installation and Operation Plan during the preceding permit
term, you may request that compliance with the requirements of this
section during the following permit term be determined based on whether
you remain in compliance with your Technology Installation and
Operation Plan, revised in accordance with your adaptive management
plan in Sec. 125.104(b)(4)(ii)(C) if applicable performance standards
are not being met. Each request and approval of a Technology
Installation and Operation Plan shall be limited to one permit term.
(3) During subsequent permit terms, if you selected and installed
restoration measures and have been in compliance with the construction,
operational, maintenance, monitoring, and adaptive management
requirements in your Restoration Plan during the preceding permit term,
you may request that compliance with the requirements of this section
during the following permit term be determined based on whether you
remain in compliance with your Restoration Plan, revised in accordance
with your adaptive management plan in Sec. 125.104(b)(5)(v) if
applicable performance standards are not being met. Each request and
approval of a Restoration Plan shall be limited to one permit term.
(e) 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.
Sec. 125.104 As an owner or operator of a Phase III existing
facility, what must I collect and submit when I apply for my reissued
NPDES permit?
(a)(1) You must submit to the Director the Proposal for Information
Collection required in paragraph (b)(1) of this section prior to the
start of information collection activities;
(2) You must submit to the Director the information required in 40
CFR 122.21(r)(2) (except (r)(2)(iv)), (r)(3) and (r)(5) and any
applicable portions of the Comprehensive Demonstration Study (Study),
except for the Proposal for Information Collection required by
paragraph (b)(1) of this section; and
(i) You must submit your NPDES permit application in accordance
with the time frames specified in 40 CFR 122.21(d)(2).
(ii) If you are a Phase III existing facility and your existing
permit expires before [4 years from publication of the final rule], you
may request that the Director establish a schedule for you to submit
the information required by this section as expeditiously as
practicable, but not later than [3 years and 180 days from publication
of the final rule]. Between the time your existing permit expires and
the time an NPDES permit containing requirements consistent with this
subpart is issued to your facility, the best technology available to
minimize adverse environmental impact will continue to be determined
based on the Director's best professional judgment.
(3) In subsequent permit terms, the Director may approve a request
to reduce the information required to be submitted in your permit
application on the cooling water intake structure(s) and the source
waterbody, if conditions at your facility and in the waterbody remain
substantially unchanged since your previous application. You must
submit your request for reduced cooling water intake structure and
waterbody application information to the Director at least one year
prior to the expiration of the permit. Your request must identify each
required information item in 40 CFR 122.21(r) and this section that you
determine has not substantially changed since the previous permit
[[Page 68549]]
application and the basis for your determination.
OPTION A FOR PARAGRAPH (b)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 50 MGD or more, located on any waterbody type or the
regulatory option that defines a Phase III existing facility as one
with design intake flows 200 MGD or more, located on any waterbody
type]:
(b) Comprehensive Demonstration Study The purpose of the
Comprehensive Demonstration Study (Study) is to characterize
impingement mortality and entrainment, to describe the operation of
your cooling water intake structures, and to confirm that the
technologies, operational measures, and/or restoration measures you
have selected and installed, or will install, at your facility meet the
applicable requirements of Sec. 125.103. All facilities except those
that have met the applicable requirements in accordance with Sec. Sec.
125.103(a)(1)(i), 125.103(a)(1)(ii), and 125.103(a)(4) must submit all
applicable portions of the Comprehensive Demonstration Study to the
Director in accordance with paragraph (a) of this section. Facilities
that meet the requirements in Sec. 125.103(a)(1)(i) by reducing their
flow commensurate with a closed-cycle, recirculating system are not
required to submit a Comprehensive Demonstration Study. Facilities that
meet the requirements in Sec. 125.103(a)(1)(ii) by reducing their
design intake velocity to 0.5 ft/sec or less are required to submit a
Study only for the entrainment requirements, if applicable. Facilities
that meet the requirements in Sec. 125.103(a)(4) and have installed
and properly operate and maintain an approved design and construction
technology (in accordance with Sec. 125.108) are required to submit
only the Technology Installation and Operation Plan in paragraph (b)(4)
of this section and the Verification Monitoring Plan in paragraph
(b)(7) of this section. Facilities that are required to meet only
impingement mortality performance standards in Sec. 125.103(b)(1) are
required to submit only a Study for the impingement mortality reduction
requirements. The Comprehensive Demonstration Study must include:
(1) Proposal For Information Collection. You must submit to the
Director for review and comment a description of the information you
will use to support your Study. The Proposal for Information Collection
must be submitted prior to the start of information collection
activities, but you may initiate such activities prior to receiving
comment from the Director. The proposal must include:
(i) A description of the proposed and/or implemented technologies,
operational measures, and/or restoration measures to be evaluated in
the Study;
(ii) A list and description of any historical studies
characterizing impingement mortality and entrainment and/or the
physical and biological conditions in the vicinity of the cooling water
intake structures and their relevance to this proposed Study. If you
propose to use existing data, you must demonstrate the extent to which
the data are representative of current conditions and that the data
were collected using appropriate quality assurance/quality control
procedures;
(iii) A summary of any past or ongoing consultations with
appropriate Federal, State, and Tribal fish and wildlife agencies that
are relevant to this Study and a copy of written comments received as a
result of such consultations; and
(iv) A sampling plan for any new field studies you propose to
conduct in order to ensure that you have sufficient data to develop a
scientifically valid estimate of impingement mortality and entrainment
at your site. The sampling plan must document all methods and quality
assurance/quality control procedures for sampling and data analysis.
The sampling and data analysis methods you propose must be appropriate
for a quantitative survey and include consideration of the methods used
in other studies performed in the source waterbody. The sampling plan
must 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).
(2) Source Waterbody Flow Information. You must submit to the
Director the following source waterbody flow information:
(i) If your cooling water intake structure is located in a
freshwater river or stream, you must provide the annual mean flow of
the waterbody and any supporting documentation and engineering
calculations to support your analysis of whether your design intake
flow is greater than five percent of the mean annual flow of the river
or stream for purposes of determining applicable performance standards
under Sec. 125.103(b). Representative historical data (from a period
of time up to 10 years, if available) must be used; and
(ii) If your cooling water intake structure is located in a lake
(other than one of the Great Lakes) or a reservoir and you propose to
increase its design intake flow, you must provide a description of the
thermal stratification in the waterbody, and any supporting
documentation and engineering calculations to show that the total
design intake flow after the increase will not disrupt the natural
thermal stratification and turnover pattern in a way that adversely
impacts fisheries, including the results of any consultations with
Federal, State, or Tribal fish and wildlife management agencies.
(3) Impingement Mortality and/or Entrainment Characterization
Study. You must submit to the Director an Impingement Mortality and/or
Entrainment Characterization Study whose purpose is to provide
information to support the development of a calculation baseline for
evaluating impingement mortality and entrainment and to characterize
current impingement mortality and entrainment. The Impingement
Mortality and/or Entrainment Characterization Study must include the
following, in sufficient detail to support development of the other
elements of the Comprehensive Demonstration Study:
(i) 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 impingement and entrainment;
(ii) A characterization of all life stages of fish, shellfish, and
any species protected under Federal, State, or Tribal Law (including
threatened or endangered species) identified pursuant to paragraph
(b)(3)(i) of this section, 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 impingement mortality and
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;
(iii) Documentation of the current impingement mortality and
entrainment of all life stages of fish, shellfish, and any species
protected under Federal, State, or Tribal Law (including threatened or
endangered species)
[[Page 68550]]
identified pursuant to paragraph (b)(3)(i) of this section and an
estimate of impingement mortality and entrainment to be used as the
calculation baseline. The documentation may include historical data
that are representative of the current operation of your facility and
of biological conditions at the site. Impingement mortality and
entrainment samples to support the calculations required in paragraphs
(b)(4)(i)(C) and (b)(5)(iii) of this section 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;
(4) Technology and Compliance Assessment Information--(i) Design
and Construction Technology Plan. If you choose to use design and
construction technologies and/or operational measures, in whole or in
part to meet the requirements of Sec. 125.103(a)(2) or (3), you must
submit a Design and Construction Technology Plan to the Director for
review and approval. The plan must explain the technologies and/or
operational measures you have in place and/or have selected to meet the
requirements in Sec. 125.103. (Examples of potentially appropriate
technologies may include, but are not limited to, wedgewire screens,
fine mesh screens, fish handling and return systems, barrier nets,
aquatic filter barrier systems, vertical and/or lateral relocation of
the cooling water intake structure, and enlargement of the cooling
water intake structure opening to reduce velocity. Examples of
potentially appropriate operational measures may include, but are not
limited to, seasonal shutdowns, reductions in flow, and continuous or
more frequent rotation of traveling screens.) The plan must contain the
following information:
(A) A narrative description of the design and operation of all
design and construction technologies and/or operational measures
(existing and proposed), including fish handling and return systems,
that you have in place or will use to meet the requirements to reduce
impingement mortality of those species expected to be most susceptible
to impingement, and information that demonstrates the efficacy of the
technologies and/or operational measures for those species;
(B) A narrative description of the design and operation of all
design and construction technologies and/or operational measures
(existing and proposed) that you have in place or will use to meet the
requirements to reduce entrainment of those species expected to be the
most susceptible to entrainment, if applicable, and information that
demonstrates the efficacy of the technologies and/or operational
measures for those species;
(C) Calculations of the reduction in impingement mortality and
entrainment of all life stages of fish and shellfish that would be
achieved by the technologies and/or operational measures you have
selected based on the Impingement Mortality and/or Entrainment
Characterization Study in paragraph (b)(3) of this section. In
determining compliance with any requirements to reduce impingement
mortality or entrainment, you must assess the total reduction in
impingement mortality and entrainment against the calculation baseline
determined in accordance with paragraph (b)(3) of this section.
Reductions in impingement mortality and entrainment from this
calculation baseline as a result of any design and construction
technologies and/or operational measures already implemented at your
facility should be added to the reductions expected to be achieved by
any additional design and/or construction technologies and operational
measures that will be implemented, and any increases in fish and
shellfish within the waterbody attributable to your restoration
measures. Facilities that recirculate a portion of their flow, but do
not reduce flow sufficiently to satisfy the compliance option in Sec.
125.103(a)(1)(i) may take into account the reduction in impingement
mortality and entrainment associated with the reduction in flow when
determining the net reduction associated with existing design and
construction technologies and/or operational measures. This estimate
must include a site-specific evaluation of the suitability of the
technologies and/or operational measures based on the species that are
found at the site, and may be determined based on representative
studies (i.e., studies that have been conducted at a similar facility's
cooling water intake structures located in the same waterbody type with
similar biological characteristics) and/or site-specific technology
prototype or pilot studies; and
(D) Design and engineering calculations, drawings, and estimates
prepared by a qualified professional to support the descriptions
required by paragraphs (b)(4)(i)(A) and (B) of this section.
(ii) Technology Installation and Operation Plan. If you choose the
compliance alternative in Sec. 125.103(a)(2), (3), (4), or (5) and use
design and construction technologies and/or operational measures in
whole or in part to comply with the applicable requirements of Sec.
125.103, you must submit the following information with your
application for review and approval by the Director:
(A) A schedule for the installation and maintenance of any new
design and construction technologies. Any downtime of generating units
to accommodate installation and/or maintenance of these technologies
should be scheduled to coincide with otherwise necessary downtime
(e.g., for repair, overhaul, or routine maintenance of the generating
units) to the extent practicable. Where additional downtime is
required, you may coordinate scheduling of this downtime with the North
American Electric Reliability Council and/or other generators in your
area to ensure that impacts to reliability and supply are minimized;
(B) List of operational and other parameters to be monitored, and
the location and frequency that you will monitor them;
(C) List of activities you will undertake to ensure to the degree
practicable the efficacy of installed design and construction
technologies and operational measures, and your schedule for
implementing them;
(D) A schedule and methodology for assessing the efficacy of any
installed design and construction technologies and operational measures
in meeting applicable performance standards or site-specific
requirements, including an adaptive management plan for revising design
and construction technologies, operational measures, operation and
maintenance requirements, and/or monitoring requirements if your
assessment indicates that applicable performance standards or site-
specific requirements are not being met; and
(E) If you choose the compliance alternative in Sec.
125.103(a)(4), documentation that the appropriate site conditions in
Sec. 125.108(a) or (b) exist at your facility.
(5) Restoration Plan. If you propose to use restoration measures,
in whole or in part, to meet the applicable requirements in Sec.
125.103, you must submit the following information with your
application for review and approval by the Director. You must address
species of concern identified in consultation with Federal, State, and
Tribal fish and wildlife management agencies with responsibility for
fisheries and wildlife potentially affected by your cooling water
intake structure(s).
(i) A demonstration to the Director that you have evaluated the use
of design and construction technologies and/or operational measures for
your facility and an explanation of how you determined that restoration
would be
[[Page 68551]]
more feasible, cost-effective, or environmentally desirable;
(ii) A narrative description of the design and operation of all
restoration measures (existing and proposed) that you have in place or
will use to produce fish and shellfish;
(iii) Quantification of the ecological benefits of the proposed
restoration measures. You must use information from the Impingement
Mortality and/or Entrainment Characterization Study required in
paragraph (b)(3) of this section, and any other available and
appropriate information, to estimate the reduction in fish and
shellfish impingement mortality and/or entrainment that would be
necessary for your facility to comply with Sec. 125.103(c)(2). You
must then calculate the production of fish and shellfish that you will
achieve with the restoration measures you will or have already
installed. You must include a discussion of the nature and magnitude of
uncertainty associated with the performance of these restoration
measures. You must also include a discussion of the time frame within
which these ecological benefits are expected to accrue;
(iv) Design calculations, drawings, and estimates to document that
your proposed restoration measures in combination with design and
construction technologies and/or operational measures, or alone, will
meet the requirements of Sec. 125.103(c)(2). If the restoration
measures address the same fish and shellfish species identified in the
Impingement Mortality and/or Entrainment Characterization Study (in-
kind restoration), you must demonstrate that the restoration measures
will produce a level of these fish and shellfish substantially similar
to that which would result from meeting applicable performance
standards in Sec. 125.103(b), or that they will satisfy site-specific
requirements established pursuant to Sec. 125.103(a)(5). If the
restoration measures address fish and shellfish species different from
those identified in the Impingement Mortality and/or Entrainment
Characterization Study (out-of-kind restoration), you must demonstrate
that the restoration measures produce ecological benefits substantially
similar to or greater than those that would be realized through in-kind
restoration. Such a demonstration should be based on a watershed
approach to restoration planning and consider applicable multi-agency
watershed restoration plans, site-specific peer-reviewed ecological
studies, and/or consultation with appropriate Federal, State, and
Tribal fish and wildlife management agencies.
(v) A plan utilizing an adaptive management method for
implementing, maintaining, and demonstrating the efficacy of the
restoration measures you have selected and for determining the extent
to which the restoration measures, or the restoration measures in
combination with design and construction technologies and operational
measures, have met the applicable requirements of Sec. 125.103(c)(2).
The plan must include:
(A) A monitoring plan that includes a list of the restoration
parameters that will be monitored, the frequency at which you will
monitor them, and success criteria for each parameter;
(B) A list of activities you will undertake to ensure the efficacy
of the restoration measures, a description of the linkages between
these activities and the items in paragraph (b)(5)(v)(A) of this
section, and an implementation schedule; and
(C) A process for revising the Restoration Plan as new information,
including monitoring data, becomes available, if the applicable
requirements under Sec. 125.103(c)(2) are not being met.
(vi) A summary of any past or ongoing consultation with appropriate
Federal, State, and Tribal fish and wildlife management agencies on
your use of restoration measures including a copy of any written
comments received as a result of such consultations;
(vii) If requested by the Director, a peer review of the items you
submit for the Restoration Plan. You must choose the peer reviewers 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 your
cooling water intake structure(s). Peer reviewers must have appropriate
qualifications (e.g., in the fields of geology, engineering, and/or
biology, etc.) depending upon the materials to be reviewed; and
(viii) A description of the information to be included in a
biennial status report to the Director.
(6) Information to Support Site-specific Determination of Best
Technology Available for Minimizing Adverse Environmental Impact. If
you have requested a site-specific determination of best technology
available for minimizing adverse environmental impact pursuant to Sec.
125.103(a)(5)(i) because of costs significantly greater than those
considered by the Administrator for a facility like yours in
establishing the applicable performance standards of Sec. 125.103(b),
you are required to provide to the Director the information specified
in paragraphs (b)(6)(i) and (b)(6)(iii) of this section. If you have
requested a site-specific determination of best technology available
for minimizing adverse environmental impact pursuant to Sec.
125.103(a)(5)(ii) because of costs significantly greater than the
benefits of meeting the applicable performance standards of Sec.
125.103(b) at your facility, you must provide the information specified
in paragraphs (b)(6)(i), (b)(6)(ii), and (b)(6)(iii) of this section:
(i) Comprehensive Cost Evaluation Study. You must perform and
submit the results of a Comprehensive Cost Evaluation Study, that
includes:
(A) Engineering cost estimates in sufficient detail to document the
costs of implementing design and construction technologies, operational
measures, and/or restoration measures at your facility that would be
needed to meet the applicable performance standards of Sec.
125.103(b);
(B) A demonstration that the costs documented in paragraph
(b)(6)(i)(A) of this section significantly exceed either those
considered by the Administrator for a facility like yours in
establishing the applicable performance standards or the benefits of
meeting the applicable performance standards at your facility; and
(C) Engineering cost estimates in sufficient detail to document the
costs of implementing the design and construction technologies,
operational measures, and/or restoration measures in your Site-Specific
Technology Plan developed in accordance with paragraph (b)(6)(iii) of
this section.
(ii) Benefits Valuation Study. If you are seeking a site-specific
determination of best technology available for minimizing adverse
environmental impact because of costs significantly greater than the
benefits of meeting the applicable performance standards of Sec.
125.103(b) at your facility, you must use a comprehensive methodology
to fully value the impacts of impingement mortality and entrainment at
your site and the benefits achievable by meeting the applicable
performance standards. In addition to the valuation estimates, the
benefit study must include the following:
(A) A description of the methodology(ies) used to value commercial,
recreational, and ecological benefits (including any non-use benefits,
if applicable);
(B) Documentation of the basis for any assumptions and quantitative
estimates. If you plan to use an entrainment survival rate other than
zero, you must
[[Page 68552]]
submit a determination of entrainment survival at your facility based
on a study approved by the Director;
(C) An analysis of the effects of significant sources of
uncertainty on the results of the study; and
(D) If requested by the Director, a peer review of the items you
submit in the Benefits Valuation Study. You must choose the peer
reviewers 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 your
cooling water intake structure. Peer reviewers must have appropriate
qualifications depending upon the materials to be reviewed.
(E) A narrative description of any non-monetized benefits that
would be realized at your site if you were to meet the applicable
performance standards and a qualitative assessment of their magnitude
and significance.
(iii) Site-Specific Technology Plan. Based on the results of the
Comprehensive Cost Evaluation Study required by paragraph (b)(6)(i) of
this section, and the Benefits Valuation Study required by paragraph
(b)(6)(ii) of this section, if applicable, you must submit a Site-
Specific Technology Plan to the Director for review and approval. The
plan must contain the following information:
(A) A narrative description of the design and operation of all
existing and proposed design and construction technologies, operational
measures, and/or restoration measures that you have selected in
accordance with Sec. 125.103(a)(5);
(B) An engineering estimate of the efficacy of the proposed and/or
implemented design and construction technologies or operational
measures, and/or restoration measures. This estimate must include a
site-specific evaluation of the suitability of the technologies or
operational measures for reducing impingement mortality and/or
entrainment (as applicable) of all life stages of fish and shellfish
based on representative studies (e.g., studies that have been conducted
at cooling water intake structures located in the same waterbody type
with similar biological characteristics) and, if applicable, site-
specific technology prototype or pilot studies. If restoration measures
will be used, you must provide a Restoration Plan that includes the
elements described in paragraph (b)(5) of this section.
(C) A demonstration that the proposed and/or implemented design and
construction technologies, operational measures, and/or restoration
measures achieve an efficacy that is as close as practicable to the
applicable performance standards of Sec. 125.103(b) without resulting
in costs significantly greater than either the costs considered by the
Administrator for a facility like yours in establishing the applicable
performance standards, or as appropriate, the benefits of complying
with the applicable performance standards at your facility;
(D) Design and engineering calculations, drawings, and estimates
prepared by a qualified professional to support the elements of the
Plan.
(7) Verification Monitoring Plan. If you comply using compliance
alternatives in Sec. 125.103(a)(2), (3), (4), or (5) using design and
construction technologies and/or operational measures, you must submit
a plan to conduct, at a minimum, two years of monitoring to verify the
full-scale performance of the proposed or already implemented
technologies and/or operational measures. The verification study must
begin once the design and construction technologies and/or operational
measures are installed and continue for a period of time that is
sufficient to demonstrate to the Director whether the facility is
meeting the applicable performance standards in Sec. 125.103(b) or
site-specific requirements developed pursuant to Sec. 125.103(a)(5).
The plan must provide the following:
(i) Description of the frequency and duration of monitoring, the
parameters to be monitored, and the basis for determining the
parameters and the frequency and duration for monitoring. The
parameters selected and duration and frequency of monitoring must be
consistent with any methodology for assessing success in meeting
applicable performance standards in your Technology Installation and
Operation Plan as required by paragraph (b)(4)(ii) of this section.
(ii) A proposal on how naturally moribund fish and shellfish that
enter the cooling water intake structure would be identified and taken
into account in assessing success in meeting the performance standards
in Sec. 125.103(b) or site-specific requirements developed pursuant to
Sec. 125.103(a)(5).
(iii) A description of the information to be included in a biennial
status report to the Director.
OPTION B FOR PARAGRAPH (b)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 100 MGD or more, located on oceans, estuaries, tidal
rivers, or one of the Great Lakes]:
(b) Comprehensive Demonstration Study. The purpose of the
Comprehensive Demonstration Study (Study) is to characterize
impingement mortality and entrainment, to describe the operation of
your cooling water intake structures, and to confirm that the
technologies, operational measures, and/or restoration measures you
have selected and installed, or will install, at your facility meet the
applicable requirements of Sec. 125.103. All facilities except those
that have met the applicable requirements in accordance with Sec. Sec.
125.103(a)(1)(i), 125.103(a)(1)(ii), and 125.103(a)(4) must submit all
applicable portions of the Comprehensive Demonstration Study to the
Director in accordance with paragraph (a) of this section. Facilities
that meet the requirements in Sec. 125.103(a)(1)(i) by reducing their
flow commensurate with a closed-cycle, recirculating system are not
required to submit a Comprehensive Demonstration Study. Facilities that
meet the requirements in Sec. 125.103(a)(1)(ii) by reducing their
design intake velocity to 0.5 ft/sec or less are required to submit a
Study only for the entrainment requirements. Facilities that meet the
requirements in Sec. 125.103(a)(4) and have installed and properly
operate and maintain an approved design and construction technology (in
accordance with Sec. 125.108) are required to submit only the
Technology Installation and Operation Plan in paragraph (b)(4) of this
section and the Verification Monitoring Plan in paragraph (b)(7) of
this section. The Comprehensive Demonstration Study must include:
(1) Proposal for Information Collection. You must submit to the
Director for review and comment a description of the information you
will use to support your Study. The Proposal for Information Collection
must be submitted prior to the start of information collection
activities, but you may initiate such activities prior to receiving
comment from the Director. The proposal must include:
(i) A description of the proposed and/or implemented technologies,
operational measures, and/or restoration measures to be evaluated in
the Study;
(ii) A list and description of any historical studies
characterizing impingement mortality and entrainment and/or the
physical and biological conditions in the vicinity of the cooling water
intake structures and their relevance to this proposed Study. If you
propose to use existing data, you must demonstrate the extent to which
the data are representative of current conditions and that the data
were
[[Page 68553]]
collected using appropriate quality assurance/quality control
procedures;
(iii) A summary of any past or ongoing consultations with
appropriate Federal, State, and Tribal fish and wildlife agencies that
are relevant to this Study and a copy of written comments received as a
result of such consultations; and
(iv) A sampling plan for any new field studies you propose to
conduct in order to ensure that you have sufficient data to develop a
scientifically valid estimate of impingement mortality and entrainment
at your site. The sampling plan must document all methods and quality
assurance/quality control procedures for sampling and data analysis.
The sampling and data analysis methods you propose must be appropriate
for a quantitative survey and include consideration of the methods used
in other studies performed in the source waterbody. The sampling plan
must 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).
(2) Impingement Mortality and Entrainment Characterization Study.
You must submit to the Director an Impingement Mortality and
Entrainment Characterization Study whose purpose is to provide
information to support the development of a calculation baseline for
evaluating impingement mortality and entrainment and to characterize
current impingement mortality and entrainment. The Impingement
Mortality and Entrainment Characterization Study must include the
following, in sufficient detail to support development of the other
elements of the Comprehensive Demonstration Study:
(i) 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 impingement and entrainment;
(ii) A characterization of all life stages of fish, shellfish, and
any species protected under Federal, State, or Tribal Law (including
threatened or endangered species) identified pursuant to paragraph
(b)(2)(i) of this section, 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 impingement mortality and
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;
(iii) Documentation of the current impingement mortality and
entrainment of all life stages of fish, shellfish, and any species
protected under Federal, State, or Tribal Law (including threatened or
endangered species) identified pursuant to paragraph (b)(2)(i) of this
section and an estimate of impingement mortality and entrainment to be
used as the calculation baseline. The documentation may include
historical data that are representative of the current operation of
your facility and of biological conditions at the site. Impingement
mortality and entrainment samples to support the calculations required
in paragraphs (b)(3)(i)(C) and (b)(4)(iii) of this section 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;
(3) Technology and Compliance Assessment Information--(i) Design
and Construction Technology Plan. If you choose to use design and
construction technologies and/or operational measures, in whole or in
part to meet the requirements of Sec. 125.103(a)(2) or (3), you must
submit a Design and Construction Technology Plan to the Director for
review and approval. The plan must explain the technologies and/or
operational measures you have in place and/or have selected to meet the
requirements in Sec. 125.103. (Examples of potentially appropriate
technologies may include, but are not limited to, wedgewire screens,
fine mesh screens, fish handling and return systems, barrier nets,
aquatic filter barrier systems, vertical and/or lateral relocation of
the cooling water intake structure, and enlargement of the cooling
water intake structure opening to reduce velocity. Examples of
potentially appropriate operational measures may include, but are not
limited to, seasonal shutdowns, reductions in flow, and continuous or
more frequent rotation of traveling screens.) The plan must contain the
following information:
(A) A narrative description of the design and operation of all
design and construction technologies and/or operational measures
(existing and proposed), including fish handling and return systems,
that you have in place or will use to meet the requirements to reduce
impingement mortality of those species expected to be most susceptible
to impingement, and information that demonstrates the efficacy of the
technologies and/or operational measures for those species;
(B) A narrative description of the design and operation of all
design and construction technologies and/or operational measures
(existing and proposed) that you have in place or will use to meet the
requirements to reduce entrainment of those species expected to be the
most susceptible to entrainment and information that demonstrates the
efficacy of the technologies and/or operational measures for those
species;
(C) Calculations of the reduction in impingement mortality and
entrainment of all life stages of fish and shellfish that would be
achieved by the technologies and/or operational measures you have
selected based on the Impingement Mortality and Entrainment
Characterization Study in paragraph (b)(2) of this section. In
determining compliance with any requirements to reduce impingement
mortality and entrainment, you must assess the total reduction in
impingement mortality and entrainment against the calculation baseline
determined in accordance with paragraph (b)(2) of this section.
Reductions in impingement mortality and entrainment from this
calculation baseline as a result of any design and construction
technologies and/or operational measures already implemented at your
facility should be added to the reductions expected to be achieved by
any additional design and/or construction technologies and operational
measures that will be implemented, and any increases in fish and
shellfish within the waterbody attributable to your restoration
measures. Facilities that recirculate a portion of their flow, but do
not reduce flow sufficiently to satisfy the compliance option in Sec.
125.103(a)(1)(i) may take into account the reduction in impingement
mortality and entrainment associated with the reduction in flow when
determining the net reduction associated with existing design and
construction technologies and/or operational measures. This estimate
must include a site-specific evaluation of the suitability of the
technologies and/or operational measures based on the species that are
found at the site, and may be determined based on representative
studies (i.e., studies that have been conducted at a similar facility's
cooling water intake structures located in the same waterbody type with
similar biological characteristics) and/or site-specific technology
prototype or pilot studies; and
[[Page 68554]]
(D) Design and engineering calculations, drawings, and estimates
prepared by a qualified professional to support the descriptions
required by paragraphs (b)(3)(i)(A) and (B) of this section.
(ii) Technology Installation and Operation Plan. If you choose the
compliance alternative in Sec. 125.103(a)(2), (3), (4), or (5) and use
design and construction technologies and/or operational measures in
whole or in part to comply with the applicable requirements of Sec.
125.103, you must submit the following information with your
application for review and approval by the Director:
(A) A schedule for the installation and maintenance of any new
design and construction technologies. Any downtime of generating units
to accommodate installation and/or maintenance of these technologies
should be scheduled to coincide with otherwise necessary downtime
(e.g., for repair, overhaul, or routine maintenance of the generating
units) to the extent practicable. Where additional downtime is
required, you may coordinate scheduling of this downtime with the North
American Electric Reliability Council and/or other generators in your
area to ensure that impacts to reliability and supply are minimized;
(B) List of operational and other parameters to be monitored, and
the location and frequency that you will monitor them;
(C) List of activities you will undertake to ensure to the degree
practicable the efficacy of installed design and construction
technologies and operational measures, and your schedule for
implementing them;
(D) A schedule and methodology for assessing the efficacy of any
installed design and construction technologies and operational measures
in meeting applicable performance standards or site-specific
requirements, including an adaptive management plan for revising design
and construction technologies, operational measures, operation and
maintenance requirements, and/or monitoring requirements if your
assessment indicates that applicable performance standards or site-
specific requirements are not being met; and
(E) If you choose the compliance alternative in Sec.
125.103(a)(4), documentation that the appropriate site conditions in
Sec. 125.108(b) exist at your facility.
(4) Restoration Plan. If you propose to use restoration measures,
in whole or in part, to meet the applicable requirements in Sec.
125.103, you must submit the following information with your
application for review and approval by the Director. You must address
species of concern identified in consultation with Federal, State, and
Tribal fish and wildlife management agencies with responsibility for
fisheries and wildlife potentially affected by your cooling water
intake structure(s).
(i) A demonstration to the Director that you have evaluated the use
of design and construction technologies and/or operational measures for
your facility and an explanation of how you determined that restoration
would be more feasible, cost-effective, or environmentally desirable;
(ii) A narrative description of the design and operation of all
restoration measures (existing and proposed) that you have in place or
will use to produce fish and shellfish;
(iii) Quantification of the ecological benefits of the proposed
restoration measures. You must use information from the Impingement
Mortality and Entrainment Characterization Study required in paragraph
(b)(2) of this section, and any other available and appropriate
information, to estimate the reduction in fish and shellfish
impingement mortality and entrainment that would be necessary for your
facility to comply with Sec. 125.103(c)(2). You must then calculate
the production of fish and shellfish that you will achieve with the
restoration measures you will or have already installed. You must
include a discussion of the nature and magnitude of uncertainty
associated with the performance of these restoration measures. You must
also include a discussion of the time frame within which these
ecological benefits are expected to accrue;
(iv) Design calculations, drawings, and estimates to document that
your proposed restoration measures in combination with design and
construction technologies and/or operational measures, or alone, will
meet the requirements of Sec. 125.103(c)(2). If the restoration
measures address the same fish and shellfish species identified in the
Impingement Mortality and Entrainment Characterization Study (in-kind
restoration), you must demonstrate that the restoration measures will
produce a level of these fish and shellfish substantially similar to
that which would result from meeting applicable performance standards
in Sec. 125.103(b), or that they will satisfy site-specific
requirements established pursuant to Sec. 125.103(a)(5). If the
restoration measures address fish and shellfish species different from
those identified in the Impingement Mortality and Entrainment
Characterization Study (out-of-kind restoration), you must demonstrate
that the restoration measures produce ecological benefits substantially
similar to or greater than those that would be realized through in-kind
restoration. Such a demonstration should be based on a watershed
approach to restoration planning and consider applicable multi-agency
watershed restoration plans, site-specific peer-reviewed ecological
studies, and/or consultation with appropriate Federal, State, and
Tribal fish and wildlife management agencies.
(v) A plan utilizing an adaptive management method for
implementing, maintaining, and demonstrating the efficacy of the
restoration measures you have selected and for determining the extent
to which the restoration measures, or the restoration measures in
combination with design and construction technologies and operational
measures, have met the applicable requirements of Sec. 125.103(c)(2).
The plan must include:
(A) A monitoring plan that includes a list of the restoration
parameters that will be monitored, the frequency at which you will
monitor them, and success criteria for each parameter;
(B) A list of activities you will undertake to ensure the efficacy
of the restoration measures, a description of the linkages between
these activities and the items in paragraph (b)(4)(v)(A) of this
section, and an implementation schedule; and
(C) A process for revising the Restoration Plan as new information,
including monitoring data, becomes available, if the applicable
requirements under Sec. 125.103(c)(2) are not being met.
(vi) A summary of any past or ongoing consultation with appropriate
Federal, State, and Tribal fish and wildlife management agencies on
your use of restoration measures including a copy of any written
comments received as a result of such consultations;
(vii) If requested by the Director, a peer review of the items you
submit for the Restoration Plan. You must choose the peer reviewers 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 your
cooling water intake structure(s). Peer reviewers must have appropriate
qualifications (e.g., in the fields of geology, engineering, and/or
biology, etc.) depending upon the materials to be reviewed; and
(viii) A description of the information to be included in a
biennial status report to the Director.
(5) Information to Support Site-specific Determination of Best
[[Page 68555]]
Technology Available for Minimizing Adverse Environmental Impact. If
you have requested a site-specific determination of best technology
available for minimizing adverse environmental impact pursuant to Sec.
125.103(a)(5)(i) because of costs significantly greater than those
considered by the Administrator for a facility like yours in
establishing the applicable performance standards of Sec. 125.103(b),
you are required to provide to the Director the information specified
in paragraphs (b)(5)(i) and (b)(5)(iii) of this section. If you have
requested a site-specific determination of best technology available
for minimizing adverse environmental impact pursuant to Sec.
125.103(a)(5)(ii) because of costs significantly greater than the
benefits of meeting the applicable performance standards of Sec.
125.103(b) at your facility, you must provide the information specified
in paragraphs (b)(5)(i), (b)(5)(ii), and (b)(5)(iii) of this section:
(i) Comprehensive Cost Evaluation Study. You must perform and
submit the results of a Comprehensive Cost Evaluation Study, that
includes:
(A) Engineering cost estimates in sufficient detail to document the
costs of implementing design and construction technologies, operational
measures, and/or restoration measures at your facility that would be
needed to meet the applicable performance standards of Sec.
125.103(b);
(B) A demonstration that the costs documented in paragraph
(b)(5)(i)(A) of this section significantly exceed either those
considered by the Administrator for a facility like yours in
establishing the applicable performance standards or the benefits of
meeting the applicable performance standards at your facility; and
(C) Engineering cost estimates in sufficient detail to document the
costs of implementing the design and construction technologies,
operational measures, and/or restoration measures in your Site-Specific
Technology Plan developed in accordance with paragraph (b)(5)(iii) of
this section.
(ii) Benefits Valuation Study. If you are seeking a site-specific
determination of best technology available for minimizing adverse
environmental impact because of costs significantly greater than the
benefits of meeting the applicable performance standards of Sec.
125.103(b) at your facility, you must use a comprehensive methodology
to fully value the impacts of impingement mortality and entrainment at
your site and the benefits achievable by meeting the applicable
performance standards. In addition to the valuation estimates, the
benefit study must include the following:
(A) A description of the methodology(ies) used to value commercial,
recreational, and ecological benefits (including any non-use benefits,
if applicable);
(B) Documentation of the basis for any assumptions and quantitative
estimates. If you plan to use an entrainment survival rate other than
zero, you must submit a determination of entrainment survival at your
facility based on a study approved by the Director;
(C) An analysis of the effects of significant sources of
uncertainty on the results of the study; and
(D) If requested by the Director, a peer review of the items you
submit in the Benefits Valuation Study. You must choose the peer
reviewers 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 your
cooling water intake structure. Peer reviewers must have appropriate
qualifications depending upon the materials to be reviewed.
(E) A narrative description of any non-monetized benefits that
would be realized at your site if you were to meet the applicable
performance standards and a qualitative assessment of their magnitude
and significance.
(iii) Site-Specific Technology Plan. Based on the results of the
Comprehensive Cost Evaluation Study required by paragraph (b)(5)(i) of
this section, and the Benefits Valuation Study required by paragraph
(b)(5)(ii) of this section, if applicable, you must submit a Site-
Specific Technology Plan to the Director for review and approval. The
plan must contain the following information:
(A) A narrative description of the design and operation of all
existing and proposed design and construction technologies, operational
measures, and/or restoration measures that you have selected in
accordance with Sec. 125.103(a)(5);
(B) An engineering estimate of the efficacy of the proposed and/or
implemented design and construction technologies or operational
measures, and/or restoration measures. This estimate must include a
site-specific evaluation of the suitability of the technologies or
operational measures for reducing impingement mortality and entrainment
of all life stages of fish and shellfish based on representative
studies (e.g., studies that have been conducted at cooling water intake
structures located in the same waterbody type with similar biological
characteristics) and, if applicable, site-specific technology prototype
or pilot studies. If restoration measures will be used, you must
provide a Restoration Plan that includes the elements described in
paragraph (b)(4) of this section.
(C) A demonstration that the proposed and/or implemented design and
construction technologies, operational measures, and/or restoration
measures achieve an efficacy that is as close as practicable to the
applicable performance standards of Sec. 125.103(b) without resulting
in costs significantly greater than either the costs considered by the
Administrator for a facility like yours in establishing the applicable
performance standards, or as appropriate, the benefits of complying
with the applicable performance standards at your facility;
(D) Design and engineering calculations, drawings, and estimates
prepared by a qualified professional to support the elements of the
Plan.
(6) Verification Monitoring Plan. If you comply using compliance
alternatives in Sec. 125.103(a)(2), (3), (4), or (5) using design and
construction technologies and/or operational measures, you must submit
a plan to conduct, at a minimum, two years of monitoring to verify the
full-scale performance of the proposed or already implemented
technologies and/or operational measures. The verification study must
begin once the design and construction technologies and/or operational
measures are installed and continue for a period of time that is
sufficient to demonstrate to the Director whether the facility is
meeting the applicable performance standards in Sec. 125.103(b) or
site-specific requirements developed pursuant to Sec. 125.103(a)(5).
The plan must provide the following:
(i) Description of the frequency and duration of monitoring, the
parameters to be monitored, and the basis for determining the
parameters and the frequency and duration for monitoring. The
parameters selected and duration and frequency of monitoring must be
consistent with any methodology for assessing success in meeting
applicable performance standards in your Technology Installation and
Operation Plan as required by paragraph (b)(3)(ii) of this section.
(ii) A proposal on how naturally moribund fish and shellfish that
enter the cooling water intake structure would be identified and taken
into account in assessing success in meeting the performance standards
in Sec. 125.103(b).
[[Page 68556]]
(iii) A description of the information to be included in a biennial
status report to the Director.
Sec. 125.105 As an owner or operator of a Phase III existing
facility, what monitoring must I perform?
OPTION A FOR Sec. 125.105--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 50 MGD or more, located on any waterbody type or the
regulatory option that defines a Phase III existing facility as one
with design intake flows 200 MGD or more, located on any waterbody
type]:
As an owner or operator of a Phase III existing facility, you must
perform monitoring, as applicable, in accordance with the Technology
Installation and Operation Plan required by Sec. 125.104(b)(4)(ii),
the Restoration Plan required by Sec. 125.104(b)(5), the Verification
Monitoring Plan required by Sec. 125.104(b)(7), and any additional
monitoring specified by the Director to demonstrate compliance with the
applicable requirements of Sec. 125.103.
OPTION B FOR Sec. 125.105--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 100 MGD or more, located on oceans, estuaries, tidal
rivers, or one of the Great Lakes]:
As an owner or operator of a Phase III existing facility, you must
perform monitoring, as applicable, in accordance with the Technology
Installation and Operation Plan required by Sec. 125.104(b)(3)(ii),
the Restoration Plan required by Sec. 125.104(b)(4), the Verification
Monitoring Plan required by Sec. 125.104(b)(6), and any additional
monitoring specified by the Director to demonstrate compliance with the
applicable requirements of Sec. 125.103.
Sec. 125.106 As an owner or operator of a Phase III existing
facility, what records must I keep and what information must I report?
As an owner or operator of a Phase III existing facility you are
required to keep records and report information and data to the
Director as follows:
(a) You must keep records of all the data used to complete the
permit application and show compliance with the requirements of Sec.
125.103, any supplemental information developed under Sec. 125.104,
and any compliance monitoring data submitted under Sec. 125.105, for a
period of at least three (3) years from date of permit issuance. The
Director may require that these records be kept for a longer period.
(b) You must submit a status report to the Director for review
every two years that includes appropriate monitoring data and other
information as specified by the Director in accordance with Sec.
125.107(b)(5).
Sec. 125.107 As the Director, what must I do to comply with the
requirements of this subpart?
(a) Permit Application. As the Director, you must review materials
submitted by the applicant under 40 CFR 122.21(r) and Sec. 125.104
before each permit renewal or reissuance.
(1) You must review and comment on the Proposal for Information
Collection submitted by the facility in accordance with Sec.
125.104(a)(1). You are encouraged to provide comments expeditiously so
that the permit applicant can make responsive modifications to its
information gathering activities. If a facility submits a request in
accordance with Sec. 125.104(a)(2)(ii) for an alternate schedule for
submitting the information required in Sec. 125.104, you must approve
a schedule that is as expeditious as practicable, but does not extend
beyond [3 years and 180 days from publication of the final rule] for
Phase III existing facilities. If a facility submits a request in
accordance with Sec. 125.104(a)(3) to reduce the information about
their cooling water intake structures and the source waterbody required
to be submitted in their permit application (other than with the first
permit application [60 days from publication of the final rule] for
Phase III existing facilities), you must approve the request within 60
days if conditions at the facility and in the waterbody remain
substantially unchanged since the previous application.
(2) After receiving the permit application from the owner or
operator of a Phase III existing facility, you must determine which of
the requirements specified in Sec. 125.103 apply to the facility. In
addition, you must review materials to determine compliance with the
applicable requirements.
(3) At each permit renewal, you must review the application
materials and monitoring data to determine whether new or revised
requirements for design and construction technologies, operational
measures, or restoration measures should be included in the permit to
meet the applicable performance standards in Sec. 125.103(b) or
alternative site-specific requirements established pursuant to Sec.
125.103(a)(5).
OPTION A FOR PARAGRAPH (b)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 50 MGD or more, located on any waterbody type or the
regulatory option that defines a Phase III existing facility as one
with design intake flows 200 MGD or more, located on any waterbody
type]:
(b) Permitting Requirements. Section 316(b) requirements are
implemented for a facility through an NPDES permit. As the Director,
you must consider the information submitted by the Phase III existing
facility in its permit application, and determine the appropriate
requirements and conditions to include in the permit based on the
compliance alternatives in Sec. 125.103(a). The following requirements
must be included in each permit:
(1) Cooling Water Intake Structure Requirements. The permit
conditions must include the requirements that implement the applicable
provisions of Sec. 125.103. You must evaluate the performance of the
design and construction technologies, operational measures, and/or
restoration measures proposed and implemented by the facility and
require additional or different design and construction technologies,
operational measure, and/or restoration measures, and/or improved
operation and maintenance of existing technologies and measures, if
needed to meet the applicable performance standards, restoration
requirements, or alternative site-specific requirements. In determining
compliance with the performance standards for facilities proposing to
increase withdrawals of cooling water from a lake (other than a Great
Lake) or a reservoir in Sec. 125.103(b)(3), you must consider
anthropogenic factors (those not considered ``natural'') unrelated to
the Phase III existing facility's cooling water intake structures that
can influence the occurrence and location of a thermocline. These
include source water inflows, other water withdrawals, managed water
uses, wastewater discharges, and flow/level management practices (e.g.,
some reservoirs release water from deeper bottom layers). As the
Director, you must coordinate with appropriate Federal, State, or
Tribal fish and wildlife management agencies to determine if any
disruption of the natural thermal stratification resulting from the
proposed increased withdrawal of cooling water does not adversely
affect the management of fisheries. Specifically:
(i) You must review and approve the Design and Construction
Technology Plan required in Sec. 125.104(b)(4) to evaluate the
suitability and feasibility of the design and construction technology
and/or operational measures proposed to meet the performance standards
in
[[Page 68557]]
Sec. 125.103(b) or site-specific requirements developed pursuant to
Sec. 125.103(a)(5).
(ii) If the facility proposes restoration measures in accordance
with Sec. 125.103(c), you must review and approve the Restoration Plan
required under Sec. 125.104(b)(5) to determine whether the proposed
measures, alone or in combination with design and construction
technologies and/or operational measures, will meet the requirements
under Sec. 125.103(c).
(iii) In each reissued permit, you must include a condition in the
permit requiring the facility to reduce impingement mortality and
entrainment (or to increase fish production, if applicable)
commensurate with the efficacy at the facility of the installed design
and construction technologies, operational measures, and/or restoration
measures.
(iv) If the facility implements design and construction
technologies and/or operational measures and requests that compliance
with the requirements in Sec. 125.103 be measured for the first permit
term (or subsequent permit terms, if applicable) employing the
Technology Installation and Operation Plan in accordance with Sec.
125.104(b)(4)(ii), you must review the Technology Installation and
Operation Plan to ensure it meets the requirements of Sec.
125.104(b)(4)(ii). If the Technology Installation and Operation Plan
meets the requirements of Sec. 125.104(b)(4)(ii), you must approve the
Technology Installation and Operation Plan and require the facility to
meet the terms of the plan including any revision to the plan that may
be necessary if applicable performance standards or alternative site-
specific requirements are not being met. If the facility implements
restoration measures and requests that compliance with the requirements
in Sec. 125.103 be measured for the first permit term (or subsequent
permit terms, if applicable) employing a Restoration Plan in accordance
with Sec. 125.104(b)(5), you must review the Restoration Plan to
ensure it meets the requirements of Sec. 125.104(b)(5). If the
Restoration Plan meets the requirements of Sec. 125.104(b)(5), you
must approve the plan and require the facility to meet the terms of the
plan including any revision to the plan that may be necessary if
applicable performance standards or site-specific requirements are not
being met. In determining whether to approve a Technology Installation
and Operation Plan or Restoration Plan, you must evaluate whether the
design and construction technologies, operational measures, and/or
restoration measures the facility has installed, or proposes to
install, can reasonably be expected to meet the applicable performance
standards in Sec. 125.103(b), restoration requirements in Sec.
125.103(c)(2), and/or alternative site-specific requirements
established pursuant to Sec. 125.103(a)(5), and whether the Technology
Installation and Operation Plan and/or Restoration Plan complies with
the applicable requirements of Sec. 125.104(b). In reviewing the
Technology Installation and Operation Plan, you must approve any
reasonable scheduling provisions that are designed to ensure that
impacts to energy reliability and supply are minimized, in accordance
with Sec. 125.104(b)(4)(ii)(A). If the facility does not request that
compliance with the requirements in Sec. 125.103 be measured employing
a Technology Installation and Operation Plan and/or Restoration Plan,
or the facility has not been in compliance with the terms of its
current Technology Installation and Operation Plan and/or Restoration
Plan during the preceding permit term, you must require the facility to
comply with the applicable performance standards in Sec. 125.103(b),
restoration requirement in Sec. 125.103(c)(2), and/or alternative
site-specific requirements developed pursuant to Sec. 125.103(a)(5).
In considering a permit application, you must review the performance of
the design and construction technologies, operational measures, and/or
restoration measures implemented and require additional or different
design and construction technologies, operational measures, and/or
restoration measures, and/or improved operation and maintenance of
existing technologies and measures, if needed to meet the applicable
performance standards, restoration requirements, and/or alternative
site-specific requirements.
(v) You must review and approve the proposed Verification
Monitoring Plan submitted under Sec. 125.104(b)(7) (for design and
construction technologies) and/or monitoring provisions of the
Restoration Plan submitted under Sec. 125.104(b)(5)(v) and require
that the monitoring continue for a sufficient period of time to
demonstrate whether the design and construction technology, operational
measures, and/or restoration measures meet the applicable performance
standards in Sec. 125.103(b), restoration requirements in Sec.
125.103(c)(2) and/or site-specific requirements established pursuant to
Sec. 125.103(a)(5).
(vi) If a facility requests requirements based on a site-specific
determination of best technology available for minimizing adverse
environmental impact, you must review the application materials
submitted under Sec. 125.104(b)(6) and any other information you may
have, including quantitative and qualitative benefits, that would be
relevant to a determination of whether alternative requirements are
appropriate for the facility. If a facility submits a study to support
entrainment survival at the facility, you must review and approve the
results of that study. If you determine that alternative requirements
are appropriate, you must make a site-specific determination of best
technology available for minimizing adverse environmental impact in
accordance with Sec. 125.103(a)(5). You, as the Director, may request
revisions to the information submitted by the facility in accordance
with Sec. 125.104(b)(6) if it does not provide an adequate basis for
you to make this determination. Any alternative site-specific
requirements established based on new and/or existing design and
construction technologies, operational measures, and/or restoration
measures, must achieve an efficacy that is, in your judgment, as close
as practicable to the applicable performance standards of Sec.
125.103(b) without resulting in costs that are significantly greater
than the costs considered by the Administrator for a like facility in
establishing the applicable performance standards in Sec. 125.103(b),
determined in accordance with Sec. 125.103(a)(5)(i)(A) through (F), or
the benefits of complying with the applicable performance standards at
the facility. A ``like facility'' is one that is subject to the same
requirements as those that would otherwise be applicable to the
facility seeking a site-specific determination. In other words, ``like
facilities'' for Phase III existing facilities include only other Phase
III existing facilities; and
(vii) You must review the proposed methods for assessing success in
meeting applicable performance standards and/or restoration
requirements submitted by the facility under Sec. 125.104(b)(4)(ii)(D)
and/or (b)(5)(v)(A), evaluate those and other available methods, and
specify how assessment of success in meeting the performance standards
and/or restoration requirements must be determined including the
averaging period for determining the percent reduction in impingement
mortality and entrainment and/or the production of fish and shellfish.
Compliance for facilities who request that compliance be measured
employing a Technology Installation and Operation Plan and/or
Restoration Plan must be determined in accordance with Sec.
125.107(b)(1)(iv).
(2) Monitoring Conditions. You must require the facility to perform
[[Page 68558]]
monitoring in accordance with the Technology Installation and Operation
Plan in Sec. 125.104(b)(4)(ii), the Restoration Plan required by Sec.
125.104(b)(5), if applicable, and the Verification Monitoring Plan
required by Sec. 125.104(b)(7). In determining any additional
applicable monitoring requirements in accordance with Sec. 125.105,
you must consider the facility's Verification Monitoring, Technology
Installation and Operation, and/or Restoration Plans, as appropriate.
You may modify the monitoring program based on changes in physical or
biological conditions in the vicinity of the cooling water intake
structure.
(3) Record Keeping and Reporting. At a minimum, the permit must
require the facility to report and keep records specified in Sec.
125.106.
(4) Design and Construction Technology Approval. (i) For a facility
that chooses to demonstrate that it has installed and properly operate
and maintain a design and construction technology approved in
accordance with Sec. 125.108, the Director must review and approve the
information submitted in the Technology Installation and Operation Plan
in Sec. 125.104(b)(4)(ii) and determine if it meets the criteria in
Sec. 125.108.
(ii) If a person requests approval of a technology under Sec.
125.108(b), the Director must review and approve the information
submitted and determine its suitability for widespread use at
facilities with similar site conditions in its jurisdiction with
minimal study. As the Director, you must evaluate the adequacy of the
technology when installed in accordance with the required design
criteria and site conditions to consistently meet the performance
standards in Sec. 125.103. You, as the Director, may only approve a
technology following public notice and consideration of comment
regarding such approval.
(5) Biennial Status Report. You must specify monitoring data and
other information to be included in a status report every two years.
The other information may include operation and maintenance records,
summaries of adaptive management activities, or any other information
that is relevant to determining compliance with the terms of the
facility's Technology Operation and Installation Plan and/or
Restoration Plan.
OPTION B FOR PARAGRAPH (b)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 100 MGD or more, located on oceans, estuaries, tidal
rivers, or one of the Great Lakes]:
(b) Permitting Requirements. Section 316(b) requirements are
implemented for a facility through an NPDES permit. As the Director,
you must consider the information submitted by the Phase III existing
facility in its permit application, and determine the appropriate
requirements and conditions to include in the permit based on the
compliance alternatives in Sec. 125.103(a). The following requirements
must be included in each permit:
(1) Cooling Water Intake Structure Requirements. The permit
conditions must include the requirements that implement the applicable
provisions of Sec. 125.103. You must evaluate the performance of the
design and construction technologies, operational measures, and/or
restoration measures proposed and implemented by the facility and
require additional or different design and construction technologies,
operational measure, and/or restoration measures, and/or improved
operation and maintenance of existing technologies and measures, if
needed to meet the applicable performance standards, restoration
requirements, or alternative site-specific requirements. Specifically:
(i) You must review and approve the Design and Construction
Technology Plan required in Sec. 125.104(b)(3) to evaluate the
suitability and feasibility of the design and construction technology
and/or operational measures proposed to meet the performance standards
in Sec. 125.103(b) or site-specific requirements developed pursuant to
Sec. 125.103(a)(5).
(ii) If the facility proposes restoration measures in accordance
with Sec. 125.103(c), you must review and approve the Restoration Plan
required under Sec. 125.104(b)(4) to determine whether the proposed
measures, alone or in combination with design and construction
technologies and/or operational measures, will meet the requirements
under Sec. 125.103(c).
(iii) In each reissued permit, you must include a condition in the
permit requiring the facility to reduce impingement mortality and
entrainment (or to increase fish production, if applicable)
commensurate with the efficacy at the facility of the installed design
and construction technologies, operational measures, and/or restoration
measures.
(iv) If the facility implements design and construction
technologies and/or operational measures and requests that compliance
with the requirements in Sec. 125.103 be measured for the first permit
term (or subsequent permit terms, if applicable) employing the
Technology Installation and Operation Plan in accordance with Sec.
125.104(b)(3)(ii), you must review the Technology Installation and
Operation Plan to ensure it meets the requirements of Sec.
125.104(b)(3)(ii). If the Technology Installation and Operation Plan
meets the requirements of Sec. 125.104(b)(3)(ii), you must approve the
Technology Installation and Operation Plan and require the facility to
meet the terms of the plan including any revision to the plan that may
be necessary if applicable performance standards or alternative site-
specific requirements are not being met. If the facility implements
restoration measures and requests that compliance with the requirements
in Sec. 125.103 be measured for the first permit term (or subsequent
permit terms, if applicable) employing a Restoration Plan in accordance
with Sec. 125.104(b)(4), you must review the Restoration Plan to
ensure it meets the requirements of Sec. 125.104(b)(4). If the
Restoration Plan meets the requirements of Sec. 125.104(b)(4), you
must approve the plan and require the facility to meet the terms of the
plan including any revision to the plan that may be necessary if
applicable performance standards or site-specific requirements are not
being met. In determining whether to approve a Technology Installation
and Operation Plan or Restoration Plan, you must evaluate whether the
design and construction technologies, operational measures, and/or
restoration measures the facility has installed, or proposes to
install, can reasonably be expected to meet the applicable performance
standards in Sec. 125.103(b), restoration requirements in Sec.
125.103(c)(2), and/or alternative site-specific requirements
established pursuant to Sec. 125.103(a)(5), and whether the Technology
Installation and Operation Plan and/or Restoration Plan complies with
the applicable requirements of Sec. 125.104(b). In reviewing the
Technology Installation and Operation Plan, you must approve any
reasonable scheduling provisions that are designed to ensure that
impacts to energy reliability and supply are minimized, in accordance
with Sec. 125.104(b)(3)(ii)(A). If the facility does not request that
compliance with the requirements in Sec. 125.103 be measured employing
a Technology Installation and Operation Plan and/or Restoration Plan,
or the facility has not been in compliance with the terms of its
current Technology Installation and Operation Plan and/or Restoration
Plan during the preceding permit term, you must require
[[Page 68559]]
the facility to comply with the applicable performance standards in
Sec. 125.103(b), restoration requirement in Sec. 125.103(c)(2), and/
or alternative site-specific requirements developed pursuant to Sec.
125.103(a)(5). In considering a permit application, you must review the
performance of the design and construction technologies, operational
measures, and/or restoration measures implemented and require
additional or different design and construction technologies,
operational measures, and/or restoration measures, and/or improved
operation and maintenance of existing technologies and measures, if
needed to meet the applicable performance standards, restoration
requirements, and/or alternative site-specific requirements.
(v) You must review and approve the proposed Verification
Monitoring Plan submitted under Sec. 125.104(b)(6) (for design and
construction technologies) and/or monitoring provisions of the
Restoration Plan submitted under Sec. 125.104(b)(4)(v) and require
that the monitoring continue for a sufficient period of time to
demonstrate whether the design and construction technology, operational
measures, and/or restoration measures meet the applicable performance
standards in Sec. 125.103(b), restoration requirements in Sec.
125.103(c)(2) and/or site-specific requirements established pursuant to
Sec. 125.103(a)(5).
(vi) If a facility requests requirements based on a site-specific
determination of best technology available for minimizing adverse
environmental impact, you must review the application materials
submitted under Sec. 125.104(b)(5) and any other information you may
have, including quantitative and qualitative benefits, that would be
relevant to a determination of whether alternative requirements are
appropriate for the facility. If a facility submits a study to support
entrainment survival at the facility, you must review and approve the
results of that study. If you determine that alternative requirements
are appropriate, you must make a site-specific determination of best
technology available for minimizing adverse environmental impact in
accordance with Sec. 125.103(a)(5). You, as the Director, may request
revisions to the information submitted by the facility in accordance
with Sec. 125.104(b)(5) if it does not provide an adequate basis for
you to make this determination. Any alternative site-specific
requirements established based on new and/or existing design and
construction technologies, operational measures, and/or restoration
measures, must achieve an efficacy that is, in your judgment, as close
as practicable to the applicable performance standards of Sec.
125.103(b) without resulting in costs that are significantly greater
than the costs considered by the Administrator for a like facility in
establishing the applicable performance standards in Sec. 125.103(b),
determined in accordance with Sec. 125.103(a)(5)(i)(A) through (F), or
the benefits of complying with the applicable performance standards at
the facility. A ``like facility'' is one that is subject to the same
requirements as those that would otherwise be applicable to the
facility seeking a site-specific determination. In other words, ``like
facilities'' for Phase III existing facilities include only other Phase
III existing facilities; and
(vii) You must review the proposed methods for assessing success in
meeting applicable performance standards and/or restoration
requirements submitted by the facility under Sec. 125.104(b)(3)(ii)(D)
and/or (b)(4)(v)(A), evaluate those and other available methods, and
specify how assessment of success in meeting the performance standards
and/or restoration requirements must be determined including the
averaging period for determining the percent reduction in impingement
mortality and entrainment and/or the production of fish and shellfish.
Compliance for facilities who request that compliance be measured
employing a Technology Installation and Operation Plan and/or
Restoration Plan must be determined in accordance with Sec.
125.107(b)(1)(iv).
(2) Monitoring Conditions. You must require the facility to perform
monitoring in accordance with the Technology Installation and Operation
Plan in Sec. 125.104(b)(3)(ii), the Restoration Plan required by Sec.
125.104(b)(4), if applicable, and the Verification Monitoring Plan
required by Sec. 125.104(b)(6). In determining any additional
applicable monitoring requirements in accordance with Sec. 125.105,
you must consider the monitoring facility's Verification Monitoring,
Technology Installation and Operation, and/or Restoration Plans, as
appropriate. You may modify the monitoring program based on changes in
physical or biological conditions in the vicinity of the cooling water
intake structure.
(3) Record Keeping and Reporting. At a minimum, the permit must
require the facility to report and keep records specified in Sec.
125.106.
(4) Design and Construction Technology Approval. (i) For a facility
that chooses to demonstrate that it has installed and properly operate
and maintain a design and construction technology approved in
accordance with Sec. 125.108, the Director must review and approve the
information submitted in the Technology Installation and Operation Plan
in Sec. 125.104(b)(3)(ii) and determine if it meets the criteria in
Sec. 125.108.
(ii) If a person requests approval of a technology under Sec.
125.108(b), the Director must review and approve the information
submitted and determine its suitability for widespread use at
facilities with similar site conditions in its jurisdiction with
minimal study. As the Director, you must evaluate the adequacy of the
technology when installed in accordance with the required design
criteria and site conditions to consistently meet the performance
standards in Sec. 125.103. You, as the Director, may only approve a
technology following public notice and consideration of comment
regarding such approval.
(5) Biennial Status Report. You must specify monitoring data and
other information to be included in a status report every two years.
The other information may include operation and maintenance records,
summaries of adaptive management activities, or any other information
that is relevant to determining compliance with the terms of the
facility's Technology Operation and Installation Plan and/or
Restoration Plan.
Sec. 125.108 What are Approved Design and Construction Technologies?
OPTION A FOR PARAGRAPH (a)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 50 MGD or more, located on any waterbody type or the
regulatory option that defines a Phase III existing facility as one
with design intake flows 200 MGD or more, located on any waterbody
type]:
(a) The following technologies constitute approved design and
construction technologies for purposes of Sec. 125.103(a)(4):
(1) Submerged cylindrical wedgewire screen technology, if you meet
the following conditions:
(i) Your cooling water intake structure is located in a freshwater
river or stream;
(ii) Your cooling water intake structure is situated such that
sufficient ambient counter currents exist to promote cleaning of the
screen face;
(iii) Your maximum through-screen design intake velocity is 0.5 ft/
s or less;
(iv) The slot size is appropriate for the size of eggs, larvae, and
juveniles of all
[[Page 68560]]
fish and shellfish to be protected at the site; and
(v) Your entire main cooling water intake flow is directed through
the technology. Small flows totaling less than 2 MGD for auxiliary
cooling uses are excluded from this provision.
(2) A technology that has been approved in accordance with the
process described in paragraph (b) of this section.
OPTION B FOR PARAGRAPH (a)--[This language reflects the regulatory
option that defines a Phase III existing facility as one with design
intake flows of 100 MGD or more, located on oceans, estuaries, tidal
rivers, or one of the Great Lakes]:
(a) A design and construction technology may be approved for use in
accordance with the compliance alternative in Sec. 125.103(a)(4). The
technology must be approved in accordance with the process described in
paragraph (b) of this section.
(b) You or any other interested person may submit a request to the
Director that a technology be approved in accordance with the
compliance alternative in Sec. 125.103(a)(4) after providing the
public with notice and an opportunity to comment on the request for
approval of the technology. If the Director approves the technology, it
may be used by all facilities with similar site conditions under the
Director's jurisdiction. Requests for approval of a technology must be
submitted to the Director and include the following information:
(1) A detailed description of the technology;
(2) A list of design criteria for the technology and site
characteristics and conditions that each facility must have in order to
ensure that the technology can consistently meet the appropriate
impingement mortality and entrainment performance standards in Sec.
125.103(b); and
(3) Information and data sufficient to demonstrate that facilities
under the jurisdiction of the Director can meet the applicable
impingement mortality and entrainment performance standards in Sec.
125.103(b) if the applicable design criteria and site characteristics
and conditions are present at the facility.
3. Add subpart N to part 125 to read as follows:
Subpart N--Requirements Applicable to Cooling Water Intake Structures
for New Offshore Oil and Gas Extraction Facilities Under Section 316(b)
of the Act
Sec.
125.130 What are the purpose and scope of this subpart?
125.131 Who is subject to this subpart?
125.132 When must I comply with this subpart?
125.133 What special definitions apply to this subpart?
125.134 As an owner or operator of a new offshore oil and gas
extraction facility, what must I do to comply with this subpart?
125.135 May alternative requirements be authorized?
125.136 As an owner or operator of a new offshore oil and gas
extraction facility, what must I collect and submit when I apply for
my new or reissued NPDES permit?
125.137 As an owner or operator of a new offshore oil and gas
extraction facility, must I perform monitoring?
125.138 As an owner or operator of a new offshore oil and gas
extraction facility, must I keep records and report?
125.139 As the Director, what must I do to comply with the
requirements of this subpart?
Subpart N--Requirements Applicable to Cooling Water Intake
Structures for New Offshore Oil and Gas Extraction Facilities Under
Section 316(b) of the Act
Sec. 125.130 What are the purpose and scope of this subpart?
(a) This subpart establishes requirements that apply to the
location, design, construction, and capacity of cooling water intake
structures at new offshore oil and gas extraction facilities. The
purpose of these requirements is to establish the best technology
available for minimizing adverse environmental impact associated with
the use of cooling water intake structures at these facilities. These
requirements are implemented through National Pollutant Discharge
Elimination System (NPDES) permits issued under section 402 of the
Clean Water Act (CWA).
(b) This subpart implements section 316(b) of the CWA for new
offshore oil and gas extraction facilities. Section 316(b) of the CWA
provides that any standard established pursuant to sections 301 or 306
of the CWA 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.
(c) New offshore oil and gas extraction facilities that do not meet
the threshold requirements regarding amount of water withdrawn or
percentage of water withdrawn for cooling water purposes in Sec.
125.131(a) must meet requirements determined by the Director on a case-
by-case, best professional judgement (BPJ) basis.
(d) 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. 125.131 Who is subject to this subpart?
(a) This subpart applies to a new offshore oil and gas extraction
facility if it meets all of the following criteria:
(1) It is a point source that uses or proposes to use a cooling
water intake structure;
(2) It has at least one cooling water intake structure that uses at
least 25 percent of the water it withdraws for cooling purposes as
specified in paragraph (c) of this section; and
(3) It has a design intake flow greater than two (2) million
gallons per day (MGD).
(b) Use of a cooling water intake structure includes obtaining
cooling water by any sort of contract or arrangement with an
independent supplier (or multiple suppliers) of cooling water if the
supplier or suppliers withdraw(s) water from waters of the United
States. Use of cooling water does not include obtaining cooling water
from a public water system or the use of treated effluent that
otherwise would be discharged to a water of the U.S. This provision is
intended to prevent circumvention of these requirements by creating
arrangements to receive cooling water from an entity that is not itself
a point source.
(c) The threshold requirement that at least 25 percent of water
withdrawn be used for cooling purposes must be measured on an average
monthly basis. A new offshore oil and gas extraction facility meets the
25 percent cooling water threshold if, based on the new facility's
design, any monthly average over a year for the percentage of cooling
water withdrawn is expected to equal or exceed 25 percent of the total
water withdrawn.
(d) Neither this subpart nor Subpart I applies to seafood
processing vessels and offshore liquefied natural gas import terminals
that are new facilities as defined in 40 CFR 125.83. Seafood processing
vessels and offshore liquefied natural gas import terminals must meet
requirements established by the Director on a case-by-case, best
professional judgment (BPJ) basis.
Sec. 125.132 When must I comply with this subpart?
You must comply with this subpart when an NPDES permit containing
requirements consistent with this subpart is issued to you.
[[Page 68561]]
Sec. 125.133 What special definitions apply to this subpart?
The following special definitions apply to this subpart:
Annual mean flow means the average of daily flows over a calendar
year. Historical data (up to 10 years) must be used where available.
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 that is used in another industrial process
either before or after it is used for cooling is considered process
water for the purposes of calculating the percentage of a new offshore
oil and gas extraction facility's intake flow that is used for cooling
purposes in Sec. 125.131(c).
Cooling water intake structure means the total physical structure
and any associated constructed waterways used to withdraw cooling water
from waters of the U.S. 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.
Design intake flow means the value assigned (during the facility's
design) to the total volume of water withdrawn from a source water body
over a specific time period.
Design intake velocity means the value assigned (during the design
of a cooling water intake structure) to the average speed at which
intake water passes through the open area of the intake screen (or
other device) against which organisms might be impinged or through
which they might be entrained.
Entrainment means 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 water system.
Estuary means a semi-enclosed body of water that has a free
connection with open seas and within which the seawater is measurably
diluted with fresh water derived from land drainage. The salinity of an
estuary exceeds 0.5 parts per thousand (by mass) but is typically less
than 30 parts per thousand (by mass).
Fixed facility means a bottom founded offshore oil and gas
extraction facility permanently attached to the seabed or subsoil of
the outer continental shelf (e.g., platforms, guyed towers, articulated
gravity platforms) or a buoyant facility securely and substantially
moored so that it cannot be moved without a special effort (e.g.,
tension leg platforms, permanently moored semi-submersibles) and which
is not intended to be moved during the production life of the well.
This definition does not include mobile offshore drilling units (MODUs)
(e.g., drill ships, temporarily moored semi-submersibles, jack-ups,
submersibles, tender-assisted rigs, and drill barges).
Hydraulic zone of influence means that portion of the source
waterbody hydraulically affected by the cooling water intake structure
withdrawal of water.
Impingement means 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.
Maximize means to increase to the greatest amount, extent, or
degree reasonably possible.
Minimize means to reduce to the smallest amount, extent, or degree
reasonably possible.
Minimum ambient source water surface elevation means the mean low
tidal water level for estuaries or oceans. The mean low tidal water
level is the average height of the low water over at least 19 years.
New offshore oil and gas extraction facility means any building,
structure, facility, or installation that:
(1) Meets the definition of a ``new source'' or ``new discharger''
in 40 CFR 122.2 and 122.29(b)(1) and (4);
(2) Is regulated by the Offshore and Coastal Subcategories of the
Oil and Gas Extraction Point Source Category Effluent Guidelines in 40
CFR 435.10 or 40 CFR 435.40; and
(3) Commenced construction after [60 days from publication of the
final rule].
Ocean means marine open coastal waters with a salinity greater than
or equal to 30 parts per thousand (by mass).
Offshore liquefied natural gas (LNG) import terminal means any
facility located in waters defined in 40 CFR 435.10 or 40 CFR 435.40
that liquefies, re-gasifies, transfers, or stores liquefied natural
gas.
Sea chest means the underwater compartment or cavity within the
facility or vessel hull or pontoon through which sea water is drawn in
(for cooling and other purposes) or discharged.
Seafood processing vessel means any offshore or nearshore,
floating, mobile, facility engaged in the processing of fresh, frozen,
canned, smoked, salted or pickled seafood, seafood paste, mince, or
meal.
Source water means the water body (waters of the U.S.) from which
the cooling water is withdrawn.
Tidal excursion means the horizontal distance along the estuary or
tidal river that a particle moves during one tidal cycle of ebb and
flow.
Tidal river means the most seaward reach of a river or stream where
the salinity is typically less than or equal to 0.5 parts per thousand
(by mass) at a time of annual low flow and whose surface elevation
responds to the effects of coastal lunar tides.
Sec. 125.134 As an owner or operator of a new offshore oil and gas
extraction facility, what must I do to comply with this subpart?
(a)(1) The owner or operator of a new offshore oil and gas
extraction facility must comply with:
(i) Track I in paragraph (b) or Track II in paragraph (c) of this
section, if it is a fixed facility; or
(ii) Track I in paragraph (b) of this section, if it is not a fixed
facility.
(2) In addition to meeting the requirements in paragraph (b) or (c)
of this section, the owner or operator of a new offshore oil and gas
extraction facility may be required to comply with paragraph (d) of
this section.
(b) Track I requirements for new offshore oil and gas extraction
facilities. (1)(i) New offshore oil and gas extraction facilities that
withdraw greater than 2 MGD, do not employ sea chests as cooling water
intake structures, and are fixed facilities must comply with all of the
requirements in paragraphs (b)(2) through (8) of this section.
(ii) New offshore oil and gas extraction facilities that withdraw
greater than 2 MGD, employ sea chests as cooling water intake
structures, and are fixed facilities must comply with the requirements
in paragraphs (b)(2), (3), (4), (6), (7), and (8) of this section.
(iii) New offshore oil and gas extraction facilities that withdraw
greater than 2 MGD and are not fixed facilities must comply with the
requirements in paragraphs (b)(2), (4), (6), (7), and (8) of this
section.
(2) You must design and construct each cooling water intake
structure at your facility to a maximum through-screen design intake
velocity of 0.5 ft/s;
(3) For cooling water intake structures located in an estuary or
tidal river, the total design intake flow over one tidal cycle of ebb
and flow must be no greater than one (1) percent of the volume of the
water column within the area centered about the opening of the intake
with a diameter defined by the distance of one tidal excursion at the
mean low water level;
[[Page 68562]]
(4) You must select and implement design and construction
technologies or operational measures for minimizing impingement
mortality of fish and shellfish if the Director determines that:
(i) There are threatened or endangered or otherwise protected
federal, state, or tribal species, or critical habitat for these
species, within the hydraulic zone of influence of the cooling water
intake structure; or
(ii) Based on information submitted by any fishery management
agency(ies) or other relevant information, there are migratory and/or
sport or commercial species of impingement concern to the Director that
pass through the hydraulic zone of influence of the cooling water
intake structure; or
(iii) Based on information submitted by any fishery management
agency(ies) or other relevant information, that the proposed facility,
after meeting the technology-based performance requirements in
paragraphs (b)(2) and (5) of this section, would still contribute
unacceptable stress to the protected species, critical habitat of those
species, or species of concern;
(5) You must select and implement design and construction
technologies or operational measures for minimizing entrainment of
entrainable life stages of fish and shellfish;
(6) You must submit the applicable application information required
in 40 CFR 122.21(r) and Sec. 125.136(b). If you are a fixed facility
you must submit the information required in 40 CFR 122.21(r)(2) (except
(r)(2)(iv)), (3), and (4) and Sec. 125.136(b) of this subpart as part
of your application. If you are a not a fixed facility, you must only
submit the information required in 40 CFR 122.21(r)(2)(iv), (r)(3)
(except r(3)(ii)) and Sec. 125.136(b) as part of your application.
(7) You must implement the monitoring requirements specified in
Sec. 125.137;
(8) You must implement the recordkeeping requirements specified in
Sec. 125.138.
(c) Track II requirements for new offshore oil and gas extraction
facilities. The owner or operator of a new offshore oil and gas
extraction facility that is a fixed facility and chooses to comply
under Track II must comply with the following requirements:
(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 applicable
requirements of paragraph (b)(2) and for fixed facilities without sea
chests, paragraph (b)(5) of this section. This demonstration must
include a showing that the impacts to fish and shellfish, including
important forage and predator species will be comparable to those which
would result if you were to implement the requirements of paragraph
(b)(2) and for fixed facilities without sea chests, paragraph (b)(5) of
this section. In identifying such species, the Director may consider
information provided by any fishery management agency(ies) along with
data and information from other sources.
(2) For cooling water intake structures located in an estuary or
tidal river, the total design intake flow over one tidal cycle of ebb
and flow must be no greater than one (1) percent of the volume of the
water column within the area centered about the opening of the intake
with a diameter defined by the distance of one tidal excursion at the
mean low water level.
(3) You must submit the application information required in 40 CFR
122.21(r) and Sec. 125.136(c).
(4) You must implement the monitoring requirements specified in
Sec. 125.137.
(5) You must implement the record-keeping requirements specified in
Sec. 125.138.
(d) You must comply with any more stringent requirements relating
to the location, design, construction, and capacity of a cooling water
intake structure or monitoring requirements at a new offshore oil and
gas extraction facility that the Director deems are reasonably
necessary to comply with any provision of Federal or State law,
including compliance with applicable state water quality standards
(including designated uses, criteria, and antidegradation
requirements).
Sec. 125.135 May alternative requirements be authorized?
(a) Any interested person may request that alternative requirements
less stringent than those specified in Sec. 125.134(a) through (d) be
imposed in the permit. The Director may establish alternative
requirements less stringent than the requirements of Sec. 125.134(a)
through (d) only if:
(1) There is an applicable requirement under Sec. 125.134(a)
through (d);
(2) The Director determines that data specific to the facility
indicate that compliance with the requirement at issue would result in
compliance costs wholly out of proportion to the costs EPA considered
in establishing the requirement at issue or would result in significant
adverse impacts on local water resources other than impingement or
entrainment, or significant adverse impacts on energy markets;
(3) The alternative requirement requested is no less stringent than
justified by the wholly out of proportion cost or the significant
adverse impacts on local water resources other than impingement or
entrainment, or significant adverse impacts on energy markets; and
(4) The alternative requirement will ensure compliance with other
applicable provisions of the Clean Water Act and any applicable
requirement of Federal or State law.
(b) The burden is on the person requesting the alternative
requirement to demonstrate that alternative requirements should be
authorized.
Sec. 125.136 As an owner or operator of a new offshore oil and gas
extraction facility, what must I collect and submit when I apply for my
new or reissued NPDES permit?
(a)(1) As an owner or operator of a new offshore oil and gas
extraction facility, you must submit to the Director a statement that
you intend to comply with either:
(i) The Track I requirements for new offshore oil and gas
extraction facilities in Sec. 125.134(b); or
(ii) If you are a fixed facility, the Track II requirements in
Sec. 125.134(c).
(2) You must also submit the application information required by 40
CFR 122.21(r) and the information required in either paragraph (b) of
this section for Track I or, if you are a fixed facility that chooses
to comply under Track II, paragraph (c) of this section for Track II
when you apply for a new or reissued NPDES permit in accordance with 40
CFR 122.21.
(b) Track I application requirements. To demonstrate compliance
with Track I requirements in Sec. 125.134(b), you must collect and
submit to the Director the information in paragraphs (b)(1) through (3)
of this section.
(1) Velocity information. You must submit the following information
to the Director to demonstrate that you are complying with the
requirement to meet a maximum through-screen design intake velocity of
no more than 0.5 ft/s at each cooling water intake structure as
required in Sec. 125.134(b)(2):
(i) A narrative description of the design, structure, equipment,
and operation used to meet the velocity requirement; and
(ii) 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 68563]]
(2) Source waterbody flow information. If you are a fixed facility
and your cooling water intake structure is located in an estuary or
tidal river, you must provide the mean low water tidal excursion
distance and any supporting documentation and engineering calculations
to show that your cooling water intake structure facility meets the
flow requirements in Sec. 125.134(b)(3).
(3) Design and Construction Technology Plan. To comply with Sec.
125.134(b)(4) and/or (5), if applicable, you must submit to the
Director the following information in a Design and Construction
Technology Plan:
(i) If the Director determines that additional impingement
requirements should be included in your permit:
(A) Information to demonstrate whether or not you meet the criteria
in Sec. 125.134(b)(4);
(B) Delineation of the hydraulic zone of influence for your cooling
water intake structure;
(ii) New offshore oil and gas extraction facilities required to
install design and construction technologies and/or operational
measures must develop a plan explaining the technologies and measures
you have selected. (Examples of appropriate technologies include, but
are not limited to, increased opening to cooling water intake structure
to decrease design intake velocity, wedgewire screens, fixed screens,
velocity caps, location of cooling water intake opening in waterbody,
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, if applicable:
(A) A narrative description of the design and operation of the
design and construction technologies, including fish-handling and
return systems, that you will use to maximize the survival of those
species expected to be most susceptible to impingement. Provide
species-specific information that demonstrates the efficacy of the
technology;
(B) To demonstrate compliance with 125.134(b)(5), if applicable, a
narrative description of the design and operation of the design and
construction technologies that you will use to minimize entrainment of
those species expected to be the most susceptible to entrainment.
Provide species-specific information that demonstrates the efficacy of
the technology; and
(C) Design calculations, drawings, and estimates to support the
descriptions provided in paragraphs (b)(3)(iii)(A) and (B) of this
section.
(c) Application requirements for Track II. If you are a fixed
facility and have chosen to comply with the requirements of Track II in
Sec. 125.134(c) you must collect and submit the following information:
(1) Source waterbody flow information. If your cooling water intake
structure is located in an estuary or tidal river, you must provide the
mean low water tidal excursion distance and any supporting
documentation and engineering calculations to show that your cooling
water intake structure facility meets the flow requirements in Sec.
125.134(c)(2);
(2) Track II Comprehensive Demonstration Study. 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
applicable requirements in Sec. 125.134(b)
(i) To meet the ``comparable level'' requirement, you must
demonstrate that:
(A) You have reduced impingement mortality of all life stages of
fish and shellfish to 90 percent or greater of the reduction that would
be achieved through the applicable requirements in Sec. 125.134(b)(2);
and
(B) If you are a facility without sea chests, you have minimized
entrainment of entrainable life stages of fish and shellfish in
accordance with Sec. 125.134(b)(5);
(ii) 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:
(A) A description of the proposed and/or implemented
technology(ies) to be evaluated in the Study;
(B) 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
impingement mortality and (if applicable) entrainment impacts, and
provide documentation showing that the data were collected using
appropriate quality assurance/quality control procedures;
(C) Any public participation or consultation with Federal or State
agencies undertaken in developing the plan; and
(D) 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; and
(iii) You must submit documentation of the results of the Study to
the Director. Documentation of the results of the Study must include:
(A) Source Water Biological Study. The Source Water Biological
Study must include:
(1) 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;
(2) An identification of all threatened or endangered species that
might be susceptible to impingement and entrainment by the proposed
cooling water intake structure(s); and
(3) A description of additional chemical, water quality, and other
anthropogenic stresses on the source waterbody.
(B) Evaluation of potential cooling water intake structure effects.
This evaluation will include:
(1) Calculations of the reduction in impingement mortality and, if
applicable, entrainment of all life stages
[[Page 68564]]
of fish and shellfish that would need to be achieved by the
technologies you have selected to implement to meet requirements under
Track II. To do this, you must determine the reduction in impingement
mortality and entrainment that would be achieved by implementing the
requirements of Sec. 125.134(b)(2) and, for facilities without sea
chests, Sec. 125.134(b)(5) of Track I at your site.
(2) An engineering estimate of efficacy for the proposed and/or
implemented technologies used to minimize impingement mortality and (if
applicable) entrainment of all life stages of fish and shellfish and
maximize survival of impinged life stages of fish and shellfish. You
must demonstrate that the technologies reduce impingement mortality and
(if applicable) entrainment 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. 125.134(b)(2) and, for facilities
without sea chests, Sec. 125.134(b)(5) of Track I. The efficacy
projection must include a site-specific evaluation of technology(ies)
suitability for reducing impingement mortality and (if applicable)
entrainment based on the results of the Source Water Biological Study
in paragraph (c)(2)(iv)(A) 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.
(C) Verification monitoring plan. You must include in the Study 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 impingement mortality and (if applicable) entrainment to
the level documented in paragraph (c)(2)(iii)(B) 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 impingement mortality and entrainment
reduction required in Sec. 125.134(c), and that the operation of the
technology has been optimized.
Sec. 125.137 As an owner or operator of a new offshore oil and gas
extraction facility, must I perform monitoring?
As an owner or operator of a new offshore oil and gas extraction
facility, you will be required to perform monitoring to demonstrate
your compliance with the requirements specified in Sec. 125.134 or
alternative requirements under Sec. 125.135.
(a) Biological monitoring. (1)(i) Fixed facilities without sea
chests that choose to comply with the Track I requirements in Sec.
125.134(b)(1)(i) must monitor for entrainment. These facilities are not
required to monitor for impingement, unless the Director determines
that the information would be necessary to evaluate the need for or
compliance with additional requirements in accordance with Sec.
125.134(b)(4) or more stringent requirements in accordance with Sec.
125.134(d).
(ii) Fixed facilities with sea chests that choose to comply with
Track I requirements are not required to perform biological monitoring
unless the Director determines that the information would be necessary
to evaluate the need for or compliance with additional requirements in
accordance with Sec. 125.134(b)(4) or more stringent requirements in
accordance with Sec. 125.134(d).
(iii) Facilities that are not fixed facilities are not required to
perform biological monitoring unless the Director determines that the
information would be necessary to evaluate the need for or compliance
with additional requirements in accordance with Sec. 125.134(b)(4) or
more stringent requirements in accordance with Sec. 125.134(d).
(iv) Fixed facilities with sea chests that choose to comply with
Track II requirements in accordance with Sec. 125.134(c), must monitor
for impingement only. Fixed facilities without sea chests, must monitor
for both impingement and entrainment.
(2) Monitoring must characterize the impingement rates and (if
applicable) entrainment rates of commercial, recreational, and forage
base fish and shellfish species identified in the Source Water Baseline
Biological Characterization data required by 40 CFR 122.21(r)(4),
identified in the Comprehensive Demonstration Study required by Sec.
125.136(c)(2), or as specified by the Director.
(3) 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), those used by the Comprehensive Demonstration
Study required by Sec. 125.136(c)(2), or as specified by the Director.
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
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.
(4) Impingement sampling. 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.
(5) Entrainment sampling. If your facility is subject to the
requirements of Sec. 125.134(b)(1)(i) or (c), you must collect samples
to monitor entrainment rates (simple enumeration) for each species over
a 24-hour period and no less than biweekly 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. 125.136(c)(2). You must collect samples only when the cooling
water intake structure is in operation.
(b) Velocity monitoring. If your facility uses a surface intake
screen systems, you must monitor head loss across the screens and
correlate the measured value with the design intake velocity. The head
loss across the intake screen must be measured at the minimum ambient
source water surface elevation (best professional judgment based on
available hydrological data). The maximum head loss across the screen
for each cooling water intake structure must be used to determine
compliance with the velocity requirement in Sec. 125.134(b)(2). If
your facility uses devices other than surface intake screens, you must
monitor velocity at the point of entry through the device. You must
monitor head loss or velocity during initial facility startup, and
thereafter, at the frequency specified in your NPDES permit, but no
less than once per quarter.
(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 visual
inspections at least weekly to ensure that any design and construction
technologies required in Sec. 125.134(b)(4), (b)(5), (c), and/or (d)
are
[[Page 68565]]
maintained and operated to ensure that they will continue to function
as designed. Alternatively, you must inspect via remote monitoring
devices to ensure that the impingement and entrainment technologies are
functioning as designed.
Sec. 125.138 As an owner or operator of a new offshore oil and gas
extraction facility, must I keep records and report?
As an owner or operator of a new offshore oil and gas extraction
facility you are required to keep records and report information and
data to the Director as follows:
(a) You must keep records of all the data used to complete the
permit application and show compliance with the requirements, any
supplemental information developed under Sec. 125.136, and any
compliance monitoring data submitted under Sec. 125.137, for a period
of at least three (3) years from the date of permit issuance. The
Director may require that these records be kept for a longer period.
(b) You must provide the following to the Director in a yearly
status report:
(1) For fixed facilities, biological monitoring records for each
cooling water intake structure as required by Sec. 125.137(a);
(2) Velocity and head loss monitoring records for each cooling
water intake structure as required by Sec. 125.137(b); and
(3) Records of visual or remote inspections as required in Sec.
125.137(c).
Sec. 125.139 As the Director, what must I do to comply with the
requirements of this subpart?
(a) Permit application. As the Director, you must review materials
submitted by the applicant under 40 CFR 122.21(r), Sec. 125.135, and
Sec. 125.136 at the time of the initial permit application and before
each permit renewal or reissuance.
(1) After receiving the initial permit application from the owner
or operator of a new offshore oil and gas extraction facility, the
Director must determine applicable standards in Sec. 125.134 or Sec.
125.135 to apply to the new offshore oil and gas extraction facility.
In addition, the Director must review materials to determine compliance
with the applicable standards.
(2) For each subsequent permit renewal, the Director must review
the application materials and monitoring data to determine whether
requirements, or additional requirements, for design and construction
technologies or operational measures should be included in the permit.
(3) For Track II facilities, the Director may review the
information collection proposal plan required by Sec.
125.136(c)(2)(ii). The facility may initiate sampling and data
collection activities prior to receiving comment from the Director.
(b) Permitting requirements. Section 316(b) requirements are
implemented for a facility through an NPDES permit. As the Director,
you must determine, based on the information submitted by the new
offshore oil and gas extraction facility in its permit application, the
appropriate requirements and conditions to include in the permit based
on the track (Track I or Track II), or alternative requirements in
accordance with Sec. 125.135, the new offshore oil and gas extraction
facility has chosen to comply with. The following requirements must be
included in each permit:
(1) Cooling water intake structure requirements. At a minimum, the
permit conditions must include the performance standards that implement
the applicable requirements of Sec. 125.134(b)(2), (3), (4) and (5);
Sec. 125.134(c)(1) and (2); or Sec. 125.135.
(i) For a facility that chooses Track I, you must review the Design
and Construction Technology Plan required in Sec. 125.136(b)(3) to
evaluate the suitability and feasibility of the technology proposed to
minimize impingement mortality and (if applicable) entrainment of all
life stages of fish and shellfish. In the first permit issued, you must
include a condition requiring the facility to reduce impingement
mortality and/or entrainment commensurate with the implementation of
the technologies in the permit. Under subsequent permits, the Director
must review the performance of the technologies implemented and require
additional or different design and construction technologies, if needed
to minimize impingement mortality and/or entrainment of all life stages
of fish and shellfish. In addition, you must consider whether more
stringent conditions are reasonably necessary in accordance with Sec.
125.134(d).
(ii) For a fixed facility that chooses Track II, you must review
the information submitted with the Comprehensive Demonstration Study
information required in Sec. 125.136(c)(2), evaluate the suitability
of the proposed design and construction technology and/or operational
measures to determine whether they will reduce both impingement
mortality and/or 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. 125.136(c)(2)(iii)(C) 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. 125.134(c)(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. 125.134(b)(2) and, if
applicable, Sec. 125.134(b)(5).
(iii) If a facility requests alternative requirements in accordance
with Sec. 125.135, you must determine if data specific to the facility
meet the requirements in Sec. 125.135(a) and include in the permit
requirements that are no less stringent than justified by the wholly
out of proportion cost or the significant adverse impacts on local
water resources other than impingement or entrainment, or significant
adverse impacts on energy markets.
(2) Monitoring conditions. At a minimum, the permit must require
the permittee to perform the monitoring required in Sec. 125.137. You
may modify the monitoring program when the permit is reissued and
during the term of the permit based on changes in physical or
biological conditions in the vicinity of the cooling water intake
structure. The Director may require continued monitoring based on the
results of the Verification Monitoring Plan in Sec.
125.136(c)(2)(iii)(C).
(3) Record keeping and reporting. At a minimum, the permit must
require the permittee to report and keep records as required by Sec.
125.138.
[FR Doc. 04-24913 Filed 11-23-04; 8:45 am]
BILLING CODE 6560-50-P