National Pollutant Discharge Elimination System Proposed Regulations To Establish Requirements for Cooling Water Intake Structures at Phase III Facilities; Notice of Data Availability, 71057-71071 [05-23276]
Download as PDF
<![CDATA[
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
label or in labeling of meal products as
defined in § 101.13(l) or main dish
products as defined in § 101.13(m),
provided that the food contains less
than 10 g total fat, 4.5 g or less saturated
fat, and less than 95 mg cholesterol per
100 g and per labeled serving;
(4) The term ‘‘extra lean’’ may be used
on the label or in labeling of foods,
except meal products as defined in
§ 101.13(l) and main dish products as
defined in § 101.13(m), provided that
the food is a discrete seafood or game
meat product and as packaged contains
less than 5 g total fat, less than 2 g
saturated fat, and less than 95 mg
cholesterol per reference amount
customarily consumed and per 100 g;
and
(5) The term defined in paragraph
(e)(4) of this section may be used on the
label or in labeling of meal products as
defined in § 101.13(l) and main dish
products as defined in § 101.13(m),
provided that the food contains less
than 5 g of fat, less than 2 g of saturated
fat, and less than 95 mg of cholesterol
per 100 g and per labeled serving.
*
*
*
*
*
Dated: November 18, 2005.
Michael M. Landa,
Deputy Director for Regulatory Affairs, Center
for Food Safety and Applied Nutrition.
[FR Doc. 05–23293 Filed 11–23–05; 8:45 am]
BILLING CODE 4160–01–S
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 9, 122, 123, 124, and 125
[OW–2004–0002, FRL–8002–3]
RIN 2040–AD70
National Pollutant Discharge
Elimination System Proposed
Regulations To Establish
Requirements for Cooling Water Intake
Structures at Phase III Facilities;
Notice of Data Availability
Environmental Protection
Agency (EPA).
ACTION: Notice of data availability.
AGENCY:
SUMMARY: On November 24, 2004, EPA
published proposed regulations to
establish requirements for cooling water
intake structures at Phase III facilities
under section 316(b) of the Clean Water
Act (CWA). EPA proposed the following
three options for defining which
existing facilities would be subject to
uniform national requirements, based
on the facility’s design intake flow
threshold and source waterbody type:
The facility has a total design intake
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
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
specifically from an ocean, estuary, tidal
river, or one of the Great Lakes. The
proposed rule would also establish
national section 316(b) requirements for
new offshore oil and gas extraction
facilities. This notice of data availability
(NODA) summarizes significant data
EPA received or collected since
publication of the proposed rule and
discusses how EPA may use this data in
revising its analyses. EPA solicits public
comment on the information presented
in this notice and the record supporting
this notice.
DATES: Comments on this notice of data
availability must be received or
postmarked on or before midnight
December 27, 2005.
ADDRESSES: Comments may be
submitted by mail addressed to Water
Docket, Environmental Protection
Agency, Mailcode: 4101T, 1200
Pennsylvania Ave., NW., Washington,
DC, 20460, Attention Docket ID No OW–
2004–0002. Comments may also be
submitted electronically, or by hand
delivery. Follow the detailed
instructions as provided in Section B.1
of the SUPPLEMENTARY INFORMATION
section to file comments electronically.
FOR FURTHER INFORMATION CONTACT: For
additional technical information contact
Paul Shriner at (202) 566–1076. For
additional economic information
contact Erik Helm at (202) 566–1066.
For additional biological information
contact Ashley Allen at (202) 566–1012.
The e-mail address for the above
contacts is rule.316b@epa.gov.
SUPPLEMENTARY INFORMATION:
General Information
A. How Can I Get Copies of This
Document and Other Related
Information?
1. Docket. EPA has established an
official public docket for this action
under Docket ID No. OW–2004–0002.
The official public docket consists of the
documents specifically referenced in
this action, any public comments
received, and other information related
to this action. Although a part of the
official docket, the public docket does
not include Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
The official public docket is the
collection of materials that is available
for public viewing at the Water Docket
PO 00000
Frm 00017
Fmt 4702
Sfmt 4702
71057
in the EPA Docket Center, (EPA/DC)
EPA West, Room B102, 1301
Constitution Ave., NW., Washington,
DC. The EPA Docket Center 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.
2. Electronic Access. You may access
this Federal Register document
electronically through the EPA Internet
under the ‘‘Federal Register’’ listings at
https://www.epa.gov/fedrgstr/.
An electronic version of the public
docket is available through EPA’s
electronic public docket and comment
system, EPA Dockets. You may use EPA
Dockets at https://www.epa.gov/edocket/
to submit or view public comments,
access the index listing of the contents
of the official public docket, and to
access those documents in the public
docket that are available electronically.
Once in the system, select ‘‘search,’’
then key in the appropriate docket
identification number.
Certain types of information will not
be placed in the EPA Dockets.
Information claimed as CBI and other
information whose disclosure is
restricted by statute, which is not
included in the official public docket,
will not be available for public viewing
in EPA’s electronic public docket. EPA’s
policy is that copyrighted material will
not be placed in EPA’s electronic public
docket but will be available only in
printed, paper form in the official public
docket. To the extent feasible, publicly
available docket materials will be made
available in EPA’s electronic public
docket. When a document is selected
from the index list in EPA Dockets, the
system will identify whether the
document is available for viewing in
EPA’s electronic public docket.
Although not all docket materials may
be available electronically, you may still
access any of the publicly available
docket materials through the docket
facility identified in Section A.1. EPA
intends to work towards providing
electronic access to all of the publicly
available docket materials through
EPA’s electronic public docket.
For public commenters, it is
important to note that EPA’s policy is
that public comments, whether
submitted electronically or in paper,
will be made available for public
viewing in EPA’s electronic public
docket as EPA receives them and
without change, unless the comment
contains copyrighted material, CBI, or
other information whose disclosure is
restricted by statute. When EPA
E:\FR\FM\25NOP1.SGM
25NOP1
71058
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
identifies a comment containing
copyrighted material, EPA will provide
a reference to that material in the
version of the comment that is placed in
EPA’s electronic public docket. The
entire printed comment, including the
copyrighted material, will be available
in the public docket.
Public comments submitted on
computer disks that are mailed or
delivered to the docket will be
transferred to EPA’s electronic public
docket. Public comments that are
mailed or delivered to the Docket will
be scanned and placed in EPA’s
electronic public docket. Where
practical, physical objects will be
photographed, and the photograph will
be placed in EPA’s electronic public
docket along with a brief description
written by the docket staff.
B. How and to Whom Do I Submit
Comments?
You may submit comments
electronically, by mail, or through hand
delivery/courier. To ensure proper
receipt by EPA, identify the appropriate
docket identification number in the
subject line on the first page of your
comment. Please ensure that your
comments are submitted within the
specified comment period. Comments
received after the close of the comment
period will be marked ‘‘late.’’ EPA is not
required to consider these late
comments, however, late comments may
be considered if time permits. If you
wish to submit CBI or information that
is otherwise protected by statute, please
follow the instructions in Section C. Do
not use EPA Dockets or e-mail to submit
CBI or information protected by statute.
1. Electronically. If you submit an
electronic comment as prescribed
below, EPA recommends that you
include your name, mailing address,
and an e-mail address or other contact
information in the body of your
comment. Also include this contact
information on the outside of any disk
or CD–ROM you submit, and in any
cover letter accompanying the disk or
CD–ROM. This ensures that you can be
identified as the submitter of the
comment and allows EPA to contact you
in case EPA cannot read your comment
due to technical difficulties or needs
further information on the substance of
your comment. EPA’s policy is that EPA
will not edit your comment, and any
identifying or contact information
provided in the body of a comment will
be included as part of the comment that
is placed in the official public docket,
and made available in EPA’s electronic
public docket. If EPA cannot read your
comment due to technical difficulties
and cannot contact you for clarification,
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
EPA may not be able to consider your
comment.
i. EPA Dockets. Your use of EPA’s
electronic public docket to submit
comments to EPA electronically is
EPA’s preferred method for receiving
comments. Go directly to EPA Dockets
at https://www.epa.gov/edocket, and
follow the online instructions for
submitting comments. To access EPA’s
electronic public docket from the EPA
Internet Home Page, select ‘‘Information
Sources,’’ ‘‘Dockets,’’ and ‘‘EPA
Dockets.’’ Once in the system, select
‘‘search,’’ and then key in Docket ID No.
OW–2004–0002. The system is an
‘‘anonymous access’’ system, which
means EPA will not know your identity,
e-mail address, or other contact
information unless you provide it in the
body of your comment.
ii. E-mail. Comments may be sent by
electronic mail (e-mail) to OW–
Docket@epa.gov, Attention Docket ID
No. OW–2004–0002. In contrast to
EPA’s electronic public docket, EPA’s email system is not an ‘‘anonymous
access’’ system. If you send an e-mail
comment directly to the Docket without
going through EPA’s electronic public
docket, EPA’s e-mail system
automatically captures your e-mail
address. E-mail addresses that are
automatically captured by EPA’s e-mail
system are included as part of the
comment that is placed in the official
public docket, and made available in
EPA’s electronic public docket.
iii. Disk or CD ROM. You may submit
comments on a disk or CD ROM that
you mail to the mailing address
identified in Section B.2. These
electronic submissions will be accepted
in WordPerfect or ASCII file format.
Avoid the use of special characters and
any form of encryption.
2. By Mail. Send an original and three
copies of your comments to the Water
Docket, Environmental Protection
Agency, Mailcode: 4101T, 1200
Pennsylvania Ave., NW., Washington,
DC, 20460, Attention Docket ID No OW–
2004–0002.
3. By Hand Delivery or Courier.
Deliver your comments to: Water Docket
in the EPA Docket Center, (EPA/DC)
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 as identified in Section A.1.
C. How Should I Submit CBI to the
Agency?
Do not submit information that you
consider to be CBI electronically
through EPA’s electronic public docket
or by e-mail. Send or deliver
PO 00000
Frm 00018
Fmt 4702
Sfmt 4702
information identified as CBI 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 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.
D. What Should I Consider as I Prepare
My Comments for EPA?
You may find the following
suggestions helpful for preparing your
comments:
1. Explain your views as clearly as
possible.
2. Describe any assumptions that you
used.
3. Provide any technical information
and/or data you used that support your
views.
4. If you estimate potential burden or
costs, explain how you arrived at your
estimate.
5. Provide specific examples to
illustrate your concerns.
6. Offer alternatives.
7. Make sure to submit your
comments by the comment period
deadline identified.
8. To ensure proper receipt by EPA,
identify the appropriate docket
identification number in the subject line
on the first page of your response. It
would also be helpful if you provided
the name, date, and Federal Register
citation related to your comments.
Table of Contents
I. Purpose of this Notice
II. Environmental Impacts
E:\FR\FM\25NOP1.SGM
25NOP1
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
III. Engineering Costing Revisions
IV. Economic Impact
V. Benefits
I. Purpose of This Notice
This notice presents a summary of
significant data EPA has received,
collected, or developed since proposal
and a discussion of how EPA is
considering using these data in revised
analyses supporting the final rule.
Section II of this notice discusses
additional data about the environmental
impacts associated with cooling water
intake structures at facilities potentially
subject to regulation under Phase III.
This includes data obtained from the
National Oceanic and Atmospheric
Administration (NOAA), which
characterize the nature and abundance
of fish and shellfish in the vicinity of
offshore oil and gas extraction facilities
in the Gulf of Mexico potentially subject
to regulation under Phase III. It also
includes data extracted during EPA’s
review of additional cooling water
intake structure impact studies relevant
to Phase III.
This notice also discusses EPA’s
revision of certain elements of the
proposed Phase III rule cost estimates
and presents the revised costing
information. This includes revisions to
the Phase III cost development
methodology (i.e., cost-test tool) and the
data inputs to this methodology, which
are discussed in more detail in section
III of today’s notice.
For the proposed regulation, EPA
conducted an economic analysis of four
major categories of manufacturers
potentially subject to regulation under
Phase III: paper and allied products,
chemical and allied products, petroleum
and coal products, and primary metals.
These manufacturing categories,
combined with steam electric facilities,
represent 99 percent of cooling water
use by all existing facilities potentially
subject to regulation under section
316(b). Therefore, all other existing
manufacturing facilities were grouped
together in ‘‘other industries.’’ EPA has
now revised its economic impact
analysis for these ‘‘other industries,’’ to
better capture the food and kindred
products sector, which represents the
next largest user of cooling water among
the ‘‘other industries.’’ The updated
technology modules, costs, and
economic analyses, including these
additional industrial categories, are not
anticipated to significantly affect the
proposed benefits analyses. However,
EPA has made minor adjustments to the
benefits analysis through use of the
population matrix fish model discussed
at proposal (69 FR 68510), which has
been peer reviewed subsequent to
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
publication of the proposed rule. Data
and adjustments to the economic impact
and benefits analyses are discussed in
sections IV and V of today’s notice,
respectively.
EPA solicits public comment on the
information presented in this notice and
the record supporting this notice.
II. Environmental Impacts
For today’s NODA, EPA analyzed
additional data on the regions in which
offshore oil and gas extraction facilities
operate in order to better characterize
the potential for entrainment of
ichthyoplankton (planktonic egg and
larval life stages of fish) by these
facilities. Offshore oil and gas extraction
facilities operate off the coasts of
California and Alaska and in the Gulf of
Mexico. Most activity takes place in the
Gulf of Mexico region (see Phase III
proposed TDD; DCN 7–0004, document
ID OW–2004–0002–0027, pp. 3–130 to
3–148).
Because planktonic organisms have
limited swimming ability, those present
in offshore regions where oil and gas
activities take place are at risk of
entrainment by cooling water intake
structures at offshore oil and gas
facilities. EPA obtained data on
densities of ichthyoplankton in the Gulf
of Mexico from the Southeast Area
Monitoring and Assessment Program
(SEAMAP).1 This long-term sampling
program collects information on the
density of fish larvae and eggs
throughout the Gulf of Mexico.
EPA analyzed the SEAMAP data to
determine average ichthyoplankton
densities in the Gulf of Mexico for the
available sampling period (1982–2003).
Actual conditions at any one location
and at any one time vary from this
average. EPA’s analysis of the SEAMAP
data indicates that ichthyoplankton
occur throughout the Gulf of Mexico.
On average, densities are highest at
sampling stations in the shallower
regions of the Gulf of Mexico and lowest
at sampling stations in the deepest
regions. Average densities are greater
than 450 organisms/100 m3 at sampling
stations in waters less than 50 meters
deep. Average densities gradually
decrease to 100 organisms/100 m3 as
sampling station depth-at-location
increases to 150 meters. At stations in
waters greater than 150 meters deep,
densities are relatively uniform and fall
1 Adam Rettig and Blaine Snyder, Tetra Tech, Inc.
Memorandum to Ashley Allen, EPA. A summary of
ichthyoplankton presence and abundance in the
Gulf of Mexico, as part of an assessment of the
potential for entrainment by offshore oil and gas
facilities. DCN 8–5220. Document ID OW–2004–
0002–951.
PO 00000
Frm 00019
Fmt 4702
Sfmt 4702
71059
between 25 organisms/100 m3 and 100
organisms/100 m3.
The wide range of ichthyoplankton
densities seen in the offshore Gulf of
Mexico region falls within the range of
ichthyoplankton densities seen in
freshwater and coastal water bodies in
coastal and inland regions of the United
States.2 Over 600 different fish taxa
were identified in the SEAMAP
samples, including species of
commercial and recreational utility.
Spawning events occur at all times of
the year in the Gulf of Mexico, with
different species typically spawning at a
time of year particular to that species.3
In the area surrounding offshore oil
and gas extraction facilities off the
California coast, the California
Cooperative Oceanic Fisheries
Investigations (CalCOFI) program has
gathered data on densities of
ichthyoplankton and other organisms.
According to the CalCOFI and other
research programs, a number of fish and
shellfish species, including species of
commercial and recreational value, are
known to live and spawn in this region.4
EPA does not know of similarly
extensive sampling programs for the
Alaska offshore region. However, a
number of fish and shellfish species,
including species of commercial and
recreational value, are known from
various research programs to live and
spawn in the offshore regions of Alaska
where oil and gas activities currently
take place or may take place in the
future. The eggs and larvae of many
species found in the offshore regions of
California and Alaska are planktonic
and could therefore also be vulnerable
to entrainment by a facility’s cooling
water intake structure operating in these
regions. Larger life stages (e.g. adults
and juveniles) could be vulnerable to
impingement. EPA believes these data
indicate the potential for entrainment
and impingement from cooling water
intake structures at oil and gas facilities
operating in offshore regions.
EPA also continued to collect
impingement and entrainment studies
from Phase II and Phase III facilities that
indicated in their industry
questionnaire that they had conducted
such studies (see 69 FR 68458). Since
2 A. L. Allen (EPA). Memorandum to EPA Docket
OW–2004–0002. Information on Ichthyoplankton
Densities in Various Aquatic Ecosystems in the
United States. DCN 8–5240.
3 Ditty, J.G. Seasonality and depth distribution of
larval fishes in the northern Gulf of Mexico above
latitude 26 (degrees) 00 (minutes) N. DCN 7–
0013A03. Document ID OW–2004–0002–0174.
4 A.L. Allen (EPA). Memorandum to EPA Docket
OW–2004–0002. Information on Fish Species that
Live and Spawn off the Coasts of Alaska and
California in the Vicinity of Offshore Oil and Gas
Production Areas. DCN 8–5260.
E:\FR\FM\25NOP1.SGM
25NOP1
71060
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
proposal, EPA has collected 12
additional studies containing data that
can be used for the national
environmental assessment.5 (See the
Regional Benefits Assessment for the
Proposed Section 316(b) Rule for Phase
III Facilities [EPA–821–R–04–017], p.
A1–3 for a description of data needs and
quality criteria for the environmental
assessment.) Though EPA has not fully
evaluated the data in these studies, the
data from these studies appear to be
consistent with data from previously
collected studies.
correspondingly. Additionally, EPA
conducted a sensitivity analysis using
two different intake flow values to
estimate engineering compliance costs.
Technical corrections to the cost-test
tool and the results of the intake flow
analyses are discussed below.7 Costs
were revised for 149 of the 155 facilities
(weighted value) potentially subject to
the Phase III regulations.8 In aggregate,
the national technology capital costs
decreased by approximately 10% from
the capital costs at proposal and O&M
costs decreased by approximately 38%.
III. Engineering Costing Revisions
As described in the preamble for the
Phase III proposed rule (69 FR 68498),
EPA used a spreadsheet program called
the ‘‘cost-test tool’’ to estimate
engineering costs for model facilities. In
contrast to Phase II, EPA does not have
facility-level data for all potentially
regulated facilities, and is therefore
conducting the analysis using a model
facility approach. Based on a series of
data inputs, such as cooling system
type, waterbody type, intake location,
design intake flow (DIF), technology inplace, and through-screen velocity, the
cost-test tool determines one of two
possible performance expectations: (1)
Impingement requirements only, or (2)
both impingement and entrainment
requirements.6 The cost-test tool then
determines a compliance response for
each intake at a model facility and
assigns one of 12 technology modules as
the best-performing technology for that
model intake. Cost estimates are derived
through a series of computations that
apply facility-specific data to the
selected technology module. Cost
outputs include capital costs,
incremental operation and maintenance
(O&M) costs, and installation downtime
(in weeks) where appropriate (69 FR
68498). These model facility costs are
then weighted and summed to provide
national technology cost estimates for
the proposal.
For today’s NODA, EPA’s analyses
reflect updated data inputs to the costtest tool. In a few cases, EPA has
provided technical corrections to certain
data inputs. EPA has revised the capital
costs, the annual O&M costs, and any
monitoring and study costs
A. Corrections to Cost-Test Tool Data
Inputs
Since the publication of the proposed
rule, EPA reviewed elements of the
survey database for Phase III facilities
for technical accuracy. These data serve
as model facility inputs to the cost-test
tool. Today’s NODA reports the
outcome of this review. EPA found a
few inconsistencies and checked them
against the original data reported in a
given facility’s 316(b) survey. Most
inconsistencies were identified in the
following fields of the cost-test tool:
• Technology in-place (the current
technology at the facility);
• Intake water depth and intake well
depth;
• Through-screen velocity; and
• Design intake flow (DIF).
For technology in-place, intake water
depth and intake well depth, and
through-screen velocity, EPA corrected
data inputs that were incorrectly
interpreted for the cost-test tool in the
proposed rule analysis. To do so, EPA
reviewed 316(b) survey responses and
written comments submitted with the
survey to ensure that the correct
parameters were identified and input
into the cost-test tool. EPA also
reviewed the facility-level data for DIF
and found that some model facilities
included emergency intake flows in
their calculation of DIF. These facilities’
costs were potentially overstated, and
the costs were adjusted to remove
emergency intakes and emergency
intake flows. Some facilities also
reported more than one technology inplace and also operate more than one
intake, indicating that the facility has
two distinct types of intake structure
(e.g., a facility may have a shoreline
intake and a submerged offshore intake).
The costs for these ‘‘split’’ intakes are
5 ‘‘Summary Descriptions of Facilities with
Impingement and Entrainment Studies Collected
Since Proposal of the Section 316(b) Phase III Rule’’
provides a summary of these studies supplementing
the Regional Benefits document DCN 8–5282. These
12 studies are also in the record for today’s NODA.
6 Input parameters for the cost-test tool are
defined and discussed in the Proposed 316(b) Phase
III Technical Development Document, Section 5
(DCN 7–0004). The decision tree used to apply
technology cost modules is also detailed in the
TDD.
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
7 See Revisions for Phase III Compliance Cost
Estimates (DCN 8–6600) for a detailed discussion.
8 For the NODA, revisions were made to the
capital costs, O&M costs, and downtime costs. Costs
increased for some model facilities, and decreased
for others. In some cases, only one of the three cost
categories changed for a model facility, but in many
cases, revisions were made in all three categories.
PO 00000
Frm 00020
Fmt 4702
Sfmt 4702
now generated separately for each
intake. The corrected values for DIF
(‘‘corrected DIF’’ or ‘‘revised DIF’’) were
subsequently used in the cost tool to
calculate facility costs.
Other corrections were made to the
canal length for certain model facilities.
Additionally, adjustments were made to
model facilities to account for multiple
intakes with unique characteristics, e.g.,
model facilities with intakes
withdrawing from different waterbody
types, model facilities with both
shoreline and submerged intakes, and
model facilities with intake velocities
less than and greater than 0.5 foot per
second (fps). These model facilities’
costs were potentially overstated at
proposal, as they included costs of
technology modules for the model
facilities’ total flows rather than just
those intakes needing technology
modules.
EPA also reviewed the calculation of
O&M costs for all scenarios and revised
costs to ensure that all incremental
variable O&M costs were based on the
actual intake flow (AIF). For the
proposal, EPA used AIF for some
variable O&M costs and DIF for others.
EPA previously noted that the AIF is, on
average, less than half of the total DIF
(69 FR 68460). EPA believes that using
AIF for all cost modules is more
appropriate for use in estimating
technology O&M costs since the AIF
will more accurately capture periods in
which screens are not required to be
operated as long or backwashed as
frequently. Using the AIF more
accurately reflects any incremental costs
associated with reductions in power
demand, wear on the system, and
operator labor hours. Since AIF is on
average less than half of the DIF,
incremental O&M costs based on DIF
tend to overstate costs.
EPA also revised the baseline O&M
costs for existing technologies for all
technology modules except modules 5
(fish barrier net) and 8 (add velocity
cap). In doing so, EPA accounted for
O&M costs currently borne by facilities
to maintain any existing technologies,
and only calculated the incremental
baseline O&M costs for a new
technology (as required by the rule).
Modules 5 and 8 remain unchanged, as
any existing technologies would likely
remain in place after a new technology
is installed as a result of the regulations.
For all other modules, the existing
technology would be removed and
replaced by a new technology. In one
additional case, EPA failed to account
for a model facility’s baseline O&M
costs. In this case, EPA has now
included the baseline O&M costs, and
the model facility’s costs were corrected
E:\FR\FM\25NOP1.SGM
25NOP1
71061
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
to reflect only the incremental O&M
costs.
The corrections to the engineering
costs also resulted in changes to some
of the pilot study costs estimated for the
Information Collection Request (ICR).
B. Installation Downtime
For the analysis supporting the
proposal, installation downtime (the
amount of time that a facility may need
to shut down due to the installation of
an impingement and/or entrainment
technology) was estimated using EPA’s
Phase II modeling methodology (see
Phase II Technical Development
Document DCN 6–0004). This approach
primarily presumes that the facility
would need to shut down operations
completely to retrofit an intake to either
add a larger intake or relocate an intake
to be submerged offshore. Although this
is true for most electric generators,
manufacturing facilities may have
greater flexibility regarding operation of
various production operations and
cooling water requirements.9 Alternate
electricity sources may be available or
other intakes with sufficient excess
capacity may be available for use during
construction of a new intake technology.
Therefore, EPA believes that the
assumptions used for Phase II facilities
may be overly conservative for Phase III
model facilities and may tend to
overestimate downtime potentially
incurred by Phase III model facilities
and the associated lost revenue.
Since the proposal, EPA has contacted
several manufacturing facilities to verify
the technology in-place, and has
collected additional vendor and
consultant data to update the downtime
estimates.10 Based on this information,
EPA corrected DIF values and revised
cost module allocations for some model
facilities, reduced downtime estimates
by two weeks for technology modules 3,
4, 7, 12, and 14 (see exhibit 5–23 of the
proposed Development Document DCN
6–0004), and considered each intake at
those model facilities with multiple
intakes separately. These activities
resulted in significant reductions in the
need for any downtime at some
facilities, and reduced downtime
estimates for others. The revised
installation downtime estimates are
presented below for the three regulatory
options and compared with values
presented at proposal.
EXHIBIT III–1.—REVISED INSTALLATION DOWNTIME ESTIMATES
National Net Downtime Estimates (Weeks)
100 MGD certain
waterbodies
50 MGD all
200 MGD all
Proposal
NODA
Proposal
NODA
Proposal
NODA
104 ...............................................................................................................................
55
16
2
28
17
For Phase III model facilities with
multiple intakes, downtime estimates
remain at zero for those facilities with
shoreline intakes that are not dedicated
intakes, as discussed in the proposal.
Using the approach presented in today’s
NODA, and applying the model
facilities’ weights to achieve a national
estimate, downtime estimates would be
reduced by 49 weeks, 14 weeks, and 11
weeks, respectively, for the three
regulatory options (50 MGD–All, 100
MGD Certain Waterbodies, and 200
MGD–All, weighted values).
EPA is soliciting comments on this
approach to calculating installation
downtime for Phase III facilities. EPA
presents the revised estimates of
downtime costs in Section IV.B. Exhibit
IV–4 of this notice.
C. Use of Alternate Intake Flow Data to
Estimate Costs
For the proposed rule, EPA used the
DIF to estimate all engineering
compliance costs. The DIF is typically
established prior to the design phase of
construction and is estimated based on
the maximum potential flow volume
requirement for that facility. As stated
previously, facilities rarely operate at
flows close to the maximum DIF, and
9 Id.
10 See
Downtime Duration Input and Analysis of
Manufacturing Facilities (DCN 8–6601).
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
several commenters on the Phase III
proposal stated that this methodology
may have overestimated costs for the
Phase III rulemaking.
Several facilities commented that for
older facilities, especially those that
have implemented flow reduction
measures, the plant’s original DIF may
be significantly higher than what is
required under normal operations today.
The costs developed for the proposed
rule reflected the entire DIF as originally
reported by the facility. EPA believes
this may have resulted in overestimating
flow for costing purposes. For example,
EPA’s costs should exclude technology
retrofits to those structures where the
intakes and/or pump houses have been
permanently taken out of service.
However, EPA is not able to identify all
cases where a facility’s reported DIF is
significantly higher than the plant’s
current maximum intake flow or
‘‘MRIF.’’ To assess the impact of using
DIF in the cost analysis, EPA conducted
a sensitivity analysis using the three
different intake flow values: The DIF
with the corrections noted above in
Section III.A. (‘‘corrected DIF’’); the AIF;
and the MRIF.11 The AIF is calculated
as the three-year average (1996–1998) of
intake flow volume reported on the
316(b) surveys. The MRIF is calculated
as the three-year average (also 1996–
1998) of the maximum reported daily
intake flow reported on the 316(b)
surveys.12 Estimated engineering
compliance costs for the three flow
values are presented in Section IV.B,
Exhibit IV–7 for each proposed option
(50 MGD all, 200 MGD all, and 100
MGD certain waterbodies).13
As part of the sensitivity analysis,
installation downtime estimates were
also developed using the AIF and the
MRIF values and are presented in
Exhibit III–2.
11 See Revisions for Phase III Compliance Cost
Estimates (DCN 8–6600) for a detailed discussion.
12 Where MRIF values were not provided on the
316(b) survey, EPA imputed the values from the
reported AIF.
13 See DCNs 8–6608A, 8–6608B, and 8–6608C.
PO 00000
Frm 00021
Fmt 4702
Sfmt 4702
EXHIBIT III–2.—ESTIMATED NATIONAL
INSTALLATION DOWNTIME USING ALTERNATIVE INTAKE FLOWS
Net downtime (weeks) for
NODA (weighted)
Intake flow
alternative
Corrected
DIF .........
AIF .............
MRIF ..........
E:\FR\FM\25NOP1.SGM
25NOP1
50
MGD
all
55
54
54
100 MGD
certain
waterbodies
2
2
2
200
MGD
all
17
16
16
71062
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
EPA acknowledges that using DIF to
estimate engineering capital costs may
overestimate costs for some facilities,
but believes that DIF provides the best
margin of safety for periods of peak
flows and allows for growth of future
operations. EPA also believes that using
the AIF or MRIF flows as the design
basis for capital costs is not appropriate
since many manufacturing facilities
have flow requirements that vary greatly
over time. Using the AIF may result in
technologies being substantially
undersized during periods of peak flow
requirements, thus limiting the proper
function of the technology. For example,
intake screens are sized based on an
acceptable through-screen velocity;
when the actual flow exceeds the AIF,
the performance of the technology
suffers and greater impingement and
entrainment may result. EPA also
reviewed survey data that showed the
MRIF exceeding the DIF in some
extreme cases; in these instances, a
technology sized for the MRIF may not
be adequately protective. For these
reasons, EPA intends to use the
corrected DIF values in developing
engineering capital costs for the final
rule. EPA solicits comments on this
approach.
D. Consideration of Operating Time
Under the Phase II rule, facilities with
a capacity utilization rate less than 15
percent are afforded reduced regulatory
requirements, i.e., impingement
mortality only regardless of waterbody
type or DIF. Capacity utilization rate is
defined as ‘‘the ratio between the
average annual net generation of power
by the facility (in Megawatt hours
(MWh)) and the total net capability of
the facility to generate power (in MW)
multiplied by the number of hours
during a year’’ (69 FR 41684). In the
proposed rule for Phase III, EPA
solicited comments on an analogous
approach for manufacturing facilities
(69 FR 68484). No comments were
received that reflected a specific
approach; however, several commenters
noted that reductions in flow or
sporadic intake use should be addressed
in the final requirements. In today’s
NODA, EPA is considering using a
threshold of fewer than 60 days of
operation for manufacturing facilities
for reduced regulatory requirements.14
The 60 day value was approximated as
15 percent of 365 days. For facilities
with intakes operating fewer than 60
days per year, the intake would only be
subject to impingement mortality
14 Meadows, K. Memo to P. Shriner, EPA RE:
Estimates of Operating Days for Phase III Facilities.
DCN 8–6604.
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
requirements similar to those
requirements for a Phase II facility
operating at less than 15 percent
capacity utilization rate. EPA solicits
comments on this approach.
IV. Economic Impact
In this section of today’s NODA, EPA
first describes additional analyses that
were undertaken for the ‘‘Other
Industries,’’ which, as described at
proposal, are industries in addition to
the electric power industry and the
Primary Manufacturing Industries that
are potentially within the scope of the
section 316(b) regulation. Second, EPA
reviews an alternative concept for
valuing the social cost of installation
downtime. Third, EPA presents revised
estimates of the social cost of
compliance based on the revisions to
the engineering cost analysis for
regulatory compliance, as discussed in
Section III, above.
A. Additional Analyses for the Other
Industries
As described in the proposal, EPA
framed its initial analysis and datagathering for the proposed Phase III rule
on the electric power industry (facilities
with design intake flow of less than 50
MGD) and four manufacturing
industries: Paper, Chemicals, Petroleum,
and Primary Metals, (the ‘‘Primary
Manufacturing Industries’’). EPA
focused on these industrial categories
because they are cooling-waterintensive, and EPA therefore expected a
substantial number of facilities in these
categories would potentially be subject
to the proposed regulation. Collectively,
this target population was estimated to
generate 99 percent of the cooling water
in the nation (see 69 FR 68457). Because
other industries contribute relatively
little cooling water generation, EPA
excluded them from the target
population for purposes of data
collection activities.
From a list of facilities in the target
population, EPA selected a statistical
sample to receive a questionnaire.
Selecting facilities in this manner
allows statistical inferences to be made
about all eligible facilities in the target
population, including those that did not
respond or did not receive the
questionnaire. When EPA received the
responses, it found a few (22)
questionnaires had been completed by
facilities that were not part of the target
population for the questionnaire.
However, EPA determined that the 22
facilities may be subject to the rule
because their operations include cooling
water usage. For this reason, EPA
retained the data and considered them
on a facility-level basis in the impact
PO 00000
Frm 00022
Fmt 4702
Sfmt 4702
analysis of the proposed rule. EPA
performed a less detailed assessment of
the economic circumstances in terms of
the industries’ ability to comply with
the proposed Phase III regulation
without material economic/financial
impact. In its analysis at proposal, EPA
found that none of the 22 facilities
would be expected to incur an adverse
economic impact from compliance with
any of the proposed regulatory options.
EPA proposed to extrapolate these
findings to all ‘‘other’’ industries,
because the associated (‘‘other’’)
industries collectively contribute one
percent or less of the cooling water
usage, and therefore EPA believes there
would be few, if any, additional
potentially regulated facilities in the
‘‘other’’ industries. Comments on the
proposal suggested that EPA should
consider the impacts of the Other
Industries, not just the facilities
themselves.
Since the proposal, EPA has
continued to investigate these facilities
and the Other Industries more generally
to increase its understanding of the
potential impact of the 316(b) regulation
on such industries. These efforts
include:
1. A comparative analysis of cooling
water use and compliance cost for the
Other Industries and Primary
Manufacturing Industries facilities. This
analysis considered several normalized
measures of cooling water use and
compliance cost for facilities in the
Other Industries and Primary
Manufacturing Industries.15
2. Preparation of a detailed industry
profile and assessment of business
conditions and outlook for the Food and
Kindred Products industry. EPA chose
this industry for additional analysis
because it submitted over half (12) of
the 22 Other Industries questionnaires
that EPA received and because it is the
next largest user of cooling water, after
the electric power industry and the
Primary Manufacturing Industries, as
reported in the Census of Manufacturers
reports of cooling water usage.16 None
of the twelve facilities analyzed are
expected to experience financial stress
as a result of any of the proposed Phase
III options.
3. Development of a basis for
extrapolating results from the analysis
of subset of the Food and Kindred
Products industry facilities to the
15 See Statistical Analysis of Other Industries and
Primary Manufacturing Industries Facility Data,
DCN 8–2502 and Evaluation of Similarities Between
Intakes at Phase III Food and Kindred Products
Facilities and Other Phase III Manufacturers;
DCN8–6607.
16 See Profile of Food and Kindred Products
Industry (SIC 20), DCN 8–2500.
E:\FR\FM\25NOP1.SGM
25NOP1
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
broader population of facilities in the
industry. In addition to preparing an
economic profile for the Food and
Kindred Products industry, EPA also
sought to develop a method for
extrapolating the findings from the
analysis of the 12 individual Food and
Kindred Products facilities to the
broader population of facilities in the
industry.17 EPA considered an ex-poststratification approach to develop
sample weights for facilities in the
industry, but EPA concluded that
sufficient data were not available to
develop reliable sample weights by this
method. As an alternative, less rigorous
approach, EPA also considered
extrapolating facility results to the
broader population based on the
approximate fraction of total cooling
water use in the Food and Kindred
Products industry represented by the 12
facilities from which EPA received
questionnaires. This analysis indicated
that these facilities account for
approximately 32 percent of estimated
total cooling water usage in the Food
and Kindred Products industry at the
time of EPA’s survey, which, in turn,
would imply an extrapolation multiplier
of 3.11. This concept of extrapolation
assumes that compliance cost, facility
counts, and other regulatory impact
measures are directly proportional to
cooling water usage, as represented by
the 12 facilities, and thus can be scaled
to the total Food and Kindred Products
industry on this basis. Of these 12 Food
and Kindred Products facilities, 3
reported design intake flow of at least 50
MGD, and thus could be subject to the
Phase III regulation under the regulatory
applicability thresholds as outlined at
Proposal and carried forward to this
NODA. The remaining 9 Food and
Kindred Products facilities reported
design intake flow of less than 50 MGD
and thus would not be subject to the
Phase III regulation, based on the
regulatory applicability thresholds set
forth in the proposed regulation. For the
purposes of EPA’s analyses for the
Phase III regulation, the estimated
extrapolation multiplier of 3.11 would
thus apply only to those facilities with
design intake flow of at least 50 MGD.
Applying this extrapolation multiplier
to the 3 Food and Kindred Products
facilities with at least 50 MGD design
intake flow, EPA estimates that
approximately 9 to 10 facilities, total, in
the Food and Kindred Products industry
could potentially be within the scope of
the Phase III regulation, based on the
17 See
Using Cooling Water Usage Data to
Extrapolate Analysis Results for the 12 Food &
Kindred Products Facilities to the Industry Level,
DCN 8–2503.
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
lowest of the three regulatory
applicability thresholds as presented for
the proposed regulation. EPA seeks
comment on usage of this extrapolation
concept for estimating the industry-level
impact of Phase III regulatory
compliance for the Food and Kindred
Products industry.
4. Further review of Other Industries
facilities outside of the Food and
Kindred Products industry. As
described above, 12 of the 22 Other
Industries facilities are within the Food
and Kindred Products. The remaining
10 facilities lie in a broad range of
industries, with five being in
manufacturing industries and five in
resource and agricultural (nonmanufacturing) industries. Four of these
remaining facilities have a DIF greater
than 50 MGD, and are in the Fabricated
Metal Products, Transportation
Equipment, and Metal Mining
industries.18
In the same way as described above
for the Food and Kindred Products
industry facilities, EPA considered
extrapolating regulatory analysis
findings for the non Food and Kindred
Products facilities based on the fraction
of estimated total cooling water usage
represented by these facilities in their
respective industries, and in the
aggregate of the remaining industries
not accounted for by the five Primary
Manufacturing Industries or the Food
and Kindred Products industry. This
potential basis for extrapolation is
limited to only those Other Industries
facilities that are in Manufacturing
sectors, because cooling water usage
data were collected in the Economic
Census only for manufacturing
industries. Using the same concepts as
described in the preceding paragraph,
EPA calculated that cooling water usage
in the five manufacturing sector Other
Industries facilities represented from 0.7
percent to 13.8 percent of the estimated
cooling water usage in the respective
industries of each of these facilities.
When the calculation is performed on
an aggregate basis for all of the
industries not accounted for by the five
Primary Manufacturing Industries or the
Food and Kindred Products industry,
the resulting fraction of total cooling
water usage accounted for by the five
manufacturing sector Other Industries
facilities is 1.5 percent. These relatively
low estimated percentage coverages
would indicate relatively high
extrapolation multipliers, ranging from
7.2 to 149.0, for the individual
18 See Using Cooling Water Usage Data to
Extrapolate Analysis Results for the 10 Other
Industries’ Facilities Not In Food & Kindred
Products to the Industry Level, DCN 8–2558 for
further information on these facilities.
PO 00000
Frm 00023
Fmt 4702
Sfmt 4702
71063
industries, and of 67.3 for the aggregate
remaining industry comparison.
Because the estimated fractions of
cooling water usage covered by the five
manufacturing sector Other Industries
facilities, both by individual industry
and in the aggregate, are low (0.7 to 13.8
percent), the implied statistical error in
using this information as a basis for
extrapolation to the remainder of the
industries would be very high.
Accordingly, EPA has considerably less
confidence in using the information
from the scant number of Other
Industries facilities outside the Food
and Kindred Products industry as a
basis for extrapolating regulatory
findings from the five manufacturing
sector Other Industries to the industry
level than is the case for the Food and
Kindred Products industry, where the
cooling water usage coverage is
relatively high—32 percent. EPA seeks
comment on the usage of this
extrapolation concept for estimating the
industry-level impact of Phase III
regulatory compliance for Other
Industries outside of the Food and
Kindred Products industry.
EPA’s analysis shows, with only one
exception, that the values for Other
Industries facilities fall within the
distributions of values for the Primary
Industries facilities. As a result, EPA
continues to propose to include the
Other Industries within the scope of the
316(b) Phase III regulation. EPA notes
this general approach is appropriate for
determining the national costs and
economic impacts of the proposed
regulations, and these results should not
be used for facility-specific costing
exercises.
B. Alternative Approach to Valuing the
Social Cost of Installation Downtime
For the proposal (see Proposed Phase
III Economic Analysis Appendix 2 to
Chapter B3: Calculation of Installation
Downtime Cost, DCN 7–0002), EPA
calculated the cost of installation
downtime for the manufacturers facility
impact/private cost analysis, as the loss
in pre-tax income, accounting for lost
revenue, reduced variable production
costs, and cost of replacement
electricity, if any. However, as described
in the proposal, the social cost of
downtime is based on a different
economic concept. Specifically, under
the assumption that the total quantity of
goods and services produced and sold
by the affected industries would not
change as a result of the regulation, the
cost to society from installation
downtime is the increase in cost for
producing the goods and services that
would otherwise have been produced by
the affected facilities’ except for the
E:\FR\FM\25NOP1.SGM
25NOP1
71064
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
occurrence of installation downtime.
That is, other producers are assumed to
replace the production of goods and
services lost due to installation
downtime, or even the affected facilities
may produce these goods and services,
but in a different time period. Either
way, the cost to society is the amount,
if any, by which the cost to produce
these replacement goods and services
exceeds the cost at which the affected
facilities would have produced these
goods and services if they were not to
incur installation downtime due to the
316(b) regulation. Another possibility is
that the quantity of goods and services
produced would change, in which case
social cost comparison must also
account for lost consumer surplus. EPA
believes it is reasonable to ignore this
effect as long as the overall impacts (and
any associated price changes) are small
relative to the size of the affected
sectors.
EPA is not able to estimate precisely
what this additional cost is likely to be.
Conceptually, the cost to society could
vary over a broad range depending on
the structure of, and character of
competition in, the production of goods
and services in the individual markets
affected by the 316(b) Phase III
regulation.
At the low end of this possible range,
if the replacement goods and services
can be provided by other producers (or
by the affected facilities but at a
different time) at the same variable
production cost as otherwise would
have been incurred by the affected
316(b) Phase III facilities, then the cost
to society of installation downtime
would be zero. Because the cost for
alternative producers is the same as for
the producers incurring downtime,
society incurs no incremental resource
cost when other producers provide the
replacement goods and services. In this
case, although the affected 316(b) Phase
III facilities might incur a financial
impact from installation downtime, this
impact—the loss in pre-tax income
described in the preceding section—
becomes a transfer of income from the
producers incurring installation
downtime losses to the producers who
make up the lost production.
At the high end of this possible range,
the cost to society would be
approximately equal to the pre-tax
income loss incurred by facilities due to
installation downtime. That is, the cost
to society would again be the lost
revenue from installation downtime less
the variable cost of producing the goods
and services not produced due to the
installation downtime. In this case, the
variable production cost for other
producers to replace the lost goods and
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
services is assumed to be essentially the
same as the price received for the sale
of the goods and services not produced
by the facilities incurring the
installation downtime. This assumption
is consistent with a competitive market
model of increasing marginal
production cost, such that the variable
production cost of the marginal supplier
of goods and services produced and sold
in any period is approximately equal to
the price received for those goods and
services in the market.
EPA believes that this latter highsocial-cost-valuation approach is
reasonable for the analysis of
installation downtime in the electric
power industry. For electricity, this
assumption is consistent with the
electricity market concept that the
variable production cost of the last
generating unit to be dispatched is
approximately the same as the price
received for the last unit of production.
However, for manufacturers, EPA
believes that this latter approach may
overstate the cost to society of
installation downtime. The goods and
services produced by facilities in the
manufacturers segment are not
necessarily produced and sold in as
orderly markets as the markets for
electricity. In addition, unlike
electricity, the goods and services
produced by Phase III manufacturers
may be able to be produced at a
different time than the time at which the
goods and services would otherwise
have been produced by the affected
facilities. As a result of these differences
in market and production
characteristics, the cost of producing the
replacement goods and services may be
lower than the price at which the goods
and services are sold, and as a result,
the cost to society of downtime would
be correspondingly lower. In the lower
bound case, as outlined above, the
replacement goods and services might
be produced at the same cost as they
would otherwise have been produced by
the affected 316(b) facilities and, in this
case, society would incur no cost from
downtime.
The likely reality is that the cost to
society from installation downtime lies
somewhere between these cases. At the
time of the proposal, lacking specific
knowledge of the overall production
cost structure of the affected industries
and for the numerous goods and
services provided by the affected
industries, to be conservative in its
analysis, EPA adopted the higher end
assumption for its analysis of the social
cost of downtime for the manufacturers
segment, but explained that the
resulting value likely overstates social
cost. For example, 12 percent of Phase
PO 00000
Frm 00024
Fmt 4702
Sfmt 4702
III facilities (manufacturers with a loss
of goods produced) incurred average
downtime costs of $10,650 per MGD of
design intake flow (see Technical
Development Document for the
Proposed 316(b) Phase III Rule, page 5–
41; DCN 7–0004). In comparison, 18
percent of Phase II facilities (i.e. electric
generators) incurred average downtime
costs of $882 per MGD of design intake
flow. Actual downtime costs (in dollars)
vary for each individual facility; see the
proposed Economic Analysis for more
information.
For this NODA, EPA has calculated
the social cost of installation downtime
both according to the conservative,
higher end assumption (as presented in
the proposal) and according to the lower
bound case, in which the social cost of
downtime is zero. As stated above, EPA
is not able to know with certainty where
the social cost of downtime will actually
fall along this scale but believes these
two cases provide a reasonable upper
and lower bound of the social cost of
downtime. EPA seeks comment on
which of these approaches to valuing
the social cost of installation downtime
best reflects the national social cost of
installation downtime for the proposed
rule.
C. Estimated Social Cost of Compliance
Based on Revised Engineering Cost
Analysis
EPA calculated new social cost
estimates for the direct cost of
compliance using costs based on the
three different intake flow values—the
corrected DIF, the AIF, and the MRIF—
and reflecting the other revisions to the
engineering cost analysis as described in
Section III, above. For this analysis, EPA
used the same methodology as
described in the proposal, but brought
all costs forward to mid-2004$ using the
Implicit Price Deflator for Gross
Domestic Product or another
appropriate index to adjust costs to the
year of interest. For the analysis of
social costs, EPA used two discount
rates, 3% and 7%, to discount all costs
to the beginning of 2007, the date at
which the rule is assumed to become
effective. EPA assumed that all
regulated facilities 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. The last year
for which costs were tallied is 2043. The
basis for these projections can be found
in Chapter B1 of the Economic Analysis
for the Proposed Section 316(b) Rule for
Phase III Facilities (DCN 7–0002). For
this NODA, EPA did not estimate costs
incurred by governments for
E:\FR\FM\25NOP1.SGM
25NOP1
71065
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
administering the regulation as these
costs are not expected to differ
materially from those presented at
proposal.
Below, EPA presents these revised
social cost estimates of the direct cost of
compliance to facilities, based on the
three threshold options in the proposed
Phase III rule: (1) Design intake flow of
at least 50 MGD, any source waterbody
type (‘‘50 MGD ALL’’), (2) design intake
flow of at least 200 MGD any source
waterbody type (‘‘200 MGD ALL’’), and
(3) design intake flow of at least 100
MGD, from an ocean, estuary, tidal
river, or Great Lake (‘‘100 MGD Certain
Waterbodies’’). The first set of exhibits
and discussion bring forward to midyear 2004$ the costs based on DIF as
known at proposal and compare these
values to the cost estimates based on the
corrected DIF, which reflect the
corrections and adjustment made to the
DIF since proposal, as described in
Section III. C, above. These cost
estimates reflect the upper bound
valuation of downtime, as presented at
proposal. In the second section, EPA
presents the alternative cost estimates
for the corrected DIF values using the
lower bound valuation of downtime, as
described in Section IV.B, above. The
third section presents costs using the
alternative intake flow concepts as the
basis for determining regulatory
applicability—Maximum Reported
Intake Flow (MRIF) and Average Intake
Flow (AIF). Finally, EPA presents a
summary comparison of the cost
estimates under the original and
corrected DIF and alternative intake
flow concepts, and for the upper and
alternative, lower bound estimate of the
social cost of downtime.
Adjusting Proposal Cost Estimates to
2004 Dollars and Applying DIF
Corrections
Exhibits IV–3 and IV–4 summarize
the changes in the cost estimates from
proposal, based first, on bringing the
cost values forward from mid-year 2003
to mid-year 2004, and second, on the
corrections to DIF, as described at
Section III. C, above. As shown in
Exhibit IV–3, the proposal cost
estimates were brought forward to midyear 2004 using the Implicit Price
Deflator for Gross Domestic Product.
This adjustment resulted in a uniform
increase of 2.6% (rounded) to each
component of social cost and to total
social cost.
EXHIBIT IV–3.—ANNUALIZED TOTAL SOCIAL COSTS OF COMPLIANCE FOR ALL OPTIONS AS PRESENTED AT PROPOSAL
BROUGHT FORWARD TO 2004$
[In millions]
In 2003$
Cost component
3% discount
rate
In 2004$
7% discount
rate
3% discount
rate
7% discount
rate
50 MGD All Option
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
$0.3
2.7
14.3
14.1
8.0
3.1
4.4
$0.4
3.7
18.6
13.9
6.7
2.5
3.7
$0.3
2.7
14.6
14.5
8.2
3.2
4.5
$0.4
3.8
19.1
14.2
6.9
2.6
3.8
Total Social Cost ......................................................................................
46.8
49.5
48.0
50.8
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
0.1
0.5
7.4
7.9
4.9
0.6
1.1
0.2
0.7
9.9
7.7
4.1
0.5
0.9
0.1
0.6
7.6
8.1
5.1
0.6
1.1
0.2
0.8
10.1
7.9
4.2
0.5
0.9
Total Social Cost ......................................................................................
22.6
24.0
23.2
24.6
200 MGD All Option
100 MGD Certain Waterbodies Option
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
0.2
0.8
4.3
7.1
2.9
0.9
1.3
0.3
1.1
5.6
6.9
2.4
0.8
1.1
0.2
0.9
4.4
7.3
3.0
0.9
1.3
0.3
1.2
5.8
7.0
2.5
0.8
1.1
Total Social Cost ......................................................................................
17.5
18.1
17.9
18.6
Note: Prices adjusted to 2004$ using the Implicit Price Deflator for Gross Domestic Product. See DCN 8–2521.
As described above, EPA corrected
the DIF for certain facilities and revised
the estimates of compliance costs based
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
on these corrected DIF values. Exhibit
IV–4, below, compares the total
annualized social costs of the three
PO 00000
Frm 00025
Fmt 4702
Sfmt 4702
proposed options under the DIF as
known at proposal to the new costs
based on the corrected DIF. For the 50
E:\FR\FM\25NOP1.SGM
25NOP1
71066
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
MGD All Option, total social costs
decline from $48.0 million to $36.7
million under the 3% rate, and from
$50.8 to $37.5 million at the 7% rate.
The 200 MGD All Option’s total social
costs decrease from $23.2 million to
$18.1 million at the 3% rate, and from
$24.6 million to $18.8 million at the 7%
rate. Total social costs under the 100
MGD Certain Waterbodies Option fall
from $17.9 million to $13.7 million at
the 3% rate, and from $18.6 to $13.3
million at the 7% rate. EPA notes that
due to the smaller number of facilities
potentially regulated under the 200
MGD All and the 100 MGD Certain
Waterbodies options, changes in costs
for any one model facility are more
likely to result in large changes in the
total national costs.
EXHIBIT IV–4.—COMPARISON OF ANNUALIZED SOCIAL COSTS OF COMPLIANCE USING DIF AS KNOWN AT PROPOSAL AND
USING CORRECTED DIF
[In millions, mid-2004$]
In 2003$
Cost component
3% discount
rate
In 2004$
7% discount
rate
3% discount
rate
7% discount
rate
50 MGD All Option
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
$0.3
2.7
14.6
14.5
8.2
3.2
4.5
$0.4
3.8
19.1
14.2
6.9
2.6
3.8
$0.3
3.2
5.9
13.1
5.1
3.8
5.3
$0.4
4.5
7.9
12.9
4.3
3.1
4.5
Total Social Cost ......................................................................................
48.0
50.8
36.7
37.5
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
0.1
0.6
7.6
8.1
5.1
0.6
1.1
0.2
0.8
10.1
7.9
4.2
0.5
0.9
0.1
0.7
4.3
8.1
2.8
0.8
1.4
0.2
0.9
5.9
7.9
2.3
0.6
1.1
Total Social Cost ......................................................................................
23.2
24.6
18.1
18.8
200 MGD All Option
100 MGD Certain Waterbodies Option
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
0.2
0.9
4.4
7.3
3.0
0.9
1.3
0.3
1.2
5.8
7.0
2.5
0.8
1.1
0.2
1.0
0.0
8.3
1.7
1.1
1.5
0.2
1.3
0.0
8.1
1.4
0.9
1.3
Total Social Cost ......................................................................................
17.9
18.6
13.7
13.3
Compliance Costs Based on Upper and
Lower Bound Valuation of Installation
Downtime and Using Corrected DIF
Values
As described at Section IV.B, EPA
also developed social cost estimates
based on an alternative concept of
downtime valuation. Exhibit IV–5
compares the estimates of social cost
using the corrected DIF values under the
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
original, upper bound downtime
valuation concept and the alternative,
lower bound valuation concept. For this
comparison, all components of cost
except downtime cost are unchanged
between the two cases, and, as
described, for the alternative, lower
bound valuation concept, the estimated
downtime cost is simply set to zero. As
shown in Exhibit IV–5, the total social
cost values decline by 16 percent (3%
PO 00000
Frm 00026
Fmt 4702
Sfmt 4702
discount rate) and 21 percent (7%
discount rate) under the 50 MGD All
Option and by 24 percent (3% discount
rate) and 31 percent (7% discount rate)
under the 200 MGD All Option. Because
no facilities are expected to incur
downtime costs under the 100 MGD
Certain Waterbodies Option, the
estimated social costs are the same
under both the upper and lower bound
downtime valuation cases.
E:\FR\FM\25NOP1.SGM
25NOP1
71067
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
EXHIBIT IV–5.—ANNUALIZED SOCIAL COST OF COMPLIANCE USING CORRECTED DIF AT UPPER AND LOWER BOUND
ESTIMATES OF DOWNTIME
[In millions, mid-2004$]
Upper valuation of downtime
Lower valuation of downtime
3% discount
rate
Regulatory Option
3% discount
rate
50 MGD All ......................................................................................................
200 MGD All ....................................................................................................
100 MGD Certain Waterbodies .......................................................................
Comparison of Alternative Intake Flow
Concepts as Basis for Determining
Regulatory Applicability
EPA also estimated social costs using
the two alternative intake flow concepts
for determining regulatory
applicability—Maximum Reported
Intake Flow (MRIF) and Average Intake
Flow (AIF). Exhibit IV–6 presents the
social costs under these alternative flow
concepts for each option, using the
upper bound downtime valuation
concept, as described at proposal. Costs
are lower under both of the alternative
intake flow approaches than under the
DIF approach. Costs decrease by a
greater amount (relative to the corrected
7% discount
rate
$36.7
18.1
13.7
$37.5
18.8
13.3
7% discount
rate
$30.7
13.7
13.7
$29.6
13.0
13.3
Option, costs decline, at the 3 percent
rate, from $18.1 million under the
corrected DIF to $16.5 million (MRIF),
and to $15.4 million (AIF). At the 7
percent rate, costs decline from $18.8
million under the corrected DIF to $17.1
million (MRIF) and to $16.1 million
(AIF). Under the 100 MGD Certain
Waterbodies Option, at the 3 percent
discount rate, total social costs decline
from $13.7 million under the corrected
DIF to $11.7 million (MRIF) and to
$10.6 million (AIF). At the 7 percent
discount rate, costs decline from $13.3
million under the corrected DIF to $11.3
million (MRIF), and to $10.2 million
(AIF).
DIF values) under the AIF approach
than under the MRIF approach. As
discussed at proposal, these costs
assume all facilities would comply with
the regulations by installing the single
best-performing technology module,
which does not necessarily reflect the
most cost-effective compliance
alternative (69 FR 68499).
Overall, the costs for the 50 MGD All
Option decrease, at the 3 percent rate,
from $36.7 million under the corrected
DIF, to $33.5 million (MRIF basis) and
to $32.0 million (AIF basis). At the 7
percent rate, total costs decline from
$37.5 million under the corrected DIF to
$34.2 million (MRIF), and to $32.7
million (AIF). Under the 200 MGD All
EXHIBIT IV–6.—ANNUALIZED SOCIAL COST OF COMPLIANCE UNDER MRIF AND AIF BASES FOR DETERMINING
REGULATORY APPLICABILITY, UPPER BOUND DOWNTIME VALUATION
[In millions, mid-2004$]
MRIF
Cost Component
3% discount
rate
AIF
7% discount
rate
3% discount
rate
7% discount
rate
50 MGD All Option
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
$0.2
3.2
5.4
11.0
4.7
3.8
5.3
$0.2
4.5
7.2
10.8
3.9
3.1
4.5
$0.2
3.2
5.4
9.6
4.5
3.8
5.3
$0.2
4.5
7.2
9.4
3.8
3.1
4.5
Total Social Cost ......................................................................................
33.5
34.2
32.0
32.7
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
Repermitting .....................................................................................................
Monitoring ........................................................................................................
0.1
0.7
3.8
7.3
2.5
0.8
1.4
0.1
0.9
5.1
7.1
2.1
0.6
1.1
0.1
0.7
3.8
6.4
2.3
0.8
1.4
0.1
0.9
5.1
6.2
2.0
0.6
1.1
Total Social Cost ......................................................................................
16.5
17.1
15.4
6.1
0.1
1.3
0.0
6.6
1.2
0.1
1.0
0.0
5.7
1.3
0.1
1.3
0.0
5.5
1.1
200 MGD All Option
100 Certain MGD Waterbodies Option
Pilot Study ........................................................................................................
Initial Permitting ...............................................................................................
Downtime .........................................................................................................
Capital Cost .....................................................................................................
O&M .................................................................................................................
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
PO 00000
Frm 00027
Fmt 4702
Sfmt 4702
0.1
1.0
0.0
6.8
1.4
E:\FR\FM\25NOP1.SGM
25NOP1
71068
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
EXHIBIT IV–6.—ANNUALIZED SOCIAL COST OF COMPLIANCE UNDER MRIF AND AIF BASES FOR DETERMINING
REGULATORY APPLICABILITY, UPPER BOUND DOWNTIME VALUATION—Continued
[In millions, mid-2004$]
MRIF
Cost Component
3% discount
rate
AIF
7% discount
rate
3% discount
rate
7% discount
rate
Repermitting .....................................................................................................
Monitoring ........................................................................................................
1.1
1.5
0.9
1.3
1.1
1.5
0.9
1.3
Total Social Cost ......................................................................................
11.7
11.3
10.6
10.2
Summary of Social Costs Over
Regulatory Options, Alternative Intake
Flow Concepts, and Alternative
Installation Downtime Valuations
regulatory and analytic configurations
as outlined in the preceding discussion.
Exhibit IV–7, below, summarizes
social costs according to the various
EXHIBIT IV–7.—ANNUALIZED SOCIAL COSTS OVER REGULATORY OPTIONS, ALTERNATIVE INTAKE FLOW CONCEPTS, AND
ALTERNATIVE INSTALLATION DOWNTIME VALUATIONS
[In millions, mid-2004$]
Discount rate
(percent)
Regulatory option
100 MGD Certain Waterbodies Option ........................
Alternative, Lower Bound Downtime Valuation Concept:
50 MGD All Option .......................................................
200 MGD All Option .....................................................
100 MGD Certain Waterbodies Option ........................
D. Additional Regulatory Costs to 316(b)
Facilities
EPA’s after-tax cash flow (ATCF)
adjustment analysis brings the estimates
of cash flow forward from the time of
the 316(b) facility survey (years 1996–
1998) to the time of the regulatory
analysis (2003). The ATCF analysis does
account implicitly for additional
regulatory costs incurred through 2003.
However, the ATCF adjustment analysis
does not capture the impact of new
regulations that came into effect during
this period and for which costs had not
yet been incurred, or fully incurred, by
2003. The EPA is aware of other
environmental regulations that were
recently or soon to be promulgated,
potentially imposing additional costs
beyond those reflected in the survey
financial statements. Prior to
determining the final compliance costs
for the 316(b) Phase III regulations, EPA
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
48.0
50.8
23.2
24.6
17.9
18.6
36.7
37.5
18.1
18.8
13.7
13.3
33.5
34.2
16.5
17.1
11.7
11.3
32.0
32.0
15.4
16.1
10.6
10.2
3
7
3
7
3
7
200 MGD All Option .....................................................
Corrected DIF
3
7
3
7
3
7
Upper Bound Downtime Valuation Concept, as Presented
at Proposal:
50 MGD All Option .......................................................
Proposed rule
MRIF
AIF
33.4
31.7
15.7
14.5
13.5
12.8
30.7
29.6
13.7
13.0
13.7
13.3
28.1
28.1
12.7
11.9
11.7
11.3
26.6
25.5
11.6
10.9
10.6
10.2
will review EPA’s Unified Agenda for
EPA regulatory actions that may affect
Phase III regulated facilities during the
time horizon of the analysis. EPA does
not have cost information to provide at
this time; however, EPA intends to
review regulatory actions not captured
in the proposed rule ATCF adjustment
analysis, and then consider whether
estimation of model facility costs for
these regulations might be warranted for
the Phase III final regulation analysis.
EPA intends to include these
evaluations as supplemental economic
analyses in the final record.
in response to peer review comments.19
These corrections help to better
characterize the summary level data
generated by the analysis and are
discussed below. In addition, a revised
commercial fishing benefits approach
that uses both revenue and cost data
that are region and species specific, and
also accounts for the effect of region and
species specific fishery management
regimes on the potential benefits is
discussed. EPA also examined a
modeling approach that considers the
effects of population-level dynamics in
estimating the impact of impingement
mortality and entrainment.
V. Benefits
A. Recreational Benefits
In today’s NODA, EPA is making
several minor corrections to its analysis
of national benefits. The meta-analysis
used for the proposal to estimate
recreational fishing benefits was revised
In this NODA, EPA is documenting a
few minor changes to the meta-analysis
PO 00000
Frm 00028
Fmt 4702
Sfmt 4702
19 A.L. Allen (EPA). Memorandum to EPA Docket
OW–2004–0002. Materials for Peer Review of the
Population Projection Matrix Model. DCN 8–5200.
E:\FR\FM\25NOP1.SGM
25NOP1
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
methodology used to estimate
recreational fishing benefits.20 Meta
regressions are designed to statistically
summarize the relationship between
benefit measures and a set of
characteristics compiled from multiple
primary study sources. The changes,
which were made in response to peer
reviewers’ comments, all relate to the
way the explanatory variables are
defined in the meta-analysis equation
that allows EPA to estimate the
recreational benefits.
The first change made to the
specification of the meta-model was to
combine the trout_west, trout_east, and
trout_other variables into a new
variable, trout_nonGL. This variable
represents all species of trout caught
outside of the Great Lakes region. This
change was made to address concerns
about the limited number of
observations within each of the three
initial variables, particularly
trout_other. The estimated coefficients
on these fish type variables may reflect
more than influences of trout_other on
the calculation of willingness-to-pay
dollar values, and may inadvertently
capture other study-specific influences
not fully modeled, such as study
geography. The new variable,
trout_nonGL, now includes 49
observations. This increased number of
observations is expected to decrease
overall sensitivity of the model to any
single data point.
EPA also changed the meta-model by
revising the specification of the trips
and age variables using categorical
(dummy) variables. Age and trips are
now represented by two dummy
variables each: age42_down, age43_up,
trips19_down, and trips20_up. For
example, age42_down is a binary
variable indicating that the mean age of
sample respondents in a particular
study was less than 43 years. This
means that the variable is one if the
mean age of the sample respondents is
less then 43 and zero if the mean sample
age was greater than or equal to 43, or
was not reported. The variable p
age43_up is a binary variable indicating
that the mean age of sample respondents
was 43 or greater. This means that the
variable is one if the mean age of the
sample respondents is 43 or greater and
zero if the mean sample age was less
than 43, or was not reported. The
default case captures studies in which
mean age was not reported. Similar
logic applies to the trips variables.
Because age and trips were not reported
by all studies, EPA believes that this is
a more appropriate and transparent
means of representing these variables.
These new dummy variables are
interpreted as the additional impact on
willingness-to-pay values associated
with studies that reported age (or trips)
71069
that fall in the four defined categories,
compared to the default of when age (or
trips) data are not reported. The values
at which the two sets of dummy
variables were divided (43 and 20, for
age and trips, respectively) were chosen
because they occur approximately
halfway through the range of age and
trips values observed in the meta-data.
The final change that EPA made to the
meta-model was to drop the gender
variable. EPA chose to eliminate this
variable because, after the model
modifications discussed above, all
categorical (dummy) variable
specifications of the gender variable
were not statistically significantly
different. Other model results were not
affected by this omission.
The following Exhibit IV–8 presents
the marginal recreational values per fish
used in the proposed rule analysis and
the values calculated based on the
revised meta-model. Most of the revised
marginal per fish values are 10% to 50%
lower than the values used in the
proposed rule analysis. The greatest
decrease in per fish values occurred in
the California region. The revised values
for the California region are, however,
more consistent with the values
estimated for other regions. The revised
marginal values for freshwater bass and
panfish in the Great Lakes region are 3%
(panfish) to 19% (bass) higher.
EXHIBIT IV–8.—MARGINAL RECREATIONAL VALUE PER FISH, BY REGION AND SPECIES
[Mid-2004$]
Marginal Recreational Value per Fish, by Region and Species (June 2004$) a
Species
Marginal Recreational
Value per Fish Used
in the Proposed Rule
Analysis:
Small game b .........
Flatfish ..................
Other saltwater c ....
Salmon ..................
Trout ......................
Walleye/pike ..........
Bass ......................
Panfish ..................
Revised Marginal Recreational Value per
Fish:
Small game b .........
Flatfish ..................
Other saltwater c ....
Salmon ..................
Trout ......................
Walleye/pike ..........
Bass ......................
California
North Atlantic
Mid-Atlantic
South Atlantic
Gulf of Mexico
Great Lakes
Inland
$12.98
16.12
4.67
........................
........................
........................
........................
........................
$7.89
8.32
4.34
........................
........................
........................
........................
........................
$7.09
7.14
3.85
........................
........................
........................
........................
........................
$5.83
6.03
3.19
........................
........................
........................
........................
........................
$5.49
........................
2.97
........................
........................
........................
........................
........................
........................
........................
........................
$11.56
8.25
4.73
6.09
1.09
$7.62
........................
........................
........................
2.88
5.32
7.19
1.00
6.14
8.25
2.50
........................
........................
........................
........................
5.03
5.04
2.52
........................
........................
........................
........................
4.99
4.75
2.47
........................
........................
........................
........................
4.84
4.75
2.41
........................
........................
........................
........................
4.76
........................
2.34
........................
........................
........................
........................
........................
........................
........................
$11.23
7.98
3.48
7.24
4.53
........................
........................
........................
2.40
3.47
7.62
20 See Recreational Fishing Analysis for the
316(b) Regulation for Phase III Facilities (DCN 8–
4601).
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
PO 00000
Frm 00029
Fmt 4702
Sfmt 4702
E:\FR\FM\25NOP1.SGM
25NOP1
71070
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
EXHIBIT IV–8.—MARGINAL RECREATIONAL VALUE PER FISH, BY REGION AND SPECIES—Continued
[Mid-2004$]
Marginal Recreational Value per Fish, by Region and Species (June 2004$) a
Species
Panfish ..................
California
North Atlantic
Mid-Atlantic
South Atlantic
Gulf of Mexico
........................
........................
........................
........................
........................
Great Lakes
1.13
Inland
0.90
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.
EPA estimates the recreational welfare
gain from the proposed regulation by
multiplying the marginal value per fish
by the additional number of fish caught
by recreational anglers that would have
been impinged or entrained in the
absence of the regulation. Whether the
total value of recreational fishing
benefits of the final 316b rule will be
revised downward or upward will
depend on the estimated reduction in
impingement and entrainment
attributed to the 316(b) regulation for
Phase III facilities and species affected
by impingement and entrainment.
B. Commercial Fishing Benefits
EPA is considering a revision to its
methodology for estimating the
commercial fishing-related benefits to
society from the 316(b) Phase III
regulation. Whereas the previous
analysis for the Phase II regulation and
the Phase III proposed regulation relied
on region- and species-specific revenue
data, those analyses did not use regionspecific harvesting cost data and also
did not account for the effect of regionand species-specific fishery
management regimes on expected
societal benefits. The revised approach
uses both revenue and cost data that are
region- and species-specific, and also
accounts for the effect of region- and
species-specific fishery management
regimes on the potential benefits. In
addition, the data underlying the
revised analysis are also considerably
more recent than the data used in the
previous analyses.
The analysis develops estimates of
societal net benefits derived from
increased commercial fishing harvest
resulting from reduced impingement
and entrainment of marine aquatic
species. For this analysis, the Agency
retained the proposed assumption that
the 316(b) regulations will not affect the
commercial catch landing price, but will
affect the quantity of fish harvested at
that price. As a result, the analysis
continues to focus on the increase in
producer surplus as the measure of
societal benefit in the commercial
fishing sector. Net benefits are assessed
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
as the product of an estimated net
benefits ratio for each species and
region-specific fishery, multiplied by
the gross revenue from increased
commercial fishing harvest. The
analysis utilizes the most recent
available variable cost, landings and exvessel price data collected by the
regional offices of NOAA’s National
Marine Fisheries Service (NOAA
Fisheries).21 The data and the
methodology used in this analysis are
the same as those used by NOAA
Fisheries to assess the effect of new or
amended fishery regulations on the U.S.
commercial fishing industry and the
U.S. economy. EPA solicits comment on
the use of these data in the revised
commercial fishing benefits analysis.
Today’s NODA provides results of
this revised approach for the North and
Mid Atlantic regions. The decrease in
fishermen’s costs produces an increase
in social welfare with monetized
regional values that range from zero to
$9,418 ($2002, undiscounted)
depending on the species of interest.
The complete analysis is described in
more detail in the memo, ‘‘Revised
Assessment of Commercial Fishery
Benefits for 316(b) Regulations; The
North and Mid Atlantic Regions’’ (DCN
8–4918). EPA solicits comment on the
use of this revised approach for all
regions for which NOAA Fisheries data
are available.
C. Impingement and Entrainment
EPA is using an age-structured matrix
population model to examine the
potential population-level consequences
of impingement mortality and
entrainment of individual organisms.
EPA refers to the model as the
Population Projection Matrix (PPM)
model. A matrix population model uses
stage-specific rates of survival and
reproduction, combined with the
number of individuals in each stage, to
estimate changes in population size over
time.22 The model considers the effects
21 See
DCNs 8–4800 to 8–4906.
Caswell, H. 1989. Matrix Population
Models: Construction, Analysis, and Interpretation.
Sinauer Associates, Inc., Sunderland, MA.
22 See
PO 00000
Frm 00030
Fmt 4702
Sfmt 4702
of certain population-level dynamics
(i.e., density-dependent survival and
reproduction) that are not directly
considered in EPA’s other modeling
efforts.
For those species and populations for
which sufficient data are available, EPA
is first using the PPM model to
represent a species’ population under
current conditions (i.e., without
implementation of the regulatory
options proposed in this rulemaking
effort). The model uses the same species
and stage-specific rates of survival used
for EPA’s modeling efforts presented as
part of the proposed rule (see DCNs 2–
0016 to 2–0024), as well as reproductive
rates estimated by a calibration
procedure based on the intrinsic growth
rate of the population size.23 By
reference to historical harvest rates for
the population and facility-provided
impingement and entrainment loss
records, the model partitions total
mortality for the population into three
sources of mortality: Natural mortality,
fishing mortality, and mortality due to
impingement and entrainment. Densitydependent survival in a single life stage
is modeled as a linear function of
population abundance, with the
carrying capacity of the population set
so that the equilibrium harvest level
predicted by the model under baseline
conditions matches the average historic
harvest level for the population. The
model does not strictly specify the life
stage in which density dependent
survival occurs, but instead allows users
to designate one life stage as being
subject to density dependent survival.
EPA will consider available information
on density dependent survival
dynamics when making this designation
so as to identify biologically realistic
model scenarios.24
23 Myers, R.A., K.G. Bowen, and N.J. Barrowman.
1999. Maximum reproduction rate of fish at low
population sizes. Canadian Journal of Fisheries and
Aquatic Sciences 56:2004–2419 (DCN OW–2002–
0004–1793).
24 See Section 4 in Newbold, S. and R. Iovanna.
2005. Population-level Impacts on Fish of Cooling
Water Intake Withdrawals. Report prepared for the
316(b) Scientific and Economic Review panel.
E:\FR\FM\25NOP1.SGM
25NOP1
Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Proposed Rules
EPA is then using the PPM model to
evaluate the potential impacts of
regulatory options described in the
proposed rule. To do this, EPA adjusts
the life stage-specific rates of
impingement and entrainment mortality
to reflect the estimated effectiveness of
a given regulatory option. EPA then
compares the model’s estimates with
and without implementation of a given
regulatory option to estimate the
option’s impact on population
abundance.
Given the limited number of species
populations for which sufficient data is
available to implement the PPM model,
EPA foresees using the model as a
supplement to, rather than as a
replacement for, the modeling efforts
described in the proposal. Some
preliminary results from use of the PPM
model are described in Section 4 of DCN
8–5201. EPA has also conducted a peer
review of the model.25 EPA solicits
comment on the use of the PPM model
for the final rule. EPA also solicits
submission of data that may be used to
implement the model.
Dated: November 18, 2005.
Benjamin H. Grumbles,
Assistant Administrator for Water.
[FR Doc. 05–23276 Filed 11–23–05; 8:45 am]
BILLING CODE 6560–50–U
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[R05–OAR–2005–IN–0007; FRL–7999–4]
Approval and Promulgation of
Implementation Plan; Indiana
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
SUMMARY: EPA is proposing to approve
Indiana’s April 8, 2005, submittal which
revises existing sulfur dioxide (SO2)
emission limits for sources in Dearborn
County. On April 8, 2005, Indiana
submitted its final rule as published in
the Indiana Register. Indiana held
public hearings on the submittal on May
5, 2004 and October 6, 2004. Indiana is
requesting that EPA approve the
revisions to Indiana’s SO2 rule for
Dearborn County, which removes
obsolete rule language and updates
information for sources listed in the
rule. These revisions will not result in
National Center for Environmental Economics, U.S.
EPA, Washington, DC. DCN 8–5201.
25 A.L. Allen (EPA). Memorandum to EPA Docket
OW–2004–0002. Materials for Peer Review of the
Population Projection Matrix Model. DCN 8–5200.
VerDate Aug<31>2005
13:23 Nov 23, 2005
Jkt 205001
an increase in SO2 emissions in
Dearborn County because no emission
limits were increased.
In the final rules section of this
Federal Register, EPA is approving the
SIP revision as a direct final rule
without prior proposal, because EPA
views this as a noncontroversial
revision and anticipates no adverse
comments. A detailed rationale for the
approval is set forth in the direct final
rule. If we do not receive any adverse
comments in response to these direct
final and proposed rules, we do not
contemplate taking any further action in
relation to this proposed rule. If EPA
receives adverse comments, we will
withdraw the direct final rule and will
respond to all public comments in a
subsequent final rule based on this
proposed rule. EPA will not institute a
second comment period on this action.
Any parties interested in commenting
on this action should do so at this time.
DATES: Written comments must be
received on or before December 27,
2005.
Submit comments,
identified by Regional Material in
EDocket (RME) ID No. R05–OAR–2005–
IN–0007 by one of the following
methods:
Federal eRulemaking Portal: https://
www.regulations.gov. Follow the on-line
instructions for submitting comments.
Agency Web site: https://
docket.epa.gov/rmepub/.
RME, EPA’s electronic public docket
and comment system, is EPA’s preferred
method for receiving comments. Once
in the system, select ‘‘quick search,’’
then key in the appropriate RME Docket
identification number. Follow the
online instructions for submitting
comments.
E-mail: mooney.john@epa.gov.
Fax: (312) 886–5824.
Mail: You may send written
comments to: John M. Mooney, Chief,
Criteria Pollutant Section, Air Programs
Branch (AR–18J), U.S. Environmental
Protection Agency, 77 West Jackson
Boulevard, Chicago, Illinois 60604.
Hand delivery: Deliver your
comments to: John M. Mooney, Chief,
Criteria Pollutant Section, Air Programs
Branch (AR–18J), U.S. Environmental
Protection Agency, Region 5, 77 West
Jackson Boulevard, 18th floor, Chicago,
Illinois 60604. Such deliveries are only
accepted during the Regional Office’s
normal hours of operation. The Regional
Office’s official hours of business are
Monday through Friday, 8:30 a.m. to
4:30 p.m. excluding Federal holidays.
Instructions: Direct your comments to
RME ID No. R05–OAR–2005–IN–0007.
EPA’s policy is that all comments
ADDRESSES:
PO 00000
Frm 00031
Fmt 4702
Sfmt 4702
71071
received will be included in the public
docket without change, 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 RME, regulations.gov,
or e-mail. The EPA RME Web site and
the Federal regulations.gov Web site 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 RME 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 instructions on
submitting comments, go to section I(B)
of the SUPPLEMENTARY INFORMATION
section of this document.
Docket: All documents in the
electronic docket are listed in the RME
index at https://www.epa.gov/rmepub/.
Although listed in the index, some
information is not publicly available,
i.e., CBI or other information whose
disclosure is restricted by statute.
Publicly available docket materials are
available either electronically in RME or
in hard copy at Environmental
Protection Agency, Region 5, Air and
Radiation Division, 77 West Jackson
Boulevard, Chicago, Illinois 60604.
(Please telephone Charles Hatten at
(312) 886–6031 before visiting the
Region 5 Office.)
FOR FURTHER INFORMATION CONTACT:
Charles Hatten, Environmental
Engineer, Criteria Pollutant Section, Air
Programs Branch (AR–18J), USEPA,
Region 5, 77 West Jackson Boulevard,
Chicago, Illinois 60604, (312) 886–6031.
Hatten.Charles@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information.
A. Does This Action Apply to Me?
B. What Should I Consider as I Prepare My
Comments for EPA?
II. What Action Is EPA Taking Today?
E:\FR\FM\25NOP1.SGM
25NOP1
]]>Agencies
[Federal Register Volume 70, Number 226 (Friday, November 25, 2005)]
[Proposed Rules]
[Pages 71057-71071]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-23276]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 122, 123, 124, and 125
[OW-2004-0002, FRL-8002-3]
RIN 2040-AD70
National Pollutant Discharge Elimination System Proposed
Regulations To Establish Requirements for Cooling Water Intake
Structures at Phase III Facilities; Notice of Data Availability
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of data availability.
-----------------------------------------------------------------------
SUMMARY: On November 24, 2004, EPA published proposed regulations to
establish requirements for cooling water intake structures at Phase III
facilities under section 316(b) of the Clean Water Act (CWA). EPA
proposed the following three options for defining which existing
facilities would be subject to uniform national requirements, based on
the facility's 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 specifically from an ocean, estuary, tidal river, or
one of the Great Lakes. The proposed rule would also establish national
section 316(b) requirements for new offshore oil and gas extraction
facilities. This notice of data availability (NODA) summarizes
significant data EPA received or collected since publication of the
proposed rule and discusses how EPA may use this data in revising its
analyses. EPA solicits public comment on the information presented in
this notice and the record supporting this notice.
DATES: Comments on this notice of data availability must be received or
postmarked on or before midnight December 27, 2005.
ADDRESSES: Comments may be submitted by mail addressed to Water Docket,
Environmental Protection Agency, Mailcode: 4101T, 1200 Pennsylvania
Ave., NW., Washington, DC, 20460, Attention Docket ID No OW-2004-0002.
Comments may also be submitted electronically, or by hand delivery.
Follow the detailed instructions as provided in Section B.1 of the
SUPPLEMENTARY INFORMATION section to file comments electronically.
FOR FURTHER INFORMATION CONTACT: For additional technical information
contact Paul Shriner at (202) 566-1076. For additional economic
information contact Erik Helm at (202) 566-1066. For additional
biological information contact Ashley Allen at (202) 566-1012. The e-
mail address for the above contacts is rule.316b@epa.gov.
SUPPLEMENTARY INFORMATION:
General Information
A. How Can I Get Copies of This Document and Other Related Information?
1. Docket. EPA has established an official public docket for this
action under Docket ID No. OW-2004-0002. The official public docket
consists of the documents specifically referenced in this action, any
public comments received, and other information related to this action.
Although a part of the official docket, the public docket does not
include Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. The official public docket
is the collection of materials that is available for public viewing at
the Water Docket in the EPA Docket Center, (EPA/DC) EPA West, Room
B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket
Center 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.
2. Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at https://www.epa.gov/fedrgstr/.
An electronic version of the public docket is available through
EPA's electronic public docket and comment system, EPA Dockets. You may
use EPA Dockets at https://www.epa.gov/edocket/ to submit or view public
comments, access the index listing of the contents of the official
public docket, and to access those documents in the public docket that
are available electronically. Once in the system, select ``search,''
then key in the appropriate docket identification number.
Certain types of information will not be placed in the EPA Dockets.
Information claimed as CBI and other information whose disclosure is
restricted by statute, which is not included in the official public
docket, will not be available for public viewing in EPA's electronic
public docket. EPA's policy is that copyrighted material will not be
placed in EPA's electronic public docket but will be available only in
printed, paper form in the official public docket. To the extent
feasible, publicly available docket materials will be made available in
EPA's electronic public docket. When a document is selected from the
index list in EPA Dockets, the system will identify whether the
document is available for viewing in EPA's electronic public docket.
Although not all docket materials may be available electronically, you
may still access any of the publicly available docket materials through
the docket facility identified in Section A.1. EPA intends to work
towards providing electronic access to all of the publicly available
docket materials through EPA's electronic public docket.
For public commenters, it is important to note that EPA's policy is
that public comments, whether submitted electronically or in paper,
will be made available for public viewing in EPA's electronic public
docket as EPA receives them and without change, unless the comment
contains copyrighted material, CBI, or other information whose
disclosure is restricted by statute. When EPA
[[Page 71058]]
identifies a comment containing copyrighted material, EPA will provide
a reference to that material in the version of the comment that is
placed in EPA's electronic public docket. The entire printed comment,
including the copyrighted material, will be available in the public
docket.
Public comments submitted on computer disks that are mailed or
delivered to the docket will be transferred to EPA's electronic public
docket. Public comments that are mailed or delivered to the Docket will
be scanned and placed in EPA's electronic public docket. Where
practical, physical objects will be photographed, and the photograph
will be placed in EPA's electronic public docket along with a brief
description written by the docket staff.
B. How and to Whom Do I Submit Comments?
You may submit comments electronically, by mail, or through hand
delivery/courier. To ensure proper receipt by EPA, identify the
appropriate docket identification number in the subject line on the
first page of your comment. Please ensure that your comments are
submitted within the specified comment period. Comments received after
the close of the comment period will be marked ``late.'' EPA is not
required to consider these late comments, however, late comments may be
considered if time permits. If you wish to submit CBI or information
that is otherwise protected by statute, please follow the instructions
in Section C. Do not use EPA Dockets or e-mail to submit CBI or
information protected by statute.
1. Electronically. If you submit an electronic comment as
prescribed below, EPA recommends that you include your name, mailing
address, and an e-mail address or other contact information in the body
of your comment. Also include this contact information on the outside
of any disk or CD-ROM you submit, and in any cover letter accompanying
the disk or CD-ROM. This ensures that you can be identified as the
submitter of the comment and allows EPA to contact you in case EPA
cannot read your comment due to technical difficulties or needs further
information on the substance of your comment. EPA's policy is that EPA
will not edit your comment, and any identifying or contact information
provided in the body of a comment will be included as part of the
comment that is placed in the official public docket, and made
available in EPA's electronic public docket. 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.
i. EPA Dockets. Your use of EPA's electronic public docket to
submit comments to EPA electronically is EPA's preferred method for
receiving comments. Go directly to EPA Dockets at https://www.epa.gov/
edocket, and follow the online instructions for submitting comments. To
access EPA's electronic public docket from the EPA Internet Home Page,
select ``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once
in the system, select ``search,'' and then key in Docket ID No. OW-
2004-0002. The system is an ``anonymous access'' system, which means
EPA will not know your identity, e-mail address, or other contact
information unless you provide it in the body of your comment.
ii. E-mail. Comments may be sent by electronic mail (e-mail) to OW-
Docket@epa.gov, Attention Docket ID No. OW-2004-0002. In contrast to
EPA's electronic public docket, EPA's e-mail system is not an
``anonymous access'' system. If you send an e-mail comment directly to
the Docket without going through EPA's electronic public docket, EPA's
e-mail system automatically captures your e-mail address. E-mail
addresses that are automatically captured by EPA's e-mail system are
included as part of the comment that is placed in the official public
docket, and made available in EPA's electronic public docket.
iii. Disk or CD ROM. You may submit comments on a disk or CD ROM
that you mail to the mailing address identified in Section B.2. These
electronic submissions will be accepted in WordPerfect or ASCII file
format. Avoid the use of special characters and any form of encryption.
2. By Mail. Send an original and three copies of your comments to
the Water Docket, Environmental Protection Agency, Mailcode: 4101T,
1200 Pennsylvania Ave., NW., Washington, DC, 20460, Attention Docket ID
No OW-2004-0002.
3. By Hand Delivery or Courier. Deliver your comments to: Water
Docket in the EPA Docket Center, (EPA/DC) 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 as identified in Section A.1.
C. How Should I Submit CBI to the Agency?
Do not submit information that you consider to be CBI
electronically through EPA's electronic public docket or by e-mail.
Send or deliver information identified as CBI 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 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.
D. What Should I Consider as I Prepare My Comments for EPA?
You may find the following suggestions helpful for preparing your
comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide any technical information and/or data you used that
support your views.
4. If you estimate potential burden or costs, explain how you
arrived at your estimate.
5. Provide specific examples to illustrate your concerns.
6. Offer alternatives.
7. Make sure to submit your comments by the comment period deadline
identified.
8. To ensure proper receipt by EPA, identify the appropriate docket
identification number in the subject line on the first page of your
response. It would also be helpful if you provided the name, date, and
Federal Register citation related to your comments.
Table of Contents
I. Purpose of this Notice
II. Environmental Impacts
[[Page 71059]]
III. Engineering Costing Revisions
IV. Economic Impact
V. Benefits
I. Purpose of This Notice
This notice presents a summary of significant data EPA has
received, collected, or developed since proposal and a discussion of
how EPA is considering using these data in revised analyses supporting
the final rule.
Section II of this notice discusses additional data about the
environmental impacts associated with cooling water intake structures
at facilities potentially subject to regulation under Phase III. This
includes data obtained from the National Oceanic and Atmospheric
Administration (NOAA), which characterize the nature and abundance of
fish and shellfish in the vicinity of offshore oil and gas extraction
facilities in the Gulf of Mexico potentially subject to regulation
under Phase III. It also includes data extracted during EPA's review of
additional cooling water intake structure impact studies relevant to
Phase III.
This notice also discusses EPA's revision of certain elements of
the proposed Phase III rule cost estimates and presents the revised
costing information. This includes revisions to the Phase III cost
development methodology (i.e., cost-test tool) and the data inputs to
this methodology, which are discussed in more detail in section III of
today's notice.
For the proposed regulation, EPA conducted an economic analysis of
four major categories of manufacturers potentially subject to
regulation under Phase III: paper and allied products, chemical and
allied products, petroleum and coal products, and primary metals. These
manufacturing categories, combined with steam electric facilities,
represent 99 percent of cooling water use by all existing facilities
potentially subject to regulation under section 316(b). Therefore, all
other existing manufacturing facilities were grouped together in
``other industries.'' EPA has now revised its economic impact analysis
for these ``other industries,'' to better capture the food and kindred
products sector, which represents the next largest user of cooling
water among the ``other industries.'' The updated technology modules,
costs, and economic analyses, including these additional industrial
categories, are not anticipated to significantly affect the proposed
benefits analyses. However, EPA has made minor adjustments to the
benefits analysis through use of the population matrix fish model
discussed at proposal (69 FR 68510), which has been peer reviewed
subsequent to publication of the proposed rule. Data and adjustments to
the economic impact and benefits analyses are discussed in sections IV
and V of today's notice, respectively.
EPA solicits public comment on the information presented in this
notice and the record supporting this notice.
II. Environmental Impacts
For today's NODA, EPA analyzed additional data on the regions in
which offshore oil and gas extraction facilities operate in order to
better characterize the potential for entrainment of ichthyoplankton
(planktonic egg and larval life stages of fish) by these facilities.
Offshore oil and gas extraction facilities operate off the coasts of
California and Alaska and in the Gulf of Mexico. Most activity takes
place in the Gulf of Mexico region (see Phase III proposed TDD; DCN 7-
0004, document ID OW-2004-0002-0027, pp. 3-130 to 3-148).
Because planktonic organisms have limited swimming ability, those
present in offshore regions where oil and gas activities take place are
at risk of entrainment by cooling water intake structures at offshore
oil and gas facilities. EPA obtained data on densities of
ichthyoplankton in the Gulf of Mexico from the Southeast Area
Monitoring and Assessment Program (SEAMAP).\1\ This long-term sampling
program collects information on the density of fish larvae and eggs
throughout the Gulf of Mexico.
---------------------------------------------------------------------------
\1\ Adam Rettig and Blaine Snyder, Tetra Tech, Inc. Memorandum
to Ashley Allen, EPA. A summary of ichthyoplankton presence and
abundance in the Gulf of Mexico, as part of an assessment of the
potential for entrainment by offshore oil and gas facilities. DCN 8-
5220. Document ID OW-2004-0002-951.
---------------------------------------------------------------------------
EPA analyzed the SEAMAP data to determine average ichthyoplankton
densities in the Gulf of Mexico for the available sampling period
(1982-2003). Actual conditions at any one location and at any one time
vary from this average. EPA's analysis of the SEAMAP data indicates
that ichthyoplankton occur throughout the Gulf of Mexico. On average,
densities are highest at sampling stations in the shallower regions of
the Gulf of Mexico and lowest at sampling stations in the deepest
regions. Average densities are greater than 450 organisms/100 m\3\ at
sampling stations in waters less than 50 meters deep. Average densities
gradually decrease to 100 organisms/100 m\3\ as sampling station depth-
at-location increases to 150 meters. At stations in waters greater than
150 meters deep, densities are relatively uniform and fall between 25
organisms/100 m\3\ and 100 organisms/100 m\3\.
The wide range of ichthyoplankton densities seen in the offshore
Gulf of Mexico region falls within the range of ichthyoplankton
densities seen in freshwater and coastal water bodies in coastal and
inland regions of the United States.\2\ Over 600 different fish taxa
were identified in the SEAMAP samples, including species of commercial
and recreational utility. Spawning events occur at all times of the
year in the Gulf of Mexico, with different species typically spawning
at a time of year particular to that species.\3\
---------------------------------------------------------------------------
\2\ A. L. Allen (EPA). Memorandum to EPA Docket OW-2004-0002.
Information on Ichthyoplankton Densities in Various Aquatic
Ecosystems in the United States. DCN 8-5240.
\3\ Ditty, J.G. Seasonality and depth distribution of larval
fishes in the northern Gulf of Mexico above latitude 26 (degrees) 00
(minutes) N. DCN 7-0013A03. Document ID OW-2004-0002-0174.
---------------------------------------------------------------------------
In the area surrounding offshore oil and gas extraction facilities
off the California coast, the California Cooperative Oceanic Fisheries
Investigations (CalCOFI) program has gathered data on densities of
ichthyoplankton and other organisms. According to the CalCOFI and other
research programs, a number of fish and shellfish species, including
species of commercial and recreational value, are known to live and
spawn in this region.\4\ EPA does not know of similarly extensive
sampling programs for the Alaska offshore region. However, a number of
fish and shellfish species, including species of commercial and
recreational value, are known from various research programs to live
and spawn in the offshore regions of Alaska where oil and gas
activities currently take place or may take place in the future. The
eggs and larvae of many species found in the offshore regions of
California and Alaska are planktonic and could therefore also be
vulnerable to entrainment by a facility's cooling water intake
structure operating in these regions. Larger life stages (e.g. adults
and juveniles) could be vulnerable to impingement. EPA believes these
data indicate the potential for entrainment and impingement from
cooling water intake structures at oil and gas facilities operating in
offshore regions.
---------------------------------------------------------------------------
\4\ A.L. Allen (EPA). Memorandum to EPA Docket OW-2004-0002.
Information on Fish Species that Live and Spawn off the Coasts of
Alaska and California in the Vicinity of Offshore Oil and Gas
Production Areas. DCN 8-5260.
---------------------------------------------------------------------------
EPA also continued to collect impingement and entrainment studies
from Phase II and Phase III facilities that indicated in their industry
questionnaire that they had conducted such studies (see 69 FR 68458).
Since
[[Page 71060]]
proposal, EPA has collected 12 additional studies containing data that
can be used for the national environmental assessment.\5\ (See the
Regional Benefits Assessment for the Proposed Section 316(b) Rule for
Phase III Facilities [EPA-821-R-04-017], p. A1-3 for a description of
data needs and quality criteria for the environmental assessment.)
Though EPA has not fully evaluated the data in these studies, the data
from these studies appear to be consistent with data from previously
collected studies.
---------------------------------------------------------------------------
\5\ ``Summary Descriptions of Facilities with Impingement and
Entrainment Studies Collected Since Proposal of the Section 316(b)
Phase III Rule'' provides a summary of these studies supplementing
the Regional Benefits document DCN 8-5282. These 12 studies are also
in the record for today's NODA.
---------------------------------------------------------------------------
III. Engineering Costing Revisions
As described in the preamble for the Phase III proposed rule (69 FR
68498), EPA used a spreadsheet program called the ``cost-test tool'' to
estimate engineering costs for model facilities. In contrast to Phase
II, EPA does not have facility-level data for all potentially regulated
facilities, and is therefore conducting the analysis using a model
facility approach. Based on a series of data inputs, such as cooling
system type, waterbody type, intake location, design intake flow (DIF),
technology in-place, and through-screen velocity, the cost-test tool
determines one of two possible performance expectations: (1)
Impingement requirements only, or (2) both impingement and entrainment
requirements.\6\ The cost-test tool then determines a compliance
response for each intake at a model facility and assigns one of 12
technology modules as the best-performing technology for that model
intake. Cost estimates are derived through a series of computations
that apply facility-specific data to the selected technology module.
Cost outputs include capital costs, incremental operation and
maintenance (O&M) costs, and installation downtime (in weeks) where
appropriate (69 FR 68498). These model facility costs are then weighted
and summed to provide national technology cost estimates for the
proposal.
---------------------------------------------------------------------------
\6\ Input parameters for the cost-test tool are defined and
discussed in the Proposed 316(b) Phase III Technical Development
Document, Section 5 (DCN 7-0004). The decision tree used to apply
technology cost modules is also detailed in the TDD.
---------------------------------------------------------------------------
For today's NODA, EPA's analyses reflect updated data inputs to the
cost-test tool. In a few cases, EPA has provided technical corrections
to certain data inputs. EPA has revised the capital costs, the annual
O&M costs, and any monitoring and study costs correspondingly.
Additionally, EPA conducted a sensitivity analysis using two different
intake flow values to estimate engineering compliance costs.
Technical corrections to the cost-test tool and the results of the
intake flow analyses are discussed below.\7\ Costs were revised for 149
of the 155 facilities (weighted value) potentially subject to the Phase
III regulations.\8\ In aggregate, the national technology capital costs
decreased by approximately 10% from the capital costs at proposal and
O&M costs decreased by approximately 38%.
---------------------------------------------------------------------------
\7\ See Revisions for Phase III Compliance Cost Estimates (DCN
8-6600) for a detailed discussion.
\8\ For the NODA, revisions were made to the capital costs, O&M
costs, and downtime costs. Costs increased for some model
facilities, and decreased for others. In some cases, only one of the
three cost categories changed for a model facility, but in many
cases, revisions were made in all three categories.
---------------------------------------------------------------------------
A. Corrections to Cost-Test Tool Data Inputs
Since the publication of the proposed rule, EPA reviewed elements
of the survey database for Phase III facilities for technical accuracy.
These data serve as model facility inputs to the cost-test tool.
Today's NODA reports the outcome of this review. EPA found a few
inconsistencies and checked them against the original data reported in
a given facility's 316(b) survey. Most inconsistencies were identified
in the following fields of the cost-test tool:
Technology in-place (the current technology at the
facility);
Intake water depth and intake well depth;
Through-screen velocity; and
Design intake flow (DIF).
For technology in-place, intake water depth and intake well depth,
and through-screen velocity, EPA corrected data inputs that were
incorrectly interpreted for the cost-test tool in the proposed rule
analysis. To do so, EPA reviewed 316(b) survey responses and written
comments submitted with the survey to ensure that the correct
parameters were identified and input into the cost-test tool. EPA also
reviewed the facility-level data for DIF and found that some model
facilities included emergency intake flows in their calculation of DIF.
These facilities' costs were potentially overstated, and the costs were
adjusted to remove emergency intakes and emergency intake flows. Some
facilities also reported more than one technology in-place and also
operate more than one intake, indicating that the facility has two
distinct types of intake structure (e.g., a facility may have a
shoreline intake and a submerged offshore intake). The costs for these
``split'' intakes are now generated separately for each intake. The
corrected values for DIF (``corrected DIF'' or ``revised DIF'') were
subsequently used in the cost tool to calculate facility costs.
Other corrections were made to the canal length for certain model
facilities. Additionally, adjustments were made to model facilities to
account for multiple intakes with unique characteristics, e.g., model
facilities with intakes withdrawing from different waterbody types,
model facilities with both shoreline and submerged intakes, and model
facilities with intake velocities less than and greater than 0.5 foot
per second (fps). These model facilities' costs were potentially
overstated at proposal, as they included costs of technology modules
for the model facilities' total flows rather than just those intakes
needing technology modules.
EPA also reviewed the calculation of O&M costs for all scenarios
and revised costs to ensure that all incremental variable O&M costs
were based on the actual intake flow (AIF). For the proposal, EPA used
AIF for some variable O&M costs and DIF for others. EPA previously
noted that the AIF is, on average, less than half of the total DIF (69
FR 68460). EPA believes that using AIF for all cost modules is more
appropriate for use in estimating technology O&M costs since the AIF
will more accurately capture periods in which screens are not required
to be operated as long or backwashed as frequently. Using the AIF more
accurately reflects any incremental costs associated with reductions in
power demand, wear on the system, and operator labor hours. Since AIF
is on average less than half of the DIF, incremental O&M costs based on
DIF tend to overstate costs.
EPA also revised the baseline O&M costs for existing technologies
for all technology modules except modules 5 (fish barrier net) and 8
(add velocity cap). In doing so, EPA accounted for O&M costs currently
borne by facilities to maintain any existing technologies, and only
calculated the incremental baseline O&M costs for a new technology (as
required by the rule). Modules 5 and 8 remain unchanged, as any
existing technologies would likely remain in place after a new
technology is installed as a result of the regulations. For all other
modules, the existing technology would be removed and replaced by a new
technology. In one additional case, EPA failed to account for a model
facility's baseline O&M costs. In this case, EPA has now included the
baseline O&M costs, and the model facility's costs were corrected
[[Page 71061]]
to reflect only the incremental O&M costs.
The corrections to the engineering costs also resulted in changes
to some of the pilot study costs estimated for the Information
Collection Request (ICR).
B. Installation Downtime
For the analysis supporting the proposal, installation downtime
(the amount of time that a facility may need to shut down due to the
installation of an impingement and/or entrainment technology) was
estimated using EPA's Phase II modeling methodology (see Phase II
Technical Development Document DCN 6-0004). This approach primarily
presumes that the facility would need to shut down operations
completely to retrofit an intake to either add a larger intake or
relocate an intake to be submerged offshore. Although this is true for
most electric generators, manufacturing facilities may have greater
flexibility regarding operation of various production operations and
cooling water requirements.\9\ Alternate electricity sources may be
available or other intakes with sufficient excess capacity may be
available for use during construction of a new intake technology.
Therefore, EPA believes that the assumptions used for Phase II
facilities may be overly conservative for Phase III model facilities
and may tend to overestimate downtime potentially incurred by Phase III
model facilities and the associated lost revenue.
---------------------------------------------------------------------------
\9\ Id.
---------------------------------------------------------------------------
Since the proposal, EPA has contacted several manufacturing
facilities to verify the technology in-place, and has collected
additional vendor and consultant data to update the downtime
estimates.\10\ Based on this information, EPA corrected DIF values and
revised cost module allocations for some model facilities, reduced
downtime estimates by two weeks for technology modules 3, 4, 7, 12, and
14 (see exhibit 5-23 of the proposed Development Document DCN 6-0004),
and considered each intake at those model facilities with multiple
intakes separately. These activities resulted in significant reductions
in the need for any downtime at some facilities, and reduced downtime
estimates for others. The revised installation downtime estimates are
presented below for the three regulatory options and compared with
values presented at proposal.
---------------------------------------------------------------------------
\10\ See Downtime Duration Input and Analysis of Manufacturing
Facilities (DCN 8-6601).
Exhibit III-1.--Revised Installation Downtime Estimates
----------------------------------------------------------------------------------------------------------------
National Net Downtime Estimates (Weeks)
-----------------------------------------------------------------------------------------------------------------
50 MGD all 100 MGD certain 200 MGD all
----------------------------------------------------------------- waterbodies -----------------------
------------------------
Proposal NODA Proposal NODA Proposal NODA
----------------------------------------------------------------------------------------------------------------
104................................................. 55 16 2 28 17
----------------------------------------------------------------------------------------------------------------
For Phase III model facilities with multiple intakes, downtime
estimates remain at zero for those facilities with shoreline intakes
that are not dedicated intakes, as discussed in the proposal. Using the
approach presented in today's NODA, and applying the model facilities'
weights to achieve a national estimate, downtime estimates would be
reduced by 49 weeks, 14 weeks, and 11 weeks, respectively, for the
three regulatory options (50 MGD-All, 100 MGD Certain Waterbodies, and
200 MGD-All, weighted values).
EPA is soliciting comments on this approach to calculating
installation downtime for Phase III facilities. EPA presents the
revised estimates of downtime costs in Section IV.B. Exhibit IV-4 of
this notice.
C. Use of Alternate Intake Flow Data to Estimate Costs
For the proposed rule, EPA used the DIF to estimate all engineering
compliance costs. The DIF is typically established prior to the design
phase of construction and is estimated based on the maximum potential
flow volume requirement for that facility. As stated previously,
facilities rarely operate at flows close to the maximum DIF, and
several commenters on the Phase III proposal stated that this
methodology may have overestimated costs for the Phase III rulemaking.
Several facilities commented that for older facilities, especially
those that have implemented flow reduction measures, the plant's
original DIF may be significantly higher than what is required under
normal operations today. The costs developed for the proposed rule
reflected the entire DIF as originally reported by the facility. EPA
believes this may have resulted in overestimating flow for costing
purposes. For example, EPA's costs should exclude technology retrofits
to those structures where the intakes and/or pump houses have been
permanently taken out of service. However, EPA is not able to identify
all cases where a facility's reported DIF is significantly higher than
the plant's current maximum intake flow or ``MRIF.'' To assess the
impact of using DIF in the cost analysis, EPA conducted a sensitivity
analysis using the three different intake flow values: The DIF with the
corrections noted above in Section III.A. (``corrected DIF''); the AIF;
and the MRIF.\11\ The AIF is calculated as the three-year average
(1996-1998) of intake flow volume reported on the 316(b) surveys. The
MRIF is calculated as the three-year average (also 1996-1998) of the
maximum reported daily intake flow reported on the 316(b) surveys.\12\
Estimated engineering compliance costs for the three flow values are
presented in Section IV.B, Exhibit IV-7 for each proposed option (50
MGD all, 200 MGD all, and 100 MGD certain waterbodies).\13\
---------------------------------------------------------------------------
\11\ See Revisions for Phase III Compliance Cost Estimates (DCN
8-6600) for a detailed discussion.
\12\ Where MRIF values were not provided on the 316(b) survey,
EPA imputed the values from the reported AIF.
\13\ See DCNs 8-6608A, 8-6608B, and 8-6608C.
---------------------------------------------------------------------------
As part of the sensitivity analysis, installation downtime
estimates were also developed using the AIF and the MRIF values and are
presented in Exhibit III-2.
Exhibit III-2.--Estimated National Installation Downtime Using
Alternative Intake Flows
------------------------------------------------------------------------
Net downtime (weeks) for NODA
(weighted)
------------------------------
Intake flow alternative 100 MGD
50 MGD certain 200 MGD
all waterbodies all
------------------------------------------------------------------------
Corrected DIF............................ 55 2 17
AIF...................................... 54 2 16
MRIF..................................... 54 2 16
------------------------------------------------------------------------
[[Page 71062]]
EPA acknowledges that using DIF to estimate engineering capital
costs may overestimate costs for some facilities, but believes that DIF
provides the best margin of safety for periods of peak flows and allows
for growth of future operations. EPA also believes that using the AIF
or MRIF flows as the design basis for capital costs is not appropriate
since many manufacturing facilities have flow requirements that vary
greatly over time. Using the AIF may result in technologies being
substantially undersized during periods of peak flow requirements, thus
limiting the proper function of the technology. For example, intake
screens are sized based on an acceptable through-screen velocity; when
the actual flow exceeds the AIF, the performance of the technology
suffers and greater impingement and entrainment may result. EPA also
reviewed survey data that showed the MRIF exceeding the DIF in some
extreme cases; in these instances, a technology sized for the MRIF may
not be adequately protective. For these reasons, EPA intends to use the
corrected DIF values in developing engineering capital costs for the
final rule. EPA solicits comments on this approach.
D. Consideration of Operating Time
Under the Phase II rule, facilities with a capacity utilization
rate less than 15 percent are afforded reduced regulatory requirements,
i.e., impingement mortality only regardless of waterbody type or DIF.
Capacity utilization rate is defined as ``the ratio between the average
annual net generation of power by the facility (in Megawatt hours
(MWh)) and the total net capability of the facility to generate power
(in MW) multiplied by the number of hours during a year'' (69 FR
41684). In the proposed rule for Phase III, EPA solicited comments on
an analogous approach for manufacturing facilities (69 FR 68484). No
comments were received that reflected a specific approach; however,
several commenters noted that reductions in flow or sporadic intake use
should be addressed in the final requirements. In today's NODA, EPA is
considering using a threshold of fewer than 60 days of operation for
manufacturing facilities for reduced regulatory requirements.\14\ The
60 day value was approximated as 15 percent of 365 days. For facilities
with intakes operating fewer than 60 days per year, the intake would
only be subject to impingement mortality requirements similar to those
requirements for a Phase II facility operating at less than 15 percent
capacity utilization rate. EPA solicits comments on this approach.
---------------------------------------------------------------------------
\14\ Meadows, K. Memo to P. Shriner, EPA RE: Estimates of
Operating Days for Phase III Facilities. DCN 8-6604.
---------------------------------------------------------------------------
IV. Economic Impact
In this section of today's NODA, EPA first describes additional
analyses that were undertaken for the ``Other Industries,'' which, as
described at proposal, are industries in addition to the electric power
industry and the Primary Manufacturing Industries that are potentially
within the scope of the section 316(b) regulation. Second, EPA reviews
an alternative concept for valuing the social cost of installation
downtime. Third, EPA presents revised estimates of the social cost of
compliance based on the revisions to the engineering cost analysis for
regulatory compliance, as discussed in Section III, above.
A. Additional Analyses for the Other Industries
As described in the proposal, EPA framed its initial analysis and
data-gathering for the proposed Phase III rule on the electric power
industry (facilities with design intake flow of less than 50 MGD) and
four manufacturing industries: Paper, Chemicals, Petroleum, and Primary
Metals, (the ``Primary Manufacturing Industries''). EPA focused on
these industrial categories because they are cooling-water-intensive,
and EPA therefore expected a substantial number of facilities in these
categories would potentially be subject to the proposed regulation.
Collectively, this target population was estimated to generate 99
percent of the cooling water in the nation (see 69 FR 68457). Because
other industries contribute relatively little cooling water generation,
EPA excluded them from the target population for purposes of data
collection activities.
From a list of facilities in the target population, EPA selected a
statistical sample to receive a questionnaire. Selecting facilities in
this manner allows statistical inferences to be made about all eligible
facilities in the target population, including those that did not
respond or did not receive the questionnaire. When EPA received the
responses, it found a few (22) questionnaires had been completed by
facilities that were not part of the target population for the
questionnaire. However, EPA determined that the 22 facilities may be
subject to the rule because their operations include cooling water
usage. For this reason, EPA retained the data and considered them on a
facility-level basis in the impact analysis of the proposed rule. EPA
performed a less detailed assessment of the economic circumstances in
terms of the industries' ability to comply with the proposed Phase III
regulation without material economic/financial impact. In its analysis
at proposal, EPA found that none of the 22 facilities would be expected
to incur an adverse economic impact from compliance with any of the
proposed regulatory options. EPA proposed to extrapolate these findings
to all ``other'' industries, because the associated (``other'')
industries collectively contribute one percent or less of the cooling
water usage, and therefore EPA believes there would be few, if any,
additional potentially regulated facilities in the ``other''
industries. Comments on the proposal suggested that EPA should consider
the impacts of the Other Industries, not just the facilities
themselves.
Since the proposal, EPA has continued to investigate these
facilities and the Other Industries more generally to increase its
understanding of the potential impact of the 316(b) regulation on such
industries. These efforts include:
1. A comparative analysis of cooling water use and compliance cost
for the Other Industries and Primary Manufacturing Industries
facilities. This analysis considered several normalized measures of
cooling water use and compliance cost for facilities in the Other
Industries and Primary Manufacturing Industries.\15\
---------------------------------------------------------------------------
\15\ See Statistical Analysis of Other Industries and Primary
Manufacturing Industries Facility Data, DCN 8-2502 and Evaluation of
Similarities Between Intakes at Phase III Food and Kindred Products
Facilities and Other Phase III Manufacturers; DCN8-6607.
---------------------------------------------------------------------------
2. Preparation of a detailed industry profile and assessment of
business conditions and outlook for the Food and Kindred Products
industry. EPA chose this industry for additional analysis because it
submitted over half (12) of the 22 Other Industries questionnaires that
EPA received and because it is the next largest user of cooling water,
after the electric power industry and the Primary Manufacturing
Industries, as reported in the Census of Manufacturers reports of
cooling water usage.\16\ None of the twelve facilities analyzed are
expected to experience financial stress as a result of any of the
proposed Phase III options.
---------------------------------------------------------------------------
\16\ See Profile of Food and Kindred Products Industry (SIC 20),
DCN 8-2500.
---------------------------------------------------------------------------
3. Development of a basis for extrapolating results from the
analysis of subset of the Food and Kindred Products industry facilities
to the
[[Page 71063]]
broader population of facilities in the industry. In addition to
preparing an economic profile for the Food and Kindred Products
industry, EPA also sought to develop a method for extrapolating the
findings from the analysis of the 12 individual Food and Kindred
Products facilities to the broader population of facilities in the
industry.\17\ EPA considered an ex-post-stratification approach to
develop sample weights for facilities in the industry, but EPA
concluded that sufficient data were not available to develop reliable
sample weights by this method. As an alternative, less rigorous
approach, EPA also considered extrapolating facility results to the
broader population based on the approximate fraction of total cooling
water use in the Food and Kindred Products industry represented by the
12 facilities from which EPA received questionnaires. This analysis
indicated that these facilities account for approximately 32 percent of
estimated total cooling water usage in the Food and Kindred Products
industry at the time of EPA's survey, which, in turn, would imply an
extrapolation multiplier of 3.11. This concept of extrapolation assumes
that compliance cost, facility counts, and other regulatory impact
measures are directly proportional to cooling water usage, as
represented by the 12 facilities, and thus can be scaled to the total
Food and Kindred Products industry on this basis. Of these 12 Food and
Kindred Products facilities, 3 reported design intake flow of at least
50 MGD, and thus could be subject to the Phase III regulation under the
regulatory applicability thresholds as outlined at Proposal and carried
forward to this NODA. The remaining 9 Food and Kindred Products
facilities reported design intake flow of less than 50 MGD and thus
would not be subject to the Phase III regulation, based on the
regulatory applicability thresholds set forth in the proposed
regulation. For the purposes of EPA's analyses for the Phase III
regulation, the estimated extrapolation multiplier of 3.11 would thus
apply only to those facilities with design intake flow of at least 50
MGD. Applying this extrapolation multiplier to the 3 Food and Kindred
Products facilities with at least 50 MGD design intake flow, EPA
estimates that approximately 9 to 10 facilities, total, in the Food and
Kindred Products industry could potentially be within the scope of the
Phase III regulation, based on the lowest of the three regulatory
applicability thresholds as presented for the proposed regulation. EPA
seeks comment on usage of this extrapolation concept for estimating the
industry-level impact of Phase III regulatory compliance for the Food
and Kindred Products industry.
---------------------------------------------------------------------------
\17\ See Using Cooling Water Usage Data to Extrapolate Analysis
Results for the 12 Food & Kindred Products Facilities to the
Industry Level, DCN 8-2503.
---------------------------------------------------------------------------
4. Further review of Other Industries facilities outside of the
Food and Kindred Products industry. As described above, 12 of the 22
Other Industries facilities are within the Food and Kindred Products.
The remaining 10 facilities lie in a broad range of industries, with
five being in manufacturing industries and five in resource and
agricultural (non-manufacturing) industries. Four of these remaining
facilities have a DIF greater than 50 MGD, and are in the Fabricated
Metal Products, Transportation Equipment, and Metal Mining
industries.\18\
---------------------------------------------------------------------------
\18\ See Using Cooling Water Usage Data to Extrapolate Analysis
Results for the 10 Other Industries' Facilities Not In Food &
Kindred Products to the Industry Level, DCN 8-2558 for further
information on these facilities.
---------------------------------------------------------------------------
In the same way as described above for the Food and Kindred
Products industry facilities, EPA considered extrapolating regulatory
analysis findings for the non Food and Kindred Products facilities
based on the fraction of estimated total cooling water usage
represented by these facilities in their respective industries, and in
the aggregate of the remaining industries not accounted for by the five
Primary Manufacturing Industries or the Food and Kindred Products
industry. This potential basis for extrapolation is limited to only
those Other Industries facilities that are in Manufacturing sectors,
because cooling water usage data were collected in the Economic Census
only for manufacturing industries. Using the same concepts as described
in the preceding paragraph, EPA calculated that cooling water usage in
the five manufacturing sector Other Industries facilities represented
from 0.7 percent to 13.8 percent of the estimated cooling water usage
in the respective industries of each of these facilities. When the
calculation is performed on an aggregate basis for all of the
industries not accounted for by the five Primary Manufacturing
Industries or the Food and Kindred Products industry, the resulting
fraction of total cooling water usage accounted for by the five
manufacturing sector Other Industries facilities is 1.5 percent. These
relatively low estimated percentage coverages would indicate relatively
high extrapolation multipliers, ranging from 7.2 to 149.0, for the
individual industries, and of 67.3 for the aggregate remaining industry
comparison. Because the estimated fractions of cooling water usage
covered by the five manufacturing sector Other Industries facilities,
both by individual industry and in the aggregate, are low (0.7 to 13.8
percent), the implied statistical error in using this information as a
basis for extrapolation to the remainder of the industries would be
very high. Accordingly, EPA has considerably less confidence in using
the information from the scant number of Other Industries facilities
outside the Food and Kindred Products industry as a basis for
extrapolating regulatory findings from the five manufacturing sector
Other Industries to the industry level than is the case for the Food
and Kindred Products industry, where the cooling water usage coverage
is relatively high--32 percent. EPA seeks comment on the usage of this
extrapolation concept for estimating the industry-level impact of Phase
III regulatory compliance for Other Industries outside of the Food and
Kindred Products industry.
EPA's analysis shows, with only one exception, that the values for
Other Industries facilities fall within the distributions of values for
the Primary Industries facilities. As a result, EPA continues to
propose to include the Other Industries within the scope of the 316(b)
Phase III regulation. EPA notes this general approach is appropriate
for determining the national costs and economic impacts of the proposed
regulations, and these results should not be used for facility-specific
costing exercises.
B. Alternative Approach to Valuing the Social Cost of Installation
Downtime
For the proposal (see Proposed Phase III Economic Analysis Appendix
2 to Chapter B3: Calculation of Installation Downtime Cost, DCN 7-
0002), EPA calculated the cost of installation downtime for the
manufacturers facility impact/private cost analysis, as the loss in
pre-tax income, accounting for lost revenue, reduced variable
production costs, and cost of replacement electricity, if any. However,
as described in the proposal, the social cost of downtime is based on a
different economic concept. Specifically, under the assumption that the
total quantity of goods and services produced and sold by the affected
industries would not change as a result of the regulation, the cost to
society from installation downtime is the increase in cost for
producing the goods and services that would otherwise have been
produced by the affected facilities' except for the
[[Page 71064]]
occurrence of installation downtime. That is, other producers are
assumed to replace the production of goods and services lost due to
installation downtime, or even the affected facilities may produce
these goods and services, but in a different time period. Either way,
the cost to society is the amount, if any, by which the cost to produce
these replacement goods and services exceeds the cost at which the
affected facilities would have produced these goods and services if
they were not to incur installation downtime due to the 316(b)
regulation. Another possibility is that the quantity of goods and
services produced would change, in which case social cost comparison
must also account for lost consumer surplus. EPA believes it is
reasonable to ignore this effect as long as the overall impacts (and
any associated price changes) are small relative to the size of the
affected sectors.
EPA is not able to estimate precisely what this additional cost is
likely to be. Conceptually, the cost to society could vary over a broad
range depending on the structure of, and character of competition in,
the production of goods and services in the individual markets affected
by the 316(b) Phase III regulation.
At the low end of this possible range, if the replacement goods and
services can be provided by other producers (or by the affected
facilities but at a different time) at the same variable production
cost as otherwise would have been incurred by the affected 316(b) Phase
III facilities, then the cost to society of installation downtime would
be zero. Because the cost for alternative producers is the same as for
the producers incurring downtime, society incurs no incremental
resource cost when other producers provide the replacement goods and
services. In this case, although the affected 316(b) Phase III
facilities might incur a financial impact from installation downtime,
this impact--the loss in pre-tax income described in the preceding
section--becomes a transfer of income from the producers incurring
installation downtime losses to the producers who make up the lost
production.
At the high end of this possible range, the cost to society would
be approximately equal to the pre-tax income loss incurred by
facilities due to installation downtime. That is, the cost to society
would again be the lost revenue from installation downtime less the
variable cost of producing the goods and services not produced due to
the installation downtime. In this case, the variable production cost
for other producers to replace the lost goods and services is assumed
to be essentially the same as the price received for the sale of the
goods and services not produced by the facilities incurring the
installation downtime. This assumption is consistent with a competitive
market model of increasing marginal production cost, such that the
variable production cost of the marginal supplier of goods and services
produced and sold in any period is approximately equal to the price
received for those goods and services in the market.
EPA believes that this latter high-social-cost-valuation approach
is reasonable for the analysis of installation downtime in the electric
power industry. For electricity, this assumption is consistent with the
electricity market concept that the variable production cost of the
last generating unit to be dispatched is approximately the same as the
price received for the last unit of production. However, for
manufacturers, EPA believes that this latter approach may overstate the
cost to society of installation downtime. The goods and services
produced by facilities in the manufacturers segment are not necessarily
produced and sold in as orderly markets as the markets for electricity.
In addition, unlike electricity, the goods and services produced by
Phase III manufacturers may be able to be produced at a different time
than the time at which the goods and services would otherwise have been
produced by the affected facilities. As a result of these differences
in market and production characteristics, the cost of producing the
replacement goods and services may be lower than the price at which the
goods and services are sold, and as a result, the cost to society of
downtime would be correspondingly lower. In the lower bound case, as
outlined above, the replacement goods and services might be produced at
the same cost as they would otherwise have been produced by the
affected 316(b) facilities and, in this case, society would incur no
cost from downtime.
The likely reality is that the cost to society from installation
downtime lies somewhere between these cases. At the time of the
proposal, lacking specific knowledge of the overall production cost
structure of the affected industries and for the numerous goods and
services provided by the affected industries, to be conservative in its
analysis, EPA adopted the higher end assumption for its analysis of the
social cost of downtime for the manufacturers segment, but explained
that the resulting value likely overstates social cost. For example, 12
percent of Phase III facilities (manufacturers with a loss of goods
produced) incurred average downtime costs of $10,650 per MGD of design
intake flow (see Technical Development Document for the Proposed 316(b)
Phase III Rule, page 5-41; DCN 7-0004). In comparison, 18 percent of
Phase II facilities (i.e. electric generators) incurred average
downtime costs of $882 per MGD of design intake flow. Actual downtime
costs (in dollars) vary for each individual facility; see the proposed
Economic Analysis for more information.
For this NODA, EPA has calculated the social cost of installation
downtime both according to the conservative, higher end assumption (as
presented in the proposal) and according to the lower bound case, in
which the social cost of downtime is zero. As stated above, EPA is not
able to know with certainty where the social cost of downtime will
actually fall along this scale but believes these two cases provide a
reasonable upper and lower bound of the social cost of downtime. EPA
seeks comment on which of these approaches to valuing the social cost
of installation downtime best reflects the national social cost of
installation downtime for the proposed rule.
C. Estimated Social Cost of Compliance Based on Revised Engineering
Cost Analysis
EPA calculated new social cost estimates for the direct cost of
compliance using costs based on the three different intake flow
values--the corrected DIF, the AIF, and the MRIF--and reflecting the
other revisions to the engineering cost analysis as described in
Section III, above. For this analysis, EPA used the same methodology as
described in the proposal, but brought all costs forward to mid-2004$
using the Implicit Price Deflator for Gross Domestic Product or another
appropriate index to adjust costs to the year of interest. For the
analysis of social costs, EPA used two discount rates, 3% and 7%, to
discount all costs to the beginning of 2007, the date at which the rule
is assumed to become effective. EPA assumed that all regulated
facilities 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. The last
year for which costs were tallied is 2043. The basis for these
projections can be found in Chapter B1 of the Economic Analysis for the
Proposed Section 316(b) Rule for Phase III Facilities (DCN 7-0002). For
this NODA, EPA did not estimate costs incurred by governments for
[[Page 71065]]
administering the regulation as these costs are not expected to differ
materially from those presented at proposal.
Below, EPA presents these revised social cost estimates of the
direct cost of compliance to facilities, based on the three threshold
options in the proposed Phase III rule: (1) Design intake flow of at
least 50 MGD, any source waterbody type (``50 MGD ALL''), (2) design
intake flow of at least 200 MGD any source waterbody type (``200 MGD
ALL''), and (3) design intake flow of at least 100 MGD, from an ocean,
estuary, tidal river, or Great Lake (``100 MGD Certain Waterbodies'').
The first set of exhibits and discussion bring forward to mid-year
2004$ the costs based on DIF as known at proposal and compare these
values to the cost estimates based on the corrected DIF, which reflect
the corrections and adjustment made to the DIF since proposal, as
described in Section III. C, above. These cost estimates reflect the
upper bound valuation of downtime, as presented at proposal. In the
second section, EPA presents the alternative cost estimates for the
corrected DIF values using the lower bound valuation of downtime, as
described in Section IV.B, above. The third section presents costs
using the alternative intake flow concepts as the basis for determining
regulatory applicability--Maximum Reported Intake Flow (MRIF) and
Average Intake Flow (AIF). Finally, EPA presents a summary comparison
of the cost estimates under the original and corrected DIF and
alternative intake flow concepts, and for the upper and alternative,
lower bound estimate of the social cost of downtime.
Adjusting Proposal Cost Estimates to 2004 Dollars and Applying DIF
Corrections
Exhibits IV-3 and IV-4 summarize the changes in the cost estimates
from proposal, based first, on bringing the cost values forward from
mid-year 2003 to mid-year 2004, and second, on the corrections to DIF,
as described at Section III. C, above. As shown in Exhibit IV-3, the
proposal cost estimates were brought forward to mid-year 2004 using the
Implicit Price Deflator for Gross Domestic Product. This adjustment
resulted in a uniform increase of 2.6% (rounded) to each component of
social cost and to total social cost.
Exhibit IV-3.--Annualized Total Social Costs of Compliance for All Options as Presented at Proposal Brought
Forward to 2004$
[In millions]
----------------------------------------------------------------------------------------------------------------
In 2003$ In 2004$
---------------------------------------------------------------
Cost component 3% discount 7% discount 3% discount 7% discount
rate rate rate rate
----------------------------------------------------------------------------------------------------------------
50 MGD All Option
----------------------------------------------------------------------------
